Answer:
C) 12.51%
Explanation:
Initial stock price = $59
Selling price = $66
Dividends paid = $0.38
The total return on the investment is the the sum of the dividend yield and the capital gains yield on the investment:
[tex]R= DY +CGY\\R=\frac{dividends}{initial\ price}+ \frac{final\ price-initial\ price}{initial\ price} \\R=\frac{0.38}{59}+ \frac{66-59}{59}\\R=0.1251 = 12.51\%[/tex]
The return on the investment is 12.51%
To calculate the total return on the investment, the capital gains and dividends received are combined. The total earnings of $7.38, divided by the initial $59 investment and converted to a percentage, yield a total return of 12.51%.
Explanation:The subject of this question is the calculation of total return on investment (ROI), which is a concept in finance and investing. To calculate the total return, we consider both the capital gains and any dividends received. The initial investment was $59, and the investment was sold for $66, resulting in a capital gain of $66 - $59 = $7. The investor also received a dividend payment of $0.38. The total earnings are therefore $7 (capital gain) + $0.38 (dividend), which equals $7.38. To find the total return as a percentage, we divide the total earnings by the initial investment and multiply by 100: ($7.38 / $59) × 100 = 12.51%. Therefore, the correct answer is C) 12.51%.
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Dell did not reveal Intel's "additional rebates" as an unusual cost reduction that might not continue in the future. A study by Dichev et al. revealed the beliefs of some 169 CFOS. CFOS believed that earnings quality is high when they are what? Predictable and accrued Sustainable and accrued Sustainable and backed by cash flow Predictable and backed by cash flow
Answer:
Solution: Sustainable and backed by cash flow .
Explanation:
Explanation: The CFOs have a belief that earnings would be of high quality when these are sustainable, as well as backed by actual cash flow. The specific quality characteristics are those which has consistent reporting choices over time, and long-term estimation avoidances.
Prepare the issuer's journal entry for each of the following separate transactions.
On March 1, Atlantic Co. issues 49,500 shares of $4 par value common stock for $318,500 cash.
On April 1, OP Co. issues no-par value common stock for $84,000 cash.
On April 6, MPG issues 3,400 shares of $20 par value common stock for $53,000 of inventory, $150,000 of machinery, and acceptance of a $103,000 note payable.
Answer:
See the explanation section
Explanation:
1. March 1
Debit Cash $318,500
Credit Common Stock (49,500 x $4 par value) = $198,000
Credit Additional paid-in capital $120,500
Since, the company issues 49,500 shares with an excess of par value, an additional paid-in capital account will be a credit. It can be calculated = $(318,500 - 198,000) or, [$(318,500/49,500) - $4]*49,500.
In both the cases, the additional capital is $120,500.
2. April 1
Debit Cash $84,000
Credit Common Stock $84,000
There will be no additional capital as the firm issues the same number of stock with no-par value.
3. April 6
Debit Inventory $53,000
Debit Machinery $150,000
Credit Note payable $103,000
Credit Common Stock (3,400 x $20) $68,000
Credit Additional paid-in capital $32,000
Since the company issues common stock for inventory and machinery, those should be debited. The company also accepts a notes payable to issue the common stock so that the note payable is credit. And the balancing amount will be additional paid-in capital.
When a company issues shares, it records a debit to the assets received and credits the stock account for the par value of the shares, and the excess amount is credited to Paid-In Capital in Excess of Par value, Common Stock. The above entries demonstrate the process for Atlantic Co., OP Co., and MPG based on the respective scenarios.
Explanation:The subject of this question is business, specifically accounting. When a company issues stock, it records a journal entry. Here are the entries:
Atlantic Co. on March 1: Debit Cash $318,500, Credit Common Stock $198,000 (49,500 shares x $4 par value), Credit Paid-In Capital in Excess of Par Value, Common Stock $120,500 ($318,500 - $198,000),For OP Co. on April 1: Debit Cash $84,000, credit Common Stock $84,000 (since there's no par value specified),For MPG on April 6: Debit Inventory $53,000, Debit Machinery $150,000, Debit Notes Payable $103,000, Credit Common Stock $68,000 (3,400 shares x $20 par value), Credit Paid-In Capital in Excess of Par Value, Common Stock $238,000 ($306,000 - $68,000), These entries demonstrate how to recognize the issuance of common stock. The exact names for the accounts might vary depending on the company's choice, but the concepts remain the same.Learn more about Issuing Shares here:https://brainly.com/question/31391322
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On October 1, 2019, Westfield Company sold machinery to a customer for $21,000. The customer could not pay at the time of sale, but agreed to pay 10 months later, and signed a 10-month note at 12% interest. How much interest revenue was earned during 2019? Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.
Answer:
$630
Explanation:
The computation of the interest revenue is shown below:
= Principal × rate of interest × number of months ÷ (total number of months in a year)
= $21,000 × 12% × (3 months ÷ 12 months)
= $630
The three month is computed from October 1 to December 31. We assume the books are closed on December 31
We simply apply the simple interest formula, So that the correct value of interest can be computed
Hence, all the things are considered for the computation part.
According to the National Association of Realtors, the mean sale price for existing homes in the United States in 2011 was $214,300. Assume that sale prices are normally distributed with a standard deviation of $41,000. Find the percentage of existing homes in 2011 that sold for less than $255,300?
Answer:
49.9%
Explanation:
Please see attachment .
A company has outstanding 20-year noncallable bonds with a face value of $1000, and 11% annual coupon, and a market price of $1,294.54. if the company was to issue new debt, what would be a reasonable estimate of the interest rate on the debt? If the company’s tax rate is 40%, what Is its after-ax cost of debt?
Answer:
8% and 4.8%
Explanation:
In this question, we use the Rate formula which is shown in the spreadsheet.
The NPER represents the time period.
