Answer:
It will have 34,351 available for a down payment at the end of Year 3
Explanation:
savings:
first year: 10,000
second year 10,000 + 5% = 10,000 x 1.05 = 10,500
third years (10,000 + 5%) + 5% = 10,500 x 1.05 = 11,025
return on Invetment
The first saving will capitalize for two years at 9%
[tex]Principal \: (1+ r)^{time} = Amount[/tex]
First year: 10,000.00
time 2.00
rate 0.09
[tex]10000 \: (1+ 0.09)^{2} = Amount[/tex]
Amount 11,881.00
The second savings will capitalize for one yeat at 9%
Second year: 10,500.00
time 1.00
rate 0.09
[tex]10500 \: (1+ 0.09)^{1} = Amount[/tex]
Amount 11,445.00
Total amount:
11,881 + 11,445 + 11,025 = 34,351
What are the determinants of demand?
Income
Price of related goods
A good's own price
Technology
Tastes and preferences
Resource prices
Number of consumers
Final answer:
The determinants of demand include income, price of related goods, a good's own price, tastes and preferences, and the number of consumers. These factors influence how much of a product consumers are willing and able to purchase, causing the demand curve to shift right for an increase or left for a decrease in demand.
Explanation:
The determinants of demand are factors that influence the quantity of a product that consumers are willing and able to purchase at different prices. These determinants include:
Income: Higher income levels typically increase the ability to purchase goods, leading to a rise in demand, while lower income reduces demand.
Price of related goods: The demand for a product can be influenced by the prices of substitutes and complements. If a substitute good becomes cheaper, demand for the original product may decrease, and vice versa.
A good's own price: Generally, as the price of a good increases, its demand decreases, and as the price decreases, its demand increases. This is known as the law of demand.
Tastes and preferences: Changes in consumer tastes and preferences can shift demand. For example, if there's a new health trend favoring a particular food, demand for that food may increase.
Number of consumers: An increase in the number of consumers generally leads to an increase in demand for products.
Each of these factors can cause the demand curve to shift either to the right (an increase in demand) or to the left (a decrease in demand).
Southeast Corporation made sales of $ 950 million during 2018. Of this amount, Southeast collected cash for $ 876 million. The company's cost of goods sold was $ 260 million, and all other expenses for the year totaled $ 275 million. Also during 2018, Southeast paid $ 410 million for its inventory and $ 250 million for everything else. Beginning cash was $ 75 million. a. How much was Southeast's net income for 2018? b. How much was Southeast's cash balance at the end of 2018? a. How much was Southeast's net income for 2018?
Answer:
The cash balace was $291.000.000
The Net Income was $415.000.000
Explanation:
You have to divide the operations in two the operations that represent cash flow and operations that only represent a register in the accounting but doesn't represent money exchange.
Net income
Sales $950.000.000
Cost of sold goods -$260.000.000
other expenses -$415.000.000
Total net income $415.000.000
Cash balance
Beginning Cash $75.000.000
Collected cash +$876.000.000
Paid invetory - $410.000.000
Paid Everything else - $250.000.000
Total cash balance $291.000.000
As you can see the first things that you have to do is clasified the movements if they represents money gets by yhe company(+) or cost or expeditures(-), and after you have to make the operations.
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: A.$53,760.
Explanation:
Year 1 Year 2 Year 3 Year 4 Year 5
Cost 67200 53.760 40.320 26.880 13.440
Dep-Acu 13.440 13.440 13.440 13.440 13.440
Book Value 53.760 40.320 26.880 13.440 0
Anchored inflationary expectations are people's expectations of future inflation that:
A. increase if inflation rises temporarily.
B. are based on the unemployment rate.
C. do not change if inflation rises temporarily.
D. are based on the level of potential output.
Answer:
C) do not change if inflation rises temporarily
Explanation:
Anchored in economics means being insensitive to certain information due to a bias or belief. Anchored inflationary expectations is basically the belief that inflation won't raise
Suppose an economy produces two goods, food and machines. This economy always operates on its production possibilities frontier. Last year, it produced 50 units of food and 30 machines. This year it experienced a technological advance in its machine-making industry. As a result, this year the society wants to produce 55 units of food and 30 machines. Which of the following statements is true? a Because the technological advance occurred in the machine-making industry, it will not be possible to increase food production without reducing machine production below 30. b In order to increase food production in these circumstances without reducing machine production, the economy must reduce inefficiencies. c Because the technological advance occurred in the machine-making industry, increases in output can only occur in the machine industry. d The technological advance reduced the amount of resources needed to produce 30 machines. These resources could be used to produce more food.
Final answer:
The correct statement is that the technological advance in the machine-making industry reduced the resources needed to produce the same amount of machines, allowing the freed-up resources to be used for increased food production, thus benefiting the overall economy.
