Answer:
$8,744,669.10
Explanation:
Using the MS Excel Present value function
Value of the note = PV(Rate, Nper, PMT, -FV, Type)
Value of the note = PV(7.7%/2, 4*2, -1000000*4%/2, -1000000)
Value of the note = 8744669.0978
Value of the note = $8,744,669.10
So, the value of the Treasury note is $8,744,669.10
In supply and demand theory, an increase in consumer income for a normal good will: A. Shift the demand curve in and to the left, lowering the equilibrium price but raising the equilibrium quantity. B. Shift the demand curve out and to the right, raising the equilibrium price and quantity. C. Shift the supply curve out and to the right, lowering the equilibrium price but raising the equilibrium quantity. D. Shift the supply curve in and to the left, lowering the equilibrium price and quantity. E. Shift the demand curve out and to the right, lowering the equilibrium price but raising the equilibrium quantity.
Answer:
b
Explanation:
Normal goods are goods that are goods whose demand increases when income increases and falls when income falls
If income increases, demand increases. the demand curve shifts to the right. This leads to an increase in equilibrium price and quantity
Following are the accounts and balances from the adjusted trial balance of Stark Company. Notes payable $ 11,000 Accumulated depreciation-Buildings $ 15,000 Prepaid insurance 2,500 Accounts receivable 4,000 Interest expense 500 Utilities expense 1,300 Accounts payable 1,500 Interest payable 100 Wages payable 400 Unearned revenue 800 Cash 10,000 Supplies expense 200 Wages expense 7,500 Buildings 40,000 Insurance expense 1,800 Stark, Withdrawals 3,000 Stark, Capital 24,800 Depreciation expense-Buildings 2,000 Services revenue 20,000 Supplies 800 Prepare the (1) income statement and (2) statement of owner's equity for the year ended December 31, and (3) balance sheet at December 31. The Stark, Capital account balance was $24,800 on December 31 of the prior year.
Answer:
STARK COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31
PARTICULARS AMOUNT$
Service Revenue 20,000
Less-Expenses
Supplies expense 200
Interest expense 500
Insurance expense 1800
Utilities expense 1300
Depreciation expense 2000
Wages expense 7500
Total expenses 13,300
Net profit $6,700
STARK COMPANY
STATEMENT OF RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31 Amount$
Retained earnings December 31 prior year end 14,800
Add- Net income 6,700
Less- Dividends 3,000
Retained earnings, December 31 Current year end $18,500
Bing Book Bindery has identified two activity cost pools: printing, with an activity driver of batches processed, and binding, with an activity driver of direct labor hours. For the coming quarter, total factory overhead of $140,000 is split such that 65% is allocated to printing and 35% is allocated to binding. Bing makes two types of books: hard cover and soft cover. During the quarter, it expects to produce 5,200 hard cover books and 12,000 soft cover books. Hard covers are produced in batch sizes of 100 and soft covers are produced in batch sizes of 300. A hard cover book requires 0.75 hours of direct labor, while a soft cover book requires 0.25 hours. What is the overhead allocation to soft covers for printing
Answer:
Bing Book Bindery
The overhead allocation to soft covers for printing is:
= $68,250.
Explanation:
a) Data and Calculations:
Activity Cost Pools Overhead Activity Driver Number Overhead
Cost Usage Rates
Printing $91,000 Batches processed 400 $227.50
Binding $49,000 Direct labor hours 150 $326.67
Total $140,000
Overhead rates:
Printing = $227.50 ($91,000/400)
Binding = $326.67 ($49,000/150)
Hard Cover Soft Cover Total
Units produced 5,200 12,000 17,200
Batches 100 300 400
Direct labor hours 0.75 0.25
Total direct labor hours 75 (0.75*100) 75 (0.25*300) 150
Overhead allocated to Soft Cover:
Printing = ($227.50 * 300) $68,250
Binding = ($326.67 * 75) 24,500
Total overhead = $92,750
Overhead allocated to Harc Cover:
Printing = ($227.50 * 100) $22,750
Binding = ($326.67 * 75) 24,500
Total overhead = $47,250
Jorgansen Lighting, Inc., manufactures heavy-duty street lighting systems for municipalities. The company uses variable costing for internal management reports and absorption costing for external reports to shareholders, creditors, and the government. The company has provided the following data:
Year 1 Year 2 Year 3
Inventories:
Beginning (units) 200 170 180
Ending (units) 170 180 220
Variable costing net operating income $1,080,400 $1,032,400 $996,400
The company's fixed manufacturing overhead per unit was constant at $560 for all three years.
