Answer:
The accumulated value of Fund Y at the end of Year 10 is $2,084.67.
Explanation:
Note: Find attached the excel file for the calculation of the accumulated value of Fund Y at the end of Year 10.
The accumulated value of Fund Y at the end of Year 10 is ending balance in year 10 which is in red color.
Also note the following from the attached excel file:
a) The ending balance of Fund X is 0.00 because Fund Y is depleted after Year 10.
b) The beginning balance of Fund Y and its earned interest are equal to 0.00, because no amount of money is deposite in Fund Y until after Year 1 which is the withdrawal from Fund X.
One-year Treasury securities yield 4%. The market anticipates that 1-year from now 1-year Treasury securities will yield 2.1%. If the pure expectations theory is correct, what should be the yield today for 2-year Treasury securities? Write your answer as a percentage, i.e. for example write 8% as 8.
Answer:
3.05%
Explanation:
According to Pure Expectation Theory, the future short term interest rates are actually the forward rates.
Mathematically,
(1 + r2,0)^2 = (1 + r1,0)^1 * (1 + r1,1)^1
Here,
r2,0 is the rate of interest for 2 year treasury security from today
r1,0 is the rate of the interest for 1 year treasury security from today
r1,1 is the rate of the interest for 2 year treasury security from Year 1
By Putting Values, we have:
(1 + r2,0)^2 = (1 + 0.04)^1 * (1 + 0.021)^1
(1 + r2,0)^2 = 1.06184
By taking square-root on both sides, we have:
(1 + r2,0) = 1.0305
r2,0 = 3.05%
Denver Co. recently used 14,000 labor hours to produce 7,500 units. According to manufacturing specifications, each unit is anticipated to take two hours to complete. The company's actual payroll costs were $158,200. If the standard labor cost per hour is $11, Denver's labor efficiency variance is: Question 18 options: $11,300 (U). $11,000 (U). $11,000 (F). $11,300 (F).
Answer:
Direct labor time (efficiency) variance= $11,000 favorable
Explanation:
Giving the following information:
Denver Co. recently used 14,000 labor hours to produce 7,500 units. According to manufacturing specifications, each unit is anticipated to take two hours to complete. The standard labor cost per hour is $11.
To calculate the direct labor efficiency variance, we need to use the following formula:
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
Direct labor time (efficiency) variance= (2*7,500 - 14,000)*11
Direct labor time (efficiency) variance= $11,000 favorable
george forgot to pay his monthly life insurance premium that was due march 1. the policy had a face value of $100,000. on march 21, george died. how much will the insurer pay george's beneficiary for this death claim
Answer: An amount equal to the face value of the policy, MINUS the overdue premiums and any interest or late penalties George owed them
Explanation:
Grace Periods are usually included in Life Insurance policies to safeguard the client in question in case they are late with their payment. This means that should they pay within the grace period they will not lose their coverage.
Normally in Life Insurance, a grace period of 30 days is standard. George died 20 days after his due date which meant that he was still under a grace period and so the Insurance company will still pay out to his beneficiaries but they will deduct all monies owed by George.
A customer has an individual cash account, an individual margin account, a joint cash account with his wife, and a custodial account for each of his 2 children. If the firm liquidates, Securities Investor Protection Corporation covers::________
Answer and Explanation:
The Securities Investor Protection Corporation enhance security for the registered broker and distributor customers and national securities exchanges members
In the given situation, it is mentioned that a customer has 4 accounts i.e person cash account, person margin account, cash account jointly with his wife and custodial account for two children
Now if the firm liquidates, the (Securities Investor Protection Corporation) SIPC covers all accounts but separately i.e both person accounts are count as one by adding them, the joint account as an individual and the custodial account as an individual
On January 1, 20X8, Package Company acquired 80 percent of Stamp Company's common stock for $280,000 cash. At that date, Stamp reported common stock outstanding of $200,000 and retained earnings of $100,000, and the fair value of the noncontrolling interest was $70,000. The book values and fair values of Stamp's assets and liabilities were equal, except for other intangible assets which had a fair value $50,000 greater than book value and an 8-year remaining life. Stamp reported the following data for 20X8 and 20X9: Stamp Corporation Year Net Income Comprehensive Income Dividends Paid 20X8 $ 25,000 $ 30,000 $ 5,000 20X9 35,000 45,000 10,000 Package reported net income of $100,000 and paid dividends of $30,000 for both the years. Based on the preceding information, what is the amount of comprehensive income attributable to the controlling interest for 20X8?