Given that,
Present value = $1,294.54
Future value or Face value = $1,000
PMT = 1,000 × 11% = $110
NPER = 20 years
The formula is shown below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after solving this,
1. The pretax cost of debt is 8%
2. And, the after tax cost of debt would be
= Pretax cost of debt × ( 1 - tax rate)
= 8% × ( 1 - 0.40)
= 4.8%
A reasonable estimate of the interest rate on new debt can be determined by looking at the market price of existing bonds. The after-tax cost of debt can be calculated by multiplying the interest rate by (1 - tax rate).
Explanation:If a company was to issue new debt, a reasonable estimate of the interest rate on the debt can be determined by looking at the market price of the existing 20-year noncallable bonds. In this case, the market price of the bonds is $1,294.54, which is higher than the face value of $1,000. This indicates that there is high demand for the bonds and investors are willing to pay a premium for them. Therefore, the interest rate on the new debt would likely be lower than 11% to make it attractive to investors.
The after-tax cost of debt can be calculated by multiplying the interest rate by (1 - tax rate). In this case, the interest rate is 11% and the tax rate is 40%, so the after-tax cost of debt would be 11% * (1 - 0.40) = 6.6%.
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A senator renounces his past support for protectionism: "The U.S. trade deficit must be reduced, but import quotas only annoy our trading partners. If we subsidize U.S. exports instead, we can reduce the deficit by increasing our competitiveness."
Show the effect of an export subsidy on the market for foreign exchange.
The value of dollars in the market for foreign-currency exchange.....falls or rise.... as a result of this export subsidy.
True or False: The export subsidy reduces the trade deficit.
Answer
The answer and procedures of the exercise are attached in a the following image.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
A department store decides to use "secret shoppers" at unannounced times to test for service quality among its personnel. Store personnel are rewarded for excellent service attitudes. Which of the following reinforcement schedules would most likely apply in this situation?
A) fixed-ratio reinforcementB) fixed-interval reinforcementC) variable-ratio reinforcementD) variable-interval reinforcement
Answer:
The answer is letter D.
Explanation:
The reinforcement schedule most likely applied in this situation is variable interval reinforcement.
Final answer:
The department store using 'secret shoppers' employs a variable-interval reinforcement schedule to encourage consistent quality service from their personnel.
Explanation:
The reinforcement schedule that most likely applies to a department store using 'secret shoppers' to reward personnel for excellent service attitudes is variable-interval reinforcement. This schedule rewards employees after varying and unpredictable periods, which in this context, means they never know when a secret shopper will visit, encouraging consistent quality of service. It's similar to the scenario of Manuel, the manager at a fast-food restaurant, who never knows when the quality control person will come, thereby maintaining a high level of cleanliness and customer service to ensure his team earns their bonus.
A proxy is: Multiple Choice A document that delegates a stockholder's voting rights to an agent. A contractual commitment by an investor to purchase unissued shares of stock. An amount of assets defined by state law that stockholders must invest and leave invested in a corporation. The right of common stockholders to protect their proportionate interests in a corporation by having the first opportunity to purchase additional shares of common stock issued by the corporation. An arbitrary amount assigned to no-par stock by the corporation's board of directors.
Answer:
Option (A) is correct.
Explanation:
A proxy refers to a document which represents the authority to take some decision or do some activity on behalf of other person. For example, in case of voting, proxy could be used for voting here to represent some other person. A proxy is also referred as the authority or power given to a person to act for another person.
January 1, Edison Corporation had 1,000,000 shares of $10 par value common stock outstanding. On March 31, the company declared a 20% stock dividend. Market value of the stock was $18/share. As a result of this event,A. Edison's Paid-in Capital in Excess of Par account increased $1,600,000.B. Edison's total stockholders' equity was unaffected.C. Edison's Stock Dividends account increased $3,600,000.D. All of these answers are correct.
Answer:
D All of these answers are correct.
Explanation:
Given that the corporation had 1,000,000 shares of $10 par value common stock outstanding. On March 31, the company declared a 20% stock dividend. Market value of the stock was $18/share. As a result of this event
Paid-in Capital in Excess of Par = 1000000*20%*(18-10) = 1600000
Stock dividend = 1000000*20%*18= 3600000
Edison's total stockholders' equity was unaffected because increase in Stock dividend leads to decrease in retained earnings by the same amount.
Answer is option D All of these answers are correct.
LIFO LIquIdatIonDuring July, Laesch Company, which uses a perpetual inventory system, sold 1,240 units from its LIFO-based inventory.which had originally cost 518 per unit. The replacement cost is expected to be $27 per unit.RequiredPlease respond to the following two independent scenarios as requested.a. Case 1: In July, the company is planning to reduce its inventory and expects to replace only 900 of these units byDecember 31, the end of its fiscal year.(1) Prepare the entry in July to record the sale of the 1,240 units.(2] Discuss the proper financial statement presentation of the valuation account related to the 1,240 units sold.(3) Prepare the entry for the replacement of the 900 units in September at an actual cost of $31 per unit.b. Case2~ In July, the company is planning to reduce its inventory and expects to replace only300 of its units by December 31, the end of its fiscal year.(1) Prepare the entry in July to record the sale of the 1,240 units.(2] In December, the company decided not to replace any of the 1,240 units. Prepare the entry required on December 31 toeliminate any valuation accounts related to the inventory that will not be replaced.
Answer
The answer and procedures of the exercise are attached in the following archives.
Explanation
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
The market value of Yeates Corporation’s common stock had become excessively high. The stock was currently selling for $270 per share. To reduce the market price of the common stock, Yeates declared a 3-for-1 stock split for the 310,000 outstanding shares of its $12 par value common stock. Required: a. What entry will be made on the books of Yeats Corporation for the stock split? b. Determine the number of common shares outstanding and the par value after the split. c. Explain how the market value of stock will be affected by the stock split ?
Answer:
b. the number of common shares outstanding is 930,000 and the stock split is $4.
Explanation:
Please see attachment
The entry on the books of Yeates Corporation for the stock split, the number of common shares outstanding and the par value after the split, and the potential impact on the market value of the stock.
