Answer:
The value of any asset is the sum of the present values of all future cash flows it is expected to provide over the relevant time period
Explanation:
When valuing an asset, an investor should
1. First forecast the cash flows that he is likely to receive in each period during during the investment horizon.
2. Discount each of the periodic cash-flows at the relevant periodic required rate of return - i.e calculate the present value for each cash-flow
3. Sum the present values calculated in step 2. This total is the value of the asset.
Leading economic indicators suggest that incomes will be going up next year. In response to these reports, companies are forecasting increased prices for future sales of their goods. As a result of these increases, the supply curve will: a. shift to the right, causing the equilibrium price to decrease. b. remain the same, but the equilibrium price will increase. c. remain the same, but the equilibrium price will decrease. d. shift to the right, causing the equilibrium price to increase. e. shift to the left, causing the equilibrium price to increase.
Answer: Option (e) is correct.
Explanation:
Since firms are expecting a higher price in the near future, so they will think to diminish their supply presently so as to sell products later on at the more expensive rate.
Hence, all the firms wants to increase their profit by shifting their supply curve leftwards in the current situation.
So, supply curve shifts towards the left and causing an increase in the equilibrium price.
Flannigan Company manufactures and sells a single product that sells for $450 per unit; variable costs are $270. Annual fixed costs are $800,000. Current sales volume is $4,200,000. Flannigan Company management targets an annual pre-tax income of $1,125,000. Compute the dollar sales to earn the target pre-tax net income.
Answer:
$4,812,500 Dollar sales to achieve EBT of 1,125,000
Explanation:
The goal would be to calcualte the break even formula adding in the dividend the target profit:
[tex]\frac{FixedCost+Target Profit}{Contribution Margin Ratio} = $Sales to Target Profit[/tex]
Where:
[tex]\frac{Contribution Margin}{Sales Revenue} = $Contribution Margin Ratio[/tex]
Where:
[tex]$Contribution Margin - Fixed Cost = Net Income[/tex]
So first step
$450 Sales - $270 Variable Cost = $180 Contribution Margin
Second:
180/450 = 40% CM ratio
Finally:
[tex]\frac{FixedCost+Target Profit}{Contribution Margin Ratio} = $Sales to Target Profit[/tex]
[tex]\frac{800,000+1,125,000}{0.40} = $4,812,500[/tex]
Prince Electronics, a manufacturer of consumer electronic goods, has five distribution centers in different regions of the country. For one of its products, a highspeed modem priced at $330 per unit, the average weekly demand at each distribution center is 70 units. Average shipment size to each distribution center is 350 units, and average lead time for delivery is 2 weeks. Each distribution center carries 2 weeks' supply as safety stock but holds no anticipation inventory. a. On average, how many dollars of pipeline inventory will be in transit to each distribution center? $ nothing. (Enter your response as an integer.) b. How much total inventory (cycle, safety, and pipeline) does Prince hold for all five distribution centers? nothing units. (Enter your response as an integer.)
The average pipeline inventory in transit to each distribution center of Prince Electronics is $231,000. The total inventory held by Prince for all five distribution centers comes to 5950 units.
Explanation:To determine the average amount in dollars of pipeline inventory in transit to each distribution center, we must first understand that pipeline inventory refers to the stock that is in transit between the manufacturer and the distribution center. The amount of pipeline inventory is determined by the multiplication of the shipment size, price per unit, and shipment lead time. This gives us:
Pipeline Inventory = Shipment size * Price per unit * Lead Time
For Prince Electronics, the calculation becomes 350 units * $330/unit * 2 weeks = $231,000.
To find the total inventory, we sum the `cycle inventory`, `safety stock`, and `pipeline inventory`. The cycle inventory is the shipment size (350 units), the safety stock is two weeks' average demand (70 units/week * 2 weeks = 140 units), and we've already calculated the pipeline inventory.
Total inventory = Cycle Inventory + Safety Stock + Pipeline Inventory
So for all five distribution centers, Prince's total inventory is: (350 units + 140 units + 700 units) * 5 = 5950 units.
Learn more about Inventory management here:https://brainly.com/question/33751079
#SPJ12
In order for an economy to be successful, there must be some form of organization. Firms produce products that are marketed and sold. There must be people who desire to purchase and consume the products that are produced by the firms. This group of individuals that consumes the products that are produced in a market economy are known as households . Which of the following is true in a market economy? A. A household is often the primary production unit in a market economy. B. A household demands goods and services from the market and supplies factor inputs. C. All households except the very wealthy are constrained by limited incomes. D. A household is best represented by a married couple with two cats and a dog.
Explanation: For firm to produce commodity they require inputs which are thus provided by households.Labor is supplied by the household sector which is an important input for the production of goods and services. In return the households are provided with wages or salary. Further the households demands goods and service which they pay for using their wages or salary.
