Bases on the following information calculate the sustainable growth rate for Southern Light.
Profit margin = 8.4 %
Capital intensity ratio =0.45
Debt-equity ratio =0.60
Net income = $95,000
Dividends = $ 40,000
Answer:
20.91%
Explanation:
The following values is the details of a report gotten from Southern Light
Profit margin= 8.4%
Capital intensity ratio= 0.45
Debt to equity ratio= 0.60
Net income= $95,000
Dividend= $40,000
The first step is to calculate the return on equity
ROE= Profit margin×Total assets turnover×equity multiplier
= 8.4/100×1/0.45×(1+0.60)
= 0.084×2.222×1.6
= 0.2987×100
= 29.87%
The next step is to calculate the Plowback ratio
Plowback ratio= 1-(dividend/net income)
= 1-($40,000/$95,000)
= 1-0.421
= 0.579
Therefore, the sustainable growth rate can be calculated as follows
= ROE×Plowback ratio/1-ROE(Plowback ratio)
= 0.2987×0.579/1-0.2987(0.579)
= 0.17295/1-0.17295
= 0.17295/0.8271
= 0.2091×100
= 20.91%
Hence the sustainable growth rate for southern light is 20.91%
A company issued 6-year, 8% bonds with a par value of $450,000. The market rate when the bonds were issued was 7.5%. The company received $454,500 cash for the bonds. Using the straight-line method, the amount of recorded interest expense for the first semiannual interest period is:
Answer:
$17,667
Explanation:
Premium on bonds
= $454,000 - $450,000
= $4,000
Cash interest paid
= $450,000 × 8% × 6/12
= $18,000
Amortization of premium for each period
= $4,000 ÷ 12
= $333
Therefore,
Interest expense
= $18,000 - $333
= $17,667
Dawson entered into a contract with Jensen for the sale of Dawson's boat. Which set of legal rules governs this transaction
Answer:
Uniform Commercial Code
Explanation:
This type of transaction is governed by the legal rules set in the Uniform Commercial Code. Also known as the UCC this code was published in 1952 and was established as law with the goal of harmonizing the law of sales as well as other commercial transactions across the United States of America. This includes contracts of sales of any and all property including boats.
Exercise 10-6 Direct Materials and Direct Labor Variances [LO10-1, LO10-2] Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 7.30 pounds $ 2.25 per pound $ 16.43 Direct labor 0.65 hours $ 6.50 per hour $ 4.22 During the most recent month, the following activity was recorded: 16,600.00 pounds of material were purchased at a cost of $2.05 per pound. All of the material purchased was used to produce 2,000 units of Zoom. 1,200 hours of direct labor time were recorded at a total labor cost of $11,400. Required: 1. Compute the materials price and quantity variances for the month.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Standard:
Direct materials 7.30 pounds $ 2.25 per pound $16.43
Actual:
16,600 pounds of material was purchased for $2.05 per pound. All of the material purchased was used to produce 2,000 units of Zoom.
To calculate the direct material price and quantity variance, we need to use the following formula:
Direct material price variance= (standard price - actual price)*actual quantity
Direct material price variance= (2.25 - 2.05)*16,600
Direct material price variance= $3,320 favorable
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Standard quantity= 2,000*7.3= 14,600
Direct material quantity variance= (14,600 - 16,600)*2.25
Direct material quantity variance= $4,500 unfavorable
When deleting a check all of the following is true except: Multiple Choice It is better to delete the check than void the check in order to erase all records of the transaction The deleted check no longer appears in the check register QuickBooks changes the amount deducted in the check register to zero All of the choices are correct
Answer: It is better to delete the check than void the check in order to erase all records of the transaction
Explanation:
When a check is deleted, it should be noted that such check is being removed entirely from the system and also the transaction of the check will no longer be visible anywhere in the system.
Voiding a check mean that the amount of the transaction on the check will be changed to zero but it should be ited that a record of such transaction will still be kept in QuickBooks but deleting it will help remove the transaction in QuickBooks.
