Answer:
Earning growth rate will be 12 %
Explanation:
We have given that Bennington Enterprises earned $34.07 million this year.
Return equity = 16 % = 0.16
Retained earning = 75 % = 0.75
We have to find the firm's growth rate
We know that growth rate is given by
Growth rate = Return on equity × retained earning
So firm's growth rate will be equal to = 0.16×0.75 = 0.12
Therefore the earning growth rate will be 12 %
The firm's earnings growth rate is 12%.
To find the firm's earnings growth rate, we need to determine the addition to retained earnings and then calculate the growth rate using the sustainable growth rate formula.
Given information:
- Earnings for the current year = $34.07 million
- Return on equity = 16%
- Retention ratio = 75%
Step 1: Calculate the addition to retained earnings.
Addition to retained earnings = Earnings × Retention ratio
Addition to retained earnings [tex]= 34.07 million\$ * 0.75 = 25.5525\$ million[/tex]
Step 2: Calculate the sustainable growth rate using the sustainable growth rate formula.
Sustainable growth rate = Return on equity × Retention ratio
Sustainable growth rate [tex]= 0.16 * 0.75 = 0.12 or 12\%[/tex]
Therefore, the firm's earnings growth rate, which is the sustainable growth rate, is 12%.
Bramble Industries purchased $9,100 of merchandise on February 1, 2020, subject to a trade discount of 10% and with credit terms of 3/15, n/60. It returned $2,300 (gross price before trade or cash discount) on February 4. The invoice was paid on February 13. Assuming that Bramble uses the perpetual method for recording merchandise transactions, record the purchase, return, and payment using the gross method. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 6,578. Credit account titles are automatically indented when amount is entered. Do not indent manually.)DateAccount Titles and ExplanationDebitCredit Feb. 1Feb. 4Feb. 13 Feb. 1Feb. 4Feb. 13 Feb. 1Feb. 4Feb. 13SHOW LIST OF ACCOUNTSLINK TO TEXTLINK TO VIDEO Assuming that Bramble uses the periodic method for recording merchandise transactions, record the purchase, return, and payment using the gross method. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 6,578. Credit account titles are automatically indented when amount is entered. Do not indent manually.)DateAccount Titles and ExplanationDebitCredit Feb. 1Feb. 4Feb. 13 Feb. 1Feb. 4Feb. 13 Feb. 1Feb. 4Feb. 13SHOW LIST OF ACCOUNTSLINK TO TEXTLINK TO VIDEO At what amount would the purchase on February 1 be recorded if the net method were used? (Round answer to 0 decimal places, e.g. 6,578.)Net price $
Answer:
The first two solutions are attached in the excel document.
The answer and procedures of the exercise are attached in a microsoft excel document.
Explanation:
Solution 3:
Amount at which purchase on February 1 be recorded if the net method were used = $9,100*90%*97% = $7,944
Vulcan Flyovers offers scenic overflights of Mount St. Helens, the volcano in Washington State that explosively erupted in 1982. Data concerning the company’s operations in July appear below:
Vulcan Flyovers Operating Data For the Month Ended July 31
Actual Results Flexible Budget Planning Budget
Flights (q) 55 55 53
Revenue ($350.00q) $ 16,200 $ 19,250 $ 18,550
Expenses:
Wages and salaries ($3,700 $86.00q) 8,398 8,430 8,258
Fuel ($33.00q) 1,979 1,815 1,749
Airport fees ($870 $32.00q) 2,510 2,630 2,566
Aircraft depreciation ($9.00q) 495 495 477
Office expenses ($230 $1.00q) 453 285 283
Total expense 13,835 13,655 13,333
Net operating income $ 2,365 $ 5,595 $ 5,217
The company measures its activity in terms of flights. Customers can buy individual tickets for overflights or hire an entire plane for an overflight at a discount.
Required:
Complete the fexible budget perfromance for july:
(a) Revenue and spending variance.
(b) Activity variances.
Final answer:
The flexible budget performance for July can be analyzed by calculating the revenue and spending variances as well as the activity variances. The revenue variance is -$3,050 and the spending variance is $180. The net operating income activity variance is -$2,852.
Explanation:
The flexible budget performance for July can be calculated by analyzing the revenue and spending variances as well as the activity variances.
(a) Revenue and Spending Variances:
The revenue variance can be calculated by finding the difference between the actual revenue and the flexible budget revenue. In this case, the revenue variance is $16,200 - $19,250 = -$3,050. The spending variances can be calculated by finding the difference between the actual expenses and the flexible budget expenses for each category. The total spending variance is $13,835 - $13,655 = $180.
