Answer:
Cozy Bookstore
Allocation of Service Departments' Overheads to the Operating Departments:
Books Magazines Newspapers Total
Allocation of:
Advertising Dept. $19,260 $11,556 $11,984 $42,800
(Dollar Sales)
Purchasing Dept. $14,445 $6,420 $11,235 $32,100
(Purchase Orders)
Total $33,705 $17,976 $23,219 $74,900
Explanation:
a) Data and Calculations:
1. Allocation Basis:
Department Sales Purchase Orders
Books $ 180,000 (45%) 1,170 (45%)
Magazines 108,000 (27%) 520 (20%)
Newspapers 112,000 (28%) 910 (35%)
Total $ 400,000 2,600
2. Allocation of Advertising Department expenses of $42,800 on the basis of dollar sales:
Books = 45% of $42,800 = $19,260
Magazines = 27% of $42,800 = $11,556
Newspapers = 28% of $42,800 = $11,984
3. Allocation of Purchasing Department expenses of $32,100 on the basis of Purchase orders:
Books = 45% of $32,100 = $14,445
Magazines = 20% of $32,100 = $6,420
Newspapers = 35% of $32,100 = $11,235
4. The allocation of overheads for the service departments of Advertising and Purchase of Cozy Bookstore was done using the direct method. This method allocates the overheads directly to each operating unit of either Books, Magazines, or Newspapers. This is a straightforward method. Other methods exists for the allocation. They include the step method and the reciprocal method; details of their discussions are not included in this class.
Jeff has the opportunity to receive lump-sum payments either now or in the future. Which of the following opportunities is the best, given that the interest rate is 4% per year?
a. one that pays $ 900 now
b. one that pays $ 1080 in two years
c. one that pays $ 1350 in five years
d. one that pays $ 1620 in ten years
Answer:
c. one that pays $ 1350 in five years
Explanation:
we have to calculate the present value of each option:
option a, $900 (that is the present value)option b, $1,080 in 2 years. PV = $1,080 / (1 + 4%)² = $998.52option c, $1,350 in 5 years. PV = $1,350 / (1 + 4%)⁵ = $1,109.60option d, $1,620 in 10 years. PV = $1,620 / (1 + 4%)¹⁰ = $1,094.41Option c yields the highest present value = $1,109.60
Che MFG Company experiences the following cost behavior patterns each week
Fixed costs: supervisor's salary $1,200; factory rent $2,900
Mixed costs: utilities $1,700+ $5.75 per unit
Variable costs per unit manufacturing labor wages $21.00; supplies used in production $9.00; packaging cost $2.75, warranty cost $4
Required: Compute total costs to be incurred for a week with 2,770 units of activity. (Do not round intermediate calculations.)
Total cost___________
Answer:
Total cost= $123,525
Explanation:
Giving the following information:
Fixed costs: supervisor's salary $1,200; factory rent $2,900
Mixed costs: utilities $1,700+ $5.75 per unit
Variable costs per unit manufacturing labor wages $21.00; supplies used in production $9.00; packaging cost $2.75, warranty cost $4
We need to determine the total cost of 2,770 units:
Total variable cost= 5.75*2,770 + 21*2,770 + 9*2,770 + 2.75*2,770 + 4*2,770
Total variable cost= $117,725
Total fixed costs= 1,200 + 2,900 + 1,700= $5,800
Total cost= 117,725 + 5,800= $123,525
Regulations that permit a regulated firm to cover its costs and to make a normal level of profit are commonly referred to as
Answer:
cost plus regulation
Explanation:
Cost plus regulation is generally used by the government to regulate monopolies (mainly natural monopolies like utilities, and others). The price that the monopoly can charge for its goods or services is set by the government and it should generally cover all of the company's costs plus allow it to make a "normal" profit.
The standard overhead applied is based on the ______ level of activity multiplied by the predetermined overhead rate.
Answer: actual level
Explanation:
It should be noted that when determining the standard overhead cost rate, overhead costs have to be grouped into the fixed cost and the variable costs.
The standard overhead applied is based on the actual level of activity multiplied by the predetermined overhead rate.
BankMart Inc. recently issued bonds that mature in 9 years. They have a par value of $1,000 and an annual coupon of 3%. The current market interest rate is 8%.What should be the bond's price?
