Answer: a. ineffective branding.
Explanation:
People were already used to seeing Bic as a pen brand to the extent that in some countries Bic is a generic name for all pens . When they introduced the underwear, people could probably see no need to buying an underwear with the Bic brand because they knew it as a pen brand. They therefore could not generate a strong brand association with the new product.
It is the same logic as when an actor has been on a Sitcom for so long that when they take on other roles, the public judges them a bit too harshly for it because they are not used to them in other roles.
Contracts are a form of private law because the terms contained within a contract bind the relevant parties, not the public as a whole.
a) true
b) false
Answer:
The correct answer is the option A: True.
Explanation:
To begin with, the contracts inside the law are regulated by the Anglo-America common law that defines a contract as the agreement between two or more parties in which they establish the basis and principles of the agreement and the clauses that could cause to end the contract. Moreover, a contract is also part of the civil law and therefore that it does not implicate the public as a whole in any way due to the fact that in order to be a correct contract the parties must accept the bond between only them and nobody else.
On July 1, Shady Creek Resort borrowed $250,000 cash by signing a 10-year, 8% installment note requiring equal payments each June 30 of $37,258. What amount of principal will be included in the first annual payment
Answer:
Principal payable in year 1 = $17,258
Explanation:
Loan Amortization: A loan repayment method structured such that a series of equal periodic installments will be paid for certain number of periods to offset both the loan principal amount and the accrued interest.
The annual installment is computed as follows:
Annual installment= Loan amount/annuity factor .
The annual installment is already given as 37,258.
Principal payable = Annual installment - interest amount
Interest amount = Interest rate × loan amount
= 8%× 250,000 =20,000
Principal payable in year 1 =37,258 - 20,000 =$17,258
Principal payable in year 1 = $17,258
Cold Chiller Corporation (CCC) has annual sales of $10 million, cost of goods sold of 60 percent, average age of inventory of 80 days, average collection period of 35 days, average payment period of 30 days, and purchases that are 60 percent of cost of goods sold. How much does CCC have invested in its cash conversion cycle assuming a 365-day year?
Answer:
Cold Chiller Corporation (CCC)
Investment in cash conversion cycle:
= $10 million x 60% = $6million
which is invested for 145 (80 + 35 + 30) days before being realized as cash.
Explanation:
The cash conversion cycle (CCC) is a metric that expresses the time (measured in days) it takes for a company to convert its investments in inventory and other resources into cash flows from sales. It gives us an indication as to how long it takes a company to collect cash from sales of inventory. Often a company will finance its inventory instead of paying for it with cash up front.
The formula for the Cash Conversion Cycle is:
CCC = Days of Sales Outstanding PLUS Days of Inventory Outstanding MINUS Days of Payables Outstanding.
CCC = DSO + DIO – DPO.
Days of Sales outstanding:
DSO = [(Beginning Accounts Receivable + Ending Account Receivable) / 2] / (Revenue / 365)
Days of Inventory Outstanding:
DIO = [(Beginning Inventory + Ending Inventory / 2)] / (COGS / 365)
Operating Cycle = DSO + DIO.
Days of Payables Outstanding:
DPO = [(Beginning Accounts Payable +Ending Accounts Payable) / 2] / (COGS / 365)
Arctica manufactures snowmobiles and ATVs. These products are made in different departments, and each department has its own manager. Each responsibility performance report only includes those costs that the particular department manager can control: raw materials, wages, supplies used, and equipment depreciation.
Snowmobile ATV Combined SnowmobileATV Combined
(Budget) (Budget) (Budget) (Actual) (Actual) (Actual)
Raw materials $19,990 $28,000 $47,990 $19,920 $29,320 $49,240
Employee wages10,900 21,000 31,900 11,210 21,740 32,950
Dept. manager 4,800 5,700 10,500 4,900 4,900 9,800
salary
Supplies used 3,850 1,400 5,250 3,670 1,420 5,090
Depreciation- Equip.6,500 13,000 19,500 6,500 13,000 19,500
Utilities 410 590 1,000 380 550 930
Rent 6,200 6,800 13,000 5,800 6,800 12,600
Totals $52,650 $76,490 $129,148 $52,380 $77,730$130,110
Prepare a responsibility accounting report for the snowmobile department.
