Answer: $4,379.83
Explanation:
Given the following details:
Periodic payment = $550
Interest rate = 11%
Number of periods = 20 years
Present Value (PV) = P[(1 - (1 + r)^-n) / r]
Where
P = periodic payment = $550
r = Interest rate = 11% = 0.11
n = number of periods = 20
PV = 550[(1 - (1 + 0.11)^-20) / 0.11]
PV = 550[(1 - (1.11)^-20) / 0.11]
PV = 550[(1 - 0.1240339) / 0.11]
PV = 550[0.8759660 / 0.11]
PV = 550(7.9633281)
PV = 4379.8304
PV = 4379.83
Several factors affect a firm’s need for external funds. Evaluate the effect of each following factor and place a check next to each factor that is likely to increase a firm’s need for external capital—that is, its AFN (additional funds needed). Check all that apply. The firm increases its dividend payout ratio. The firm’s inventory turnover decreases, with no effect on the sales forecast. The firm previously thought its fixed assets were being operated at full capacity, but now it learns that it actually has excess capacity. Dividends to common shareholders are paid out of after-tax earnings. Do these payouts affect a firm’s AFN? No, dividends do not affect a firm’s AFN, because they are paid out of after-tax earnings. Yes, dividends still affect a firm’s AFN even though they are paid out of after-tax earnings.
Answer:
1.
The firm increases its dividend payout ratio.This will increase the need for external funds because with more funds going towards dividends, there will be less funds available to fund operations. The company will therefore be more probable of being in need of Additional funds.
The firm’s inventory turnover decreases, with no effect on the sales forecast.If the firm's inventory turnover increases, it means that the firm is taking longer to sell off inventory. This will mean that the company will have to invest more in working capital to maintain these inventory levels. This will lead to a higher probability of them needing additional funds.
2. Yes, dividends still affect a firm’s AFN even though they are paid out of after-tax earnings.
Even though they are paid after-tax, they still eat into the funds that the business can be able to set aside to fund operations. So when dividends are paid, the need for AFN increases as well.
During its first month of operations in March, Volz Cleaning, Inc., completed six transactions with the dollar effects indicated in the following schedule:
Dollar Effect of Each of the Six Transactions Ending Balance
Accounts 1 2 3 4 5 6
Cash $ 45,000 $ (8,000) $ (2,000) $ (7,000) $ 3,000 $ (4,000)
Investments (short-term) 7,000 (3,000)
Notes receivable (due in six months)2,000
Computer equipment 4,000
Delivery truck 35,000
Notes payable (due in 10 years) 27,000
Common stock (3,000 shares) 6,000
Additional paid-in capital 39,000
Prepare a classified balance sheet for Volz Cleaning, Inc., at the end of March.
Answer and Explanation:
The Preparation of classified balance sheet for Volz Cleaning, Inc., at the end of March is shown below:-
Assets
Current Assets:
Cash $27,000
($45,000 - $8,000 - $2,000 - $7,000 + $3,000 - $4,000)
Investment (short term) $4,000
($7,000 - $3,000)
Notes receivables $2,000
Total Current Assets $33,000
Long Term Non Current Assets:
Computer equipment $4,000
Delivery Truck $35,000
Total long term $39,000
Total assets $72,000
Liabilities
Liabilities
Notes payable $27,000
Total liabilities $27,000
Stockholder equity
Common Stock $6,000
Additional Paid in Capital $39,000
Total Stockholder's equity $45,000
Total Liabilities & Stockholder's
equity $72,000
Boilermaker House Painting Company incurs the following transactions for September:
1. Paint houses in the current month for $11,000 on account.
2. Purchase painting equipment for $12,000 cash.
3. Purchase office supplies on account for $1,700.
4. Pay workers' salaries of $2,400 for the current month
5. Purchase advertising to appear in the current month for $1,200 caslh
6. Pay office rent of $3,600 for the current month.
7. Receive $6,000 from customers in (1) above.
8. Receive cash of $4,200 in advance from a customer who plans to have his house painted in the following month.
Required:
1. Prepare journal entries for the above transactions.
2. Post each transaction to T-accounts and calculate the ending balances.
At the beginning of September, the company had the following account balances:
Cash $17,100
Accounts Receivable 800
Supplies 320
Equipment 5,600
Accounts Payable 700
Common Stock 16,000
Retained Earnings 7,120.
All other accounts had a beginning balance of zero.
