Answer:
C. $ 168 comma 000
Explanation:
The computation of the residual income is shown below:
= Operating income - minimum return
where,
Operating income is $600,000
And, the minimum return equal to
= Invested asset amount × minimum rate of return
= $3,600,000 × 12%
= $432,000
Now put these values to the above formula
So, the value would equal to
= $600,000 - $432,000
= $168,000
We simply applied the above formula
You are considering upgrading from your current inkjet printer to a laser printer. Your old printer cost $350. The new printer costs $600. Print cartridges for the old printer cost $80 each, and print cartridges for the new printer cost $120 each. Cartridges for both printers last for approximately 500 sheets of printing. Your roommate has offered to purchase your old printer for $50. Which cost is a sunk cost
Answer:
$300 i.e irrecoverable cost of old printer
Explanation:
Sunk costs refer to those costs incurred in the past which can no longer be recovered. Such costs are considered as irrelevant in decision making process since they have no current or future implications.
For example, research and development costs incurred by an enterprise in the past represent sunk costs since those costs can no longer be recovered and secondly have no current or future implications w.r.t investment decisions.
In the given case, the cost incurred in purchase of old printer is a sunk cost, incurred in the past. The irrecoverable part of the said cost i.e $350 less $50 i.e $300 represents sunk cost. Also, the expenditure on old printer's cartridges which costed $80 apiece would be regarded as a sunk cost.
This cost of $300 cannot be recovered and would be considered irrelevant w.r.t the decision of purchasing a new advanced printer.
Suppose labor productivity is $110,000 per worker in 2015. Calculate the value of labor productivity in 2035 (20 years later) if: Instructions: Enter your responses rounded to the closest $100. a. Productivity continues to grow by 2.6 percent per year. U.S labor productivity in 2035 would be $ 183,798 183,798 Correct per worker. b. Productivity falls to 2.0 percent per year (the average productivity growth between 1970 and 2009). U.S. labor productivity in 2035 would be $ 163,454 163,454 Correct per worker. c. How much lager would labor productivity per worker be in 2035 with the higher growth rate compared to the lower growth rate. Instructions: Enter your responses rounded to two decimal places. 1.12
Answer:
A. Based on a 2.6% productivity growth per year labor productivity will be $183,798 in 2035 (that is $73,798 improvement over 20 years)
B. Based on a 2.0% productivity growth per year labor productivity will be $163,454 in 2035 (that is $53,454 improvement over 20 years)
C. The difference between both growth scenarios is $20,343
Explanation:
A detailed presentation can be found attached.
The labor productivity in 2035 is estimated to be $183,798 per worker with a 2.6% annual growth rate and $163,454 per worker with a 2.0% annual growth rate. The difference between these two rates is 1.12 times larger at a growth rate of 2.6% than 2.0%.
Explanation:The question asks to calculate the value of labor productivity in 2035, given certain growing rates. In this scenario:
If productivity continues to grow by 2.6 percent per year, from a labor productivity of $110,000 in 2015, the estimation for 2035 predicts a U.S labor productivity of $183,798 per worker. If productivity falls to 2.0 percent per year (average productivity growth between 1970 and 2009), from the same initial labor productivity of $110,000 in 2015, U.S labor productivity in 2035 will be estimated to be $163,454 per worker. The difference in labor productivity per worker in 2035 with the higher growth rate compared to the lower growth rate is 1.12 times larger at a growth rate of 2.6% versus 2.0%.Learn more about Labor Productivity Calculation here:
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The following information is for a collateralized mortgage obligation (CMO). Tranche A of $50 million receives quarterly payments at 9 percent per year, tranche B of $100 million receives quarterly payments at 10 percent per year, and tranche C of $50 million receives quarterly payments at 11 percent per year.If at the end of the first quarter, the CMO trustee receives total cash flows of $8 million, how are they distributed among the three tranches? (0.2 points)5. What is the principal outstanding on Tranche A, Tranche B, and Tranche C after the end of year payment in the previous question? (0.2 points)
The major prediction of the lemons model is that:
a. asymmetric information reduces the average quality of goods offered for sale.
b. a used car in good condition can be sold for a higher-than-average price.
c. people will generally choose "low-hanging fruit".
d. used cars offered for sale are generally in better-than-average condition.
Answer:
A) asymmetric information reduces the average quality of goods offered for sale.
Explanation:
The lemons model or problem refers to investing or purchase related problems due to the fact that investors/buyers have different information about securities/products than the sellers.
Since investors/buyers know that there are lemons (bad products) up for sale, but do not know which of them are actually bad, they will be willing to pay a lower price for high quality investments/goods than if only high quality investments/goods were sold without any lemons mixed with them.