When a check is voided, the check details like the check number, account, payee, memo and date will be unchanged, even though the amount will change to zero.
Therefore, the option that says that it is better to delete the check than void the check in order to erase all records of the transaction isn't true.
Tom, the marketing manager, who is a member of a task force for new product development, is expected to represent the marketing department's concerns to the task force. Tom and his involvement with the task force describes ____________. a group norm a group role groupthink group cohesiveness group polarization
Answer:
a group role
Explanation:
The group role is the role of the group in which the person who is involved in a group describe their role so that they could able to build a relationship with the customer or client
In the given case since tom, who are a marketing manager and his involvement with the task force represent the group role
Therefore the second option is correct
Proctor and Gamble announced that it would sell off or close down up to 100 of its brands. This is an example of which turnaround strategy used by successful companies
Answer:
"Selective product and marketing pruning " is the correct answer.
Explanation:
Several traditional or decreasing companies have a large or increasing number of product lines that are moderately successful or lose capital. It is partially because though existing companies are now addressing almost every competitive already need intentionally or unintentionally, other than on relatively developing companies.So that the above is the correct answer.
Sydney Retailing (buyer) and Troy Wholesalers (seller) enter into the following transactions. May 11 Sydney accepts delivery of $39,500 of merchandise it purchases for resale from Troy: invoice dated May 11; terms 3/10, n/90; FOB shipping point. The goods cost Troy $26,465. Sydney pays $470 cash to Express Shipping for delivery charges on the merchandise. 12 Sydney returns $1,100 of the $39,500 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $737. 20 Sydney pays Troy for the amount owed. Troy receives the cash immediately. (Both Sydney and Troy use a perpetual inventory system and the gross method.) 1. Prepare journal entries that Sydney Retailing (buyer) records for these three transactions. 2. Prepare journal entries that Troy Wholesalers (seller) records for these three transactions g g
Answer:
1. Prepare journal entries that Sydney Retailing (buyer) records for these three transactions.
May 11 Sydney accepts delivery of $39,500 of merchandise it purchases for resale from Troy: invoice dated May 11; terms 3/10, n/90; FOB shipping point. The goods cost Troy $26,465. Sydney pays $470 cash to Express Shipping for delivery charges on the merchandise.
May 11, merchandise purchased on account, terms 3/10, n/90
Dr Merchandise inventory 39,500
Cr Accounts payable 39,500
May 11, freight costs
Dr Merchandise inventory 470
Cr Cash 470
12 Sydney returns $1,100 of the $39,500 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $737.
May 12, merchandise is returned
Dr Accounts payable 1,100
Cr Merchandise inventory 1,100
20 Sydney pays Troy for the amount owed. Troy receives the cash immediately.
May 20, invoice is paid
Dr Accounts payable 38,400
Cr Cash 37,248
Cr Purchase discounts 1,152
2. Prepare journal entries that Troy Wholesalers (seller) records for these three transactions.
May 11 Sydney accepts delivery of $39,500 of merchandise it purchases for resale from Troy: invoice dated May 11; terms 3/10, n/90; FOB shipping point. The goods cost Troy $26,465. Sydney pays $470 cash to Express Shipping for delivery charges on the merchandise.
May 11, merchandise sold on account, terms 3/10, n/90
Dr Accounts receivable 39,500
Cr Sales revenue 39,500
Dr Cost of goods sold 26,465
Cr Merchandise inventory 26,465
12 Sydney returns $1,100 of the $39,500 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $737.
May 12, merchandise is returned
Dr Sales revenue 1,100
Cr Accounts receivable 1,100
Dr Merchandise inventory 737
Cr Accounts receivable 737
20 Sydney pays Troy for the amount owed. Troy receives the cash immediately.
May 20, invoice is paid
Dr Cash 37,248
Dr Sales discounts 1,152
Cr Accounts receivable 38,400
Vargas, Inc. sold goods with a selling price of $ 54,000 in 2019 and estimated 4%warranty expense for the year. Customers complained of defects, and goods with a cost of $ 3,500 had to be replaced. Which of the following is the correct journal entry for honoring the warranties with goods?