Answer:
ArcticaSnowmobile DepartmentResponsibility Accounting Report
Budget Actual Variance
Raw materials $19,990 $19,920 $70 Favorable
Employee wages 10,900 11,210 310 Unfavorable
Dept. manager 4,800 4,900 100 Unfavorable
Supplies used 3,850 3,670 180 Favorable
Depreciation- Equip. 6,500 6,500 0 0
Utilities 410 380 30 Favorable
Rent 6,200 5,800 400 Favorable
Totals $52,650 $52,380 $270 Favorable
Explanation:
a) Data
Snowmobile ATV Combined Snowmobile ATV Combined
(Budget) (Budget) (Budget) (Actual) (Actual) (Actual)
Raw materials $19,990 $28,000 $47,990 $19,920 $29,320 $49,240
Employee wages 10,900 21,000 31,900 11,210 21,740 32,950
Dept. manager 4,800 5,700 10,500 4,900 4,900 9,800
salary
Supplies used 3,850 1,400 5,250 3,670 1,420 5,090
Depreciation- Equip.6,500 13,000 19,500 6,500 13,000 19,500
Utilities 410 590 1,000 380 550 930
Rent 6,200 6,800 13,000 5,800 6,800 12,600
Totals $52,650 $76,490 $129,148 $52,380 $77,730 $130,110
b) The responsibility accounting report is a performance report that presents a comparison of the actual and budgeted amounts of controllable costs for a department and its manager, showing the variances, and indicating whether each cost element is favorable or unfavorable.
A 10% coupon bond, $1,000 par value, annual payments, 10 years to maturity is callable in 3 years at a call price of $1,100. If the bond is selling today for $975, the yield to call is _________.
Answer:
13.98%.
FV = 1100, n = 3, PMT = 100, PV = -975, i = 13.98%.
A stock has an expected return of 12.6 percent, the risk-free rate is 7 percent, and the market risk premium is 10 percent. What must the beta of this stock be
Answer:
0.56
Explanation:
In this question we used the Capital Asset Pricing Model formula i.e shown below:
As we know that
Expected rate of return = Risk free rate of return + Beta × market risk premium
12.6% = 7% + Beta × 10%
12.6% - 7% = Beta × 10%
5.6% = Beta × 10%
So, the beta is
= 5.6% ÷ 10%
= 0.56
Hence, the beta of the stock is 0.56
Question 3 (2 points)
Which of the following is NOT a way to balance a project?
..
O At the Enterprise Level
At the Business Case Level
.
O At the Program Level
At the Project Level
Answer:
1
Explanation:
at the bisiness casel level
The calculated cost of trade credit for a firm that buys on terms of 2/10, net 30, is lower (other things held constant) if the firm plans to pay in 40 days than in 30 days.
A. True
B. False
Answer:
A. True
Explanation:
The terms of 2/10, net 30 implies that the firm is entitled to receive a 2 percent discount if it makes payment within 10 days for the goods it bought on term but the seller expects to pay full amount of the amount due in 30 days if it fails to pay within 10 days.
However, since there will be no more discount after the discount period, the cost of trade credit will continue to fall longer the payment is extended. For this question this can be demonstrated using the formula for calculating the cost of trade discount as follows:
Cost of trade discount = {[1 + (discount rate / (1 - discount rate))]^(365/days after discount)} - 1 ................... (1)
We can now applying equation (1) as follows:
For payment in 40 days
Cost of trade credit (payment in 40 days)= {[1 + (0.02 / (1 - 0.02))]^(365/40)} - 1 = 0.202436246672765, or 20%
For payment in 30 days
Cost of trade credit (payment in 30 days) = {[1 + (0.02 / (1 - 0.02))]^(365/30)} - 1 = 0.278643315029666, or 28%
Conclusion
Since the 20% calculated cost of trade credit for payment in 40 days is lower than 28% calculated cost of trade credit for payment in 30 days, the correct option is A. True. That is, the calculated cost of trade credit for a firm that buys on terms of 2/10, net 30, is lower (other things held constant) if the firm plans to pay in 40 days than in 30 days.