Explanation:a. The entry that will be made on the books of Yeates Corporation for the stock split is as follows:
Debit: Paid-in Capital in Excess of Par - Common Stock
Credit: Common Stock
Credit: Additional Paid-in Capital
b. After the stock split, the number of common shares outstanding will be 930,000 (310,000 shares * 3) and the par value will be $4 (original par value of $12 divided by 3).
c. The market value of the stock will not be directly affected by the stock split. However, the stock split may increase the liquidity of the stock and make it more affordable for individual investors to purchase. As a result, the increased demand may lead to an increase in the market price of the stock.
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Charles orders 40 cases of mescal from a Mexican distributor at a price of $90 per case. 2. A U.S. company sells 200 spark plugs to a Korean company at $5.00 per spark plug. 3. Gilberto, a U.S. citizen, pays $1,500 for a laptop he orders from Microell (a U.S. company).Complete the following table by indicating how the combined effects of these transactions will be reflected in the U.S. national accounts for the current year.Hint: Be sure to enter a "0" if none of the transactions listed are included in a given category and to enter a minus sign when the balance is negative.Amount(Dollars)Consumption Investment Government Purchases Imports Exports Net Exports Gross Domestic Product (GDP)
Answer:consumption= 4600, Investment=0 , Government Purchases=0
imports = 3600, exports= 1000, net exports= -2600, GDP=2000
Explanation:
Charles order will be considered as imports which are 40*90=3600
us company's selling will be considered as exports which are 200* 5 =1000
net exports (NX) = exports (x) - imports (M)
- 2600 = 1000 - 3600
NX = -2600
total consumption (c) = exports + imports
4600 = 1000 + 3600
C = 4600
GDP ( gross domestic product) is the final value of good and services which are produced within an economy
open economy is when there is free trade between countries and there are no restriction on imports and exports of goods and services;
GDP = C + G + I+ NX
GDP = 4600 +0+0 +(-2600)
GDP =4600-2600
GDP=2000
Investment and Government Purchases are considered s 0 as no transaction is given.
Vendors at Municipal Stadium sell their wares at prices that include the city, state, and transit district sales taxes; the total of these taxes is 8.25 percent when added to prices that do not include the sales tax.
a. Convert this 8.25 percent tax-exclusive sales tax rate into its tax-inclusive equivalent rate (Hint: Use the method outlined for VAT calculations.)
b. A vendor has receipts (including sales tax) at a game of $15,325. What sales tax must the vendor remit to the tax authorities?
Answer:8.25/108.25
It means the goods is sold of tax inclusive rate 8.25
B.$1167.96
8.25/108.25 * 15325= $1167.96 this is the amount to be remitted to the tax authority as the sales was inclusive of vat.
Bosch is a German firm that manufactures home appliances such as dishwashers, ovens, and ranges. It competes with companies such as GE Elite and LG. Bosch is perceived as the class of the industry. Bosch pursues a(n) _____strategy.
1) focus
2) blue ocean
3) overall cost leadership
4) differentiation
5) middle-of-the-road
Answer:
Differentiation
Explanation:
Differentiation strategy, is the strategy that distinguishes a product or service, from other similar products, rendered by the competitors in the market. The requirements involved is the development of a product or service, that is a unique selling point for the customers, in terms of product design, features, brand image, quality, or customer service.
When a firm pursues differentiation strategy, it attempts to become crave out a niche for itself in the industry, by offering those products and services, which have value to the customers. In this strategy, the firm picks one or more such dimensions that are regarded as important by the customer’s flock.s.
Bosch is implementing a differentiation strategy by focusing on unique features and high quality, which sets them apart from competitors and justifies a higher price point.
Explanation:Bosch, a German firm known for its high-quality home appliances, appears to be employing a differentiation strategy. This strategy involves offering unique features that are valued by customers and can include superior service, advanced technology, or other enhanced attributes. Bosch is perceived as the class of the industry, which suggests that its products offer something that competitors such as GE Elite and LG do not, justifying potentially higher prices.
In the context of a differentiation strategy, some businesses might concentrate on their core competencies, which is an approach that can contribute to their success by focusing on a limited range of products or services in which they excel. This allows them to maintain a unique position in the market and please their target audience who is willing to pay a premium for these differentiated attributes.
The trial balance before adjustment of Taylor Swift Inc. shows the following balances.
DrCr
Accounts Receivable90,000
Allowance for Doubtful Accounts1,750
Sales Revenue (all on credit)$680,000
Give the entry for estimated bad debts assuming that the allowance is to provide for doubtful accounts on the basis of a 4% of gross accounts receivable and (b) 5% of gross accounts receivable and Allowance for Doubtful Accounts has a $1,700 credit balance.
Answer:
Explanation:
The journal entries are shown below;
a. Bad debt expense A/c Dr $5,350
To Allowance for doubtful debts $5,350
(Being bad debt expense is recorded)
The computation of the bad debt expense is shown below:
= Account receivable × estimated percentage given + debit balance of Allowance for Doubtful Accounts
= $90,000 × 4% + $1,750
= $5,350
B. Bad debt expense A/c Dr $2,800
To Allowance for doubtful debts $2,800
(Being bad debt expense is recorded)
The computation of the bad debt expense is shown below:
= Account receivable × estimated percentage given - credit balance of Allowance for Doubtful Accounts
= $90,000 × 5% - $1,7000
= $2,800
Final answer:
The Federal Reserve's open market sale of Treasury bonds to Acme Bank affects its balance sheet by adjusting reserves and bonds, with a potential reduction in loans to maintain reserve requirements. A hypothetical bank's net worth is calculated as the difference between its assets and liabilities, determined through a T-account balance sheet.