(b) Activity Variances:
The activity variances can be calculated by finding the difference between the actual results and the planning budget results. The net operating income activity variance is $2,365 - $5,217 = -$2,852.
Grouper Corporation had 141,600 shares of stock outstanding on January 1, 2017. On May 1, 2017, Grouper issued 68,400 shares. On July 1, Grouper purchased 10,320 treasury shares, which were reissued on October 1. Compute Grouper’s weighted-average number of shares outstanding for 2017. Weighted-average number of shares outstanding
Answer:
184,620 shares
Explanation:
The computation of the weighted-average number of shares outstanding is shown below:
On January 1, 2017 to May 1, 2017
= 141,600 shares × 4 months ÷ 12 months
= 47,200 shares
On May 1, 2017 to July 1, 2017
= 141,600 shares + 68,400 shares × 2 months ÷ 12 months
= 35,000 shares
On July 1, 2017 to October 1, 2017
= 141,600 shares + 68,400 shares - 10,320 shares × 3 months ÷ 12 months
= 49,920 shares
On October 1, 2017 to December 31, 2017
= 141,600 shares + 68,400 shares - 10,320 shares + 10,320 shares × 3 months ÷ 12 months
= 52,500 shares
So, the Weighted-average number of shares outstanding would be
= 47,200 shares + 35,000 shares + 49,920 shares + 52,500 shares
= 184,620 shares
Hampton Corporation's common stock dividends are expected to grow by 8% per year. Recently, the firm paid a $3.00 common stock dividend. Hampton has a beta of 1.40. The expected return on the S&P 500 index is 12.5% and the rate of return on U.S. Treasury securities is 7%. Using this information and the CAPM, what is the stock's intrinsic value?
a) $72
b) $66.67
c) $24
d) $48.36
e) $25.92
Answer:
d) $48.36
Explanation:
For computing the intrinsic value, first we have to compute the cost of equity by using CAPM Model which is shown below:
Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)
= 7% + 1.4 × (12.5% - 7%)
= 7% + 1.4 × 5.5%
= 7% + 7.7%
= 14.70%
Now the intrinsic value would be
In this question, we apply the Gordon model which is shown below:
= Next year dividend ÷ (Required rate of return - growth rate)
where,
Current year dividend
= $3 + $3 × 8%
= $3 + 0.24
= $3.24
The other items rate would remain the same
Now put these values to the above formula
So, the value would equal to
= 3.24 ÷ (14.70% - 8%)
= $48.36
The intrinsic value of Hampton Corporation's common stock as per the Capital Asset Pricing Model (CAPM) is calculated to be $48.36.
Explanation:To calculate the intrinsic value of Hampton Corporation's common stock using the Capital Asset Pricing Model (CAPM), we first need to determine the required rate of return. We use the formula: Risk-free rate + Beta*(Market rate of return - Risk-free rate), in this case is 7% + 1.4*(12.5% - 7%) = 14.3%.
Next, we calculate the expected dividend in the next year, which would be the recent dividend paid grown by the growth rate. That gives us $3.00 * 1.08 = $3.24.
The intrinsic value is calculated using the Gordon Growth Model which is the expected dividends divided by required rate of return minus the growth rate. Hence, the intrinsic value will be $3.24 / (14.3% - 8%) = $48.36.
Therefore, the option d) $48.36 is the correct answer.
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The softbank telecommunications and internet corporation prides itself on being a forward-thinking, innovative company.To market its various products, Softbank coordinates many marketing tools such as sales promotions, digital marketing, advertising, public relations campaigns, and even some guerrilla marketing with its corporate and marketing strategic message. What impact does a coordinated message have on Softbank's target markets?
a. it reinforces the company's culture and marketing message across a variety of platforms and creates a more efficient and effective means to impact customers' perceptions and behavior.
b. it communicates messages across a variety of platforms and creates fractured marketing communication that impacts customers' perceptions and behavior.
c. it delivers a variety of messages across various platforms and creates confusion among its target market customers' perceptions and behavior.
Answer:
(A). It reinforces the company's culture and marketing message across a variety of platforms and creates a more efficient and effective means to impact customers' perceptions and behavior.
Explanation:
Coordination ensures resources are fully utilized and wastages are reduced. As such, it leads to efficiency and effectiveness in an organization.
Coordination in marketing ensures a consistent message across all the organization's marketing platforms.
By coordinating its corporate and strategic message with its marketing tools, Softbank Telecommunications and Internet Corporation, focuses on achieving its goals and objectives, while also communicating its values and culture to its customers in various target markets.
A coordinated message reinforces Softbank's culture and marketing message across platforms, creating an efficient and effective means to impact customers' perceptions and behavior.