The net income for Martinez Company for 2020 was $305,900. During 2020, depreciation on plant assets was $120,200, amortization of patent was $39,400, and the company incurred a loss on sale of plant assets of $23,500. Compute net cash flow from operating activities. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Answer:
$489,000
Explanation:
Martinez Company
Computation of net cash flow from operating activities for 2010
Details Amount ($)
Net income 305,900
Non-cash expenses adjustment:
Plant depreciation 120,200
Patent amortization 39,400
Loss on sale of plant assets 23,500
Net cash flow from operating activities 489,000
An oil company has agreed to buy oil from Russia at 1,800 Rubles per barrel. Have it shipped to Amsterdam by a Norwegian shipping line for 20 Kroner per barrel. The oil will be refined in Rotterdam for 20 Euros per barrel. Finally, a Philippine shipping line will bring gasoline to Miami for 200 Philippine pesos per barrel. What is the landed cost in dollars of this four-part transaction
Answer:
Landing cost = 56.49 dollars per barrel.
Explanation:
Buying Cost of oil barrel = 1,800 Rubles, which is equal to 27.50 USD per barrel.
Shipping Cost = 20 Krones, which is equal to 2.35 USD per barrel.
Refining Cost = 20 Euros, which is equal to 22.82 USD per barrel.
Transportation Cost = 200 Philippine peso, which is equal to 3.82 USD per barrel.
Therefore, to find landing cost of the above mentioned transaction = 27.50 + 2.35 + 22.82 + 3.82 = 56.49 USD per barrel.
A tornado struck the only manufacturing plant of Toledo Farm Implements (TFI) on June 1. All work-in-process inventory was destroyed, but a few records were salvaged from the wreckage and from the company's headquarters. If acceptable documentation is provided, the loss will be covered by insurance. The insurable value of work-in-process inventory consists of direct materials, direct labor, and applied overhead. The following information about the plant appears on the April financial statements at the company's downtown headquarters: Materials inventory, April 30 $ 98,000 Work-in-process inventory, April 30 172,400 Finished goods inventory, April 30 64,000 Cost of goods sold through April 30 697,200 Accounts payable (materials suppliers), April 30 43,200 Manufacturing overhead through April 30 369,800 Payroll payable, April 30 0 Withholding and other payroll liabilities, April 30 19,400 Overhead applied through April 30 359,200 A count of the inventories on hand May 31 shows the following: Materials inventory $ 86,000 Work-in-process inventory
Required:
Determine the cost of the work-in-process inventory lost in the disaster.
Calculating the lost WIP inventory involves starting with the April 30 WIP value, adding May's manufacturing costs, and subtracting any remaining inventory. Without complete data, an exact calculation isn't possible, and TFI must work with their insurer to estimate the loss.
Explanation:To determine the cost of the work-in-process (WIP) inventory lost in the disaster at Toledo Farm Implements (TFI), we need to calculate the WIP as of May 31. This is done by adding the beginning WIP inventory to the total manufacturing costs incurred during the month (materials used, direct labor, and overhead applied) and then subtracting the ending WIP inventory (if any).
Starting with the WIP inventory as of April 30, which was $172,400, we then add the costs of materials used, direct labor, and manufacturing overhead applied during May. The value of materials used can be calculated by taking the beginning materials inventory, adding purchases (which can be calculated by the change in accounts payable if that represents solely material purchases), and then subtracting the ending materials inventory. The exact amount of materials purchased is not provided, but if we assume all accounts payable were for materials, purchases would be the change in accounts payable plus the materials used during May. We need additional data for direct labor costs and actual overhead costs for May to make a complete calculation, but we know the applied overhead figure is $359,200 as of April 30.
The missing figures make it impossible to calculate the exact loss without assumptions or additional data. If such data is unattainable, TFI should consult with their insurer on an estimation method acceptable for the insurance claim.
Southeastern Bell stocks a certain switch connector at its central warehouse for supplying field service offices. The yearly demand for these connectors is 15 comma 000 units. Southeastern estimates its annual holding cost for this item to be $25.00 per unit. The cost to place and process an order from the supplier is $75.00. The company operates 300 days per year, and the lead time to receive an order from the supplier is 2 working days. a) What is the economic order quantity? nothing units (round your response to the nearest whole number). b) What are the annual holding costs? $ nothing (round your response to the nearest whole number). c) What are the annual ordering costs? $ nothing (round your response to the nearest whole number). d) What is the reorder point? nothing units (round your response to the nearest whole number).
Answer:
EOQ= 300 units
Annual ordering cost= $3750
Annual holding cost =$3750
Re-order point =100 units
Explanation:
The Economic Order Quantity (EOQ) is the order size that minimizes the balance of ordering cost and holding cost. At the EOQ, the carrying cost is equal to the holding cost.