Explanation:
Balance Sheet Adjustments for Acme Bank after Open Market Sale
When the Federal Reserve sells $10 million in Treasury bonds to Acme Bank, Acme's assets increase in bonds by $10 million, but their reserves decrease as they pay for these bonds. Assuming the bank maintains a 10% reserve requirement, the balance sheet would be adjusted as follows:
Reserves decrease by $10 million (payment for bonds)Bonds increase by $10 million (acquisition of bonds)Loans need to be reduced to restore reserves to the required 10% of depositsAfter purchasing the bonds, Acme Bank's reserves would be insufficient to meet the required reserve ratio. To comply, Acme Bank would need to reduce its loans. In terms of numbers:
Initial reserve requirement: 10% of $300 million in deposits = $30 million.After buying bonds, reserves are $20 million (initial $30 million - $10 million for bond purchase).To restore reserves to the required $30 million, Acme needs an additional $10 million.Acme Bank would reduce loans by $10 million to increase reserves.This would bring the reserves back to the required level, ensuring compliance with the reserve requirement.Net Worth Calculation for a Hypothetical Bank
A different bank with deposits of $400, reserves of $50, government bonds worth $70, and loans of $500 would have the following T-account balance sheet:
Assets: Reserves ($50) + Bonds ($70) + Loans ($500) = $620Liabilities: Deposits ($400)Equity (Net Worth): Assets - Liabilities = $620 - $400 = $220Thus, the bank's net worth would be $220. This reflects the bank's financial health as the difference between its assets and liabilities.
(Ignore income taxes in this problem.) Blaine Corporation is considering replacing a technologically obsolete machine with a new state-of-the-art numerically controlled machine. The new machine would cost $180,000 and would have a ten-year useful life. Unfortunately, the new machine would have no salvage value. The new machine would cost $12,000 per year to operate and maintain, but would save $48,000 per year in labor and other costs. The old machine can be sold now for scrap for $20,000. What is the simple rate of return on the new machine (round off your answer to the nearest one-hundredth of a percent)? Select one:
1) 10.00%2) 26.67%3) 22.50%4) 11.25%show work please
Answer
The answer and procedures of the exercise are attached in the following image.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
Commercial paper is very popular with many firms because Multiple Choice it can usually be issued below the prime rate. there are no required lines of credit at the bank. it satisfies the firm's need for long-term funds. it is very simple to roll over (refinance) in times of economic turmoil.
Answer:There are no required line of credit at the bank.
It's very simple to roll over(refinance) in times of economic turmoil.
Explanation:
A commercial paper is issued by banks or large companies to finance short term requirements like working capital.
It does not require having a line of credit credit with the bank and can be easily rollover.
However it's rate are normally higher than prevailing prime rate since non financial institutions are involved and it's usually for a short period.
2. Introduction to the foreign-currency exchange market In an open economy, why is the supply curve for dollars in the foreign-currency exchange market vertical? Net capital outflow equals net exports. Net capital outflow is determined by real GDP, not the real exchange rate. Net capital outflow is determined by the real interest rate, not the real exchange rate. Net capital outflow is extremely sensitive to small changes in the real exchange rate.
Answer:
The answer is Net capital outflow is determined by the real interest rate, not the real exchange rate.
Explanation:
Because the difference between imports and exports must be the same difference between purhcases and sale of foreign capital. The supply curve is vertical because the amount of dollars supplied for net capital outflow is not related to the real exchange rate.
The level will be determined by the real interest rate in the market for loanable funds.
In an open economy, the supply curve for dollars in the foreign-currency exchange market is vertical because net capital outflow is extremely sensitive to small changes in the real exchange rate.
The subject of this question is Economics at the College level. In an open economy, the supply curve for dollars in the foreign-currency exchange market is vertical because net capital outflow is extremely sensitive to small changes in the real exchange rate.
Net capital outflow refers to the difference between capital outflows and capital inflows. It is determined by the real interest rate, which affects the demand for domestic and foreign assets. When the real exchange rate changes, it affects the relative prices of foreign and domestic goods, leading to changes in net capital outflow.
Therefore, small changes in the real exchange rate can have a significant impact on net capital outflow, causing the supply curve for dollars to be vertical in the foreign-currency exchange market.
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Universal Exports Inc. has a very attractive credit policy, and none of its customers pays in cash when the firm makes a sale. Universal Exports Inc. sells to its customers on credit terms of 3/10, net 30. If a customer bought $100,000 worth of goods and paid the firm cash eight days after the sale, how much cash would Universal Exports Inc. get from the customer? $92,500 $90,000 $97,000 $85,000 If the customer paid off the account after 15 days, Universal Exports Inc. would receive . Approximately 35% of Universal Exports Inc.’s customers take advantage of the discount and pay on the 10th day. The remaining 65% take an average of 35 days to pay off their accounts. What is Universal Exports Inc.’s days sales outstanding (DSO), or the average collection period? 23.63 days 26.25 days 24.94 days 31.50 days
Answer:
$97,000 ; 26.25 days
Explanation:
The computations are shown below:
1. The cash collected would be
= Sale value of goods × (1 - discount rate)
= $100,000 × (1 - 3%)
= $100,000 × 0.97
= $97,000
2. The days sales outstanding would be
= Number of days for advantage × advantage percentage + remaining percentage × average days to pay off their accounts
= 10 days × 35% + (1 - 0.35) × 35 days
= 3.5 days + 22.75 days
= 26.25 days
No-Toxic-Toys currently has $200,000 of equity and is planning an $80,000 expansion to meet increasing demand for its product. The company currently earns $50,000 in net income, and the expansion will yield $25,000 in additional income before any interest expense. The company has three options: (1) do not expand, (2) expand and issue $80,000 in debt that requires payments of 8% annual interest, or (3) expand and raise $80,000 from equity financing. For each option, compute (a) net income and (b) return on equity (Net Income ÷ Equity). Ignore any income tax effects. (Round "Return on equity" to 1 decimal place.)
Depending on whether No-Toxic-Toys chooses to not expand, expand with debt financing, or expand with equity financing, the company will experience different changes in net income and return on equity. If the company expands through debt financing, it may increase its net income and return on equity to 34.3%. Equity financing increases the return on equity to 26.8%.