Answer: B. A household demands goods and services from the market and supplies factor inputs
Explanation: The economy entails effective management of a system, or especially its resources. As a system of production and distribution and consumption, it requires several level of organization between firms and households. While firms are engaged in marketing of goods and services, the household are engaged in placing demands for these products and services which they consume. They are also involved in the supply of factor inputs such as capital to fund production, human resources in form of labour, management etc. This interplay of roles is the driving force behind successful economies.
When observation employs standardized procedures, trained observers, schedules for recording, and other devices that reflect the scientific procedures of other primary data methods, it is said to be _____ observation. A. simpleB. systematicC. organizedD. structuredE. semistructured
Answer: Option B
Explanation: Under systematic sampling the intent of the analyst is to make sure that all the observers get the same results when the given circumstances are same thus scientific procedures and methods are used in the data analyzing for utmost accuracy in the results.
A. simple sampling means a subset chosen from larger data.
C. Organized sampling means the data is grouped in various sets.
D. Structured sampling involves combination of sampling and using different models to compute results.
E. Semi structured sampling involves sampling involves sapling in which data is flexible and has loose ends.
Which of the following statements relating to attest and assurance services is not correct?Multiple Choicea. Independence is an important attribute of assurance service providers. b. Financial statement auditing is a form of attest service but it is not an assurance service. c. Assurance services can be performed to improve the quality or context of information for decision makers. d. In performing an attest service, the CPA determines the correspondence of the subject matter (or an assertion about the subject matter) against criteria that are suitable and available to users.
Answer:
The following statement regarding attest and assurance is not correct:
B. Financial statement auditing is a form of attest service but not an assurance service.
Explanation:
Assurance service can be defined as a professional service provided by a chartered accountant or CA or certified public accountant or CPA. the goal of these services is to improve information or context of information, to facilitate decision makers in making better decisions. Audits is a type of assurance service. Assurance service provide independent and professional opinion in order to reduce the risk from incorrect information. So, option B is the correct answer.
A baseball team plays in a stadium that holds 55,000 spectators. With ticket prices at $10, the average attendance had been 27,000. When ticket prices were lowered to $8, the average attendance rose to 33,000. (a) Find the demand function (price p as a function of attendance x), assuming it to be linear.
Final answer:
The demand function for the baseball team scenario is found using two provided points of price and attendance and the slope formula, and it is determined to be p = -1/3000 x + 10.9, which relates ticket price to attendance linearly.
Explanation:
To find the demand function for the given baseball team scenario, we want to find a linear relationship between ticket price p and attendance x. We have two points: (27000, 10) when the price is $10 and the attendance is 27,000, and (33000, 8) when the price drops to $8 and attendance increases to 33,000. Using these points, we can calculate the slope (m) of the demand function:
m = (p2 - p1) / (x2 - x1) = (8 - 10) / (33000 - 27000) = -2 / 6000 = -1/3000
Now, we can use point-slope form to create the linear equation, then rearrange to slope-intercept form (y = mx + b) to find the demand function.
p - p1 = m(x - x1)
p - 10 = -1/3000(x - 27000)
p = -1/3000 x + 9 + 27/3000
p = -1/3000 x + 109/10
The demand function, therefore, is p = -1/3000 x + 10.9. This function tells us the ticket price p for any given number of attendees x.
Following are interest rates (annual percentage rates) for a 30-year-fixed-rate mortgage from a sample of lenders in a certain city. It is reasonable to assume that the population is approximately normal. 4.327, 4.461, 4.547, 4.662 , 4.365, 4.526 , 4.842 Find the upper bound of the 99% confidence interval for the mean rate.
Hey There!:
Sample Mean = 4.4823
SD = 0.1859
Sample Size (n) = 7
Standard Error (SE) = SD/root(n) = 0.0703
alpha (a) = 1-0.99 = 0.01
t(a/2, n-1 ) = 3.7074
Margin of Error (ME) = t(a/2,n-1)x SE = 0.2606
99% confidence interval is given by:
Sample Mean +/- (Margin of Error)
4.4823 +/- 0.2606 = (4.222 , 4.743)
Hope this helps!
Homestead Crafts, a distributor of handmade gifts, operates out of owner Emma Finn’s house. At the end of the current period, Emma looks over her inventory and finds that she has 700 units (products) in her basement, 29 of which were damaged by water and cannot be sold. 100 units in her van, ready to deliver per a customer order, terms FOB destination. 100 units out on consignment to a friend who owns a retail store. How many units should Emma include in her company’s period-end inventory?
Answer: 871 units
Explanation: Ending inventory is the amount of inventory a company hazs at the end of a specific period, generally at the end of the year.
.
The number of units in ending inventory can be calculated using following formula :-
Ending inventory = Inventory in hand + inventory ready for sale + invnetory sent on consignment - damaged units
Ending inventory = 700 + 100 + 100 - 29
= 871 units
A baseball team plays in a stadium that holds 58,000 spectators. With ticket prices at $10, the average attendance had been 27,000. When ticket prices were lowered to $8, the average attendance rose to 33,000. (a) Find the demand function (price p as a function of attendance x), assuming it to be linear.