Explanation:
The economy in question operated on its production possibilities frontier (PPF) last year, producing 50 units of food and 30 machines. This year, with the technological advance in the machine-making industry, the correct statement is: The technological advance reduced the amount of resources needed to produce 30 machines. These resources could be used to produce more food. This scenario is an illustration of how technological progress in one sector can indirectly benefit other sectors by freeing up resources. It's akin to the economy experiencing growth, where the PPF shifts outward, resulting in the potential for increased production capacity not just in the industry with the technological advance, but economy-wide, as long as the society chooses to utilize the freed-up resources efficiently.
During the last year, Len Corp. generated $1,170.00 million in cash flow from operating activities and had negative cash flow generated from investing activities (-640.00 million). At the end of the first year, Len Corp. had $200 million in cash on its balance sheet, and the firm had $280 million in cash at the end of the second year. What was the firm’s cash flow (CF) due to financing activities in the second year?
The firm’s cash flow due to financing activities in the second year was calculated to be - $450 million, using the given change in cash balance, cash flow from operating and investing activities.
Explanation:To determine the cash flow due to financing activities for Len Corp. in the second year, we utilize the formula that the change in a company's cash balance is equal to the net cash flow from operating activities plus net cash flow from investing activities plus net cash flow from financing activities. In this case, the change in cash balance from the end of the first year to the end of the second year is an increase of $80 million (from $200 million to $280 million).
The net cash flow from operating activities was $1,170 million, and the net cash flow from investing activities was - $640 million. Therefore, the equation we can use is:
Change in cash = Cash flow from operations + Cash flow from investing + Cash flow from financing
Which simplifies to:
$80 million = $1,170 million - $640 million + Cash flow from financing
By rearranging and solving for Cash flow from financing, we get:
Cash flow from financing = $80 million - $1,170 million + $640 million
Cash flow from financing = - $450 million.
Therefore, the firm’s cash flow due to financing activities in the second year was - $450 million.
Within economics, the theory of scarcity says that there are unlimited wants and a finite amount of resources. However, history has demonstrated the power of productivity to overcome the theory of scarcity. What is the economic practice responsible for overcoming scarcity?
Answer:
According to the economists, the resources are scarce and human wants are unlimited. So, it is difficult to satisfy each and every want of people. But according to the theory of abundance, we can overcome from this problem by division and specialization of labor. If there is a proper division of labor according to their specialization then this will increase the productivity and one can produce more goods with the same level of resources.
From this economic practice, we can overcome from the problem of scarce resources.
Exercise 25-6 Lewis Company’s standard labor cost of producing one unit of Product DD is 3.1 hours at the rate of $12.7 per hour. During August, 42,200 hours of labor are incurred at a cost of $12.80 per hour to produce 13,500 units of Product DD. (a) Compute the total labor variance. Total labor variance $ (b) Compute the labor price and quantity variances. Labor price variance $ Labor quantity variance $ (c) Compute the labor price and quantity variances, assuming the standard is 3.4 hours of direct labor at $12.95 per hour. Labor price variance $ Labor quantity variance $
Final answer:
A.The total labor variance is $8,315.B. The labor price variance is -$6,330 and the labor quantity variance is -$47,815.C. The labor price variance is $4,220 and the labor quantity variance is $4,445.Explanation:
(a) To compute the total labor variance, we need to calculate the difference between the standard labor cost and the actual labor cost incurred.
Standard labor cost = Standard hours * Standard rate
Standard labor cost = 3.1 hours * $12.7 per hour
Standard labor cost = $39.37 per unit
Actual labor cost = Actual rate * Actual hours
Actual labor cost = 42,200 hours * $12.80 per hour
= $539,360
Total labor variance = Actual labor cost - Standard labor cost
Total labor variance = $539,360 - ($39.37 * 13,500 units)
Total labor variance = $539,360 - $531,045
Total labor variance = $8,315
Therefore, the total labor variance is $8,315.
(b) To compute the labor price variance and labor quantity variance, we need to compare the actual hours and rate to the standard hours and rate.
Labor price variance = (Actual rate - Standard rate) * Actual hours
Labor price variance = ($12.80 - $12.7) * 42,200 hours
Labor price variance = $0.10 * 42,200 hours
Labor price variance = $4,220
The difference in labor amount (actual hours minus standard hours) * The going rate
(42,200 hours - (13,500 units * 3.1 hours)) * $12.7 per hour is the labor quantity variance.(42,200 hours - 41,850 hours) * $12.7 per hour is the labor quantity variance.Labor quantity variance = 350 hours * $12.7 per hourLabor quantity variance = $4,445Consequently, the difference in labor quantity is $4,445 and the difference in labor price is $4,220.
(c) Assuming the standard is 3.4 hours of direct labor at $12.95 per hour, we can calculate the labor price variance and labor quantity variance using the same formulas as in part (b).
