Answer:
A.
Explanation:
Not too sure but I hope that is right.
Nash Incorporated factored $156,000 of accounts receivable with Crane Factors Inc. on a without-recourse basis. Crane assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable for possible adjustments. Prepare the journal entry for Nash Incorporated and Crane Factors to record the factoring of the accounts receivable to Crane.
Answer:
Nash Incorporated,
Dr Cash $143,520
Dr Due from Factor $9,360
Dr Loss on Sale of Receivables $3,120
Cr Accounts Receivable $156,000
Crane Factors
Dr Accounts Receivable $156,000,
Cr Due to Customer Nash $9,360
Cr Interest Revenue $3,120
Cr Cash $143,520
Explanation:
Preparation of the journal entry for Nash Incorporated and Crane Factors to record the factoring of the accounts receivable to Crane.
Nash Incorporated,
Dr Cash $143,520
($156,000-$9,360-$3,120)
Dr Due from Factor $9,360
(6%*$156,000)
Dr Loss on Sale of Receivables $3,120
(2%*156,000)
Cr Accounts Receivable $156,000,
Crane Factors
Dr Accounts Receivable $156,000,
Cr Due to Customer Nash $9,360
(6%*$156,000)
Cr Interest Revenue $3,120
(2%*156,000),
Cr Cash $143,520
($156,000-$9,360-$3,120)
Vaughn Company reports the following operating results for the month of August: sales $315,000 (units 5,000); variable costs $219,000; and fixed costs $71,600. Management is considering the following independent courses of action to increase net income. Compute the net income to be earned under each alternative. 1. Increase selling price by 10% with no change in total variable costs or sales volume.
Answer: $55,900
Explanation:
Based on the information given in the question, the following can be derived:
Units = 5000
Sales = $315000
Variable costs = $219,000
Fixed costs = $71,600
Selling price per unit
= 315,000/5000.
= 63
Variable expense per unit
= 219,000/5,000
= 43.8
Contribution margin per unit
= 63 - 43.8
= 19.2
We then calculate the 10% increase in selling price. This will be:
= $63 × (100% + 10%)
= $63 × 110%
= $63 × 1.10
= $69.3
Sales = 5000 × 69.3 = 346500
Less: Variable expense = 5000 × 43.80 = 219000
Contribution margin = 127500
Less: Fixed expense = 71,600
Net operating income = 55,900
Assume an investee has the following financial statement information for the three years ending December 31, 2013:(At December 31) 2011 2012 2013Current assets $310,500 $416,550 $428,205Tangible fixed assets 844,500 861,450 992,595Intangible assets 75,000 67,500 60,000Total assets $1,230,000 $1,345,500 $1,480,800Current liabilities $150,000 $165,000 $181,500Noncurrent liabilities 330,000 363,000 399,300Common stock 150,000 150,000 150,000Additional paid-in capital 150,000 150,000 150,000Retained earnings 450,000 517,500 600,000Total liabilities and equity $1,230,000 $1,345,500 $1,480,800(At December 31) 2011 2012 2013Revenues $1,275,000 $1,380,000 $1,455,000Expenses 1,162,500 1,260,000 1,314,000Net income $112,500 $120,000 $141,000Dividends $37,500 $52,500 $58,500Review of pre-consolidation cost method (controlling investment in affiliate, fair value equals book value)Assume that on January 1, 2011, an investor company purchased 100% of the outstanding voting common stock of the investee. On the date of the acquisition, the investee's identifiable net assets had fair values that approximated their historical book values. In addition, the acquisition resulted in no goodwill or bargain purchase gain recognized in the consolidated financial statements of the investor company. Assuming that the investor company uses the cost method to account for its investment in the investee, what is the balance in the "investment in investee" account in the investor company's preconsolidation balance sheet on December 31, 2013?A. $900,000B. $750,000C. $675,000D. $1,480,800Assume that on January 1, 2011, an investor company purchased 100% of the outstanding voting common stock of the investee. On the date of the acquisition, the investee's identifiable net assets had fair values that approximated their historical book values. In addition, the acquisition resulted in no goodwill or bargain purchase gain recognized in the consolidated financial statements of the investor company. Assuming that the investor company uses the cost method to account for its investment in the investee, what is the balance in the "income from investee" account in the investor company's preconsolidation income statement for the year ended December 31, 2013?A. $141,000B. $82,500C. $58,500D. $112,500Assume that on January 1, 2011, an investor company purchased 100% of the outstanding voting common stock of the investee. On the date of the acquisition, the investee's identifiable net assets had fair values that approximated their historical book values, except for tangible fixed assets, which had fair value that was $150,000 higher than the investee's recorded book value. The tangible fixed assets had a remaining useful life of 10 years. In addition, the acquisition resulted in goodwill in the amount of $300,000 recognized in the consolidated financial statements of the investor company. Assuming that the investor company uses the equity method to account for its investment in the investee, what is the balance in the "income from investee" account in the investor company's pre-consolidation income statement for the year ended December 31, 2013?A. $126,000B. $82,500C. $67,500D. $141,000