Answer:P(x) = -3000[tex]\times[/tex](x) + 57000
Explanation:
Let the demand function be given by p(x)
Let P(x) be the demand for the match at price x
P(x) = a[tex]\times[/tex](x) + b
27000 = a[tex]\times[/tex](10) + b
33000 = a[tex]\times[/tex](8) + b
Solving we get a = -3000 and b = 57000
Thus P(x) = -3000[tex]\times[/tex](x) + 57000
Answer: The demand function is:
[tex]P = 19 - \frac{1}{3000} Q[/tex]
Explanation:
The linear demand function is as follows:
P = a - bQ ⇒ (1)
Where,
p - price
Q - Quantity
a - intercept value
b - slope coefficient
From the given data, we have the following two equations:
10 = a - b(27,000) ⇒ (2)
8 = a - b(33,000) ⇒ (3)
By solving the equations (2) and (3), we get
a = 19 and b = [tex]\frac{1}{3000}[/tex]
So, the demand function is as follows:
putting the values of 'a' and 'b' in equation (1), we get
[tex]P = 19 - \frac{1}{3000} Q[/tex]
Bruley Corporation applies manufacturing overhead to products on the basis of standard machine-hours. The company's predetermined overhead rate for fixed manufacturing overhead is $5.10 per machine-hour and the denominator level of activity is 5,300 machine-hours. In the most recent month, the total actual fixed manufacturing overhead was $27,230 and the company actually worked 5,230 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 5,250 machine-hours. What was the overall fixed manufacturing overhead volume variance for the month?
$357 Favorable
$255 Unfavorable
$357 Unfavorable
$102 Favorable
Answer:
$102 Favorable
Explanation:
rate $5.1
Actual overhead 27,230
Actual Machine Hours 5,230
Standart Machine Hours 5,250
rate (std hours - actual hours) volume variance
$5.1 (5,250 - 5,230) = 5.1 x 20 = 102F
Rice Company has a unit selling price of $650, variable costs per unit of $450, and fixed costs of $319,700. Compute the break-even point in units using (a) the mathematical equation and (b) unit contribution margin. (Round answers to 0 decimal places, e.g. 1,225.) (a) Mathematical Equation (b) Unit contribution margin Break-even point units units
Answer:
a) Using mathematical equation 1599 units
b) Using contribution margin 1598 units
Explanation:
Break even point in units in mathematical terms = [tex]\frac{Fixed cost}{Selling price - Variable Cost}[/tex]
= [tex]\frac{319,700}{650 - 450}[/tex] = [tex]\frac{319,700}{200}[/tex] = 1599 units
b) Using contribution margin
Contribution = Selling Price - Variable Cost = $650 - $450 = $200
Contribution margin = ( $200/ $650 ) X 100 = 30.77%
BEP = $319,700 / 30.77% = $1,039,000.025
Number of units = $1,038,999.025/$650 = 1598 units
a) Using mathematical equation 1599 units
b) Using contribution margin 1598 units
On March 1, 2018, E Corp. issued $1,400,000 of 8% nonconvertible bonds at 103, due on February 28, 2028. Each $1,000 bond was issued with 30 detachable stock warrants, each of which entitled the holder to purchase, for $75, one share of Evan's $25 par common stock. On March 1, 2018, the market price of each warrant was $3. By what amount should the bond issue proceeds increase shareholders' equity?
Answer: $126,000
Explanation: Shareholders equity can be defined as the total amount of investment done by the shareholders in the company. This investment can be done through various kinds of securities like common stock, preference shares.
As per this problem shareholder equity would be
= (no. of shares to be collected by warrant holders)*(price of each warrant)
and,
no. of shares to be collected = (1400 bonds) * (30 shares)
= 42,000 shares
.
therefore, equity :-
(42,000 shares) ( $3 ) = $126,000
Large public water and sewer companies often become _________ monopolies because they benefit from ________. Although the company faces high start-up costs, the firm experiences ___________ average _________ production costs as it expands and adds more customers. Smaller competitors would experience _________ average costs and would be less _______.
Answer:
The answers are
1) Natural
2) Economies of Scale
3) Falling
4) Per Unit
5) Higher
6) Efficient
Explanation:
The above answers are put in the blanks given in the question as follows:
Large public water and sewer companies often become ____Natural_____ monopolies because they benefit from ___Economies of Scale____. Although the company faces high start-up costs, the firm experiences ____Falling____ average ____Per Unit_____ production costs as it expands and adds more customers. Smaller competitors would experience ____Higher_____ average costs and would be less ___Efficient____.
Large public utility companies become natural monopolies due to economies of scale, which leads to decreasing average total costs as customer base expands. These monopolies face high initial costs with low marginal costs for new customers, deterring smaller competitors due to higher average costs and less efficiency.
Explanation:Large public water and sewer companies often become natural monopolies because they benefit from economies of scale. Although the company faces high start-up costs, the firm experiences decreasing average total production costs as it expands and adds more customers. Smaller competitors would experience higher average costs and would be less efficient.