Labor price variance = (Actual rate - Standard rate) * Actual hours
Labor price variance = ($12.80 - $12.95) * 42,200 hours
Labor price variance = -$0.15 * 42,200 hours
Labor price variance = -$6,330
The difference in labor amount (actual hours minus standard hours) * The going rate
The labor quantity variance is equal to (12.95 per hour - (13,500 units * 3.4 hours) - 42,200 hours.(42,200 hours - 45,900 hours) * $12.95 per hour is the labor quantity variance.Variance in labor quantity = -3,700 hours * $12.95 per hourVariance in labor quantity = -$47,815Therefore, the labor price variance is -$6,330 and the labor quantity variance is -$47,815.
Total labor variance is $8,515 favorable. Labor price variance is $4,220 unfavorable, and labor quantity variance is 350 hours favorable. With revised standards of 3.4 hours at $12.95 per hour, the labor price variance becomes $630 favorable, and the labor quantity variance is 3,700 hours unfavorable.
Given Data:
Standard labor cost per unit: 3.1 hours at $12.7 per hour.
Actual labor data for August: 42,200 hours at $12.80 per hour for producing 13,500 units of Product DD.
Step-by-Step Solution:
(a) Compute the total labor variance.
Total labor variance is the difference between the actual labor cost incurred and the standard labor cost that should have been incurred based on the actual production.
Calculate standard labor cost per unit:
Standard labor cost per unit = 3.1 hours × $12.7 = $39.37 per unit
Calculate actual labor cost incurred:
Actual labor cost = 42,200 hours × $12.80 = $540,160
Calculate standard labor cost for actual production:
Standard labor cost for 13,500 units = 13,500 units × $39.37 = $531,645
Total labor variance:
Total labor variance = Actual labor cost - Standard labor cost
Total labor variance = $540,160 - $531,645 = $8,515 (favorable)
So, the total labor variance is $8,515 favorable.
(b) Compute the labor price and quantity variances.
Labor price variance:
Labor price variance measures how the actual rate paid compares to the standard rate.
Standard rate = $12.7 per hour
Actual rate = $12.80 per hour
Labor price variance = (Actual rate - Standard rate) × Actual hours
Labor price variance = ($12.80 - $12.7) × 42,200 hours
Labor price variance = $0.10 × 42,200
Labor price variance = $4,220 (unfavorable)
Labor quantity variance:
Labor quantity variance measures the efficiency of labor usage in terms of hours.
Standard hours for actual production = 13,500 units × 3.1 hours = 41,850 hours
Labor quantity variance = Actual hours - Standard hours
Labor quantity variance = 42,200 hours - 41,850 hours
Labor quantity variance = 350 hours (favorable)
Therefore,
Labor price variance = $4,220 unfavorable
Labor quantity variance = 350 hours favorable
(c) Compute the labor price and quantity variances, assuming the revised standard of 3.4 hours at $12.95 per hour.
Revised standard labor cost per unit:
Revised standard labor cost per unit = 3.4 hours × $12.95 = $44.03 per unit
Recalculate the variances with the revised standard:
Labor price variance:
Revised standard rate = $12.95 per hour
Labor price variance = (Actual rate - Revised standard rate) × Actual hours
Labor price variance = ($12.80 - $12.95) × 42,200 hours
Labor price variance = -$630 (favorable)
Labor quantity variance:
Revised standard hours for actual production = 13,500 units × 3.4 hours = 45,900 hours
Labor quantity variance = Actual hours - Revised standard hours
Labor quantity variance = 42,200 hours - 45,900 hours
Labor quantity variance = -3,700 hours (unfavorable)
Therefore,
Labor price variance (revised) = $630 favorable
Labor quantity variance (revised) = 3,700 hours unfavorable
Consider a mutual fund with $260 million in assets at the start of the year and 10 million shares outstanding. The fund invests in a portfolio of stocks that provides dividend income at the end of the year of $2.5 million. The stocks included in the fund's portfolio increase in price by 9%, but no securities are sold and there are no capital gains distributions. The fund charges 12b-1 fees of 1.00%, which are deducted from portfolio assets at year-end. What is the net asset value at the start and end of the year?
Answer: $26; $28.057
Explanation:
Total value = $260 million in assets
Shares outstanding = 10 million
Dividends = $2.5 million
Fund value at the start of the year = [tex]\frac{Total\ value}{No.\ of\ shares\ outstanding}[/tex]
= [tex]\frac{260}{10}[/tex]
= $26
Fund value at the end of the year:
Dividend per share = [tex]\frac{Dividends}{No\ of\ shares}[/tex]
= [tex]\frac{2.5}{10}[/tex]
= $0.25
Price gain at 9% with deduction of 1% of 12b-1
Fund value at the end of the year = $26 × 1.09 × (1 - 0.01)
= $28.057
Are budgets part of the performance measurement system or the performance reward system? a. Part of neither the performance measurement system nor the performance reward system b. Part of both the performance measurement system and the performance reward system c. Part of the performance reward system only d. Part of the performance measurement system only
Answer:
b. Part of both the performance measurement system and the performance reward system
Explanation:
Both are linked according to the objectives and golas.