Requried:
Determine each yearâs absorption costing net operating income.
The absorption costing net operating income for Year 1, 2 and 3 is $1,063,000, $1,038,000, $1,018,800 respectively.
The absorption costing NOI of Year 1Change in inventory = Beginning Inventory - Ending Inventory
= 200 units - 170 units
= 30 units
Fixed Manufacturing Overhead Beginning = Beginning Inventory units * Fixed manufacturing overhead per unit
= 200 units * $560
= $112,000
Fixed Manufacturing Overhead Ending = Ending Inventory units * Fixed manufacturing overhead per unit
= 170 units * $560
= $95,200
Deferred in/(release) =Fixed Manufacturing Overhead Ending - Fixed Manufacturing overhead Beginning
= $95,200 - $112,00
= -$16,800
Absorption Costing NOI = Variable Costing NOI + Fixed manufacturing overhead from inventory deferred during the period
= $1,012,400 + -$16,800
= $1,063,000
The absorption costing NOI of Year 2Change in inventory = Beginning Inventory - Ending Inventory
= 170 units - 180 units
= -10 units
Fixed Manufacturing Overhead Beginning = Beginning Inventory units * Fixed manufacturing overhead per unit
= 170 units * $560
= $95,200
Fixed Manufacturing Overhead Ending = Ending Inventory units * Fixed manufacturing overhead per unit
= 180 units * $560
= $100,800
Deferred in/(release) =Fixed Manufacturing Overhead Ending - Fixed Manufacturing overhead Beginning
= $100,800 - $95,200
= $5,600
Absorption Costing NOI = Variable Costing NOI + Fixed manufacturing overhead from inventory deferred during the period
= $1,032,400 + $5,600
= $1,038,000
The absorption costing NOI of Year 3Change in inventory = Beginning Inventory - Ending Inventory
= 180 units - 220 units
= -40 units
Fixed Manufacturing Overhead Beginning = Beginning Inventory units * Fixed manufacturing overhead per unit
= 180 units * $560
= $100,800
Fixed Manufacturing Overhead Ending = Ending Inventory units * Fixed manufacturing overhead per unit
= 220 units * $560
= $123,200
Deferred in/(release) =Fixed Manufacturing Overhead Ending - Fixed Manufacturing overhead Beginning
= $123,200 - $100,800
= $22,400
Absorption Costing NOI = Variable Costing NOI + Fixed manufacturing overhead from inventory deferred during the period
= $996,400 + $22,400
= $1,018,800
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A division earning a positive profit will always increase its return on investment (ROI) if it increases operating expenses and Group of answer choices investment by the same dollar amount. sales by the same percentage. sales by the same dollar amount. investment by the same percentage.
Answer: Sales by the same dollar amount.
Explanation:
Return on Investment is calculated by the formula:
= (Sales - Operating income) / Investment
From the above, you can see that if investment is increased relative to sales and operating expenses are increased as well, ROI will decrease instead of increase.
This formula deals with dollar amounts not percentages so increasing sales by the same percentage is not right.
Only correct option is to increase sales dollar amount as this would lead to a higher numerator which would then give a larger ROI.
Daniel, age 38, is single and has the following income and expenses in 2016.
Salary income $60,000
Net rent income 6,000
Dividend income 3,500
Payment of alimony 12,000
Mortgage interest on residence 4,900
Property tax on residence 1,200
Contribution to traditional IRA 5,000
Contribution to United Church 2,100
Loss on the sale of real estate (held for investment) 2,000
Medical expenses 3,250
State income tax 300
Federal income tax 7,000
a. Calculate Daniel's AGI.
b. Should Daniel itemize his deductions from AGI or take the standard deduction? Explain.
Answer: See Explanation
Explanation:
A. Calculate Daniels AGI
To calculate Daniel's AGI, we have to get his gross income first which will be:
=
Salary income + Net rent + Dividend income
= $60,000 + $6000 + $3500
= $69500
His deductions FOR AGI will be calculated as:
Alimony paid = $12,000
Contribution to traditional IRA = $5,000
Loss on sale of real estate = $2,000 Deduction for AGI = ($19,000)
Adjusted gross income will now be:
= $69500 - $19000
= $50,500
b. Should Daniel itemize his deductions from AGI or take the standard deduction? Explain.
The itemized deductions include:
Mortgage interest on residence = $4,900
Add: Property tax on the residence = $1,200
Add: Contribution to United church = $2,100
Add: State income tax = $300
Total itemized deductions = $ 8,500
Since the total itemized deductions is $8,500 and the deduction for AGI is $19000, he should therefore itemize his deductions as it is cheaper.