These natural monopolies arise in industries like water and electrical services, where the initial fixed costs are high, but the marginal cost of adding an additional customer is very low. Such industries have high barriers to entry due to their large initial investment requirements. As the monopolist's output increases, the fixed cost is spread over more units, reducing the average total cost. This creates a situation where one producer can serve the entire market more efficiently than numerous smaller producers who would need to make duplicate capital investments.
Identical products, as well as a large number of buyers and sellers, are characteristics of a market. In such markets, sellers of goods influence the prevailing market price, giving them the role of price in the market. True or False: The market for wheat does not exhibit the two primary characteristics that define perfectly competitive markets.
Answer: False
Explanation:
Indistinguishable items, just as countless purchasers and merchants, are attributes of a perfectly competitive market. In such market, venders of products don't impact the prevailing market price, giving them the role of price takers in the market.
In a perfectly competitive firm, there are numerous purchasers and venders. In addition, all merchants sell an indistinguishable goods. Also, since every merchant dominates a little segment of the market, dealers can't impact the cost. Along these lines, sellers are price takers.
There are large number of sellers and buyers in the wheat market. Also, they are selling similar type of wheat.
The wheat market exhibits characteristics of a perfectly competitive market with many buyers and sellers of a homogeneous product and no single entity able to set prices, making the market for wheat a close representation of perfect competition. The assertion is False.
The market for wheat can typically be considered a close example of a perfectly competitive market. This is primarily due to the presence of many buyers and sellers in the market, the homogeneity of the product, and the fact that no single entity has sufficient power to influence the market price.
Therefore, the assertion in the question is false; the market for wheat does exhibit the two primary characteristics that define perfectly competitive markets: a large number of sellers offering an identical product (wheat in this case), and a large number of buyers, ensuring that neither side of the market has price-setting power.
Furthermore, the conditions that specify this market form include insignificant contributions of individual producers to the overall market supply, perfect information about the products, and the absence of transaction costs, which are typically met in the case of agricultural markets. In the long-run, economic profits tend to zero, reiterating the characteristic that firms cannot set prices above the market equilibrium. They are price takers, with the market price determined by the intersection of supply and demand curves for the overall market.
An investor just purchased an office building for $100,000. He knows for certain that he can sell the building for $110,000 in five years. Approximately how much does he need to charge in annual rent in order to achieve a 15% annual return on the deal (rounded to the nearest hundred dollars)?
Answer:
$13,000 per year
Explanation:
The annual return on the deal will needs to be 15%
the return would be:
[tex]\frac{Gain On Sale + 5YearsRent}{Adquisition Value} = $Return On Investment[/tex]
Because we are asked to fullfil an annual rate and this is a 5 years project:
the return would be 0.15 * 5 years
Now posting the know values on the formula
[tex]\frac{10,000 + Rent }{100,000} = 0.15 * 5[/tex]
We have to sovle for the rent
So 10,000 + 5YearsRent = 0.15*5*100,000
5YearsRent = 75,000 - 10,000
5YearsRent = 65,000
Now we have to divide by 5 year, because that would be the return for 5 years.
Rent = $65,000/5 years = $13,000 per year
$13,000 per year is need to charge in annual rent in order to achieve a 15% annual return on the deal.
What is annual return?The annual return is the return that an investment provides over time, expressed as a time-weighted annual percentage. Returns may come from dividends, capital gains, or capital returns.
The yearly rate of return is calculated by dividing the overall gain or loss at the end of the year by the initial investment made at the beginning of the year. This strategy is also known as the annual rate of return or nominal annual rate.
An investment has generated a 15% yearly return, for instance, if a $1,000 original investment increases by $100 in the instrument's market value and pays a $50 dividend.
Thus, it is $13,000 per year.
For more information about annual return, click here:
https://brainly.com/question/14333133
#SPJ6
Penn Station is saving money to build a new loading platform. Two years ago, they set aside $24,000 for this purpose. Today, that account is worth $28,399. What rate of interest is Penn Station earning on this investment?
Answer:
0,087792106 = rate
Explanation:
We need to calculate the interest of the investment
principal x (1 + rate)^time = value
replacing with the know values
24,000 x (1+rate)^2 = 28,399
28,399/24,000 = (1 + rate)^2
sqrt (28,399/24,000) -1 = rate
now we solve for the unknown value
0,087792106 = rate
To find the interest rate that Penn Station is earning on their investment, we can use the formula for compound interest. Using the given information, we can calculate the interest rate to be approximately 7.47%.