3. Prepare a trial balance.
Answer:
1) Dr Accounts receivable 11,000
Cr Service revenue 11,000
2) Dr Equipment 12,000
Cr Cash 12,000
3) Dr Supplies 1,700
Cr Accounts payable 1,700
4) Dr Wages expense 2,400
Cr Cash 2,400
5) Dr Advertising expense 1,200
Cr Cash 1,200
6) Dr Rent expense 3,600
Cr Cash 3,600
7) Dr Cash 6,000
Cr Accounts receivable 6,000
8) Dr cash 4,200
Cr Deferred revenue 4,200
Cash Accounts receivable
debit credit debit credit
17,100 800
12,000 11,000
2,400 6,000
1,200 5,800
3,600
6,000
4,200
8,100
Supplies Equipment
debit credit debit credit
320 5,600
1,700 12,000
2,020 17,600
Accounts payable Deferred revenue
debit credit debit credit
700 4,200
1,700
2,400
Common stock Retained earnings
debit credit debit credit
16,000 7,120
Service revenue Rent expense
debit credit debit credit
11,000 3,600
Wages expense Advertising expense
debit credit debit credit
2,400 1,200
Boilermaker House Painting Company
Trial Balance
For the month ended September 30, 202x
debit credit
Cash $8,100
Accounts Receivable $5,800
Supplies $2,020
Equipment $17,600
Accounts Payable $2,400
Deferred revenue $4,200
Common Stock $16,000
Retained Earnings $7,120
Service revenue $11,000
Rent expense $3,600
Wages expense $2,400
Advertising expense $1,200
Totals $40,720 $40,720
You manage a risky portfolio with an expected rate of return of 22% and a standard deviation of 34%. The T-bill rate is 6%. Your risky portfolio includes the following investments in the given proportions: Stock A 31 % Stock B 36 % Stock C 33 % Suppose that your client decides to invest in your portfolio a proportion y of the total investment budget so that the overall portfolio will have an expected rate of return of 18%. a. What is the proportion y? (Round your answer to the nearest whole number.) b. What are your client’s investment proportions in your three stocks and the T-bill fund? (Do not round intermediate calculations. Round your answers to 2 decimal places.) c. What is the standard deviation of the rate of return on your client’s portfolio? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Answer and Explanation:
A.
E(r) = y x R(rp) + (1-y)*rf
0.18 = y * 0.22+(1-y)*0.06
0.18 = 0.22y +0.06 -0.06y
Collect like terms
0.18-0.06 = 0.22y - 0.06y
0.12 = 0.16y
y = 0.12/0.16
= 0.75
= 75%
B.
Stock a = 31% x 0.75
= 0.2325
= 23.25%
Stock b = 36% * 0.75
= 0.27%
Stock c = 33% * 0.75
= 0.2475
= 24.75%
A total of all these stocks gives 100 percent
C.
We have standard deviation = 34%
Y * standard deviation
= 0.75 * 0.34
= 0.255
= 25.5%
The following transactions occurred during March, the first month of operations for Quality Galleries, Inc. * Capital Stock was issued in exchange for $360,000 cash. * Purchased $180,000 of equipment by making a $60,000 cash down payment and signing a note payable for the balance. * Made a $35,000 cash payment on the note payable from the purchase of equipment. * Sold a piece of equipment for cash of $18,000. The equipment was sold at cost, so there is no gain or loss on the sale. What are total assets of Quality Galleries at the end of March
Answer:
$445,000
Explanation:
Calculation for the total assets of Quality Galleries at the end of March
First step is to find the balance in the Cash account at the end of March
Cash account balance =$360,000 - $60,000 - $35,000 + $18,000
Cash account balance = $283,000
Now that we have know the Cash account balance the Second step is to calculate for total assets at the end of March
Total assets = $283,000+ $180,000 - $18,000
Total assets = $445,000
Therefore the total assets of Quality Galleries at the end of March will be $445,000
Holly and Luke formed a partnership, investing $240,000 and $80,000, respectively. Determine their participation in the year's net income of $200,000 under each of the following independent assumptions: No agreement concerning division of net income; Divided in the ratio of original capital investment; Interest at the rate of 15% allowed on original investments and the remainder divided in the ratio of 2:3; Salary allowances of $50,000 and $70,000, respectively, and the balance divided equally; Allowance of interest at the rate of 15% on original investments, salary allowances of $50,000 and $70,000, respectively, and the remainder divided equally.
Answer:
1) No agreement concerning division of net income;
if no agreement is made, then profits must be divided equally among partners = $200,000 / 2 = $100,000 for Holly and $100,000 for Luke.2) Divided in the ratio of original capital investment;
Holly should receive $200,000 x ($240,000 / $320,000) = $150,000Luke will get $200,000 - $150,000 = $50,0003) Interest at the rate of 15% allowed on original investments and the remainder divided in the ratio of 2:3;
Holly will receive:
$240,000 x 15% = $36,000($200,000 - $48,000) x 2/5 = $60,800total $96,800Luke will receive:
$80,000 x 15% = $12,000($200,000 - $48,000) x 3/5 = $91,200total $103,2004) Salary allowances of $50,000 and $70,000, respectively, and the balance divided equally;
Holly will receive:
$50,000 salary($200,000 - $120,000) /2 = $40,000total $90,000Luke will receive:
$70,000 salary($200,000 - $120,000) /2 = $40,000total $110,0005) Allowance of interest at the rate of 15% on original investments, salary allowances of $50,000 and $70,000, respectively, and the remainder divided equally.
Holly will receive:
$240,000 x 15% = $36,000$50,000 salary($200,000 - $168,000) /2 = $16,000total $102,000Luke will receive:
$80,000 x 15% = $12,000$70,000 salary($200,000 - $168,000) /2 = $16,000total $98,000The Correct Answer is
1) when there is No agreement concerning the division of net income; then the profits must be divided equally among the partners = $200,000 / 2 = $100,000 for Holly and $100,000 for Luke.
