Answer:
-1,004,500
Explanation:
Cash used by an transaction is known as the cash outflow and cash provided by the transaction is known as cash inflow. Expenses and payments uses the cash and Revenue or receipts provide the cash.
All of the following cash flows are incurred in year 0
Base price = $970,000
Installation cost = $19,500
Increase in Working capital = $15,000
Total Cash Flow = $970,000 + $19,500 + $15,000 = $1,004,500
Cash has been used by each above transaction so,There is a Cash out flow of $1,004,500.
Final answer:
The Year-0 net cash flow for the Campbell Company upon purchasing a robotic paint sprayer is the sum of its cost, installation, and increased inventory needs, amounting to -$1,004,500.
Explanation:
The Year-0 net cash flow for Campbell Company considering the purchase of a robotic paint sprayer is calculated by adding the initial cost of the sprayer, installation costs, and the change in net working capital. We do not include depreciation here as it not a cash flow, and it will be considered when calculating tax savings in the later years. Therefore, the initial cash outflow (net cash flow at Year-0) for the sprayer is:
Cost of the sprayer: $970,000
Installation costs: $19,500
Increase in net working capital: $15,000
Adding these together, the total Year-0 net cash flow is:
-$970,000 (cost of the sprayer) - $19,500 (installation costs) - $15,000 (net working capital) = -$1,004,500
As passengers lined up to board an Acme Airliner, they are informed that there has been a bomb threat and that everyone must be searched. Ernesta is abnormally sensitive to being touched by anyone, but she is anxious to reach her destination and therefore says nothing while the airline personnel conduct a "pat-down" over her clothing. Can she sue the airline for battery? Explain your answer
Answer:
She can't sue the airline since as per law airline has the right to each individual and person in case of any threat.
Answer:
No, she cant sue the airline company for battery because of a "pat down".
Explanation:
A Pat down is an act of passing the hands over the body of a clothed person to detect concealed weapons, drugs, etc.
this is a standard procedure conducted efore boarding an aircraft. therefore it is not illegal and has no grounds for litigation.
Furthermore, the possibility of a bomb explosion demands for through security checks.
She willingly obliged to be search to prove her innocence. Therefore, her rights were not infringed on.
Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $39.2 million cash on October 1,2015, to provide working capital for anticipated expansion. Precision signs a one-year, 8% promissory note to Midwest Bank under a prearranged short-term line of credit. Interest on the note is payable at maturity. Each firm has a December 31 year-end.1.Prepare the journal entries on October 1, 2015, to record the issuance of the note.
2.Record the adjustment on December 31, 2015.
3.Prepare the journal entry on September 30, 2016, to record payment of the notes payable at maturity
Answer:
1) October 1 2015, Cash $39.2million Dr
Notes Payable $39.2million Cr
2) December 31, 2015 Interest expense $0.784million Dr
Interest Payable $0.784million Cr
3) September 30, 2016 Notes Payable $39.2million Dr
Interest Payable $0.784million Dr
Interest Expense $2.352million Dr
Cash $42.336million Cr
Explanation:
1.
When note is issued, liability is credit by the notes value and cash is credited.
2.
The adjusting entry is prepared 3 months after the note is issued so the 3 month's interest on note relates to 2015 and it should be recorded as expense and as it is payable at maturity so interest payable is credited.
3 month interest = 39.2 * 0.08 * 3/12 = 0.784million
3.
The note and interest will be payable that was accrued along with the remaining 9 months interest. Total interest is 39.2 * 0.08 = 3.136million
Prithi acquired and placed in service $190,000 of equipment on August 1, 2015, for use in her sole proprietorship. The equipment is 5-year recovery property. No other acquisitions are made during the year. Prithi elects to expense the maximum amount under Sec. 179. Prithi's total deductions for the year (including Sec. 179 and depreciation) area.) $25,000b.) $63,000c.) $58,000d.) $38,000
Answer:
d.) $38,000
Explanation:
Given that
Acquired value of the plant = $190,000
Recovery period = 5 years
So according to section 179, the total deduction is limit to the 1 by 5 i.e useful life or recovery period of acquired price or purchase price
So, the amount is
= Acquired value of the plant ÷ recovery period
= $190,000 ÷ 5 years
= $38,000
By dividing the acquired value with the recovery period we can get the maximum deduction
The Stewart Company has $1,695,500 in current assets and $678,200 in current liabilities. Its initial inventory level is $423,875, and it will raise funds as additional notes payable and use them to increase inventory. How much can its short-term debt (notes payable) increase without pushing its current ratio below 2.0? Round your answer to the nearest cent.
