Answer:
The answer is letter C
Explanation:
It illustrates the interaction between customer wants/needs and the service recovery plan.
The ABC Auto Supply Company of Burlington, Vermont, uses an e-commerce software program on its Web site to allow customers such as Quickeeze Body Shop to enter their own orders for auto parts. ABC is following a(n) ____ business model.a. B2Bb. supplier-to-customerc. B2Cd. automotive-supplye. online customer focus
Answer:
The correct answer is letter "A": B2B.
Explanation:
In a B2B business model goods or services are traded between two or more businesses. Most parts of these transactions are dedicated to the exchange of raw materials. Customers are part of the process only when the final product is offered in the open market but not during the B2B business process.
Fisher Steel produces steel plates for manufacturing and construction. They generally use a static budget with the following costs based on 50,000 units per month: Indirect materials, $105,000; indirect labor, $98,000; utilities, $14,000; supervision, $5,000; depreciation, $22,000. If Fisher wanted to create a flexible budget for 60,000 units, what value would they record for fixed costs?
A : $49,200
B : $32,400
C : $27,000
D : $41,000
Answer:
C : $27,000
Explanation:
Mainly there are two types of cost i.e variable cost and the fixed cost. The variable cost is that cost which is change when the production level change whereas the fixed cost is that cost which remains constant whether production level changes or not
So, the variable cost includes indirect material, indirect labor, and utilities
And, the fixed cost includes supervision and depreciation expense.
Now the fixed cost would be
= Supervision + depreciation expense
= $22,000 + $5,000
= $27,000
Stock Y has a beta of 1.40 and an expected return of 14.8 percent. Stock Z has a beta of .85 and an expected return of 11.3 percent. If the risk-free rate is 4.85 percent and the market risk premium is 7.35 percent, are these stocks overvalued or undervalued?
Answer:
Stock Y has overvalued and Stock Z as undervalued
Explanation:
In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below
Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)
For Stock Y
= 4.85% + 1.40 × 7.35%
= 4.85% + 10.29%
= 15.14%
For Stock Z
= 4.85% + 0.85 × 7.35%
= 4.85% + 6.2475%
= 11.0975%
The (Market rate of return - Risk-free rate of return) is also called market risk premium and the same is applied in the answer
As we see the expected return of both the stock So, Stock Y has overvalued and Stock Z as undervalued
For what kinds of needs do you think a firm would issue securities in the money market versus the capital market? A firm would issue securities in the money market versus the capital market because:
Answer:
Explanation:
Capital markets are majorly used for long- term fixed assets, making a company use it over for several years , also with maturities greater than one year. On the other hand money markets are short-term markets, so firms using these would be in need of funds for less than a year. Transactions in short-term or marketable securities take place in the money market
Allise Industries manufactures and exports copper wiring to markets all over the world. It has adopted an advertising organizational structure in which its managers in each country or region have the authority to make decisions for their market. Allise Industries has a __________ organizational structure.
A) Centralized
B) Decentralized
C) Matrix
D) Individualized
E) Globalized
Answer:
Letter B is correct. Decentralized.
Explanation:
A decentralized organizational structure has as its main feature the flexible hierarchy, ie decision making is also shared with the lower hierarchical levels.
This structure model has the advantage of motivating employees, who feel valued and fundamental to organizational success. Another advantage of decentralization is the flexibility to deal with new marketing challenges and the speed of decision making, which aids in business opportunity costs.
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Use the following information to answer question(s) below. On January 1, 2011, Punch Corporation purchased 80% of the common stock of Soopy Co. Separate balance sheet data for the companies at the acquisition date(after the acquisition) are given below:PunchSoopy Cash $34,000 $206,000 Accounts Receivable 144,000 26,000 Inventory 132,000 38,000 Land 68,000 32,000 Plant assets 700,000 300,000 Accum. Depreciation (240,000) (60,000) Investment in Soopy392,000Total assets$1,230,000 $ 542,000 Accounts payable $206,000 $142,000 Capital stock 800,000300,000 Retained earnings224,000 100,000Total liabilities & equities$ 1,230,000 $ 542,000 At the date of the acquisition, the book values of Soopy's net assets were equal to the fair value except for Soopy's inventory, which had a fair value of $60,000.
Determine below what the consolidated balance would be for each of the requested accounts. What amount of Inventory will be reported?