Explanation:To answer this question, we need to compute the net income and return on equity for each of the three options.
I. Do not expand: Since the company does not make any changes, the net income remains $50,000 and equity is $200,000. The return on equity (ROE) is Net Income ÷ Equity = 50,000 ÷ 200,000 = 0.25 or 25%
II. Expand with debt financing: The company borrows $80,000 at an 8% interest rate. First compute the annual interest payments: 80,000 * 8% = $6,400. The new net income is existing income plus additional income minus interest: 50,000 + 25,000 - 6,400 = $68,600. The equity stays the same at $200,000, so ROE = 68,600 ÷ 200,000 = 0.343 or 34.3%
III. Expand with equity financing: The company raises $80,000 in new equity, so total equity is 200,000 + 80,000 = $280,000. The new net income is simply the old income plus the additional income: 50,000 + 25,000 = $75,000. ROE = 75,000 ÷ 280,000 = 0.268 or 26.8%
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(Prepared from a situation suggested by Professor John W. Hardy.) Lone Star Meat Packers is a major processor of beef and other meat products. The company has a large amount of T-bone steak on hand, and it is trying to decide whether to sell the T-bone steaks as they are initially cut or to process them further into filet mignon and the New York cut.If the T-bone steaks are sold as initially cut, the company figures that a 1-pound T-bone steak would yield the following profit:Selling price ($7.95 per pound) $ 7.95Less joint costs incurred up to the split-off point whereT-bone steak can be identified as a separate product 3.80Profit per pound $ 4.15If the company were to further process the T-bone steaks, then cutting one side of a T-bone steak provides the filet mignon and cutting the other side provides the New York cut. One 16-ounce T-bone steak cut in this way will yield one 6-ounce filet mignon and one 8-ounce New York cut; the remaining ounces are waste. It costs $0.55 to further process one T-bone steak into the filet mignon and New York cuts. The filet mignon can be sold for $12.00 per pound, and the New York cut can be sold for $8.80 per pound.What is the financial advantage (disadvantage) of further processing one T-bone steak into filet mignon and New York cut steaks?
Answer:
The financial advantage (disadvantage) from further processing is $0.40.
Explanation:
Compute the financial advantage (disadvantage) of further processing of T-bone into filet mignon and New York cut steaks using the equation as shown below:
Financial advantage = Total sales from further processing −
Sale revenue lost of one T−bone − Cost of further processing
=$8.90−$7.95−$0.55
=$0.40
Hence, the financial advantage (disadvantage) of further processing of T-bone into filet mignon and New York cut steaks is $0.40.
Working Notes:
Compute the total sales from further processing using the equation as shown below:
Sales from further processing = One Fileted Mignon + New York Cut
=$4.50+$4.40
=$8.90
Hence, the total sale from further processing is $8.90.
Compute the Sales revenue from one fileted mignon after further processing using the equation as shown below:
One Fileted Migon = (Selling price per filet mignon×Yeild per ounce / Size of one T−bone steak )
= $12×6 ounce / 16 ounce
=$4.50
Hence, the sales revenue from one fileted mignon after further processing is $4.50.
Compute the Sales revenue from one New York cut after further processing using the equation as shown below:
New York cut = (Selling price per New York cut × Yeild per ounce / Size of one T−bone steak )
= $8.8×8ounce / 16 ounce
=$4.40
The financial advantage of further processing one T-bone steak into filet mignon and New York cut steaks overselling it as initially cut is $4.20 per pound.
A student has inquired about the financial advantages or disadvantages of further processing one T-bone steak into filet mignon and New York cut steaks. To answer this, we need to perform a cost-benefit analysis. We know that selling T-bone steaks as initially cut yields a profit of $4.15 per pound after joint costs of $3.80 are deducted from the selling price of $7.95 per pound.
If Lone Star Meat Packers further processes a 1-pound T-bone steak, it will result in a 6-ounce filet mignon and an 8-ounce New York cut, with processing costs of $0.55 per steak. At $12.00 per pound for filet mignon and $8.80 per pound for New York cut, the revenue from the processed steak is:
Filet mignon: 6 ounces / 16 ounces per pound * $12.00 per pound = $4.50New York cut: 8 ounces / 16 ounces per pound * $8.80 per pound = $4.40Adding these together gives a total revenue of $8.90 for the processed meats. After subtracting the processing cost of $0.55, we get $8.35. Compared to the $4.15 profit from the unprocessed 1-pound T-bone steak, the additional profit from processing is $8.35 - $4.15 = $4.20.
Therefore, Lone Star Meat Packers would have a financial advantage of $4.20 per pound by further processing the T-bone steaks into filet mignon and New York cut steaks.
Assume the Residential Division of Kipper Faucets had the following results last year Net sales revenue Operating income Average total assets Management's target rate of return What is the division's ROI? $ 18,700,000 7,480,000 5,500,000 18% A. 13696 B. 40% С. 74% D. 340%
Answer:
What is the division's ROI? A. 136%Explanation:
The ROI (Return on Investment), it's a financial ratio that measure the benefit that an investor will receive in relation to their investment cost.
It's determined by the Operating Income / Average Total Assets =
$7,480,000 / $5,500,000 = 136%
Final answer:
The ROI for the Residential Division of Kipper Faucets is A. 136.36%.
Explanation:
The ROI (Return on Investment) for the Residential Division of Kipper Faucets can be calculated by dividing the Operating income by the Average total assets and multiplying by 100 to get the percentage. So, in this case, the calculation is:
ROI = (Operating income / Average total assets) x 100
= (7,480,000 / 5,500,000) x 100
= 136.36%
Therefore, the division's ROI is 136.36%. Option A, 136.96, is incorrect as it does not represent a percentage.