Timberline Associates uses the weighted-average method in its process costing system. The following data are for the first processing department for a recent month:
Work in process, beginning:
Units in process 2,400
Percent complete with respect to materials 75%
Percent complete with respect to conversion 50%
Costs in the beginning inventory:
Materials cost $8,400
Conversion cost $7,200
Units started into production during the month 20,800
Units completed and transferred out 22,200
Costs added to production during the month:
Materials cost $97,400
Conversion cost $129,600
Work in process, ending:
Units in process 1,000
Percent complete with respect to materials 80%
Percent complete with respect to conversion 60%
Required:
A. Determine the equivalent units of production.
B. Determine the costs per equivalent unit.
C. Determine the cost of ending work in process inventory.
D. Determine the cost of the units transferred to the next department.
The managers in Julio's company sponsor monthly brainstorming sessions and reward employees with gift cards and recognition when an out-of-the box idea leads to organizational improvements. Julio's company is an example of a(n) _______ organization.
Answer:
Learning.
Explanation:
In this scenario, the managers in Julio's company sponsor monthly brainstorming sessions and reward employees with gift cards and recognition when an out-of-the box idea leads to organizational improvements.
Hence, Julio's company is an example of a learning organization.
A learning organization is one which is typically characterized by creating an enabling environment for growth, training, and development of its employees. This opportunity and incentives help employees to engage in critical and creative thinking, research, and development. Consequently, employees would become more confident, brilliant, intelligent, knowledgeable and professionals in their assigned positions or roles, thus helping the organization to achieve its aim, goals and objectives.
In a nutshell, this ultimately implies that it's very important and necessary that organizations sponsor brainstorming sessions and reward employees awesomely, when an out-of-the box idea leads to organizational improvements.
Aspin Corporation’s charter authorizes issuance of
2,000,000 shares of common stock. Currently, 1,400,000 shares are outstand-
ing, and 100,000 shares are being held as treasury stock. The firm wishes to
raise $48,000,000 for a plant expansion. Discussions with its investment bankers
indicate that the sale of new common stock will net the firm $60 per share.
Answer and Explanation:
The calculation of the sale of new common stock is shown below:-
a. Not issued = Authorized shares - Outstanding shares - Treasury stock
= 2,000,000 - 1,400,000 + 100,000
= 500,000
Now
Maximum shares = Not issued + Treasury stock
= 500,000 + 100,000
= 600,000
b. Since if we find out the number of shares that should be issued is
= $48,000,000 ÷ $60 per share
= 800,000
But the maximum shares is 600,000 so this shares would only be issued upto this limit only
Therefore the funds should not be raised
c. Now The firm could also develop extra 200,000 shares together it get amortized also.
Hence, it can sell 800,000 shares and the amount could rise to $48,000,000
A company issued 8%, 15-year bonds with a par value of $550,000 that pay interest semiannually. The market rate on the date of issuance was 8%. The journal entry to record each semiannual interest payment is:
Answer:
Debit Credit
Bond Interest Expense $22,000
Cash $22,000
Being semi-annual interest payment on bonds
Explanation:
The semi-interest payment on the bonds equals
Coupon rate × par Value × 1/2
Semi-annual interest payment = 8%× 550,000 × 1/2=22,000
Semi- annual payment = $22,000
The accounting entry to record the interest payment each time payment is made would be:
Debit Credit
Bond Interest Expense $22,000
Cash $22,000
Being semi-annual interest payment on bonds
Note that interest payment is an expense, hence to increase an expense the expense account is debit. On the other hand. the interest payment is a cash outflow, which reduces the cash asset, hence the cash account is credited.
