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
Answers
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%
Related Questions
A drawback to using stock options as part of manager compensation is that Group of answer choices it encourages managers to engage in empire building. All of the listed answers are true. None of the listed answers are true. it can create an incentive for mangers to manipulate information to prop up a stock price temporarily, giving them a chance to cash out before the price returns to a level reflective of the firm's true prospects. it encourages managers to undertake projects that will increase stock price.
Answers
Answer:
C. it can create an incentive for mangers to manipulate information to prop up a stock price
temporarily, giving them a chance to cash out before the price returns to a level reflective of
the firm's true prospects.
Explanation:
A management stock option gives enable managers to have legal right in order to purchase some certain number of shares with the fixed price during some time in future time. Though there are some condition that are needed to be satisfied such as continued employment. It should be noted that drawback to using stock options as part of manager compensation is that it can create an incentive for mangers to manipulate information to prop up a stock price
temporarily, giving them a chance to cash out before the price returns to a level reflective of the firm's true prospects.
Congratulations, you've won the lottery! The jackpot was $10,000,000, and you have an important choice to make. You can either take your winnings in annual payments of $500,000 spread out over 20 payments (with the first payment coming immediately and then at the end of each year for the next 19 years), or you can take a one-time payment of $6,600,000 right now. What is the present value of your winnings if you opt for the annual payments and the market interest rate is 5%
Answers
Answer:
$6,542,660.43
Explanation:
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
Cash flow each year from year 0 to 19 = $500,000
I = 5%
PV = $6,542,660.43
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.
Relix, Inc., is a domestic corporation with the following temporary timing differences for the current year. The building depreciation for tax purposes exceeds book depreciation by $13,000. The furniture and fixtures depreciation for tax purposes exceeds book depreciation by $3,800. The accrued litigation expenses in the amount of $16,000 are deductible for book purposes but not yet deductible for tax. The book-tax basis differences for the deferred assets and liabilities are listed below.
Beginning of year Current-year diff-e End of year
Gross deferred tax asset $7,140 $3,360 $10,500
Gross deferred tax liability ($12,852) ($3,528) ($16,380)
In addition to the temporary differences above, Relix reported two permanent differences between book and taxable income. It earned $2,375 in tax-exempt municipal bond interest, and it incurred $780 in nondeductible business meals expense. Relix's book income before tax is $4,800. Assume a 21% Federal corporate tax rate and no valuation allowance.
Compute Relix's total provision for income tax reported in its financial statements, and determine its book net income after tax.
If required, round your answers to the nearest dollar.
Book net income before tax $4,800
Provision for income tax expense $
Net income after tax $
Answers
Answer:
Computation of Provision for income tax expense
Particulars Amount
Pre tax financial income $4,800
Add: Non deductible business meal $780
Less: Tax exempt interest -$2,375
Less: Book tax difference in depreciation -$16,800
of building and Furniture & fixtures
Add: Accured litigation expenses $16,000
Taxable Income $2,405
Provision for income tax Expense
Current Tax (21% of $2,405) $505
Deferred tax liability $3,528
Deferred tax asset -$3,360
Total Provision for income tax expense $673
Computation of book net income after tax
Particulars Amount
Book net income before taxes $4,800
Less: Provision for income tax expense -$673
Net Income after tax $4,127
Provision for income tax expense = $673
The net income after taxes = $4123
The Pre tax financial income is given to be = $4,800
The Non deductible business meal is given to be = $780
The tax exempt interest is = $2,375
The book tax difference = $16800
The litigation expenses = $16000
From here the taxable income =
4800+780-2375-16800+16000
= $2405
21% of $2,405
= 0.21*2405
= $505.05
Deferred tax = 3528
Deferred tax asset = 3360
505+3528-3360
Income tax expense = $673
The net income before taxes = 4800
after taxes = 4800 - 673
= $4123
The net income after taxes = $4123
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A large global automobile manufacturer is considering outsourcing the manufacturing of a solenoid used in the transmission of its SUVs. The company estimates that annual fixed costs of manufacturing the part in-house, which include equipment, maintenance, and manage-ment, amounts to $6 million. The variable costs of labor and material are $5.00 per unit. The company has an offer from a major subcontractor to produce the part for $8.00 per unit. However, the subcontractor wants the company to share in the costs of the equipment. The automobile company estimates that the total cost would be $4 million, which also includes management oversight for the new supply contact
Required:
a. How many solenoids would the automobile company need per year to make theâ in-house option leastâcostly?
b. What otherâ factors, besidesâ costs, should the automobile company consider before revising its supply chain forâ SUVs?
Answers
Answer:
A) The company must consume more than 666667 solenoids per year to make the in-house option least costly.
B) - quality of the product
- prompt delivery of products
- good communication & relationship with external parties.