2) when the Divided in the ratio of original capital investment;
Then the Holly should be received $200,000 x ($240,000 / $320,000) = $150,000 After that the Luke will be get the $200,000 - $150,000 = $50,0003) Then the Interest at the rate of 15% allowed on original investments and also that the remainder divided in the ratio of 2:3;
So that the Holly will receive: So that $240,000 x 15% = $36,000 when ($200,000 - $48,000) x 2/5 = $60,800 the total is $96,800 Therefore Luke will be receive: $80,000 x 15% = $12,000 ($200,000 - $48,000) x 3/5 = $91,200 The total is $103,2004) When the Salary allowances of $50,000 and $70,000, respectively, and also that the balance divided equally;
Then Holly will be received: $50,000 salary ($200,000 - $120,000) /2 = $40,000 The total is $90,000 So that Luke will receive: $70,000 salary ($200,000 - $120,000) /2 = $40,000 The total answer is $110,0005) When the Allowance of at the rate of interest 15% on the original that is an investment, salary allowances of $50,000 and also that $70,000, and after that the remainder divided equally.
When the Holly will receive $240,000 x 15% = $36,000 $50,000 salary ($200,000 - $168,000) /2 = $16,000 The total is $102,000 After that Luke will be receive: $80,000 x 15% = $12,000 $70,000 salary ($200,000 - $168,000) /2 = $16,000 The total is $98,000Learn more about:
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Which applicants would be best qualified for the jobs based on educational level?
O Applicant 2 is qualified to be a Radiologist, applicant 1 is qualified to be an Orderly, and applicants 2, 3, and 4
are qualified to be Biomedical Engineers.
O Applicant 3 is qualified to be a Radiologist, applicant 2 is qualified to be an Orderly and applicants 1 and 4 are
qualified to be Biomedical Engineers
O Applicant 1 is qualified to be a Radiologist, applicant 4 is qualified to be an Orderly, and applicants 2 and 3 are
qualified to be Biomedical Engineers.
O Applicant 4 is qualified to be a Radiologist, applicant 3 is qualified to be an Orderly, and applicants 1, 2, and
are qualified to be Biomedical Engineers
Answer:
Applicant 4 is qualified to be a Radiologist, applicant 3 is qualified to be an Orderly, and applicants 1, 2, and 4 are qualified to be Biomedical Engineers.
Explanation:
Applicant 4 is qualified to be a Radiologist, applicant 3 is qualified to be an Orderly, and applicants 1, 2, who are qualified to be Biomedical Engineers would be best qualified for the jobs based on educational level.
What is a job?Body of reporting, particularly a particular task carried out as part of one's daily duties or for a set fee. As a means of generating income and gaining access to a variety of crucial and – anti-goods, systems, and exercises, work plays a significant role in the framing of a patient's identity development.
In this, there will be an application that will be some changes with the person who is qualified. This can be with respect to the carriers that were like radiologists, Biomedical Engineers. As the person will be the one who will be educated will get the job.
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According to a supply and demand model for apples, if the average household income decreases at the same time 10 apple orchards go out of business, one would expect the equilibrium Group of answer choices price of apples to be indeterminate and the equilibrium quantity of apples in the market to increase. quantity of apples in the market to be indeterminate and the equilibrium price of apples to increase. price of apples to increase and the equilibrium quantity of apples in the market to decrease. quantity of apples in the market to decrease and the equilibrium price of apples to stay the same. quantity of apples in the market to decrease and the equilibrium price of apples to be indeterminate.
Answer:
quantity of apples in the market to decrease and the equilibrium price of apples to be indeterminate.
Explanation:
The decrease in income would reduce the demand for apples because there would be less disposable income available to buy apples. The decrease in demand would lead to a fall in price and quantity
If 10 orchards go out of business. The supply of apples would reduce. This would reduce quantity and increase price.
Taking these two occurrence together, equilibrium quantity would fall and there would be an indeterminate change in equilibrium price
Check the attached image for a graph showing these changes
On January 4, Year 1, Barber Company purchased 12,500 shares of Convell Company for $150,000 plus a broker's fee of $4,000. Convell Company has a total of 62,500 shares of common stock outstanding and it is presumed the Barber Company will have a significant influence over Convell. During each of the next two years, Convell declared and paid cash dividends of $0.75 per share, and its net income was $117,000 and $112,000 for Year 1 and Year 2, respectively. The January 12, Year 3, entry to record Barber's sale of 7,500 shares of Convell Company stock, which represents 60% of Barber's total investment, for $101,250 cash should be:
Answer:
Debit Cash $101,250; debit loss on sale of Investment $7,380;credit Long -term Investments $108,630
Explanation:
The journal entry is shown below:
Before that the following calculations could be done
Ownership Percentage 20%
($12,500 ÷ $62,500)
Investment cost $154,000
$150,000 + $4,000
Add: Share of Year 1 net income $23,400
$117,000 × 20%
Add: Share of Year 2 net income $22,400
$112,000 × 20%
Less: Dividends for Year 1 -$9,375
12,500 × 0.75
Less: Dividends for Year 2 -$9,375
12,500 × 0.75
Carrying value of Investment $181,050
The Journal entry is shown below:-
Cash Dr, 101,250
Loss on sale of Investment Dr, $7,380
To Long -Term Investments $108,630 (181050 × 60%)
A large software company has developed the most popular word processor
on the market. Almost every consumer and business in the country uses its
product, which has forced most of its competitors out of business. If a new
company tries to promote an innovative word processor of its own, the large
company usually buys that business right away to eliminate the competition.
2
This situation best illustrates which market condition?
This situation best illustrates the market condition of Monopoly.
what are the real means of Monopoly?