Iron Works International is considering a project that will produce annual cash flows of $38,200, $46,900, $57,600, and $23,100 over the next four years, respectively. What is the internal rate of return if the project has an initial cost of $112,800
Answer:
18.11%
Explanation:
The internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.
IRR can be calculated using a financial calculator
Cash flow in year 0 = $-112,800
Cash flow in year 1 = $38,200
Cash flow in year 2 = $46,900
Cash flow in year 3 =$57,600
Cash flow in year 4 =$23,100
IRR = 18.11%
To find the IRR using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
Westchester Corp. is considering two equally risky, mutually exclusive projects, both of which have normal cash flows. Project A has an IRR of 11%, while Project B's IRR is 14%. When the WACC is 8%, the projects have the same NPV. Given this information, which of the following statements is CORRECT?a. If the WACC is 9%, Project A's NPV will be higher than Project B's. b. If the WACC is greater than 14%, Project A's IRR will exceed Project B's. c. If the WACC is 13%, Project A's NPV will be higher than Project B's. d. If the WACC is 9%, Project B's NPV will be higher than Project A's. e. If the WACC is 6%, Project B's NPV will be higher than Project A's.
Answer:
d. If the WACC is 9%, Project B's NPV will be higher than Project A's.
Explanation:
The internal rate of return is the return in which the NPV is zero i.e cash inflows equal to the initial investment
While the WACC refers to the cost of capital by considering the capital structure i.e cost of equity, cost of preferred stock and cost of debt by taking their weightage
Now if the WACC is 9% so project B NPV would be higher as compared to project A as we can see that project B IRR is greater than the project A IRR
Therefore option d is correct
Using the information below for Singing Dolls, Inc., determine the total manufacturing costs incurred during the year:Work in Process, January 1 $53,000Work in Process, December 31 38,500Direct materials used 14,000Total Factory overhead 7,000Direct labor used 28,000a- $49,000.b- $95,000.c- $102,000.d- $63,500.e- $14,500.
Answer:
The correct answer is D.
Explanation:
Giving the following information:
Work in Process, January 1 $53,000
Work in Process, December 31 38,500
Direct materials used 14,000
Total Factory overhead 7,000
Direct labor used 28,000
To calculate the total manufacturing costs, we need to use the following formula:
cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
cost of goods manufactured= 53,000 + 14,000 + 28,000 + 7,000 - 38,500
cost of goods manufactured= $63,500
On January 15 of the current year, Henry sold stock with a basis of $7,000 to his grandson Isaac for $4,000, its fair market value on that date. On December 30 of the current year, Isaac sold the same stock for $8,000 to a friend in a bona fide, arms-length transaction. As a result of these transactions, A. Isaac has a recognized gain of $4,000. B. Isaac has a recognized gain of $1,000. C. Henry has a recognized loss of $3,000. D. Neither Henry nor Isaac has a recognized gain or loss.
Answer:
B. Isaac has a recognized gain of $1,000
Explanation:
Issac's basis in computing gain is $7,000
Therefore, Gain = Selling Price - Basis Price
Gain = $8000 - $7,000
= $1,000
Issac has a recognized gain of $1000
Two solutions are investigated for a safety program Soution 1 First cost ---25,000 annual maintenance cost 4,000 Life -- 2years Solution 2 First cost ---88,000 annual maint 1400 Life 6 years Neither project has a salvage value Compare the two solutions using present value using 15% interest- what is present cost of solution 2
Answer:
Present value for solution 2 = $93,298.28
Solution 1 has a lower cost compared to solution 2. Solution 1 would be more desirable based on the lower cost
Explanation:
Present value is the sum of discounted cashflows
Solution 1
Cash flow in year 0 = 25,000
Cash flow in year 1 and 2 = 4,000
I = 15%
Present value = $31,502.84
Solution 2
Cash flow in year 0 = 88,000
Cash flow in year 1 and 6 = 1,400
I = 15%
Present value = $93,298.28
Solution 1 has a lower cost compared to solution 2. Solution 1 would be more desirable based on the lower cost
To find the PV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Indirect labor includes: (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)
Complete Question:
Options:
a) labor of employees working directly on the product
b) labor of the maintenance employees
c) labor of the clerical staff
Answer:
Indirect labor includes:
b) labor of the maintenance employees
c) labor of the clerical staff (factory)
Explanation:
Indirect labor is the cost of labor for all those who contribute to the production of a product, but indirectly. These include the labor costs of equipment and factory maintenance employees, factory clerical staff, supervisors, and managers, product inspectors and quality controllers, etc. The determining factor is the level of involvement: direct or indirect or outside production. If it is direct or outside production, it is not part of indirect labor.