It is computed using he formulae below
EOQ = √ (2× Co× D)/Ch
EOQ = √ (2× 75× 15,000)/25
EOQ = 300 units
Annual holding cost
= EOQ/2 × holding cost per unit
= 300/2 × $25
=$3750
Annual ordering cost
= Annul demand/EOQ × ordering cost per order
=( 15,000/300)× $75
= $3750
Re-order Point
Maximum consumption × maximum lead time
=( 15,000/300)× 2 = 100 units
Riverside Manufacturing designs and manufactures bathtubs for home and commercial applications. Riverside recorded the following data for its commercial bathtub production line during the month of March: Standard DL hours per tub 5 Standard variable overhead rate per DL hour $ 4.00 Standard variable overhead cost per unit $ 20.00 Actual variable overhead costs $ 18 comma 500 Actual DL hours 3 comma 700 Actual variable overhead cost per machine hour $ 5.00 Actual tubs produced 1 comma 200 What is the variable manufacturing overhead efficiency variance in March?
Answer:
The variable manufacturing overhead efficiency variance is 9,000 Favorable.
Explanation:
According to the given data we have the following:
actual DL hours=3,700
standard hours= Actual tubs produced×Standard DL hours per tub
standard hours=1,200×5=6,000
standard rate=$4
Therefore, to calculate the variable manufacturing overhead efficiency variance, we would have to use the following formula:
Variable efficiency variance= (actual hrs - standard hrs)*standard rate
Variable efficiency variance= (3,700 - 6,000)*4
Variable efficiency variance=-$9,000 Favorable
On November 30, Petrov Co. has $105,400 of accounts receivable and uses the perpetual inventory system. Dec. 4 Sold $6,505 of merchandise (that had cost $4,163) to customers on credit, terms n/30. 9 Sold $14,756 of accounts receivable to Main Bank. Main charges a 2% factoring fee. 17 Received $3,578 cash from customers in payment on their accounts. 27 Borrowed $8,432 cash from Main Bank, pledging $10,962 of accounts receivable as security for the loan. (1) Prepare journal entries to record the above transactions. (2) Which transaction would most likely require a note to the financial statements?
Answer:
1)Journal Entries are given below
2) November 27 requires notes to Financial Statements
Explanation:
1) Journal Entries :
DEBIT CREDIT
Nov-04 A/C RECEIVABLES 6505
SALES/REVENUE 6505
COST OF GOODS SOLD 4163
INVENTORY 4163
Nov-09 FEE EXPENSE FACTORING 295
CASH 14461
A/C RECEIVABLES 14756
Nov-17 CASH 3578
A/C RECEIVABLES 3578
Nov-27 CASH 8432
NOTES PAYABLES 8432
Nov-27 NO JOURNAL ENTRY REQUIRED
2) NOTES TO FINANCIAL STATEMENTS
AN AMOUNT OF $ 10962 OF A/C Receivable IS PLEDGED AS SECURITY FOR LOAN.
The 2016 financial statements of CVS Health Corporation reported the following information (in millions): 2016 2015 Net sales $177,526 $153,290 Cost of sales 148,669 126,762 Inventories, net 14,760 14,001 The inventory turnover ratio for 2016 is: A. 9.22 B. 11.48 C. 9.33 D. 10.34 E. None of the above
Answer:
D. 10.34
Explanation:
The computation of inventory turnover ratio is shown below:-
For computing the inventory turnover ratio first we need to find out the average inventory
Average inventory = (Opening stock + Closing stock) ÷ 2
= ($14,760 + $14,001) ÷ 2
= 14380.50
Inventory turnover ratio = Cost of goods sold ÷ Average inventory
= $148,669 ÷ 14380.50
= 10.34
BCD Partnership plans to distribute cash of $20,000 to partner Brad at the end of the taxyear. BCD reported a loss for the year, and Brad’s share of the loss is $10,000. At thebeginning of the tax year, Brad’s basis in his partnership interest, including his share ofpartnership liabilities, was $15,000. BCD expects to report substantial income in futureyears.• What rules are used to calculate Brad’s ending basis in his partnership interest?• How much gain or loss will Brad report for the tax year?• Will the deduction for the $10,000 loss be suspended?• Could any planning opportunities be used to minimize any negative taxramifications of the distribution
Answer:
The rules used to calculate brad's ending basis in his partnership interest is called Ordering rules., and his gain for the tax year report is $ 5,000. the loss for $10,000 can be suspended or put on hold.
Explanation:
From the above question, we resolve the following.
Question 1: What rules are used to calculate Brad’s ending basis in his partnership interest
Explanation: The rules used here is called the Ordering rules. or refers to reduce basis by distributions; increase basis by income items and contributions; and then losses deducted to the extent of remaining basis
Question 2: How much gain or loss will Brad report for the tax year
Explanation: For he tax year report the gain is $ 5,000 gain
Question 3: Will the deduction for the $10,000 loss be suspended
Explanation: Yes loss of $ 10,000 is to be suspended because losses cannot be deductible to pay off shareholders.