Answer:
Price of Bond = $687.66
Explanation:
The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV).
Value of Bond = PV of interest + PV of RV
The value of bond for Bank Mart Inc can be worked out as follows:
Step 1
Calculate the PV of interest payments
Annual interest payment
= 3%× 1000 = 30
PV of interest payment
PV = A× (1- 1+r)^(-n)
A- 30, r- 8%, n- 9
30× ((1-1.08^(-9))/0.08)=187.41
Step 2
PV of redemption Value
PV = RV × (1+r)^(-n)
RV - 1000, r- 8%, n- 9
PV of RV = 1000 × 1.08^(-9) = 500.24
Step 3
Price of bond
Total PV = 187.41 + 500.24 = $687.66
Price of Bond = $687.66
1. What are Red Bull's greatest strengths and risks as more companies (like Coca-Cola, Pepsi, and Monster) enter the energy drink category and gain market share? 2. Should Red Bull do more traditional advertising? Why or why not? Discuss the effectiveness of Red Bull's sponsorships, for example, Bull Stratos. Is this a good use of Red Bull' marketing budget? Where should the company draw the line?
Answer:
Strengths
RedBull is a well-established brand in the Energy Drink sub-sector.It has been in existence since 1987 making it a 33-year-old company. That's a lot of experience doing the same thing. Given its years of experience, consumers have a lot of confidence in its brand. This means it has strong brand equity.As of 2019, RedBull still has the highest market share of any energy drink in the world with a record 7.5 billion cans soldRisks
The challenge is this, Coca-cola is a much older company with about 128 years behind it. It was established in 1892.Coca-cola equally has a very strong brand equityIn the carbonated drinks sub-sector, it has dominated the sector since 2004. It's market share is estimated at 42.5%.It has about 500 brands compared to Redbull which has only one brand.In Pepsi was created in 1893. Just one year younger than Coca-cola. It currently has about 24.9% of the soda market. Within the cola segment alone, it has about 100 flavours.Monster energy as a strong entrant into the energy drink market is only 18 years old and it already has 49 different drinks with about 14% market share worldwide.Suffice it to say that if Red Bull does not concieve of a critical strategy to maintain market dominance, it may continue to bleed it's market share.
2. Red Bull should do more than traditional advertising.
There is no reason why it can go into the Soda space. There are countries where the big players still exert a huge dominance. Mexico, for instance, consumes the more coca-cola than anywhere else in the world.
Red Bull in addition to keeping it's market share through aggressive advertising, can enter into the soda market, targeting these regions where coca-cola and other players seem to have a pseudo monopoly.
Red Bull can also look at creating more flavours depending on the psychographics of the target market it is looking at.
Bull Stratos
Red Bull Stratos is the official name for the project involving Mr Baumgartner's mission. Mr Baumgartner's project involved a record breaking jump for the ages from the edge of space which cost about USD 30 million. It is on record that this is nothing like what Red Bull have ever done before and it did so at a fraction of it's annual sports marketing which is estimated at about USD 300 Million.
To answer the question about its effectiveness, its definitely yes.
Over 8 million people saw the jump which had the Red Bull logo/ branding conspicuously displayed. It was dubbed "the most successful Public Relations campaign of year 2012."
The line will always be dictated by the metrics which show returns on marketing budget invested.
Any strategy that currently works to enhance the brand of Red Bull or at least keep its dominance over the energy drink market, must be explored.
Cheers!
O'Mally Department Stores is considering two possible expansion plans. One proposal involves opening 5 stores in Indiana at the cost of $1,810,000. Under the other proposal, the company would focus on Kentucky and open 6 stores at a cost of $2,000,000. The following information is available: Indiana proposal Kentucky proposal Required investment $1,810,000 $2,000,000 Estimated life 6 years 6 years Estimated residual value $80,000 $40,000 Estimated annual cash inflows over the next 10 years $700,000 $800,000 Required rate of return 13% 13% The accounting rate of return for the Indiana proposal is closest to (Round any intermediary calculations to the nearest dollar, and round your final answer to the nearest hundredth of a percent, X.XX%.)