A monopoly is a dominant position of an industry or a zone by means of one agency, to the point of excepting all different possible competitors. Monopolies are frequently discouraged in loose-market countries. they're seen as main to price-gouging and deteriorating exceptional due to the dearth of opportunity choices for purchasers.
what's a monopoly instance?Monopoly instance #1 – Railways
The government affords public services just like the railways. for this reason, they are a monopolist due to the fact new partners or privately held companies are not allowed to run railways. however, the charge for the tickets is affordable so that the general public can use public shipping.
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Answer:
monopoly
Explanation:
You are given the following series of one-year interest rates: 3%, 5%,13 %, 15% Assuming that the expectations theory is the correct theory of the term structure, calculate the interest rates in the term structure for maturities of one to four years, and plot the resulting yield curve. 1. Using the point drawing tool, plot the interest rate (calculated using the data above) for each of the four terms to maturity. Properly label each point according to its corresponding term. 2. Using the 4-point curved line drawing tool, connect these points. Label your curve 'yield curve'. Carefully follow the instructions above, and only draw the required objects.
Answer:
interest rate for year 1 = 3%
interest rate for year 2 = ( 3% + 5% )/2 = 4%
interest rate for year 3 = ( 3% + 5% + 13% )/ 3 = 7%
interest rate for year 4 = ( 3% + 5% + 13% + 15%) / 4 = 9%
Explanation:
Interest rates :
interest rate for year 1 = 3%
interest rate for year 2 = ( 3% + 5% )/2 = 4%
interest rate for year 3 = ( 3% + 5% + 13% )/ 3 = 7%
interest rate for year 4 = ( 3% + 5% + 13% + 15%) / 4 = 9%
Attached below is the plot
A restaurant prepares 200.00 pizza slices and sells them at a rate of $12.00/slice. Expenses for the restaurant include raw material for pizza at $5.00 per slice, $103.00 for monthly rental and monthly insurance of $30.00. Lost sale are taken as $6.00 per unhappy customer. Leftover pizza can be sold for $2.00. The restaurant is open only for 25 days in a month. Today there was a party at nearby office so the demand for pizza went up to 223.00 slices. How much profit could the restaurant earn today?
Answer:
$1428
Explanation:
Profit = Total Revenue - total cost
total revenue = price x quantity sold
total cost = variable cost + fixed cost
total revenue = 223 x $12 = $2676
Variable cost = $5 x 223 = $1115
total fixed cost = $103.00 + $30.00 = $133.00.
Total cost = $1115 + $133 = $1248
profit = $2676 - $1248 = $1428
Angerstein Inc. produces calendars in a two-process, two-department operation. In the Printing Department, calendars are printed and cut. In the Assembly Department, the material received from Printing is assembled into individual calendars and bound. Each department maintains its own Work in Process Inventory, and costs are assigned using FIFO process costing. In Assembly, conversion costs are incurred evenly throughout the process; direct material is added at the end of the process. For September, the following production and cost information is available for the Assembly Department:
• Beginning WIP Inventory: 5,000 calendars (30 percent complete as to conversion); transferred in cost, $7,550; conversion cost, $1,093
• Transferred in during September: 80,000 calendars
• Current period costs: transferred in, $80,000; direct material, $10,270, conversion, $13,991
• Ending WIP Inventory: 6,000 calendars (80 percent complete as to conversion) For the Assembly Department, compute the following:
a. Equivalent units of production for each cost component EU for transferred in 85,000 x EU for direct materials 79,000 EU for conversion 83,800 x
b. Cost per EUP for each cost component Note: Round your answers to two decimal places. Transferred in cost per EUP $ 87.550 X Material cost per EUP Conversion cost per EUP $ 0 x
c. Cost transferred to Finished Goods Inventory Note: Round your final answer to the nearest whole dollar. $ 105,860
d. Cost of ending WIP Inventory Note: Round your final answer to the nearest whole dollar. $ $ 7,044
Answer:
a) EU for transferred in costs = 80,000
EU for materials costs = 79,000
EU for conversion costs = 82,300
b) cost per EU for transferred in costs = $1
cost per EU for materials costs = $0.13
cost per EU for conversion costs = $0.17
c) costs transferred to finished goods inventory = $106,088
d) cost of ending WIP = $6,816
Explanation:
units completed = 5,000 + 80,000 - 6,000 = 79,000
beginning WIP 5,000 units:
transferred in costs $7,550
30% completed for conversion costs ($1,093)
0% completed for materials
current period:
transferred in costs $80,000, cost per EUP = $80,000 / 80,000 = $1.00
materials $10,270, cost per EUP = $10,270 / 79,000 = $0.13
conversion $13,991, cost per EUP = $13,991 / [(5,000 x 70%) + 74,000 + (6,000 x 80%)] = $13,991 / 82,300 = $0.17
costs transferred to finished goods inventory = (74,000 x $1) + (79,000 x $0.13) + (77,500 x $0.17) + $7,550 + $1,093 = $106,088
ending WIP = (4,800 x $0.17) + $6,000 = $6,816
Decision Point: How Can You Help the Sales Team Better Understand the Commission Plan? You remember from your discussion with Sean that, "Many members of the sales team don’t seem to understand the commission system, and many see it as unfair." You study the existing commission plan and don’t see anything as inherently unfair, but you have your suspicions as to who might think it unfair. You speak to a number of sales personnel and discover that it is the newer salespeople who see the commission plan as unfair. Commission rates for sales personnel who have been employed by Swazzi for less than two years are lower than for employees who have been at Swazzi for longer than two years. Newer employees believe they put as much effort into each sale as longer-tenured employees and should be rewarded the same. Using expectancy theory, what would you do to address this problem? Select an option from the choices below and click Submit.