Explanation:To find the interest rate that Penn Station is earning on their investment, we can use the formula for compound interest:
Future Value = Principal * (1 + Interest Rate)^Time
Using the given information, we can plug in the values:
$28,399 = $24,000 * (1 + Interest Rate)^2
Solving for Interest Rate, we get:
Interest Rate = (28,399 / 24,000)^(1/2) - 1
Interest Rate ≈ 0.0747, or 7.47%
Learn more about Interest Rate here:https://brainly.com/question/32615546
#SPJ11
Houston Pumps recently reported $220,000 of sales, $140,500 of operating costs other than depreciation, and $9,250 of depreciation. The company had $35,250 of outstanding bonds that carry a 6.75% interest rate, and its federal-plus-state income tax rate was 35%. In order to sustain its operations and thus generate future sales and cash flows, the firm was required to spend $15,250 to buy new fixed assets and to invest $6,850 in net operating working capital. What was the firm's free cash flow?
Answer:
The free cash flow for the firm would be $32,812
Explanation:
In this question we have been given the
total sales = $220,000
operating cost ( without deprecation) = $140,500
depreciation cost = $9250
income tax rate = 35%
capital expenditure(amount invested in fixed asset) = $15,250
investment made in net working capital = $6850
Here our first step should be to calculate the EBIT which is the earnings before interest and tax, for calculating this we will subtract the operating and depreciation cost from the total sales of the company,
EBIT = total sales - operating cost - depreciation
= $220,000 - $140,500 - $9250
= $70,250
After this we will subtract the federal plus income tax from this EBIT to get EBAT,
EBAT = $70,250 - 35% x $70,250
= $70,250 - $24,588 ( the original amount was $24587.5 but we
took approximate)
= $ 45,662
Now we will add back the depreciation in it and subtract the investment made in capital expenditure and net operating working capital cost(OWCC)
FREE CASH FLOW = EBAT + Depreciation - Capital expenditure - OWCC
= $45,662 + $9250 - $15,250 - $ 6850
= $32,812
Answer: $32,813
Explanation: The amount of funds available in a corporate entity for distribution to all of its security holders is termed as free cash flow to the firm. It is used as a measure of company's profitability after all expenses are paid.
formula :-
free cash flow = EBIT + Depreciation- capital expenditure - working capital
where,
EBIT= sales - operating cost- depreciation
= 220,000 - 140,500 - 9,250
= 70,250
now putting values into equation :-
free cash flow = 70,250(1-35%) + 9,250 -15,250 - 6,850 = $32,813
Policies and standards are a collection of concrete definitions that describe acceptable and unacceptable human behavior. The questions related to_______________ are more appropriate for procedures or guidelines than policies or standards, which require detail that is more at the level of________________. A. where, when and how; what and why B. how; what C. where and when; what, who and why D. where, when, and how; what, who, and why
Answer:
The questions related to where, when and how are more appropriate for procedures or guidelines than policies or standards, which require detail that is more at the level of what, who and why .
Explanation:
In the first part of the question, the importance is given for procedure or guidelines. That's why where, when and how is used whereas what, who and why shows the policies or standard as it require more detailing at each level.
The where, when and how shows the vital importance of the particular thing whereas the what, who and why show the impacts of the events.
Thus, The questions related to where, when and how are more appropriate for procedures or guidelines than policies or standards, which require detail that is more at the level of what, who and why
Jing Company was started on January 1, Year 1 when it issued common stock for $28,000 cash. Also, on January 1, Year 1 the company purchased office equipment that cost $15,200 cash. The equipment was delivered under terms FOB shipping point, and transportation cost was $1300. The equipment had a five-year useful life and a $5700 expected salvage value. Assume that Jing Company earned $17,400 cash revenue and incurred $11,000 in cash expenses in Year 3. Using straight-line depreciation and assuming that the office equipment was sold on December 31, Year 3 for $8900, the amount of net income or (loss) appearing on the December 31, Year 3 income statement would be:
Answer:
5,280 net income for the Year 3
Explanation:
This would be the situation:
17,400 revenue
11,000 expenses
gain/loss on sale of equipment
= net income year 3
To know the result of the sale of equipment we have to do
sales price - book value = gain/loss on sale of equipment
8900 - book value = gain/loss
We have to determinate the book value.
book value = adquisition cost - acumulated depreciation
The equipment cost 15,200 + 1,300 transportation cost = 16,500 Adquisition Cost
acumulated depreciation = depreciation per year * 3 years
and depreciation per year is:
[tex]\ $ depreciation per year $= \frac{Adquisition Value - Salvage Value }{Useful Life}[/tex]
Here we have all the values, so we stop digging and start solving.
depreciation = (16,500-5,700)/5 = 2,160acumulated depreciation = 2,160 * 3 = 6,480book value = 16,500 - 6,480 = 10,020gain/loss = 8,900 - 10,020 = -1,120 LOSS on sale of Equipmentnet income = 17,400 - 11,000 - 1,120 = 5,280 net income for the Year 3
The net income of Jing Company that would appear on the December 31, Year 3, income statement would be $5,280.
Explanation:First, let's calculate the depreciation expense for Jing Company over the three years. The initial cost of the office equipment is $15,200 plus $1,300 transportation cost (since it's FOB shipping point), totaling $16,500. The salvage value is expected to be $5,700.