Explanation:A coordinated message has a positive impact on Softbank's target markets because it reinforces the company's culture and marketing message across a variety of platforms. This creates a more efficient and effective means to impact customers' perceptions and behavior. By using various marketing tools such as sales promotions, digital marketing, advertising, public relations campaigns, and guerrilla marketing, Softbank ensures a consistent and cohesive message that resonates with its target market.
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How does a bond issuer decide on the appropriate coupon rate to set on its bonds?
Explain the difference between the coupon rate and the required return on a bond.
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.
On January 1, 2021, Lyle's Limeade issues 3%, 20-year bonds with a face amount of $80,000 for $69,058, priced to yield 4%. Interest is paid semiannually.What amount of interest expense will be recorded in the December 31, 2021, annual income statement?
Answer:
The interest expense of $2,765.94 is recorded in the annual income statement.
Explanation:
As the interest is paid semiannually, so the first interest will be in June, it is computed by using the method of effective interest rate :
Interest expense = Amount × Rate / 2
=$69,058 × 0.04 / 2
= $1,381.16
Now, Computing the amount of the above interest expense that amortizes the bond discount as:
= Face value × issued at 3% / 2
= 80,000× 0.03 / 2
= $1,200
= $1,381.16 - $1,200
= $181.16
The difference is added to the carrying value of the bond which is:
= Difference amount + Carrying amount
= $181.16+ $69,058
= $69,239.16
The interest for 6 months ending on December 31 is computed as:
= $69,239.16 ×0.04 / 2
= $1,384.78
Total interest expense at 12/31/12 would be:
= June 30 expense + December 31 expense
= $1,381.16 + $1,384.78
= $2,765.94
The interest expense Lyle's Limeade would record in the December 31, 2021, annual income statement, based on its bond issued at discount, would be $2,789.94.
Explanation:Lle's Limeyade issued a 3% bond whose face value is $80,000. However, this bond was sold for less than its face value at $69,058, meaning that the bond was issued at a discount. This happens when the market interest rate (4% in this case) is higher than the bond's coupon interest rate (3%). Interest expense for a bond issued at a discount is calculated using the market interest rate at the time the bond was issued multiplied by the bond's book value at the beginning of the year.
Since the interest is paid semiannually, you would use 2% (4%/2) as the rate for each 6-month period. Therefore, if this bond was issued on January 1, 2021, the interest expense recorded in the December 31, 2021, annual income statement would be the sum of the interest expenses of the two 6-month periods in 2021.
The interest for the first six months would be $69,058 (book value at beginning of 2021) * 2% = $1,381.16. Then, the book value at the beginning of the second period would be $69,058 (initial book value) + $1,381.16 (first period interest) = $70,439.16. So, the interest expense for the second six months is $70,439.16 * 2% = $1,408.78.
So, the total interest expense that would be recorded in the December 31, 2021, annual income statement would be $1,381.16 (first six months interest) + $1,408.78 (second six months interest) = $2,789.94.
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Makai Metals Corporation has 9.4 million shares of common stock outstandin par value $1,000 each. The common stock currently sells for $42 per share a maturity and sell for 113 percent of par. The market risk premium is 8.2 perce rate is 35 percent. a. What is the firm's market value capital structure?
Answer:
Please see attachment
Explanation:
Please see attachment
Horner Company buys a delivery van with a list price of $70,000. The dealer grants a 15% reduction in list price and an additional 2% cash discount on the net price if payment is made in 30 days. Sales taxes amount to $930 and the company paid an extra $700 to have a special device installed. What should be the recorded cost of the van?
a. $58,310.
b. $59,907.
c. $59,940.
d. $59,240.
Answer:
c. $59,940.
Explanation:
The computation of the recorded cost of the van is shown below:
= Net price - net price × cash discount + sales tax + extra amount paid for special device installed
where,
Net price = $70,000 - $70,000 × 15%
= $70,000 - $10,500
= $59,500
And, the other items values would remain the same
Now put these values to the above formula
So, the value would be equal to
= $59,500 - $59,500 × 2% + $930 + $700
= $59,500 - $1,190 + $930 + $700
= $59,940
Final answer:
To find the recorded cost of the van, calculate the net price after discounts, add sales taxes and the cost of the special device. The correct recorded cost of the van is $59,940.
Explanation:
To find the recorded cost of the van, we need to calculate the net price after the discounts and then add the sales taxes and the cost of the special device.
The list price is $70,000.
The dealer grants a 15% reduction, which means a discount of $70,000 * 0.15 = $10,500.
The net price after the 15% reduction is $70,000 - $10,500 = $59,500.
The dealer also offers an additional 2% cash discount if payment is made in 30 days. This is a discount of $59,500 * 0.02 = $1,190.