Question Completion with Options:
*Re-evaluate the existing commission plan to determine whether you can eliminate the perception of unfairness. Re-evaluate the base salaries by comparing them to other upscale clothing stores.
*Put all salespeople on the same commission plan regardless of tenure. This will clearly establish a strong relationship between performance and reward for all sales personnel. Increase the base salaries of longer-tenured salespeople who have worked for Swazzi more than two years to reinforce the relationship between their experience/loyalty and their rewards.
*Travel to the stores and explain the system in detail to the sales teams. Tell them you will try to clear up any perceived unfairness once you see whether they are serious about selling
Answer:
*Put all salespeople on the same commission plan regardless of tenure. This will clearly establish a strong relationship between performance and reward for all sales personnel. Increase the base salaries of longer-tenured salespeople who have worked for Swazzi more than two years to reinforce the relationship between their experience/loyalty and their rewards.
Explanation:
Longer-term sales personnel should be rewarded differently from newer personnel. But, this differential reward should not be based on the sales commission. The base salary will be more ideal for this tenure reward. This will be in line with the Expectancy Theory which states that employees base their individual levels of effort on what is necessary to perform well and earn rewards within the workplace. The theory also requires that the reward structure is clear with well-defined goals and routine evaluations. The Expectancy Theory helps workers to put in their best because they are looking forward to some well-defined and clear rewards.
Dewey Corp. is expected to have an EBIT of $2.45 million next year. Depreciation, the increase in net working capital, and capital spending are expected to be $180,000, $85,000, and $185,000, respectively. All are expected to grow at 18 percent per year for four years. The company currently has $13 million in debt and 800,000 shares outstanding. The company’s WACC is 9.1 percent and the tax rate is 21 percent. You decide to calculate the terminal value of the company with the price-sales ratio. You believe that Year 5 sales will be $27.4 million and the appropriate price-sales ratio is 1.9. What is your estimate of the current share price?
Answer:
$41.13
Explanation:
The current share price can be calculated by first deducting the debt from the firm value then divide the equity value by the number of shares outstanding. To calculate the firm value first we need to calculate the free cash flows and after calculating free cashflows we will multiply them with the Compan's WACC to reach the present value of each free cash flow
DATA
EBIT = 2.45m
WACC = 9.1%
Tax rate = 21%
Debt = 13m
Outstanding shares = 800,000
NOTE: Calculations are attached in attachments
If Ford Motor Company builds a new auto plant in South Africa this is considered to be
Group of options omitted and they are
a) brownfield investment only
b) brownfield and horizontal investment
c) greenfield and horizontal investment
d) greenfield and vertical investmen
Answer:c) greenfield and horizontal investment
Explanation:
A green-field investment is foreign direct investment whereby a parent company establishes a new subsidiary in a different or foreign country, starting its operations from the scratch, ie building the establishment from ground up and not buying an already existing plant or structure..
By horizontal direct investment , it means that the investor establishes the same type of operation in a different country as it operates in its home country, for example, Ford Motor Company based in the United States building a new auto plant in South Africa.
Why should investors know the difference between nominal and real interest rates?
O to know what they are likely to lose
O to understand changes in monetary policy
to guarantee an investment's profitability
O to recognize the effects of inflation
Answer:
to recognize the effects of inflation
Explanation:
The nominal rate of interest is the interest earned before adjusting for inflation. The nominal interest rate is simple to recognize and calculate. It is the rate quoted on loans, deposits, bonds, and mutual funds. The nominal rate communicates to the investor the percentage of returns to expect from their investment. The higher the percentage, the better the returns. However, nominal interest does not take account of inflation.
Inflation erode the purchasing power of money. A high inflation rate will mean that any investment gains may not benefit the investor as the currency will have weakened. The real interest rate considers inflation rates. It tells the investor the actual gain from an investment after adjusting for inflation.
Answer:
To recognize the effects inflation.
Explanation: This is the correct answer on edg 2020 (just took the quiz) ^-^
2. An electronics manufacturing firm is currently manufacturing resistors that have a variable cost of $0.50 per unit and a selling price of $1.00 per unit. Fixed costs are $100,000. Current volume is 300,000 units. The firm can substantially improve the product quality by adding a new piece of equipment at an additional fixed cost of $60,000. Variable cost would increase to $0.60, but volume should jump to 500,000 units due to the higher-quality product. a. Should the firm buy the new equipment? b. What is the minimum price the company would have to charge in order for the new equipment to be worth purchasing (assuming the higher or lower price doesn’t affect the 500,000 unit volume)?
Answer:
a. Should the firm buy the new equipment?
no, because operating profit will decreaseb. What is the minimum price the company would have to charge in order for the new equipment to be worth purchasing (assuming the higher or lower price doesn’t affect the 500,000 unit volume)?