Pericloud Company uses a standard costing system. The following information pertains to direct materials for July: Standard price per lb. $20.00 Actual purchase price per lb. $18.00 Quantity purchased 2,000 lbs. Quantity used 1,400 lbs. Standard quantity allowed for actual output 1,450 lbs. Actual output 500 units Pericloud Company reports its materials price variances at the time of purchase. What is the materials usage variance for Pericloud Company? a.$7,850 U b.$1,000 F c.$1,900 U d.$2,450 F
Answer:
b) $1000 (F)
Explanation:
We are given:
•Standard price SP = $20
•Actual price AP = $18.00
•Quantity purchased QP = 2000lbs
• Quantity used = 1400 lbs
• Std qty for actual output = 1450lbs
•Actual output = 500 units
To find the materials usage variance for Pericloud Company we use the formula:
Standard price * ( actual quantity of materials used - standard quantity allowed)
SP * ( AQ - SQ)
From the report, we have
SP = $20
AQ = 1400lbs
SQ = 1450lbs
Therefore, we now have:
$20 * (1400lbs - 1450lbs)
= $1000
4.1 Measuring Interest Rates 1) The concept of ________ is based on the common-sense notion that a dollar paid to you in the future is less valuable to you than a dollar today. A) present value B) future value C) interest D) deflation
Answer:
The correct answer is letter "A": present value.
Explanation:
The Present Value of Money concept states that it is better to have a dollar today than a dollar tomorrow. This happens because having money today implies it can be deposited in a bank account to benefit from the interest rate or invest it so at a certain point in time the same amount of money will have a higher value.
Having the money available tomorrow may not provide the same returns as if the started to be invested yesterday.
Ninety-eight homeowners brought action seeking to enjoin as a nuisance the construction and operation of a ready-mix concrete plan on property adjacent to a residential area. Plaintiffs live southwest, west and east across the highway from the plant. The plant is bounded immediately on the north and south by other business concerns. The trial court found for the plaintiffs.
Did the defendant's operation of a concrete plant in an area zoned for light to general industrial use constitute a nuisance?
Why?
Answer:
The spirit of personal irritation is associate intervention with the utilization and pleasure of land. So long because the intervention is considerable and unreasoning, and love would be aggressive or problematic to the conventional individual, nearly any disruption to the satisfaction of property could quantity to a nuisance.
Final answer:
Whether the operation of a concrete plant constitutes a nuisance depends on several factors such as the extent of interference and zoning laws. Similar principles were applied in the Grayned v. City of Rockford case, which upheld an ordinance as constitutional. Zoning regulations must be reasonable and related to public welfare.
Explanation:
The operation of a ready-mix concrete plant adjacent to a residential area, even in a zone designated for light to general industrial use, may constitute a nuisance if it significantly interferes with homeowners' use and enjoyment of their property. Courts generally assess whether such an operation is a nuisance by considering factors such as the type and degree of interference, the character of the neighborhood, and the plant's operation's compliance with existing regulations.
In a similar vein, the Grayned v. City of Rockford case held that an ordinance prohibiting disturbances near a school was constitutional because it was narrowly tailored to serve a significant government interest and did not restrict more speech than necessary.
In assessing environmental justice and nuisances, it's also important to consider the principle of 'Not In My Back Yard' (NIMBY), community responses to undesirable facilities, and the impacts of zoning regulations. For instance, land-use and zoning regulations are limited and must be reasonable, bearing substantial relation to the public welfare without being arbitrary.
Holding constant risk and the real returns available abroad, higher domestic real interest rates __________ capital inflows, __________ capital outflows, and __________ net capital inflows.
Answer:
increase, decrease, increase
Explanation:
Holding constant risk and the real returns available abroad, higher domestic real interest rates increase capital inflows, decrease capital outflows, and increase net capital inflows.
Answer:
Increase capital inflows
Decrease capital outflows
Increase capital inflows
Explanation:
This is mainly.because when the real interest rates are high, that means the interest rates are well above the inflation level and investors, can get a higher yield. However, highers interest rates discourage borrowings as the cost of capital is high.
Samuelson and Messenger (S&M) began 2018 with 300 units of its one product. These units were purchased near the end of 2017 for $22 each. During the month of January, 200 units were purchased on January 8 for $25 each and another 260 units were purchased on January 19 for $27 each. Sales of 190 units and 200 units were made on January 10 and January 25, respectively. There were 370 units on hand at the end of the month. S&M uses a periodic inventory system.