Answer:
Consider the following explanation
Explanation:
consolidated balance
Cash 240,000
Accounts Receivable 170000
Inventory 192,000
Land 100000
Plant assets-net 700,000
Goodwill 68000
Total assets 1,470,000
Total liabilities: 206,000 + 142,000 = 348,000
Which of the following is not an advantage of ROI?
(A) It encourages managers of departments with high ROIs to invest in average ROI projects.
(B) It encourages managers to pay careful attention to the relationships among sales, expenses, and investment.
(C) It encourages cost efficiency.
(D) It discourages excessive investment in operating assets.
Answer:
(A) It encourages managers of departments with high ROIs to invest in average ROI projects.
Explanation:
The full form of ROI is Return of investment. Generally, ROI is used by different organizations to find out the profit from the expenditure. By using the concept of return of investment the organization can save money as well as time.ROI also helps to explore and measure potential returns on various investment opportunities
Therefore answer is a.
Final answer:
Option (A) is not an advantage of ROI as it may lead to underinvestment in projects with average ROI, even if they're beneficial to the company. Options (B), (C), and (D) describe true advantages of utilizing ROI.
Explanation:
The question deals with the concept of Return on Investment (ROI), which is crucial in evaluating the performance of business investments and departments. Specifically, the question is asking which option is not an advantage of using ROI.
(A) states ROI would encourage managers with high ROIs to invest in average ROI projects. This is generally considered a disadvantage of ROI because it can lead to underinvestment as managers may avoid investments that could lower their department's overall ROI, even if these investments are beneficial to the company as a whole.
On the other hand, (B) and (C) are true advantages as ROI indeed encourages managers to focus on sales, expenses, and efficiency. (D) can also be seen as an advantage because dissuading excessive investment can prevent over-capitalization and encourage the optimal use of resources.
U.S. residents accounted for over 75 percent of cruise ship passengers, and U.S. ports had 8 million passengers leaving on cruises in 2004. The growth in cruise travel was phenomenal after the terrorist attacks on September 11, 2001. According to a situational analysis, this event created an _____ for the industry.a. internal strength
b. internal weakness
c. internal threat
d. external weakness
e. external opportunity
Answer:
e. External opportunity
Explanation:
An external opportunity is an extension of the market due to some external development outside the industry. In this case, the cruise industry has benefited in a major way due to external developments.
Situational analysis would mean that the September 11 attacks created an e. external opportunity.
What is an external opportunity?This is when an event happens outside an industry that leads to the industry experiencing growth.
The 9/11 attacks were outside the cruise ship industry but as a result of them, the Cruise ship industry recorded massive growth.
In conclusion, option E is correct.
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Sunny Day Manufacturing Company has a current stock price of $33.35 per share, and is expected to pay a per-share dividend of $2.03 at the end of the year. The company’s earnings’ and dividends’ growth rate are expected to grow at the constant rate of 8.70% into the foreseeable future. If Sunny Day expects to incur flotation costs of 6.50% of the value of its newly-raised equity funds, then the flotation-adjusted (net) cost of its new common stock (rounded to two decimal places) should be .
Answer:
Flotation adjusted cost of equity is 15.21% .
Explanation:
Current Stock price, P = $33.35 per share
Flotation cost, F = 6.50%
Net proceed from sale of stock = P × (1 - F)
= $33.35 × (1 - 6.50%)
= $31.18225
Net proceed from sale of stock is $31.18225.
Flotation adjusted cost of equity:
= (Expected dividend ÷ Net Proceed from sale of equity) + Growth rate
= ($2.03 ÷ $31.18225) + 8.70%
= 6.51% + 8.70%
= 15.21%
Flotation adjusted cost of equity is 15.21% .
Your firm needs a computerized line-boring machine that costs $90,000 and requires $16,000 in maintenance costs for each year of its 3-year life. After 3 years, this machine will be replaced. The machine falls into the MACRS 3-year class life category. The MACRS percentages for each year are 33.33 percent, 44.44 percent, 14.82 percent, and 7.41 percent, respectively. Assume a tax rate of 35 percent and a discount rate of 10 percent. Assume the machine can be sold for $12,000 at the end of year 3. What is the aftertax salvage value of the machine?A) $5,633B) $7,800C) $7,920D) $10,134E) $10,678
Answer:
The aftertax salvage value of the machine is D) $10,134
Explanation:
Hi. first, we need to find out the book value of the machine at the selling date, that is 3 years from now, and the book value is as follows.