Explanation:
A) Since if they use a subcontractor, they will share part of the equipment cost, Let the cross over point for manufacturing the solenoid in house and using a contractor be denoted as x.
Now, variable costs of labor and material are $5.00 per unit. This is 5x
Also from the subcontractor, production of the part is estimated at $8.00 per unit. This is 8x.
Thus;
6000000 + 5x = 4000000 + 8x
Rearranging, we have;
6000000 - 4000000 = 8x - 5x
3x = 2000000
x = 2000000/3
x ≈ 666667
Thus, the company must consume more than 666667 solenoids per year to make the in-house option least costly.
B) Apart from cost, other factors the company must consider are quality of the product, prompt delivery of products, good communication & relationship with stakeholders involved.
During the year ended December 31, 2018, Kelly’s Camera Shop had sales revenue of $210,000, of which $105,000 was on credit. At the start of 2018, Accounts Receivable showed a $12,000 debit balance and the Allowance for Doubtful Accounts showed a $680 credit balance. Collections of accounts receivable during 2018 amounted to $76,000.Data during 2018 follow:On December 10, a customer balance of $1,900 from a prior year was determined to be uncollectible, so it was written off.On December 31, a decision was made to continue the accounting policy of basing estimated bad debt losses on 2 percent of credit sales for the year.Required:Give the required journal entries for the two events in December.Show how the amounts related to Accounts Receivable and Bad Debt Expense would be reported on the balance sheet and income statement for 2018.On the basis of the data available, does the 2 percent rate appear to be reasonable?
Answers
Answer:
Kelly's Camera Shop
1. Journal Entries
Debit Accounts Receivable $105,000
Credit Sales Revenue $105,000
To record the sales on credit for the year.
Debit Cash $76,000
Credit Accounts Receivable $76,000
To record the cash collections on account.
Debit Allowance for doubtful accounts $1,900
Credit Accounts Receivable $1,900
To write off a bad debt.
Debit Bad Debt Expense $3,320
Credit Allowance for doubtful accounts $3,320
To record the bad debt expense for the year.
2. Balance Sheet (partial) as of December 31, 2018:
Accounts Receivable $39,100
Less Allowance for
doubtful accounts 2,100
Net Accounts Receivable $37,000
Explanation:
a) Data and Analysis:
T-accounts:
Accounts Receivable
Account Title Debit Credit
Beginning balance $12,000
Sales revenue 105,000
Cash $76,000
Bad Debts written off 1,900
Ending balance 39,100
Totals $117,000 $117,000
Allowance for Doubtful Accounts
Account Title Debit Credit
Beginning balance $680
Bad debts written off $1,900
Bad Debt Expense 3,320
Ending balance 2,100
Total $4,000 $4,000
Analysis of transactions:
Accounts Receivable $105,000 Sales Revenue $105,000
Cash $76,000 Accounts Receivable $76,000
Allowance for doubtful accounts $1,900 Accounts Receivable $1,900
Bad Debt Expense $3,320 Allowance for doubtful accounts $3,320
Penny’s Pool Service & Supply, Inc. (PPSS) is completing the accounting process for the year just ended, December 31, 2015. The transactions during 2015 have been journalized and posted. The following data with respect to adjusting entries are available:
a. PPSS owed $7,500 wages to the office receptionist and three assistants for working the last 10 days in December. The employees will be paid in January 2016.
b. On October 1, 2015, PPSS received $24,000 from customers who prepaid pool cleaning service for one year beginning on November 1, 2015.
c. The company received a $520 utility bill for December utility usage. It will be paid in January 2016.
d. PPSS borrowed $30,000 from a local bank on May 1, 2015, signing a note with a 10 percent interest rate. The note and interest are due on May 1, 2016.
e. On December 31, 2015, PPSS cleaned and winterized a customer’s pool for $800, but the service was not yet recorded on December 31.
f. On August 1, 2015, PPSS purchased a two-year insurance policy for $4,200, with coverage beginning on that date. The amount was recorded as Prepaid Insurance when paid.
g. On December 31, 2015, PPSS had $3,100 of pool cleaning supplies on hand. During 2015, PPSS purchased supplies costing $23,000 from Pool Corporation, Inc., and had $2,400 of supplies on hand on December 31, 2014.
h. PPSS estimated that depreciation on its buildings and equipment was $8,300 for the year.
i. At December 31, 2015, $110 of interest on investments was earned
Required: Prepare adjusting entries for Penny's Pool Service & Supply, Inc., on December 31, 2015.
Answers
Answer:
Penny's Pool Service & Supply, Inc.