With a useful life of 5 years, we have (Cost - Salvage Value) / Useful life = Depreciation expense per year, so ($16,500 - $5,700) / 5 = $2,160 per year. Over three years, the accumulated depreciation is thus $2,160 × 3 = $6,480.
The book value on December 31, Year 3 is Cost - Accumulated Depreciation = $16,500 - $6,480 = $10,020. When the equipment was sold, there was a loss of Book Value - Selling Price = $10,020 - $8,900 = $1,120.
By the end of Year 3, Jing Company earned $17,400 revenue and incurred $11,000 of expenses, in addition to the $1,120 loss from selling the equipment. As a result, the net income for Year 3 is Revenue - Expenses - Loss = $17,400 - $11,000 - $1,120 = $5,280.
Learn more about Net Income here:https://brainly.com/question/2484976
#SPJ11
Sprouts Corporation reported net cash provided by operating activities of $412,000, net cash used by investing activities of $250,000, and net cash provided by financing activities of $70,000. In addition, cash spent for capital assets during the period was $200,000. No dividends were paid. Calculate free cash flow. (Show a negative free cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Answer:
$32,000.00
Explanation:
Free cash flow is net cash inflow after all of the items.
Here, Inflow from operating activities - Used in investing activities + Inflow from financing activities - Cash outflow on capital assets = Free cash flow
= $412,000.00 - $250,000.00 + $70,000.00 - $200,000.00 = $32,000.00
Note: Generally amount used in purchasing capital assets is part of investing activity, here it is not part of such activity as it is given in addition.
Therefore, free cash flow = $32,000.00
To calculate free cash flow, subtract the cash spent on capital assets from the net cash provided by operating activities.
Explanation:To calculate free cash flow, we need to subtract the cash spent for capital assets during the period from the net cash provided by operating activities. Free cash flow is the amount of cash available to the company after all expenses and investments have been taken into account. In this case, the cash spent for capital assets is $200,000 and the net cash provided by operating activities is $412,000.
So, the free cash flow would be $412,000 - $200,000 = $212,000.
Therefore, the free cash flow is $212,000.
A restaurant has annual sales of $424000, an average inventory of $6400, and an annual cost of goods sold of $252000. (Round your answer to 1 decimal place.) What is the restaurant's days-of-supply of inventory
Answer:
It has supply for 9 complete days
Explanation:
[tex]\frac{cogs}{360} = inventory \: used \: per \: day[/tex]
252,000/360=700
this division tell us how much inventory we use per day total. COGS is an annual figure. Dividing this by 360 we get COGS per day or supply request per day
[tex] \frac{inventory}{use \: per \: day} = days \: of \: supply[/tex]
6400/700 = 9 days
in this division we check how many complete days our inventory stands for
The "true" rate of interest is the same as the ________ rate.A. taxB. statedC. nominalD. effective
Answer:
The "true" rate of interest is the same as the effective rate
Explanation:
A tax
the tax rate is the amount tax this decrease the rate, it is a variable that impact the rate, not a rate.
B stated and C nominal are rate which are not taking into consideration inflation, taxes and other risk
D effective rate is the real rate of the project or investment or loan.
Velim Electronics manufactures electric shavers and is considering decreasing the price by $3 a unit for the coming year. With a $3 price decrease, the unit demand is expected to increase by 25%, and a high volume materials discount is expected to decrease the variable costs per unit by $2 per unit. Currently Projected Demand 50,000 units 62,500 units Selling price $60 $57 Variable costs per unit $52 $50 Would you recommend the $3 price decrease?
Answer:
Yes decrease in price is recommended.
Explanation:
In the given case the decision will be based on contribution margin.
Contribution margin = Sales - Variable Costs
Contribution margin in case of original sales will be
Sales = 50,000 units X $60 = $3,000,000
Less: Variable Cost = 50,000 X $52 = $2,600,000
Contribution Margin = $3,000,000 - $2,600,000 = $400,000
Contribution Margin In case of Decrease in Price
Sales = 62,500 units X $57 = $3,562,500
Less: Variable Cost = 62,500 X $50 = $3,125,000
Contribution Margin = $3,562,500 - $3,125,000 = $437,500
Since contribution margin has increased price shall be decreased.
Thus it is recommended to decrease the price.
Final answer:
Performing a break-even analysis for Velim Electronics indicates that the $3 price decrease per unit is recommended despite the lower contribution margin per unit, as the overall contribution margin increases with higher sales volume, potentially resulting in higher profits.
Explanation:
To determine whether Velim Electronics should decrease the price of their electric shavers by $3 a unit, we need to perform a break-even analysis and consider the impact of the price change on the contribution margin and ultimately on profit. The current selling price is $60, and the variable costs per unit are $52. After the proposed price decrease, the selling price would become $57, and variable costs would reduce to $50 due to high volume discounts. To compute the change in profit, we consider the increase in units sold and compare the contribution margin before and after the price reduction.
