Answer:
$22.7%
Explanation:
Purchase Price $22
Gains on stock during holding period
Dividend 2018 $2
Dividend 2019 $3
Dividend 2020 $4
Loss on sale of stock (18-22) ($4)
Total gain on per stock (2+3+4-4)=$5
Total Return on stock during holding period=$5/22=22.7%
Florence Inc. lost an entire plant due to an earthquake on May 1, 2018. In preparing its insurance claim on the inventory loss, the company developed the following data: Inventory Jan1, 2018, $470,000; sales and purchases from Jan 1, 2018, to May 1, 2018, $1,260,000 and $895,000, respectively. Florence consistently reports a 30% gross profit.
The estimated inventory on May 1, 2018, is:
Answer:
$483,000
Explanation:
The computation of the estimated inventory on May 1, 2018, is shown below:
= Inventory as on Jan 1, 2018 + purchase of inventory + sales on inventory × gross profit rate - sales on inventory
= $470,000 + $895,000 + $1,260,000 × 30% - $1,260,000
= $470,000 + $895,000 + $378,000 - $1,260,000
= $483,000
By applying the above formula we can get the ending estimated inventory
Consider the following cash flows: Year Cash Flow 0 –$ 32,500 1 14,800 2 16,900 3 12,200 What is the IRR of the above set of cash flows? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Internal rate of return %
Answer:
The correct answer is 17.22%.
Explanation:
According to the scenario, the computation of the given data are as follows:
Let IRR be X, then we can calculate the IRR by using following formula:
Year 0 = Year 1 cash flow ÷ ( 1 + IRR)^1 + Year 2 Cash flow ÷ ( 1 + IRR)^2 + Year 3 Cash flow ÷ ( 1 + IRR)^3 + Year 0 Cash flow
By putting the value, we get
0 = $14,800 ÷ ( 1 + X)^1 + $16,900 ÷ ( 1 + X)^2 + $12,200 ÷ ( 1 + X)^3 - $32,500 By solving the function
IRR = 17.22%
On January 1, the Elias Corporation issued 10% bonds with a face value of $99,000. The bonds are sold for $97,020. The bonds pay interest semiannually on June 30 and December 31 and the maturity date is December 31, ten years from now. Elias records straight-line amortization of the bond discount. The bond interest expense for the year ended December 31 of the first year is. a.$10,098 b.$9,900 c.$9,702 d.$1,980
The bond interest expense for the year ended December 31 of the first year is $990.
Explanation:To calculate the bond interest expense for the year ended December 31 of the first year, we need to determine the bond discount and the number of interest payments made during the year. The bond discount is the difference between the face value of the bond ($99,000) and the selling price ($97,020), which is $1,980. Since the bonds pay interest semiannually, there would be two interest payments made during the year. The bond interest expense would be the bond discount divided by the number of interest payments, which is $1,980 / 2 = $990.
Leaf Industries is preparing its master budget for 2013. Relevant data pertaining to its sales budget are as follows:Sales for the year are expected to total 8,000,000 units. Quarterly sales are 25%, 30%, 15%, and 30%, respectively. The sales price is expected to be $2.00 per unit for the first quarter and then be increased to $2.20 per unit in the second quarter. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total for YrUnit Sales 8,000,000Unit Selling Price Total Sales
Answer:
Total sales revenue is $17,200,000
Average selling price is $2.15
Explanation:
Q1 Q2 Q3 Q4 Total
sales (8,000,000*25%)2,000,000 2,000,000
sales (8,000,000*30%) 2,400,000 2,400,000
sales(8,000,000*15%) 1,200,000 1,200,000
sales(8,000,000*30%) 2,400,000 2,400,000
sales price $2 $2.20 $2.20 $2.20
Revenue(price*qty) $4,000,000 $5,280,000 $2,640,000 $5280,000
Total sales=( $4,000,000+ $5,280,000+ $2,640,000 + $5280,000)=$17,200,000
Average sales price=total revenue/total volume
total revenue of $17,200,000
total volume 8,000,000
average sales price=$17,200,000/8,000,000=$2.15
Steven, age 43, earns $80,000 annually; and his wage replacement ratio has been determined to be 80%. He expects inflation will average 3% for his entire life expectancy. He expects to work until 68, and live until 90. He anticipates an 8% return on his investments. Additionally, Social Security Administration has notified him that his annual retirement benefit, in today's dollars will be $26,000. Using the capital needs / annuity method. Calculate how much capital Steven will need.