Adjusting Entries:
a. Debit Wages Expense $7,500
Credit Wages Payable $7,500
To record accrued wages.
b. Debit Deferred Revenue $4,000
Credit Service Revenue $4,000
To record earned revenue.
c. Debit Utility Expense $520
Credit Utility Payable $520
To record accrued utility expense.
d. Debit Interest Expense $2,000
Credit Interest Payable $2,000
To record interest expense due.
e. Debit Accounts Receivable $800
Credit Service Revenue $800
To record service revenue earned.
f. Debit Insurance Expense $875
Credit Prepaid Insurance $875
To record expired insurance for the period.
g. Debit Supplies Expense $23,700
Credit Supplies $23,700
To record supplies expense for the period.
h. Debit Depreciation Expense - building and equipment $8,300
Credit Accumulated Depreciation - building and equipment $8,300
To record depreciation expense for the period.
i. Debit Interest Receivable $110
Credit Interest Revenue $110
To record interest revenue earned.
Explanation:
a) Data and Analysis:
a. Wages Expense $7,500 Wages Payable $7,500
b. Deferred Revenue $4,000 Service Revenue $4,000 ($24,000 * 2/12)
c. Utility Expense $520 Utility Payable $520
d. Interest Expense $2,000 Interest Payable $2,000 ($30,000 * 10% * 8/12)
e. Accounts Receivable $800 Service Revenue $800
f. Insurance Expense $875 Prepaid Insurance $875 ($4,200 * 5/24)
g. Supplies Expense $23,700 Supplies $23,700 ($3,100+23,000- 2,400)
h. Depreciation Expense - building and equipment $8,300 Accumulated Depreciation - building and equipment $8,300
i. Interest Receivable $110 Interest Revenue $110
In accounting terms, the adjusting entries are the entries that are usually made at the end of the accounting or the financial year in order to allocate the income and expenditure to the period of time in which they are actually incurred.
The Journal entries have been attached below.
Working notes:
[tex]\begin{aligned}\text{Service Revenue}= \$4,000\times \$24,000 \times\frac{2}{12}\end{aligned}[/tex]
[tex]\begin{aligned}\text{ Interest Payable}= \$2,000\times\$30,000 \times 10\% \times\frac{8}{12}\end{aligned}[/tex]
[tex]\begin{a;igned}\text{Prepaid Insurance}=\ $875 \times\$4,200 \times\frac{5}{24}\end{aligned}[/tex]
[tex]\text{Supplies}=\ $23,700 \times(\$3,100+23,000- 2,400)[/tex]
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Analyzing and Computing Accrued Warranty Liability and Expense Waymire Company sells a motor that carries a 60-day unconditional warranty against product failure. From prior years' experience, Waymire estimates that 2% of units sold each period will require repair at an average cost of $100 per unit. During the current period, Waymire sold 69,000 units and repaired 1,000 units. (a) How much warranty expense must Waymire report in its current period income statement
Answers
Answer:
the warranty expense reported is $138,000
Explanation:
a. The computation of the warranty expense that should be reported in its current period income statement is shown below:
= Given percentage × units sold × repair average cost
= 2% × 69,000 units × $100 per units
= $138,000
Hence, the warranty expense reported is $138,000
jayda started a corporation that creates software products for clients. which statement correctly reflects jayde's role in the corporation?
Answers
Answer:
good for herlelellelelel
Answer:
idgaf
Explanationk bye
Blending process Units of Product Percent of Conversion
Beginning work in process 150,000 80%
Goods started 310,000 100
Goods completed 340,000 100
Ending work in process 120,000 25
Required:
Compute the total equivalent units of production for conversion using the FIFO method.
Answers
Answer:
Number of equivalent units= 370,000
Explanation:
To calculate the cost of equivalent units using the FIFO (first-in, first-out), we need to use the following structure:
COST PER EQUIVALENT UNITS:
Beginning work in process = beginning inventory* %incompleted
Units started and completed = units completed - beginning WIP
Ending work in process completed= Ending WIP* %completed
=Number of equivalent units
Beginning work in process = 150,000*0.2= 30,000
Units started and completed = 340,000 - 30,000= 310,000
Ending work in process completed= 120,000*0.25= 30,000
Number of equivalent units= 370,000
Required: a. Adams Company's production cycle starts in Department A. The following information is available for July: Units Work in process, July 1 (60% complete) 71,000 Started in July 360,000 Work in process, July 31 (20% complete) 39,000 Materials are added at the beginning of the process in Department A. Using the weighted-average method, what are the equivalent units of production for materials and conversion costs for the month of July, respectively
Answers
Answer:
materials = 431,000 units and
conversion = 399,800 units
Explanation:
Note that Adams Company uses weighted-average method. This means we calculate equivalent units of production on the number of physical units completed and transferred and units in ending inventory.