Answer:
1. The balance in the "investment in investee" account in the investor company's preconsolidation balance sheet on December 31, 2013 is:
A. $900,000
2. The balance in the "income from investee" account in the investor company's preconsolidation income statement for the year ended December 31, 2013 is:
B. $82,500
3. The balance in the "income from investee" account in the investor company's pre-consolidation income statement for the year ended December 31, 2013 is:
D. $141,000
Explanation:
a) Data and Calculations:
Financial Statements for the three years ending December 31, 2013:
(At December 31) 2011 2012 2013
Current assets $310,500 $416,550 $428,205
Tangible fixed assets 844,500 861,450 992,595
Intangible assets 75,000 67,500 60,000
Total assets $1,230,000 $1,345,500 $1,480,800
Current liabilities $150,000 $165,000 $181,500
Noncurrent liabilities 330,000 363,000 399,300
Common stock 150,000 150,000 150,000
Additional paid-in capital 150,000 150,000 150,000
Retained earnings 450,000 517,500 600,000
Total liabilities and equity $1,230,000 $1,345,500 $1,480,800
(At December 31) 2011 2012 2013
Revenues $1,275,000 $1,380,000 $1,455,000
Expenses 1,162,500 1,260,000 1,314,000
Net income $112,500 $120,000 $141,000
Dividends $37,500 $52,500 $58,500
Income retained for the current year $82,500
Retained income for year 2012 517,500
Retained income for year 2013 $600,000
Common stock 150,000
Additional paid-in capital 150,000
Total equity $900,000
For each of the following items, indicate by using the appropriate code letter, how the item should be reported in the statement of cash flows, using the direct method.
Potential Matches:
1 : Declaration and payment of a cash dividend.
2 : Decrease in accounts receivable during a period.
3 : Conversion of bonds payable into common stock.
4 : Purchase of land for cash.
5 : Decrease in merchandise inventory during a period.
6 : Decrease in accounts payable during a period.
7 : Issuance of preferred stock for cash.
8 : Sale of equipment for cash at book value.
: Added in determining cash receipts from customers
: Added in determining cash payments to suppliers
: Deducted in determining cash payments to suppliers
: Cash outflow-investing activity
: Cash inflow-investing activity
: Cash outflow-financing activity
: Cash inflow-financing activity
: Significant non-cash investing and financing activity
Answer and Explanation:
The matching is as follows;
1. The cash dividend should belong from financing activity as a cash outflow
2. If there is an decrease in the account receivable so it would be added for calculating the cash receipts from customers
3. The bond payable would be converted into common stock so this is a non-cash investing and financing activity
4. The land should be purchased for cash so it belong from investing activity as a cash outflow
5. There is a reduction in the merchandise inventory so it would be subtracted for calculating the cash payment made to suppliers
6. There is a reduction in the account payable so it would be added for calculating the cash payment made to suppliers
7. The preferred stock is issued for cash belong from financing activity as a cash inflow
8. The equipment is sold at the book value belong from investing activity as a cash inflow
Management of Wee Ones (WO), an operator of day-care facilities, wants the company's profit to be subdivided by center. The firm's accountant has provided the following data: Center Budgeted Revenue Actual Revenue Budgeted Direct Costs Actual Direct Costs Downtown $ 320,000 $ 340,200 $ 300,000 $ 300,000 Irvine 560,000 534,600 510,000 440,000 H. Beach 720,000 745,200 690,000 740,000 Totals $ 1,600,000 $ 1,620,000 $ 1,500,000 $ 1,480,000 WO's advertising, which is handled by the home office, is not reflected in the preceding figures and amounted to $60,000. Assume that management used the allocation base that is most influenced by advertising effort and consistent with sound managerial accounting practices. How much advertising would be allocated to the Irvine center
Answer: $19,800
Explanation:
Actual Revenue would be the most appropriate base to use because it is the most influenced by advertising effort and sound managerial practices.