Answer:
Comprehensive income attributable to the controlling interest for 20X8 is $119,000
Explanation:
Stamp Corporation
Year Net Income Comprehensive Income Dividends Paid 20X8 $ 25,000 $ 30,000 $ 5,000
20X9 $35,000 $45,000 $ 10,000
The amount of comprehensive income attributable to the controlling interest for 20X8 ;
Comprehensive income of Stamp Corporation = $30,000
Less: Annual amortization of intangible assets acquired on acquisition (50000/8) = $6,250
Comprehensive income of Stamp Corporation after adjustment = $23,750
Income attributable to controlling interest = 80% × $23,750 = $19,000
Net income of Package Company = $100,000
Comprehensive income attributable to the controlling interest = Income attributable to controlling interest + Net income of Package Company
= $19,000 + $100,000
= $119,000
An insurance policy sells for $1200. Based on past data, an average of 1 in 100 policyholders will file a $10 comma 000 claim, an average of 1 in 250 policyholders will file a $40 comma 000 claim, and an average of 1 in 400 policyholders will file an $80 comma 000 claim. Find the expected value (to the company) per policy sold. If the company sells 30 comma 000 policies, what is the expected profit or loss?
Answer:
Expected Value = $740
Expected profit = $22.2m
Explanation:
We can easily calculate the expected value and expected profit/loss in this situation by some minor working
Expected values = Expected Claim - per policy cost
Expected profit/loss = (Expected claim - per policy cost) x number of policies
As you can see per policy cost and no of policies are given in the question data we just need to find expected claim for calculation of expected profit or loss and expected value
Expected Claim = (1/100x$10,000)+(1/250x$40,000)+(1/400x$80,000)
Expected Claim = 100 + 160 + 200
Expected Claim = 460
Now we have a value of expected claim lets put it into Expected profit/loss formula and expected value formula
Expected value = 460-1200
Expected value = -740
-$740 is the value per policy
Expected profit/loss = (460 - $1200 per policy) x 30,000
Expected profit or loss = -22,200,000
Expected loss to the customer = -$22.2 m
Expected profit for the company = $22.2m
The point factor method may appear to be a very objective approach to valuing jobs, but like other job evaluation methods, it relies heavily on _____________.
a. Projective values
b. Historical events
c. Standardized scoring
d. Subjective judgments
e. Compensable expert
Answer: Subjective judgments
Explanation:
Point factor method is an important method used during job evaluation. The responsibilities, requirements, and every other aspects of the job will be evaluated by using some set of standardised factors whereby points will be given to every job description.
It I based on subjective judgements because it is based on the personal judgement of the individual rating as no formal calculations will be made but just the opinion of the subject and also his or her past experience.
Finch Company began its operations on March 31 of the current year. Finch has the following projected costs: May June April $159,700 890 Manufacturing costs (1) Insurance expense (2) Depreciation expense Property tax expense (3) $192,500 890 1,920 $214,400 890 1,920 1,920 440 440 440
(1) Of the manufacturing costs, three-fourths are paid for in the month they are incurred; one fourth is paid in the following month
(2) Insurance expense is $890 a month; however, the insurance is paid four times yearly in the first month of the quarter, (i.e., January, April, July, and October).
(3) Property tax is paid once a year in November The cash payments expected for Finch Company in the month of May are
a. $224 225
b. $144,375
c. $184,300
d. $39,925
Answer:
$184,300
Explanation:
1 There will be no cash payment for insurance expense because it has been already paid.
2 Depreciation is not a cash expense
3 Property tax will be paid in November
4 Only the manufacturing cost is to be paid in May
Manufacturing cost = May(75%) + April(25%)
Manufacturing cost = ($192,500 x 75%) + ($159,700 x 25%)
Manufacturing cost = $184,300
In December of 2021, XL Computer's internal auditors discovered that office equipment costing $800,000 was charged to expense in 2019. The asset had an expected life of 10 years with no residual value. XL would have recorded a half year of depreciation in 2019.