Step 1 : Determine units completed and transferred
Units completed and transferred = Opening Inventory + Units Started - Ending Inventory
= 71,000 + 360,000 - 39,000
= 392,000
Step 2 : Determine equivalent units of production
Materials
Units completed and transferred (392,000 x 100%) = 392,000
Units in ending inventory (39,000 x 100%) = 39,000
Total equivalent units of production = 431,000
Conversion
Units completed and transferred (392,000 x 100%) = 392,000
Units in ending inventory (39,000 x 20%) = 7,800
Total equivalent units of production = 399,800
A debit balance in the Allowance for Doubtful Accounts A. indicates that actual bad debt write-offs have exceeded previous provisions for bad debts. B. is the normal balance for that account. C. cannot occur if the percentage of receivables method of estimating bad debts is used. Click Save and Submit to save and submit. Click Save All Answers to save all answers. D. indicates that actual bad debt write-offs
Answers
Answer:
D. indicates that actual bad debt write-offs
Explanation:
A debit balance can be regarded as negative cash balance when checking ones account with a bank. It should be noted that debit balance in the Allowance for Doubtful Accounts
indicates that actual bad debt write-offs
On January 1, 2021, Jasperse Corporation leased equipment under a finance lease designed to earn the lessor a 10% rate of return for providing long-term financing. The lease agreement specified ten annual payments of $90,000 beginning January 1, and each December 31 thereafter through 2029. A 10-year service agreement was scheduled to provide maintenance of the equipment as required for a fee of $8,000 per year. Insurance premiums of $7,000 annually are related to the equipment. Both amounts were to be paid by the lessor and lease payments reflect both expenditures.
Required:
At what amount will Jasperse record a right-of-use asset?
Answers
Answer:
$554,320
Explanation:
Annual payment = $90,000
Rate = 10%
Time period = 10 years
Maintenance of equipment = $8,000
PVAD of $1(n = 10, i=11) = 6.76
Lease payment = $90,000 - $8,000 = $82,000
Amount of Right-of-use asset = Lease payment * PVAD of $1
Amount of Right-of-use asset = $82,000 * 6.76
Amount of Right-of-use asset = $554,320
So, Jasperse will record $554,320 as a right-of-use asset amount.
The following table presents Generic Motors Company's production budget. GM's inventory policy is to have ending inventory equal to20% of next month's sales.
February March April
Ending inventory 5,000
Beginning inventory 2,000
Budgeted sales 13,000 17,000 18,000
Budgeted production
Required:
a) Fill in the missing numbers in the table above.
(Hint if you get stuck: What is the relation between ending inventory for one month and beginning inventory for the following month?)
b) Why do firms want to hold inventory of finished goods? (an alternative could be to produce exactly the amount they are going to sell, and hold zero inventories)
Answers
Answer:
a.
________________________________February__March__April
Ending inventory 20% of next Months sale _3400___3600__5,000
Beginning inventory__________________ 2,000__ 3400__ 3600
Budgeted sales _____________________ 13,000__17,000_ 18,000
Budgeted production_________________ 14,400__ 17,200_ 19,400
b.
Firms wants to hold the finished goods inventry in order to deal with the future demand
Explanation:
a.
Use the following formula to calculate the Budgeted production
Budgeted Production = Beginning Inventory - Ending Inventory + Busgeted Sales
Working
________________________________February__March__April
Ending inventory 20% of next Months sale _3400___3600__5,000
Less: Beginning inventory______________2,000__ 3400__ 3600
Add: Budgeted sales _________________ 13,000__17,000_ 18,000
= Budgeted production________________14,400__ 17,200_ 19,400
b.
The finished goods inventory is held to deal with the future market demand. If the firm produce the uniits equals o the current demand then in case of increase in demand or unexpected demand increase the firms will not be able to fulfil the demand and will lose the opportunity.
Before preparing financial statements for the current year, the chief accountant for Oriole Company discovered the following errors in the accounts.
1. The declaration and payment of $47,000 cash dividend was recorded as a debit to Interest Expense $47,000 and a credit to Cash $47,000.
2. A 10% stock dividend (1,100 shares) was declared on the $10 par value stock when the market price per share was $19. The only entry made was Stock Dividends (Dr.) $11,000 and Dividend Payable (Cr.) $11,000. The shares have not been issued.
3. A 4-for-1 stock split involving the issue of 354,000 shares of $5 par value common stock for 91,750 shares of $20 par value common stock was recorded as a debit to Retained Earnings $1,835,000 and a credit to Common Stock $1,835,000.
Required:
Prepare the correcting entries at December 31.
Answers
Answer:
Oriole Company
Correcting Journal Entries:
1. Debit Dividends $47,000
Credit Interest Expense $47,000
To correct the error.
2. No corrections required
3. Debit Common Stock $1,835,000
Credit Retained Earnings $1,835,000
To correct the error.