Total actual revenue from all centers is $1,620,000.
Actual revenue for Irvine center is $534,600.
Advertising expenses to Irvine would be:
= Advertising cost * Actual revenue for Irvine / Total actual revenue for all centers
= 60,000 * 534,600 / 1,620,000
= $19,800
distribution strategies
1. Suppose two types of firms wish to borrow in the bond market. Firms of type A are in good financial health and are relatively low risk. The appropriate premium over the risk-free rate of lending to these firms is 2%. Firms of type B are in poor financial health and are relatively high risk. The appropriate premium over the risk-free rate of lending to these firms is 6%. As an investor, you have no other information about these firms except that type A and type B firms exist in equal numbers. a. At what interest rate would you be willing to lend if the risk-free rate were 5%
Answer:
Type A is 7%, type b is 11%
Explanation:
We have these two firm's as type a and type b
For type A
Interest would be = risk Free rate of 2% + risk free rate of 5% = 7%
For type B
= Risk free rate of 5% + risk free rate of 6% = 11%
I would use the average of this two 9% as interest but this is not going to work for type A because this interest rate is too high. People won't want to pay this much.
Atul purchased goods costing Rs 50000 at an invoice price,which is 50% above cost.. on invoice price je enjoyed 15% trade discount and Rs 3750 cash discount on cash payment of goods in lump sum at the time of purchase ...the purchase price to be recorded in the books will be
Answer: Rs 63750
Explanation:
Since Atul purchased goods costing Rs 50000 at an invoice price,which is 50% above cost. Then the purchase of the goods cost:
= 50000 × (100% + 25%)
= 50000 × 125%
= 50000 × 1.25
= Rs 75000
We then deduct the trade discount of 15% to get the purchase price to be recorded in the book. This will be:
= 75000 × (100% - 15%)
= 75000 × 85%
= 75000 × 0.85
= 63750
Therefore, the answer is Rs63750
Rahul needs a loan and is speaking to several lending agencies about the interest rates they would charge and the terms they offer. He particularly likes his local bank because he is being offered a nominal rate of 6%. But the bank is compounding monthly. What is the effective interest rate that Rahul would pay for the loan
Answer: 6.17%
Explanation:
When calculating the effective rate of an interest rate being compounded over a number of periods in a year, use the following:
= [ (1 + Nominal rate / Number of periods in a year) ^ Number of periods in a year- 1] * 100%
Number of periods = Compounding is monthly = 12
Effective rate = [ (1 + 6% / 12)¹² - 1 ] * 100%
= 6.17%
The Reserve Company had 606 million shares of common stock outstanding at January 1, 2016. The following activities affected common shares during the year: There are no potential common shares outstanding. 2016 Feb. 27 Purchased 18 million shares of treasury stock. Oct. 30 Sold the treasury shares purchased on February 27. Nov. 29 Issued 72 million new shares. Dec. 31 Net income for 2016 is $1,200 million. 2017 Jan. 14 Declared and issued a 2 for 1 stock split. Dec. 31 Net income for 2017 is $1,200 million. Required: 1. Determine the 2016 EPS. 2. Determine the 2017 EPS. 3. At what amount will the 2016 EPS be presented in the 2017 comparative financial statements
Answer:
1. $2.00
2. $0.88
3. $1.00
Explanation:
1. Calculation to determine the 2016 EPS
First step is to calculate the Total Movement of shares and WACSO
Date Movement of shares Ratio WACSO(no. of shares * Ratio)
1-Jan-16 $606 million*12/12 =$606 million
28-Feb-16 (18 million)*10/12=(15 million)
31-Oct-16 18 million*2/12=3 million
30-Nov-16 72 million*1/12=6 million
Total 678 million 600 million
Now let calculate 2016 EPS
Net income $1,200 million
÷Divided by WACSO 600 million
=EPS $2.00
($1,200 million/600 million)
Therefore 2016 EPS will be $2.00
2. Calculation to determine 2017 Earnings per share
First step is to calculate the No. of shares outstanding after stock split
No. of shares outstanding as of 2017 678 million
*Stock split 2
=No. of shares outstanding after stock split 1,356 million
(678 million*2)
Now let calculate 2017 EPS
Net income $1,200 million
÷Divided by WACSO 1,356 million
=EPS 0.88
($1,200 million/1,356 million)
Therefore 2017 EPS will be $0.88
3. Calculation to determine At what amount will the 2016 EPS be presented in the 2017
First step is calculate No. of shares outstanding after stock split
Wacso based on item no. 1 600 million
*Stock split 2
=No. of shares outstanding after stock split 1200 million
(600 million*2)
Now let calculate the 2016 EPS be presented in the 2017
Net income 1200 million
÷Divided by WACSO 1200 million
=EPS 1.00
(1200 million/1200 million)
Therefore At what amount will the 2016 EPS be presented in the 2017 will be $1.00
plies manufacturing overhead at the rate of $40 per machine hour. Budgeted machine hours for the current period were anticipated to be 120,000; however, a lengthy strike resulted in actual machine hours being worked of only 90,000. Budgeted and actual manufacturing overhead figures for the year were $4,800,000 and $4,180,000, respectively. On the basis of this information, the company's year-end overhead was:
Answer:
$580,000 under applied.