[tex]BookValue=90,000-90,000*0.3333-90,000*0.4444-90,000*0.1482=6,669[/tex]
Since taxes are based on the profit you make by selling something, our profit is:
[tex]Profit=12,000-6,669=5,331[/tex]
Therefore, our taxes are:
[tex]Taxes=5,331*0.35=1,866[/tex]
So, the after tax salvage value of the machine is the money you received on the sale minus the taxes you have to pay, that is:
Salvage Value of the Machine = $12,000 - $1,866?= $10,134
That is option D)
Best of luck.
The typical family on the Planet Econ consumes 10 pizzas, 7 pairs of jeans, and 20 gallons of milk. In 2016, pizzas cost $10 each, jeans cost $40 per pair, and milk cost $3 per gallon. In 2017, the price of pizzas went down to $8 each, while the prices of jeans and milk remained the same. Between 2016 and 2017, a typical family's cost of living:
Answer:
decreased by 4.5%
Explanation:
A family consumes: 10 pizzas, 7 pairs of jeans, and 20 gallons of milk.
In 2016, pizzas cost $10 each, jeans cost $40 per pair, and milk cost $3 per gallon.
The family's total cost of living in 2016 is:
[tex]C_{2016} = 10*\$10 +7*\$40 +20*\$3\\C_{2016} = \$440[/tex]
In 2017, pizzas cost $8 each, jeans cost $40 per pair, and milk cost $3 per gallon.
The family's total cost of living in 2017 is:
[tex]C_{2017} = 10*\$8 +7*\$40 +20*\$3\\C_{2016} = \$420[/tex]
The change, in percentage, of a typical family's cost of living is:
[tex]R=\frac{C_{2017}-C_{2016}}{C_{2016}} \\R=\frac{420-440}{440} \\R=0.045\ or\ 4.5\%[/tex]
The cost of living decreased by 4.5%
Bell’s Shop can make 1000 units of a necessary component with the following costs: Direct Materials $24000 Direct Labor 6000 Variable Overhead 3000 Fixed Overhead ? The company can purchase the 1000 units externally for $39000. The unavoidable fixed costs are $2000 if the units are purchased externally. An analysis shows that at this external price, the company is indifferent between making or buying the part. What are the fixed overhead costs of making the component?
Final answer:
The fixed overhead costs of making the component are $6000.
Explanation:
To determine the fixed overhead costs of making the component, we need to compare the cost of making the component with the cost of buying it externally. The total cost of making the component includes direct materials, direct labor, variable overhead, and fixed overhead. We are given that the direct materials cost is $24000, direct labor cost is $6000, and the variable overhead cost is $3000. The fixed overhead cost can be calculated by subtracting the sum of the other costs from the cost of purchasing the component externally:
Fixed Overhead = Cost of Purchasing Externally - (Direct Materials + Direct Labor + Variable Overhead)
Fixed Overhead = $39000 - ($24000 + $6000 + $3000)
Fixed Overhead = $39000 - $33000
Fixed Overhead = $6000
Fixed overhead cost of making component: $6,000. Total cost of making equals external purchase cost at $39,000.
To find the fixed overhead costs of making the component, we need to determine the total cost of making the component and compare it with the cost of purchasing externally.
Given:
- Direct Materials: $24,000
- Direct Labor: $6,000
- Variable Overhead: $3,000
- Fixed Overhead: ?
- External purchase cost for 1000 units: $39,000
- Unavoidable fixed costs if purchased externally: $2,000
Step-by-Step Calculation:
1. Total Cost of Making Internally:
- Total Variable Cost = Direct Materials + Direct Labor + Variable Overhead
- Total Variable Cost = $24,000 + $6,000 + $3,000 = $33,000
- Total Cost of Making = Total Variable Cost + Fixed Overhead
- Total Cost of Making = $33,000 + Fixed Overhead
2. Total Cost of Purchasing Externally:
- External purchase cost = $39,000
3. Equating Costs to Determine Fixed Overhead:
- The company is indifferent between making or buying, meaning the costs are equal.
- Set the total cost of making equal to the external purchase cost and solve for Fixed Overhead:
[tex]\[ $33,000 + \text{Fixed Overhead} = $39,000 \][/tex]
[tex]\[ \text{Fixed Overhead} = $39,000 - $33,000 \][/tex]
[tex]\[ \text{Fixed Overhead} = $6,000 \][/tex]
Answer:
The fixed overhead costs of making the component are $6,000.