Answer:
Steven will need a capital of $1,061,342.10
Explanation:
Annual Savings
= $80,000*0.8
= $64,000.00
Period
= 68 - 43
= 25
Future Value of annual savings
= FV
= $64000*(1 + 0.03)^25
= $134,001.79
Future Value of social security
= FV
= $26000*(1 + 0.03)^25
= $54,438.23
Annual Investment required at age of 68
= $134,001.79 - $54,438.23
= $79,563.56
Present value of a number of cash flows over his retirement years,
Inflation Adjusted Rate
= (1.08/1.03) - 1
= 4.85%
Period
= 90 - 68
= 22
Capital Required
= PV(4.85%,22,-79563.56)
= $1,061,342.10
Therefore, Steven will need a capital of $1,061,342.10
On December 28, 2021, Videotech Corporation (VTC) purchased 15 units of a new satellite uplink system from Tristar Communications for $26,000 each. The terms of each sale were 1/10, n/30. VTC uses the gross method to account for purchase discounts and a perpetual inventory system. VTC paid the net-of-discount amount on January 6, 2022. Prepare the journal entries on December 28 and January 6 to record the purchase and paymen
Answer:
December 28, 2021
Merchandise $26,000 (debit)
Trade Payable $26,000 (credit)
January 6, 2022
Trade Payable $260 (debit)
Discount Received $260 (credit)
Being recognition of discount received
Trade Payable $25,740 (credit)
Cash $25,740 (credit)
Being settlement of an account
Explanation:
December 28, 2021
Recognise Liability and an Asset
January 6, 2022
Recognise Cash and an Income and also de-recognise a Liability
Answer:
December 28, 2021 Entry:
DR: Satellite uplink systems($26,000*15) $390,000
CR: Accounts Payable(Tristar Communication) $390,000
(To record purchase of Satellite uplink systems from Tristar Communication on credit)
Entry on January 6, 2022:
DR: Accounts Payable(Tristar Communication) $ 390,000
Cr: Cash Discount (390,000×1%) $3,900
Cr: Cash/Bank $ 386,100
Explanation:
On Dec 28, 2021 as the units were purchased on credit so a liability is recognized against the purchase of assets.
On Jan 6, 2022 there has been a cash discount received of 1% of invoice value if payment has been made with 10 days of invoice. As the payment has been made with in 10 days so a cash discount is received which is categorized as an income for the business.
You work for a leveraged buyout firm and are evaluating a potential buyout of UnderWater Company. UnderWater's stock price is $ 15 and it has 1.25 million shares outstanding.You believe that if you buy the company and replace its management, its value will increase by 35 %. You are planning on doing a leveraged buyout of UnderWater and will offer $ 18.75 per share for control of the company. a. Assuming you get 50 % control, what will happen to the price of non-tendered shares? b. Given the answer in part (a), will shareholders tender their shares, not tender their shares, or be indifferent? c. What will your gain from the transaction be?
Answer:
a. The shareholders will want to tender their shares.
c. The gain will be $25.31 million – $23.44 million = $1.87 million.
Explanation:
a. The value of the firm is 1.25 million shares* 15= $18.75 million.
Increase in value, 18.75*135% = $25.31 million, so now this is the value of the firm
If 50% of the shares are bought for $18.75 Million, you will buy 0.625 million shares, so the total amount that will be paid is $11.72 million.
Now, the money against shares will be borrowed as collateral. This means that the new value of the equity will be $25.31 million – $11.72 million = 13.59 million.
1.25 million shares are there so now the price of the share will be = $10.87 million ($13.59 million/$1.25 million = $ 10.87 million).
b.The price of the shares has decreased from $13.59 to $10.87 after the tender offer, everyone will want to tender their shares for $18.75.
c. Supposing everyone tenders the shares and you will buy at $18.75 per share, you will pay $23.44 (18.75 per share *1.25 million shares) to acquire the company and it will be worth $25.31 million.
The gain will be $25.31 million – $23.44 million = $1.87 million.
Kubin Company’s relevant range of production is 13,000 to 18,000 units. When it produces and sells 15,500 units, its average costs per unit are as follows:Kubin Company’s relevant range of production is 13,000 to 18,000 units. When it produces and sells 15,500 units, its average costs per unit are as follows:
Cost per Unit $ 7.40 s 4.40 s 1.90 5.40 Direct labor Variable manufacturing overhead Fixed nanufacturing overhead 3.90 Fixed s 2.90 s 1.40 e.90 1. For financial accounting purposes, what is the total amount of product costs incurred to make 15,500 units? 2. For financial accounting purposes, what is the total amount of perlod costs incurred to sell 15,500 units? 3. For financial 4. For financial accounting purposes, what is the total amount of period costs incurred to sell 13,000 units? accounting purposes, what is the total amount of product costs incurred to make 18.000 units?