$1.02 per unitExplanation:
contribution margin per unit = $0.50
total units sold = 300,000
fixed costs = $100,000
operating income = (300,000 x $0.50) - $100,000 = $50,000
if the firm improves the quality of their products:
contribution margin per unit = $0.40
total units sold = 500,000
fixed costs = $160,000
operating income = (500,000 x $0.40) - $160,000 = $40,000
if you want to keep operating income at $50,000 then minimum sales price should be:
500,000 = $210,000 / contribution margin
contribution margin = $210,000 / 500,000 = $0.42
sales price = contribution margin + variable costs = $0.42 + $0.60 = $1.02 per unit
The future of work is characterized by (choose all that apply):
a.
Staying at the same job for your entire career.
b.
Working with international colleagues.
c.
Repetitive jobs.
d.
Multiple career changes.
Answer:
B
Explanation:
You want a good impression with people and you also need people to help you along the way
The Wod Chemical Company produces a chemical compound that is used as a lawn fertilizer. The compound can be produced at a rate of 10,000 pounds per day. Annual demand for the compound is 0.6 million pounds per year. The fixed cost of setting up for a production run of the chemical is $1,500, and the variable cost of production is $3.50 per pound. The company uses an interest rate of 22 percent to account for the cost of capital, and the costs of storage and handling of the chemical amount to 12 percent of the value. Assume that there are 250 working days in a year.
A. What is the optimal size of the production run for this particular compound?
B. What proportion of each production cycle consists of uptime and what proportion consists of downtime?
C. What is the average annual cost of holding and setup attributed to this item? If the compound sells for $3.90 per pound, what is the annual profit the company is realizing from this item?
Answer:
A. What is the optimal size of the production run for this particular compound?
first we have to determine the holding cost per unit = h = (22% + 012%) x ($3.5) = $1.19 per unit, per year
then we have to calculate the modified holding cost per year = h' = h x [1 / (D/P)] = $1.19 x [1 / (600,000/2,500,000)] = $0.9044 per unit, per year
now we have to substitute h for h' in the EOQ formula:
Q' = √ [(2 x S x D) / h'] = √ [(2 x $1,500 x 600,000) / $0.9044] = 44,612.44 ≈ 44,612 units
B. What proportion of each production cycle consists of uptime and what proportion consists of downtime?
Time between production runs = Q' / D = 44,612 / 600,000 = 0.07435333
Uptime = Q' / P = 44,612 / 2,500,000 = 0.0178448
Downtime = total time - uptime = 0.07435333 - 0.0178448 = 0.05650853
uptime = 0.0178448 / 0.07435333 = 24% of total time
downtime = 0.05650853 / 0.07435333 = 76% of total time
C. What is the average annual cost of holding and setup attributed to this item? If the compound sells for $3.90 per pound, what is the annual profit the company is realizing from this item?
average annual holding cost and setup costs = (AD/Q') + (h'Q'/2) = [($1,500 x 600,000) / 44,612] + [($0.9044 x 44,612) / 2] = $40,144
profit per unit = $3.90 - $3.50 = $0.40 per pound
total annual profit = ($0.40 x 600,000) - $40,144 = $199,856
A municipality is considering an investment in a small renewable energy power plant with the following parameters. The cost is $360,000, and the output averages 50 kW year-round. The price paid for electricity at the plant gate is $0.039/kWh. The investment is to be evaluated over a 25-year time horizon, and the expected salvage value at the end of the project is $20,000. The MARR is 6%.Calculate the NPV of this investment. Is it financially attractive? Calculate the operating credit per kWh which the government would need to give to the investment in order to make it break even financially. Express your answer to the nearest 1/1000th of dollars
Answer:
this project is not financially attractive because the NPV is negative (-$136,974.74)operating credit per kWh = $0.0245Explanation:
initial investment = $360,000
yearly cash flows 1 - 24 = 50 x $0.039 x 24 hours x 365 days = $17,082
yearly cash flow year 25 = $17,082 + $20,000 = $37,082
using a financial calculator, the present value of the yearly cash flows = $223,025.26
this project's NPV = -$360,000 + $223,025.26 = -$136,974.74
in order for this project to be profitable, NCFs should be:
$360,000 - ($20,000 / 1.06²⁵) = $355,340.03
annual earnings = $355,340.03 / 12.783 (PV annuity factor, 6%, 25 periods) = $27,797.86
total kWh = 50 x 24 x 365 = 438,000
$27,797.86 / 438,000 = $0.063465 per kWh
operating credit = $0.063465 - $0.039 = $0.0245
Frinut Company estimates the following overhead costs for the coming year: Equipment depreciation $250,000 Equipment maintenance 50,000 Supervisory salaries 20,000 Factory rent 100,000 Total $420,000 Frinut budgeted $600,000 in direct labor costs and 14,000 machine hours for the coming year. (a) Incorrect answer iconYour answer is incorrect. Calculate the predetermined overhead rate using direct labor costs as the allocation base. (Round answer to 2 decimal places, e.g. 15.25.) Predetermined overhead rate $enter the predetermined overhead rate in dollars per direct labor 1.7 per direct labor Attempts: 1 of 1 used (b) Incorrect answer iconYour answer is incorrect. Calculate the predetermined overhead rate using machine hours as the allocation base. (Round answer to 2 decimal places, e.g. 15.25.) Predetermined overhead rate $enter the predetermined overhead rate in dollars per machine hour 72.86 per machine hour
Answer:
$0.70 per direct labor hour
$30 per direct labor hour
Explanation:
The computation is shown below:
a. For predetermined overhead rate using direct labor costs is