Explanation:
a) Data and Analysis:
1. Dividends $47,000 Interest Expense $47,000
2. No corrections required
3. Common Stock $1,835,000 Retained Earnings $1,835,000
b) When a stock split is done, there is no journal entry involving an amount of money. What is recorded is just a memo entry. The memo entry serves to notify that the number of Oriole shares and the par value per share have changed to reflect the reality.
Foxmoor Company applies manufacturing overhead by using a predetermined rate of 50% of direct labor cost. The data that follow pertain to job no. 764:
Direct material cost $55,000
Direct labor cost 80,000
If Foxmoor adds a 40% markup on total cost to generate a profit, which of the following choices depicts a portion of the accounting needed to record the sale of job no. 764?
Account Debited Amount
A. Cost of Goods Sold $175,000
B. Cost of Goods Sold $245,000
C. Finished Goods Inventory $175,000
D. Finished Goods Inventory $245,000
E. Sales Reveune $245,000
a. Choice A
b. Choice B
c. Choice C
d. Choice D
e. Choice E
Answers
Answer:
e. Choice E
Explanation:
Total cost of job no. 764 = $55,000 + $80,000 + 80,000 x 50%
= $175,000
Total Revenue for job no. 764 = $175,000 + $175,000 x 40%
= $245,000
E. Sales Revenue $245,000
The consequences of poor
mangement to the government
and society .
Answers
Consider the following information about employment across industries in Chicago.
Number of employees Location Quotient
Manufacturing 58,435 0.559
Finance and insurance 102,751 1.825
Administrative and support 107,618 1.181
Educational services 9,379 1.566
Health care and social assistance 179,570 1.046
Arts, entertainment, and recreation 19,132 0.986
If there were a national downturn in these industries, which is likely to be most closely linked to the residential real estate market in Chicago?
A. Manufacturing
B. Finance and Insurance
C. Administrative and Support
D. Educational services
E. Health care and social assistance
F. Arts, entertainment, and recreation
G. None of the above.
Answers
Answer:
B. Finance and Insurance
Explanation:
The Location Quotient (LQ) value of finance and insurance is the highest (1.825) and its employment concentration (102,751) is higighesth as well although not the highest.
We know that when (LQ) is greater that 1, its indicates the high concentration in regional growth and opportunities as finance and insurance is concerned.
On the other hand lowest, (LQ) at manufacturing is less than 1 and the employment is also low (58,435), that indicates that manufacturing employment has less of a share of the total in regional growth and opportunities.
So, if there were a national downturn in these industries, Finance and Isurance is likely to be most closely linked to the residential real estate market in Chicago.
You just got a job and plan to save for the college expenses for your kids. You have a son and a daughter. Your son is 4 years old, and your daughter is only 1 year old. Both of them plan to go to a four-year college at the age of 18. The estimated college expense is about $40,000 per year. Assume you plan to invest into a portfolio that offers you return about 6% per year until your daughter is graduated from college. How much money do you need to save every year if your first saving is in one year
Answers
Answer:
$11,508.25
Explanation:
your son will start college in 14 years, and the present value of his college tuition = $40,000 x 3.4651 (PVIFA, 6%, 4 periods) = $138,604
your daughter will start college in 17 years, so you need in today's dollars $138,604
you will need to save enough money to cover both tuitions;
money required to cover your son's tuition = $138,604 / 21.015 (FVIFA, 6%, 14 periods) = $6,595.48
money required to cover your daughter's tuition = $138,604 / 28.213 (FVIFA, 6%, 14 periods) = $4,912.77
total annual savings = $11,508.25
Kraus Steel Company has two departments, Casting and Rolling. In the Rolling Department, ingots from the Casting Department are rolled into steel sheet. The Rolling Department received 31,600 tons from the Casting Department in October. During October, the Rolling Department completed 45,900 tons, including 15,900 tons of work in process on October 1. The ending work in process inventory on October 31 was 1,600 tons.How many tons were started and completed during October?
Answers
Answer:
30,000 tons
Explanation:
Units Completed = Beginning Work in Process Units Completed + Units started and Completed during October
45,900 = 15,900 + Units started and Completed during October
Units started and Completed during October = 45,900 - 15,900
Units started and Completed during October = 30,000 tons
Watson Oil recently reported (in millions) $8,250 of sales, $5,750 of operating costs. The company had $3,200 of outstanding bonds that carry a 5% interest rate, and its federal-plus-state income tax rate was 35%. In order to sustain its operations and thus generate future sales and cash flows, the firm was required to make $600 of capital expenditures on operating long-term assets and to invest $300 in net operating working capital. By how much did the firm's net income exceed its free cash flow
Answers
Answer:
$796
Explanation:
The computation of the excess amount is shown below:
As we know that
Free cash flows = Net Income + Depreciation + Interest (1-tax) - Capital expenditures +- changes in Working capital
Now the difference could be determined by the following formula
-Depreciation - interest (1-tax) + capital expenditure + changes in Working capital
= -$650 - 0.05 × $3,200 × (1 - 0.35) + $1,250 + $300
= $796
Which of the following should be considered last when searching for financing? Question 1 options: Family members Banks Commercial finance companies Credit cards
Answers
Answer:
Credit cards
Explanation:
A credit card can be defined as a small rectangular-shaped plastic card issued by a financial institution to its customers, which typically allows them to purchase goods and services on credit based on the agreement that the amount would be paid later with an agreed upon interest rate.
