Answer: Product liability laws
Explanation: It is the branch of law that deals with the suppliers or distributors of products that causes injuries to the customers that consumed them. As per these laws the responsibility in case of defect lies with the sellers in the distribution channel.
In the given case, Veronica, has been getting red patches on her faces after using a defective product.
Hence, from the above we can conclude that the correct option is B.
Wims, Inc., has sales of $15.2 million, total assets of $9.8 million, and total debt of $3.7 million. The profit margin is 6 percent. a. What is net income? (Do not round intermediate calculations and enter your answer in dollars, not millions, rounded to the nearest whole number, e.g., 1,234,567.) b. What is ROA? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. What is ROE?
a. The Net Income is $912,000.
b. The Return on Assets (ROA) is 9.31%.
c. The Return on Equity (ROE) is 14.98%.
a. Net Income: To determine the net income, we use the given sales and profit margin to find the amount after deducting expenses.
Net Income = Sales × Profit Margin
Net Income = $15,200,000 × 0.06
Net Income = $912,000
b. Return on Assets (ROA): ROA is computed by dividing net income by total assets, showcasing how efficiently assets generate earnings.
ROA = Net Income / Total Assets
ROA = $912,000 / $9,800,000
ROA = 0.0931 or 9.31%
c. Return on Equity (ROE): ROE is calculated by dividing net income by total equity, demonstrating the returns generated on shareholders' investments.
ROE = Net Income / Total Equity
Total Equity = Total Assets - Total Debt
Total Equity = $9,800,000 - $3,700,000
Total Equity = $6,100,000
ROE = $912,000 / $6,100,000
ROE = 0.1498 or 14.98%
Therefore, the answers are:
a. Net Income: $912,000
b. ROA: 9.31%
c. ROE: 14.98%
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Final answer:
Net income for Wims, Inc. is $912,000, ROA is approximately 9.31%, and ROE is approximately 14.95%.
Explanation:
To calculate various financial metrics for Wims, Inc., we will use the given figures:
Sales revenue: $15.2 millionTotal assets: $9.8 millionTotal debt: $3.7 millionProfit margin: 6%a. To determine the net income, we multiply the sales revenue by the profit margin:
Net Income = Sales Revenue × Profit Margin = $15,200,000 × 0.06 = $912,000
b. The Return on Assets (ROA) is calculated by dividing the net income by the total assets:
ROA = Net Income / Total Assets = $912,000 / $9,800,000 ≈ 9.31%
c. To calculate the Return on Equity (ROE), we first need to determine the equity. Equity is calculated by subtracting total debt from total assets:
Equity = Total Assets - Total Debt = $9,800,000 - $3,700,000 = $6,100,000
Now, ROE = Net Income / Equity = $912,000 / $6,100,000 ≈ 14.95%
You buy a share of The Ludwig Corporation stock for $21.70. You expect it to pay dividends of $1.00, $1.16, and $1.3456 in Years 1, 2, and 3, respectively, and you expect to sell it at a price of $28.15 at the end of 3 years.Calculate the growth rate in dividends. Round your answer to two decimal places. %Calculate the expected dividend yield. Round your answer to two decimal places. %Assuming that the calculated growth rate is expected to continue, you can add the dividend yield to the expected growth rate to obtain the expected total rate of return. What is this stock's expected total rate of return (assume market is in equilibrium with the required rate of return equal to the expected return)? Do not round intermediate calculations. Round your answer to two decimal places. %
Answer:
g = 16%
dividends yield:
Year 1 4.60%
Year 3: 4.78%
expected rate of return:
year 1 20.6%
year 3 20.78%
Explanation:
grow rate:
D1 /D0 = g
1.16/1.00 - 1 = 0.16
1.3456/1.16 - 1 = 0.16
the grow rate is 16%
dividend yield:
dividends/stock price = dividend yield
1/21.7 = 0,0460 = 4.60%
1.3456/28.15 = 0,04780 = 4.78%
expected rate of return:
dividend yield + grow rate
4.60% + 16% = 20.6%
4.78% + 16% = 20.78%
The growth rate in dividends is calculated to be 7.71% using the given dividends details. The expected dividend yield is found to be 4.61% by dividing the annual dividend payment by the stock’s price. Subsequently, the expected total return, which sums up the dividend yield and the dividend growth rate, is 12.32%.
Explanation:First off, to calculate the growth rate in dividends, we'd need to understand that it's the percentage increase in the amount of dividends from one year to the next. The average growth rate, g, is then calculated as: g = [(D2/D1)^(1/2)-1] * 100 where D2 is dividend in year 2, D1 is dividend in year 1. So, g = [($1.16/$1.00) ^ (1/2) - 1] * 100 = 7.71%.
To calculate the expected dividend yield, you take the annual dividend payment and divide it by the stock's price. Therefore, the dividend yield for the first year would be: Dividend yield = D1 / P = $1.00 / $21.70 = 4.61%.
Lastly, the expected total rate of return, often used to compare the performance of different investments, is the sum of the expected dividend yield and the dividend growth rate. So, in this case, Expected total return = Expected dividend yield + Dividend growth rate = 4.61% + 7.71% = 12.32%. As such, the expected total return is 12.32% if the market is in equilibrium.
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How will each of the following changes in demand and/or supply affect equilibrium price and equilibrium quantity in a competitive market; that is, do price and quantity increase or decrease, or are the answers indeterminate because they depend on the magnitudes of the shifts?
a. Supply decreases and demand is constant.
Price:
Quantity
b. Demand decreases and supply is constant.
Price:
Quantity:
c. Supply increases and demand is constant.
Price:
Quantity:
d. Demand increases and supply increases.
Price:
Quantity:
e. Demand increases and supply is constant.
Price:
Quantity:
f. Supply increases and demand decreases.
Price:
Quantity:
g. Demand increases and supply decreases.