Answer:
1. Total Amount of Product Costs $296,050
2. Total Amount of Period Costs Incurred $141,050
3. Total Amount of Product Costs $330,300
4. Total Amount of Period Costs $135,300
Explanation:
The computation is shown below:
1. For total product cost
Total Amount of Product Costs = Units × (Direct Material Per Unit + Direct Labor Per Unit + Variable Manufacturing Overhead + Fixed Manufacturing Overhead Per Unit)
= 15,500 units × ($7.40 + $4.40 + $1.90 + $5.40)
= $296,050
2. For total period cost
Total Amount of Period Costs = Units × (Fixed Selling Expense Per Unit + Fixed Administrative Expense Per Unit + Sales Commissions Per Unit + Variable Administrative Expense Per Unit)
= 15,500 units × ($3.90 + $2.90 + $1.40 + $.90)
= $141,050
3. For total amount of product cost incurred
Direct Material (18,000 units × $7.40) $133,200
Direct Labor (18,000 units × $4.40) $79,200
Variable Manufacturing Overhead (18,000 units × $1.90) $34,200
Fixed Manufacturing Overhead (15,500 units × $5.40) $83,700
Total Product Costs $330,300
4. For total amount of period cost incurred
Fixed Selling Expense (15,500 units × $3.90) $60,450
Fixed Administrative Expense (15,500 units × $2.90) $44,950
Sales Commissions (13,000 units × $1.40) $18,200
Variable Administrative Expense (13,000 units × $.90) $11,700
Total Period Costs $135,300
We simply applied the above formulas
and we know that the period cost includes the major portion of selling and admin expense while the product cost includes the direct labor, direct material, and the manufacturing overhead cost or we can say total manufacturing cost
A pizza deliverer who is in an accident while en route to deliver a pizza for a restaurant has: a. no liability for the accident. b. the only liability for the accident if he was driving his own car. c. liability along with the restaurant for the accident. d. none of the above
Answer:
B is the answer
Explaination step by step:
Final answer:
In a car accident involving a pizza deliverer, liability may be shared between the driver and the restaurant due to the concept of vicarious liability, depending on the employment arrangement and the accident's circumstances.
Explanation:
In assessing who holds responsibility in a car accident scenario like the one described, it's important to consider both the actions of the driver and the context of the accident. If the pizza deliverer was driving their own vehicle and had an accident while performing duties for the restaurant, both the driver and the restaurant may share liability contingent on the specific details of their employment arrangement and the circumstances of the accident. This is due to the legal concept known as 'vicarious liability,' where an employer can be held responsible for the actions of its employees, provided those actions occur within the scope of their employment. However, if the deliverer was obeying all traffic laws and their actions in driving were not the proximate cause of the accident, they might evade liability as suggested in the case of the driver triggering an explosion by using the turn signal without fault.
A company wants to set up their headquarters in Spain where the corporate tax rates are as follows: 11% of first $40,000 profits, 22% of next $26,000, 39% of next $29,000, and 42% of everything over $110,000. Consultants estimate that they will have gross revenues of $350,000, total costs of $100,000, and $10,000 in allowable tax deductions. What is taxable income for the first year and how much should the company expect to pay in taxes?
Answer:
The correct answer is $240,000 and $76,030.
Explanation:
According to the scenario, the computation for the given data are as follows:
Total Revenue = $350,000
Total cost = $100,000
So, Profit = $350,000 - $100,000 = $250,000
Allowable tax deduction = $10,000
So,Taxable income = $250,000 - $10,000 = $240,000
Tax to pay:
11% on first $40,000 = ( 11% × $40,000) =$4,400
22% on next $26,000 = ( 22% × $26,000) = $5720
39% on next $29,000 = ( 39% × $29,000) = $11,310
42% on ($240,000 - $110,000) = ( 42% × $130,000) = $54,600
So, Total tax payable = $4,400 + $5,720 + $11,310 + $54600
= $76,030
Bill Thompson, Chief Financial Officer of Garden Tools, Inc., suspects irregularities in the payroll system, and orders an inspection of "each and every payroll voucher issued since January 1, 1999." Five percent of the payroll vouchers contained material errors. This is an example of __________.
A. nonparametric statistics
B. nominal data
C. descriptive statistics
D. inferential statistics
Answer:
The correct answer is letter "C": descriptive statistics.
Explanation:
Descriptive Statistics is a term used for meaningful analysis of data. This usually means arranging or summing up vast volumes of data so that it can be understood more easily. Descriptive statistics do not necessarily serve to come to a conclusion or to support an inference. But they explain the data in a meaningful way. You may use descriptive statistics for a whole population or a sample.
An advantage of team diversity is that: a. diverse teams are much more challenging to manage. b. if speed and efficiency are important, a diverse team is appropriate. c. diverse team members are less creative and innovative over the long term. d. diverse team members possess more complementary information and expertise.
Answer: d. diverse team members possess more complementary information and expertise
Explanation:
Diverse team members are increasingly becoming welcome in the business world. Look at most Boards for instance, they don't usually solely comprise of people in the same industry but rather people from different industries and expertise. Why is that?
Simple. If you look at a problem from one angle alone, you can't completely fix it. This is why a diverse team is important. They bring different types of information and various angles that COMPLIMENT each other.
The expertise that people from various backgrounds can bring together can be very useful because again, they can compliment each other and more often than not, make the project way better than it could be if it was approached from one angle.
A corporation purchases 35000 shares of its own $20 par common stock for $30 per share, recording it at cost. What will be the effect on total stockholders’ equity? Decrease by $700000. Decrease by $1050000. Decrease by $350000. Increase by $1050000.
Answer:
Decrease by $1,050,000
Explanation:
Data provided as per the question
Purchase shares = 35,000
Common stock per share = $30
The computation of total stockholders’ equity is shown below:-
Treasury stock = Purchase shares × Common stock per share
= 35,000 × $30
= $1,050,000
Shareholder's Equity will be reduced by $1,050,000. So, for calculating the shareholder equity we simply applied the above formula.