A. Estimated Warranty Payable 1,500 Cash 1,500B. Estimated Warranty Payable 1,500 Warranty Expense 1,500C. Warranty Expense 1,500 Merchandise Inventory 1,500D. Estimated Warranty Payable 1,500 Merchandise Inventory 1,500
Answer:
Estimated Warranty Payable 1,500 Debit
Merchandise Inventory 1,500 Credit
Explanation:
Vargas, Inc.
Sales $ 54,000
Warranty 4%
Defected Items $ 3500
The Estimated Warranty Payable is a deferred liability and is posted in the journal unless paid . It is debited when an equal amount of merchandise inventory is credited . An equal amount of inventory is credited to honor the warranty charges which are a liability of the seller if the deal is not accordingly set. So the correct entry is
Estimated Warranty Payable 3,500 Debit
Merchandise Inventory 3,500 Credit
The amount is equal to the defected items claimed. But from the given choices it is
Estimated Warranty Payable 1,500 Debit
Merchandise Inventory 1,500 Credit
In the context of project management, a task duration is always the same as the amount of work (effort) it takes to finish the task. true or false?
Answer:
False
Explanation:
The statement that says that in the context of project management, a task duration is always the same as the amount of work (effort) it takes to finish the task is false because the effort is the time a person needs to finish a task while the duration is the period of time that a person has to finish it. For example, an employee has a task that takes forty hours of work to finish it but he has a month to do it. In this case, the effort is forty hours but the task duration is one month.
"Suppose a firm wants to take advantage of an upward-sloping yield curve. If the firm believes that interest rates will stay constant and it wants to use the current yield curve to bolster profits, which approach should the firm follow?"a. Conservative approach b. Aggressive approach c. Maturity matching approach
Answer: b. Aggressive approach
Explanation:
The Aggressive approach refers to using short term finance to finance temporary working capital and some of permanent working capital.
When facing an upward sloping yield curve which means that interest rates are expected to.rise in future, it is better to use the current rates to bolster profit. By engaging in an Aggressive approach, the company can borrow now to fund their operations as the Aggressive approach involves using short term financing to cater for working capital. This will keep interest costs at a minimum because they will.not be calculated based on the impending increase in interest rates but rather on current short term rates.
Gullett Corporation had $32,000 of raw materials on hand on November 1. During the month, the Corporation purchased an additional $81,000 of raw materials. The journal entry to record the purchase of raw materials would include a:
Answer:
Dr Raw materials $81, 000
Cr Accounts payable $81,000
Explanation:
Preparation of the journal entry to record the purchase of raw materials for Gullett Corporation
Since we were told that the Corporation already had the amount of $32,000 of raw materials on hand in which they later purchased an additional amount of $81,000 of the raw materials this means we are going to record the Journal entry by Debiting Raw materials with the amount of $81, 000 which is the additional amount of the raw materials purchased and to Credit Accounts payable with the same amount of $81,000.
Dr Raw materials $81, 000
Cr Accounts payable $81,000
(To record purchase of raw materials)
The tests of whether a diversified company's businesses exhibit resource fit do not include whether:
a. the corporate parent has sufficient cash to fund the needs of its individual businesses and pay dividends to shareholders without having to borrow money.
b. the excess cash flows generated by cash cow businesses are sufficient to cover the negative cash flows of its cash hog businesses.
c. the company has adequate financial strength to fund its different businesses and maintain a healthy credit rating.
d. a business adequately contributes to achieving the corporate parent's performance targets.
e. the corporate parent has or can develop sufficient resource strengths and competitive capabilities to be successful in each of the businesses it has diversified into.
Answer: a. the corporate parent has sufficient cash to fund the needs of its individual businesses and pay dividends to shareholders without having to borrow money.