Performance measure is a quantifiable expression of the amount, cost, or result of activities that indicate how much, how well, and at what level, products or services are provided to customers during a given time period.
Performance and reward strategies are driven by the concept that employees are not inherently born with the desire to come to work and put in their maximum effort every day for no reason at all. ... An effective performance and reward strategy aligns with organizational goals and objectives
Answer:
b. Part of both the performance measurement system and the performance reward system
Explanation:
You need to accumulate $10,000. To do so, you plan to make deposits of $1,250 per year, with the first payment being made a year from today, in a bank account that pays 12 percent interest, compounded annually. Your last deposit will be less than $1,250 if less is needed to round out to $10,000. How many years will it take you to reach your $10,000 goal, and how large will the last deposit be?
It will take you 6years. The final deposit will be $3,458. The final date on which you can make a deposit into a Cash ISA, as specified in the additional terms and conditions provided to you when you open your specific Cash ISA.
What is interest?Interest is the payment of an amount above the principal sum by a borrower or deposit-taking financial institution to a lender or depositor at a specific rate. It is distinct from a fee paid by the lender to the borrower or a third party.In its most basic form, interest is calculated as a percentage of the principal. For example, if you borrow $100 from a friend and agree to repay it with 5% interest, your interest payment would be 5% of $100: $100(0.05) = $5.Here,
The initial deposit will be $1,250.
We will have $1,400 at the end of the year. We employ an interest formula.
A=P (1+r)ⁿ
A=Final total
P stands for Principal ( deposit)
r = the interest rate
n= time
A=1250 (1+0,12)¹=1400
We will deposit $1,250 in year 2 and have accumulated $1,400.
As a result, P will be $1250 + $1400 = $2650.
A=2650 (1+0,12)¹=$2.968
Year 3 = deposit 1250+ total 2.968
A= 4.724,16
Year 4 = deposit 1250+ totalled 4.724,16
A= 6.691,06
Year 5 = deposit 1250+ totalled 6.691,06
A= 8.893,99
We are almost there, so we must perform another calculation.
Year 6 = A Final = 10000= (deposit +accumulated) * 112
So here,
deposit=(10000/112)-8.893,99
Last deposit= $3,458.
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Final answer:
To reach a $10,000 goal with deposits of $1,250 per year and 12% interest compounded annually, it will take approximately 9.85 years. The last deposit will be $750.
Explanation:
To calculate how many years it will take to reach your $10,000 goal, we can use the formula for compound interest:
Final Amount = Principal Amount × (1 + Interest Rate)^Number of Years
In this case, the final amount is $10,000, the principal amount is $1,250, and the interest rate is 12%. Let's solve for the number of years:
$10,000 = $1,250 × (1 + 0.12)^Number of Years
To find the number of years, we can divide both sides of the equation by $1,250 and take the logarithm of both sides:
Number of Years = log(10,000/1,250)/log(1.12)
Using a calculator, we find that it will take approximately 9.85 years to reach the $10,000 goal. Since you make deposits yearly, the last deposit will be made in the 10th year. To calculate the amount of the last deposit, we subtract the sum of the previous deposits (9 deposits of $1,250) from the $10,000 goal:
Last Deposit = $10,000 - (9 × $1,250)
Last Deposit = $10,000 - $11,250
Last Deposit = $750
Project X has an internal rate of return of 20 percent. Project Y has an internal rate of return of 15 percent. Both projects have a positive net present value. Which of the following statements is most correct? Select one: a. Project X must have a higher net present value than Project Y. b. If the two projects have the same WACC, Project X must have a higher net present value. c. Project X must have a shorter payback than Project Y. d. Both answers b and c are correct. e. None of the above answers is correct.
An economist makes an assumption that each additional year of education causes future wages to rise by 7 percent. In this model, if a person with 12 years of education makes $21 000 per year, then a person with 4-year college degree would earn ? per year. (Round your intermediate calculations to two decimal places.)
Answer:
Wage year 4= $12222.19
Explanation:
Giving the following information:
Each additional year of education causes future wages to rise by 7 percent.
A person with 12 years of education makes $21 000 per year.
A person with 4 years of education=$?
We will use the present value formula to calculate the wage in year 0. Then with the final value formula calculate the year 4 wage.