Question 4: Could any planning opportunities be used to minimize any negative tax ramifications of the distribution
Explanation: Yes there are planning opportunities to minimize negative tax ramifications of the distribution are as under tax diversification: which means diversifying investments in different types of accounts can diversify tax risk and create more flexibility to optimally select the most tax efficient method of liquidating assets.
Residual income is the:A. difference between the net sales that the analyst expects the firm to generate and the required earnings of the firm. B. difference between the net income that the analyst expects the firm to generate and the required earnings of the firm. C. difference between the common stock that the analyst expects the firm to issue and the required earnings of the firm. D. difference between the expenses that the analyst expects the firm to generate and the required earnings of the firm.
Answer:
The correct answer is letter "D": difference between the expenses that the analyst expects the firm to generate and the required earnings of the firm.
Explanation:
Residual income represents the amount that is left after a company has paid all its capital costs. It is the result of acquiring assets to generate steady revenue over time. Real state, bonds, or stocks are examples of corporate and individual residual income.
Therefore, we could say that residual income is calculated by subtracting the expenses of a firm from its expected earnings out of different sources.
Tano issues bonds with a par value of $180,000 on January 1, 2016. The bonds' annual contract rate is 8%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 10%, and the bonds are sold for $170,862. 1. What is the amount of the discount on these bonds at issuance
Answer:
The discount on the bonds issuance is $9,138.00
Explanation:
discount on bonds at issuance=bonds face value-bonds cash proceeds
bonds face value is $180,000
bonds cash proceeds =$170,862
Discount on bonds at issuance=$180,000-$170,862
Discount on bonds at issuance=$9,138.00
The necessary journal entries to record the bonds issuance are follows:
Dr Cash $170,862.00
Dr discount on bonds issue $9,138.00
Cr Bonds payable $180,000
The discount on the bonds would amortized over relevant years
Issuing bonds is termed as the way for companies to raise the funds for the company. It is referred to as the broad function between the investor and the firm or the corporate. The investor agrees to invest some amount of money in the firm with the guarantee to get a fixed interest in return.
The discount on issuance of the bonds is $9,138.00
Discount on bonds at issuance=bonds face value-bonds cash proceeds
bonds face value is $180,000
bonds cash proceeds =$170,862
[tex]\text{Discount on bonds at issuance}=\$180,000-\$170,862[/tex]
Discount on bonds at issuance=$9,138.00
The necessary journal entries to record the issuance of the bonds have been attached below.
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A product normally sells for $200 per unit. A special price of $180 is offered for the export market. The variable production cost is $160 per unit. An additional export tariff of 10% of revenue must be paid for all export products. What is incremental net income per unit from accepting this special order?
Answer:
Effect on income= $2 increase per unit
Explanation:
Giving the following information:
A special price of $180 is offered for the export market. The variable production cost is $160 per unit. An additional export tariff of 10% of revenue must be paid for all export products.
We need to calculate the effect on income using the following formula:
Effect on income= sales - unitary variable costs
Effect on income= 180 - (160 + 180*0.1)= $2 increase per unit
Assume we have a firm's per-day production data: one person can produce 8 units, 2 people can produce 15 units, 3 people can produce 18 units, and 4 people can produce 20 units. If the per-unit price of the good produced is $5 and daily per-person wages are $27, how many people should the firm hire?
Answer:
1 person.
Explanation:
For one person;
Wage =$27
Total Cost of units = 8×5 = $40
Per unit profit = (40-27)/8 = $1.625 per unit
For two people;
Wage =$27 × 2 = $54
Total Cost of units = 15×5 = $75
Per unit profit = (75-54)/15 = $1.4 per unit
For three people;
Wage =$27 × 3 = $81
Total Cost of units = 18×5 = $90
Per unit profit = (90-81)/18 = $0.5 per unit
For four people;
Wage =$27 × 4 = $108
Total Cost of units = 20×5 = $100
Per unit profit = (100-108)/20 = -$0.4 per unit
Therefore, for the four cases the maximum profit per unit is $1.625, with one person. And since there is no production limits (minimum). So, the firm should hire 1 person.
Swifty Industries had sales in 2016 of $7,520,000 and gross profit of $1,261,000. Management is considering two alternative budget plans to increase its gross profit in 2017. Plan A would increase the selling price per unit from $8.00 to $8.40. Sales volume would decrease by 10% from its 2016 level. Plan B would decrease the selling price per unit by $0.50. The marketing department expects that the sales volume would increase by 115,000 units. At the end of 2016, Swifty has 45,000 units of inventory on hand. If Plan A is accepted, the 2017 ending inventory should be equal to 5% of the 2017 sales. If Plan B is accepted, the ending inventory should be equal to 66,000 units. Each unit produced will cost $1.80 in direct labor, $1.40 in direct materials, and $1.20 in variable overhead. The fixed overhead for 2017 should be $1,553,000.