Explanation:
Resource fit refers to a situation where the various businesses under a company have adequate access to resources from the parent company to enable them to be successful and that the parent company should not only be able to fund these businesses but also have the skills required to run them.
All the options exhibit this except option A. This is because the company should be able to fund its businesses regardless of if it is by debt or otherwise. They just need to be able to fund the businesses should the need arise.
Hardmon Enterprises is currently anâ all-equity firm with an expected return of 15.2%. It is considering a leveraged recapitalization in which it would borrow and repurchase existing shares. Assume perfect capital markets.
a. Suppose Hardmon borrows to the point that itsâ debt-equity ratio is 0.50. With this amount ofâ debt, the debt cost of capital is 5%. What will be the expected return of equity after thisâtransaction?
b. Suppose instead Hardmon borrows to the point that itsâdebt-equity ratio is 1.50. With this amount ofâ debt, Hardmon's debt will be much riskier. As aâ result, the debt cost of capital will be 7%. What will be the expected return of equity in thisâcase?
c. A senior manager argues that it is in the best interest of the shareholders to choose the capital structure that leads to the highest expected return for the stock. How would you respond to thisâ argument?
Answer and Explanation:
The computation is shown below:
a. The expected return of equity is
= Expected return + debt to equity ratio × (expected return - debt cost to capital)
= 15.2% + 0.5 × (0.152 - 0.05)
= 20.3%
b. Now the debt cost of capital is 7%
So, the expected return of equity is
= Expected return + debt to equity ratio × (expected return - debt cost to capital)
= 15.2% + 0.5 × (0.152 - 0.07)
= 27.5%
c. As we know that if the investment has a higher return than of course it has high risk also or we can say it is compensated by high risk
So it would be best shareholder interest
For strategic success from its merger with Amoco, the corporate _____________ must merge together.Multiple Choiceculturesrulespolicies
Answer:
Cultures
Explanation:
For strategic success from its merger with Amoco, the corporate CULTURES must tend to merge together because at the firm level, a strategy is a form of a comprehensive plan which help to states how an organization or a company will achieve their mission, aim and objectives.
Lastly, STRATEGY SUCCESS can be seen as a road map which enables or help an organisation or a company to get to where they intend to reach in order for their proposed mission to be accomplished, Although this can only be based on good information that is been gathered in advance.
Assume the market for manufactured houses is in equilibrium. Imagine that trade restrictions increased the cost of cement, which is an input in making manufactured houses. How does this impact the manufactured house market
Answer: f. Supply of manufactured houses shifts leftward and manufactured houses increase in price
Explanation:
All else being equal, when the price of an input into the production process increases, it makes producing the goods in question more expensive and so producers will respond by reducing production levels to maintain Profitability.
As the price of cement rises, making manufactured houses becomes more expensive and so the makers of manufactured houses will reduce the number of manufactured houses they make. This will reduce Supply thereby shifting the Supply Curve to the left. The new Equilibrium level will indicate a higher Equilibrium price as shown in the attached graph.
Tiago makes three models of camera lens. Its product mix and contribution margin per unit follow: Percentage of Unit sales Contribution Margin per unit Lens A 25 % $ 38 Lens B 40 30 Lens C 35 43 Required: 1. Determine the weighted-average contribution margin per unit. 2. Determine the number of units of each product that Tiago must sell to break even if fixed costs are $187,000. 3. Determine how many units of each product must be sold to generate a profit of $73,000.