Answer:
O'Mally Department Stores
The accounting rate of return for the Indiana proposal is closest to 24.28%
Explanation:
a) Data and Calculations:
Indiana proposal Kentucky proposal
Required investment $1,810,000 $2,000,000
Estimated life 6 years 6 years
Estimated residual value $80,000 $40,000
Estimated depreciable cost $1,730,000 $1,960,000
Average depreciable cost $288,333 $326,667
Estimated annual cash inflows
over the next 10 years $700,000 $800,000
Average cash inflows $70,000 $80,000
Required rate of return 13% 13%
Accounting rate of return = Average cash inflows/Average depreciable cost x 100 = $70,000/$288,333 x 100 = 24.28%
The Indiana proposal of O'Mally Department Stores' accounting rate of return is the ratio of estimated accounting profit to the average investment cost. The estimated accounting profit is equivalent to the average cash inflow and the average investment cost is equivalent to the average depreciable cost.
Consider Kodak's core competency before Fisher's arrival. As the market shifted from film to digital did the company's historical core competency still quality as a core competency? Did it pass the core competency test question(s)? If so, which one(s)?
a. Test 1
b. Test 2
c. Test 3
Answer: None of the three tests were passed as the market transitioned.
Explanation: one of the core competencies of Kodak were
1. Film was the basics of their critics products and services. As the market transitioned from the use of films for camera and devices to digital, Kodak refused or was reluctant to take the necessary risk to expand and forge beyond it current market and product to the digitalized market as a result suffered the consequence.
The "TAO" approach to digital marketing analytics stands for.
Answer:
The "TAO" approach to digital marketing stands for the way through which digital marketers can make themselves heard in the digital world in the midst of all the digital noise. He believed that, apprenticeships is the best way.
This offers the person a great way to gain both knowledge and experience while getting paid at the same time. For example,there are more and more apprenticeship bodies someone can engage with like The Juice Academy and Arch Apprentices.
Explanation:
The Sweet Tooth Restaurant borrowed $3,000 on a note dated May 15 with a simple interest of 11%. The maturity date of the loan is September 1. The restaurant made partial payments of $875 on June 15 and $940 on August 1. Find the amount due on the maturity date.
Answer:
Amount due is $1,256.14
Explanation:
Calculation of the interest to date at time of 1st partial payment
I1=PRT1
I1= 3,000 * 0.11 * 31/360
I1= $28.42
Remaining Principal = Principal + Interest - Payment
P1 = 3,000 + 28.42 - 875
P1 = $2,153.42
Calculation of the interest to date at time of 2nd partial payment
I2 = P1RT2
I1= 2,153.42* 0.11 * 47/360
I1= $30.93
Remaining Principal = Principal + Interest - Payment
P2= 2,153.42 + 30.93 - 940
P2= $1,244.35
Calculation of the remaining interest on the maturity date
I3= P2RT3
I3= 1,244.35 * 0.11 * 0.31/360
I3= $11.79
Amount due = Remaining Principal + Interest
P3= 1,244.35 + 11.79
P3= $1,256.14
Thus, the amount due is $1,256.14
In the short run, the quantity of output that firms supply can deviate from the natural level of output if the actual price level in the economy deviates from the expected price level. Several theories explain how this might happen.
Answer: fall, reducing, fall below
Explanation:
the misperceptions theory asserts that changes in the price level can temporarily mislead firms about what is happening to their output prices. Consider a soybean farmer who expects a price level of 100 in the coming year. If the actual price level turns out to be 90, soybean prices will __________ , and if the farmer mistakenly assumes that the price of soybeans declined relative to other prices of goods and services, she will respond by __________ the quantity of soybeans supplied. If other producers in this economy mistake changes in the price level for changes in their relative prices, the unexpected decrease in the price level causes the quantity of output supplied to __________the natural level of output in the short run.
According to the Security Risk Management: Building an Information Security Risk Management Program From the Ground Up textbook, "there will be risks that can't be mitigated at all, aren't worth the effort to reduce the exposure any further, or just won't be addressed in the short term due to other priorities" (p. 47). Provide a real-world example for each of these three scenarios and explain why the risk meets the criteria.
Answer with Explanation:
Risk which can’t be mitigated: The risks that the share price would fall due to sudden political environment instability or events that effects the economy will definitely affect the business operations as well. Thus are the risks that can not be mitigated at all. Another example would be Corona virus implications on the operation of the company which is again a risk that can't be mitigated.