Maker-Bot Corporation has 10,000 shares of 10%, $90 par value, cumulative preferred stock outstanding since its inception. No dividends were declared in the first two years. If the company pays $400,000 of dividends in the third year, how much will common stockholders receive?
A. $355,000
B. $270,000
C. $0
D. $130,000
E. $140,000
Answer:
How much will common stockholders receiveD. $130,000
Explanation:
Total Dividends to Preferred Stockholders
10.000 Shares
10% cumulative preferred stock outstanding
$90 Par Value
Dividends: 10,000 * 10% * $90 = $90.000
Preferred dividends in arrears for two years.
$90,000*2 Years = $180.000
Preferred dividends for the current year
$90,000
Total Dividends to Preferred Stockholders
$180,000 + $90,000 = $270,000
Total Dividends to be paid by the company
$400,000
Preffered Stockholers : $270,000
Common Stockholers: $130,000
Assume that labor demand is given by Qd = 200 - 10P and labor Supply is given by Qs = 10P - 20, where P = wage and Q = quantity of labor. If a minimum wage of $15 is imposed on this market, what is the net effect on wages paid to labor in this market? Group of answer choices $240 loss $100 loss $200 gain $360 gain $50 gain
Imposing a minimum wage of $15 in this labor market will lead to a net gain of $360 in wages paid to labor.
Explanation:Imposing a minimum wage of $15 in this labor market will lead to an increase in wages paid to labor in this market. The minimum wage of $15 will be above the equilibrium wage, causing a surplus of labor as the quantity supplied exceeds the quantity demanded. At the minimum wage, the quantity demanded will be 12 units (200-10*15) and the quantity supplied will be 130 (10*15-20), resulting in a surplus of 118 units. Therefore, the net effect on wages paid to labor in this market will be a $360 gain.
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Complete Question
Assume that labor demand is given by Qd = 200 - 10P and labor Supply is given by Qs = 10P - 20, where P = wage and Q = quantity of labor. If a minimum wage of $15 is imposed on this market, what is the net effect on wages paid to labor in this market?
Group of answer choices
a. $240 loss
b. $100 loss
c. $200 gain
d. $360 gain
e. $50 gain
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What is the definition of a dominant strategy in game theory?
1- to allocate all personnel resources towards defensive talent in order to dominate opposing offenses
2- the best strategy to pick, assuming the other player picks their own best choice
3- to make the exact same move that was made by the other player
4- the choice that causes the payoff for the other player to be minimized, regardless of the payoff it earns
5- the best strategy to pick no matter which moves are chosen by the other player
Answer:
5- the best strategy to pick no matter which moves are chosen by the other player
Explanation:
Dominant strategy is the best strategy to pick no matter which moves are chosen by the other player.
Dominant strategy is used in game theory to determine the best strategy for oligopoly firms in a collusion.
For example, in a prisoners dilemma, there are two prisoners, if both of them confess, they get 5 years in prison, if both of them don't confess, they are set free and if one confesses and the other doesn't, the prisoner that confesses gets 2 years in prison while the other who doesn't confess gets 10 years in prison.
The dominant strategy here is for the prisoners to confess. It is the best strategy regardless of what the other prisoner does.
I hope my answer helps you.
Corporation needs to raise $70 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. The offer price is $30 per share and the company’s underwriters charge a spread of 8 percent. If the SEC filing fee and associated administrative expenses of the offering are $575,000, how many shares need to be sold?
(Do not round intermediate calculations and enter your answer in shares, not millions of shares, rounded to the nearest whole number, e.g., 1,234,567.)
Answer:
$2536.232
Explanation:
The spread in this case is 30*8% = 2.4
A spread is simply gap between the bid and the ask prices of a security or asset, like a stock, bond or commodity and the net proceeds are the amount of money the seller receives following the sale of an asset after all costs and expenses are deducted from the gross proceeds.
The net proceeds in this case is 30-2.4 =27.6
To get the number of share we can simply divide the funds need by the net proceeds per share = 70000000/27.6 = $2536.232. Therefore the correct answer is $2536.232
Net public debt is gross public debt minus all government interagency borrowing, all public debt plus all government interagency borrowing. all public debt minus all money owed on the federal income tax. all federal public debt irrespective of who owns it. QUESTION 5 How does the federal government finance a budget deficit? It borrows funds by selling Treasury bonds. It cuts spending on entitlement programs. It purchases U.S. Treasury bonds. It redeems its lous.