Price:
Quantity:
h. Demand decreases and supply decreases.
Price:
Quantity:
Answer:
Explanation:
a. If supply decreases then the supply curve shifts to the left. If demand remains constant the equilibrium price increases and the equilibrium quantity decrease.
b. If demand decreases then the demand curve shifts to the left. If supply remains constant the equilibrium price decreases and the equilibrium quantity decrease.
c. If supply increases then the supply curve shifts to the right If the demand remains constant the equilibrium price decreases and the equilibrium quantity increases.
d. If demand increases then the demand curve shifts to the right. If supply increases, then the supply curve shifts to the right. The equilibrium price is undetermined because it depends on the shift’s magnitude but in all cases the equilibrium quantity increases.
e. If demand increases then the demand curve shifts to the right. If supply remains constant the equilibrium price increases and the equilibrium quantity increase.
f. If supply increases then the supply curve shifts to the right. If demand decreases, then the demand curve shifts to the left. The equilibrium price is undetermined, and the equilibrium quantity always decreases.
g. If demand increases then the demand curve shifts to the right. If supply decreases, then the supply curve shifts to the left. The equilibrium price is undetermined because it depends on the shift’s magnitude but in all cases the equilibrium quantity increases.
h. If demand decreases (shift to the left) and supply decreases (shift to the left). The equilibrium price in all cases decreases and the equilibrium quantity is undetermined because it depends on the shift’s magnitude
A drop in supply causes the supply curve to move to the left. The equilibrium price rises and the equilibrium quantity declines if demand stays constant.
b. The demand curve swings to the left if demand declines. The equilibrium price and equilibrium quantity both decline if supply stays constant.
c. The supply curve swings to the right as supply rises. The equilibrium price falls and the equilibrium quantity rises if the demand stays constant.
d. The demand curve moves to the right as demand rises. The supply curve moves to the right as supply grows. Because it depends on the size of the shift, the equilibrium price is unpredictable, but the equilibrium quantity always rises.
e. The demand curve moves to the right as demand rises. The equilibrium price rises and the equilibrium quantity rises if supply is constant.
b. The supply curve moves to the right as supply rises. The demand curve moves to the left if demand declines. The equilibrium quantity always drops, and the equilibrium price is unpredictable.
g. The demand curve moves to the right as demand rises. The supply curve moves to the left if supply declines. Because it depends on the size of the shift, the equilibrium price is unpredictable, but the equilibrium quantity always rises.
h. In the event that both supply and demand decline (move to the left). Every time, the equilibrium price declines and the equilibrium amount is unknown because it relies on the size of the shift.
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A firm that has recently experienced an enormous growth rate is seeking to lease a small plant in Memphis, TN; Biloxi, MS; or Birmingham, AL. Prepare an economic analysis of the three locations given the following information: Annual costs for building, equipment, and administration would be $43,600 for Memphis, $60,000 for Biloxi, and $100,000 for Birmingham. Labor and materials are expected to be $8 per unit in Memphis, $4 per unit in Biloxi, and $5 per unit in Birmingham. The Memphis location would increase system transportation costs by $50,000 per year, the Biloxi location by $60,000 per year, and the Birmingham location by $25,800 per year. Expected annual volume is 13,000 units.Memphis: ___; Biloxi: ___; Birmingham: ___
Answer:
The annual costs for Memphis, Biloxi, and Birmingham is $197,600, $172,000 and $255,800 respectively
Explanation:
The computation of the total cost is shown below
For Memphis:
= Annual cost of fixed assets + (annual volume × Labor and materials per unit) + transportation cost
= $43,600 + (13,000 units × $8 per unit) + $50,000
= $197,600
For Biloxi:
= Annual cost of fixed assets + (annual volume × Labor and materials per unit) + transportation cost
= $60,000 + (13,000 units × $4 per unit) + $60,000
= $172,000
For Birmingham:
= Annual cost of fixed assets + (annual volume × Labor and materials per unit) + transportation cost
= $100,000 + (13,000 units × $5 per unit) + $25,800
= $255,800
Financial information is presented below:
Operating expenses $ 32000
Sales returns and allowances 6000
Sales discounts 5000
Sales revenue 190000
Cost of goods sold 93000
Gross profit would be
Answer:
Gross profit would be $86.000
Explanation:
Gross Margin income statement
Sales $ 190.000
Sales Discount -$ 5.000
Sales Return & Allowances -$ 6.000
Cost of Goods -$ 93.000
Gross Profit $ 86.000
Gross Profit does not take operating expenses into account.
Venus Crates manufactures custom crates for a variety of uses. The following data have been recorded for Job 551, which was recently completed. Direct materials used cost $7,700. There were 90 machine hours used on this job. The predetermined overhead rate is $32 per machine hour used. There were 179 direct labor hours worked on this job at a direct labor wage rate of $31 per hour. What is the total manufacturing cost of Job 551?
Answer:
Cost of goods manufactured= $16,129
Explanation:
Total manufacturing cost is the aggregate amount of cost incurred by a business to produce goods in a reporting period.
Generally accepted accounting principles require that the cost of goods sold shall consist of:
the cost of direct materials
the cost of direct labor
the cost of manufacturing overhead
In this exercise:
Cost of goods manufactured:
Direct materials= $7,700
Direct Labor=179hours * $31=$5,549
Factory overhead= $32*90 hours= $2,880
Total= $16,129
Kansas Enterprises purchased equipment for $73,500 on January 1, 2018. The equipment is expected to have a five-year life, with a residual value of $6,300 at the end of five years.
Using the straight-line method, the book value at December 31, 2018 would be:
A.$53,760.
B.$60,060.
C.$58,800.
D.$67,200.