Risks, that aren’t worth the effort to reduce the exposure any further:
The part of the sentence talks about the risk exposure which says that if the company doesn't resides in an area which is not prone to seismic activity and the chances of earthquake in a country is below 0.000001% which is almost negligible but still it is worthless to purchase the earthquake insurance. As this risk is almost negligible hence it is not worth the effort to reduce the exposure any further.
Risks that wouldn't be addressed in short term due to other priorities:
The risks that will not occur in the next 12 month, can be addressed after 6 months and thus allowing the company to prioritize the risks that must be resolved first. This means that if their is a risk that one of our several products that would be launched after 12 months from now will not be winning customer market can be addressed after 6 months because it is dependent on our future action. If we don't launch our product, our product is not rejected by the customer. Hence situations like this allows us to prioritize our risks.
A project that provides annual cash flows of $2,700 for nine years costs $8,800 today.
Requirement 1:A. At a required return of 9 percent, what is the NPV of the project?
B. At a required return of 28 percent, what is the NPV of the project?
C. At what discount rate would you be indifferent between accepting the project and rejecting it?
Answer:
A. $8,187.17
B. $597.38
C. 30%
Explanation:
Calculate the Net Present Value of the Project at the Required Return of 9%
The following is the calculation of NPV using a financial calculator :
($8,000) CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
9.00 % i/yr
Shift NPV $8.187.1666 or $8,187.17
Calculate the Net Present Value of the Project at the Required Return of 9%
The following is the calculation of NPV using a financial calculator :
($8,000) CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
28.00 % i/yr
Shift NPV $597.3765 or $597.38
You will be indifferent between accepting the project and rejecting it at the internal rate of return. The Internal Rate of Return is the interest rate that makes the Present Vale of Cash Flows to equal the Initial Cost of the Investment.
Use the Data given to find the Internal Rate of Return :
($8,000) CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
$2,700 CFj
Shift IRR 30%
what is Social responsibilities in business
Answer:
Social responsibility in business, also known as corporate social responsibility (CSR), pertains to people and organizations behaving and conducting business ethically and with sensitivity towards social, cultural, economic, and environmental issues.
Cullumber Corporation had 312,000 shares of common stock outstanding on January 1, 2017. On May 1, Cullumber issued 29,700 shares.
(a) Compute the weighted-average number of shares outstanding if the 29,700 shares were issued for cash.
Weighted-average number of shares outstanding $
(b) Compute the weighted-average number of shares outstanding if the 29,700 shares were issued in a stock dividend.
Weighted-average number of shares outstanding $
Answer:
a. Issued for Cash = ($312,000 * 12/12) + ($29,700 * 8/12)
= $312,000 + $19,800
= $331,800
b. Issued in a stock dividend: Shares issued in the stock dividend are assumed outstanding from the beginning of the year
= ($312,000 * 12/12) + ($29,700 * 12/12)
= $312,000 + $29,700
= $341,700
Planet Company had operating income of $12,000, average operating assets of $125,000, and sales of $45,000. What is Planet's return on investment (ROI)
Answer:
36.36%
Explanation:
Return on investment is given as;
Profit / Cost of goods sold × 100%
Given that profit is $12,000 and sales is $45,000 ;
Cost of goods sold
= $45,000 - $12,000
= $33,000
Therefore, return on investment is
= 12,000 / 33,000 × 100%
= 36.36%
Bawl purchased ABC bonds on 1/1/21. Data regarding these available-for-sale securities follow: Cost MV December 31, 2021 $100,000 $ 91,000 December 31, 2022 100,000 111,000 December 31, 2023 100,000 106,000 The unrealized Gain/Loss reported in OCI of the 2023 Comprehensive Income statement is:
Answer:
Bawl with ABC bonds
The unrealized Gain/Loss reported in OCI of the 2023 Comprehensive Income statement is:
A Loss of $5,000
Explanation:
a) Data and Calculations:
Cost MV Unrealized Profit or (Loss)
December 31, 2021 $100,000 $ 91,000 $9,000 (Loss)
December 31, 2022 100,000 111,000 20,000
December 31, 2023 100,000 106,000 5,000 (Loss)
Available-for-sale Investment
Debit Credit
Dec 31 100,000
Loss 9,000
Dec 31 91,000
Profit 20,000
Dec 31 111,000
Loss 5,000
Dec 31 106,000
The Available-for-sale Investment will show a loss of $5,000 in the Other Comprehensive Income of the 2023 Comprehensive Income Statement based on the yearly adjustments to the account with losses and profits.