The current contribution margin per unit is $60 - $52 = $8, resulting in a total contribution margin of 50,000 units × $8 = $400,000. With the proposed changes, the contribution margin per unit would be $57 - $50 = $7, but the demand is expected to increase by 25%, leading to sales of 62,500 units. The total contribution margin thus would be 62,500 units × $7 = $437,500.
We can see that after the price decrease, even though the unit contribution margin is lower by $1, the overall contribution margin increases due to the higher quantity of units sold. Therefore, the $3 price decrease is recommended because it will result in an increased contribution margin and potentially higher profits for Velim Electronics, assuming that the increase in demand by 25% accurately reflects the market's response to the price decrease.
An invoice dated July 23rd for $2,500 is subject to a chain trade discount of 40/15. Credit terms are 5/10, 2/30, N/45. The invoice is paid in full on August 15th. The item is priced with a 60% markup based on selling price. The item is later sold during a sale where the price was markdown by 20%. Determine the sale price.
Answer: Sale Price = 80% of Selling price = $2,500
Explanation:
First we'll compute the net price after the trade discounts have been deducted :
i.e. Net price after the trade discounts have been deducted =2500 x 60% x 85% = $1,275.
Now, using the net price after the trade discounts have been deducted we'll compute Amount submitted in payment of the invoice:
i.e. Amount submitted in payment of the invoice = 1,275 x 98% = $1,250.
Selling price =[tex]\frac{Amount submitted in payment of the invoice}{40}[/tex]= [tex]\frac{1,250}{40}[/tex] = $3,125.
Sale Price = 80% of Selling price = $2,500
Pat, a world famous musician and composer, agrees to give ten piano lessons to Quinn in exchange for $1,000. Pat's attempt to delegate his contract to Ruth, an inexperienced pianist, will probably be:
The attempt to delegate the contract to an inexperienced pianist will likely be seen as invalid, as it implies a substantial change in the quality of performance initially contracted.
Explanation:Pat's attempt to delegate his contract to Ruth, an inexperienced pianist, will probably be invalid or unenforceable. In contract law, a party to a contract (the delegator) may transfer their obligations under the contract to another party (the delegatee), however this is usually subject to certain conditions. One such condition is that the delegation does not result in a material change in the performance expected under the contract. In this case, Pat is a world famous musician and composer, implying a certain level of skill and expertise. Ruth, on the other hand, is said to be inexperienced. This suggests that Ruth's performance would not meet the standard expected under the original contract, therefore, the delegation would likely be seen as invalid.
Learn more about Contract Delegation here:https://brainly.com/question/31320038
#SPJ3
Talbot Enterprises recently reported an EBITDA of $6.5 million and net income of $1.95 million. It had $1.625 million of interest expense, and its corporate tax rate was 35%. What was its charge for depreciation and amortization? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000. $
Answer: 1.375M
Explanation: We need to follow follwing steps :-
[tex]step 1 : EBT=\:\frac{1.95}{\left ( 1-0.35 \right )}=3[/tex]
step 2 : EBIT = EBT + INT
: EBIT = 3M +1.625M
= 4.625M
step 3 : D and A = EBITDA - EBIT
= 6.5M- 4.625M
= 1.375M
Knowledge Check 01 Chao, Inc., a service provider, has two divisions. The firm’s most recent annual contribution format segmented income statement appears below. Total Company Eastern Division Western Division Sales $ 450,000 $ 90,000 $ 360,000 Variable expenses 243,000 27,000 216,000 Contribution margin 207,000 63,000 144,000 Traceable fixed expenses 100,800 46,800 54,000 Division segment margin 106,200 $ 16,200 $ 90,000 Common fixed expenses 72,000 Net operating income $ 34,200 If the company eliminates the Western Division and the Eastern Division sales increase by 10% as a result, how much will the company’s net operating income decrease? $83,700 $88,380 $90,000 $137,700 $144,000
Answer:
It will decrease for $83,700
Explanation:
[tex]\left[\begin{array}{cccc}-&East&West&Total\\Sakes&90,000&360,000&450,000\\Var.Exp&27,000&216,000&243,000\\CM&63,000&144,000&207,000\\Fixed Cost&46,800&54,000&100,800\\Fixed&&&72,000\\Inome&16,200&90,000&34,200\\\end{array}\right][/tex]
IF West Discontinued
-90,000 Income from Western Division
+10% CM East = 6,300
83,700
The traceable fixed cost will be eliminated if wester division is closed.
There is no data about unavoidable fixed cost, so it should be assumed all are eliminated.
If Chao, Inc. eliminates the Western Division and increases the Eastern Division's sales by 10%, the company's net operating income decreases by $83,700.
Explanation:Given the problem, if Chao Inc. eliminates the Western Division, it will lose its contribution to the total company's net operating income, which is currently $90,000. However, it's also mentioned that the Eastern Division's sales would increase by 10% as a result. Currently, the Eastern Division's contribution margin ratio (Contribution Margin / Sales) is 70% ($63,000/$90,000). So, a 10% increase in sales for the Eastern Division, which is $9,000 ($90,000 * 10%), will generate an additional contribution of $6,300 (70% * $9,000), hence a net decrease in operating income of $83,700 ($90,000 - $6,300).