Answer:
Using the straight-line method, the book value at December 31, 2018 would be $53.760
Explanation:
2018 2019 2020 2021 2022
Cost 67200 53.760 40.320 26.880 13.440
Dep-Acu 13.440 13.440 13.440 13.440 13.440
Book Value53.760 40.320 26.880 13.440 0
The Manda Panda Company uses the allowance method to account for bad debts. At the beginning of 2018, the allowance account had a credit balance of $92,400. Credit sales for 2018 totaled $3,190,000 and the year-end accounts receivable balance was $507,500. During this year, $88,500 in receivables were determined to be uncollectible. Manda Panda anticipates that 3% of all credit sales will ultimately become uncollectible. The fiscal year ends on December 31. Required: 1. Does this situation describe a loss contingency? 2. What is the bad debt expense that Manda Panda should report in its 2018 income statement? 3. Prepare the appropriate journal entry to record the contingency. 4. Complete the table below to calculate the net realizable value Manda Panda should report in its 2018 balance sheet?
1. No, 2. The bad debt expense is $95,700. 3. The journal entry would be a debit to bad debt expense and a credit to allowance for doubtful accounts. 4. Net realizable value is $419,000.
Explanation:1. No, this situation does not describe a loss contingency. A loss contingency is an uncertain event that may result in a loss for a company. In this case, the bad debts are already identified and can be estimated.
2. The bad debt expense that Manda Panda should report in its 2018 income statement can be calculated by multiplying the credit sales by the estimated percentage of uncollectible credit sales. So, the expense would be $3,190,000 * 0.03 = $95,700.
3. The appropriate journal entry to record the bad debt expense would be:
Debit Bad Debt Expense $95,700Credit Allowance for Doubtful Accounts $95,7004. The net realizable value that Manda Panda should report in its 2018 balance sheet can be calculated by subtracting the allowance for doubtful accounts from the accounts receivable. So, the net realizable value would be $507,500 - $88,500 = $419,000.
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Calculate the value of a $1 comma 000-par-value bond paying quarterly interest at an annual coupon interest rate of 13% and having 12 years until maturity if the required return on similar-risk bonds is currently a 11% annual rate paid quarterly.
Answer:
The value of the bond = $1,132.37
Explanation:
The price of a bond is equivalent to the present value of all the cash flows that are likely to accrue to an investor once the bond is bought. These cash-flows are the periodic coupon payments that are to be paid quarterly and the par value of the bond that will be paid at the end of 12 years.
During the 12 years, there are 48 equal periodic coupon payments that will be made. Given a par value equal to $1,000, in each year, the total coupon paid will be [tex] 1,000*0.13 [/tex]= $130. This annual payment will be split into four equal payments equal to [tex]\frac{130}{4}[/tex] =$32,5 . This stream of cash-flows is an ordinary annuity.
The required rate of return is to 11% per annum which equates to 2.75% per quarterly period.
The PV of the cash-flows = PV of the coupon payments + PV of the par value of the bond
=32.5*PV Annuity Factor for 48 periods at 2.75%+ $1,000* PV Interest factor with i=2.75% and n =48
= [tex]32.5*\frac{[1-(1+0.0275)^-^4^8]}{0.0275}+ \frac{1,000}{(1+0.0275)^4^8} [/tex]=$1,132.37
Mack's guitar fabrication shop produces low cost, highly durable guitars for beginners. Typically, out of the 100 guitars that begin production each month, only 82 percent are considered good enough to sell. The other 18 percent are scrapped due to quality problems that are identified after they have completed the production process. Each guitar sells for $260. Because some of the production process is automated, each guitar only requires 10 labor hours. Each employee works an average of 160 hours per month. Labor is paid at $11 per hour, materials cost is $40 per guitar, and overhead is $4 comma 2004,200.
a. The labor productivity ratio for Mack's guitar fabrication shop is $ nothing per hour. (Enter your response rounded to two decimal places.)
Answer: 21.32 per hour
Explanation:
Guitars produced each month = 100
considered good enough to sell = 82%
Remaining are scrapped = 18 %
Selling price of each guitar = $260
Each guitar requires = 10 labor hours
Each employee works an average = 160 hours per month
Labor is paid = $11 per hour
materials cost = $40 per guitar
overhead = $4,200
Therefore,
Number of guitars are good enough to sell = 82% of 100
= 82 guitars
Value of output = Number of guitars sell × Selling price of each guitar
= 82 × $260
= $21,320
Input in labor hours = Guitars produced each month × Labor hour employed in each guitar
= 100 × 10
= 1,000 hours
Labor productivity =[tex]\frac{output}{input}[/tex]
= [tex]\frac{21,320}{1,000}[/tex]
= 21.32 per hour
Wildwood, an outdoors clothing store, reports the following information for June: Sales revenue $104,000 Income tax expense $11,000 Operating expenses 22,000 Cost of goods sold 65,000 Deferred revenues $15,000 Nonoperating revenues 12,000 What is Wildwood's gross profit for June?
Answer:
The gross profit is $39,000
Explanation:
The computation of the gross profit is shown below:
= Sales revenue - cost of goods sold
= $104,000 - $65,000
= $39,000
The gross profit always be computed by subtracting the cost of goods sold from the sales revenue. Therefore, we apply this formula to find out the gross profit.
All these items which is shown above will record in the income statement.
Carbondale Casting produces cast bronze valves on a 10-person assembly line. On a recent day, 160 valves were produced during an 8-hour shift. a) Calculate the labor productivity of the line. b) John Goodale, the manager at Carbondale, changed the layout and was able to increase production to 180 units per 8-hour shift. What is the new labor productivity per labor-hour? c) What is the percentage of productivity increase?
Answer:
A) labor productivity= 20 units per hours
B) labor productivity= 22.5 units per hours
C) %of productivity increase= 12.5%
Explanation:
Giving the following information:
Carbondale Casting produces cast bronze valves on a 10-person assembly line.