The net price after both discounts is $59,500 - $1,190 = $58,310.
The sales tax is $930, and the cost of the special device is $700.
Therefore, the recorded cost of the van should be $58,310 + $930 + $700 = $59,940.
Therefore, the correct answer is c. $59,940.
Excess reserves A. are reserves banks keep above the legal requirement. B. are reserves banks keep to meet the reserve requirement. C. are loans made at above market interest rates. D. are the deposits that banks do not use to make loans. Suppose the required reserve ratio is 1313% and a bank has the following balance sheet: Assets Liabilities Reserves $2 comma 0002,000 Deposits $10 comma 00010,000 Loans $8 comma 0008,000 This bank keeps required reserves of $nothing and excess reserves of $nothing. (Enter your responses as integers.)
Answer:
The correct answer is A
Required reserve is $1,300
Excess reserve is $700
Explanation:
Excess reserve is the capital reserve that is held by the financial institutions or the banks in excess or more of what is needed by the creditors, internal controls or the regulators.
So, it is the reserves banks need to keep above the legal requirements.
The required reserve is computed as:
Required reserve = Reserve ratio × Deposits
= 13% × 10,000
= $1,300
Excess reserve is computed as:
Excess reserve = Reserves - Required reserve
= $2,000 - $1,300
= $ 700
Excess reserves are funds that banks hold over and above the legal requirement set by the Federal Reserve. Based on the 13% reserve ratio and the bank's balance sheet, the required reserves are $1,300 and the excess reserves are $700.
Explanation:In response to your question, the excess reserves are reserves that banks hold in addition to the legal requirement. This means they surpass what's mandated by the Federal Reserve, and is not used for loans or investments. So, option A is correct in stating that excess reserves are the reserves banks keep above the legal requirement.
Looking at the bank's balance sheet with reserves of $2,000 and deposits of $10,000, you can calculate the required and excess reserves. Given that the required reserve ratio is 13%, the required reserves would be 13% of $10,000 which equals $1,300. Since the actual reserves are $2,000, the excess reserves would be $2,000 - $1,300 which equals $700.
So, the bank keeps required reserves of $1300 and excess reserves of $700.
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________ management is a systematic, structured approach to improvement, in which people critically examine, rethink, and redesign business processes in order to achieve dramatic improvements in one or more performance measures, such as quality, cycle time, or cost.
A. Business process
B. Business activity
C. Application service
D. Business service
E. Application performance\
Answer: (A) Business process management
Explanation:
The business process management is one of the systematic and structure approach for monitoring, executing, designing and also control the process in the business management.
The main aim of the business process management is that it helps in improve the overall operation of the business management. It also control the workflow and also reduce the expenditure of the business.
It also achieve the various dramatic improvement by measuring the performance, quality and the cost. Therefore, Option (A) is correct.
Which pricing policy is probably "best" for a profit-oriented, low-cost producer who is introducing a new product into a market with elastic demand and is expecting strong competition very soon after product introduction?
A. Skimming pricing
B. Introductory price dealing
C. Meeting competition pricing
D. Penetration pricing
E. Status-quo pricing
Answer:
D
Explanation:
Penetration pricing strategy is setting an initial low price in other to gain market share and switch consumers from competitors. As a new entrant into the market with Low cost production, penetration pricing strategy should be introduced.
Sue now has $125. How much would she have after 8 years if she leaves it invested at 8.5% with annual compounding?
$205.83
$216.67
$228.07
$240.08
$252.08
Answer:
future value = 240.076 = 240.08
so correct option is $240.08
Explanation:
given data
present value = $125
rate = 8.5 % = 0.085
time = 8 year
to find out
future value
solution
we get here future value that is express as
future value = present value × [tex](1+r)^{t}[/tex] ...........................1
here r is rate and t is time period
put here value in equation 1
future value = present value × [tex](1+r)^{t}[/tex]
future value = $125 × [tex](1+0.085)^{8}[/tex]
future value = 240.076 = 240.08
so correct option is $240.08
This year Jack intends to file a married-joint return. Jack received $167,500 of salary and paid $5,000 of interest on loans used to pay qualified tuition costs for his dependent daughter, Deb. This year Jack has also paid moving expenses of $4,300 and $28,300 of alimony to his ex-wife, Diane, who divorced him in 2012.b. Suppose that Jack also reported income of $8,800 from a half share of profits from a partnership. Disregard any potential self-employment taxes on this income.What AGI would Jack report under these circumstances?
Final answer:
Jack's adjusted gross income (AGI) would be calculated by adding his salary ($167,500) and partnership income ($8,800) to get $176,300, then subtracting deductible alimony payments ($28,300) to arrive at an AGI of $148,000.