Answer:
A. $36.55
B. 5116 units
C. 7114 units
Explanation:
Requirement 1: Weighted average contribution margin per unit
Lens A = $38 x 25% = $9.5
Lens B = $30 x 40% = $12
Lens C = $43 x 35% = $15.05
Total Contribution margin per unit = $36.55
Requirement 2: Breakeven if fixed cost is $187,000
Break even point (units) = Fixed cost / Contribution per unit
Break even point (units) = 187,000/36.55
Break even point (units) = 5116 units
Lens A = 5116 x 25% = 1279 units
Lens B = 5116 x 40% = 2046 units
Lens C = 5116 x 35% = 1791 units
Requirement 3: How many units to be sold to generate $73,000 profit
Required units = Fixed cost - required profit / contribution per unit
Required units = ($187,000-$73,000)/$36.55
Required units = 7114 units
Lens A = 7114 x 25% = 1779 units
Lens B = 7114 x 40% = 2846 units
Lens C = 7114 x 35% = 2489 units
A compnay issues 100000 of 5%, 10 year bonds dated january 1. The bonds pay interest semiannually on june 30 and Decemnber 31 each year. If the bonds are sold at par value, the issuer records the sale with a debit to what accounts?
Answer:
Debit to cash-$100,000; credit to bond payable- $100,000
Explanation:
Since the bonds are issued by the company, it is a debit on the part of the company. This then serves up as credit to the company when it sells the bonds at june 30 and december 31 each year.
Cheers.
XYZ Company received $18,000 on April 1, 2020 for one year's rent in advance and recorded the transaction with a credit to a nominal account. The December 31, 2020 adjusting entry is
Answer:
Dr Rent revenue
Cr Unearned rent revenue, $4,500
Explanation:
Preparation of XYZ Company Journal entry
Since we were told that the Company received the amount of $18,000 on April 1, 2020 for a one year's rent paid in advance in which the transaction has a credit to a nominal account, this means we have to record the transaction by Debiting Rent revenue with 4,500 and Crediting Unearned rent revenue, with the same amount of $4,500 calculated as
(3/12 x $18,000 ).
Dr Rent revenue
Cr Unearned rent revenue, $4,500
(3/12 x $18,000 )
E24-3 (Segmented Reporting) Carlton Company is involved in four separate industries. The following information is available for each of the four industries.
Operating Segment Total Revenue Operating Profit (Loss) Identifiable Assets
W $60,000 $15,000 $167,000
X 10,000 3,000 83,000
Y 23,000 (2,000) 21,000
Z 9,000 1,000 19,000
$102,000 $17,000 $290,000
Instructions:
Determine which of the operating segments are reportable based on the:
(a) Revenue test.
(b) Operating profit (loss) test.
(c) Identifiable assets test.
Answer:
(a) Revenue test.
Only report segments that generate at least 10% of total revenues:
WXY(b) Operating profit (loss) test.
Only report segments that generate at least 10% of profits or losses:
WXY(c) Identifiable assets test.
Only report segments that account for at least 10% of combined assets:
WXExplanation:
Operating Total Operating Identifiable
segment revenue profit (loss) assets
W $60,000 $15,000 $167,000
X $10,000 $3,000 $83,000
Y $23,000 ($2,000) $21,000
Z $9,000 $1,000 $19,000
$102,000 $17,000 $290,000
10% $10,200 $1,700 $29,000
A company's net profit Margins M, expressed as a percent is determined using the formula M = 100l/R where I represent net income and R represent net Revenue. Calculate the net profit margin for a company with a net income of $254,000 and a net revenue of $7,548,000. Round to the nearest hundredth of a percent
Answer:
3.37%
Explanation:
M = 100l/R.
M = 100 x $254,000 / $7,548,000 = 3.3651...
Rounding to the nearest hundredth, we get the net profit margin is 3.37%.
In large organizations, the potential exists for different parts of an organization to pursue its own goals rather than the overall company goals. Proper _______ can help to resolve conflicts when they arise
Answer:
Objectives
Explanation:
Generally, organizations are required to set short or medium-term objectives to ensure there's an effective customer relationships management, improve worker's efficiency or productivity and more importantly to increase their revenues and profits. These objectives are usually drafted by the executive or top management of an organization and it's mandatory that all the employees are diligently working towards achieving this set goals.
In large organizations, the potential exists for different parts of an organization to pursue its own goals rather than the overall company goals. Proper objectives can help to resolve conflicts when they arise.