Required:
Prepare the necessary correcting entry that would be made in 2016 (ignore income taxes), and the entry to record depreciation for 2021.
Answer and Explanation:
The Journal entries are shown below:-
1. Office equipment Dr, $800,000
To Accumulated depreciation-equipment $120,000
To Retained earnings $680,000
(Being office equipment is recorded)
Here we debited the office equipment as assets is increasing and we credited the accumulated depreciation-equipment as assets is decreasing and retained earning as stockholder is increasing.
2. Depreciation expenses Dr, $80,000
To Accumulated depreciation-equipment $80,000
(Being depreciation expenses is recorded)
Here we debited the depreciation expenses as it increasing the expenses and we credited the accumulated depreciation-equipment as decreases the assets.
Working note
Depreciation
For 2019
= $800,000 ÷ 10 years
= $80,000 × 6 ÷ 12
= $40,000
For 2020
= $800,000 ÷ 10 years
= $80,000
Total = $40,000 + $80,000
= $120,000
Hamilton company uses a periodic inventory system, at the end of the annuanl accounting period, December 31,2015, the accounting records provided the following information for product 1:
Unit Unit Cost
Inventory, December 31, 2014 2000 $5
For the year 2015:
Purchase, March 21 6000 4
Purchase, August 1 4000 2
Inventory, December 31, 2015 3000
Required:
Compute ending inventory and cost of goods sold under FIFO, LIFO, and average cost inventory costing methods.
Answer:
FIFO : Ending Inventory = $6,000, Cost of Goods Sold = $36,000
LIFO : Ending Inventory = $36,000, Cost of Goods Sold = $28,000
Weighted Average Cost Method : Ending Inventory = $10,500, Cost of Goods Sold = $31,500
Explanation:
FIFO
Assumes that the first goods received by business will be the first ones to be delivered to the final customer.
Ending Inventory
Ending Inventory = Units left × Earliest Price
= 3000 units × $2
= $6,000
Cost of goods sold
Cost of goods sold : 2000 units × $5 = $10,000
6000 units × $4 = $24,000
1000 units × $2 = $2,000
Total = $36,000
LIFO
Assumes that the last goods purchased are the first ones to be issued to the final customer.
Ending Inventory
Ending Inventory 2000 units × $5 = $10,000
6000 units × $4 = $24,000
1000 units × $2 = $2,000
Total = $36,000
Cost of goods sold
Cost of goods sold : 4000 units × $2 = $8,000
5000 units × $4 = $20,000
Total = $28,000
Weighted Average Cost Method
The average cost of goods held is recalculated each time a new delivery of goods is received Issues are then priced out at this weighted average cost.
First Calculate the Average Cost
Average Cost = Total Cost / Total Units
= (2000 × $5 + 6000 × $4 + 4000 × $2) / 12,000
= $42,000 / 12,000
= $3.50
Ending Inventory
Ending Inventory = Units left × Average Price
= 3000 units × $3.50
= $10,500
Cost of goods sold
Ending Inventory = Units Sold × Average Price
= 9,000 units × $3.50
= $31,500
A large international company has two business units. Invested assets and condensed income statement data for each business unit for the past year are as follows: Compute the following for Business Unit 1: a) Operating Income Using the Dupont Formula: b) Profit Margin % (round % to 1 decimal) c) Investment Turnover (round to 2 decimals) d) Return on Investment (round 1 decimal) Compute the following for Business Unit 2: 2A) Operating Income Using the Dupont Formula: 2B) Profit Margin (round % to 1 decimal) 2C) Investment Turnover (round to 2 decimals) 2D) Return on Investment (round 1 decimal)
Answer:
1. Compute the following for Business Unit 1:
a) Operating Income = $117,500
b) Profit Margin = 20.7%
c) Investment Turnover = 0.86
d) Return on Investment = 0.2
2. Compute the following for Business Unit 2:
a) Operating Income = $69,750
b) Profit Margin = 12.2%
c) Investment Turnover = 1.18
d) Return on Investment = 0.1
Explanation:
1. Compute the following for Business Unit 1:
a) Operating Income
Operating Income = Revenue – Operating expenses = $280,000 – $162,500 = $117,500
Using the Dupont Formula:
b) Profit Margin % (round % to 1 decimal)
Net income = Operating income – Services department charges = $117,500 - $59,500 = $58,000