Credit cards should be considered last when searching for financing.
The main sources of finance are; Family members, Banks Commercial and finance companies.
Way Cool produces two different models of air conditioners. The company produces the mechanical systems in their components department. The mechanical systems are combined with the housing assembly in its finishing department. The activities, costs, and drivers associated with these two manufacturing processes and the production support process follow.
Process Activity Overhead Cost Driver Quantity
Components Changeover $ 470,000 Number of batches 890
Machining 304,000 Machine hours 8,130
Setups 225,000 Number of setups 120
$ 999,000
Finishing Welding $192,000 Welding hours 5,200
Inspecting 235,000 Number of inspections 850
Rework 61,000 Rework orders 220
$ 488,000
Support Purchasing 145,000 Purchase orders 543
Providing space 33,000 Number of units 4,620
Providing utilities 65,000 Number of units 4,620
$ 243,000
Additional production information concerning its two product lines follows.
Model 145 Model 212
Units produced 1,500 3,120
Welding hours 2,000 3,200
Batches 445 445
Number of inspections 480 370
Machine hours 2,850 5,280
Setups 60 60
Rework orders 160 60
Purchase orders 362 181
Required:
1. Determine departmental overhead rates and compute the overhead cost per unit for each product line. Base your overhead assignment for the components department on machine hours. Use welding hours to assign overhead costs to the finishing department. Assign costs to the support department based on number of purchase orders.
2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $250 for Model 145 and $170 for Model 212.
3. If the market price for Model 145 is $1,700 and the market price for Model 212 is $300, determine the profit or loss per unit for each model.
Answers
Answer:
Way Cool
1. Using ABC, the overhead cost per unit for each product line:
Model 145 Model 212
Overhead cost per unit $534.39 $266.12
2. The total cost per unit for each product line, if the direct labor and direct materials costs per unit are $250 for Model 145 and $170 for Model 212:
Model 145 Model 212
Total cost per unit $784.39 $436.12
3. If the market price for Model 145 is $1,700 and the market price for Model 212 is $300, the profit or loss per unit for each model:
Model 145 Model 212
Profit (loss) per unit $915.61 ($136.12)
Explanation:
a) Data and Calculations:
Process Activity Overhead Cost Driver Quantity
Components Changeover $ 470,000 Number of batches 890
Machining 304,000 Machine hours 8,130
Setups 225,000 Number of setups 120
Total $ 999,000
Finishing
Welding $ 192,000 Welding hours 5,200
Inspecting 235,000 Number of inspections 850
Rework 61,000 Rework orders 220
Total $ 488,000
Support
Purchasing $ 145,000 Purchase orders 543
Providing space 33,000 Number of units 4,620
Providing utilities 65,000 Number of units 4,620
Total $ 243,000
Additional production information concerning its two product lines follows:
Model 145 Model 212 Total
Units produced 1,500 3,120 4,620
Welding hours 2,000 3,200 5,200
Batches 445 445 890
Number of inspections 480 370 850
Machine hours 1,800 4,200 6,000
Setups 60 60 120
Rework orders 160 60 220
Purchase orders 362 181 543
Overhead Rates per Activity Pool:
Components Changeover $ 470,000/890 = $528
Machining 304,000/ 8,130 = $37.39
Setups 225,000/120 = $1,875
Total $ 999,000
Finishing
Welding $ 192,000/5,200 = $36.92
Inspecting 235,000/850 = $276.47
Rework 61,000/220 = $277.27
Total $ 488,000
Support
Purchasing $ 145,000/543 = $267
Providing space 33,000/4,620 = $7.14
Providing utilities 65,000/4,620 = $14.07
Total $ 243,000
Total overheads = $1,730,000
Model 145 Model 212
Units produced 1,500 3,120
Welding hours $73,840 (2,000*$36.92) $118,144 (3,200*$36.92)
Batches 234,960 (445*$528) 234,960 (445*$528)
Number of inspections 132,706 (480*$276.47) 102,294 (370*$276.47)
Machine hours 106,562 (2,850*$37.39) 197,419 (5,280*$37.39)
Setups 112,500 (60*$1,875) 112,500 (60*$1,875)
Rework orders 44,363 (160*$277.27) 16,636 (60*$277.27)
Purchase orders 96,654 (362*$267) 48,327 (181*$267)
Total overhead costs $801,585 $830,280
Units produced 1,500 3,120
Overhead cost per unit $534.39 $266.12
Total production costs:
Model 145 Model 212
Direct costs per unit $250 $170
Total direct costs $375,000 $530,400
Total overhead costs $801,585 $830,280
Total production costs $1,176,585 $1,360,680
Units produced 1,500 3,120
Total cost per unit $784.39 $436.12
Model 145 Model 212
Market price per unit $1,700.00 $300.00
Total cost per unit 784.39 436.12
Profit (loss) per unit $915.61 ($136.12)
Needham Company uses a job-order costing system. During the month of September, the company worked on three jobs. The job-order cost sheets for the three jobs contained the following information at the end of September: Job A Job B Job C Beginning Balances $ 4,900 $ 3,900 $ 6,900 Direct Materials 1,900 2,500 2,900 Direct Labor 3,300 5,500 2,700 The company applies overhead at 120% of direct labor cost. The total cost of Job A at the end of September was:
Answers
Answer is in the file below
tinyurl.com/wtjfavyw
Which of the following statements about real and nominal interest rates is correct? A. An increase in the real interest rate is necessarily accompanied by either an increase in the nominal interest rate, an increase in the inflation rate, or both. B. When the inflation rate is positive, the nominal interest rate is necessarily greater than the real interest rate. C. When the nominal interest rate is rising, the real interest rate is necessarily rising; when the nominal interest rate is falling, the real interest rate is necessarily falling. D. If the nominal interest rate is 4 percent and the inflation rate is 3 percent, then the real interest rate is 7 percent.
Answers
Answer:
B. When the inflation rate is positive, the nominal interest rate is necessarily greater than the real interest rate.
Explanation:
A real interest rate can be regarded as
an interest rate that adjustment has been made on in order to remove the effects of inflation so that the real cost of funds to the borrower as well as real yield to the lender can be reflected. A nominal interest rate on the other hand can be regarded as interest rates calculated before consideration of inflation. It should be noted that When the inflation rate is positive, the nominal interest rate is necessarily greater than the real interest rate.
Avery works for Proctor and Gamble as a market researcher in the United States. P&G is interested in launching a new line of shampoo in India and has asked her to look into doing research to support this decision. Since Avery is not familiar with the language or the culture, what should she do?
Answers
Explanation:
According to the scenario in question, an effective alternative for market researcher Avery would be to hire an Indian market research company to carry out the research that P&G needs to do before launching a new shampoo line in India, because as Avery does not is familiar with the Indian language and culture, these could be significant barriers to conducting effective research, since India is a country known for having a very strong culture, so an Indian company could achieve the objective of Proctor and Gamble of more effectively, as it would have more specific information about the culture and the need of the Indian people about a particular product.
For each hypothetical scenario, indicate whether the tariff described is more likely a protective tariff or a revenue tariff.
a. In response to concerns from business leaders, a legislator has designed a new tariff on raw materials used by many manufacturing firms. The legislator felt the new tariff was necessary based on input from the private sector that new discoveries of natural re
sources abroad would threaten to put domestic producers of raw materials out of business. To meet this goal, this tariff will charge $1,500 on every crate of the imported goods plus an additional 6% of the total value of the imported goods.
b. In an effort to balance next year's budget, a senator has proposed a new tariff. She proposed the new tariff with a goal of raising a total of $100 million, To meet this goal, this tariff will charge $2,000 on every ton that is imported.
Answers
Answer:
a. In response to concerns from business leaders, a legislator has designed a new tariff on raw materials used by many manufacturing firms. The legislator felt the new tariff was necessary based on input from the private sector that new discoveries of natural resources abroad would threaten to put domestic producers of raw materials out of business. To meet this goal, this tariff will charge $1,500 on every crate of the imported goods plus an additional 6% of the total value of the imported goods.
protective tariff since it is designed to protect domestic industries from competition of out of state producers. It is designed to increase the price of imported goods.b. In an effort to balance next year's budget, a senator has proposed a new tariff. She proposed the new tariff with a goal of raising a total of $100 million, To meet this goal, this tariff will charge $2,000 on every ton that is imported.
revenue tariff since its main purpose is to increase government revenue, not to protect domestic industries.The first scenario describes protective tariff whereas the second scenario explains revenue tariff.
What is protective and revenue tariff?In international trade, protective tariffs are applied on the imported goods to protect and prevent the domestic industries from competition.
In scenario a, a tariff of $1,500 and additional of 6% was charged on imported goods to protect the domestic producers. Therefore the first scenario describes protective tariff.