A firm in a competitive industry has a total cost function of TC = 0.2 Q2 – 5Q + 30, whosecorresponding marginal cost curve is MC=0.4Q – 5. If the firm faces a price of 6,
a)what quantity should it sell? (10 points)
b)What profit does the firm make at this price? (10 points)
c)Should the firm shut down? (10 points)
Answer:
Consider the following calculations
Explanation:
TC=0.2Q2 - 5Q + 30,
MC=0.4Q - 5.
Equilibrium condition
MC=P
0.4Q - 5 = 6
0.4Q = 11
Q = 11/.4
=27.5
Profit = TR - TC
=27.5*6 - .2(27.5)2 -5(27.5)+30
=165 -756.25 -137.5 +30
= - 698.5
Firm is incurring loss
Firm will continue to produce as long as it is able to recover AVC
AVC =0.2Q -5
=0.2(27.5) -5
=5.5 -5
=0.5
Hence firm will continue to produce
Final answer:
The firm should sell 27.5 units to maximize profit at the given price of $6. It would make a profit of approximately $121.25. Since the firm is profitable, it should not consider shutting down.
Explanation:
To determine the profit-maximizing level of output for a firm in a competitive industry, we equate the marginal cost (MC) to the price (P), since a profit-maximizing firm will produce up to the point where MC = P.
a) Quantity Sold: Given the firm's MC = 0.4Q - 5, and the market price P = 6, we set MC equal to P:
0.4Q - 5 = 6
0.4Q = 11
Q = 11 / 0.4
Q = 27.5 units (rounded to two decimal places)
The firm should sell 27.5 units.
b) Profit Calculation: Profit (π) is the total revenue (TR) minus total cost (TC). The TR can be calculated as P × Q, and TC from the given function TC = 0.2Q2 – 5Q + 30.
TR = 6 × 27.5 = 165
TC = 0.2 × (27.5)^2 – 5 × 27.5 + 30
TC = 0.2 × 756.25 – 137.5 + 30
TC ≈ 151.25 – 137.5 + 30
TC ≈ 43.75
π = TR – TC = 165 – 43.75 = 121.25
The firm makes a profit of approximately $121.25.
c) Shut Down Decision: A firm should shut down if the price it receives is less than the average variable cost (AVC), since it cannot cover its variable costs. The directly obtained AVC from the TC function is not given. We can analyze using the provided TC to infer AVC, or simplify and say since the firm is making profits, it should not shut down.
Considering the profit calculated above, the firm should not shut down.
Rivoli Inc. hired you as a consultant to help estimate its cost of capital. You have been provided with the following data: D0 = $0.80; P0 = $22.50; and g = 8.00% (constant). Based on the DCF approach, what is the cost of equity from retained earnings?
Answer:
Cost of equity from retained earning is 11.84 %
Explanation:
We have given dividend [tex]D_0=$0.80[/tex]
Price at the beginning [tex]P_0=$22.50[/tex]
Growth rate g = 8 %
We have to find the cost of equity from retained earning
Now dividend at the end of year [tex]D_1[/tex] = $0.80×1.08 = 0.864
We know that cost of equity is given by
[tex]Ke=\frac{D_1}{P_O}+g=\frac{0.864}{22.50}+0.08=0.1184=11.84%[/tex]
So cost of equity from retained earning is 11.84 %
Suppose you are the manager of a watchmaking firm operating in a competitive market. Your cost of production is given by C = 200 + 2q^2, where q is the level of output and C is total cost. (The marginal cost of production, MC(q), is 4q; the fixed cost, FC, is $200). a. If the price of a watch is $80, how many watches should you produce to maximize profits? (Enter your response as an integer.) b. What will the profit level be? (Enter your response rounded to two decimal places.) c. At what minimum price will the firm produce a positive output? (Enter your response as an integer.)
Answer:
1. 20 units
2. $600
Explanation:
1. [tex]C = 200 + 2q^{2}[/tex]
MC = 4q
Price, P = $80
For maximizing profits,
Marginal cost = Price of the commodity
4q = 80
q = 20 units
[tex]C = 200 + 2q^{2}[/tex]
[tex]C = 200 + 2(20)^{2}[/tex]
= 200 + 800
= 1,000
2. Profit = Total revenue - Total cost
= (Price × Quantity) - TC
= (80 × 20) - $1,000
= $1,600 - $1,000
= $600
3. We know that the firm in the short run will be produce at a point where total revenue is greater than the total variable cost
Average variable cost = variable cost ÷ quantity
[tex]=\frac{2Q^{2}}{Q}[/tex]
= 2Q
MC = 4Q
Here, MC is greater than AVC at any given point.
so in the short run firm will producing short run positive profit.
Prepare a master schedule given this information: It is now the end of week 1; customer orders are 25 for week 2, 16 for week 3, 11 for week 4, 8 for week 5, and 3 for week 6. Use the MPS rule of ordering production when projected on-hand inventory would be negative without production. Suppose that there are currently 64 pumps in inventory and a production lot size of 70 pumps is used.
Answer:
You didn´t post the complete information of the exercise, I searched the exercise online and tried to ask the most useful question.
Explanation:
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
Final answer:
To create a master schedule for pump production from weeks 2 to 6, we calculate inventory depletions from customer orders. If projected inventory dips below zero, we produce in lot sizes of 70 pumps. For the specified demand, no production is needed for these weeks.
Explanation:
The student's question relates to creating a master schedule for production based on customer orders and current inventory levels. To prepare a master schedule, we must analyze customer demand, beginning inventory, and production lot size to ensure that production meets demand without resulting in negative on-hand inventory. Let's outline a five-week schedule using the Master Production Schedule (MPS) rule:
Calculate projected inventory for each week by subtracting customer orders from the current inventory.When projected inventory is negative, schedule production of a predefined production lot size to meet demand.Factor in the new inventory after production to calculate the following week's beginning inventory.Starting with a current inventory of 64 pumps and a week 2 demand for 25 pumps:
Week 2 projected inventory: 64 - 25 = 39 pumps (No production needed).Week 3 demand is 16 pumps. Week 2 ending inventory (39 pumps) - Week 3 demand (16 pumps) = 23 pumps remaining (No production needed).Week 4 demand is 11 pumps. On-hand inventory would be 23 - 11 = 12 pumps remaining (No production needed).Week 5 demand is 8 pumps. On-hand inventory would be 12 - 8 = 4 pumps remaining (No production needed).Week 6 demand is 3 pumps. Projected on-hand inventory is 4 - 3 = 1 pump (No production needed).Throughout weeks 2 to 6, the inventory levels never drop below zero, so no production is needed based on a lot size of 70 pumps and given demand. However, the week after Week 6 might require production if there are any orders since on-hand inventory would start at just 1 pump.