A newly formed firm must decide on a plant location. There are two alternatives under consideration: locate near the major raw materials or locate near the major customers. Locating near the raw materials will result in lower fixed and variable costs than locating near the market, but the owners believe there would be a loss in sales volume because customers tend to favor local suppliers. Revenue per unit will be $172 in either case.
Omaha Kansas City
Annual fixed costs ($ millions) $1.0 $1.1
Variable cost per unit $30 $45
Expected annual demand (units) 9800 11,625
Required:
Using the above information, determine what the profit would be for Kansas City.
Answer:
Profit for Kansas City = $376,375
Explanation:
a) Data and Calculations:
Omaha Kansas City
Expected annual demand (units) 9,800 11,625
Annual fixed costs $1,000,000 $1,100,000
Variable cost per unit $30 $45 $294,000 $523,125
Total cost $1,294,000 $1,623,125
Revenue $1,685,600 $1,999,500
Profit $391,600 $376,375
From the above differential analysis, it appears that locating in Omaha would be better and more profitable than locating in Kansas City for the company. This is based on the fact that more profit ($15,225) will be generated with Omaha location than locating in Kansas City.
Design specifications reflecting customer requirements for a product are known as:________
a) control limits
b) capability indices
c) natural variability
d) tolerances
Answer:
d) Tolerances.
Explanation:
This is seen to directly reflect on total range of the customer satisfactory choices of the said product. It is also known according to product research and customer satisfaction on choices to conventionally deal properly with the variation of manufacturing processes to meet the requirements of product quality. Cases that bring up things like customer development in product customization has also been generally accepted that customer requirements also have acceptable tolerance range. Top business moguls are seen to most times leverage on these requirements which include tolerance, customers are more likely to get their desired product.
The labor cost to produce a certain item is $8.50 per hour. Job setup costs $50 and material costs are $20 per unit. The item can be purchased for $88.50 per unit. The learning rate is 90 percent. Overhead is charged at a rate of 50 percent of labor, materials, and setup costs.
Required:
a. Determine the average unit cost for 20 units, given that the first unit took 5 hours to complete.
b. What is the minimum production quantity necessary to make production cost less than purchase cost?
Answer:
Explanation:
Given
Setup cost =$50
Material cost = $20
= $20×$20
= $400
Purchased cost = $88.50
Learning rate (P) = 90%
Labor cost is $8.50, and it requires 5 hours to produce the first unit. Total time required for the production of 20 units is
= 5×14.608
= $73.04
The value 14.608 is the total time factor which has been taken from table 7S.1 and the time required for the production of 20 units at the rate of 90% is 14.608. Hence, the labor cost for the production of 20 units will be calculated using the following method.
Cost of labor for production of 20 units
= 8.50×73.04
= $620.84
Hence,
In the problem, it has been given that the overhead cost is 50% of the labor material, and setup cost. Hence,
= 50/100 (620.84+50+400)
= 0.5×(1070.84)
= $535.42
Hence total cost
$535.42 +$1070.84
=$ 1606.26
Hence, the cost of production of 20 units is calculated by the following method.
= $1606.26÷20
=$80.313
Therefore, the unit cost is $80.313/unit.
Ans B:
The minimum production quantity important to make the production cost less than the purchase cost is calculated by the trial-and-error method. Now, let's take average unit cost when the 10 units are produced.
Setup cost =$50
Material cost = $20
= $20×$10
= $200
Labor cost is $8.50, and it requires 5 hours to produce the first unit. Total time required for the production of 10 units is
=5×7.994
= $39.97
The value 7.994 is the total time factor which has been taken from table 7S.1 and the time required for the production of 10 units at the rate of 90% is 7.994. Therefore, the labor cost for the production of 10 units will be calculated by the following method.