Required:
1. Calculate ending inventory and cost of goods sold for January using FIFO.
2. Calculate ending inventory and cost of goods sold for January using average cost.
Answer:
1. ending inventory $9,770 and cost of goods sold $8,850
2.ending inventory $9,135.30 and cost of goods sold $9,346
Explanation:
FIFO Inventory System Sells the Older Inventory Acquired First Followed by the Recent Acquired Inventory
Cost of Sale :
10 January (190 units × $22) = $4,180
25 January : (110 units × $22) = $2,420
(90 units × $25) = $2,250
Total = $8,850
Inventory :
110 units × $ 25 = $2,750
260 units × $27 = $7,020
Total = $9,770
Weighted Average Cost Method Calculates a New Cost of Inventory with each purchase made
New Cost 8 January
Unit Cost = Total Cost / Total Number of Units
=((300 units × $22) + (200 units × $ 25)) / (300 units + 200 units)
= $23.20
New Cost 19 January
Unit Cost = Total Cost / Total Number of Units
=((310 units × $23.20) + (200 units × $ 27)) / (310 units + 200 units)
= $24.69
Cost of Sale :
10 January (190 units × $23.20) = $4,408
25 January : (200 units × $24.69) = $4,938
Total = $9,346
Inventory :
370 units × $24.69 = $9,135.30
Zena Technology sells arc computer printers for $54 per unit. Unit product costs are:
Direct materials $15
Direct labor 19
Manufacturing overhead 6
Total $40
A special order to purchase 11,000 arc printers has recently been received from another company and Zena has the idle capacity to fill the order. Zena will incur an additional $3 per printer for additional labor costs due to a slight modification the buyer wants to be made to the original product. One-third of the manufacturing overhead costs are fixed and will be incurred no matter how many units are produced. When negotiating the price, what is the minimum selling price that Zena should accept for this special order?
The minimum selling price that Zena should accept for the special order is $22 per unit.
The minimum selling price for the special order is calculated as follows:
Given Information:
Selling price for regular sales = $54 per unitUnit product costs for regular sales:Direct materials = $15 per unitDirect labor = $19 per unitManufacturing overhead = $6 per unit (of which $2 is fixed and $4 is variable)Total unit product cost for regular sales = $15 + $19 + $6= $40 per unit
Special order details:
Special order quantity = 11,000 units
Additional direct labor cost for the special order = $3 per unit
Variable portion of manufacturing overhead per unit = $4 per unit
There is a need to calculate the minimum selling price that Zena should accept for the special order.
Calculating the relevant cost for the special order:
Relevant cost per unit = Direct materials + Additional direct labor + Variable portion of manufacturing overhead
Relevant cost per unit = $15 + $3 + $4
= $22 per unit
Calculating the contribution margin per unit:
Contribution margin per unit = Selling price per unit - Relevant cost per unit
Contribution margin per unit = $54 - $22
= $32 per unit
To ensure that the special order provides a positive contribution to cover fixed costs and contribute to profit, the minimum selling price should be at least the relevant cost per unit:
Minimum selling price = Relevant cost per unit
Minimum selling price = $22 per unit
Therefore, the minimum selling price that Zena should accept for the special order is $22 per unit. Any selling price above this amount will contribute to covering fixed costs and generating a profit.
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Brenda graduated with her B.A. in business administration and was surprised when she was told she was unqualified to run the human resources department in several companies without work experience. Now she must decide what to do as a stepping stone to reach her goal. Which option best fits Brenda's goals
Answer: Brenda must take a lower level job in the human resources department for experience
Explanation:
Brenda must take a lower level job in the human resources department for experience, as this experience she gains in the department would go a long way in boosting her resume and helping her reach her goals as of running the human resources department one day.
Exercise 13-8 Payback Period and Simple Rate of Return [LO13-1, LO13-6]
[The following information applies to the questions displayed below.]
Nick’s Novelties, Inc., is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $320,000, have a fifteen-year useful life, and have a total salvage value of $32,000. The company estimates that annual revenues and expenses associated with the games would be as follows:
Revenues $ 230,000
Less operating expenses:
Commissions to amusement houses $ 80,000
Insurance 20,000
Depreciation 19,200
Maintenance 50,000 169,200
Net operating income $ 60,800
Garrison 16e Rechecks 2017-05-22
Exercise 13-8 Part 1
Required:
1a. Compute the pay back period associated with the new electronic games.
1b. Assume that Nick’s Novelties, Inc., will not purchase new games unless they provide a payback period of five years or less. Would the company purchase the new games?
Answer:
4 years
Yes
Explanation:
Payback period calculates the amount of time it takes to recover the amount invested in a project to be recovered from the cumulative cash flow.
Cash inflow for the period = Net income + Net cash deductions (depreciation expenses)
$60,800 + $19,200 = $80,000
Payback period = amount invested / cash inflow
$320,000 / $80,000 = 4 years
If the payback period is five years or less, the project would be accepted because the amount invested would be recovered in 4 years. Therefore, the company would purchase the new games.