The Supplies Expense account was debited $1,240 by the Sanford Company for office supplies purchased during the first year of operations. At year-end, the office supplies on hand were counted and the cost of the on-hand items was $880. The appropriate adjusting entry would:
Answer:
The Decrease in expenses $360
Explanation:
Since the supplies expense is debited by $1,240 for office supplies purchased
and the office supplies on hand is $880
So, the remaining office supplies left is
= Supplies expenses debited for Office supplies purchased - office supplies on hand
= $1,240 - $880
= $360
This $360 represent that there is a decrease in expenses
Costs that are incurred in generating revenues during the period, but are not involved in the manufacturing process are referred to as
Answer:
Period costs
Explanation:
Period costs are Costs that are incurred in generating revenues during the period, but are not involved in the manufacturing process. These cost are not related directly to the production process. These costs cannot be capitalized on the company's balance sheet. They are expensed in the period in which they were incurred and are included in the financial statement during their assigned accounting period.
XYZ stock is trading at $25.75 and XYZ Jul 25 calls are trading at a premium of $2. What is the time value of the Jul 25 calls
Answer:
$125
Explanation:
Time value = Premium - Intrinsic value
Premium. = 2 or $200 i.e 2×100
Intrinsic value = 75
= $200 - $75
= $125
The time value of the Jul 25 calls will be $125.
It should be noted that the time value is simply the difference that exist between the premium and the intrinsic value. In this case, the time value will be:
= $200 - $75
= $125
The premium is gotten as 2 × 100 = $200.
Therefore, the time value of the Jul 25 calls will be $125.
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The fiscal year-end unadjusted trial balance for Nelson Company is found on the trial balance tab. Rent expense and salaries expense are equally divided between selling activities and the general and administrative activities. Nelson Company uses a perpetual inventory system. Descriptions of items that require adjusting entries on January 31, 2016, follow.
a. Store supplies still available at fiscal year-end amount to $1,750.
b. Expired insurance, an administrative expense, for the fiscal year is $1,400.
c. Depreciation expense on store equipment, a selling expense, is $1,525 for the fiscal year.
d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,900 of inventory is still available at fiscal year-end.
Multiple Step IS- Begin by selecting "Adjusted" from the drop-down below. Then, use the adjusted trial balance to prepare a multiple-step income statement. Rent expense and salaries expense are equally divided between selling activities and the general and administrative activities. For operating expenses, you must enter both the account title and the dollar amount.
Answer:
Nelson company
Income Statement
For the Month Ended January 31, 2016
Sales $111,950
- Sales discounts $2,000- Sales returns and allowances $2,200Net sales $107,750
- Cost of goods sold $40,000
Gross profit $67,750
Operating expenses:
Selling expenses:
Salaries expense $17,500Rent expense $7,500Advertising expense $9,800Depreciation expense $1,525Store supplies expense $4,050 $40,375Administrative expenses:
Salaries expense $17,500Rent expense $7,500Insurance expense $1,400 $26,400Total operating expenses $66,775
Net income ($975)
Explanation:
a. Store supplies still available at fiscal year-end amount to $1,750.
Dr Supplies expense 4,050
Cr Supplies 4,050
b. Expired insurance, an administrative expense, for the fiscal year is $1,400.