Answer:1. All public debt minus all money own on the federal income tax.
2 It cuts spending on entitlement programs
Explanation:
Public debts refers to sum total of goverments debts, in relation to net public debts this refers to the gross debts minus all debts payments that are due to the government of which tax income is an example
Deficit budget is a situation where the budgeted incomes for the coming. year is less than the budgeted expenditures for the coming year. The government is faced with the issue of raising funds to finance the budget an one of such ways is reducing spending on the expenditures.
Buying treasury bonds or redemption of ( iou) will only reduce the already not enough funds available to fund the budget and invariably increasing the deficit.
The Portland Division's operating data for the past two years is as follows: Year 1 Year 2 Return on investment 12 % 24 % Net operating income ? $ 288,000 Turnover ? 2 Margin ? ? Sales $ 1,600,000 ? The Portland Division's margin in Year 2 was 150% of the margin for Year 1. The net operating income for Year 1 was:
Multiple Choice
A. $192,000
B. $128,000
C. $266,667
D. $208,000
To find the net operating income for Year 1 in the Portland Division, we need to determine the margin for Year 1. Given that the margin for Year 2 was 150% of the margin for Year 1, we can solve for the margin of Year 1 and calculate the net operating income.
Explanation:To find the net operating income for Year 1, we need to determine the margin for Year 1.
We know that the margin for Year 2 was 150% of the margin for Year 1. Let's assume the margin for Year 1 is x.
From the given information, we can write the equation: 1.5x = Margin for Year 2.
Next, we can find the margin for Year 2 by multiplying the turnover and margin.
From the given information, we have: 2 * x = Margin for Year 2.
Solving these equations simultaneously, we get x = 1, and the margin for Year 1 is 1.
Therefore, the net operating income for Year 1 is $192,000 (1 * $192,000 = $192,000).
The industry that produces portable CD players is in long-run equilibrium. Then the demand for portable CD players decreases permanently. As a result, firms will Some firms will ____ the market, and the market supply curve will shift ______. exit leftward exit rightward enter, rightward enter, leftward
Answer:
As a result firms will exit the market and the supply curve will shift leftward.
Explanation:
Since the demand decreases permanently in the market for CD players, the existing companies will incur economic loss, as because they do have existing stock, which shall not be sold on the current price.
Also no new manufacturing will be done and in future the supply will shift leftward as there will be less suppliers in the market.
Basically the suppliers, when will accept the permanent decline in demand will majorly exit the market and then they will find alternative businesses, with high demand.
Accordingly the firms will exit and accordingly will less suppliers the supply will be decreased and curve will move leftward.
Commons, Inc. provides the following information for 2018:
Net income $36,000
Market price per share of common stock $16/share
Dividends paid $0.70/share
Common stock outstanding at Jan. 1, 2018 130,000 shares
Common stock outstanding at Dec. 31, 2018 165,000 shares
The company has no preferred stock outstanding. Calculate the dividend yield for common stock?
Answer:
4.375%
Explanation:
The formula to compute the dividend yield for common stock is shown below:
= Dividend per share ÷ Market price per share
= $0.70 per share ÷ $16 per share
= 4.375%
It shows a relationship between the dividend per share and the market price per share so that the accurate amount of dividend yield can come.
All other information which is given is not relevant. Hence, ignored it
Feeling Better Medical Inc., a manufacturer of disposable medical supplies, prepared the following factory overhead cost budget for the Assembly Department for October of the current year. The company expected to operate the department at 100% of normal capacity of 7,000 hours.
Variable costs:
Indirect factory wages $21,000
Power and light 15,540
Indirect materials 13,440
Total variable cost $49,980
Fixed costs:
Supervisory salaries $12,720
Depreciation of plant and equipment 32,630
Insurance and property taxes 9,950
Total fixed cost 55,300
Total factory overhead cost $105,280
During October, the department operated at 7,400 standard hours, and the factory overhead costs incurred were indirect factory wages, $22,420; power and light, $16,130; indirect materials, $14,500; supervisory salaries, $12,720; depreciation of plant and equipment, $32,630; and insurance and property taxes, $9,950.
Required:
Prepare a factory overhead cost variance report for October. To be useful for cost control, the budgeted amounts should be based on 7,400 hours. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Round your per unit computations to the nearest cent, if required. If an amount box does not require an entry, leave it blank.