160 valves are produced during an 8-hour shift.
A) labor productivity= number of unit/number of hours= 160/8= 20 units per hours
B) labor productivity= number of unit/number of hours= 180/8= 22.5 units per hours
C) %of productivity increase= (22.5/20)-1= 0.125= 12.5%
a. The labor productivity of the line is 2 valve per hour shift.
b. The increase production to 180 units per 8-hour shift is 2.25 valve per hour shift.
c. The percentage of productivity increase is 12.5%.
Labor productivitya. Labor productivity:
Labor productivity=16 valves/ 8 hour shift
Labor productivity=
b. New labor productivity:
New labor productivity=18 valves/ 8 hour shift
New labor productivity=2.25 valve per hour shift
c. Percentage of productivity increase:
Percentage of productivity increase=0.25/2
Percentage of productivity increase=12.5%
Inconclusion the labor productivity of the line is 2 valve per hour shift.
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Orange Inc. issued 29,500 nonqualified stock options valued at $59,000 (in total). The options vest over two years—half in 2018 (the year of issue) and half in 2019. One thousand options are exercised in 2019 with a bargain element on each option of $5. What is the 2019 book-tax difference associated with the stock options?
Answer:
The 2019 book-tax difference associated with the stock options is $24,500 unfavorable
Explanation:
The steps to compute the book-tax difference is explained below:
Step 1: First we have to divide the total stock amount by two years so that we can find out the one year amount
Step 2: Then, compute the option amount for 2019, and subtract it from step 1
So, the total stock amount for year 1 equals to
= Issued non qualified stock options ÷ 2 years
= $59,000 ÷ 2
= $29,500
Now, the book difference would equal to
= $29,500 - (1,000 options × $5)
= $29,500 - $5,000
= $24,500 unfavorable
Final answer:
The 2019 book-tax difference for the exercised stock options is negative $24,500. This is calculated by subtracting the tax benefit of $5,000 (1,000 options with a $5 bargain element each) from the book expense of $29,500 recognized for the options that vested in 2019.
Explanation:
The question deals with the calculation of the book-tax difference related to nonqualified stock options exercised by employees of Orange Inc. In 2019, 1,000 options are exercised with a bargain element of $5 each. The bargain element represents the difference between the stock's market value at the time of exercise and the exercise price that employees pay to acquire the stock. To compute the book-tax difference for these exercised options, we need to consider the total taxable benefit received by the employees, which is the bargain element times the number of options exercised ($5 times 1,000 = $5,000). On the book side, if the expense recognized for accounting purposes over the vesting period matches the total value given, we would take half of the $59,000 value recognized in 2018 and the other half in 2019.
The book expense related to these options for 2019 is therefore $29,500 (half of the total $59,000 value). The book-tax difference for 2019 is the difference between the tax benefit and the book expense recognized, which would be the tax benefit of $5,000 subtracted from the book expense of $29,500, resulting in a negative book-tax difference of $24,500 for 2019. This figure represents the amount deducted for accounting purposes that exceeds the tax benefit realized by the employees for the options exercised in 2019.
Use the information below to answer the following questions: Common Stock: $17,000 Service Revenue: $20,000 Notes Payable: $5,000 Salaries Expense: $10,000 Accounts Receivable: $7,000 Ending Retained Earnings: $26,000 Supplies: $2,000 Insurance Expense: $1,500 Prepaid Insurance: $3,000 Utilities Expense: $4,000 Office Equipment: $16,000 Accounts Payable: $4,000 Cash: $24,000.
An income statement prepared for the year ended December 31 2013 would reflect Net Income of how much?
A Balance Sheet prepared as of December 31, 2013 would reflect total Assets of how much?
A Balance Sheet prepared as of December 31, 2013 would reflect total Liabilities of how much?
A Balance Sheet prepared as of December 31, 2013 would reflect total Stockholders' Equity of how much?
Answer:
Please see details bellow:
Explanation:
BALANCE SHEET
Assets
Cash $24.000
Accounts Receivable $7.000
Prepaid Insurances $3.000
Office Equipment $16.000
Inventory $2.000
TOTAL ASSETS 52.000
Liabilities
Accounts Payable $4.000
Notes Payable $5.000
TOTAL LIABILITIES $9.000
Equity
Common Stock $17.000
Retained Earnings $26.000
TOTAL EQUITY $43.000
INCOME STATEMENT
Sales $20.000
Salaries Expenses -$10.000
Insurances Expenses -$1.500
Utilities Expenses -$4.000
Net Income $4.500
A company issued 6%, 10-year bonds with a face amount of $90 million. The market yield for bonds of similar risk and maturity is 7%. Interest is paid semiannually. At what price did the bonds sell? (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided. Enter your answers in whole dollars. Round final answers to the nearest whole dollar.)
To determine the selling price of the 6%, 10-year bonds with a face value of $90 million and a market yield of 7%, calculate the present value of the semiannual interest payments and the principal payment using the PVA and PV formulas respectively.
Explanation:To calculate the selling price of the bonds, we need to find the present value of the interest payments and the principal payment. The company issued 6%, 10-year bonds with a face amount of $90 million, and the market yield is 7% with interest paid semiannually. Therefore, the semiannual interest rate is 3.5% (half of 7%), and there are 20 periods (2 per year for 10 years).
The semiannual interest payment is $2.7 million ($90 million * 6% / 2). We use the Present Value of An Annuity (PVA) formula for calculating the present value of the interest payments, and the Present Value (PV) formula for the principal amount. Notably, the interest payments are an annuity since they are equal payments made at regular intervals.
Price of Bonds = PV of interest payments + PV of principal = PVA of $2.7 million payments for 20 periods at 3.5% + PV of $90 million at the end of 20 periods at 3.5%.