Explanation:
The computation of the company's year end overhead is seen below;
The applied overhead is
= Predetermined overhead rate × actual machine hours
= $40 × 90,000
= $3,600,000
Then, the applied overhead
= $4,180,000 - $3,600,000
= $580,000
Hence, the ending overhead is $580,000 under applied
McNulty, Inc., produces desks and chairs. A new CFO has just been hired and announces a new policy that if a product cannot earn a margin on sales of at least 20 percent, it will be dropped. The margin is computed as product gross profit divided by reported product cost.Manufacturing overhead for year 1 totaled $800,000. Overhead is allocated to products based on direct labor cost. Data for year 1 show the following: Chairs DesksSales revenue $ 1,150,000 $ 2,105,000 Direct materials 584,000 800,000 Direct labor 160,000 340,000 Required:a-1. Based on the CFO's new policy, calculate the profit margin for both chairs and desks.Profit Margin (%)Chairs Desks a-2. Which of the two products should be dropped?b. Regardless of your answer in requirement a, the CFO decides at the beginning of year 2 to drop the chair product. The company cost analyst estimates that overhead without the chair line will be $650,000. The revenue and costs for desks are expected to be the same as last year. What is the estimated margin for desks in year 2?
Answer:
McNulty, Inc.
Chairs Desks
a) Profit margin (%) 6.33% 31.36%
b) The estimated margin for desks in year 2 is:
= 17.6%
Explanation:
a) Data and Calculations:
Expected gross profit margin on cost = 20%
Manufacturing overhead for year 1 = $800,000
Chairs Desks Total
Sales revenue $ 1,150,000 $ 2,105,000 $ 3,255,000
Direct materials 584,000 800,000 1,384,000
Direct labor 160,000 340,000 500,000
Overhead 337,572 462,428 800,000
Total costs $1,081,572 $1,602,428 $2,684,000
Gross Profit $68,428 $502,572 $571,000
Profit margin 6.33% 31.36% 21.27%
Margin (%) = Gross profit/Total costs * 100
Allocation of Manufacturing Overhead based on direct labor cost:
Chairs = $337,572 ($584,000/$1,384,000 * $800,000)
Desks = $462,428 ($800,000/$1,384,000 * $800,000)
Year 2:
Desks
Sales revenue $ 2,105,000
Direct materials 800,000
Direct labor 340,000
Overhead 650,000
Total costs $ 1,790,000
Gross Profit $315,000
Profit margin 17.6%
the excessive use of simple sentences is preferable in academic writing?
Biarritz Corp. is growing quickly. Dividends are expected to grow at a rate of 31 percent for the next three years, with the growth rate falling off to a constant 6.1 percent thereafter. If the required return is 12 percent and the company just paid a dividend of $2.80, what is the current share price
Answer:
$82.85
Explanation:
Danks Corporation purchased a patent for $405,000 on September 1, 2019. It had a useful life of 10 years. On January 1, 2021, Danks spent $99,000 to successfully defend the patent in a lawsuit. Danks feels that as of that date, the remaining useful life is 5 years. What amount should be reported for patent amortization expense for 2021?