Pension data for Fahy Transportation Inc. include the following: ($ in millions) Discount rate, 9% Expected return on plan assets, 12% Actual return on plan assets, 13% Projected benefit obligation, January 1 $ 550 Plan assets (fair value), January 1 500 Plan assets (fair value), December 31 560 Benefit payments to retirees, December 31 68 Required: Assuming cash contributions were made at the end of the year, what was the amount of those contributions
Answer:
the amount of those contributions is $63 million
Explanation:
The computation of the amount of those contributions is shown below:
Plan assets, end of year $560
Less: Plan assets, Starting of the year -$500
Less: Actual return -$65 ($500 × 13%)
Add: Retiree benefits paid $68
Cash contributions $63 million
Hence, the amount of those contributions is $63 million
Blake doesn't much care about cars but is engaging in a substantial amount of information search about cars since he is about to buy a new car. In terms of involvement, Blake is Multiple Choice high in product involvement; low in purchase involvement. low in product involvement; low in purchase involvement. high in product involvement; high in purchase involvement. low in product involvement; high in purchase involvement. high in value-expressive involvement; low in product involvement.
Answer:
The answer "low in product involvement; high in purchase involvement".
Explanation:
In this question, Blake doesn't care a great deal about vehicles and is looking for something like a lot of information about cars when he's about to install a separate vehicle. Blake's involvement throughout the product is low; he is quite involved in purchasing because Low-involvement products were normally inexpensive, so if the customer makes an error by purchasing these they present a low risk. This same customer is related to excessive participation products if their fail, are complex, and are due to greater sticker prices. Somewhere in the middle of minimal participation products were falling.
why do we have a graduated income tax?
The current spot price of WTI Houston Crude Oil Futures, expiring in 1-year, is $43 (per bbl). You can contract storage cost for oil, for one year, at 2% (of the underlying spot price) on a continuously compounded basis. The risk-free rate is 0.5% per annum on a continuously compounded basis. If the current spot price for oil is $40.50, what is the implied convenience yield for this contract?
Answer:
-3.49%
Explanation:
Theoretical price (Ft) = $43
Current spot price (St) = $40.5
Storage cost (u) = 2%
Risk free rate (Rf) = 0.5%
T = 1 year
Let y = Convenience yield
Ft = St e^(Rf + u - y)T
43 = 40.5 e^(0.005 + 0.02 - y)
y = - 3.49%
Hence, convenience yield = -3.49%
Both Bond Sam and Bond Dave have 7.3 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has three years to maturity, whereas Bond Dave has 20 years to maturity. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Sam and Bond Dave
Answer:
-5.14 for sam
-18.01% for dave
Explanation:
We first calculate for Sam
R = 7.3%
We have 2% increase
= 9.3%
We calculate for present value of coupon and present value at maturity using the formula for present value in the attachment
To get C
1000 x 0.073/2
= 36.5
time= 3 years x 2 times payment = 6
Ytm = rate = 9.3%/2 = 0.0465
Putting values into the formula
36.5[1-(1+0.0465)^-6/0.0465]
= 36.5(1-0.7613/0.0465)
36.5(0.2385/0.0465)
= 36.5 x 5.129
Present value of coupon = 187.20
We solve for maturity
M = 1000
T = 6 months
R = 0.0465
1000/(1+0.0465)⁶
= 1000/1.3135
Present value = 761.32
We add up the value of present value at maturity and that at coupon
761.32 + 187.20
= $948.52
Change in % = 948.52/1000 - 1
= -0.05148
= -5.14 for sam
We calculate for Dave
He has 20 years and payment is two times yearly
= 20x2 = 40
36.5 [1-(1+0.0465)^-40/0.0465]
Present value = 36.5 x 18.014
= 657.511
At maturity,
Present value = 1000/(1+0.0465)⁴⁰
= 1000/6.1598
= 162.34
We add up these present values
= 657.511+162.34 = $819.851
Change = 819.851/1000 -1
= -0.1801
= -18.01%
Select the correct statement below regarding Manufacturing Overhead: Multiple Choice Manufacturing overhead is always an estimated cost. Manufacturing overhead is a clearing account and is neither shown on the balance sheet or income statement in published financial statements. Manufacturing overhead is an inventory account that is shown on the balance sheet. Manufacturing overhead is an expense account for all factory costs that are neither direct materials or direct labor.