The cost of production of 20units
8.50×7.994×5
= $339.745
If the average aggregate inventory value is $100,000 and the cost of goods sold is $450,000, which of the following is inventory turnover?
A. 19.23
B. 4.5
C. 0.8654
D. 0.2222
E. None of the above
Answer: B 4.5
Explanation:
Since the 1980s and 1990s, segmentation in global financial markets has been reduced. As a result of this, the correlation among securities markets has increased, thereby reducing, but not eliminating, the benefits of international portfolio diversification. True or Worse
Answer: True
Explanation:
With the on-going drive towards Globalization, companies took advantage to raise more capital by listing across various stock exchanges in the world. The result of this became that the securities market became more correlated.
This had the advantage of granting many companies enough capital that they became Multinational companies but it had the disadvantage of reducing the benefits of international portfolio diversification because the companies would be able to influence the movement of stock across the nations that they are listed in. Where before you could trade in Japan if there were losses in the NYSE, with a company being on both and suffering, both exchanges would feel it.
At first glance, the research reported in the Washington Post article Why We've Been Hugely Underestimating the Overfishing of the Oceans may appear to be only bad news for the world's stock of fish. However, researchers believe that their discovery of how much overfishing has been underestimated could also be good news. Determine whether each statement should be considered good news or bad news based on the information in the article.
Good news Bad news
a. Fisheries may be able to feed more people than previously thought.
b. Policy made using FAO data could be poorly made because FAO data does not match reality.
c. Severe declines in catches since the 1990s may be due to unsustainable fishing.
d. Sustainable food production may be more at risk than scientists thought due to the fishing industry catching far more fish than previously believed
e. Declines in catches have been even greater than FAO data suggests.
f. When catches peaked, fisheries were actually much more productive than previously thought
Answer:
According to the article, the following statements is classified under the following headings:
Good News:
a. Fisheries may be able to feed more people than previously thought.
b. Policy made using FAO data could be poorly made because FAO data does not match reality.
f. When catches peaked, fisheries were actually much more productive than previously thought
Bad News:
c. Severe declines in catches since the 1990's may be due to unsustainable fishing.
d. Sustainable food production may be more at risk than scientists thought due to the fishing industry catching far more fish than previously believed
e. Declines in catches have been even greater than FAO data suggests.
Explanation:
27 The following information is related to the defined benefit pension plan of Dreamworld Company for the year: Service cost $ 60,000 Contributions to pension plan 110,000 Benefits paid to retirees 150,000 Plan assets (fair value), January 1 640,000 Plan assets (fair value), December 31 750,000 Actual return on plan assets 150,000 PBO, January 1 900,000 PBO, December 31 960,000 Discount rate 10 % Long-term expected return on plan assets 9 % Assuming no other relevant data exist, what is the pension expense for the year
Answer:
$92,400
Explanation:
Calculation for the pension expense for the year
PENSION EXPENSE
Service cost $60,000
Interest cost $90,000
(10%*900,000)
Less Expected return on plan assets ($57,600)
(9%*640,000)
Pension expense $92,400
Therefore the is the pension expense for the year will be $92,400
The rate of economic growth per capita in France from 1996 to 2000 was 1.9% per year, while in Korea over the same period it was 4.2%. Per capita real GDP was $28,900 in France in 2003, and $12,700 in Korea. Assume the growth rates for each country remain the same. 1. Compute the doubling time for France’s per capita real GDP. Use the rule of 72. 2. Compute the doubling time for Korea’s per capita real GDP. Use the rule of 72. 3. What will France’s per capita real GDP be in 2045? 4. What will Korea’s per capita real GDP be in 2045?