= Estimated overhead ÷ estimated direct labor cost
= $420,000 ÷ $600,000
= $0.70 per direct labor hour
b. For the predetermined overhead rate using machine hours is
= Estimated overhead ÷ estimated machine hours
= $420,000 ÷ 14,000 machine hours
= $30 per direct labor hour
can someone help me with the picture above please. if your right i’ll give you the extra points
Swanson Company has identified the following activities related to indirect production costs: Activity Activity Costs Cost Drivers Machine Setup $180,000 1,500 Setup Hours Materials Handling $50,000 12,500 pounds of materials Electric Power $20,000 20,000 Kilowatt hours Swanson Company has obtained the following data concerning two products: Product 1 Product 2 Number of units produced 4,000 20,000 Direct Material Cost $20,000 $25,000 Direct Labor Cost $12,000 $20,000 Number of setup hours 100 120 Pounds of materials used 500 1,500 Kilowatt-hours 1,000 2,000 Using Activity Based Costing, what is the total production cost per unit for Product 1
Answer:
Unitary cost= $11.75
Explanation:
First, we need to calculate the predetermined overhead rate for each activity:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Machine Setup= 180,000/1,500= $120 per set up hour
Materials Handling= 50,000/12,500= $4 per pound
Electric Power= 20,000/20,000= $1 per kilowatt hour
Product 1:
Number of units produced 4,000
Direct Material Cost $20,000
Direct Labor Cost $12,000
Number of setup hours 100
Pounds of materials used 500
Kilowatt-hours 1,000
Now, we can determine the total cost for Product 1:
Total cost= 20,000 + 12,000 + (120*100 + 4*500 + 1*1,000)
Total cost= $47,000
Finally, the unitary cost:
Unitary cost= 47,000/4,000
Unitary cost= $11.75
Here are data on two stocks, both of which have discount rates of 18%: Stock A Stock B Return on equity 18 % 15 % Earnings per share $ 4.60 $ 2.90 Dividends per share $ 2.30 $ 2.30 a. What are the dividend payout ratios for each firm? (Enter your answers as a percent rounded to 2 decimal places.) b. What are the expected dividend growth rates for each stock? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) c. What is the proper stock price for each firm? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Answer:
a. What are the dividend payout ratios for each firm?
payout ratio stock A = $2.30 / $4.60 = 0.5 = 50%payout ratio stock B = $2.30 / $2.90 = 0.7931 = 79.31%b. What are the expected dividend growth rates for each stock?
growth rate stock A = 0.18 x (1 - 50%) = 0.09 = 9%growth rate stock B = 0.15 x (1 - 79.31%) = 0.031035 = 3.10%c. What is the proper stock price for each firm?
stock A's proper price = $2.507 / (0.18 - 0.09) = $27.86stock B's proper price = $2.3713 / (0.18 - 0.031) = $15.91Explanation:
dividend payout ratio = dividend / EPS
growth rate = ROE x (1 - dividend payout ratio)
P₀ = Div₁ / (Re - g)
Rhonda owns 50% of the stock of Peach Corporation. She and the other 50% shareholder, Rachel, have decided that additional contributions of capital are needed if Peach is to remain successful in its competitive industry. The two shareholders have agreed that Rhonda will contribute assets having a value of $200,000 (adjusted basis of $15,000) in exchange for additional shares of stock. After the transaction, Rhonda will hold 75% of Peach Corporation and Rachel's interest will fall to 25%. a. What gain is realized on the transaction
Answer:
$185,000
Explanation:
According to the given situation, the computation of gain is shown below:-
Recognized gain = Amount realized—stock - Adjusted basis of property transferred
= $200,000 - $15,000
= $185,000
Therefore, for computing the recognized gain we simply applied the above formula.
Hence, the gain realized on the transaction is $185,000
1. What is the ending balance in the accounts listed below given the following transactions: a. RWV borrows $1,100,000 in the form of a note payable. b. RWV purchases land for $250,000. c. RWV builds a building for $750,000. d. RWV orders $7,500 worth of food, which will be paid for later. e. RWV provides services worth $95,000, and will bill for the services later. f. RWV pays salaries to employees totaling $45,000. g. RWV pays $7,500 towards the food it previously ordered. h. RWV uses $5,000 worth of food. i. RWV pays $17,000 of G
Answer:
RWVEnding Account Balances:Account Details Debit Credit
Notes Payable $1,100,000
Cash $30,500
Land 250,000
Building 750,000
Supplies (Food) 2,500
Accounts Receivable 95,000
Service Revenue 95,000
Salaries Expense 45,000
Supplies (Food) Exp. 5,000
G 17,000
Totals $1,195,000 $1,195,000
Explanation:
a) Notes Payable
Account Details Debit Credit
Cash $1,100,000
a) Cash Account
Account Details Debit Credit
Notes Payable $1,100,000
Land (b) $250,000
Building (c) 750,000
Salaries (f) 45,000
Supplies (Food) (g) 7,500
G (i) 17,000
Balance c/d $30,500
b) Land
Account Details Debit Credit
Cash $250,000
c) Building
Account Details Debit Credit
Cash $750,000
d) Supplies (Food)
Account Details Debit Credit
Accounts Payable $7,500
Supplies (Food) Expense (h) $5,000
Balance c/d $2,500
Accounts Payable
Account Details Debit Credit
Supplies (d) $7,500
Cash (g) $7,500
e) Accounts Receivable
Account Details Debit Credit
Service Revenue $95,000
Service Revenue
Account Details Debit Credit
Accounts Receivable (e) $95,000
f) Salaries Expense
Account Details Debit Credit
Cash $45,000
h) Supplies (Food) Expense
Account Details Debit Credit
Supplies (Food) $5,000
i) G
Account Details Debit Credit
Cash $17,000
Outdoor Expo provides guided fishing tours. The company charges $300 per person but offers a 20% discount to parties of four or more. Consider the following transactions during the month of May.