Feeling Better Medical Inc.
Factory Overhead Cost Variance Report—Assembly Department
For the Month Ended October 31
Normal capacity for the month 7,000 hrs.
Actual production for the month 7,400 hrs.
Budget Actual Favorable Variances Unfavorable Variances
Variable costs:
Indirect factory wages
Power and light
Indirect materials
Total variable cost
Fixed costs:
Supervisory salaries
Depreciation of plant and equipment
Insurance and property taxes
Total fixed cost
Total factory overhead cost
Total controllable variances
Excess hours used over normal at the standard rate for fixed factory overhead
Answer
The answer and procedures of the exercise are attached in the following archives.
Explanation
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
On December 31, 2020, Vaughn Manufacturing granted some of its executives options to purchase 181000 shares of the company’s $10 par common stock at an option price of $50 per share. The Black-Scholes option pricing model determines total compensation expense to be $1353900. The options become exercisable on January 1, 2021, and represent compensation for executives’ services over a three-year period beginning January 1, 2021. At December 31, 2021 none of the executives had exercised their options. What is the impact on Vaughn’s net income for the year ended December 31, 2021 as a result of this transaction under the fair value method?
Answer:
The impact on Vaughn’s net income for the year ended December 31, 2021 as a result of this transaction under the fair value method is a $ 451.300 decrease.
Explanation:
Fair value option is 1.353.900
Life option 3 years
Total compensation expense should be recognized as expense by the company over the life of the option.
1.353.900/3 = 451.300
Bonita Industries is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $6350000 on March 1, $5260000 on June 1, and $8550000 on December 31. Bonita Industries borrowed $3200000 on January 1 on a 5-year, 13% note to help finance construction of the building. In addition, the company had outstanding all year a 11%, 3-year, $6370000 note payable and an 12%, 4-year, $12050000 note payable. What is the weighted-average interest rate used for interest capitalization purposes?
Answer
The answer and procedures of the exercise are attached in the following archives.
Explanation
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
Final answer:
The weighted-average interest rate used for interest capitalization purposes is 11.4%.
Explanation:
To calculate the weighted-average interest rate used for interest capitalization purposes, we need to determine the amount of interest incurred on specific borrowings. Here's the breakdown:
The interest on the 5-year, 13% note borrowed on January 1 is $320,000.The interest on the 11%, 3-year note is $700,700.The interest on the 12%, 4-year note is $1,446,000.To calculate the weighted-average interest rate, we divide the total interest incurred on all borrowings by the sum of the outstanding balances of all borrowings at the beginning of the period. In this case, the weighted-average interest rate is:
(320,000 + 700,700 + 1,446,000) / (3,200,000 + 6,370,000 + 12,050,000) = 2,466,700 / 21,620,000
This simplifies to:
0.114 or 11.4%
ABC's investment managers buy an assortment of stocks and bonds or other investments and then repackage them into different products investors may wish to purchase. The company then sells shares of their ________ to interested investors.
Answer:
The correct word for the blank space is: Mutual Fund.
Explanation:
Mutual funds are investment vehicles that consist of a mix of different assets such as stocks, bonds or other securities portfolios. Mutual funds offer exposure to diversified, professionally managed investments for small or individual investors at a low price.
Valuation Using an Income Statement Multiple JAKKS Pacific Inc., a toy manufacturer, reports net income for the recent twelve months of $14.73 million. JAKKS’ has 20.05 million shares outstanding. The industry average PE (using the trailing twelve months earnings) for its competitors is 22.17. Using this industry average PE, estimate the intrinsic value of JAKKS Pacific’s equity. Do not round until your final answer. Round answer to two decimal places.
Answer:
$16.27
Explanation:
For computing the intrinsic value, first we have to compute the earning per share which is shown below:
Earning per share = (Net income) ÷ (Number of shares outstanding)
= ($14.73 million) ÷ (20.05 million shares)
= 0.734
Now the intrinsic value would be
= Earning per share × P/E ratio
= 0.734 × 22.17
= $16.27
To calculate the intrinsic value of JAKKS Pacific's equity, we multiply the earnings per share by the industry average P/E ratio and then by the number of shares outstanding, resulting in an estimated equity value of $326,414,000.