Answer and Explanation:
The rule of 72 refers the time period in which your investment which you invest should be doubled
So based on the rule of 72, the computation is shown below:
1. doubling time for France per capita real GDP is
= Rule of 72 ÷ rate
= 72 ÷ 1.9
= 37.89 years
2. Doubling time for Korea per capita real GDP is
= Rule of 72 ÷ rate
= 72 ÷ 4.2
= 17.14 years
3. France per capita real GDP in year 2045 is
= Per capita read GDP × (1 + growth rate)^time period
= $28,900 × 1.019^42
= $63,710.88
4. Korea per capita real GDP in year 2045 is
= Per capita read GDP × (1 + growth rate)^time period
= $12,700 × 1.042^42
= $71,490.43
The time period 42 comes from
= 2045 - 2003
= 42 years
Skysong, Inc. reports the following liabilities (in thousands) on its December 31, 2020, balance sheet and notes to the financial statements. Accounts payable $4,392.0 Mortgage payable $6,845.0 Unearned rent revenue 1,650.0 Notes payable (due in 2023) 351.0 Bonds payable 2,003.0 Salaries and wages payable 651.0 Current portion of mortgage payable 2,228.0 Notes payable (due in 2021) 2,584.0 Prepare the liabilities section of Skysong’s balance sheet as at December 31, 2020.
Answer:
Skysong, Inc.
Liabilities section
Current liabilities:
Accounts payable $4,392Salaries and wages payable $651Unearned rent revenue $1,650Mortgage payable $2,228Notes payable $2,584Total current liabilities $11,505Long term liabilities:
Mortgage payable $4,617 Notes payable (due in 2023) $351Bonds payable $2,003Total long term liabilities $6,971Total liabilities: $18,476
A manufacturing company is thinking about building a new factory. The new factory, if built, will give a return of $200 million in 4 years, and it would cost $125 million today to build. The company will decide to build the factory if the interest rate is
Answer:
The company will decide to build the factory if the interest rate is 12.47 %.
Explanation:
The required interest rate r, can be determined as follows ;
PV = - $125 million
n = 4
Pmt = $0
P/yr = 1
FV = $200 million
r = ?
Using a Financial Calculator, the required interest rate r, is 12.4683 or 12.47 % (2 decimal places)
Moepro, Inc. is considering a fiveyear project that has an initial outlay or cost of $120,000. The respective future cash inflows from its project for years 1, 2, 3, 4 and 5 are: $55,000, $45,000, $35,000, $25,000, and $15,000. Moepro uses the internal rate of return method to evaluate projects. What is the project's IRR? A. The IRR is over 25.50%. B. The IRR is about 17.86%. C. The IRR is less than 22.50%. D. The IRR is about 19.16%.
Answer:
B. The IRR is about 17.86%.
Explanation:
The Calculation of the Project`s Internal Rate of Return (IRR) can be done using a Financial Calculator as follows ;
-$120,000 CFj
$55,000 CFj
$45,000 CFj
$35,000 CFj
$25,000 CFj
$15,000 CFj
Shift IRR 17,8557 or 17.86 % (2 decimal places)
The current spot exchange rate Singapore dollar against U.S. dollar (SGD/USD) is 0.6000. After considerable study, an investor concluded that the Singapore dollar will appreciate against the U.S. dollar in the coming 90 days, probably to about 0.7000. She has the following options on the Singapore dollar to choose from:
Option Strike price Premium
Put on SGD 0.6500 0.00003
Call on SGD 0.65 0.00046
1. Should the investor buy a put on Singapore dollars or a call on Singapore dollars?
2. What is the investor's break-even price on the option purchased in part a?
3. Using your answer from part a, what is the investor's gross profit and net profit (including premium) if the spot rate at the end of 90 days is indeed 0.7000?
4.Using your answer from part a, what is the investor's gross profit and net profit (including premium) if the spot rate at the end of 90 days is 0.8000?
Answer:
i) Investor should buy a call option as expected spot price on SGD after 90 days is 0.7 which less than the strike price 0.65 under call option.
II) Break-even price on option selected
Strike price under call option 0.65000
Add : Premium 0.00046
Break even price 0.65046
iii) Actual spot rate after 90 days 0.70000
Less: Strike price under call option 0.65000
Gross profit 0.05000
Less: Call option premium 0.00046
Net profit 0.04954
iv) Actual spot rate after 90 days 0.80000
Less: Strike price under call option 0.65000
Gross profit 0.15000
Less: Call option premium 0.00046
Net Profit 0.14954
Your portfolio is comprised of 30 percent of stock X, 25 percent of stock Y, and 45 percent of stock Z. Stock X has a beta of 1.16, stock Y has a beta of 1.47, and stock Z has a beta of 0.42. What is the beta of your portfolio
Answer:
The beta of your portfolio is 0.9045
Explanation:
Hope this help :D