Profit Margin = Net income / Revenue = ($58,000 / $280,000) * 100 = 20.7%
c) Investment Turnover (round to 2 decimals)
Investment Turnover = Revenue / Invested Assets = $280,000 / $325,000 = 0.86
d) Return on Investment (round 1 decimal)
Return on Investment = Net income / Invested Assets = $58,000 / $325,000 = 0.1785 = 0.2
2. Compute the following for Business Unit 2:
a) Operating Income
Operating Income = Revenue – Operating expenses = $222,500 – $152,750 = $69,750
Using the Dupont Formula:
b) Profit Margin % (round % to 1 decimal)
Net income = Operating income – Services department charges = $69,750 - $42,625 = $27,125
Profit Margin = Net income / Revenue = ($27,125 / $222,500) * 100 = 12.2%
c) Investment Turnover (round to 2 decimals)
Investment Turnover = Revenue / Invested Assets = $222,500 / $189,000 = 1.18
d) Return on Investment (round 1 decimal)
Return on Investment = Net income / Invested Assets = $27,125 / $189,000 = 0.1435 = 0.1
There are many diet aids on the market. They promise immediate weight loss without exercise or a change in diet. Each is accompanied by a testimonial from a satisfied user. If you pay close attention, you will notice that each ad also contains the statement, "Results may vary." Most likely this statement is included to prevent the Federal Trade Commission (FTC) from requiring the dietary aid distributor from having to:_______.
Answer:
run corrective advertising
Explanation:
This was likely included to prevent the Federal Trade Commission (FTC) from requiring the dietary aid distributor from having to run corrective advertising. This is a sort of punishment placed on an ad company that has made an ad with false or misleading information, in order to correct this they must add a message that is placed on their ads in order to right this wrong. This message can badly hurt the company as it advises the viewers that the company has spread false information.
On December 31, 2018, a company had assets of $29 billion and stockholders' equity of $22 billion. That same company had assets of $55 billion and stockholders' equity of $17 billion as of December 31, 2019. During 2019, the company reported total sales revenue of $22 billion and total expenses of $20 billion. What is the company's debt-to-assets ratio on December 31, 2019
Answer:
0.69
Explanation:
From the question above on December 31, 2018 a company has an assets of $29 billion and stockholders equity of $22 billion.
On December 31, 2019 the same company recorded an assets of $55billion and stockholders equity of $17billion
Inorder to calculate the debt-to-assess ratio the first step is to find the amount of liabilities
Liabilities= Assets-Stockholders equity
Assets= $55 billion
Stockholders equity= $17 billion
= $55billion-$17billion
= $38 billion
Therefore, the debt-to-assets ratio can be calculated as follows
Debt-to-assets ratio= Total liabilities/Total Assets
= $38 billion/ $55 billion
= 0.69
Hence on December 31, 3019 the debt-to-assets ratio is 0.69
Suppose you are trying to decide whether to invest in a company that generates a high expected ROE, and you want to conduct further analysis on the company’s performance. If you wanted to conduct a comparative analysis for the current year, you would: Compare the firm’s financial ratios for the current year with its ratios in previous years Compare the firm’s financial ratios with other firms in the industry for the current year
Answer:
Compare the firm’s financial ratios with other firms in the industry for the current year
Explanation:
return on equity (ROE) = net income / stockholders' equity
it measures how profitable the company is according the amount of money that stockholders' invested in it.
Since you are trying to conduct a comparative analysis for the current year, it doesn't make sense to compare the current financial ratios with the financial ratios of previous years. If you want to compare the current year, you must compare the current financial ratios to the ratios of other companies in the same industry or the industry as a whole.