Dr Insurance expense 1,400
Cr Prepaid insurance 1,400
c. Depreciation expense on store equipment, a selling expense, is $1,525 for the fiscal year.
Dr Depreciation expense 1,525
Cr Accumulated depreciation - store equipment 1,525
d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,900 of inventory is still available at fiscal year-end.
Dr Cost of goods sold 1,600
Cr Merchandise inventory 1,600
Stocks X and Y have the following data. Assuming the stock market is efficient and the stocks are in equilibrium, which of the following statements is CORRECT? X Y Price $25 $25 Expected dividend yield 5% 3% Required return 12% 10% a. Stock X pays a higher dividend per share than Stock Y. b. Stock Y pays a higher dividend per share than Stock X. c. Stock Y has a lower expected growth rate than Stock X. d. One year from now, Stock X should have the higher price. e. Stock Y has the higher expected capital gains yield.
Answer:
a. Stock X pays a higher dividend per share than Stock Y.
Explanation:
stock x, dividend = $1.25
$25 = $1.25 / (12% - g)
12% - g = $1.25 / $25
12% - g = 5%
g = 7%
stock y, dividend = $0.75
$25 = $0.75 / (10% - g)
10% - g = $0.75 / $25
10% - g = 3%
g = 7%
both growth rates are equal, what varies are the dividends that the stocks yield and the required rates of return
On May 1, Southern Oil Corporation purchased 2,000 shares of its $10 par value common stock at a cash price of $13/share. On July 15, 900 shares of the treasury stock were sold for cash at $17/share. Journalize the two transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
Answer:
1.
May 1,
DR Treasury Stock $ 26,000
CR Cash $26,000
(To record purchase of Treasury Stock)
Working - 2,000 * $13 per share
= $26,000
2.
July 15,
DR Cash $ $15,300
CR Treasury Stock $11,700
CR Additional Paid-in Capital $3,600
(To record sale of Treasury Stock)
Working and Notes
Cash = 900 * $17 per share = $15,300
Treasury Stock = 900 * purchase price of $13 per share = $11,700
When a stock is sold for more than it was bought or issued for, record this in the Additional Paid-in Capital account.
= Cash - Treasury
= 15,300 - 11,700
= $3,600
Consolidated net income may include the parent's separate operating income plus the parent's share of the subsidiary's reported net income plus/ minus: ________
a. the unrealized profit on upstream intercompany sales of inventory made during the current year.
b. the profit realized this year from upstream intercompany sales of inventory made last year.
c. unrealized profit on downstream intercompany sales of inventory made during the current year.
d. the parent's share of profit realized this year from upstream intercompany sales of inventory made last year.
Answer:
b. the profit realized this year from upstream intercompany sales of inventory made last year
Explanation:
Consolidated net income can be defined as the amount of the net income of the parent company and it has well exclude any of the income from the subsidiaries that was recognized in its individual financial statements in addition with the net income of its subsidiaries that was determined after excluding unrealized gain in inventories as well as the income from the intra-group transactions which is why CONSOLIDATED NET INCOME is often reported on the consolidated income statement for periods after the acquisition has occured.
Therefore CONSOLIDATED NET INCOME may tend to include the parent's separate operating income in addition with the parent's share of the subsidiary's reported net income plus/ minus the profit that was realized this year from the upstream intercompany sales of the inventory that was made last year
Government officials have hired your consulting firm to encourage more people to use the theater . In the initial meeting, you discussed several options for increasing demand. Three suggestions are listed below. Based on your knowledge of the law of demand, what is your recommendation for each suggestion?
Suggestion 1: Reduce the price of public transportation
Choose one:
a. Not recommend
b. Recommend
Suggestion 2: Increase the prices of private transportation by increasing the price of parking and gasoline
Choose one:
a. Not recommend
b. Recommend
Suggestion 3: Offer monthly and yearly passes that reduce the price per ride
Choose one:
a. Not recommend
b. Recommend
Answer:
Suggestion 1: Not Recommended
Suggestion 2: Recommended
Suggestion 3: Not Recommended
Explanation:
The law of demand says that the increase in the price of the commodity will result in decrease in the utility derived from that product and as a result the consumption of the product falls.