1. Prepare a sales budget for 2017 under each plan.
2. Prepare a production budget for 2017 under each plan.
3. Compute the production cost per unit under each plan.
4. Compute the gross profit under each plan.
5. Which plan should be accepted?
Answer:Kindly check explanation
Explanation:
2016 volume = 7520000 ÷ 8 = 940,000
Plan A volume = 940,000 - (0.1×940000) = 846000
Plan A selling price = $8.40
Plan B selling price = $(8 - 0.5) = $7.5
Plan B volume = $940,000 + 115,000 = 1,055,000
SALES BUDGET ;
—-------------------------- Plan A. PlanB
Expected unit sale-846,000; 1055000
Unit selling price - $8.40. ; $7.50
Total sales - $7,106,400; $7,912,500
PRODUCTION BUDGET ;
------------------------------- PlanA. PlanB
Expected unit sales- 846000. 1055000
Add:
ending inventory - 42,300. 66,000
Total required unit - 888300. 1,121,000
Less:
Beg. finished goods - 45000. 45000
Tot. required goods - 843,300. 1,076,000
C.
Variable cost = $(1.80+1.40+1.20) = $4.40
Variable cost(PlanA) = $4.40 × 843300 = $3,710,520
Variable cost(PlanB) = $4.40 × 1076000 = $4,734,400
--------------------------------- PlanA. PlanB
Variable cost 3,710,520. 4,734,400
Fixed cost 1553000. 1553000
Total cost(c) 5,263,520. 6,287,400
Total unit(u). 843,300. 1,076,000
Unit cost (c/u) $6.24. $5.84
D.) GROSS PROFIT
Cost of goods sold(PlanA) = $6.24 × 846000 = $5,279,040
Cost of goods sold(PlanB) = $5.84 × 1055000 = $6,161,200
--------------------------------- PlanA. PlanB
SALES. $7,106,400 $7,912,500
Cost of goods sold. $5,279,040. $6,161,200
Gross profit. $1,827,360 $1,751,300
E.) Plan A should be accepted due to it's higher gross profit margin
there are a 140 pounds of flour in inventry on october 1. 1400 loaves are to be produced in october and 1500 loaves in november. flour costs $3 per pound and 1/2 pound is used per loaf. with the policy of 20% of next month's needs being in ending inventory, what is the budget for flour purchases in october
Answer:
The budgeted floor purchases for October is 710 pounds and the cost of 710 pounds of flour is $2130
Explanation:
The flour needed to meet the October's production requirement for loaves is,
1400 * 1/2 = 700 pounds
The desired ending inventory of flour in October = 1500 * 1/2 * 0.2 = 150 pounds
The purchases for October should be enough to meet the desired ending inventory for October and the remaining Production requirement for October after adjusting for opening inventory .
Purchases = Closing Inventory + Production - Opening Inventory
Purchases = 150 + 700 - 140 = 710 pounds
The cost of purchases = 710 * 3 = $2130
The planned flour purchases for October are 710 pounds and the cost for total flour is $2130.
Given that,
Opening stock is 140 pounds.Flour cost $3 per pound and 1/2 pound is used per loaf.In October, production are 1400 loaves and in November, production will be 1500 loaves.Safety stock of 20% of next month needs to be maintained.According to the scenario, computation of given data are as follows,
Flour needs for October production = 1,400 loaves [tex]\times[/tex] 1/2 pound
= 700 pounds
Flour needs for 20% of November production = (1,500 loaves [tex]\times[/tex] 1/2 pounds) [tex]\times[/tex] 20%
= 150 pounds
So, total purchase of flour in October will be as follows,
Purchases = 20% Inventory of Nov. + Current month production - Opening stock
By putting the value, we get,
Purchases = 150 Pounds + 700 pounds - 140 Pounds
= 710 pounds
So, cost of 710 pound flour purchases = 710pounds [tex]\times[/tex] $3
= $2,130
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Assume that the standard deviation of the U.S. market portfolio is 18.2%, the standard deviation of the world portfolio is 17.1%, and the correlation between the U.S. and nonU.S. market portfolios is .47. Suppose you invest 25% of your money in the U.S. stock market and the other 75% in the nonU.S. portfolio. What is the standard deviation of your portfolio?