PV= FV/[(1+r)^n]
FV=final value at t time
r= rate
n= period of time
PV= 21000/(1,07^12)= $9324. 2511
Final Value= PV*(1+r)^t
Final Value year 4= 9324.2511*(1,07^4)= $12222.19
A primary market would be utilized when:
A. investors buy or sell existing securities.
B. shares of common stock are exchanged.
C. securities are initially issued.
D. a commission must be paid on the transaction.
Answer: Option C
Explanation: Primary market refers to the market in which the securities are sold to the general public for the first time by the companies. In simple words, the initial public offering process takes place in such markets. The securities could be of any type whether debt, equity or preference.
The market in which existing securities are bough and sold is called secondary market. And the commission is paid in both secondary and primary market.
Hence the correct option is C.
In the JK partnership, Jacob's capital is $140,000, and Katy's is $40,000. They share income in a 3:2 ratio, respectively. They decide to admit Erin to the partnership. Each of the following questions is independent of the others.
Refer to the information provided above. Jacob and Katy agree that some of the inventory is obsolete. The inventory account is decreased before Erin is admitted. Erin invests $38,000 for a one-fifth interest. What is the amount of inventory written down?
A. $10,000
B. $20,000
C. $28,000
D. $36,000
Answer:
Option C
$28,000
Explanation:
As for the information provided,
We have,
New partner to be admitted is Erin and his share will be 1/5th
For this he brings in $38,000.
Therefore, total capital will be = [tex]38,000 \times 5 = 190,000[/tex]
But actual capital after his addition = $140,000 + $40,000 + $38,000 = $218,0000
Therefore, value of inventory written off as will reduce assets, and capital also = $218,000 - $190,000 = $28,000.
This will ultimately make the contribution of Erin equivalent to his share.
The future value and present value equations also help in finding the interest rate and the number of years that correspond to present and future value calculations. If a security currently worth $12,800 will be worth $16,843.93 seven years in the future, what is the implied interest rate the investor will earn on the security—assuming that no additional deposits or withdrawals are made? 3.20% 1.32%
Answer:
r = 4% at this rate a principal of 12,800 returns 16,843.93 in seven years
Explanation:
We will calculate the interest rate at which a principal of 12,800 return 16,843.93 in seven years
[tex]Principal \: (1+ r)^{time} = Amount[/tex]
Principal 12,800
time 7 years
rate ?
Amount 16,843.93
[tex]12800 \: (1+ r)^{7} = 16,843.93[/tex]
[tex](1+r)^{7} = 16,843.93\div12,800\\\\r =\sqrt[7]{16,843.93\div12,800} -1[/tex]
r = 0.0400
r = 4%
Slotnick Chemical received $230,000 from customers as deposits on returnable containers during 2018. Ten percent of the containers were not returned. The deposits are based on the container cost marked up 10%. How much profit did Slotnick realize on the forfeited deposits?
Answer:
$20,909.09
Explanation:
We have been given that Slotnick Chemical received $230,000 from customers as deposits on returnable containers during 2018. 10% of the containers were not returned. The deposits are based on the container cost marked up 10%.
The price after mark-up would be [tex]100\%+10\%=110\%[/tex]
To find the profit on the forfeited deposits, we will divide $230,000 times 10% by 110% as:
[tex]\text{Profit on the forfeited deposits}=\frac{\$230,000\times 10\%}{110\%}[/tex]
[tex]\text{Profit on the forfeited deposits}=\frac{\$230,000}{11}[/tex]
[tex]\text{Profit on the forfeited deposits}=\$20,909.0909[/tex]
[tex]\text{Profit on the forfeited deposits}\approx \$20,909.09[/tex]
Therefore, Slotnick realize a profit of $20,909.09 on the forfeited deposits.
On January 1, 2018, G Corporation agreed to grant all its employees two weeks paid vacation each year, with the stipulation that vacations earned each year can be taken the following year. For the year ended December 31, 2018, G's employees each earned an average of $700 per week. A total of 460 vacation weeks earned in 2018 were not taken during 2018. Wage rates for employees rose by an average of 8 percent by the time vacations actually were taken in 2019. What is the amount of G's 2019 wages expense related to 2018 vacation time?
Answer: $25,760
Explanation:
Given that,
Average earning of each employee = $700 per week
vacation weeks earned in 2018 were not taken in 2018 = 460
Wage rates for employees rose by an average of 8 percent.
Total earnings = $700 per week × 460
= $322,000
Amount of G's 2019 wages expense = Total earnings × Wage rate
= $322,000 × 8%
= $25,760
You notice that your grocery store always has day-old bakery products at a reduced price. Why might that be?
A. At the original price, the quantity demanded was greater than the quantity supplied.
B. At the original price, there was a shortage of bakery products.
C. The original price was an equilibrium price because it was established in a free market.
D. At the original price, quantity supplied was greater than quantity demanded.
D. At the original price, quantity supplied was greater than quantity demanded.
Answer:
D. At the original price, quantity supplied was greater than quantity demanded.
Explanation:
The supply the first day was greater than quantity demanded. That is because, the price wasn't in equilibrium, it should be lower to increase the demanded quantity.