I hope my answer helps you
Following question #14, suppose the project requires an initial investment in net working capital of $300,000, and maintains at this level until the end of year 2. And, this net working capital will be recovered at the end of the project. What are the project's incremental free cash flows?
Final answer:
The project's incremental free cash flows include the initial investment of $300,000 in net working capital, which does not impact the free cash flows until it is recovered at the end of the project. This recovery is considered a cash inflow that must be included in the final calculation of the project's free cash flows.
Explanation:
The project's incremental free cash flows can be defined as the cash flows that are directly attributable to the project in question, separate from the company's other operations. When considering an initial investment in net working capital of $300,000, it is important to note that this investment is not an expense but rather it is a use of cash that is expected to be recovered at the end of the project. In the years leading up to the recovery, the net working capital will not impact the free cash flows since it remains constant. However, at the end of year 2, when the net working capital is recovered, this will generate a positive incremental free cash flow, as this money is returned to the firm.
Reinvesting in net working capital is key for a business to maintain its operations and support growth, as it ensures the company has the funds necessary to continue operating on a day-to-day basis. Importantly, the recovery of net working capital at the end of the project should be included in the project's incremental free cash flow calculations as a cash inflow.
To summarize, the investment in net working capital will temporarily remove cash from the company's free cash flow, but will return as a cash inflow when the working capital is recovered at the end of the project, thus generating incremental free cash flow at that time.
Masterson Company's budgeted production calls for 66,000 units in April and 62,000 units in May of a key raw material that costs $1.60 per unit. Each month's ending raw materials inventory should equal 30% of the following month's budgeted materials. The April 1 inventory for this material is 19,800 unit. What is the budgeted materials needed in units for April?
Answer:
The budgeted materials needed in units for April is 64,800 units
Explanation:
In order to calculate the budgeted materials needed in units for April we would have to use the following formula:
Budgeted Materials =Materials needed +ending inventory −beginning inventory available
To calculate the ending inventory we would have to use the following formula:
Ending inventory=0.3×Following month budgeted materials
Ending inventory=0.3×62,000
Ending inventory=18,600
Therefore, Budgeted Materials =66,000+18,600−19,800
Budgeted Materials= 64,800 units
The budgeted materials needed in units for April is 64,800 units
The budgeted materials needed in units for April are 64,800 units.
To determine the budgeted materials needed in units for April for Masterson Company, we need to calculate the raw materials required for production and the desired ending inventory for April. Here's a step-by-step breakdown:
1. Calculate the desired ending inventory for April:
- May's budgeted production: 62,000 units
- Desired ending inventory for April (30% of May's production):
[tex]\[ \text{Ending inventory for April} = 0.30 \times 62,000 = 18,600 \text{ units} \][/tex]
2. Calculate the total raw materials required for April:
- April's budgeted production: 66,000 units
- Beginning inventory for April: 19,800 units
3. Formula to calculate the budgeted raw materials needed:
[tex]\[ \text{Materials needed for production} + \text{Desired ending inventory} - \text{Beginning inventory} = \text{Budgeted materials needed} \][/tex]
- Materials needed for production in April: 66,000 units
- Desired ending inventory for April: 18,600 units
- Beginning inventory for April: 19,800 units
4. Plug the values into the formula:
[tex]\[ \text{Budgeted materials needed} = 66,000 + 18,600 - 19,800 \][/tex]
5. Calculate the result:
[tex]\[ \text{Budgeted materials needed} = 66,000 + 18,600 - 19,800 = 64,800 \text{ units} \][/tex]
Exercise 20-18 Budgeted cash receipts LO P2 Jasper Company has sales on account and for cash. Specifically, 70% of its sales are on account and 30% are for cash. Credit sales are collected in full in the month following the sale. The company forecasts sales of $525,000 for April, $535,000 for May, and $560,000 for June. The beginning balance of Accounts Receivable is $400,000 on April 1. Prepare a schedule of budgeted cash receipts for April, May, and June.
Answer:
$1,756,600.
Explanation:
P2 Jasper Company
Budgeted cash Receipt
For the 2nd quarter
April May June
Accounts Receivable $400,000
70% in the month of Sale $367,500 $374,500 $392,000
30% in the month after Sale $110,250 $112,350
Budgeted cash receipt $767,500 $484,750 $504,350
Total budgeted cash receipt for the 2nd quarter = $767,500 + $484,750 + $504,350 = $1,756,600.
30% in the month after sale means 30% amount will be received in the following month.