For instance, the sales department in a bid to meet daily or monthly targets may result to unauthorized marketing channels and procedures which may be in contrast to the objectives of the human resources department.
With proper objectives such as policies and guidelines, conflicts of goals would be mitigated as various departments would ensure their activities are in tandem with the overall company goals. This can be easily achieved by appointing functional managers who have an oversight function of supervising the employees in their departments at all times.
Suppose the U.S. dollar-euro exchange rate is 1.11.1 dollars per euro, and the U.S. dollar-Mexican peso rate is 0.10.1 dollars per peso. What is the euro-peso rate? nothing euros per Mexican peso. (Enter your response rounded to three decimal places.)
Answer:
Explanation:
According to the given data we have the following:
1 euro=1.11 dollars
1 peso=0.10 dollars
Hence, 11.10 peso=1.11 dollares
So, 1 euro=11.10 peso
Therefore, 1/11.10 euro=1 peso
0.09009 euro=1 peso
The euro-peso rate is 0.09009 euro=1 peso
It is important to reduce your debt in order to (afford/ increase /improve) your credit?
Paying down a debt as quickly as possible can help (distribute/ eliminate/ reduce) interest owned?
Checking your credit report can help you (decrease interest payments/ monitor your information/ reduce your debt)?
Answer:
1. Improve
2. Reduce
3. Monitor your information
Explanation:
1. When you have a lot of debt to your name, it reduces your credit and presents you as a risky individual who will be unable to take on more debt because they haven't finished paying off the others that they have. You will be more of a credit risk and this will reduce you're credit.
2. Interest is charged on the remainder of your debt. If you pay off your debt faster, there will be less of an amount for interest to be charged on so it will reduce.
3. It is important to check your credit report as often as you can. It will help you monitor your information so that you can make adjustments to it or to your lifestyle if need be. You can find out if information is in anyway incorrect and act on it under The Fair Credit Reporting Act (FCRA) if necessary.
Accounts receivable is classified on the balance sheet as a current asset. current liability. noncurrent asset. long-term liability.
Answer: Current Asset
Explanation:
Accounts receivable is defined as money owed to the company by its customers for goods or services rendered that is to say When a company provides goods or render services to another customer or company but is awaiting payment on a short term basis, then the company documents the accounts receivable on a balance sheet as a current asset.
it is recorded as current asset because under legal obligations, the company will receive cash in due time,usually within a year that is why companies who render credit based goods and services set payment terms and conditions to monitor and ensure payment because this affects the company liquidity.
The first step in writing a report is to ________. a. prepare a work plan b. determine your research strategy c. understand the problem or assignment clearly d. compose the first draft
Answer:
understand the problem or assignment clearly
Explanation:
It is important to understand what one is asked to do clearly. If one doesn't understand the assignment clearly, it would negatively affect the project and one would end up doing the wrong thing.
I hope my answer helps you
The first step in writing a report is to ________ c. understand the problem or assignment clearly.
The Steps to followBefore embarking on the report writing process, it is essential to have a clear understanding of the problem or assignment at hand. This involves carefully analyzing the requirements, objectives, and scope of the report.
By gaining a comprehensive understanding, you can outline the structure, gather relevant information, and establish a coherent approach. It also enables you to identify potential challenges and devise a well-thought-out strategy.
Option C is correct/.
Read more about report here:
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A North Face retail store in Chicago sells 500 jackets each month. Each jacket costs the store $100 and the company has an annual holding cost of 25 percent. The fixed cost of a replenishment order (including transportation cost) is $100. The store currently places a replenishment order for Q.