Because it was higher, this excess are sales the next day at reduce-price to find demand.
C.- if this was equilibrium, then it would not be excess of products neither shortage
B.- if there was a shortage, there will be no left-over of day-old bakery products.
A.- If quantity demanded exceed the supply offered it will be no left-over
On completion of her introductory finance course, Marla Lee was so pleased with the amount of useful and interesting knowledge she gained that she convinced her parents, who were wealthy alums of the university she was attending, to create an endowment. The endowment is to allow three needy students to take the introductory finance course each year in perpetuity. The guaranteed annual cost of tuition and books for the course is $1,100 per student. The endownment will be created by making a single payment to the university. The university expects to earn exactly 4% per year on these funds.
A) How large an initial single payment must Marla's parents make to the university to fund the endowment ? round to the nearest dollar
B) What amount would be needed to fund the endowment if the university could earn 6% rather than 4% per year on the funds? round to the nearest dollar
Answer:
A) the downpayment wil be for 82,500 dollars at 4% interest yield
B) the downpatment will be for 55,000 if the interest yield is 6% rathen than 4%
Explanation:
The cost of the course is 1,100
The endownment will be for three students so:
3,300
Now we calculate the value of the perpetuity
The perpetuity is an annuity on which time goes to infinity, this leaves the formula like this:
Perpetuity = C/r
considering the interest rate will be of 4%
3,300 / 0.0.4 = 82,500
If the interest yield were 6% then:
3,300/0.06 = 55,000
The expression "5/10, net 45" means that the customers receive a 5% discount if they pay within 10 days; otherwise, they must pay in full within 45 days. What would the seller’s cost of capital have to be in order for the discount to be cost justified?
Answer:
Ans. The seller´s cost of capital has to be 70.73% annual in order to justify this 5% discount if bills are paid within 10 days.
Explanation:
Hi, in order for discount to be justified, the seller´s cost of capital must be equal or higher than the cost of this discount, and to find this amount, we must use the following formula.
[tex]DiscountCost=(1+\frac{Discount}{1-Discount}) ^{\frac{365}{DaysToPay-DiscountPeriod} } -1[/tex]
Where the discount is presented in its decimal form. So it should look like this.
[tex]DiscountCost=(1+\frac{0.05}{1-0.05}) ^{\frac{365}{45-10} } -1=0.7073[/tex]
That is 70.73% annual.
Best of luck.
The seller's cost of capital would have to be 4% or higher for the discount to be cost-justified.
Explanation:In order for the discount to be cost justified, the seller's cost of capital would have to be equal to or higher than the effective rate of return the firm would invest at. Let's calculate the effective rate of return using the information provided:
The customers receive a 5% discount if they pay within 10 days.Otherwise, they must pay in full within 45 days.The cost of financial capital for the firm is 9%.The firm can capture the 5% return to society.Based on this information, the effective rate of return for the firm would be 4%.
Therefore, the seller's cost of capital would have to be 4% or higher for the discount to be cost-justified.
Find the operating cash flow for the year for Harper Brothers, Inc. if it had sales revenue of $ 302,400,000, cost of goods sold of $ 148,900,000, sales and administrative costs of $ 39,200,000, depreciation expense of $ 60,300,000, and a tax rate of 40 %.
Final answer:
The operating cash flow for Harper Brothers, Inc. is $128,880,000. It is calculated by subtracting operating expenses and taxes from sales revenue and adding back the non-cash depreciation expense.
Explanation:
To calculate the operating cash flow for Harper Brothers, Inc., we will start with the sales revenue and deduct all operating expenses, excluding depreciation since it is a non-cash charge. After that, we will adjust for taxes to get the net operating cash flow.
The formula for operating cash flow is:
Operating Cash Flow = (Sales Revenue - Operating Expenses - Taxes) + DepreciationIn this case:
Sales Revenue = $302,400,000Cost of Goods Sold (COGS) = $148,900,000Sales and Administrative Costs = $39,200,000Depreciation Expense = $60,300,000First, we calculate the Earnings Before Interest and Taxes (EBIT):
EBIT = Sales Revenue - COGS - Sales and Administrative CostsEBIT = $302,400,000 - $148,900,000 - $39,200,000EBIT = $114,300,000Next, we compute the taxes:
Taxes = EBIT * Tax RateTaxes = $114,300,000 * 40%Taxes = $45,720,000Finally, we calculate the operating cash flow:
Operating Cash Flow = (EBIT - Taxes) + DepreciationOperating Cash Flow = ($114,300,000 - $45,720,000) + $60,300,000Operating Cash Flow = $68,580,000 + $60,300,000Operating Cash Flow = $128,880,000Final answer:
To calculate Harper Brothers, Inc.'s operating cash flow, subtract the cost of goods sold and sales and administrative costs from sales revenue, add back depreciation expense, calculate and subtract taxes, resulting in an operating cash flow of $165,960,000 for the year.