So by keeping the law of demand in view, we can say that the:
Reduction in price of public transportation is not recommended because every transporter will start investing in public transport and we will have higher number of buses per person.The increase in the price of parking and gasoline is recommended as the increase in parking fees and gasoline cost will discourage people to buy private transportation.Offer of monthly and yearly passes to reduce the price per ride is not recommended as it encourages the cyclists to travel via bus. Hence it is not recommended.Firm Y has issued 500 million shares of stock at $1 par value and $200 millino in additional paid in capital. Retained earnings are $5.6 billion. What is the return on equity if net income if net income is $1.1 billion?
Answer:
Return on equity = 17.46%
Explanation:
DATA:
Issued share capital = $500m
Additional Paid-in capital = $200 million
Retained Earnings = $5.6 billion
Net Income = $1.1 billion
Return on Equity = ?
Solution
Return on equity can be calculated by dividing net income in total shareholder's equity
NOTE: ALL THE WORKINGS ARE IN 1000's
Return on equity = Net Income / Shareholder's Equity
Return on equity = 1,100,000 / (500,000 + 200,000 +5,600,000)
Return on equity = $1,100,000/6,300,000
Return on equity = 17.46%
Your company, Beta Corporation, is considering a new project which you must analyze. Based on the following data, what is the project's Year 1 operating cash flow?
Sales $22,000
Depreciation $8,000
Other operating costs $12,000
Tax rate 35%
Answer:
Net operating cash flow= $9,300
Explanation:
Giving the following information:
Sales $22,000
Depreciation $8,000
Other operating costs $12,000
Tax rate 35%
We need to determine the net operating cash flow:
Sales= 22,000
Other operating costs= (12,000)
Depreciation= (8,000)
EBIT= 2,000
Tax= (2,000*0.35)= (700)
Depreciation= 8,000
Net operating cash flow= 9,300
Discuss the logic underlying the use of three-sigma limits on Shewhart control charts. How will the chart respond if narrower limits are chosen
Answer:
The Shewhart control charts are charts used to monitor processes and behaviours in businesses statistically to ensure they are under control. They have been known to produce superb results especially with the use of the 3-sigma limits. The use of narrower limits provides practicality in testing more scenarios, the investigation of more causes and detection of more false causes.
Explanation:
The use of the 3 sigma limits in the Shewhart control charts using narrow limits provides for better control of business enterprises by ensuring that more investigations and detection of false causes are conducted. Thes gives a much more specific range of results in practice compared to the wide range approach.
The use of three-sigma limits on Shewhart control charts is simply used as an economic guide to minimize economic loss.
It should be noted that three-sigma points are used as a rational and economic guide to minimum economic loss.
It typically sets a range for the process parameter at a control limit of 0.27%. The three-sigma control limits are used for checking data from a process. These are vital to monitor behaviors and processes in business.
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Corporation has the following data as of December 31, 2018:
Total Current Liabilities $38,420 Total Stockholders' Equity$ ?
Total Current Assets 62,100 Other Assets 36,800
Long-term Liabilities 179,530 Property, Plant, and Equipment, Net 264,350
Compute the debt to equity ratio at December 31, 2018. (Round your answer to two decimal places, X XX)
Total liabilities Total stockholders' equity Debt to equity ratio
Answer: 1.5
Explanation:
The debt to equity ratio will be calculated as total liabilities divided by the total equities.
The total liabilities is the sum of the total current liabilities and the long term liabilities. This will be:
= 38420 + 179,530
= $217950
Total equities will be the difference between the total assets and total liabilities. This will be:
Total asset = 264,350 + 36,800 + 62,100
= $363,250
Total equity = total asset - total liability
= $363,250 - $217,950
= $145,300
Debt to equity ratio = total liabilities/total equity
= 217950/145,300
= 1.5