Answer:
15.5%
Explanation:
The computation of the standard deviation of your portfolio is shown below:
Standard deviation of portfolio = weight of US Market portfolio ^2 × Standard deviation of US Market portfolio ^2 + weight of Non US Market portfolio^ 2 × Standard deviation of Non US Market portfolio^2 + 2 × weight of US Market portfolio × weight of Non US Market portfolio × Standard deviation of US Market portfolio × Standard deviation of Non US Market portfolio × correlation
= [0.25^2 × 18.2^2 + 0.75^2 × 17.1^ 2 + 2 × 0.25 × 0.75 × 18.2 × 17.1 × 0.47]
= (0.0625 × 331.24 + 0.5625 × 292.41 + 54.852525
= 20.7025 + 164.480625 + 54.852525
= 240.03565
Now take the square root of 240.03565 i.e 15.5%
We simply applied the above formula
b) The standard deviation of the portfolio is approximately 15.5%.
To find the standard deviation of a portfolio with multiple assets, you can use the formula for the standard deviation of a two-asset portfolio:
σp = √[(w₁² × σ₁²) + (w₂² × σ₂²) + (2 × w₁ × w₂ × σ₁ × σ₂ × ρ₁₂)]
Where: σp = standard deviation of the portfolio, w₁ and w₂ = weights of the assets in the portfolio, σ₁ and σ₂ = standard deviations of the assets, and ρ₁₂ = correlation between the assets.
Given: σ₁ (U.S.) = 18.2%, σ₂ (Non-U.S.) = 17.1%, ρ₁₂ = 0.47, w₁ = 0.25, w₂ = 0.75
Plugging in the values:
σp = √[(0.25² × 18.2²) + (0.75² × 17.1²) + (2 × 0.25 × 0.75 × 18.2 × 17.1 × 0.47)]
= √[(0.0625 × 331.24) + (0.5625 × 292.41) + (2 × 0.25 × 0.75 × 18.2 × 17.1 × 0.47)]
= √[20.7025 + 164.10525 + 54.78585]
= √[239.5936]
≈ 15.48%
Therefore, the standard deviation of the portfolio is approximately 15.5% (closest to option b).
Complete question
Assume the standard deviation of the U.S. market portfolio is 18.2%, the standard deviation of the non-U.S. portion of the world portfolio is 17.1%, and the correlation between the U.S. and non-U.S. market portfolios is .47. Suppose you invest 25% of your money in the U.S. stock market and the other 75% in the non-U.S. portfolio. What is the standard deviation of your portfolio?
a) 16.7%
b) 15.5%
c) 17.1%
d) 18.6%
Savvy Styles, your salon business, is starting to turn a solid profit. Since you have been operating out of a shared space, you decide it is time to move to a larger salon space of your own and purchase some new chairs and equipment. You get a small business loan from your local bank. Now you should plan to:___________
a. Repay the loan, including interest, over a predetermined amount of time
b. Write the bank a thank you note and put a positive review on Yelp
c. Pay the total interest upfront
d. Pay the minimum payment on the loan to the bank each month
Answer:
I would choose A.
Explanation:
Savvy styles after getting a small business loan from a local bank should plan to repay the loan, including interest, over a predetermined amount of time. Therefore option a is correct.
What is an amortized loan?An amortized loan can be defined as a type of loan that is with scheduled and periodic patents applied to the loan's both principal amount and interest accrued. Here the interest portion of the payments in this type of loan decreases while the principal portion increases.
At first, it pays the relevant interest expense for that particular period and then after that, the remainder of the payment is put toward curtailing the principal amount.
Generally, amortized loans are normally paid off over an extended period with equal amounts paid for each payment period. But there is another option, a person can pay more which further leads to reducing the principal amount they owe.
Types of amortized loans are home loans, auto loans, and personal loans for small projects.
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Which statement is true regarding a foreign currency option? Multiple Choice A foreign currency option gives the holder the obligation to buy or sell foreign currency in the future. A foreign currency option gives the holder the obligation to only sell foreign currency in the future. A foreign currency option gives the holder the obligation to only buy foreign currency in the future. A foreign currency option gives the holder the right but not the obligation to buy or sell foreign currency in the future. A foreign currency option gives the holder the obligation to buy or sell foreign currency in the future at the spot rate on the future date.
Answer: A foreign currency option gives the holder the right but not the obligation to buy or sell foreign currency in the future
Explanation:
A currency option which is also referred to as the forex option is a contract which gives the buyer the right, but not obligated to purchase or sell a particular currency at an exchange rate on or before a particular date.
Currency options is a common way for individuals, corporations, or financial institutions to curtail adverse movements in the exchange rates.
At the beginning of a year, a company predicts total direct materials costs of $1,020,000 and total overhead costs of $1,300,000. If the company uses direct materials costs as its activity base to allocate overhead, what is the predetermined overhead rate it should use during the year?
Answer:
127.45%
Explanation:
Data provided
Total overhead cost = $1,300,000
Total direct material cost = $1,020,000
The calculation of predetermined overhead rate is given below:-
Predetermined Overhead rate = Total overhead cost ÷ Total direct material cost × 100
= $1,300,000 ÷ $1,020,000 × 100
= 127.45%
So, for calculating the predetermined overhead rate we simply applied the above formula.