Answer:
Amortization Expense for year 2021 $90,000
Explanation:
The computation of the amount that should be reported for patent amortization for the year 2021 is shown below:
But before that following calculations need to be done
The value of the patent as of 31st Dec, 2020
Purchase Value as of Sep 1,2019 $405000
Less:- Amortization Expense for the year 2019 $13,500
($405000 ÷ 10 × 4 ÷ 12)
Less:- amortization expense for the year 2020 $40500 ($405,000 ÷ 10)
Value of patent as on 1st Jan, 2021 $351,000
Add:- fees to defend $99000
New Book Value for the year 2021 $450,000
Now Remaining Useful Life 5 years
So,
Amortization Expense for year 2021 $90,000 ($450,000 ÷ 5)
In 2006, Lego laid off 1,200 workers and ended production in the U.S.. The company contracted out production of basic Lego bricks to Singapore-based electronics manufacturer Flextronics, which operates factories in Mexico and eastern Europe. Which two of the ten operations management decision types were addressed by this decision
Question Completion:
Ten Operations Management Decision Types:
a. Design of goods and services
b. Managing quality
c. Process and capacity design
d. Location strategy
e. Layout strategy
f. Human resources and job design
g. Supply chain management
h. Inventory management
i. Scheduling
j. Maintenance
Answer:
Lego
The two types of operations management decisions that were addressed by Lego's decision to end production in the US are:
d. Location strategy
g. Supply chain management
Explanation:
Lego decided to close its production facilities in the U.S.A because of the shifting customer demand. There has been a growing demand for electronics by children as against plastic toys. This is why it was able to contract out its production activities to a Singapore-based manufacturer with factories in Mexico and eastern Europe. So the company is strategically moving its production to countries that have high demand for its products and, at the same time, enjoying some tax benefits.
Listed here are 20 control plans discussed in the chapter. On the blank line to the left of each control plan, insert a P (preventive), D (detective), or C (corrective) to classify that control most accurately. If you think that more than one code could apply to a particular plan, insert all appropriate codes and briefly explain your answer.Code Control Plan _________1. Library controls _________2. Program change controls _________3. Fire and water alarms_________4. Fire and water insurance _________5. Install batteries to provide backup for temporary loss in power _________6. Backup and recovery procedures _________7. Service level agreements _________8. IT steering committee 9. Security officer _________10. Operations run manuals _________11. Rotation of duties and forced vacations _________12. Fidelity bonding _________13. Personnel management (supervision) _________14. Personnel termination procedures _________15. Segregation of duties _________16. Strategic IT plan _________17. Disaster recovery planning _________18. Restrict entry to the computer facility through the use of employee badges, guest sign- in, and locks on computer room doors _________19. Access control software _________20. Personnel development controls
Answer:
Code Control Plan
____D_____1. Library controls
____P_____2. Program change controls
____D_____3. Fire and water alarms
____C_____4. Fire and water insurance
____C_____5. Install batteries to provide backup for temporary loss in power
____C_____6. Backup and recovery procedures
____P_____7. Service level agreements
____C_____8. IT steering committee
____P_____9. Security officer
____P_____10. Operations run manuals
____D_____11. Rotation of duties and forced vacations
____C_____12. Fidelity bonding
____P_____13. Personnel management (supervision)
____C_____14. Personnel termination procedures
____P_____15. Segregation of duties
____D_____16. Strategic IT plan
____C_____17. Disaster recovery planning
____P_____18. Restrict entry to the computer facility through the use of employee badges, guest sign- in, and locks on computer room doors
____P_____19. Access control software
____D_____20. Personnel development controls
Explanation:
P (preventive) controls protect against errors occurring.
D (detective) controls discover errors that have already occurred.
C (corrective) controls correct errors that have already occurred.
REQUIRED: Prepare a detailed balance sheet. Listed below is a list of accounts and their respective balances for the Maximum Company: ADVERTISING EXPENSE $ 100,000 INSURANCE EXPENSE $ 100,000 OPERATING EXPENSES- OTHER $ 75,000 PURCHASES $ 50,000 REVENUES $ 1,000,000 SALARIES AND WAGES $250,000 Other Information: Inventory at the beginning of the year was $ 50,000 and at the end of the year was $ 40,000. Accrued wages of $ 5,000 have not been included in the above balances. Payroll taxes are 25% of Salaries and Wages. Total Fixed Assets equal $ 3,000,000 which breaks down as follows: Land- $750,000; Building and Equipment- $2,000,000; and Furniture- $250,000. For depreciation purposes, the XYZ Company uses the straight-line method. The depreciable assets have a useful life of 10 years and no residual value. XYZ has a long-term note of $ 1,000,000 and pays an interest rate of 10%. Rent is calculated as 1% of gross profit plus $500 per month. The XYZ pays income taxes at a rate of 25%. REQUIRED Prepare a detailed income statement.