Explanation:
To calculate Jack's adjusted gross income (AGI), we must consider all sources of income and allowable deductions. First, we sum up all income sources:
Salary: $167,500Partnership income: $8,800This gives us a total income of $167,500 + $8,800 = $176,300.
Next, we subtract the deductions for AGI Jack is eligible to claim:
Alimony paid (since the divorce was in 2012, it is deductible): -$28,300However, the moving expenses and interest on loans for qualified tuition costs are not deductible for AGI, as these types of deductions have been suspended or changed in recent tax reforms (unless the moving expenses are for certain members of the Armed Forces). As a result, we do not subtract the $4,300 moving expenses or the $5,000 interest for tuition costs from total income.
Finally, we calculate Jack's AGI:
Total income: $176,300
Minus deductible alimony: $28,300
Adjusted Gross Income (AGI): $148,000
Jack's Adjusted Gross Income (AGI) is calculated by adding his salary and partnership income, and then subtracting allowable deductions like interest on student loans, moving expenses, and alimony. The resulting AGI is $138,700.
Calculation of Adjusted Gross Income (AGI) for Jack
To calculate Jack's Adjusted Gross Income (AGI), we need to consider his total income and then subtract allowable deductions.
Total Income: Jack received a salary of $167,500 and reported an additional $8,800 from a half share of profits from a partnership.
Add these amounts to get the Total Income:
Salary: $167,500
Partnership Income: $8,800
Total Income: $167,500 + $8,800 = $176,300
Deductions:
Interest on qualified student loans: $5,000
Moving expenses: $4,300
Alimony paid (deductible if the divorce occurred before 2019, such as in Jack's case): $28,300
The total deductions are calculated as:
$5,000 + $4,300 + $28,300 = $37,600
Finally, subtract the total deductions from the total income to get the AGI:
AGI = $176,300 - $37,600 = $138,700
Therefore, Jack will report an Adjusted Gross Income (AGI) of $138,700 in his married-joint return
Howard is saving for a long holiday. He deposits a fixed amount every month in a bank account with an EAR of 11.8%. If this account pays interest every month then how much should he save from each monthly paycheck in order to have $ 15 comma 000 in the account in five years' time?
Answer:
$184.67 each month
Explanation:
Giving the following information:
Howard is saving for a long holiday. He deposits a fixed amount every month in a bank account with an EAR of 11.8%. If this account pays interest every month then how much should he save from each monthly paycheck in order to have $ 15,000 in the account in five years' time?
We need to use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
Isolating A:
A= (FV*i)/{[(1+i)^n]-1}
n= 5*12= 60
i= 0.118/12= 0.00983
FV= 15,000
A=(15,000*0.00983)/[(1.00983^60)-1]= $184.67
Howard should save $184.67 from each monthly paycheck.
Explanation:To calculate how much Howard should save from each monthly paycheck, we need to use the formula for future value of an ordinary annuity:
FV = P * ((1 + r)^n - 1) / r
Where FV is the future value, P is the monthly deposit, r is the monthly interest rate (which is 11.8% divided by 12), and n is the number of months (which is 5 years times 12 months). Rearranging the formula to solve for P, we get:
P = FV * r / ((1 + r)^n - 1)
Plugging in the values, the calculation is:
P = $15000 * (0.118 / 12) / ((1 + (0.118 / 12))^(5 * 12) - 1) = $184.67
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Alyeska Services Company, a division of a major oil company, provides various services to the operators of the North Slope oil field in Alaska. Data concerning the most recent year appear below: Sales $ 17,900,000 Net operating income $ 4,900,000 Average operating assets $ 36,200,000 Required: 1. Compute the margin for Alyeska Services Company. (Round your answer to 2 decimal places.) 2. Compute the turnover for Alyeska Services Company. (Round your answer to 2 decimal places.) 3. Compute the return on investment (ROI) for Alyeska Services Company. (Round your intermediate calculations and final answer to 2 decimal places.)
Answer:
1. The margin for Alyeska Services Company: 27.37%
2. The turnover for Alyeska Services Company= 49.45%
3. The return on investment (ROI) for Alyeska Services Company = 13.54%
Explanation:
Please find the below for detailed explanations and calculations:
1. The margin for Alyeska Services Company = Net operating income / Sales = 4,900,000/17,900,000 = 27,37%;
2. The turnover for Alyeska Services Company= Sales / Average operating income = 17,900,000/36,200,000 = 49.45%;
3. The return on investment (ROI) for Alyeska Services Company = Net operating income/Average operating income= 4,900,000/36,200,000= 13.54%
Which of the following best describes the concept of laissez-faire?
a.
Government should not intervene in the economy.
b.