Explanation:
To calculate the operating cash flow (OCF) for Harper Brothers, Inc., we start with the sales revenue and subtract both the cost of goods sold (COGS) and sales and administrative costs. Then, we add back the depreciation expense, as it is a non-cash charge, and subtract taxes paid.
Here's the step-by-step calculation:
Using Harper Brothers, Inc.'s figures:
Therefore, the operating cash flow for Harper Brothers, Inc. is $165,960,000 for the year.
At the very least, Joe Average and Bill Gates are both identically limited by:
A. their wealth.
B. the 24 hours that comprise a day.
C. their knowledge.
D. their influence.
Answer:
The correct answer is option 'B': The 24 hours that comprise a day
Explanation:
For comparison between 2 random variables only those values can be said to be identical that have the same values.
From the given options if we compare Joe and Bill Gates we conclude
1) The 2 person's are not identically limited by wealth as the wealth difference can be large.
2) Similarly they can have a vast difference in their knowledge.
3) Person that has larger wealth and knowledge will naturally have larger influence.
Now since the length of a day is 24 hours and this is a universal truth no matter what the circumstances we conclude that they both are limited by this parameter no matter whatever be the difference between the 2.
What must audit firms do to perform financial statement audits for public companies? a. Register with the Public Company Accounting Oversight Board. b. Register with the Institute of Internal Auditors c. Register with the American Institute of Certified Public Accountants d. Register with the U.S. General Accounting Office
Answer:
a. Register with the Public Company Accounting Oversight Board.
Explanation:
As per the standards of Auditing an auditor has to be registered as an public accounting firm, and then only it can perform audit for public companies.
For this, it has to be registered with PCAOB United States.
where, PCAOB stands for Public Company Accounting Oversight Board.
Therefore, correct option is a.
Audit firms must register with the Public Company Accounting Oversight Board (PCAOB) to perform financial statement audits for public companies. Being registered with other accounting agencies, like the Institute of Internal Auditors, the American Institute of Certified Public Accountants, or the U.S. General Accounting Office, can add credibility but is not necessary.
Explanation:For audit firms to perform financial statement audits for public companies, they must register with the Public Company Accounting Oversight Board (PCAOB). The PCAOB is a nonprofit corporation established by Congress to oversee the audits of public companies in order to protect the interests of investors and further the public interest in the preparation of informative, accurate, and independent audit reports. It is not mandatory to register with the Institute of Internal Auditors (IIA), the American Institute of Certified Public Accountants (AICPA), or the U.S. General Accounting Office (GAO) to conduct audits of public companies. However, membership with these bodies can add credibility and follow best auditing practices. Ultimately, the primary requirement for auditing public companies is PCAOB registration.
Learn more about Auditing Public Companies here:https://brainly.com/question/33091333
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In 2014, Hobbs Corp. acquired 12,000 shares of its own $1 par value common stock at $18 per share. In 2015, Hobbs issued 8,000 of these shares at $25 per share. Hobbs uses the cost method to account for its treasury stock transactions. What accounts and what amounts should Hobbs credit in 2015 to record the issuance of the 8,000 shares?
Answer:
It will credit:
Treasury Stock for 144,000
Additional Paid-in TS for 56,000
Explanation:
for the purchase Hobbs did:
treasury stock 216,000
cash 216,000
the entry for the issuance of 8,000 shares will be:
cash proceeds debit: 8,000 x 25 = 200,000
treasury stock at cost: 8,000 18 = 144,000 credit
additional paid-in treasury stock for the difference 200,000 - 144,000 = 56,000
the entry will be:
cash 200,000 debit
Treasury Stock 144,000 credit
Sdditional Paid-in TS 56,000 credit
At January 1, 2018, Transit Developments owed First City Bank Group $600,000, under an 11% note with three years remaining to maturity. Due to financial difficulties, Transit was unable to pay the previous year’s interest. First City Bank Group agreed to settle Transit’s debt in exchange for land having a fair value of $450,000. Transit purchased the land in 2014 for $325,000. Required: Prepare the journal entry(s) to record the restructuring of the debt by Transit Developments. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
interest payable 66,000
note payable 384,000
Land 325,000
Gain on disposal 125,000
Explanation:
600,000 x 11% = 66,000 interest payable
the land is being used to settle the note along with the accrued interest at the time:
the accounting of Transit developments record the land at cost: 325,000
as the market valuye is 450,000 so a gain for 125,000 will be recognize.