Explanation:To estimate the intrinsic value of JAKKS Pacific's equity using the industry average P/E ratio, we first calculate JAKKS' earnings per share (EPS) by dividing its net income by the number of shares outstanding. This gives us an EPS of $14.73 million / 20.05 million shares = $0.7347 per share. We then multiply the EPS by the industry average P/E ratio of 22.17 to estimate the intrinsic value per share. Hence, the intrinsic value per share would be $0.7347 * 22.17 = $16.28. The total estimated intrinsic equity value of JAKKS would be the value per share multiplied by the total number of shares, which equals $16.28 * 20.05 million shares = $326,414,000.
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Common stock valuelong dashVariable growth Lawrence Industries' most recent annual dividend was $1.80 per share (D0equals$ 1.80), and the firm's required return is 11%. Find the market value of Lawrence's shares when dividends are expected to grow at 8% annually for 3 years, followed by a 5% constant annual growth rate in years 4 to infinity.
Answer:
market value of Lawrence's shares is $34.113
Explanation:
given data
annual dividend = $1.80 per share
Current year dividend Do = $ 1.80
required return = 11%
dividends expected grow = 8% annually
time = 3 year
growth rate = 5%
to find out
the market value of Lawrence's shares
solution
we will apply here Gordon Growth Model for terminal value in year 3 that is
Gordon Growth Model P3 = [tex]\frac{D4}{r-G}[/tex]
and [tex]\frac{D4}{r-G}[/tex] = [tex]\frac{D3(1+G)}{r-G}[/tex]
here r is required return and G is growth rate and D1 is Expected dividend of next 1 year
so here we get D1, D2, D3 and D4 they are as
D1 = $1.8×(1+0.08)
D1 = $1.944
and
D2 = $1.944×(1+0.08)
D2 =$2.0995
and
D3 = $2.0995×(1+0.08)
D3 = $2.267
and
D4 = $2.267×(1+0.05)
D4= $2.38
so
we get here now market value of the share year 3rd end that is
P3 = [tex]\frac{2.38}{0.11-0.05}[/tex]
P3 = $39.67
and
Market value of the share today is
Market value = [tex]\frac{D1}{(1.11)1} + \frac{D2}{(1.11)2} + \frac{D3}{(1.11)3} + \frac{D4}{(1.11)4}[/tex]
put here all value
Market value = [tex]\frac{1.944}{(1.11)1} + \frac{2.0995}{(1.11)2} + \frac{2.267}{(1.11)3} + \frac{39.67}{(1.11)4}[/tex]
solve we get
Market value = $34.113
so market value of Lawrence's shares is $34.113
Valerie bought 200 shares of Able stock today. Able stock has been trading for some time on the NYSE. Valerie's purchase occurred in which market?
A. Dealer market
B. Over-the-counter market
C. Secondary market
D. Primary market
E. Tertiary market
Answer:
(c) Secondary market
Explanation:
Secondary market :
The secondary market, additionally called the reseller's exchange and pursue on open offering is the budgetary market wherein recently gave money related instruments, for example, stock, securities, choices, and fates are purchased and sold.
After the initial issuance, investors can purchase from other investors in the secondary market.
On January 1, Swifty Corporation had 63,100 shares of no-par common stock issued and outstanding. The stock has a stated value of $4 per share. During the year, the following transactions occurred. Apr. 1 Issued 18,900 additional shares of common stock for $12 per share. June 15 Declared a cash dividend of $1.90 per share to stockholders of record on June 30. July 10 Paid the $1.90 cash dividend. Dec. 1 Issued 8,400 additional shares of common stock for $13 per share. Dec. 15 Declared a cash dividend on outstanding shares of $2.10 per share to stockholders of record on December 31. (a) Prepare the entries, if any, on each of the three dates that involved dividends
Final answer:
The entries for dividends involve recording the declaration and payment of dividends on June 15 and July 10 for the first dividend, and another declaration on December 15 for the second dividend, accounting for the total shares outstanding at each date including new share issues.
Explanation:
To prepare the journal entries for the dates involving dividends for Swifty Corporation, we need to record the declaration of the dividends and the payment of the dividends.
June 15: Declaration of Cash Dividend
Retained Earnings Debit: 63,100 shares x $1.90 per share = $119,890Dividends Payable Credit: $119,890This entry recognizes the declaration of a $1.90 per share dividend to be paid on July 10.
July 10: Payment of Cash Dividend
Dividends Payable Debit: $119,890Cash Credit: $119,890This entry represents the actual payment of the dividend declared on June 15.