The Florida Investment Fund buys 70 bonds of the Gator Corporation through a broker. The bonds pay 8 percent annual interest. The yield to maturity (market rate of interest) is 10 percent. The bonds have a 20-year maturity. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.
Answer:
The question requirement is found below:
a.Compute the price of a bond. (Do not round intermediate calculations and round your answer to 2 decimal places.)
b.Compute the total value of the 70 bonds. (Do not round intermediate calculations and round your answer to 2 decimal places.)
a. price of a bond is $829.73
b value of 70 bonds is $58,081.10
Explanation:
The price of the bond can be computed using the pv formula in excel as found below:
=-pv(rate,nper,pmt,fv)
rate is the yield to maturity on the bond which is 10% annually
nper is the number of annual coupon that the bond would pay before redemption,hence a 20 year bond would pay coupon interest 20 times before it is redeemed
pmt is the annual coupon,which is 8%*$1000=$80
fv is the face value of $1,000
=-pv(10%,20,80,1000)=$ 829.73
each bond is worth $829.73
70 bonds=70*$829.73 = $58,081.10
Sako Company's Audio Division produces a speaker that is used by manufacturers of various audio products. Sales and cost data on the speaker follow:
Selling price per unit on the intermediate market $43
Variable costs per unit $20
Fixed costs per unit (based on capacity) $6
Capacity in units 58,000
Sako Company has a Hi-Fi Division that could use this speaker in one of its products. The Hi-Fi Division will need 9,000 speakers per year. It has received a quote of $35 per speaker from another manufacturer. Sako Company evaluates division managers on the basis of divisional profits.
Required:
1. Assume that the Audio Division is now selling only 49,000 speakers per year to outside customers.
a. From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold to the Hi-Fi Division?
b. From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers acquired from the Audio Division?
c. If left free to negotiate without interference, would you expect the division managers to voluntarily agree to the transfer of 9,000 speakers from the Audio Division to the Hi-Fi Division?
No
Yes
d. From the standpoint of the entire company, should the transfer take place?
Transfer should take place.
Transfer should not take place.
2. Assume that the Audio Division is selling all of the speakers it can produce to outside customers.
a. From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold to the Hi-Fi Division?
b. From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers acquired from the Audio Division?
c. If left free to negotiate without interference, would you expect the division managers to voluntarily agree to the transfer of 9,000 speakers from the Audio Division to the Hi-Fi Division?
No
Yes
d. From the standpoint of the entire company, should the transfer take place?
Transfer should take place.
Transfer should not take place.
Answer and Explanation:
Sako Company's Audio Division
a. If Audio Division is currently selling only 49,000 speaker each year to outside customers at the stated $43 price, it means division is having spare capacity of 9000 speaker.
Lowest acceptable transfer price from the perspective of the audio Division = Variable cost per speaker
= $20
b. Highest acceptable transfer price from the perspective of the Hi-fi Division = marker price from outside supplier = $35 per speaker
c. Range of acceptable transfer prices (if any) between the two divisions = $20 to $35
Yes, the managers of the Audio and Hi-fi Divisions likely to voluntarily agree to a transfer price for 9,000 speakers.
d. Yes, from stand point of company also, this transfer should take place.
Solution 2:
a. If Audio Division can sell all of its speaker to outside customers for $43 per speaker, lowest acceptable transfer price from the perspective of the audio Division is selling price i.e. $43 per speaker
b. Highest acceptable transfer price from the perspective of the Hi-fi Division = marker price from outside supplier = $35 per speaker
c. Range of acceptable transfer prices (if any) between the two divisions - Range of acceptable transfer price cannot be established as lowest acceptable transfer price for audio division is higher than highest acceptable transfer price of Hifi division.
Manager of Audio and Hi -fi division is not likely to voluntarily agree to a transfer price for 9,000 speakers.
d. From stand point of the entire company also, this transfer should not take place.
In liability based on negligence, _____. a contractual relationship is involved and it does matter whether or not the buyer dealt directly with the manufacturer the manufacturer's duty of care extends to all persons who might foreseeably be injured if the manufacturer does not exercise its duty of care disclaimers in contracts are usually effective to shield a manufacturer or seller against liability for negligence to consumers the obvious danger rule can be used for complete defense
Answer:
the manufacturer's duty of care extends to all persons who might foreseeably be injured if the manufacturer does not exercise its duty of care
Explanation:
Negligence liability can apply to persons or organisations not explicitly interested in the accident at question — a term known as vicarious liability. Vicarious responsibility for negligence is also asserted to ensure that an accident victim can collect her or his compensation from an economically stable and properly protected party.
Small companies, associations, organisations and major corporations may also be held legitimately accountable in cases where they have failed to secure the health of everyone else adequately. Additionally, respondeat superior may also render an employer responsible for job-related injuries affecting his or her workers even though at the moment of the incident the employer had not been present.