Given the following information, determine the final appraisal value of the subject property.
Adjustments
Market conditions .50% (per month)
Lot Size $25,000 (per acre)
Effective age (years) $1,000 (per year)
Living area (sq. ft) $45.00 (per sq. ft)
Bath $1,250 (per bath)
Bedroom $3,000 (per bedroom)
Subject Property Comparable Property
Time sold Today 4 months ago
Lot size (acres) 0.83 0.80
Effective age (years) 8 7
Living area (sq, ft) 2,197 2,383
Bath 3.5 3.5
Bedroom 4 4
Sales price $287,000
The final appraisal value of the subject property, considering all adjustments, is $294,490.
Explanation:In real estate, appraisal value is determined by comparing the subject property with comparable properties and adjusting for differences. First, start with the sale price of the comparable property ($287,000). Then, adjust for each difference between the subject and comparable property.
Market conditions: the comparable was sold 4 months ago, so adjust by 4 * 0.5%= 2% of the sales price, gives us $287,000 * 2% = $5,740.
Lot Size: at $25,000 per acre, the difference 0.83 - 0.80 = 0.03 acre leads to an adjustment of 0.03 * $25,000 = $750.
Effective age: the subject is one year old, so adjust by $1,000.
The total adjustment is $5,740 + $750 + $1,000 = $7,490. So, the final appraisal value of the subject property would be $287,000 + $7,490 = $294,490.
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In a certain state's lottery, 45 balls numbered 1 through 45 are placed in a machine and seven of them are drawn at random. If the seven numbers drawn match the numbers that a player had chosen, the player wins $1,000,000. In this lottery, the order in which the numbers are drawn does not matter.
Compute the probability that you win the million-dollar prize if you purchase a single lottery ticket. Write your answer as a reduced fraction.
P P (win) = A single lottery ticket costs $2. Compute the Expected Value, to the state, if 10,000 lottery tickets are sold. Round your answer to the nearest dollar.
Answer: $ A single lottery ticket costs $2. Compute the Expected Value, to you, if you purchase 10,000 lottery tickets. Round your answer to the nearest dollar. Answer: $
Answer:
[tex]P(win) = \frac{1}{45,379,620}[/tex]
Expected value to the state if 10,000 tickets are sold = $19,780
Expected value to you if you purchase 10,000 tickets = -$19,780
Explanation:
Number of lotterry balls = 45
Number of balls drawn = 7
Win payout = $1,000,000
Ticket cost = $2
a) Since the order does not matter, the number of total possibilities of choosing 7 balls out of 45 is:
[tex]_{45}C_{7}=\frac{45!}{(45-7)!7!} \\_{45}C_{7}=\frac{45*44*43*42*41*40*39}{7!} \\_{45}C_{7}=45,379,620[/tex]
Therefore, the probability of winning, P(win) by purchasing a single ticket is:
[tex]P(win) = \frac{1}{45,379,620}[/tex]
b) The expected value is given by the sum of the products of each outcome's pay by its likelihood. There are two outcomes, winning (which costs the state $1,000,000) and losing (which gives the state $2).
The expected value to the state if 10,000 tickets are sold is:
[tex]EV(N=10,000) = 10,000*EV(N=1)\\EV(N=10,000)=10,000*((2*\frac{45,379,620-1}{45,379,620})-(\frac{1}{45,379,620}*1,000,000))\\EV(N=10,000) = 10,000*1.9779636\\EV(N=10,000) = \$19,780[/tex]
The expected value, to the state, if 10,000 lottery tickets are sold is $19,780
c) The expected value to a player, for 'n' given games, is the opposite of the expected value to the state since each ticket costs $2 and the potential payout is $1,000,000 is case of victory. Therefore, the expected value, to a player, if they purchase 10,000 lottery tickets is -$19,780
The probability that an individual will win the million-dollar prize if one purchases a single lottery ticket will be 1/45379620.
How to calculate probability?From the information given, the number of possibilities that one will choose 7 balls out of 45 will be:
= 45! / (45-7)!7!
= 45379620
Therefore, the probability is 1/45379620.
The expected value if 10,000 lottery tickets are sold will be:
= 10000 × [(2 × 45379620- 1)/45379620] - (1/45379620) × 1000000
= $19780
Therefore, the expected value is $19780.
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Company has 130 units in Finished Goods Inventory at the beginning of the accounting period. During the accounting period, Hacken produced 190 units and sold 320 units for $ 250 each. All units incurred $ 55 in variable manufacturing costs and $ 30 in fixed manufacturing costs. Hacken also incurred $ 7 comma 700 in Selling and Administrative Costs, all fixed. Calculate the operating income for the year using absorption costing and variable costing.
Answer:
The operating income for the year using absorption costing and variable costing is $45,100 and $49,000 respectively
Explanation:
The computation of the operating income for the year using absorption costing and variable costing is shown below:
Absorption costing:
Sales (320 units × $250) $80,000
Less: Total manufacturing cost (320 units × $85) ($27,200)
Contribution margin $52,800
Less: Selling and Administrative Costs ($7,700)
Net income $45,100
Variable costing:
Sales (320 units × $250) $80,000
Less: Variable cost (320 units × $55) ($17,600)
Contribution margin $62,400
Less: Fixed manufacturing costs (190 units × $30) $5,700
Less: Selling and Administrative Costs ($7,700)
Net income $49,000
Final answer:
Operating Income for the year using: Absorption Costing is $45,100, Variable Costing is $49,000.