Beamish Inc., which produces a single product, has provided the following data for its most recent month of operations: Number of units produced 3,700 Variable costs per unit: Direct materials $ 132 Direct labor $ 93 Variable manufacturing overhead $ 5 Variable selling and administrative expense $ 12 Fixed costs: Fixed manufacturing overhead $148,000 Fixed selling and administrative expense $288,600 There were no beginning or ending inventories. The absorption costing unit product cost was:
Answer:
Absorption costing unit product cost = $270 per unit
Explanation:
Absorption costing values unit produced using the full cost per unit.
It categories cost as production and non-production cost
Full cost per unit =Direct labour cost + direct material cost + Variable production overhead + fixed production overhead
Fixed prod overhead per unit = Total fixed production overhead/Number of units
= $148,000/3,700 units=$40 per unit
Full cost per unit = 132+ 93+ 5 + 40 = $270 per unit
Absorption costing unit = $270 per unit
Flyer Company has provided the following information prior to any year-end bad debt adjustment:Cash sales, $167,000Credit sales, $467,000Selling and administrative expenses, $127,000Sales returns and allowances, $47,000Gross profit, $507,000Accounts receivable, $275,000Sales discounts, $31,000Allowance for doubtful accounts credit balance, $2,900Flyer estimates bad debt expense assuming that 2% of credit sales have historically been uncollectible. What is the balance in the allowance for doubtful accounts after bad debt expense is recorded?a) $12,240.b) $9,340.c) $9,780.d) $6,440.
Answer:
The balance in the allowance for doubtful accounts after bad debt expense is recorded is $12,240. Option A
Explanation:
Cash sales = $167,000
Credit sales = $467,000
Selling and administrative expenses = $127,000
Sales returns and allowances = $47,000
Gross profit = $507,000
Accounts receivable = $275,000
Sales discounts = $31,000
Allowance for doubtful accounts credit balance = $2,900
Balance needed in the 'Allowance for doubtful accounts' = $467,000 × 2%
= $9,240
Credit balance in the allowance account = $2,900
Bad debts expense = Balance needed in the 'Allowance for doubtful accounts' + Credit balance in the allowance account
= $9,340 + $2,900
= $12,240
The following lots of a particular commodity were available for sale during the year Beginning inventory 9 units at $47.00 First purchase 19 units at $55.00 Second purchase 51 units at $59.00 Third purchase 19 units at $59.00 The firm uses the periodic system, and there are 26 units of the commodity on hand at the end of the year. What is the amount of inventory at the end of the year according to the LIFO method? Select the correct answer. $1,534.00 $5,598.00 $1,358.00 $1,222.00
Answer:
Ending inventory= $1,358
Explanation:
Giving the following information:
Beginning inventory 9 units at $47.00
First purchase 19 units at $55.00
Second purchase 51 units at $59.00
Third purchase 19 units at $59.00
Ending inventory in units= 26
Under the LIFO (last-in, first-out) method, the ending inventory cost is calculated using the cost of the firsts units incorporated into the inventory.
Ending inventory= 9*47 + 17*55= $1,358
Isabel, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December she received a $34,000 bill from her accountant for consulting services related to her small business. Isabel can pay the $34,000 bill anytime before January 30 of next year without penalty. Assume her marginal tax rate is 40 percent this year and next year, and that she can earn an after-tax rate of return of 9 percent on her investments.
a) What is the after-tax cost if Isabel pays the $34,000 bill in December?
b) What is the after-tax cost if Isabel pays the $34,000 bill in January?(Round your intermediate calculations and final answer to the nearest whole dollar amount.)
Answer:
a) The after-tax cost if Isabel pays the $34,000 bill in December is equal to $24,000.
b) The after-tax cost if Isabel pays the $34,000 bill in January is equal to $21,523.
Explanation:
Note: See the attached excel file for how the answers are calculated and note the alphabets A to I for how is cell is calculated.