The revenue tariff on the other hand refers to a tariff that is designed with an intention to increase revenues.
The scenario b describes a tariff that was applied to reach the target revenue of $100 million. Therefore it is a revenue tariff.
Learn more about protective and revenue tariff here:
brainly.com/question/26525730
Rupesh wants to buy a new BMW priced at $54,000. He makes a down payment of 20% of the original price. He also trades-in his old car for $10,000. (This means he sells the old car to the dealer for $10,000). For the balance, Rupesh takes a 60-month car loan at an interest rate of 3.45%. What will be the approximate payment at the end of every month
Answers
Answer:
The approximate payment at the end of every month will be $603.22.
Explanation:
Since the payment is going to be made at the end of every month, this can be calculated using the formula for calculating the present value of an ordinary annuity as follows:
PV = P * ((1 - (1 / (1 + r))^n) / r) …………………………………. (1)
Where;
PV = Present value or the balance = Price of BMW - Down payment - Old car sales amount = $54,000 - ($54,000 * 20%) - $10,000 = $33,200
P = Monthly payment = ?
r = Monthly interest rate = Annual interest rate / 12 = 3.45% / 12 = 0.0345 /
12 = 0.002875
n = number of months = 60
Substitute the values into equation (1) and solve for P, we have:
$33,200 = P * ((1 - (1 / (1 + 0.002875))^60) / 0.002875)
$33,200 = P * 55.0377058660197
P = $33,200 / 55.0377058660197
P = $603.22
Therefore, the approximate payment at the end of every month will be $603.22.
Dehner Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 47,000 Total fixed manufacturing overhead cost $ 202,100 Variable manufacturing overhead per direct labor-hour $ 2.00 Recently, Job P951 was completed with the following characteristics: Number of units in the job 50 Total direct labor-hours 100 Direct materials $ 850 Direct labor cost $ 4,700 The total job cost for Job P951 is closest to: (Round your intermediate calculations to 2 decimal places.)
Answers
Answer:
Total cost= $6,180
Explanation:
First, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= (202,100/47,000) + 2
Predetermined manufacturing overhead rate= $6.3 per direct labor hour
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 6.3*100
Allocated MOH= 630
Finally, the total cost:
Total cost= 850 + 4,700 + 630
Total cost= $6,180
In each of the following cases, calculate the price of one share of the foreign stock measured in United States dollars (US$). a. A Belgian stock priced at euros () when the exchange rate is US$/ (i.e., each euro is worth $). b. A Swiss stock priced at Swiss francs (Sf) when the exchange rate is US$/Sf. c. A Japanese stock priced at yen (¥) when the exchange rate is ¥/US$.
Answers
Answer:
$114.24
$96.18
$12.23
Explanation:
Here is the complete question :
In each of the following cases, calculate the price of one share of the foreign stock measured in United States dollars(US$).
a. A Belgian stock priced at 103.1 euros (euro) when the exchange rate is 0.9025 euro/US$.
b. A Swiss stock priced at 93.1 Swiss francs (Sf) when the exchange rate is 0.968 Sf/US$.
c. A Japanese stock priced at 1,334 yen (¥) when the exchange rate is 109.1149 ¥/US$.
Exchange rate is the rate at which one currency is exchanged for another currency
In this question, US dollar is the base currency while the other currencies are the price currency
1. (103.1 / 0.9025) x 1usd = $114.24
2. (93.1 / 0.9680) x 1 usd = $96.18
c.( 1334/109.1149) x 1 usd = $12.23
The Hopper Leg Winery from California's Sonoma Valley is trying to enter the wine market in France. To the company's surprise, it found that the France wine distribution channel was difficult to access as an outsider. Based on this, the market must have a(n) _________ distribution channel. fragmented intensive formal exclusive concentrated
Answers
Answer:
exclusive
Explanation:
Marketing mix can be defined as the choices about product attributes, pricing, distribution, and communication strategy that a company blends and offer its targeted markets (customers) so as to build and maintain a desired response.
Generally, a marketing mix is made up of the four (4) Ps;
1. Products: this is typically the goods and services that gives satisfaction to the customer's needs and wants. They are either tangible or intangible items.
2. Price: this represents the amount of money a customer buying goods and services are willing to pay for it.
3. Place: this represents the areas of distribution of these goods and services for easier access by the potential customers.
4. Promotions: for a good sales record or in order to increase the number of people buying a product and taking services, it is very important to have a good marketing communication such as advertising, sales promotion, direct marketing etc.
In this scenario, The Hopper Leg Winery from California's Sonoma Valley is trying to enter the wine market in France. To the company's surprise, it found that the France wine distribution channel was difficult to access as an outsider. Based on this, the market must have an exclusive distribution channel i.e the exclusive or unique rights to be a retailer for the supplier or manufacturer of the wine products.