Explanation:
To calculate the operating income using absorption costing and variable costing, we'll follow a step-by-step process for each. Let's start with absorption costing.
Absorption Costing
Step 1: Determine the cost per unit under absorption costing.
Under absorption costing, both variable and fixed manufacturing costs are included in the cost per unit.
Variable Manufacturing Costs: $55 per unit
Fixed Manufacturing Costs: $30 per unit
Total Cost per Unit: $55 (variable) + $30 (fixed) = $85 per unit
Step 2: Calculate Cost of Goods Sold (COGS).
To find COGS under absorption costing, we need to account for the units sold from both the beginning inventory and those produced.
Units from Beginning Inventory: 130 units (at $85 each)
Units produced and sold: 320 units sold - 130 units from inventory = 190 units (at $85 each)
COGS = (130 units * $85) + (190 units * $85)
Step 3: Calculate the sales revenue.
Sales Revenue = Units Sold * Sale Price per Unit
Sales Revenue = 320 units * $250
Step 4: Calculate the operating income under absorption costing.
Operating Income (Absorption) = Sales Revenue - COGS - Selling and Administrative Costs
Operating Income (Absorption) = (Sales Revenue) - [(130 units * $85) + (190 units * $85)] - $7,700
Variable Costing
Step 1: Determine the variable cost per unit under variable costing.
Under variable costing, only variable manufacturing costs are considered in the cost per unit.
Variable Manufacturing Costs: $55 per unit
Step 2: Calculate the variable COGS.
Units from Beginning Inventory: 130 units (at $55 each)
Units produced and sold: 320 units sold - 130 units from inventory = 190 units (at $55 each)
Variable COGS = (130 units * $55) + (190 units * $55)
Step 3: Calculate the contribution margin.
Contribution Margin = Sales Revenue - Variable COGS
Step 4: Calculate the operating income under variable costing.
Operating Income (Variable) = Contribution Margin - Selling and Administrative Costs - Fixed Manufacturing Costs (for the entire production)
Fixed Manufacturing Costs.for production = 190 units produced * $30 fixed cost per unit
Operating Income (Variable) = (Contribution Margin) - $7,700 - (190 units * $30)
Calculating the Results
Now, let's perform the calculations:
Absorption Costing:
COGS = (130 units * $85) + (190 units * $85) = ($11,050 + $16,150) = $27,200
Sales Revenue = 320 units * $250 = $80,000
Operating Income (Absorption) = $80,000 - $27,200 - $7,700 = $45,100
Variable Costing:
Variable COGS = (130 units * $55) + (190 units * $55) = ($7,150 + $10,450) = $17,600
Contribution Margin = $80,000 - $17,600 = $62,400
Fixed Manufacturing Costs for production = 190 units * $30 = $5,700
Operating Income (Variable) = $62,400 - $7,700 - $5,700 = $49,000
Conclusion
Operating Income for the year using:
- Absorption Costing: $45,100
- Variable Costing: $49,000
Sloan Transmissions, Inc., has the following estimates for its new gear assembly project: price = $1,440 per unit; variable costs = $460 per unit; fixed costs = $3.9 million; quantity = 85,000 units. Suppose the company believes all of its estimates are accurate only to within ±15 percent. What values should the company use for the four variables given here when it performs its best-case scenario analysis? What about the worst-case scenario?
Answer:
Best case scenario:
Selling price = $1,656 per unit
Variable costs = $391 per unit
Fixed costs = $3.315 million
Quantity sold = 97,750 units.
Worst case scenario:
Selling price = $1,224 per unit
Variable costs = $529 per unit
Fixed costs = $4.485 million
Quantity sold = 72,250 units.
Explanation:
Selling price (P) = $1,440 per unit
Variable costs (V) = $460 per unit
Fixed costs (F)= $3.9 million
Quantity sold (Q) = 85,000 units.
The company's revenue is given by:
[tex]R=P*Q - (V*Q) - F[/tex]
For the best case scenario, that is, to maximize revenue, price and quantity sold must be at the highest value (+15%) while fixed and variable costs must be at the lowest value (-15%).
Selling price (P) = $1,440 * 1.15 = $1,656 per unit
Variable costs (V) = $460 *0.85 = $391 per unit
Fixed costs (F)= $3.9 *0.85 = $3.315 million
Quantity sold (Q) = 85,000 *1.15 = 97,750 units.
For the worst case scenario, that is, to minimize revenue, price and quantity sold must be at the lowest value (-15%) while fixed and variable costs must be at the highest value (-15%).
Selling price (P) = $1,440 * 0.85 = $1,224 per unit
Variable costs (V) = $460 *1.15 = $529 per unit
Fixed costs (F)= $3.9 *1.15= $4.485 million
Quantity sold (Q) = 85,000 *0.85 = 72,250 units.
The best-case scenario variables would be: price = $1,656 per unit, variable costs = $391 per unit, fixed costs = $3.315 million, quantity = 97,750 units. The worst-case scenario variables would be: price = $1,224 per unit, variable costs = $529 per unit, fixed costs = $4.485 million, quantity = 72,250 units.
Explanation:In order to work out the best-case and worst-case scenarios for the Sloan Transmissions, Inc., we must take into account the provided estimate that all the given variables are accurate to within ±15%. When it comes to the best-case scenario, we will assume a higher price and quantity, and lower costs.
So, the best-case scenario variables would be: price = $1,656 per unit (1440*1.15), variable costs = $391 per unit (460*0.85), fixed costs = $3.315 million (3.9*0.85), quantity = 97,750 units (85000*1.15). For the worst-case scenario, we will assume a lower price and quantity, and higher costs. This would result in: price = $1,224 per unit (1440*0.85), variable costs = $529 per unit (460*1.15), fixed costs = $4.485 million (3.9*1.15), quantity = 72,250 units (85000*0.85).
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