Answer:
D) Expense account for all factory costs, except direct material or labour
Explanation:
Manufacturing Overhead refers to indirect costs, incurred during the process of production. This is charged as cost - to the units produced, during a reporting period. Example : Depreciation of asset, cost of asset is spread to all the useful years (& corresponding period output)
During September at Renfro Corporation, $65,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $8,000. The journal entry to accurately record this requisition would be: Multiple Choice Dr. MOH $57,000 Dr. WIP $8,000 Cr. Raw Materials $65,000 Dr. WIP $65,000 Cr. MOH $8,000 Cr. Raw Materials $57,000 Dr. WIP $57,000 Dr. MOH $8,000 Cr. Raw Materials $65,000 Dr. WIP $57,000 Dr. MOH $8,000 Cr. Direct Materials $65,000
Answer:
Debit WIP $57,000
Debit MOH $8,000
Credit raw materials $65,000
Explanation:
With regards to the above,
Indirect material used = $8,000 will be debited to manufacturing overhead [MOH]
Direct materials used =$65,000 - $8,000 = $57,000 hence will be debited to work in process account [WIP]
Raw materials will be credited by $65,000
The correct answer would therefore be;
Dr WIP $57,000
Dr MOH $8,000
Cr raw materials $65,000
A college student has been looking for a new tires. The student feels that the warranty period is a good estimate of the tire life and that 10% interest rate is appropriate. Given 4 options find the minimum Equivalent Uniform Monthly Cost. (Note: the student wants to buy 4 tires)
Warranty time (months) | Tire price (all 4 tires)
12 | 31
24 | 51
36 | 69
48 | 94
Answer:
The minimum Equivalent Uniform Monthly Cost = $2.2264
Explanation:
To find the Equivalent Uniform Monthly Cost: EUAC = P(A/P,I,N)
Where i = 10% => 10% / 12 =
N = 12 , 24 , 36 & 48 months
12 months Warranty time = 31(A/P,10%/12,12)
12 months Warranty time = 31 * 0.0879
12 months Warranty time = $2.7254
24 months Warranty time =51(A/P,10%/12,24)
24 months Warranty time = 51 * 0.0461
24 months Warranty time = $2.3534
36 months Warranty time = 69(A/P,10%/12,36)
36 months Warranty time = 69 * 0.0323
36 months Warranty time = $2.2264
48 months Warranty time =94(A/P,10%/12,48)
48 months Warranty time = 94 * 0.0254
48 months Warranty time = $2.3841
Airline Accessories has the following current assets: cash, $92 million; receivables, $84 million; inventory, $172 million; and other current assets, $8 million. Airline Accessories has the following liabilities: accounts payable, $78 million; current portion of long-term debt, $25 million; and long-term debt, $13 million. Based on these amounts, calculate the current ratio and the acid-test ratio for Airline Accessories. (Enter your answers in millions, not in dollars. For example, $5,500,000 should be entered as 5.5.)
Answer:
Current ratio 3.46
Acid-test ratio 1.71
Explanation:
A. Calculation to determine Current ratio
Using this formula
Current ratio =Current assets/Current liablities
Let plug in the formula
Current ratio=$92 million+$84 million+$172 million+$8 million/$78 million+$25 million
Current ratio=$356 million/$103 milion
Current ratio=3.46
B. Calculation to determine the acid-test ratio
Acid-test ratio=$92 million+$0+$84 million/$78 million+$25 million
Acid-test ratio=$176 million/$103 million
Acid-test ratio=1.71
Cordova, Inc., reported the following receivables in its December 31, 2020, year-end balance sheet:
Current assets:
Accounts receivable, net of $45,000 in allowance for
uncollectible accounts $ 377,000
Interest receivable 15,000
Notes receivable 350,000
Additional information:
The notes receivable account consists of two notes, a $120,000 note and a $230,000 note. The $120,000 note is dated October 31, 2020, with principal and interest payable on October 31, 2021. The $230,000 note is dated March 31, 2020, with principal and 8% interest payable on March 31, 2021.
During 2021, sales revenue totaled $2,050,000, $1,910,000 cash was collected from customers, and $34,000 in accounts receivable were written off. All sales are made on a credit basis. Bad debt expense is recorded at year-end by adjusting the allowance account to an amount equal to 10% of year-end gross accounts receivable.
Required:
1. In addition to sales revenue, what revenue and expense amounts related to receivables will appear in Cordova’s 2021 income statement?
2. Calculate the receivables turnover ratio for 2021. (Round your answer to 2 decimal places.)
1. Interest revenue
Bad debt expense
2. Accounts receivable turnover ratio
Answer:
Cordova, Inc.