Swenson Oil & Gas allows its customers to prepurchase heating oil in June for the coming winter. Customers who took advantage of the offer prepurchased 400,000 gallons of oil at $3.50 per gallon. Swenson hedged its position by contracting to purchase 400,000 gallons of oil for November delivery at a price of $3.00 per gallon. If the November spot price is $3.85 per gallon, Swenson's gross profit on the heating oil sold in June will be
Answer:
$200,000
Explanation:
The calculation of gross profit on the heating oil sold in June is shown below:-
Gross profit = Prepurchased × (Prepurchased per gallon - Delivery at a price)
= 400,000 gallon × ($3.50 per gallon - $3.00 per gallon)
= 400,000 gallon × $0.5
= $200,000
Therefore for computing the gross profit on the heating oil sold in June we simply applied the above formula.
Swenson Oil & Gas made a gross profit of $200,000 by allowing customers to pre-buy oil and then hedging their position by contracting to purchase an additional supply of oil for November delivery.
Explanation:The business scenario provided in the question is discussing how Swenson Oil & Gas utilizes a technique known as hedging to manage its financial risk. Given that they allowed their customers to pre-purchase 400,000 gallons of oil at $3.50 per gallon and then hedged their position by contracting to buy 400,000 gallons of oil for November delivery at a price of $3.00 per gallon, their gross profit can be calculated using these figures. If the November spot price is $3.85 per gallon, the gross profit equals the selling price to customers minus the cost of the oil, which results in ($3.5 - $3.00) x 400,000 = $200,000.
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On January 1, 2018, Alamar Corporation acquired a 38 percent interest in Burks, Inc., for $199,000. On that date, Burks's balance sheet disclosed net assets with both a fair and book value of $325,000. During 2018, Burks reported net income of $75,000 and declared and paid cash dividends of $22,000. Alamar sold inventory costing $25,000 to Burks during 2018 for $38,000. Burks used all of this merchandise in its operations during 2018. Prepare all of Alamar's 2018 journal entries to apply the equity method to this investment.
Answer and Explanation:
The journal entries are shown below:
1. Investment in Burks inc $199,000
To Cash $199,000
(being the investment purchased for cash is recorded)
2. Investment in Burks inc ($75,000 × 38%) $28,500
To equity in investment income $28,500
(Being the investment income is recorded)
3. Dividend receivable Dr ($22,000 × 38%) $8,360
To Investment in Burks inc $8,360
(Being the dividend receivable is recorded)
4. Cash Dr $8,360
To Dividend receivable $8,360
(Being the collection of cash is recorded)
Only these four entries are passed
Alamar Corporation uses the equity method to account for its 38 percent investment in Burks, Inc. This involves adjusting the investment account for Alamar's share of Burks's net income and dividends, and accounting for the unrealized profit on intercompany inventory sales.
When Alamar Corporation acquired a 38 percent interest in Burks, Inc., they would account for this investment under the equity method because they have significant influence over Burks, Inc. The equity method records the initial investment at cost, and then adjusts the value of the investment over time to reflect Alamar's share of Burks's net income and dividends paid out.
The initial journal entry to record the investment on January 1, 2018, is:
Cash 199,000
Investment in Burks 28,500
When Burks declared and paid cash dividends of $22,000, Alamar's share (38%) reduces the carrying amount of the investment:
Regarding the inventory sale, since Burks used all the merchandise, we must eliminate the unrealized profit on inventory sold by Alamar. Alamar sold the goods at $38,000, costing them $25,000. The unrealized profit is the difference (sales cost) that's not realized until Burks actually sells the item to an unrelated party. So, the profit that needs to be eliminated from Alamar's income is 38% (Alamar’s share) of the $13,000 (gross profit), which is $4,940.
Equity in Earnings of Burks 4,940
Investment in Burks 4,940
Kim Lee is trying to decide whether she can afford a loan she needs in order to go to chiropractic school. Right now Kim is living at home and works in a shoe store, earning a gross income of $1,230 per month. Her employer deducts a total of $171 for taxes from her monthly pay. Kim also pays $110 on several credit card debts each month. The loan she needs for chiropractic school will cost an additional $133 per month. Help Kim make her decision by calculating her debt payments-to-income ratio with and without the college loan. (Remember the 20 percent rule.) (Round your answers to 2 decimal places.) Debt payments-to-income ratio with college loan % Debt payments-to-income ratio without college loan %3.Carl’s house payment is $1,640 per month and his car payment is $482 per month. If Carl's take-home pay is $3,250 per month, what percentage does Carl spend on his home and car? (Round your answer to 2 decimal places.) Loan payments-to-income ratio %2.Suppose that your monthly net income is $2,850. Your monthly debt payments include your student loan payment and a gas credit card. They total $1,140. What is your debt payments-to-income ratio?
Answer:
yes
Explanation:
ty the answer is 293840 use a calculator and 2% of 2837e928 m.