Government should actively intervene in the economy whenever it judges the action to be beneficial.
c.
Government should intervene in the economy only to promote short-term economic stability.
d.
Government should intervene in the economy only to maximize long-term growth rates.
e.
Government should intervene in the economy only when the economy is not at full employment or there is substantial inflation.
Answer:
a. Government should not intervene in the economy.
Explanation:
The concept of laissez-faire arose during the economic liberalism movement and promotes that the government should not intervene in the economy. According to laissez-faire, the main economic role of the government was to regulate and protect rights to private property.
Therefore, the answer is a. Government should not intervene in the economy.
Laissez-faire is a principle of economic liberalism where government intervention in the economy is minimized, allowing individual economic interests to guide the market. It's best described by the statement: Government should not intervene in the economy.
Explanation:The concept of laissez-faire is best described by option a: Government should not intervene in the economy. Originating from the French phrase that literally means 'let do', laissez-faire is a fundamental principle associated with economic liberalism, where the role of the government in the economy is minimized.
This economic ideology assumes that when individuals are free to pursue their own economic interests, the result is beneficial for society as a whole. In a laissez-faire system, the market is guided by the invisible hand of supply and demand, not by government intervention.
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You own shares in Supernova Inc. that were purchased at a price of $23 per share. Quicksilver
Inc. has offered to purchase Supernova Inc. and buy your shares at a price of $34 per share.
What will be your return if you tender your shares to Quicksilver Inc. and the deal is
completed?
A) 47.83%
B) 33.48%
C) 50.22%
D) 45.43%
Answer:
A) 47.83%
Explanation:
The computation of the return is shown below:
= (Supernova price per share - owned purchase price per share) ÷ (owned purchase price per share) × 100
= ($34 per share - $23 per share) ÷ ($23 per share) × 100
= ($11 per share) ÷ ($23 per share) × 100
= 47.83%
Simply we take the difference per share and then divide it by the owned purchase price per share so that the accurate rate of return can be computed
There are three methods for estimating the cost of common stock from reinvested earnings (not newly issued stock): the CAPM method, the DCF method, and the bond-yield-plus-risk-premium method. However, only the CAPM method always provides an accurate and reliable estimate. True or false?
Answer:
False
Explanation:
Capital Asset Pricing Model(CAPM) of calculating cost of equity is not the accurate and reliable method making this statement false.
CAPM formula ; r = risk free rate + beta (Market return - risk free rate)
Its assumptions are have limitations as the beta is difficult to estimate since it is unstable and changes from time to time. Additionally, it is difficult to determine the correct risk free rate to use in the calculation.
Which of the following statements is NOT true regarding a bill of material (BOM)?
A. A BOM lists the quantity of each coponent required to make one unit of a product.
B. A BOM lists the hierarchy of components and their description.
C. In the food-service industry, BOMs manifest themselves in portion-control standards.
D. A BOM cannot be referenced on other bills of material.
Answer:
The false statement is letter "D": A BOM cannot be referenced on other bills of material.
Explanation:
A Bills of Material or BOM is a complete list including raw material, pieces and components and the quantity of each one of them that is necessary to produce or repair a product. Usually, for complementary goods, the BOM of one of them can be referenced in the BOM of another so opportunities for reducing costs can be identified.
The false statement regarding a bill of material is that a BOM cannot be referenced on other bills of material. In fact, subassemblies can have their own BOMs, which are included in the BOMs of more complex assemblies. Hence, correct option D.
The statement D. A BOM cannot be referenced on other bills of material is not true regarding a bill of material (BOM). It is quite common in complex manufacturing processes for a BOM to reference other BOMs, especially when various subassemblies are involved in creating a final product. This hierarchical structure allows for more efficient material tracking and inventory management. Therefore, subassemblies can indeed have their own BOMs, which are referenced in the BOM of a more complex assembly.
A Bill of Material (BOM) serves several critical functions in manufacturing and production:
A BOM lists the quantity of each component required to make one unit of a product, ensuring accurate material planning.
It includes a hierarchy of components along with a descriptive list, organizing the components in a way that reflects their relationships within the product.
In the food-service industry, BOMs take the form of portion-control standards, specifying the amount of each ingredient used in a dish to maintain consistency and control costs.
The process of identifying other organizations that are best at some facet of your operations and then modeling your organization after them is known as: A. copycatting. B. employee empowerment. C. patent infringement. D. continuous improvement. E. benchmarking.
Answer:
E. benchmarking
Explanation:
Benchmarking is used to identify internal opportunities for improvement by identifying other organizations that are best at some aspects of your operations, studying and breaking down what makes those organizations perform better and then aiming to implement changes in your company in order to achieve the same standards of the analyzed organizations.