Answer:
Maximum Company
Income Statement
Revenue $ 1,000,000
Less Cost of Sales
Beginning Inventory $ 50,000
Purchases $ 50,000
Less Ending Inventory ($40,000) ($60,000)
Gross Profit $940,000
Less Expenses
Salaries and Wages ($250,000 + $5,000) $255,000
Advertising expenses $100,000
Insurance expenses $100,000
Other Operating expenses $75,000
Depreciation $225,000
Interest expense $100,000
Rent expense $9,900
Payroll taxes $63,750 ($898,650)
Net Income before tax $41,350
Income tax expense ($10,338)
Net Income after tax $31,012
Explanation:
Depreciation expense :
Depreciation expense = (Cost - Salvage Value) ÷ Estimated Useful Life
therefore,
Depreciation expense = ($2,250,000) ÷ 10 = $225,000
Note :Land is not a depreciable asset
Interest expense :
Interest expense = $1,000,000 x 10% = $100,000
Rent expense :
Use the cost formula provided.
Rent expense = Gross profit x 1 % + $500
= $940,000 x 1 % + $500
= $9,900
2- A local car dealer is advertising two leasing options for its new XT 3000 series sports car. Option A: is a standard 24-month lease of $1150 per month. In addition, this option requires a down payment of $4500, plus a $1000 refundable initial deposit. In option A, the lease payments are due at the beginning of every month. For example, the first lease payment (equal to $1150) is due at the beginning of month 1. Option B: In this option, the company offers a 24-month lease plan that has only a single up-front payment of $31000 (which is paid at the beginning of month one) Note: The initial deposit in option A will be refunded to the customer at the end of month 24. Assume an interest rate of 6% compounded monthly. Which option is better for the customer
Answer:
A. Interest rates wouldn't be so high. Customer would be able to afford this lease better.
It is now January 1, 2013, and you are considering the purchase of an outstanding bond that was issued on January 1, 2011. It has a 7 percent annual coupon and had a 30-year original maturity. (It matures on December 31, 2040.) There were 11 years of call protection (until December 31, 2021), after which time it can be called at 108.5 percent of par, or $1,085. Interest rates have fallen since the bond was issued, and it is now selling at 115.5 percent of par, or $1,155. If you bought this bond, what rate of return would you probably earn, assuming you hold the bonds until they either mature or are called
Answer:
a. Assuming you hold the bonds until they mature, the rate of return you would probably earn is the YTM of 5.89%.
b. Assuming you hold the bonds until they are called, the rate of return you would probably earn is the YTC of 5.65%.
Explanation:
This can be determined by calculating the YTM and YTC as follows:
a. Calculation of Yield to Maturity (YTM)
The bond's Yield to Maturity can be calculated using the following RATE function in Excel:
YTM = RATE(nper,pmt,-pv,fv) .............(1)
Where;
YTM = yield to maturity = ?
nper = number of periods = number of years to maturity = 30
pmt = annual coupon payment = annual coupon rate * Face value = 7% * $1,000 = $70 = 70
pv = present value = current bond price = $1,155 = 1155
fv = face value or par value of the bond = 1000
Substituting the values into equation (1), we have:
YTM = RATE(30,70,-1155,1000) ............ (2)
Inputting =RATE(30,70,-1155,1000) into excel (Note: as done in the attached excel file), the YTM is obtained as 5.89%.
Therefore, assuming you hold the bonds until they mature, the rate of return you would probably earn is the YTM of 5.89%.
b. Calculation of Yield to Call (YTC)
The bond's Yield to call can be calculated using the following RATE function
in Excel:
YTC = RATE(nper,pmt,-pv,fv) .....................(3)
Where;
YTM = yield to call = ?
nper = number of periods = number of years of call protection = 11
pmt = annual coupon payment = annual coupon rate * Face value = 7% * $1,000 = $70 = 70
pv = present value = current bond price = $1,155 = 1155
fv = future value of the bond or the amount at which the bond can be called = $1,085 = 1085
Substituting the values into equation (3), we have:
YTM = RATE(11,70,-1155,1085) ............ (4)
Inputting =RATE(11,70,-1155,1085) into excel (Note: as done in the attached excel file), the YTM is obtained as 5.65%.