Final answer:
Kim Lee's debt payments-to-income ratio without the college loan would be 10.39%, and it would be 22.94% with the college loan. Carl spends 65.29% of his income on his home and car payments. If your net income is $2,850 and your monthly debt payments total $1,140, your debt payments-to-income ratio would be 40%.
Explanation:
To assist Kim Lee with her decision about the chiropractic school loan, we need to calculate her debt payments-to-income ratio with and without the college loan.
First, we'll calculate Kim's net income, which is her gross income minus the taxes deducted:
Gross Income: $1,230 per monthTaxes: $171 per monthNet Income: $1,230 - $171 = $1,059 per monthNow, her current monthly debt payments (credit card debts) are $110. To calculate the debt payments-to-income ratio without the college loan, we divide her monthly debt payments by her net income and multiply by 100 to get a percentage:
Debt payments-to-income ratio without college loan = ($110 / $1,059) × 100 = 10.39%
If she takes out the college loan, her monthly debt payments will increase by $133.
Total monthly debt payments with college loan = $110 + $133 = $243
Debt payments-to-income ratio with college loan = ($243 / $1,059) × 100 = 22.94%
For Carl's situation, his total monthly payment on debt (house and car) is $1,640 + $482 = $2,122. His take-home pay is $3,250.
Loan payments-to-income ratio for Carl = ($2,122 / $3,250) × 100 = 65.29%
Last, to find your own debt payments-to-income ratio:
Your Net Income: $2,850 per monthYour Total Monthly Debt Payments: $1,140Your Debt payments-to-income ratio = ($1,140 / $2,850) × 100 = 40%Al agrees to sell goods to Betty for a contract price of $3,000 due on delivery. Betty wrongfully rejects the goods and refuses to pay anything. Al resells the goods in strict compliance with the Code for $2,000. He incurs incidental damages for sales commissions of $200 but saves $150 in expenses because of the resale. Al is entitled to recover $1,050 from Betty.True/False
Answer:
True
Explanation:
Contract price $3,000
Revenue recovered on resale ($2,000)
Sales Commission expense $200
Expenses saved on resale ($150)
Amount recoverable from Betty as per contract $1,050
Therefore it is true that $1,050 will be recovered from Betty
SEU Co. has preferred stock outstanding that is expected to pay an annual dividend of $4.88 every year in perpetuity. If the required return is 4.69 percent, what is the current stock price
Answer:
Current stock price = $1.040
Explanation:
We know,
Current preferred stock price = Preferred dividend ÷ Expected rate of return
Given,
Expected rate of return = 4.69%
Preferred dividend = $4.88
Current preferred stock price = ?
Putting the values into the formula, we can get
Current preferred stock price = $4.88 ÷ 4.69%
Or,Current preferred stock price = $1.040.
Therefore, the current preferred stock price is $1.040.
Alpha Division had the following information: Average operating asset base in Alpha Division $500,000 Operating income in Alpha Division $60,000 Cost of capital 14% Target return on investment (ROI) 16% Margin for Alpha Division 21% If the asset base is decreased by $120,000, with no other changes, what will Alpha Division's return on investment be? (Note: Round answer to two decimal places.)
Answer:
15.79%
Explanation:
The computation of the return on investment is shown below:
Return on investment = Operating Income ÷ New operating asset base
where,
Operating income is $60,000
And, the new operating asset is
= $500,000 - $120,000
= $380,000
So, the return on investment is
= $60,000 ÷ $380,000
= 15.79%
By dividing the operating income from the new operating asset base we can get the return on investment
Ariel holds a $5,000 portfolio that consists of four stocks. Her investment in each stock, as well as each stockâs beta, is listed in the following table:
Stock Investment Beta Standard Deviation
Andalusian Limited (AL) $1,750 0.90 18.00%
Tobotics Inc. (TI) $1,000 1.30 11.00%
Water and Power Co. (WPC) $750 1.10 18.00%
Flitcom Corp. (FC) $1,500 0.60 19.50%
Required:
1. Suppose all stocks in Arielâs portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio?
O Water and Power Co.
O Flitcom Corp.
O Tobotics Inc.
O Andalusian Limited
2. Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of stand-alone risk?
O Flitcom Corp.
O Andalusian Limited
O Water and Power Co.
O Tobotics Inc.
Answer:
1) Flitcom Corp (Beta = 0.60)
2) Tobotics Inc. (s.d. = 11%)
Explanation:
1. Suppose all stocks in Ariel's portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio?
The indicator of the market risk is the Beta. It relates the variation of the price or value of the stock relative to the variation of the total stocks in the market.
The value of Beta indicates how risky is a stock relative to the risk of the market. A Beta =1 means it has the same systemic risk as the market. If Beta<1, the stock is less volatile than the market, and if Beta>1, it is more volatile than the market.