On January 1, 2019, Upward Company purchased a copy machine. The machine costs $320,000, its estimated useful life is 8 years, and its expected salvage value is $20,000. What is the depreciation expense for 2020 using double-declining-balance method
Answer:
$60,000
Explanation:
Depreciation expense using the double declining method = Depreciation factor x cost of the asset
Depreciation factor = 2 x (1/useful life) = 2 / 8 = 0.25
Depreciation expense in 2019 = 0.25 x $320,000 = $80,000
Book value at the beginning of 2020 = $320,000 - $80,000 = $240,000
Depreciation expense in 2020 = 0.25 x $240,000 = $60,000
I hope my answer helps you
An investment will pay $200 at the end the year, $250 at the end of the next year, $400 at the end of the third year, and $500 at the end of the 4th year. Other investments of equal risk earn 6%. How much is this investment worth today
Answer:
PV= $1,143.03
Explanation:
Giving the following information:
An investment will pay $200 at the end of the year, $250 at the end of the next year, $400 at the end of the third year, and $500 at the end of the 4th year. Other investments of equal risk earn 6%.
To calculate the present value, we need to use the following formula on each cash flow:
PV= FV/(1+i)^n
Cf1= 200/1.06= 188.68
Cf2= 250/1.06^2= 222.50
Cf3= 400/1.06^3= 335.85
Cf4= 500/1.06^4= 396
PV= $1,143.03
On January 1, 2021, Pharoah, Inc. signed a 10-year noncancelable lease for a heavy duty drill press. the lease stipulated annual payments of $340,000 starting at the beginning of the first year, with title passing to Pharoah at the expiration of the lease. Pharoah treated this transaction as a finance lease. The drill press has an estimated useful life of 15 years, with no salvage value. Pharoah uses straight-line depreciation for all of its plant assets. Aggregate lease payments were determined to have a present value of $2,002,339, based on implicit interest of 11%.In its 2021 income statement, what amount of interest expense should Pharoah report from this lease transaction
Answer:
$182,857.29
Explanation:
Here, Pharoah, Inc. average lease payments have a present value of $2,002,339
First lease payment = $340,000
Interest rate = 11%
To find the interest rate, first deduct the first lease payment.
$2,002,339 - $340,000
= $1,662,339
This is deducted so as to reduce total lease liability.
Find the amount of interest expense:
$1,662,339 × interest rate
= $1,662,339 × 11%
= $182,857.29
In its 2021 income statement, the amount of interest expense Pharoah should report from this lease transaction is $182,857.29
If $1200 is borrowed at 9% interest, find the amounts due at the end of 4 years if the interest is compounded as follows. (Round your answers to the nearest cent.) (i) annually $ 1693.9 Correct: Your answer is correct. (ii) quarterly $ 1204.3 Incorrect: Your answer is incorrect. (iii) monthly $ (iv) weekly $ (v) daily $ (vi) hourly $ (vii) continuously $
Answer and Explanation:
(i) The computation of compound interest for annual is shown below:-
Compound interest = A = P × (1 + r ÷ n)^t
= $1,200 × (1 + 9% ÷ 1)^1 × 4
= $1,200 × (1.09)^4
= $1,693.897932
or
= $1,693.90
(ii) The computation of compound interest for quarterly is shown below:-
= $1,200 × (1 + 9% ÷ 4)^4 × 4
= $1,200 × (1.09)^16
= $1,713.145749
or
= $1,713.15
Since it is quarterly so we divide the interest rate by 4 and multiply the time period by 4
(iii) The computation of compound interest for monthly is shown below:-
= $1,200 × (1 + 9% ÷ 12)^4 × 12
= $1,200 × (1.0075)^48
= $1,717.6864
or
= $1,717.69
Since it is monthly so we divide the interest rate by 12 and multiply the time period by 12
(iv) The computation of compound interest for weekly is shown below:-
= $1,200 × (1 + 9% ÷ 52)^4 × 52
= $1,200 × (1.432883461 )^208
= $1719.460154
or
= $1,719.46
Since it is weekly so we divide the interest rate by 52 and multiply the time period by 52
(v) The computation of compound interest for daily is shown below:-
= $1,200 × (1 + 9% ÷ 365)^4 × 365
= $1,200 × (1.43326581 )^1460
= $1719.918972
or
= $1719.92
Since it is daily so we divide the interest rate by 365 and multiply the time period by 365
(vi) The computation of compound interest for hourly is shown below:-
= $1,200 × (1 + 9% ÷ 8760)^4 × 8760
= $1,200 × (1.433326764 )^35,040
= $1,719.992117
or
= $1719.99
(vii) The computation of compound interest for continuously is shown below:-
A = Pe^rt
= 1,200e^0.09 × 4
= 1,200e^0.36
= $1,720.00
Given the following information, calculate the debt ratio percentage: Liabilities = $25,000Liquid assets = $5,000Monthly credit payments = $800Monthly savings = $760Net worth = $75,000Take-home pay = $2,300Gross income = $3,500Monthly expenses = $2,050
Answer:
33.33%
Explanation:
The debt ratio percentage is calculated as:
Liabilities / Net worth = Debt Ratio Percentage
$25,000 / $75,000 = 0.3333
0.3333 * 100 = 33.33%
The debt ratio is easy to calculate and is calculated by dividing the total liabilities of a person with the total net worth of the person. Dividing both gives a figure in decimal which is then multiplied by 100 to derive a percentage.