450,000 market value - 66,000 interest payable: 384,000 payment on the note principal
the entry will write-off the interest payable, decrease the note by that amount and recognize the land gain on disposal
Madison Finance has a total of $20 million earmarked for homeowner loans and auto loans, where x is homeowner loans in millions of dollars and y is auto loans in millions of dollars. On the average, homeowner loans have a 9% annual rate of return, whereas auto loans yield a 14% annual rate of return. Management has also stipulated that the total amount of homeowner loans should be greater than or equal to 4 times the total amount of automobile loans. Determine the total amount of loans of each type Madison should extend to each category to maximize its returns P in millions of dollars.
Answer:
Ans. Car loans must be $4,000,000 and Home loans $16,000,000 in order to use all the conditions in the problem. Return= $2,000,000
Explanation:
Hi, well, you need to make sure to get as many car loans as the conditions of the problem allows you, since it returns 14%.
I used MS Excel solver to find this result, please download the excel spreadsheet attached to this answer.
Best of luck.
Final answer:
To maximize returns P, determine the total amount of homeowner and auto loans Madison Finance should extend by solving an optimization problem with given constraints.
Explanation:
Madison Finance has $20 million for homeowner and auto loans. Let x be homeowner loans and y be auto loans. Homeowner loans have 9% return, auto loans have 14% return. The constraint is x >= 4y. To maximize returns P, solve the optimization problem.
Define the variables: Let x = amount in million dollars for homeowner loans, y = amount in million dollars for auto loans.
Write objective function: P = 0.09x + 0.14y (representing returns)
Write constraint: x >= 4y (homeowner loans should be >= 4 times auto loans)
Solve the optimization problem: Maximize P = 0.09x + 0.14y subject to x >= 4y and x + y = 20 (total amount constraint)
Determine whether each of the following costs should be classified as direct materials, direct labor, or manufacturing overhead. (a) select an option Frames and tires used in manufacturing bicycles. (b) select an option Wages paid to production workers. (c) select an option Insurance on factory equipment and machinery. (d) select an option Depreciation on factory equipment.
Answer: "(a) Frames and tires used in manufacturing bicycles" - Direct materials.
"(b) Wages paid to production workers." - Direct labor.
"(c) Insurance on factory equipment and machinery." - Manufacturing overhead.
"(d) Depreciation on factory equipment." - Manufacturing overhead.
Explanation: Direct materials are all those that are used directly in the production of a good or service.
Direct labor is that directly involved in the production of a good or service.
Manufacturing overheads are all those expenses that, although necessary for the production of a good or service, are not directly involved in the production process.
Final answer:
Direct materials include frames and tires for bicycles, direct labor is the wages paid to production workers, and manufacturing overhead encompasses insurance and depreciation on factory equipment. Variable costs change with production volume, while fixed operating costs are consistent regardless of units produced.
Explanation:
When classifying costs in manufacturing, it is important to distinguish between direct materials, direct labor, and manufacturing overhead.
Direct materials are the raw materials that are consumed during the manufacture of a product and that are directly incorporated into the product. Frames and tires used in manufacturing bicycles would be classified as direct materials, as they are integral parts of the finished product.Direct labor refers to the wages paid to production workers who are directly involved in the production of goods. Wages paid to these workers would be classified as direct labor.Manufacturing overhead includes all costs associated with the production process that are not direct labor or direct materials. This would include costs like insurance on factory equipment and machinery as well as depreciation on factory equipment, as these are indirect costs necessary for the production process but not directly tied to a specific unit of product.Variable costs, such as direct materials and direct labor, are costs that fluctuate with the number of units produced. Fixed operating costs, or manufacturing overhead, do not vary with the quantity produced in the short term.
4. Your son has been in college and has a large balance on his credit card that was used for school supplies, books, and tuition. You want to help him out since he has done very well in school. You write a letter to the credit card company stating that you will be paying the bill in the future. The credit card company agrees. Is this a valid contract? Yes or No? If Yes, identify the offer, acceptance and consideration.
Answer: you have to go to the people in person and tell them give him a credit card now boi.
Explanation:
Logan Corporation issues 40,000 shares of $50 par value preferred stock for cash at $60 per share. In the stockholders' equity section, the effects of the transaction above will be reporteda. entirely within the capital stock section.b. entirely within the additional paid-in capital section.c. under both the capital stock and additional paid-in capital sections.d. entirely under the retained earnings section.
Answer:
c. under both the capital stock and additional paid-in capital sections
Explanation:
In the given question, the corporation issued 40,000 shares for $50 par value and for cash $60 per share
So, it affects the two accounts, one is preferred stock and the second is additional paid-in capital.
The preference stock should be increased by $2,000,000 (40,000 shares × $50)
Whereas the difference of $400,000 (40,000 shares × $10) would be transferred to additional paid in the capital account
And, the preferred stock has come under a capital stock account that's why we considered both the things