This calculation requires using the PVA and PV tables or formulas: PVA = PMT * [(1 - (1 + r)^-n) / r] and PV = FV / (1+r)^n. The specific numerical values from the tables were not provided, but these formulas help us understand the relationship between the bond's cash flows, market interest rates, and the bond's price.
A= The amount of tangible assets contributed by the new partner into the partnership
B= The amount of capital credited to the new partner
C= Total Capital of the partnership before the admission of a new partner
D= Total capital of the partnership after the admission of the new partner
Refer to the above information. Which statement below is correct if a new partner purchases an interest in capital directly from the old partners?
A. C < D
B. C = D
C. C = D and B = A
D. C < D and B = A
Answer:
B. C = D
Explanation:
C= Total Capital of the partnership before the admission of a new partner
D= Total capital of the partnership after the admission of the new partner
The purchase occurs outside the partnership (but with the partners approvals)
The partnership will only credit the new partner and debit the seller partner by the amount they agree on.
The partnership received no assets and therefore his capital remains at same value.
If a new partner purchases an interest in capital directly from the old partners, the correct statement is C = D.
Explanation:If a new partner purchases an interest in capital directly from the old partners, the correct statement is C = D. This means that the total capital of the partnership before the admission of the new partner is equal to the total capital of the partnership after the admission of the new partner. It also implies that the amount of capital credited to the new partner is equal to the amount of tangible assets contributed by the new partner into the partnership.
The following is selected information from Windsor, Inc. for the fiscal year ending October 31, 2017.
Cash received from customers $258000
Revenue recognized 378400
Cash paid for expenses 146200
Cash paid for computers on November 1, 2016 that will be used for 3 years 41280
Expenses incurred including any depreciation 185760
Proceeds from a bank loan, part of which was used to pay for the computers 86000
Based on the accrual basis of accounting, what is Windsor's net income for the year ending October 31, 2017?
Answer:
Net Income 192,640
Explanation:
For the accrual basis, we will consider the revenue ercognized and the expenses incurred regardless, of the payment date or collection date.
This means we will not focus on cash, we will focus in the accrued revenues and expenses for the period:
Revenues 378,400
Expenses with deprecation (185,760)
Net Income 192,640
The cash payment on the computer and the loan are not revenues or expenses, are considered for the cash flow statement.
Araceli is a team member in a large corporation. She never speaks in team meetings because she has seen members talk behind each others' backs after the meetings. Members are constantly monitoring the other members' work and looking for mistakes to point out in a meeting. According to the information provided, which contextual factor is lacking in Araceli's team?A) adequate resourcesB) climate of trustC) team structureD) performance evaluationsE) leadership
Answer:
B) Climate of trust
Explanation:
The problem seems to be Climate of trust. This fundamental factor allows teams to perform better than the sum of the performance of each of its members. Through an environment of trust, each member is supported and coached by other team members making individual improvements and increasing synergies within the team. A climate of trust is not exempt from criticism, but this criticism is understood as a helping tool rather than an instrument of personal harm. Finally, a climate of trust allows that errors and mistakes become a useful source of learning.
Consider the following information about a risky portfolio that you manage and a risk-free asset: E(rP) = 16%, σP = 26%, rf = 4%. a. Your client wants to invest a proportion of her total investment budget in your risky fund to provide an expected rate of return on her overall or complete portfolio equal to 6%. What proportion should she invest in the risky portfolio, P, and what proportion in the risk-free asset? (Do not round intermediate calculations. Round your answer to 2 decimal place.)
Answer:
What proportion should she invest in the risky portfolio, P, and what proportion in the risk-free asset?
W1: Risky Porfolio = 17%
W2: Risk Free Asset = 83%
E(Rp): Rate of Return: 6%
E(Rp) = W1 *R1 + W2*R2
E(Rp) = 17%*16% + 83%*4% = 6%
Explanation:
To find the proportion of investment on each assets it''s necessary to applied the following equation:
E(Rp) = W1 *R1 + W2*R2
To find W2 we define it as (1-w1) and then then the equation it's solved.
Where :
E(Rp) = Expected Return
W1 : Proportion of Risky Portfolio
R1 : Expected return of Risky Portfolio
W2: Proportion of Risk Free Asset
R2 : Expected return of Risk Free Asset
a. The proportion she should invest in the risky portfolio P is 0.17, and the proportion in the risk-free asset is 0.83. b. Standard deviation of the portfolio of the rate of return on her portfolio is 0.0433. c. 1. First client is more risk averse.
Let's address each part of the question step by step.
Given information:
- Expected return of the risky portfolio, E([tex]r_P[/tex]) = 16%
- Standard deviation of the risky portfolio, [tex]\sigma_P[/tex] = 26%
- Risk-free rate, [tex]r_f[/tex] = 4%
- Required expected rate of return on the overall portfolio, [tex]E(r_{\text{portfolio}}) = 6\%[/tex]
- Standard deviation constraint for the second client, [tex]\sigma_{\text{portfolio}} \leq 23\%[/tex]
Part (a): Proportions to invest
Let x be the proportion invested in the risky portfolio P , and 1 - x be the proportion invested in the risk-free asset.
To achieve an expected return of 6% on the overall portfolio, we use the formula for the expected return of a portfolio:
[tex]E(r_{\text{portfolio}}) = x \cdot E(r_P) + (1 - x) \cdot r_f[/tex]
Substitute the given values:
[tex]0.06 = x \cdot 0.16 + (1 - x) \cdot 0.04[/tex]
Solve for x :
0.06 = 0.16x + 0.04 - 0.04x
0.06 - 0.04 = 0.12x
0.02 = 0.12x
[tex]x = \frac{0.02}{0.12}[/tex]
x = 0.1667
So, the proportion she should invest in the risky portfolio P is 0.17, and the proportion in the risk-free asset is 0.83.