Software Distributors reports net income of $54,000. Included in that number is depreciation expense of $9,500 and a loss on the sale of land of $4,900. A comparison of this year's and last year's balance sheets reveals a decrease in accounts receivable of $24,000, a decrease in inventory of $14,500, and an increase in accounts payable of $44,000. Prepare the operating activities section of the statement of cash flows using the indirect method.
Answer:
Cash flow from operating 150,900
Explanation:
The operating activities section of he cash flow statement would like this
$
Net Income 54,000
Adjustments:
Add depreciation expense 9.500
Add loss on sale of land 4,900
decrease in account receivable 24,000
Decrease in inventory 14,500
Decrease in payable 44,000
Cash flow from operating 150,900
All decrease in assets and increase in liabilities are added. All increase in assets and decrease in liabilities are subtracted.
Suppose the price level reflects the number of dollars needed to buy a basket of goods containing one cup of tea, one biscuit, and one magazine. In year one, the basket costs $10.00. In year two, the price of the same basket is $9.00. From year one to year two, there is at an annual rate of . In year one, $50.00 will buy baskets, and in year two, $50.00 will buy baskets. This example illustrates that, as the price level falls, the value of money .
Answer: Please refer to Explanation
Explanation:
Your question is not very clear so I shall be adding the missing spaces as I go along
1. From year one to year two, there is __________ at an annual rate of ________.
In year one the price was $10 and in year 2 the price was $9.
The decrease therefore can be calculated by,
= 10 - 9 / 10
= 0.1
= 10%
So from year 1 to year 2 there is A DECREASE at an annual rate of 10%.
2. In year one, $50.00 will buy ______ baskets, and in year two, $50.00 will buy _______ baskets.
In year 1, with a price of $10 per basket, $50 will buy,
= 50/10
= 5 baskets.
In year 2, with a price of $9 per basket, $50 will buy,
= 50/9
= 5.5 baskets.
= 5 baskets if they don't allow a half basket.
3. This example illustrates that, as the price level falls, the value of money ________. RISES.
As we just saw, when price levels go down, the value of money comes up meaning that you can buy more goods for the same amount of money.
If you need any clarification do comment.
The example demonstrates the inverse relationship between the price level and the value of money. As the price level falls from year one to year two, the value of money increases, allowing one to buy more goods with the same amount of money. This concept is essential in understanding inflation and the purchasing power of money.
Suppose the price level reflects the number of dollars needed to buy a basket of goods containing one cup of tea, one biscuit, and one magazine. In year one, the basket costs $10.00. In year two, the price of the same basket is $9.00. This change illustrates that as the price level falls, the value of money increases. In year one, $50.00 will buy 5 baskets (since $50/$10 = 5), and in year two, $50.00 will buy approximately 5.56 baskets (since $50/$9 ≈ 5.56). This example demonstrates the inverse relationship between the price level and the value of money: when the price level decreases, the purchasing power of money increases, allowing one to buy more goods and services with the same amount of money.
The concept of price level and its impact on the value of money can be further understood through index numbers and inflation rates. The price level is often expressed in terms of index numbers, which simplify the task of comparing changes in the cost of buying a basket of goods and services over time. When prices increase (inflation), the value of money decreases; conversely, when prices decrease (deflation), the value of money increases.
7.37 For the net cash flow series, (a) determine the number of possible i* values using the two sign tests, (b) find the EROR using the MIRR method with an investment rate of 20% per year and a borrowing rate of 10% per year, and (c) use the MIRR function to find the EROR.
Answer:
The answer is 25.19% .
Note: The values were not stated for the net series cash flows, during my research and i found the complete question and solved it.
Explanation:
From the question given,
The first step is to make use of a table for the net cash flow series
Year 1 2 3 4 5 6
Net cash flow $4100 $2000 $7000 $12000 $700 $800
Then,
Solution : MIRR is defined as modified internal rate of return, It accounts for the positive cash flows with reinvestment by using re-investment rate and negative cash flows are calculated at their present values to keep the fund aside by using finance rate.
As given also reinvestment rate = 20% and finance cost rate = 10%.
Now, from the table given of cash flows, we will calculate the future value of all cash flows in year 6.
FV = 4100*(1+0.20)^5 + 12000*(1+0.20)^2 + 800*(1+0.20)^0 = $28282.11
Now,
By applying the rate of we will computer teh PV of -ve cash flows :
PV = -2000/(1+0.1)^2 + -7000/(1+0.1)^3 + -700/(1+0.1)^5 = -$7346.73
Now MIRR can be calculated by using the formula , MIRR = \√[n]{FV(positive cash flows/PV of negative cash flows)}-1 = \√[6]{28282.11/7346.74)}-1
MIRR = 1.2519-1 = 0.2519 or 25.19%
Therefore, the only value Possible = 25.19% in this case.