Therefore, assuming you hold the bonds until they are called, the rate of return you would probably earn is the YTC of 5.65%.
Put the following statements in the correct order to summarise the sequence of events in moving from the short-run to the long-run in perfect competition.
Answer:
ok
Explanation:
Assume Purity Ice Cream Company, Inc., in Ithaca, NY, bought a new ice cream maker at the beginning of the year at a cost of $9,000. The estimated useful life was four years, and the residual value was $1,000. Assume that the estimated productive life of the machine was 16,000 hours. Actual annual usage was 5,500 hours in Year 1; 3,800 hours in Year 2; 3,200 hours in Year 3; and 3,500 hours in Year 4.Required: Complete a separate depreciation schedule for each of the alternative methods. Do not round intermediate calculations a. Straight-line. reciati Book Value At acquisition b. Units-of-production (u four decimal places for the per unit output factor) se Net Depreciation Accumulated Depreciation Book Value Expense At acquisition
Answer:
Purity Ice Cream Company
a. Depreciation Schedule, using straight-line method:
Cost Depreciation Accumulated Net Book
Expense Depreciation Value
Year 1 $9,000 $2,000 $2,000 $7,000
Year 2 $9,000 $2,000 4,000 5,000
Year 3 $9,000 $2,000 6,000 3,000
Year 4 $9,000 $2,000 8,000 1,000
b. Depreciation Schedule, using unit of production method:
Cost Depreciation Accumulated Net Book
Expense Depreciation Value
Year 1 $9,000 $2,750 $2,750 $6,250
Year 2 $9,000 $1,900 4,650 4,350
Year 3 $9,000 $1,600 6,250 2,750
Year 4 $9,000 $1,750 8,000 1,000
Explanation:
a) Data and Calculations:
Cost of ice cream maker = $9,000
Estimated useful life = 4 years
Residual value = $1,000
Depreciable amount = $8,000 ($9,000 - $1,000)
Annual depreciation (Straight-line method) = $2,000 ($8,000/4)
Estimated productive life the machine = 16,000 hours
Annual usage: Depreciation Expense
Year 1 5,500 hours $2,750
Year 2 3,800 hours 1,900
Year 3 3,200 hours 1,600
Year 4 3,500 hours 1,750
Total 16,000 hours $8,000
Depreciation rate per hour = $0.50 ($8,000/16,000)
The Carter Corporation makes products A and B in a joint process from a single input, R. During a typical production run, 50,000 units of R yield 20,000 units of A and 30,000 units of B at the split-off point. Joint production costs total $90,000 per production run. The unit selling price for A is $4.00 and for B is $3.80 at the split-off point. However, B can be processed further at a total cost of $60,000 and then sold for $7.00 per unit. In a decision between selling B at the split-off point or processing B further, which of the following items is not relevant:a. $10,000) per production run b. $96,000 per production run c. ($42,000) per production run d. $36,000 per production run
Answer: $54,000 per production run
Explanation:
As we are dealing with the decision of whether or not to process the good further, the irrelevant cost would be the cost of producing product B from input R.
This is because this cost has already been incurred to produce product B and so is a sunk cost. Sunk costs are irrelevant to the decision to process further.
30,000 units of B were made from 90,000 units R so the cost of B is:
= 30,000 / 50,000 * 90,000
= $54,000
The options here are probably for a variant of this question.
Aster Inc. has developed a new digital three-tier food steamer. Though the product comes with a self-explanatory manual, the controls and the operation of the appliance have to be explained to the customer on a one-to-one basis, in great detail. Which of the following elements of the promotional mix is Aster most likely to rely on to sell its products?
a. Advertising
b. Sales promotion
c. Public relations
d. Personal selling
Answer:
d. Personal selling
Explanation:
Personal selling would be the one of the component of the promotional mix where the person interact with the customers from face to face and explains the product with respect to its features, price, benefits, etc also at the same time customer could solve their doubts related to the product
So as per the given situation, the option d is correct
One year ago, the Jenkins Family Fun Center deposited $5,200 into an investment account for the purpose of buying new equipment four years from today. Today, they are adding another $7,000 to this account. They plan on making a final deposit of $9,200 to the account next year. How much will be available when they are ready to buy the equipment, assuming they earn a rate of return of 6 percent?
Answer:
The amount that will be available when they are ready to buy the equipment is $27,410.90.