Petrus Framing's cost formula for its supplies cost is $1,750 per month plus $9 per frame. For the month of March, the company planned for activity of 615 frames, but the actual level of activity was 622 frames. The actual supplies cost for the month was $7,850. The activity variance for supplies cost in March would be closest to: Multiple Choice $63 U $565 U $565 F
Answer:
$ 565 Unfavorable
Explanation:
The actual supplies cost for the month was $7,850
The planned cost supplies for the month would be = $1750 + 9(615)= $1750 +5535= $ 7285
Activity Variance= Actual Supplies Cost- Planned Supplies Cost
Activity Variance= $7,850-$ 7285= $ 565 Unfavorable
An activity variance is a measure of the difference in the planned budget amounts and actual amounts. It is calculated for different activity levels.
The asset account "office supplies" has a balance of $800 at the beginning of the year. The amount on hand at the end of the year is $500. The company has calculated the Office Supplies expense for the year to be $3,500. Based on this information, what amount of office supplies was purchased during the year
Answer:
Purchases= $3,200
Explanation:
Giving the following information:
The asset account "office supplies" has a balance of $800 at the beginning of the year. The amount on hand at the end of the year is $500. The company has calculated the Office Supplies expense for the year to be $3,500.
To calculate the number of purchases, we need to use the following formula:
Purchases= expense of the year + ending balance - beginning balance
Purchases= 3,500 + 500 - 800= $3,200
Greener Pastures Corporation borrowed $1,800,000 on November 1, 2015. The note carried a 8 percent interest rate with the principal and interest payable on June 1, 2016. (a) The note issued on November 1. (b) The interest accrual on December 31. 1. Indicate the effects of the amounts for the above transactions. (Enter any decreases to account balances with a minus sign. Do not round intermediate calculations.)
Answer:
Dr cash $1,800,000
Cr Notes payable $1,800,000
Interest accrual:
Dr Interest expense $24,000
Cr Interest payable $24,000
Assets =liabilities + shareholders'equity
+Cash $1,800,000 =+loan $1800,000
=+liabilities $24,000 + -retained earnings $2400
Explanation:
The issue of notes payable on November 1 2015 implies that there is cash inflow of $1,800,000 while current liabilities also increased by $1,800,000,as result cash is debited with the $1,800,000 and credit is posted notes payable.
On 31st December ,interest of two months would been incurred and should be accrued in the accounts with amount below:
$1,800,000*8%*2/12=$24,000
This should be debited to interest expense and credited to interest payable account
(a) On Nov 1
Cash
To Note Payable
(Being the note issued is recorded)
(b) On Dec 31
Interest expense $24,000 (8% of $1,800,000 × 2 ÷ 12)
To Interest payable $24,000
(Being interest expense is recorded)
Now the impacts are as follows:Assets = Liabilities + Equity
+ Cash + Note payable ($1,800,000)
($1,800,000) + Interest payable ($24,000) - Interest expense ($24,000)
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Bledsoe Company received $28,000 cash from the issue of stock on January 1, 2013. During 2013 Bledsoe earned $9,800 of revenue on account. The company collected $8,600 cash from accounts receivable and paid $6,700 cash for operating expenses. Based on this information alone, during 2013.
o Total assets increased by $39,700.
o Total assets increased by $1,900.
o Total assets increased by $31,100.
o Total assets did not change.
Answer:
During 2013:
Total assets increased by $31,100.
Explanation:
Bledsoe Company received $28,000 cash from the issue of stock on January 1, 2013. Total assets increased by $28,000
Bledsoe earned $9,800 of revenue on account. Account receivable increased by $9,800. Total assets increased by $9,800
The company collected $8,600 cash from accounts receivable. Cash account increased by $8,600 and Account receivable decreased by $8,600. Total assets did not change.
The company paid $6,700 cash for operating expenses. Cash account decreased by $6,700. Total assets decreased by $6,700
During 2013:
Total assets increased = $28,000 + $9,800 - $6,700 = $31,100
Based on the provided information, during 2013, the total assets increased by $1,900. So, the correct option is B.
To determine the change in total assets, we can analyze the impact of various financial transactions. Bledsoe Company received $28,000 cash from the issuance of stock, which is considered an inflow of assets, increasing the total assets by $28,000.
Next, the company earned $9,800 of revenue on account, indicating an increase in accounts receivable (an asset) by $9,800. When the company collected $8,600 cash from accounts receivable, this increased the cash account by $8,600 but reduced accounts receivable by the same amount. Therefore, there was no net change in total assets from this transaction.
Finally, the company paid $6,700 cash for operating expenses, which decreased the cash account by $6,700. However, since this is an expense and not an asset, it does not directly impact the total assets.