Colter Steel has $5,600,000 in assets. Temporary current assets $ 3,200,000 Permanent current assets 1,610,000 Fixed assets 790,000 Total assets $ 5,600,000 Short-term rates are 10 percent. Long-term rates are 15 percent. Earnings before interest and taxes are $1,180,000. The tax rate is 20 percent. If long-term financing is perfectly matched (synchronized) with long-term asset needs, and the same is true of short-term financing, what will earnings after taxes be
Answer:
The Earnings after taxes will be $400,000
Explanation:
According to the data we have the following Long term financing funds of Permanent current assets = $1,610,000 and Fixed assets = $790,000 so the total of Long term financing funds= $ 2,400,000
Also, we have Termperory current assets = $3,200,000
Therefore, the Long term interest expenses = $2,400,000 * 15%
= $360,000
and the Short term interest expenses = $3,200,000* 10%
= $ 320,000
Hence, Total interest expenses=$360,000+$ 320,000 =$680,000
So, Earnings before taxes=Earnings before interest and taxes-Interest expenses=$ 1,180,000- $ 680,000 =$500,000
The tax rate is 20 percent, hence, taxes=$500,000*20%=$100,000
Therefore, The Earnings after taxes would be=Earnings before taxes-taxes
=$500,000-$100,000
=$400,000
Haystack, Inc. manufactures machinery used in the mining industry. On January 1, 2017 it leased equipment with a cost of $480,000 to Silver Point Co. The 5-year lease calls for a 10% down payment and equal annual payments at the beginning of each year. The equipment has an expected useful life of 5 years. If the selling price of the equipment is $780,000, and the rate implicit in the lease is 8%, what are the equal annual payments
Answer:
$175,808
Explanation:
P=R (1-(1+i)^-n)/i
Where P=780,000*90%=$702,000
R=?
i=8%
N=5 years
By putting above values in formula, we get
P=R(1-(1+.08)^-5)/.08
702,000=R*3.993
R=702,000/3.993
R=$175,808
Which of the following generate the type of externality previously described? Check all that apply. The city where you live has granted a permit to put a movie theater in your neighborhood, causing traffic jams at night and on weekends. A microbiology lab has published its breakthrough in swine flu research. Your roommate Jacques has bought a bird that keeps you up at night with its chirping. Darnell has planted several trees in his backyard that increase the beauty of the neighborhood, especially during the fall foliage season.
There are two types of externality that is:
The First is Positive externality
The Second is Negative externality
What is an externality?A positive externality is when the usefulness of economic activities to third parties exceeds the costs. An illustration of an activity that generates a positive externality is research.
Activities that generate positive externality are usually underproduced in the economy. For this explanation, the government usually gives a subsidy to motivate its production.
A negative externality is when the cost of movements to third detachments not interested in the activity is greater than its benefit. An example of an activity that induces a negative externality is pollution. Activities that induce negative externality are usually overproduced in the economy, so, the government imposes a tax on such activities to reduce its production.
In the above inquiry, the following activities that generate positive externalities are:
1. A microbiology lab has disseminated its breakthrough in swine flu examination
2. Darnell has planted several trees in his backyard that improve the beauty of the neighborhood, particularly during the fall foliage season.
In the above query, the subsequent activities generate negative externality:
1. The city where you live has awarded a permit to put a movie amphitheater in your neighborhood, forcing traffic jams at night and on weekends
2. Your roommate Jacques has purchased a bird that maintains you up at night with its chirping
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The type of externality described in the question is a negative externality. The movie theater being granted a permit in the neighborhood causes traffic jams at night and on weekends, which negatively affects the residents.
Explanation:The type of externality described in the question is a negative externality. A negative externality occurs when the actions of a person or entity impose costs on others.
In this case, the situation of a movie theater being granted a permit in a neighborhood causing traffic jams at night and on weekends is an example of a negative externality. The traffic jams negatively affect the residents of the neighborhood by increasing congestion and potentially causing inconvenience or delays.
Therefore, the correct options that generate this type of externality are:
The city granting a permit for the movie theaterThe movie theater causing traffic jams at night and on weekendsLearn more about Negative externality here:https://brainly.com/question/34051758
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The long-term liability section of Eastern Post Corporation’s balance sheet as of January 1, 2018, included 12% bonds having a face amount of $42.4 million and a remaining premium of $6.6 million. On January 1, 2018, Eastern Post retired some of the bonds before their scheduled maturity.
Required:Prepare the journal entry by Eastern Post to record the redemption of the bonds under each of the independent circumstances below:1. Eastern Post called half the bonds at the call price of 104 (104% of face amount).2. Eastern Post repurchased $11.7 million of the bonds on the open market at their market price of $12.2 million.
Explanation:
Carrying amount of the bonds at January 1, 2018 = $42.4 million + $6.6 million = $49m, so half of that is $24.5m. Selling price was at 104, so proceeds from the sale = $21.2m x 104% = $22m, so there's a gain of $24.5m - $22m or $2.5m
Dr Bonds payable $21.2m
Dr Premium on bonds payable $3m
Cr Cash $22m
Cr Gain on redemption of bonds $2.5m
2. Eastern Post repurchased $11.7 million of the bonds on the open market at their market price of $12.2 million
We are repurchasing $11.7 m out of $42.4m here, so remember to use only 25% of the amounts given to you in the question.