1. Bad Debt Expense account of $41,800 will also appear in Cordova's 2021 income statement.
2. Receivables Turnover ratio = 4.32
Explanation:
a) Data and Calculations:
Partial Balance Sheet of Cordova, Inc.:
Current assets:
Accounts receivable, net of $45,000 in allowance for
uncollectible accounts $ 377,000
Interest receivable 15,000
Notes receivable 350,000
Notes Receivable:
Dated October 31, 2020, payable October 31, 2021 = $120,000
Dated March 31, 2020, payable March 31, 2021 = 230,000 (8%)
Total Notes Receivable = $350,000
Accounts receivable:
Beginning balance $422,000
Sales Revenue = 2,050,000
Cash collections 1,910,000
Bad Debts w/off 34,000
Ending balance = $528,000
Allowance for Uncollectible accounts:
Beginning balance $45,000
Bad debts w/off (34,000)
Bad debts expense 41,800
Ending balance (52,800)
Receivables Turnover ratio = Sales Revenue/Average Receivables
= $2,050,000/$475,000
= 4.32
Average Receivables = ($422,000 + $528,000)/2 = $475,000
The management of Furrow Corporation is considering dropping product L07E. Data from the company's budget for the upcoming year appear below: Sales $ 980,000 Variable expenses $ 383,000 Fixed manufacturing expenses $ 365,000 Fixed selling and administrative expenses $ 245,000 In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $223,000 of the fixed manufacturing expenses and $184,000 of the fixed selling and administrative expenses are avoidable if product L07E is discontinued. The financial advantage (disadvantage) for the company of eliminating this product for the upcoming year would be:
Answer:
If product L07E is discontinued, income will decrease by $190,000
Explanation:
Giving the following information:
Current loss= (13,000)
Further investigation has revealed that $223,000 of the fixed manufacturing expenses and $184,000 of the fixed selling and administrative expenses are avoidable if product L07E is discontinued.
To determine whether product L07E should be discontinued or not, we need to use the following formula:
Effect on income= Unavoidable fixed cost - current income
Effect on income= - 203,000 + 13,000
Effect on income= -$190,000
If product L07E is discontinued, income will decrease by $190,000
Umatilla Bank and Trust is considering giving Sandhill Co. a loan. Before doing so, it decides that further discussions with Sandhills accounting may be desirable. One area of particular concern is the Inventory account, which has a year-end balance of $269,380. Discussions with the accountant reveal the following.
1. Sandhill shipped goods costing $55,680 to Hemlock Company FOB shipping point on December 28. The goods are not expected to reach Hemlock until January 12. The goods were not included in the physical inventory because they were not in the warehouse.
2. The physical count of the inventory did not include goods costing $100,770 that were shipped to Sandhill FOB destination on December 27 and were still in transit at year-end.
3. Sandhill received goods costing $24,220 on January 2. The goods were shipped FOB shipping point on December 26 by Yanice Co. The goods were not included in the physical count.
4. Sandhill shipped goods costing $53,270 to Ehler of Canada FOB destination on December 30. The goods were received in Canada on January 8. They were not included in Sandhill physical inventory.
5. Sandhill received goods costing $40,510 on January 2 that were shipped FOB destination on December 29. The shipment was a rush order that was supposed to arrive December 31. This purchase was included in the ending inventory of $269,380.
Determine the correct inventory amount on December 31.
Answer:
$306,360
Explanation:
Calculation to Determine the correct inventory amount on December 31.
Correct inventory amount on December 31=$269,380+$24,220+$53,270-$40,510
Correct inventory amount on December 31=$306,360
Therefore the Correct inventory amount on December 31 is $306,360
Use the following data to determine the total amount of working capital from the Banner Auto Supplies Balance Sheet for December 31, 2020:
Cash $70,000
Accounts payable $130,000
Accounts receivable 100,000
Salaries and wages payable 20,000
Inventory 140,000
Mortgage payable 180,000
Prepaid insurance 80,000
Total liabilities $330,000
Stock investments 180,000
Land 190,000
Buildings $230,000
Common stock $240,000
Accumulated depreciation (60,000)
Retained earnings 500,000
Total stockholders' equity $740,000
Trademarks 140,000
Total assets $1,070,000
Total liabilities and stockholders' equity $1,070,000
a. 260,000
b. 240,000
c. 160,000
d. 420,000
Answer:
b. 240,000
Explanation:
Calculation to determine the total amount of working capital
First step is to calculate the Current assets
Using this formula
Current assets = Cash + Accounts receivable + Inventory + Prepaid insurance
Let plug in the formula
Current assets= $70,000 + 100,000 + 140,000 + 80,000
Current assets= $390000
Second step is to calculate the Current liabilities using this formula
Current liabilities = Accounts payable + Salaries and wages payable
Let plug in the formula
Current liabilities= $130,000 + 20,000
Current liabilities= $75,000
Now let calculate the working capital using this formula
Working capital = Current assets - Current liabilities
Let plug in the formula
Working capital = $390,000 - 150,000
Working capital = $240,000
Therefore the Working capital is $240,000
Molson Beer was produced in Canada. Coors was manufactured in the United States. A merger of the two breweries gave each brand access to a significantly larger market. To effectively reach both markets, the merged company needed to coordinate its promotional mix to produce a consistent, unified, and customer-focused message. In other words, the brewery needed to use
Answer:
Integrated marketing communication.