1. What is the annual holding and ordering cost?
2. On average, how long does a jacket spend in inventory?
3. If the retail store wants to minimize ordering and holding cost, what order size do you recommend?
4. How much would the optimal order reduce holding and ordering cost relative to the current policy?
Answer:
(1) The annual holding cost is =$6250, The ordering costs is = 500 units
(2) The total cost is = $7450
(3)224 unit
(4) $1,864.30
Explanation:
Solution
Given that:
The annual demand = 520 units * 12
= 6,240 units
The cost per order = $100 per order
The Carrying Cost = 0.25% * $100
= 25 per unit per year
Thus
(1) The Ordering quantity = 500 units every month
The annual holding cost =0.5*quantity ordered*holding cost
The Annual Holding cost = 0.5*500*25
Annual Holding cost =$6250
(2) The ordering (Annual)cost = number of orders *cost per order
Annual ordering cost =(500*12/500)*100
Annual ordering cost =$1200
Total cost = 6250+1200=7450
(3)Thus
EOQ=(2*D*S/h)^0.5
EOQ=(2*6240*100/25^)0.5
EOQ=223.43
=224 unit
(4)The ordering cost =(6240/224)*100=2785.70
Holding cost=0.5*224*25
=2800
Total cost= 2785.70+2800
Total cost=5585.70
Total savings = 7450 - 5585.70
= $1,864.30
Skolits Corp. issued 15-year bonds 2 years ago at a coupon rate of 7.3 percent. The bonds make semiannual payments. If these bonds currently sell for 103 percent of par value, what is the YTM?
Answer:
6.94%
Explanation:
The yield to maturity can be computed using excel rate function found below:
=rate(nper,pmt,-pv,fv)
nper is the coupons that bond has left to pay i.e 26 semiannual coupons in 13 years
pmt is the semiannual coupon amount i.e $1000*7.3%*6/12=36.5
pv is the current market price i.e 103%*$1000=$1030
fv is the face value of $1000
=rate(26,36.5,-1030,1000)=3.47%
semiannual yield =3.47%
annual yield =3.47% *2=6.94%
"Total revenue equals the price multiplied by the quantity. The relative change price and quantity is given by the concept of ________________."
Answer:
Elasticity
Explanation:
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.
If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes.
Demand is inelastic if a small change in price has little or no effect on quantity demanded.
Demand is unit elastic if a small change in price has an equal and proportionate effect on quantity demanded.
I hope my answer helps you
Given the following data for Glennon Company, compute (A) total manufacturing costs and (B) costs of goods manufactured:
A B
Direct materials used $270,000 Beginning work in process $40,000
Direct labor 200,000 Ending work in process 20,000
Manufacturing overhead 300,000 Beginning finished goods 50,000
Operating expenses 350,000 Ending finished goods 30,000
A) $750,000 $790,000
B) $770,000 $750,000
C) $790,000 $810,000
D) $770,000 $790,000
2) Carr Company is considering two capital investment proposals. Estimates regarding each project are provided below:
Project Soup Project Nuts
Initial investment $400,000 $600,000
Annual net income 30,000 46,000
Net annual cash inflow 110,000 146,000
Estimated useful life 5 years 6 years
Salvage value -0- -0-
The company requires a 10% rate of return on all new investments.
Present Value of an Annuity of 1
Periods 9% 10% 11% 12%
5 3.890 3.791 3.696 3.605
6 4.486 4.355 4.231 4.111
The annual rate of return for Project Soup is:
A) 55%.
B) 7.5%.
C) 27.5%.
D) 15.0%.
Answer:
1. Glennon Company
Total manufacturing costs and costs of goods sold:
C) $790,000 $810,000
2. Carr Company
Annual Rate of Return for Project Soup:
B) 7.5%.
Explanation:
1A) Total Manufacturing costs
Direct materials used $270,000
Beginning work in process 40,000
Direct labor 200,000
Ending work in process (20,000 )
Manufacturing overhead 300,000
Total manufacturing costs $790,000
1B) Costs of goods sold:
Beginning finished goods 50,000
Costs of goods manufactured 790,000
less Ending finished goods (30,000)
Cost of goods sold $810,000
2) Project Soup Project Nuts
Initial investment $400,000 $600,000
Annual net income 30,000 46,000
Net annual cash inflow 110,000 146,000
Annual Rate of Return = Annual net income/Initial Investment
= $30,000/$400,000 x 100 = 7.5%