Part (b): Standard deviation of the portfolio
To find the standard deviation [tex]\sigma_{\text{portfolio}}[/tex] of the overall portfolio:
[tex]\sigma_{\text{portfolio}} = \sqrt{x^2 \cdot \sigma_P^2}[/tex]
Substitute x = 0.1667 and [tex]\sigma_P[/tex] = 0.26 :
[tex]\sigma_{\text{portfolio}} = \sqrt{0.1667^2 \cdot 0.26^2} \\\\ \sigma_{\text{portfolio}} = \sqrt{0.02779} \\\\ \sigma_{\text{portfolio}} = 0.1667 \times 0.26 \\\\ \sigma_{\text{portfolio}} = 0.043342[/tex]
part (c): To determine which client is more risk-averse based on the given information, let's analyze the situation:
Given data:
- Expected return of the risky portfolio [tex]E(r_P) = 16\%[/tex]
- Standard deviation of the risky portfolio [tex]\sigma_P = 26\%[/tex]
- Risk-free rate [tex]r_f[/tex] = 4%
Client 1:
Client 1 wants an expected rate of return on the overall portfolio equal to 6%. This means the client will allocate part of their investment to the risky portfolio and part to the risk-free asset.
Let w be the proportion invested in the risky portfolio.
The expected return on the complete portfolio E([tex]r_c[/tex]) is given by:
[tex]E(r_c) = w \cdot E(r_P) + (1 - w) \cdot r_f[/tex]
Substituting the given values:
[tex]6\% = w \cdot 16\% + (1 - w) \cdot 4\%[/tex]
Solving for w :
0.06 = 0.16w + 0.04 - 0.04w
0.06 - 0.04 = 0.12w
0.02 = 0.12w
[tex]w = \frac{0.02}{0.12} \\\\ w = \frac{1}{6}[/tex]
So, Client 1 will invest [tex]\frac{1}{6}[/tex] or approximately 16.67% of their total investment budget in the risky portfolio.
Client 2:
Client 2 wants the highest possible return but with a constraint on the standard deviation of the portfolio, which should not exceed 23%.
Given the information provided, we know that Client 2 is willing to accept a maximum standard deviation of 23%.
Risk Aversion Comparison:
To determine which client is more risk-averse, we typically consider the preference for risk in relation to the expected return. Client 1 is satisfied with a lower expected return (6%) and will allocate a smaller portion of their investment to the risky portfolio compared to Client 2, who seeks the highest possible return but with a constraint on risk (standard deviation).
Since Client 1 is willing to accept a lower expected return (6%) and allocates a smaller portion to the risky portfolio, it indicates a higher level of risk aversion compared to Client 2, who seeks maximum return while maintaining a risk constraint.
Therefore, Client 1 is more risk-averse.
Based on the choices provided:
- First client (Client 1) is more risk averse.
The complete question is:
Consider the following information about a risky portfolio that you manage and a risk-free asset: E(rP) = 16%, σP = 26%, rf = 4%. a. Your client wants to invest a proportion of her total investment budget in your risky fund to provide an expected rate of return on her overall or complete portfolio equal to 6%.
a. What proportion should she invest in the risky portfolio, P, and what proportion in the risk-free asset? (Round your answers to 2 decimal places.)
b. What will be the standard deviation of the rate of return on her portfolio? (Do not round intermediate calculations. Round your answer to 1 decimal place.)
c. Another client wants the highest return possible subject to the constraint that you limit his standard deviation to be no more than 23%. Which client is more risk averse? multiple choice. 1. First client 2. Second client
In 2012, Teller Company sold 3,000 units at $300 each. Variable expenses were $210per unit, and fixed expenses were $120,000. The same selling price, variable expenses,and fixed expenses are expected for 2012. What is Teller's break-even point in salesdollars for 2012?
Answer:
Teller's break-even point in sales dollars for 2012 is $400,000
Explanation:
The formula to compute the break even point in dollars is shown below:
Break even point (in dollars) = (Fixed expenses) ÷ (contribution ratio)
where,
Fixed expense is $120,000
And, the contribution ratio equals to
= (Contribution per unit) ÷ (sales per unit) × 100
where,
Contribution is = Selling price - variable cost per unit
= $300 - $210
= $90 per unit
Now put the values to the above formula
So, the ratio would be
= ($90 per unit) ÷ ($300 per unit) × 100
= 30%
Now put the values to the above formula
So, the value would be
= $120,000 ÷ 30%
= $400,000
Below are the account balances for Cowboy Law Firm at the end of December. Accounts Balances Cash $ 3,600 Salaries expense 1,300 Accounts payable 1,600 Retained earnings 4,700 Utilities expense 1,100 Supplies 12,000 Service revenue 7,500 Common stock 4,200 Required: Use only the appropriate accounts to prepare an income statement.
Answer:
Income Statement
Sales $7.500
Salaries expense -$1.300
Utilities expense -$1.100
Net Income 5.100
Explanation:
To prepare an income statement for Cowboy Law Firm, you would need to include the accounts Salaries Expense, Utilities Expense, and Service Revenue. The income statement would show the firm's revenue and expenses for the given period, and calculate the net income.
Explanation:To prepare an income statement, you would need to consider the accounts that are relevant to calculating the firm's revenue and expenses. In this case, the accounts that should be included in the income statement are Salaries Expense, Utilities Expense, and Service Revenue. These accounts represent the firm's expenses and revenue for the period.
Using the given information, the income statement would look like this:
Income Statement for Cowboy Law Firm (December)
Revenue:
Service Revenue: $7,500
Expenses:
Salaries Expense: $1,300
Utilities Expense: $1,100
Net Income: $5,100
One day, a local theme park charges $40 per person for admission, and 10,000 people visit the park. On another day, the park charges $60 per person, and 20,000 people pay to enter the park. Which explanation best describes why the park sees an increase in attendance when the price is higher? Theme-park tickets are part of a rare class of goods which do not follow the Law of Demand. High prices signal a high quality park experience. The higher price gives the park an incentive to expand capacity and permit more visitors. The low-attendance day falls on an autumn Wednesday, while the high-attendance day falls on a summer Saturday.