Suppose that the position of a nation's long-run aggregate supply (LRAS) curve has not changed, but its long-run equilibrium price level has increasedincreased. FACTOR
(a) A rise in the value of the domestic currency relative to other world currencies
(b) An increase in the quantity of money in circulation
(c) An increase in the labor force participation rate
(d) A decrease in taxes
(e) A rise in real incomes of countries that are key trading partners of this nation
(f) Increased long-run economic growth
Of the factors given above, which could account for the price level increaseincrease with constant LRAS?
(A) Factors a, c, and f.
(B) Factors c and f.
(C) Factors b, d, and e.
(D) Factors b, c, d, and f.
Answer: (D) Factors B, C, D & F
Explanation:
Factor B: An increase in the quantity of money in circulation implies inflation. This will definitely cause a rise in the price level of goods and services in the nation.
Factor C: An increase in the labour force participation rate implies an increase in the quantity supply of labour. This implies an increase (general increase, not per labourer) in the price paid for labour (wages and salaries) in the nation.
Factor D: A decrease in production taxes paid by firms will encourage more production. This increase in supply of goods and services produced will result in an increased price level. The LRAS curve still won't shift. It will remain constant but along the curve, price level and quantity level will have increased.
On the other hand - for individuals - a decrease in income tax implies higher purchasing power (higher income-after-tax). This will in turn raise the prices of the goods and services purchased by individuals.
Factor F: Increased long run economic growth means increased productivity (or Gross Domestic Product) in the economy. This usually has the effect of raising inflation rate which directly impacts price level in the economy/nation.
For the wrong answers, here is the reason why they are wrong:
Factor (A)
A rise in the value of domestic currency, relative to other world currencies, does the damage of (or has the effect of) reducing the quantity of goods imported from this country by other countries. This will in turn reduce the quantity of goods exported by this country and hence, quantity produced will reduce in this country. This, instead of increasing price level, will reduce it.
Factor (E)
A rise in real incomes in trade partner countries does not mean that the extra real incomes will be used to purchase products from this country or to engage on foreign trade with this country.
You are welcome.
Acme Company has an agreement with a major credit card company which calls for cash to be received immediately upon deposit of Acme customers' credit card sales receipts. The credit card company receives 3.5% of card sales as its fee. If Acme has $2,000 in credit card sales, which of the following statements is true?a. Acme debits Cash $2,000b. Acme debits Cash $1,930c. Acme debits Accounts Receivable - Credit Card Co $2,000d. Acme debits Accounts Receivable - Credit Card Co $1,930e. Acme credits Sales $1,930
Answer:
b. Acme debits Cash $1,930
Explanation:
Before passing the journal entry, first we have to do the calculations which his shown below
= Credit card sales - Credit card sales × fee percentage
= $2,000 - $2,000 × 3.5%
= $2,000 - $70
= $1,930
The journal entries are shown below:
Cash A/c Dr $1,930
To Sales A/c $1,930
(Being cash is received after applying the fee percentage)
In economics, the term "capital" refers to :
A) mineral resources.
B) buildings and equipment.
C) consumer goods.
D) the money in one's pocket.
Answer:
D. the money in one's pocket
Explanation:
this is so because the financual assets needed fpr a business to produce good and/or services requires money
Given here is the December 31, 2013, preclosing trial balance for the City of Hudson Golf Course Enterprise Fund.Compute as of December 31, 2013, (a) total net position; (b) net investment in capital assets, net of related debt; (c)restricted net position: and (d) unrestricted net position.Oty of HudsonGolf Course Enterprise FundPredoslng Trial BalanceDecember", 208Debits (teatsCash 5 15,045Accounts receivable 37,000Estimated uncolectble accounts S 5,000Cash—restricted for debt service 150,000Cash—restricted for customer deposits 23,000Land 900,000Equipment 325,000Accumdated depreciation—eminent 105,000Buildngs 1,500,000Accumdated depreciation—builtings 650,000Accounts payable 20,000Customers’ deposits payable 23,000Interest payable on customer deposits 835Revenue bonds payable 1,000,000Accmed interest payabFrevenue bonds 6,500Net position, January 1, 2013 940,740
Answer:
Explanation:
a) For total net position :
Particulars Amount
total net assets
revenue from rentals $ 800,000.00
personal service expense $ 380,000.00
Utilities expense $ 63,000.00
repairs and maintenace respense $ 47,000.00
depreciation expense-equipment $ 15,000.00
depreciation expense-building $ 50,000.00
interest expense $ 40,030.00
uncollectible accounts expense $ 5,000.00
supplies expense $ 1,000.00 $ 601,030.00
increase in net assets $ 198,970.00
add net assets in beginning of the yr $ 940,740.00
Total ending net assets $ 1,139,710.00
b) net investment in capital assets, net of related debt:
Particulars Amount
Net capital assests $ 900,000.00
land $ 325,000.00
equipment $ 1,500,000.00
accumulated depreciation-equipment $ 105,000.00
accumulated depreciation-buildings $ 650,000.00 $ 1,970,000.00
less revenues bonds payable $ 1,000,000.00
net assets invested in capital assets, net of related debt $ 970,000.00
c) For restricted net position
Particulars Amount
Restricted assets
cash restricted fordebt service $ 150,000.00
cash restricted for customer deposit $ 23,000.00 $ 173,000.00
liabilities payable from restricted assets
customers deposits payable $ 23,000.00
restricted net assets $ 150,000.00
d) For unrestricted net position
Particulars Amount
net assets, unrestricted
total nets assets, end of year $ 1, 139,710.00
less net assets invested in capital assets, net of related $ 970,000.00
less net assets, restricted $ 150,000.00
Net assets, unrestricted $ 19,710.00
What is the payback period for an investment project with an upfront cost of $1,000,000, but benefits of $400,000 per year forever? (Note: Enter the number of years as your answer, but do not enter "years", just the number.)