Explanation:
Integrated Marketing Communication (IMC) is a process through which organizations create seamless branding and coordination of their marketing and communication objectives with its business goals and target audience or consumers. The communication tools used in IMC are both digital and traditional media such as billboards, search engine optimization, magazines, television, blog, radio, webinars etc.
The receiver is any individual who is able to read, hear or see and process the message being sent or communicated in the IMC communication process. Any interference the IMC communication process is known as noise.
An organization can analyze and measure the effectiveness of the IMC communication process by considering market share, sales, and customer loyalty.
In this scenario, Molson Beer was produced in Canada. Coors was manufactured in the United States. A merger of the two breweries gave each brand access to a significantly larger market. To effectively reach both markets, the merged company needed to coordinate its promotional mix to produce a consistent, unified, and customer-focused message. In other words, the brewery needed to use integrated marketing communication.
Last year, Rocket Inc. earned a % return. Farmer's Corp. earned %. The overall market return last year was %, and the risk-free rate was %. If Rocket stock has a beta of and Farmer's has a beta of , which stock performed better once you take risk into account? 19 12 16 3 1.9 0.5 Click the icon to see the Worked Solution. Rocket's expected return is %. (Enter as a percentage and round to one decimal place.) Farmer's expected return is %. (Enter as a percentage and round to one decimal place.) Which stock performed better once you take risk into account? (Select the best answer below.)
Answer:
a) Expected Return for Rocket Inc. = 27.7 %
b) Expected Return for Farmer's Corp. = 9.5 %
c) The Stock performed better once you take risk into account = Rocket Inc.
Explanation:
Given - Last year, Rocket Inc. earned a 19 % return. Farmer's Corp. earned 12 %. The overall market return last year was 16 %, and the risk-free rate was 3 %. If Rocket stock has a beta of 1.9 and Farmer's has a beta of 0.5.
To find - (a) Rocket's expected return is ... ?
(b) Farmer's expected return is ... ?
(c) Which stock performed better once you take risk into account ?
Solution -
The formula for Expected return is -
Expected Return = Risk-free rate + Systematic Risk ( Market Return - Risk-free rate )
a)
Now,
For Rocket Inc. -
Expected Return = 3% + 1.9 ( 16% - 3% )
= 3% + 1.9 (13 %)
= 3% + 24.7 %
= 27.7 %
⇒Expected Return for Rocket Inc. = 27.7 %
b)
For Farmer's Corp. -
Expected Return = 3% + 0.5 ( 16% - 3% )
= 3% + 0.5 (13 %)
= 3% + 6.5 %
= 9.5 %
⇒Expected Return for Farmer's Corp. = 9.5 %
c)
Now,
Given that,
Actual Return of Rocket Inc. = 19 %
Expected Return of Rocket Inc. = 27.7 %
⇒ Performance is better
Now,
Actual Return of Farmer's Corp. = 12 %
Expected Return of Farmer's Corp. = 9.5 %
⇒ Performance is worst
∴ we get
The Stock performed better once you take risk into account = Rocket Inc.
14. The last department in a production process shows the following information at the end of the period: Units Beginning Work in Process 25,000 Started into Production 240,000 Ending Work in Process 50,000 How many units have been transferred out to finished goods during the period
Answer:
the number of units transferred out to finished goods is 215,000 units
Explanation:
The computation of the number of units transferred out to finished goods is shown below;
= beginning work in process units + started into production units - ending work in process units
= 25000 + 240000 - 50000
= 215,000 units
Hence, the number of units transferred out to finished goods is 215,000 units
Regarding internationalization strategies in multinational enterprises (MNEs), in situations in which a company's products face LOW cost AND also HIGH local responsiveness pressures, the company tends to _______ : Group of answer choices serve domestic and international markets from a single (or from very few) production facilities lower the costs of value creation serve international markets from locations as close as possible to local consumers and preferences centralize marketing and product development decisions
Answer:
The answer is "choice b".