May 2 Charlene books a fishing tour with Outdoor Expo for herself and four friends at the group discount price ($1,200 = $240 × 5). The tour is scheduled for May 7.
May 7 The fishing tour occurs. Outdoor Expo asks that payment be made within 30 days of the tour and offers a 6% discount for payment within 15 days.
May 9 Charlene is upset that no one caught a single fish and asks management for a discount. Outdoor Expo has a strict policy of no discounts related to number of fish caught.
May 15 Upon deeper investigation, management of Outdoor Expo discovers that Charlene’s tour was led by a new guide who did not take the group to some of the better fishing spots. In concession, management offers a sales allowance of 30% of the amount due.
May 20 Charlene pays for the tour after deducting the sales allowance.
Required:
a. Record the necessary transaction(s) for Outdoor Expo on each date.
b. Calculate net revenues.
c. Show how Outdoor Expo would present net revenues in its income statement.
Answer:
May 2 No entry is required as the transaction is yet to happen
May 7 DR Accounts Receivable $1,200
CR Tour Revenue $1,200
May 9 DR No entry required
May 15 DR Sales Allowance (1,200 * 30%) $360
CR Accounts Receivable $360
May 20 DR Cash $789.60
DR Sales Discount $50.40
CR Accounts Receivable $840
Working
Accounts Receivable = 1,200 - 360 sales allowance = $840
Sales Discount = 840 * 6% discount = $50.40
Cash = 840 - 50.40 = $789.60
b. Net Revenues
= Revenue - Sales allowance - Sales discount
= 1,200 - 360 - 50.40
= $789,60
c. Partial Income Statement
Tour Revenues $1,200
Less:
Sales Allowance $360
Sales Discount $50.60
($410.60)
Net Tour Revenue $789.40
The net revenue for Outdoor Expo will be $789.60.
How to calculate net revenueThe necessary transactions for Outdoor Expo on each date will be:
May 2 No entry
May 7 Debit Account receivable $1200
Credit Tour revenue $1200
May 9 No entry
May 15.
Debit Sales revenue $360
Credit Sales revenue $360
May 20
Debit Cash $789.60
Credit Sales discount $50.40
Credit Account receivable $840
The net revenue will be calculated as:
= Revenue - Sales - Sales discount
= 1200 - 360 - 50.40
= $789.60
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Perpetual Inventory Using LIFO Beginning inventory, purchases, and sales data for DVD players are as follows: November 1 Inventory 120 units at $39 10 Sale 90 units 15 Purchase 140 units at $40 20 Sale 110 units 24 Sale 45 units 30 Purchase 160 units at $43 The business maintains a perpetual inventory system, costing by the last-in, first-out method. Determine the cost of goods sold for each sale and the inventory balance after each sale, presenting the data in the form illustrated in Exhibit 4. Under LIFO, if units are in inventory at two different costs, enter the units with the HIGHER unit cost first in the Cost of Goods Sold Unit Cost column and LOWER unit cost first in the Inventory Unit Cost column.
Answer:
COGS and inventory balance under LIFO (last in, first out):
November 10 sale
COGS = 90 x $39 = $3,510inventory balance after sale = $1,170November 20 sale
COGS = 110 x $40 = $4,400inventory balance after sale = $2,370November 24 sale
COGS = 30 x $40 = $1,200COGS = 15 x $39 = $585total COGS = $1,785inventory balance after sale = $585When calculating costs under LIFO, we must use the cost of the last units purchased for determining cost of goods sold. This method is generally used when the price of the goods tends to increase during the period.
Sweet Catering completed the following selected transactions during May 2016:May 1: Prepaid rent for three months, $2,400May 5: Received and paid electricity bill, $90May 9: Received cash for meals served to customers, $3,510May 14: Paid cash for kitchen equipment, $3,730May 23: Served a banquet on account, $1,520May 31: Made the adjusting entry for rent (from May 1).May 31: Accrued salary expense, $2,630May 31: Recorded depreciation for May on kitchen equipment, $560If Sweet Catering had recorded transactions using the Accrual method, how much net income (loss) would they have recorded for the month of May? If there is a loss, enter it with parentheses or a negative sign.
Answer:
See explanation below
Explanation:
• Computation of Net income/loss recorded for the month of May, using accrual method
Received cash for meals served to customers $3,510
+ Served a banquet on account $1,520
Total revenue $5,030
Less: expenses
(-) rent expense for May ($2,400/3) ($800)
(-) received and paid electricity bill ($90)
(-) accrued salary expense ($2,630)
(-) depreciation expense for May on kitchen equipment ($560)
Net income (revenue - expenses) $950
• Computation of Net income/loss recorded for the month of May, using cash method
Received cash for meals served to customers $3,510
(-) prepaid rent for three months ($2,400)
(-) received and paid electricity bill ($90)
(-) paid cash for kitchen equipment ($3,730)
Net loss ($2,710)