Answer:
2.5
Explanation:
Upfront cost = $1,000,000
Yearly benefits = $400,000
The payback period is the time that a business takes to repay the amount investment. That is, the time it takes to break even.
In this case, since benefits are steady and no further incurred costs are mentioned. The payback period (t) is given by:
[tex]t=\frac{\$1,000,000}{\$400,000} \\t=2.5\ years[/tex]
A sustainable competitive advantage is gained:
A. when a company has durable competitive assets that are central to its strategy and superior to those of rival firms. B. when a company has sufficient resources to expedite its strategy.
C. when a company realizes its inherent weaknesses are transformable to advantages.
D. when a company can stand out relative to rivals because of resource utilization.
Answer:
A. When a company has durable competitive assets that are central to its strategy and superior to those of rival firms.
Explanation:
A sustainable competitive advantage is basically the strength to hold on sustainably no matter what.
Among the following choices, an operations manager might best evaluate political risk of a country by looking at which type of country ranking?
a. based on magnitude of government social programs
b. based on corruption based on competitiveness
c. based on cost of doing business
d. based on average duration between presidential/prime minister elections
Answer:
b. based on corruption based on competitiveness
Explanation:
Competing globally and enhancing a nation’s position internationally are characteristically linked to the welfare of citizens. In fact, in today’s world, improving the welfare of citizens has become a priority for responsible governments and those which aspire to be global actors.
Liberalization, globalization of business, and access to information have induced governments in many parts of the world to demonstrate to their constituencies that they are responsive and committed to fostering a healthy economy.
Suppose that you are a systems analyst on a project that involves modifying the sales order process. Since your company receives in the neighborhood of 2500 sales orders per day, how many do you need to sample if you want 95% certainty that you have covered all variations? What if the number of sales orders per day was 25,000 orders?
Answer:
Sample size = 384.16 ≈ 385
If we increase the order size to 25,000, there will be no change in the sample size as sample size is independent of the number of orders
Explanation:
Data provided in the question:
Number of sales order received per day = 2500
Confidence level = 95%
Certainty factor for 95% certainty = 1.96
Now,
Sample size = [tex]0.25\times(\frac{\textup{Certainty factor}}{\textup{1 -Desired accuracy}})^2[/tex]
on substituting the respective values, we get
Sample size = [tex]0.25\times(\frac{\textup{1.96}}{\textup{1 - 0.95}})^2[/tex]
or
Sample size = 384.16 ≈ 385
If we increase the order size to 25,000, there will be no change in the sample size as sample size is independent of the number of orders
A firm that has total fixed costs of $40,000 sells its output for $250 per unit and has an average variable cost of $150. If the firm's cost and revenue curves are linear and output is equal to 500 units, what is the firm's degree of operating leverage?
A. 5
B. 4
C. 3
D. None of the above is correct.
Answer:
option (A) 5
Explanation:
Data provided in the question:
Total fixed cost = $40,000
Selling price = $250 per unit
Average variable cost = $150
Output = 500 units
Now,
Firm's degree of operating leverage
= {output × ( Selling price - Variable cost )} ÷ {output × ( Selling price - Variable cost )-Total fixed cost}
on substituting the respective values, we get
= [tex]\frac{500\times( 250 - 150 )}{500\times(250 - 150 ) - 40,000}[/tex]
= 50,000 ÷ [ 50,000 - 40,000 ]
= 50,000 ÷ 10,000
= 5
Hence,
The correct answer is option (A) 5