Dr Bonds payable $11.7m
Dr Premium on bonds payable $1.5m
Cr Cash $12.2 m
Cr Gain on redemption of bonds $1m
The journal entry debits the Bond Liability and Premium on Bonds Payable accounts for the respective amounts, debits Loss on Bond Redemption for the loss incurred, and credits Cash for the total amount paid. The Bond Liability and Premium on Bonds Payable accounts are credited for the amounts being retired.
1. When Eastern Post called half the bonds at the call price of 104 (104% of face amount), the journal entry would be:
Debit: Bond Liability for $21.2 million (half of $42.4 million)
Debit: Premium on Bonds Payable for $2.31 million (half of $6.6 million)
Debit: Cash for $22.064 million (104% of $21.2 million)
Credit: Cash for $22.064 million
Credit: Bond Liability for $21.2 million
Credit: Premium on Bonds Payable for $2.31 million
2. When Eastern Post repurchased $11.7 million of the bonds on the open market at their market price of $12.2 million, the journal entry would be:
Debit: Bond Liability for $11.7 million
Debit: Premium on Bonds Payable for $1.65 million (25% of $6.6 million, proportional to the amount retired)
Debit: Loss on Bond Redemption for $49,000 ($12.2 million - $11.7 million - $1.65 million)
Credit: Cash for $12.2 million
Credit: Bond Liability for $11.7 million
Credit: Premium on Bonds Payable for $1.65 million
1. For the bond call:
- The face amount of the bonds being called is half of the total face amount, which is $42.4 million / 2 = $21.2 million.
- The premium on the bonds being called is also half of the total remaining premium, which is $6.6 million / 2 = $2.31 million.
- The call price is 104% of the face amount of the bonds being called, which is $21.2 million * 1.04 = $22.064 million.
- The journal entry debits the Bond Liability and Premium on Bonds Payable accounts for the respective amounts and credits the same accounts for the amounts being redeemed. Cash is debited for the total amount paid, which is the sum of the face amount and the premium.
2. For the open market repurchase:
- The face amount of the bonds being repurchased is $11.7 million.
- The proportional amount of the premium being retired is calculated based on the ratio of the repurchased bonds to the total bonds, which is ($11.7 million / $42.4 million) * $6.6 million = $1.65 million.
- The market price paid for the bonds is $12.2 million.
- The loss on bond redemption is calculated as the difference between the market price paid and the sum of the face amount and the premium being retired, which is $12.2 million - $11.7 million - $1.65 million = $49,000.
Billings Company produces two products, Product Reno and Product Tahoe. Each product goes through its own assembly and finishing departments. However, both of them must go through the painting department. The painting department has capacity of 2,460 hours per year. Product Reno has a unit contribution margin of $120 and requires 4 hours of painting department time. Product Tahoe has a unit contribution margin of $78 and requires 3 hours of painting department time. There are no other constraints. What is the optimal mix of products?
Answer:
Optimal mix
Reno = 615 units
Tahoe = 0 units
Explanation:
Whenever a company is faced with a limiting factor i.e a resource in short supply, the company should allocate the resource to the product with he highest contribution per unit of the scare resource
Product Cont/unit painting hr /unit cont/hr Ranking
Reno $120 4 30 Ist
Tahoe $78 3 26 2nd
The company should use all of its limited 2,460 painting hours to produce the two products as follows:
Reno
= 2460/4
= 615 units of Reno
This is so as long as Billings Company can produce and sell as many units of Reno as it can produce.
Optimal mix
Reno = 615 units
Tahoe = 0 units
Employees at Clearwater Plumbing Supply, Inc. asked the management to hold an election to determine which radio station would be played on the warehouse public address (PA) system while they are working. The winning station was a Christian music station. After a few weeks of having exclusively Christian music played over the loudspeakers at work, some Muslim employees complained to the management that it was religious discrimination. The management stopped playing music on the PA system and allowed employees to wear headsets or have small radios at their workplace. An employee who is a devout Christian was extremely disappointed by this change and brought a complaint under Title VII.
(A) What is true of this scenario?
Answer:
Check the explanation
Explanation:
Going by the question we can derive a scenario whereby the employee cannot demonstrate disparate treatment since prohibiting a specific kind of music at work, even that which has been approved by a majority or popular employee vote, is not an unpleasant and adverse employment action.
Answer:
Explanation:
The employee cannot show disparate treatment because prohibiting a certain kind of music at work, even that which has been approved by a majority employee vote is not an adverse employment action.
A professional theater company wants to hire a young actor to play an important part in a play. Many actors have expressed an interest in the part, and the theater company cannot audition all of them. Since the actors are young, none have any professional experience. Which of the following sends the strongest signal ofquality?
A. An actor who has directed some plays.
B. An actor who has acted in plays at small local theaters.
C. An actor who comes from a respected talent agency.
D. An actor who has written a play.
Answer: C. An actor who comes from a respected talent agency.
Explanation:
Talent Agencies are professionals in the field. The people they send have been put through training programs that the Talent Agency knows will serve them well because they are in that same industry. For this reason, actors from Talent Agencies send the strongest signals.
Look at it this way, would you take investment advice from an investment banker or from an entrepreneur? Both could present very strong cases but the Investment Banker has expertise in the subject and is more likely to be picked.