Then, the stock with less value of Beta will contribute the least risk to the portfolio.
This is the case of Flitcom Corp (Beta=0.60)
2. Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of stand-alone risk?
The stand-alone is reflected by the standard deviation. The less the standard deviation, the less risk of the stock (measured only the stock variability).
This is the case of Tobotics Inc. (s.d. = 11%)
1: Flitcom Corp.
2: Tobotics Inc.
Given:
Andalusian Limited (AL): Beta = 0.90
Tobotics Inc. (TI): Beta = 1.30
Water and Power Co. (WPC): Beta = 1.10
Flitcom Corp. (FC): Beta = 0.60
Among these stocks, Flitcom Corp. (FC) has the lowest beta of 0.60. A lower beta indicates that the stock tends to be less volatile compared to the overall market. Therefore, Flitcom Corp. (FC) would contribute the least market risk to the portfolio if all stocks were equally weighted.
Stand-alone risk is typically measured by the standard deviation of each stock's returns. A lower standard deviation implies less volatility and hence lower stand-alone risk.
Given:
Andalusian Limited (AL): Standard Deviation = 18.00%
Tobotics Inc. (TI): Standard Deviation = 11.00%
Water and Power Co. (WPC): Standard Deviation = 18.00%
Flitcom Corp. (FC): Standard Deviation = 19.50%
Among these stocks, Tobotics Inc. (TI) has the lowest standard deviation of 11.00%. A lower standard deviation indicates that the stock has less variability in its returns, hence lower stand-alone risk.
An aging of a company's accounts receivable indicates that $4,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $900 debit balance, the adjustment to record bad debts for the period will require aa. debit to Bad Debit Expense for $5,200 b. debit to Bad Debits Expense for $4,000 c. debit to Bad Debits Expense for $2,800 d. credit to Allowance for Doubtful Accounts for $5,000
Answer:
The correct answer is Debit to Bad debt expense for $4,900, unfortunately none of the options provided in the question is correct.
Explanation:
Bad debt expense is an estimated amount of accounts receivable that is deemed to be uncollectible. There are different methods used in determining the bad debt expense - aging method, percentage-of-credit-sales method.
In the question, an amount of $4,000 was already estimated as uncollectible meanwhile the Allowance for Doubtful Accounts has a $900 debit balance. This means the bad debt expense that would be recorded would be $4,000 + $900 = $4,900. The addition is necessary in order to reinstate the Allowance for Doubtful Accounts to $4,000 and since the opening balance of the allowance account is in debit. Required journal entries are as follows:
Debit Bad debt expense $4,900
Credit Allowance for Doubtful Accounts $4,900
(To record bad debt expense)
A 100,000 loan is being repaid in 360 monthly installments at a 9% nominal annual interest rate compounded monthly. The first payment is due at the end of the first month. Determine which payment is the first where the amount of principal repaid exceeds the amount of interest paid.
Answer:
The payment after 1 year will be
F=P(1+i)^n
n=1 year
P=100,000
F=100000(1+0.09)
F=109000 after 1 year
interest=9/100*100000=90000
exceeded payment=109000-90000=19000
Answer: The 269th
Explanation:
payment= 100000×(9%/12)/(1-1/(1+9%/12)^360)
=804.6226169
Note that,
payment equal to the sum of principal and interest.
Payment= Principal + interest.
principal>interest
payment - interest >interest
interest<payment/2
Therefore,
Interest <804.6226169/2
Interest<402.3113085
The oustanding loan at the beginning of the month<402.3113085 × 12/9%
The loan oustanding at the beginning of the month < 53641.5078
So, the first month will be month after the month where loan oustanding after the monthly payment is less than 53641.5078
Time taken for the balance to reach less than 53641.5078 is NPER(9%/12,-804.6226169,100000,-53641.5078)=267.234234 or 268 months
Hence, first month is 268+1=269
Elizabeth Airlines (EA) flies only one route: Chicagolong dash—Honolulu. The demand for each flight is: Upper Q equals 500 minus Upper PQ=500−P. EA's cost of running each flight is $30,000 plus $100 per passenger. What is the profit-maximizing price that EA will charge? How many people will be on each flight? What is EA's profit for each flight? (round all answers to a whole number)
Answer:
Profit-maximizing price = $300
People on flight = 200 people per flight
Profit for each flight = $10,000
Explanation:
As per the data given in the question,
Demand curve in inverse form:
P = 500 - Q
We know that marginal revenue curve for a linear demand curve will twice the slope,
So Marginal Revenue= 500 - 2Q
Marginal cost of carrying per passenger = $100
To determine profit maximizing quantity, Equating Marginal Revenue to Marginal Cost
Let the people on each flight be Q, then
500 - 2Q = 100
Q = 200 people per flight
Substituting the value Q in demand equation to find profit maximizing price for each ticket
Profit Maximizing price (P) = $500 - $200
= $300
Profit for each flight = Total Revenue - Total Cost
= (300) (200) - (30,000 + (200) (100) )
= $10,000 per flight
The movie theater has scheduled 6 showings a day. The movie theater can play a maximum of 8 trailers for every movie showing. However, because of the time needed to clean the theater after each showing, only 32 trailers are played every day. What is the Effective capacity utilization?