Answer:
The low-attendance day falls on an autumn Wednesday, while the high-attendance day falls on a summer Saturday.
Explanation:
There are no rare class of goods which do not follow the Law of Demand
The most probable reason may be the dates are at different time period, when the demand is lower and therefore the price must be lower to generate enought attendance to make it profitable. While, the second date is onpeak demand.
The increase in attendance at the theme park when the price is higher can be explained by the concept of price elasticity of demand. When a good or service has elastic demand, a higher price can lead to an increase in revenue due to a greater increase in attendance. In this case, the higher price at the theme park results in more people attending, resulting in higher total revenue.
Explanation:The concept at play here is called price elasticity of demand. The demand curve shows how the quantity demanded of a good or service changes in response to changes in its price. When a good or service is elastic, a small change in price leads to a large change in quantity demanded. Conversely, when a good or service is inelastic, a change in price has a relatively small impact on quantity demanded.
In this case, the theme park sees an increase in attendance when the price is higher because the demand for the park is elastic. This means that when the park increases its price, fewer people are willing to pay and attend. However, the higher price per person compensates for the decrease in attendance, resulting in higher total revenue for the park.
For example, on the day when the park charges $40 per person, 10,000 people visit, resulting in a total revenue of $400,000. On the day when the park charges $60 per person, 20,000 people visit, resulting in a total revenue of $1,200,000. Even though the price per person is higher, the park earns more revenue because the increase in attendance more than offsets the decrease in price.
Suppose the doll company American Girl has an inverse demand curve of P = 150 – 0.25Q, where Q measures the quantity of dolls per day and P is the price per doll. The marginal cost is given by MC = 10 + 0.50Q. What is the total surplus at the profit-maximizing output level? $12,250 $144,000 $4,500 $18,120
Answer:
$12,250
Explanation:
The profit-maximizing output is at MC = MR
We are given with Marginal Cost we need to find Marginal Revenue
MR = additional revenue for an additional unit
P = 150 – 0.25Q
Q = (150 - P)/0.25 = 600 - 4P
Total Revenue= P x Q = (150 - 0.25Q)Q
TR = 150Q-0.25Q^2
MR = will be the slope of the total revenue function:
dTR/dQ -0.5Q + 150
Now we equalize MR and MC
-0.5Q + 150 = 10 + 0.5Q
Q = 140
P when Q = 140
P = 150 - 0.25 Q = 150 - 0.25(140) = 150 - 35 = 115
Producer surplus:(using marginal cost)
[tex]\int\limits^{140}_0 {10 + 0.50q} \, dq[/tex]
(P(140) - P(0)) x Q140
(80 - 10 ) x 140 = 9,800
Consumer surplus:
(P0 - Pm ) x Qm /2
(150 - 115) x 140 / 2 = 2.450
Total Surplus: 9,800 + 2,450 = 12,250
Final answer:
The profit-maximizing quantity for the doll company American Girl can be found by setting marginal revenue equal to marginal cost. The total surplus at the profit-maximizing output level is $18,120.
Explanation:
The profit-maximizing quantity can be determined by finding the level of output at which marginal revenue equals marginal cost. In this case, we are given the inverse demand curve and the marginal cost curve.
To find the profit-maximizing quantity, we need to equate marginal revenue (MR) with marginal cost (MC). We can do this by setting the expressions for MR and MC equal to each other and solving for Q:
150 - 0.25Q = 10 + 0.50Q
By solving this equation, we find that Q = 80.
Once we have the profit-maximizing quantity, we can calculate the total surplus by subtracting the total cost from the total revenue:
Total revenue = price * quantity = (150 - 0.25Q) * Q
Total cost = variable cost + fixed cost = (10 + 0.50Q) + 0 (since there is no fixed cost mentioned)
The total surplus at the profit-maximizing output level is obtained by subtracting total cost from total revenue:
Total surplus = (150 - 0.25Q) * Q - (10 + 0.50Q)
Plugging in Q = 80 into the equation, we can calculate the total surplus.
The total surplus at the profit-maximizing output level is $18,120.
Which of the following statements about the cost of capital is incorrect? Select one: a. A company's target capital structure affects its weighted average cost of capital. b. Weighted average cost of capital calculations should be based on the after-tax-costs of all the individual capital components. c. If a company's tax rate increases, then, all else equal, its weighted average cost of capital will increase. d. The cost of retained earnings is equal to the return stockholders could earn on alternative investments of equal risk. e. Flotation costs can increase the cost of preferred stock.
Answer:
c. If a company's tax rate increases, then, all else equal, its weighted average cost of capital will increase.
Explanation:
We will analize based on the WACC formula:
[tex]WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})[/tex]
(C) Incorrect, if the tax-rate increase, notice the cost of debt tax-shield will be higher, therefore it will generate a lower WACC
asumming a debt cost of 10%
if the tax-rate is 20% 10% ( 1 - 20%) = 8%
if the tax-rate is 50% 10% ( 1 - 50%) =5%
the cost of debt is lower, thus the WACC will be lower to.
A market comprised of a downward-sloping demand curve that intersects an upward-sloping supply curve is said to be stable because:
A. price will never change.
B. quantity will never change.
C. demand will never change.
D. at any price other than equilibrium, forces in the market move price towards the equilibrium.
A market comprised of a downward-sloping demand curve that intersects an upward-sloping supply curve is said to be stable because at any price other than equilibrium, forces in the market move price towards the equilibrium.
What is an economic equilibrium?Economic forces must be in balance for there to be economic equilibrium. Economic variables essentially hold true to their equilibrium values in the absence of outside influences. Market equilibrium is another name for economic equilibrium.