The management of L Corporation is considering a project that would require an investment of $260,000 and would last for 6 years. The annual net operating income from the project would be $110,000, which includes depreciation of $17,000. The cash inflows occur evenly throughout the year. The payback period of the project is closest to (Ignore income taxes.):
Answer:
2.04 years
Explanation:
Payback period calculates the amount of the time it takes to recover the amount invested in a project from its cumulative cash flows.
To derive cash flows from net income, add depreciation to net income.
$110,000 + $17,000 = $127,000
Payback period = $260,000 / $127,000 = 2.04 years
I hope my answer helps you
Currently, the price of Mattco stock is $30 a share. You have $30,000 of your own funds to invest. Using the maximum margin allowed of 50%, what is your percentage profit or loss if you purchase the stock and it rises to $33 a share
Answer:
The percentage profit or loss if you purchase the stock and it rises to $33 a share is 20%
Explanation:
In order to calculate the percentage profit or loss if you purchase the stock and it rises to $33 a share we would have to make the following calculation:
percentage profit or loss=Total Gain/Amount invested
Amount invested=$30,000
According to the given data we have the following:
Share price=$30
Amount invested=$30000
Therefore, Number of shares purchased= ($30,000/50% *1/30)=$2,000
Gain per share ($33-$30)=$3
Therefore, Total Gain=$2,000*$3=$6,000
Therefore, percentage profit or loss= $6,000/$30,000
percentage profit or loss=20%
The percentage profit or loss if you purchase the stock and it rises to $33 a share is 20%
Present Value of an Annuity of 1 Periods 8% 9% 10% 1 .926 .917 .909 2 1.783 1.759 1.736 3 2.577 2.531 2.487 A company has a minimum required rate of return of 8%. It is considering investing in a project that costs $97116 and is expected to generate cash inflows of $39000 each year for three years. The approximate internal rate of return on this project is
Answer:
9.92%
Explanation:
Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested
IRR can be calculated using a financial calculator:
Cash flow in year 0 = $-97116
Cash flow each year from year 1 to 3 = $39000
IRR = 9.92%
To find the IRR using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
I hope my answer helps you
he following balance sheet contains errors. Mark Brock Services Co. Balance Sheet For the Year Ended December 31 Assets Liabilities Current assets: Current liabilities: Cash $7,170 Accounts receivable $10,000 Accounts payable 7,500 Accum. depr.-building 12,525 Supplies 2,590 Accum. depr.-equipment 7,340 Prepaid insurance 800 Net income 11,500 Land 24,000 Total current assets $42,060 Total liabilities $41,365 Owner’s Equity Property, plant, and equipment: Wages payable $1,500 Building $43,700 Mark Brock, capital 88,645 Equipment 29,250 Total owner’s equity 90,145 Total property, plant, and equipment 72,950 Total assets $131,510 Total liabilities and owner’s equity $131,510 Required: Prepare a corrected balance sheet. Be sure to complete the statement heading. Refer to the lists of Accounts, Labels, and Amount Descriptions for the exact wording and order of text entries. You will not need to enter colons (:) on the Balance Sheet. "Less" or "Plus" will automatically appear if it is required.