Adding up the changes, $28,000 (issuance of stock) - $6,700 (operating expenses) = $21,300, and $21,300 + $9,800 (revenue) - $8,600 (collection of accounts receivable) = $1,900. Therefore, the total assets increased by $1,900 during 2013.
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On October 5, Cullumber Company buys merchandise on account from Marin Company. The selling price of the goods is $6,650, and the cost to Marin Company is $3,010. On October 8, Cullumber returns defective goods with a selling price of $840 and a scrap value of $430. Record the transactions on the books of Marin Company, assuming a perpetual approach.
Answer:
October 5 entries
Debit Accounts receivable $6,650
Credit Sales Revenue $6,650
To record sales
Debit Cost of goods sold $3,010
Credit Inventory $3,010
To record the cost of sales
October 8 entries
Debit Sales return $840
Credit Accounts receivable $840
To record sales reversal due to sales return
Debit Inventory $430
Credit Cost of goods sold $430
Explanation:
The perpetual inventory system is the one that ensures that the book balance for inventory is adjusted for every purchase, sale or return of inventory.
When inventory is sold on account, the entries required are debit accounts receivable and credit revenue then Debit cost of goods sold and credit inventory.
Kenny, Inc., is looking at setting up a new manufacturing plant in South Park. The company bought some land six years ago for $8.9 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent facilities elsewhere. The land would net $11.7 million if it were sold today. The company now wants to build its new manufacturing plant on this land; the plant will cost $22.9 million to build, and the site requires $1,040,000 worth of grading before it is suitable for construction. Required: What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars (e.g., 1,234,567).)
Answer:
The proper cash flow amount to use as the initial investment in fixed assets when evaluating this project is $35,640,000.
Explanation:
Cash flow = Opportunity costs + cost + upgrdation
= $11.7 million + $22.9 million + $1,040,000
= $35,640,000
Therefore, The proper cash flow amount to use as the initial investment in fixed assets when evaluating this project is $35,640,000.
Baker Company uses the weighted-average method in its process costing system. The Assembly Department started the month with 8,000 units in its beginning work-in-process inventory that were 90% complete with respect to conversion costs. An additional 95,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 11,000 units in the ending work-in-process inventory of the Assembly Department that were 90% complete with respect to conversion costs. What were the equivalent units of production for conversion costs in the Assembly Department for the month
Answer:
the equivalent units of production for conversion costs in the Assembly Department for the month are 101,900
Explanation:
Step 1 Calculate the Units Completed and Transferred to Finished Goods
Units Completed and Transferred to Finished Goods = units in beginning work-in-process inventory+ units were transferred in from the prior department-units in the ending work-in-process inventory
therefore, Units Completed and Transferred to Finished Goods = 8,000+95,000-11,000 = 92,000
Step 2 Calculate the equivalent units of production for conversion costs
Note : work-in-process inventory of the Assembly Department that were 90% complete with respect to conversion costs
Work-in-process inventory (11,000× 90%) = 9,900
Units Completed and Transferred Out (92,000× 100%) = 92,000
Total equivalent units of production = 101,900
Answer:
Equivalent unit of production = 101,900 units
Explanation:
Calculating the unit transfer to next department using the formula;
Unit transfer to next department = unit in beginning work in progress+unit started into production -unit in ending work in progress
Unit transfer to next department = 8000+95000-11000
= 92,000
Calculating the conversion unit, we have;
Conversion = 11,000*90%
= 9900
Therefore,
Equivalent unit of production = Unit transfer to next department + Conversion
= 92,000+9900
= 101,900 units
Equivalent unit of production = 101,900 units
g Alphabet Co. uses activity-based costing. The company manufactures two products, Product A and Product B. There are three activity cost pools, with estimated costs and expected cost driver quantities as follows: Activity 1 cost pool has estimated overhead of $18,000. The expected cost driver quantity of Product A is 500 and Product B is 400. Activity 2 cost pool has estimated overhead of $21,000. The expected cost driver quantity is 1,000 for Product A and 500 for Product B. Activity 3 cost pool has estimated overhead of $32,000. The expected cost driver quantity is 300 for Product A and 200 for Product. What is the pool rate for Activity 1
Answer:
Activity 1 rate driver= $20 per driver
Explanation:
Activity-based costing is a form of absorption costing where overheads are charged to product using cost drivers.
Under this method, overheads are first analyzed and categorized by the activities responsible for them and then charged to product based on the amount of benefits enjoyed using cost drivers.
Activity rate per driver is calculated as:
Activity overhead for the period / Total cost drivers for the period
Activity 1 overhead = $18,000
Total expected cost drivers for activity 1 = 500 +400 = 900
Overhead rate per cost driver
= $18,000/900 hours
= $20 per driver