Explanation:
Please find the complete question in the attached file.
In the given scenario by Enhanced diversification of commodities including SKU While local reactivity intensity is increased, businesses would be concentrated on producing products that are more appropriate or perhaps more appropriate for local customer needs. Diversifying also would raise consumers and SKU.
You plan to purchase a $340,000 house using either a 25-year mortgage obtained from your local savings bank with a rate of 8.10 percent, or a 10-year mortgage with a rate of 7.10 percent. You will make a down payment of 20 percent of the purchase price.
a. Calculate the amount of interest and, separately, principal paid on each mortgage. What is the difference in interest paid?
b. Calculate your monthly payments on the two mortgages. What is the difference in the monthly payment on the two mortgages?
Answer:
a. Interest under 10 year mortgage = CUMIPMT(7.1%/12, 10*12, 340000*80%, 1, 10*12, 0)
Interest under 10 year mortgage = 108662.44
Interest under 25 year mortgage = CUMIPMT(8.1%/12, 10*12, 340000*80%, 1, 25*12, 0)
Interest under 25 year mortgage = 363217.16
Difference in interest = 363217.16 - 108662.44
Difference in interest = 254554.72
b. Monthly payment under 10 year = PMT(7.1%/12, 10*12, 340000*80%)
Monthly payment under 10 year = 3172.19
Monthly payment under 25 year = PMT(8.1%/12, 25*12, 340000*80%)
Monthly payment under 25 year = 2117.39
Difference in the monthly payment = 3172.19 - 2117.39
Difference in the monthly payment = 1054.80
A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. The company bases its variable manufacturing overhead standards on direct labor-hours. Standard hours per unit of output 5.30 DLHs Standard variable overhead rate $ 11.66 per DLH The following data pertain to operations for the last month: Actual direct labor-hours 8800 DLHs Actual total variable manufacturing overhead cost $ 96,000 Actual output 1500 units What is the variable overhead rate variance for the month
Answer:
$9,911 Unfavorable
Explanation:
Calculation for What is the variable overhead rate variance for the month
First step is to calculate the Standard labor hours Using this formula
Standard labor hours = Actual output x Standard hours per unit of output
Let plug in the formula
Standard labor hours= 1500 x 5.30
Standard labor hours= 7,950
Now let calculate the Variable overhead efficiency variance using this formula
Variable overhead efficiency variance = Actual labor hours - Standard labor hours) x hourly rate for standard variable overhead
Let plug in the formula
Variable overhead efficiency variance= ( 8,800-7,950) x 11.66
Variable overhead efficiency variance=850×11.66
Variable overhead efficiency variance= $9,911 Unfavorable
Therefore the variable overhead rate variance for the month is $9,911 Unfavorable
On January 1, Year 1, Eller Company purchased an asset that had cost $24,000. The asset had an 8-year useful life and an estimated salvage value of $1,000. Eller depreciates its assets on the straight-line basis. On January 1, Year 5, the company spent $6,000 to improve the quality of the asset. Based on this information, the recognition of depreciation expense in Year 5 would:
Answer:
Reduce total equity by $4,375
Explanation:
Calculation to determine what the recognition of depreciation expense in Year 5 would:
First step is to calculate the Depreciation amount for each year
Depreciation = $23,000/8
Depreciation= $2,875
Second step is to calculate the Depreciation for 4 years
Depreciation for 4 years = $2,875* 4
Depreciation for 4 years = $11,500
Third step is to calculate the Carrying value of asset
Carrying value of asset = ($24,000 - $11,500)+$6,000
Carrying value of asset = $12,500+$6,000
Carrying value = $18,500
Now let calculate what the recognition of depreciation expense in Year 5 would:
Recognition of depreciation expense in Year 5 = ($18,500 - $1,000)/4
Recognition of depreciation expense in Year 5 = $4,375
Therefore Recognition of depreciation expense in Year 5 would Reduce total equity by $4,375
The following trial balance of Sarasota Traveler Corporation does not balance.
Sarasota Traveler Corporation
Trial Balance
April 30, 2020
Debit Credit
Cash $6,212
Accounts Receivable 5,390
Supplies 3,117
Equipment 6,250
Accounts Payable $7,194
Common Stock 8,150
Retained Earnings 2,150
Service Revenue 5,350
Office Expense 4,470 0
$25,439 $22,844
An examination of the ledger shows these errors.
1. Cash received from a customer on account was recorded (both debit and credit) as $1,730 instead of $2,000.
2. The purchase on account of a computer costing $3,339 was recorded as a debit to Office Expense and a credit to Accounts Payable.