Answer:
$97,645
Explanation:
Preparation of Mark Brock Services Co corrected balance sheet :
Mark Brock Services Co. Balance Sheet December 31
Assets
Current assets:
Cash$ 7,170
Accounts receivable10,000
Supplies2,590
Prepaid insurance800
Total current assets $20,560
Property, plant, and equipment:
Land$24,000
Building$43,700
Less accumulated depreciation( 12,525)
Equipment$29,250
Less accumumulated depreciation (7,340)
Total property, plant,and equipment 77,085
Total assets (77,085+20,560) $97,645
Liabilities
Current liabilities:
Accounts payable$ 7,500
Wages payable1,500
Total liabilities$ 9,000
Owner's Equity
Capital 88,645
Total liabilities and owner's equity (88,645+9,000) $97,645
Standard Product Cost, Direct Materials Variance Condiments Company uses standards to control its materials costs. Assume that a batch of ketchup (2,300 pounds) has the following standards: Standard Quantity Standard Price Whole tomatoes 3,800 lbs. $0.46 per lb. Vinegar 210 gal. 2.80 per gal. Corn syrup 18 gal. 10.20 per gal. Salt 84 lbs. 2.60 per lb. The actual materials in a batch may vary from the standard due to tomato characteristics. Assume that the actual quantities of materials for batch 08-99 were as follows: 4,000 lbs. of tomatoes 202 gal. of vinegar 19 gal. of corn syrup 83 lbs. of salt a. Determine the standard unit materials cost per pound for a standard batch. If required, round amounts to the nearest cent.
Answer:
Standard unit materials cost per pound=$1.11 per pound
Explanation:
The standard material cost for a standard batch = Total material cost / standard qty (in pounds)
Total material cost = (3,800× $0.46) + (210× 2.80) (84×2.60)=$2554.4
Total standard quantity = 2,300 pounds
Standard unit materials cost per pound =$2554.4/ 2,300 pounds=$1.11 per pounds
standard unit materials cost per pound=$1.11 per pound
If annual demand is 12,000 units, the ordering cost is $6 per order, and the holding cost is $2.50 per unit per year, which of the following is the optimal order quantity using the fixed-order quantity model?
A. 421
B. 234
C. 78
D. 26
E. 312
Answer:
240 units
Explanation:
We can find Optimal order quantity easily by Optimal order quantity formula using the fixed order quantity formula
Formula:: Optimal order quantity = [tex]\sqrt[2]{\frac{2CoD}{Ch} }[/tex]
Where
Co = Ordering cost per order
D = Annual demand
Ch = Holding cost per unit
Calculations
Lets put in the values
Optimal order quantity = [tex]\sqrt[2]{\frac{2CoD}{Ch} }[/tex]
Optimal order quantity = [tex]\sqrt[2]{\frac{2*6*12000}{2.5} }[/tex]
Optimal order quantity = 240 units
Note: There must have been a mistake in question options the answer is 240 and closest to 240 is option B
If an organization tracks its strategy implementation, looks for problem areas, evaluates whether the problem areas indicate any weakness in the strategy, and makes any necessary changes, then it is using:
Question:
If an organization tracks its strategy implementation, looks for problem areas, evaluates whether the problem areas indicate any weakness in the strategy, and makes any necessary changes, then it is using:
A) Organizational controls
B) Tactical controls
C) Behavioral controls
D) Strategic controls
Answer:
The correct option is D) Strategic controls
Explanation:
Strategic controls refer to the process which helps one to easily and immediately change direction where if proposed strategies do not create anticipated results.
For example, if a company X, decides to reduce prices to drive sales and increase market share albeit, at a cost to its bottom line, where there is no increase in sales, an effective strategic control process would be to quickly reverse the situation to the status quo before implementation and thereafter go back to the drawing table to check why demand is low.
Demand could be weak because, quality of products, or services, do not meet consumer expectations, it could be that there is a violation of one of the 'P' of marketing such as Positioning.
The head of strategy thus reviews and plans the next move to ensure that changes are effected.
Cheers!