Explanation:
This can be calculated as follows:
Future value = Present value * (100% + rate of return)^number of years the money is in deposit …….. (1)
Using equation (1), we have:
Future value of the amount deposited last year = $5,200 * (100% + 6%)^5 = $6,958.77
Future value of the amount deposited today = $7,000 * (100% + 6%)^4 = $8,837.34
Future value of the amount to be deposited next year = $9,200 * (100% + 6%)^4 = $11,614.79
Amount that will be available = Future value of the amount deposited last year + Future value of the amount deposited today + Future value of the amount to be deposited next year = $6,958.77 + $8,837.34 + $11,614.79 = $27,410.90
External failure activities A. seek to prevent defects in the products or services being produced. B inspect inputs and attributes of individual units of products or services to detect whether they conform to specifications or customer expectations. C. correct defective processes or products and services before they are delivered to customers. D. are activities required after defective products or services are delivered to customers.
Answer:
D. are activities required after defective products or services are delivered to customers.
Explanation:
Six Sigma is a quality business management strategy which helps business organizations to improve the quality of processes, products and services by discovering and eliminating defects, variations or errors. It is a strategic business concept that was developed in 1986 by Motorola.
Under the six sigma approach, any process that doesn't provide customer satisfaction or causes challenges in an organisation's process should be eliminated from the system in order to produce quality products and services. It allows only 3.4 defective features for every million opportunities and as such expects processes to be defect free 99.99966 percent of the time.
The following activities are carried out in accordance with the Six Sigma model;
External failure activities are activities required after defective products or services are delivered to customers.
The other terminologies used in the manufacturing process includes;
- Prevention: seek to prevent defects in the products or services being produced.
- Appraisal: inspect inputs and attributes of individual units of products or services to detect whether they conform to specifications or customer expectations.
- Internal failure activities: correct defective processes or products and services before they are delivered to customers.
If GDP is confidently expected to grow at a rapid 4% rate this year, how do you predict investment spending will change? Is it likely to grow faster than, slower than, or at the same rate as GDP? Why? Based on this expectation, investment spending is likely to by 4%. A rapidly growing economy will generally make business people optimistic, expectations about potential future profits. As a result, they are eager to invest.
Answer:
Based on this expectation, investment spending is likely to increase by more than 4%.
A rapidly growing economy will generally make business people more optimistic, with higher expectations about potential future profits. As a result, they are more eager to invest.
Investment will increase higher than 4% because in a growing economy like this, people will be so optimistic that they would invest huge sums to capitalize on the growth and earn some returns.
This rate of increase would be greater than GDP because GDP is based on multiple factors including investment therefore those factors like government spending would have to increase as well.
If the GDP is expected to be increased by 4%, the investment spending are likely to be increased by more than 4%.
In the rapid growing economy the investors are generally more optimistic they have higher expectations about the future potential profit as a result they will be more eager to invest.
What is GDP?GDP or gross domestic product final value of goods and services produced which is the economy during a financial year. The GDP excludes the value of intermediate consumption to avoid the problem of double counting.
An increasing GDP positively effect the investment spending as the people in the economy are optimistic about the future profit and hence will be eager to invest huge sums to make bigger profits.
Therefore rate of increase in investment spending will we more than 4% when the rate of GDP increases by 4%.
Learn more about GDP here:
https://brainly.com/question/4131508
A firm has production function y = f(x1, x2) = x 1^1/3 x 2 ^2/3 , where y is the amount of output, x1, x2 are the amount of input 1 and 2 respectively.
(a) Suppose the firms chooses to produce with inputs x1^0 , x2^0 . Calculate the marginal product with respect to input 1 and input 2. (Express them in terms of x1^0 , x2^0 .)
(b) What’s the firm’s technical rate of substitution given input level x1^0 , x2^0 ?
(c) Suppose the prices for input 1 and input 2 are are respectively w1 = 8, w2 = 2. The market price for the output is p = 50. In order to produce a fixed level of output y 0 = 8, what’s the optimal amount of each input that the firm chooses to use for production?
Answer: B
po yata ayan po yata yung sagot ?
what is a business administration
Answer:
Business administration is the administration of a commercial enterprise. It includes all aspects of overseeing and supervising business operations.
Explanation:
This is what I found during my research. Please correct me if I am wrong which I feel like I am right. Hope this helped a bit and have a good one!
☜(ˆ▿ˆc)Social computing increases
Answer:
Yes it does. Yes it does.