December 15: Declaration of Cash Dividend
Before we record the December dividend, note the increase in shares from the April and December stock issues:
Initial shares: 63,100April 1 issue: 18,900December 1 issue: 8,400Total shares by December 15: 63,100 + 18,900 + 8,400 = 90,400 sheetsRetained Earnings Debit: 90,400 shares x $2.10 per share = $189,840Dividends Payable Credit: $189,840This entry is to record the declaration of a $2.10 per share dividend to stockholders of record on December 31.
Data for a Poisson with mean 10 A BigJet flight from Philadelphia to Boston has 60 seats. The high fare is $400 and the low fare is $100. There is ample demand for the low fare class and they buy well in advance before high fare customers Demand for the high fare is Poisson with mean 10, 1 0.000 0.000 2 0.002 0.003 3 0.008 0.010 40.019 0.029 5 0.038 0.067 60.063 0.130 7 0.090 0.220 80.113 0.333 9 0.125 0.458 100.1250.583 11 0.114 0.697 12 0.0950.792 13 0.073 0.864 14 0.052 0.917 15 0.0350.951 00.000 0.000 10.0 9.0 8.0 7.0 6.0 5.0 4.1 3.2 2.5 1.8 1.3 0.8 0.5 0.3 0.2 0.1 To choose a protection level... What is Co? What is Cu? What is the optimal protection level? With the optimal protection level.. How many high fare seats can then expect to sell? What is the probability of a full flight? What is the optimal booking limit?
Answer:
Consider the following calculations
Explanation:
Co = low fare = $ 100
Cu = high fare - low fare = 400 - 100 = $ 300
Critical ratio = Cu/(Cu+Co) = 300/(300+100) = 0.75
In the table, look for F(q) >= 0.75 , that value is 0.792 and corresponding value of q = 12. Therefore,
Optimal protection level = 12
Refer the table for q=12, Expected shortage, L(q) = 0.5
Expected high fare seats to be sold = Mean demand - Expected shortage = 10-0.5 = 9.5
Probability of a full flight = 0.792
The Co and Cu values could be $300 and $400 respectively while the optimal protection level could be calculated as 0.43 based on these values. The airline may expect to sell around 10 high fare seats, and the probability of a full flight and the optimal booking limit would depend on the specific demand distribution and protection level.
Explanation:The question is asking about the calculations involved in revenue management for an airline. Specifically, it asks for the determination of the value of Co, Cu, the optimal protection level, the expected number of high fare seats to sell, the probability of a full flight, and the optimal booking limit.
Co and Cu refer to opportunity cost and overselling cost, respectively. They are generally defined in terms of the fare difference between classes. In this case, Co might be the fare difference between the low fare and the high fare ($400-$100=$300), since this is the opportunity cost every time a seat is given to a low fare passenger instead of a high fare one. Similarly, Cu, the cost associated with overbooking could be $400 (the high fare cost), if we assume that the airline has to fully refund the ticket for an oversold seat.
The optimal protection level is typically calculated using the ratio of Co and the sum of Co and Cu. In this case, it would be 300/(300+400)=0.43. The impact of this level is that when the likelihood of higher demand is greater than 0.43, it's better to keep the seat for high fare passengers.
Because the demand for the high fare is a Poisson distribution with mean 10, the number of high fare seats the airline expects to sell would closely resemble this mean. However, it would also depend on how much protection level is provided for these passengers.
The probability of a full flight and the optimal booking limit would also depend on the specific demand distribution and protection level.
Learn more about Revenue Management here:https://brainly.com/question/32771820
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If an excise tax is imposed on restaurant meals, a. fewer meals will be produced and sold b. more meals will be produced and sold c. the government's tax revenue will fall d. the market price of meals will decrease e. restaurants will sell more meals, but at a lower price per meal
Answer:
Correct option is (a)
Explanation:
Excise tax is an indirect tax which is not imposed on customers directly. Excise tax is imposed on producers or sellers for goods produced and they in turn transfer the burden of tax on customers in the form of higher prices. That is why, it is called indirect tax.
It is usually imposed on those goods such as liquor and tobacco whose consumption the Government needs to decrease. If excise tax is imposed on restaurant meals, then the restaurant will be able to produce and sell less at the same price it was charging earlier. If the restaurant wishes to sell more, then it will have to charge higher price.