It is the same here. The Talent Agency is believed to have expertise and so when they send someone, that person is considered first.
Final answer:
The strongest signal of quality for a young actor to play an important role in a play is c) coming from a respected talent agency.
Explanation:
Quality in the context of selecting a young actor for an important role in a play can be best signified by an actor who comes from a respected talent agency. Talent agencies often represent actors who have potential, and being associated with a respected agency can signal a level of professionalism and readiness for the role.
Actors who are part of respected talent agencies usually have access to better opportunities, networking, and guidance, which can enhance their skills and prepare them for challenging roles in professional theatre.
Therefore, out of the given choices, selecting c) an actor who comes from a respected talent agency would send the strongest signal of quality for the theater company.
During each of the next three years, Silver reported net income of $30,000 and paid dividends of $10,000. On January 1, 20X9, Plate sold 1,500 shares of Silver's $10 par value shares for $60,000 in cash. Plate used the fully adjusted equity method in accounting for its ownership of Silver Company. Based on the preceding information, what was the balance in the investment account reported by Plate on January 1, 20X9, before its sale of shares?
Answer:
$255,000
Explanation:
If a company acquires shares of another company the investment amount is shown in the balance sheet of the acquirer. When Plate acquired shares of Silver, it reported the investment of $225,000. The Silver reports a profit of $30,000 on January 2019. The amount reflected in the balance sheet of Plate will be $255,000. This is the sum of investment plus the profit reported by the Silver.
Of the different IRT roles, the _______________ is head of the team and issues the ultimate call regarding how to respond to an incident, whereas the __________________ role is to monitor and document all the activity that unfolds during an incident. IRT coordinator, IRT manager's IRT manager, IRT coordinator's IRT manager, IRT support IRT officer, IRT manager's.
Answer:
IRT manager, IRT coordinator's
Explanation:
Interactive response technology is made up of interactive voice response and interactive web response. They allow a system to gather keypad inputs and web inputs.
IRT manager is head of the team and issues the ultimate call regarding how to respond to an incident, whereas the IRT coordinator's role is to monitor and document all the activity that unfolds during an incident.
"The correct fill-in-the-blanks for the given statement is: Of the different IRT roles, the IRT manager is head of the team and issues the ultimate call regarding how to respond to an incident, whereas the IRT coordinator's role is to monitor and document all the activity that unfolds during an incident.
In an Incident Response Team (IRT), each member has a specific role to play during the incident response process. The roles are structured to ensure that all aspects of the incident are addressed efficiently and effectively.
- The IRT Manager is the head of the team and is responsible for making the final decisions on how to respond to an incident. This role involves strategic planning, coordination among team members, and communication with external stakeholders if necessary. The IRT Manager ensures that the team's response aligns with the organization's policies and objectives.
- The IRT Coordinator's role is to handle the administrative and logistical aspects of the incident response. This includes monitoring the incident as it progresses, documenting all actions taken by the team, and ensuring that all team members have the resources they need to perform their duties. The IRT Coordinator acts as a central point of contact for the team and is crucial in maintaining a clear record of the incident response activities.
The other roles mentioned, such as IRT Support and IRT Officer, are also part of the IRT but do not fit the description provided in the question. IRT Support typically assists with technical tasks and may provide additional resources as needed, while an IRT Officer might be responsible for specific tasks assigned by the IRT Manager or IRT Coordinator.
Therefore, the IRT Manager is the head of the team and makes the ultimate decisions, while the IRT Coordinator is responsible for monitoring and documenting the incident response activities.
Your finance textbook sold 52,500 copies in its first year. The publishing company expects the sales to grow at a rate of 16 percent each year for the next three years and by 10 percent in the fourth year. Calculate the total number of copies that the publisher expects to sell in years 3 and 4.
Answer:
The sales figure in year 3 is 81,947
The sales figure in year 4 is 90,142
Explanation:
The number of copies the publisher expects to sell in 3rd and 4th can be determined by computing the growth rate and increased sales from year 1 to year 4.
Year growth sales
1 52,500*(1+16%) 60,900
2 60900*(1+16%) 70,644
3 70644*(1+16%) 81,947
4 81,947*(1+10%) 90,142
The sales of finance books in year 3 and 4 are 81,947 and 90,142 respectively
Note that the growth rate is continuous that accounted for the need to apply the growth rate to the previous year sales in order to arrive at current year sales
By tying the salaries of top corporate managers to the price of the corporation's stock, corporations hope to avoid Select one: a. the principal-agent problem. b. corporate governance. c. conflict between the CFO and the CEO d. paying high salaries to their managers.
Answer:
the principal-agent problem.
Explanation:
The principal agent problem occurs when an agent who is entrusted with an asset is having conflicting interest with the principal (asset owner).
For example management of a company are the agents of the stockholders of the company.
The main goal of the stockholder is to make profit. So if the salaries of the top management is tied to price of the company's stock, the manager's will work to ensure stocks remain profitable.
This aligns the goals of the management and the shareholders thereby avoiding the principal agent problem.