Answer:
The effective capacity utilization is 66.7%.
Explanation:
Effective capacity utilization is a metric used to determine whether th potential capacity is being utilized or not. This capacity utilization is also called the operating rate.
Capacity utilization is usually expressed by the formula: (Actual output / Maximum output) x 100
The maximum output per the question is 6 showings x 8 trailers = 48 trailers
Meanwhile, the actual out is 32 trailers
So, capacity utilization = 32/48 x 100 = 66.7%
The Effective capacity utilization of the movie theater is 66.67%, which is found by dividing the actual number of trailers played (32) by the maximum possible number of trailers (48) and multiplying by 100%.
Explanation:To calculate the Effective capacity utilization, we first determine the maximum number of trailers that could be played daily if the movie theater utilized its full capacity. With 6 showings a day and a maximum of 8 trailers per showing, the total possible trailers would be 48 (6 showings x 8 trailers). However, the theater is only playing 32 trailers each day.
The Effective capacity utilization is therefore calculated by dividing the actual output by the design capacity: 32 trailers played divided by the maximum possible 48 trailers, then multiplied by 100 to get the percentage. The calculation yields:
(32 trailers / 48 possible trailers) x 100% = 66.67%
Therefore, the Effective capacity utilization is 66.67%, signaling that the theater is utilizing two-thirds of its trailer-playing capacity.
In a twist on the traditional brain drain, when skilled immigrants return to their home countries, the U.S. may lose its native talent to developing countries that offer researchersa. excitment and freedom of self directionb. support and facilities in areas such as steam cell research, which the U.S. as limitedc. enticing expert contractsd. resons to retun home
Answer:
When skilled immigrants return to their home countries, the U.S. may:
Lose may lose its native talent to developing countries that offer researchers.
Explanation:
Brain drain is a problem described as the process in which a country loses its most educated and talented workers to other countries through migration.
when skilled immigrants return to their home countries, the U.S. may lose its native talent to developing countries in a twist on the traditional brain drain.
Remember these immigrants were mostly trained in the US, got employed and developed their career path in the US too. They automatically add up to the native talents base too.
________ marketing is practiced by an organization that understands and anticipates customer needs even better than customers themselves do and creates products and services to meet current and future needs. Group of answer choices Customer-driven Customer-driving Affinity Societal Ambush
Answer:
Customer-driving
Explanation:
Customer-driving is an approach that understand customer and launch those products that derives them to buy it.
Customer-driven is an approach of making profit in a public organization.
Affinity is an approach of understanding customer needs.
Societal is a social relation approach.
Ambush is an attacking approach.
________ refer to the marketing communications element that involves company-sponsored activities and programs designed to create daily or special brand-related interactions with consumers. A. Advertisements B. Publicity campaigns C. Events and experiences D. Trade promotions
Answer:
Option "A" is correct.
Explanation:
Advertisements is the only correct answer in the context of Marketing Communication. Thank you.
Answer:
Events and experiences
Explanation:
Marketing communications can be defined as the different methods and approach that is employed by various companies to persuade potential customers to purchase their products.
Marketing communications helps to obtain new set of customers for businesses by building a great sense of awareness and encouraging the customers to test out the product.
A lot of different organisations sponsor variety of events such as sports, entertainment, with the sole purpose of strengthening their brand in the minds of the potential customers and also to create a long term association with the customers.
Which organization has the highest market dependence? Group of answer choices a chain of rapid-service oil change shops. a manufacturer of chemicals for the international pharmaceutical industry. a regional department store having 26 locations in the Northwest. company that specializes in making replacement tiles for the space shuttle.
Answer:
The correct answer is letter "D": company that specializes in making replacement tiles for the space shuttle.
Explanation:
Market-dependent industries are those whose production relies on the manufacturing of another institution. This is a threat for the entity since if the other producers fail, the entity is likely to follow the same path. The situation is even worse when the manufacturing company produces rare or uncommon goods.
Therefore, a firm producing replacement tiles for space shuttles is highly market-dependent since a few organizations worldwide require spare parts for space tiles, which is not a common product traded in the market.