The set of economic factors (often price and quantity) that the economy is driven toward by supply and demand is known as its economic equilibrium.
Any number of elements, including interest rates or total consumer spending, can be included in the definition of the phrase "economic equilibrium."
The point of equilibrium denotes an idealized state of rest where all hypothetically necessary economic transactions have already taken place, given the initial conditions of all pertinent economic variables.
What is a market?The trade of products and services can take place in a market, which is a gathering place for interested parties. Buyers and sellers are typically the parties engaged.
The market might be actual, like a physical store where people interact in person, or it could be virtual, like an online market, where there is no face-to-face interaction between buyers and sellers.
Markets might be real-world, like a physical store, or digital, like an online merchant. The black market, auction market, and financial market are more examples. Prices for products and services are set by markets based on supply and demand.
Hence, option D is the correct answer
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Technician A says that a cylinder head may house many vital engine components, including the crankshaft, spark plug, connecting rods, and camshaft. Technician B says in an aluminum cylinder head, the valve seats and valve guides are separate steel parts that are pressed tightly into the head. Who is right?
A. Both A and B
B. Neither A nor B
C. B only
D. A only
Answer:
A. Both
Explanation:
Answer:
Your correct answer A. Both A and B
Explanation:
Hope this helps :) -Mark Brainiest Please :)
Rotweiler Obedience School's December 31, 2007, Balance Sheet showed Net Fixed Assets of $1.875 million, and the December 31, 2008, Balance Sheet showed Net Fixed Assets of $2.12 million. The company's 2008 Income Statement showed a Depreciation Expense of $220,000. What was Rottweiler's Net Capital Spending for 2008?
Answer:
Rottweiler's Net Capital Spending for 2008: $0,465 million.
Explanation:
December 31, 2007 Net Fixed Assets of $1.875
Dureing 2008 Depreciation Expense of -$0,220
December 31, 2008 Net Fixed Assets of $1.655
Net Capital Spending for 2008 $0,465 .
December 31, 2008 Net Fixed Assets of $2.120
Match the word or phrase with the best description of it. a. select the correct word or phrase An expression about whether financial statements conform with generally accepted accounting principles. b. select the correct word or phrase A business that raises money by issuing shares of stock. c. select the correct word or phrase The portion of stockholders’ equity that results from receiving cash from investors. d. select the correct word or phrase Obligations to suppliers of goods. e. select the correct word or phrase Amounts due from customers. f. select the correct word or phrase A party to whom a business owes money. g. select the correct word or phrase A party that invests in common stock. h. select the correct word or phrase A business that is owned jointly by two or more individuals but does not issue stock.
Answer Explanation
An expression about whether financial statements conform with generally accepted accounting principles
Audition. If the statement had been done conformed to GAAP it will be a positive audit.
business that raises money by issuing shares of stock:
Corporation, raise fund from issuance of stock
The portion of stockholders’ equity that results from receiving cash from investors
Capital or total paid-in capital
Obligations to suppliers of goods
Account Payable is the liability account to represent thedebt with suppliers
Amounts due from customers
Account receivable represent the amount to collect from customer
A party to whom a business owes money
It is a debtor to the company and will be state under:
Account Receivable or Note receivable accounts
A business that is owned jointly by two or more individuals but does not issue stock.
partnership are integrate by more than one party
The question asked to match terms with definitions related to business and accounting, such as Audit Opinion, Publicly-Traded Company, Paid-In Capital, Accounts Payable, Accounts Receivable, Creditor, Shareholder, and Partnership.
Explanation:This question relates to various concepts in business and accounting. I'll match each term to the definition.
A - An expression about whether financial statements conform with generally accepted accounting principles: This refers to the Audit Opinion.B - A business that raises money by issuing shares of stock: This is a Publicly-Traded Company.C - The portion of stockholders' equity that results from receiving cash from investors: This is referred to as Paid-In Capital. D - Obligations to suppliers of goods: This is termed Accounts Payable. E - Amounts due from customers: This is Accounts Receivable.F - A party to whom a business owes money: This party is known as a Creditor.G - A party that invests in common stock: This is a Shareholder.H - A business that is owned jointly by two or more individuals but does not issue stock: This is a Partnership.Learn more about Business Terms here:https://brainly.com/question/32563554
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Time value An Iowa state savings bond can be converted to $750 at maturity 5 years from purchase. If the state bonds are to be competitive with U.S. savings bonds, which pay 5% annual interest (compounded annually), at what price must the state sell its bonds? Assume no cash payments on savings bonds prior to redemption. Ignore taxes.
Answer:
$78.35
Explanation:
Given:
Future value = $750
Maturity time = 5 years
Annual rate = 5%
Now,
Future value = P × ( 1 + r )ⁿ
Where, P is the present value of the bonds
r is the rate of interest
n is number of periods
on substituting the values, we get
$100 = P × ( 1 + 5% )⁵
or
$100 = P × ( 1.05 )⁵
or
P = $78.35
Hence, the state should sell its bond at a price of $78.35
Blue Mountain Hardware is adding a new product line that will require an investment of $1,450,000. Managers estimate that this investment will have a 10-year life and generate net cash inflows of $305,000 the first year, $290,000 the second year, and $255,000 each year thereafter for eight years. The investment has no residual value. Compute the payback period.
Answer:
payback period: 5.35 years
Explanation:
the payback period will be the time at which the project pays itself
it disregard the time value of money
the formula is:
[tex]\frac{investment}{cash \: flow} = payback[/tex]
as the fist cashflow are not regular we subtract them
1,450,000 - 305,000 - 290,000 = 855,000
and now we apply the formula
855,000 / 255,000 = 3,35294
we currently are on year 2 and we need 3.35294 more years
so the payback will occur at:
2 + 3.35 = 5.35