3. Services were performed on account for a client, $2,400, for which Accounts Receivable was debited $2,400 and Service Revenue was credited $375.
4. A payment of $245 for telephone charges was entered as a debit to Office Expense and a debit to Cash.
5. The Service Revenue account was totaled at $5,350 instead of $5,430.
InstructionsFrom this information prepare a corrected trial balance.
Answer:
Sarasota Traveler Corporation
Trial Balance as at April 30, 2020
Debit Credit
Cash $6,212
Accounts Receivable 5,390
Supplies 3,117
Equipment 6,250
Accounts Payable $7,194
Common Stock 8,150
Retained Earnings 2,150
Service Revenue 5,350
Office Expense 4,470 0
Explanation:
First prepare correcting journals. Then adjust the ledger accounts using the journals prepared
Journals
Item 1
Debit : Cash $270
Credit : Accounts Payable $270
Item 2
Debit : Computer $3,339
Credit : Office Expense $3,339
Item 3
Debit : Suspense $2,025
Credit : Service Revenue $2,025
Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales $ 70,000 Variable expenses 38,500 Contribution margin 31,500 Fixed expenses 23,310 Net operating income $ 8,190 6. If the selling price increases by $2 per unit and the sales volume decreases by 100 units, what would be the net operating income
Answer:
See
Explanation:
Sales volume = 1,000 units
Selling price = $70,000/1,000 = $70
Variable cost = $12,000/1000 = $12
900 units
Contribution margin income statement
Sales (900 × $72)
$64,800
Less:
Variable expenses (900 × $12)
($10,800)
Contribution margin
$54,000
Less:
Fixed expenses
($23,310)
Net Operating income
$30,690
[The following information applies to the questions displayed below.] Campus Stop, Inc., is a student co-op. Campus Stop uses a perpetual inventory system. The following transactions (summarized) have been selected for analysis: a. Sold merchandise for cash (cost of merchandise $152,070). $ 275,000 b. Received merchandise returned by customers as unsatisfactory (but in perfect condition) for cash refund (original cost of merchandise $800). 1,600 c. Sold merchandise (costing $9,000) to a customer on account with terms n/30. 20,000 d. Collected half of the balance owed by the customer in (c). 10,000 e. Granted a partial allowance relating to credit sales the customer in (c) had not yet paid. 1,800 Compute the gross profit percentage. (Round your answer to 1 decimal place.)
Answer: 45%
Explanation:
First calculate the sales:
= Cash sales + credit sale
= 275,000 + 20,000
= $295,000
Terms on credit sale was 2/10 n/30 and they paid half in time($10,000) but a partial allowance of $1,800 was granted:
Net sales would be:
= Sales - sales returns - sales discount
= 295,000 - 1,600 - (10,000 * 2%) - 1,800
= $291,400
COGS = 152,070 + 9,000 - 800
= $160,270
Gross profit percentage = (Sales - Cost of goods sold) / Sales
= (291,400 - 160,270) / 291,400 * 100%
= 45%
10. The assembly worker reached for an Allen wrench in the workplace, hesitating momentarily while searching for the correct size from the group of Allen wrenches lying there. Finding the correct size, she picked it up and positioned it into the hexagonal socket of a screw that had previously been hand-turned into a threaded hole in the work unit. She then twirled the Allen wrench handle with one continuous finger and wrist motion until the screw had been rotated seven turns. At this point she gripped the Allen wrench handle with her hand and tightened the screw the last quarter turn. Write a list of the therbligs that comprise this motion sequence and label each basic motion with a brief description.
Answer:
Explanation:
The list can be seen below.
Sequ Therblig Therblig Description
ence symbol name
1 TE Transport empty [tex]\text{Reach for the Allen wrench in the workplace}[/tex]
2 St select [tex]\text{ Select the correct size}[/tex]
3 G Grasp [tex]\text {Grasp the Allen wrench}[/tex]
4 TL Transport loaded [tex]\text{Pick up and move Allen wrench toward screw}[/tex]
5 P Position [tex]\text{Position Allen wrench into hexogonal socket}[/tex]
6 RL Release [tex]\text{Release grip on Allen wrench}[/tex]
7 TE Transport Empty [tex]\text{Move wrist and finger in preparation for turning}[/tex]
8 U Use [tex]\text{Twirl Allen wrench with one continuous motion}[/tex]
9 TE Transport empty [tex]\text{Reposition wrist and hand}[/tex]
10 G Grasp [tex]\text{Grip Allen wrench in preparation for tightening}[/tex]
11 U Use [tex]\text{Tighten screw with Allen wrench}[/tex]