Learn more about Contribution Margin Analysis here:https://brainly.com/question/33844268
#SPJ3
A certain product costs $200 to order. The cost per unit is $25 and the cost to carry one unit in inventory for 1 year is 20% of the value of the product. Monthly demand is 1,000 units. The company operates 5 days a week, 4 weeks per month. What is the EOQ?
Answer:
The EOQ will be 980 units
Explanation:
Cost of inventory $25 x 20% = $5
order cost = $200
Monthly demand = 1,000
Annual Demand = 12,000
[tex]\sqrt{\frac{2*12000*200}{5} } = EOQ = 979,79 = 980[/tex]
We have to round up to a complete number because we cannot order 0,79 or 0,80 units If this was a material that could be a measurement in pounds it may be possible.
The Economic Order Quantity (EOQ) is the number of units a company should order to minimize its total inventory costs. Given the stated variables, this company's EOQ would be approximately 775 units.
Explanation:The subject of your question is the Economic Order Quantity (EOQ), a principle used in inventory management that determines the optimal order quantity that minimizes total inventory costs. The EOQ formula is √[(2DS)/H], where:
D is the annual demandS is the order cost per orderH is the annual holding cost per unitIn this case, D is 12,000 units per year (1,000 units per month x 12 months), S is $200, and H is $5 (20% of $25). Therefore, the EOQ in this case is √[(2*12000*200)/5] = 774.60. Thus, the company should order approximately 775 units at a time to minimize their total inventory costs.
Learn more about Economic Order Quantity here:https://brainly.com/question/36444895
#SPJ2
A 37.0-$kg$ body is moving in the direction of the positive x axis with a speed of 342 $m/s$ when, owing to an internal explosion, it breaks into three pieces. One part, whose mass is 5.0 $kg$, moves away from the point of explosion with a speed of 311 $m/s$ along the positive y axis. A second fragment, whose mass is 4.0 $kg$, moves away from the point of explosion with a speed of 402 $m/s$ along the negative x axis. What is the speed of the third fragment? Ignore effects due to gravity.
Answer: [tex]v_{3}[/tex] = 512.3 m/s
Explanation:
Given:
M = 37 kg
v = 342 m/s
[tex]m_{1}[/tex] = 5 kg
[tex]v_{1}[/tex] = 311 m/s
[tex]m_{2}[/tex] = 4 kg
[tex]v_{2}[/tex] = 402 m/s
∴ [tex]m_{3}[/tex] = M - [tex]m_{1}[/tex] - [tex]m_{2}[/tex]
[tex]m_{3}[/tex] = 28 kg
Now, to compute the speed of third fragment we will apply conservation of momentum:
M[tex]\times[/tex]v = [tex]m_{1}\times v_{1}[/tex] + [tex]m_{2}\times v_{2}[/tex] +[tex]m_{3}\times v_{3}[/tex]
Putting values in the equation given above:
37[tex]\times[/tex](342)[tex]\hat{i}[/tex] = 5[tex]\times[/tex](311)[tex]\hat{j}[/tex] + 4[tex]\times[/tex](402)[tex]\hat{-i}[/tex] + 28[tex]\times v_{3}[/tex]
[tex]v_{3}[/tex] = 509.3 m/s [tex]\hat{i}[/tex] - 55.53 m/s [tex]\hat{j}[/tex]
Now, the magnitude of velocity of the third particle is;
[tex]v_{3}[/tex] = [tex]\sqrt{509.3^{2} + 55.53^{2} }[/tex]
[tex]v_{3}[/tex] = 512.3 m/s
The problem talks about the conservation of momentum, where the total momentum of an isolated system remains constant if no external forces act on it. It requires finding the velocity of the third piece after the explosion by setting up and solving an equation based on afore-mentioned principle.
Explanation:The subject matter of this question pertains to the physics principle known as conservation of momentum. In the question, when the body breaks into three pieces, the momentum before the explosion is equal to the momentum after the explosion. This is due to the fact that no external forces are acting upon the system, thus, the total momentum of the system is conserved.
Mathematically, we calculate it as follows:
Momentum before the explosion will be the mass of the body times its velocity, i.e., (37.0 kg)(342 m/s), on the positive x axis.
After explosion, momentum is the vector sum of the momenta of all the parts. The fragments moving on the y-axis have no effect on the total momentum on the x-axis. Therefore, the third fragment's velocity (v) can be calculated from the equation: (37.0 kg)(342 m/s) = (5.0 kg)(311 m/s) + (4.0 kg)(-402 m/s) + (28.0 kg)(v), where we got 28.0 kg as the mass of the third fragment by subtracting the known masses from the total mass. By solving this equation, we can find the velocity of the third fragment.
https://brainly.com/question/33316833
#SPJ3