Answer: d. 0.91%
Explanation:
Farmers Bank
Effective annual rate is calculated with the formula:
= (1 + Rate / number of compounding period in a year) ^ number of compounding periods in a year - 1
= ( 1 + 5%/4 quarters) ⁴ - 1
= 5.09%
Merchants bank's rate is already an annual figure so there is no need for conversion.
Difference is:
= 6% - 5.09%
= 0.91%
Concord Corporation reported the following information for 2016: October November December Budgeted sales $430000 $400000 $510000 Budgeted purchases $210000 $226000 $258000 Cost of goods sold is 35% of sales. Concord purchases and pays for merchandise 60% in the month of acquisition and 40% in the following month. Accounts payable is used only for inventory acquisitions. How much is the budgeted balance for Accounts Payable at October 31, 2016? $84000 $126000 $216000 $90400
Answer:
a. $84,000
Explanation:
Given, credit purchases are 40% of the sales, will be collected in the following month
Credit purchase = Budgeted purchase * 40%
Credit purchase = $210,000 * 40%
Credit purchase = $84,000
So, the budgeted balance for Accounts Payable at October 31, 2016 is $84,000.
Pagemaster Enterprises is considering a change from its current capital structure. The company currently has an all-equity capital structure and is considering a capital structure with 30 percent debt. There are currently 2,150 shares outstanding at a price per share of $70. EBIT is expected to remain constant at $20,000. The interest rate on new debt is 10 percent and there are no taxes. a.Rebecca owns $30,100 worth of stock in the company. If the firm has a 100 percent payout, what is her cash flow
Answer:
Pagemaster Enterprises and Rebecca
If the firm has a 100 percent payout, Rebecca's cash flow is:
= $3,097.
Explanation:
a) Data and Calculations:
Outstanding shares = 2,150
Current price of shares = $70 per share
Market value of outstanding shares = $150,500 ($70 * 2,150)
Debt = 30% of $150,500 = $45,150
Equity = 1- 0.30 = 0.70 or 70%
Interest rate on new debt = 10%
Interest expense = $4,515 ($45,150 * 10%)
EBIT = $20,000
Interest (4,515)
EBT = $15,485
Dividend payout ratio = 100%
Rebecca's investment value = $30,100 = 20% ($30,300/$150,500 * 100)
Therefore, Rebecca's cash flow = $3,097 (20% of $15,485)
$82 Using the incremental method, what amount of revenue will be allocated to Math Fun in the package that contains all three products
Answer:
$28.62
Explanation:
Calculation to determine what amount of revenue will be allocated to Math Fun in the package that contains all three products
First step is to calculate the Total revenue of three product if sold individually
Total revenue= $21 + $37 + $48
Total revenue= $106
Now let calculate the allocation of revenue to Math fun based on revenue proportion
Using this formula
Revenue allocation= Packaged revenue / Total individually revenue * Revenue of Math fun
Let plug in the formula
Revenue allocation= $82/106*37
Revenue allocation= $28.62
Therefore the amount of revenue that will be allocated to Math Fun in the package that contains all three products is $28.62
g On January 1, 2019, plant assets, net are $190,000. On December 31, 2019, plant assets, net are $290,000. Depreciation expense for the year is $20,000. During the year, plant assets were acquired for $155,000 with cash. There is a Gain on sale of plant asset of $10,000. What are the cash proceeds from the sale of the plant asset
Answer:
$45,000
Explanation:
Given the equation below,
Total beginning net book value of plant assets + Total plant assets purchased during that period - Total depreciation recorded of plant assets during that period - Net book value of plant assets sold during the period = Net closing book value of plant assets
Hence, we have
$190,000 - $20,000 + $155,000 - Net book value of plant assets sold during the period = $290,000
Net boom value of plant sold during the period = $35,000
We also have the equation below;
Sales proceed - Net book value of plant assets sold during the period = Gain(loss) on disposal of assets
Sales proceed - $35,000 = $10,000
Sales proceed = $10,000 + $35,000
Sales proceed = $45,000
Oriole Company purchased for $8,767,800 a mine that is estimated to have 48,710,000 tons of ore and no salvage value. In the first year, 2,830,000 tons of ore are extracted. (a1) Calculate depletion cost per unit. (Round answer to 2 decimal places, e.g. 0.50.) Depletion cost per unit $enter the depletion cost per ton amount in dollars per ton
Answer:
the depletion cost per unit is $0.18 per ton
Explanation:
The computation of the depletion cost per unit is shown below;
We know that
Depletion cost per ton is
= (Total cost - salvage value) ÷ total estimated units
= ($8,767,800 - $0) ÷ 48,710,000
= $0.18 per ton
Hence, the depletion cost per unit is $0.18 per ton
we simply applied the above formula so that the depletion cost per ton could come
Suppose that California Co., a U.S. based MNC, seeks to capitalize a difference in interest rates between euros and British pounds via the use of a carry trade. In particular, after 1 month, funds invested in euros will yield a 0.50% percent return, while funds invested in pounds will yield a return of 2.00% percent. Currently the spot rate of the British pound is $1.00 while the spot rate of the euro is $0.80. In other words, the pound is worth 1.25 euros. California Co. expects these spot rates to remain constant over the next month.
After 1 month, California Co. now has 612,000 pounds after investing their converted pounds. However, it is now time for California Co. to repay the 500,000 euro loan. If California Co. borrowed these euros at the prevailing rate of 0.50% percent, they must repay a total of ______________ euros. At the cross rate of 1.25, this repayment is equivalent to pounds. Thus, after repaying the loan, California Co. will have ___________ pounds.
Answer: See explanation
Explanation:
The loan repayment of the 5000 euros after one month will be:
= 500,000 × (1 + .5%)
= 500,000 × 1.0005
= 502,500
Converting 502500 euros to pounds will be:
= 502500/1.25
= 402,000
Therefore, the pounds remaining will be:
= 612,000 - 402,000
= 210,000 pounds
If California Co. borrowed these euros at the prevailing rate of 0.50% percent, they must repay a total of (502500 euros). At the cross rate of 1.25, this repayment is equivalent to (402,000) pounds. Thus, after repaying the loan, California Co. will have (210,000) pounds.
enjing purchases a bond for $2,000 with 12 remaining $40 quarterly coupon payments. The bond broker who sells her the bond reassures her that she will earn a return of 3% per quarter but does not disclose the bond's par value. What par value would result in the return the bond broker promises
Answer:
Wenjing
The par value that would result in the return the bond broker promises is:
= $1,333.
Explanation:
a) Data and Calculations:
Bond amount paid = $2,000
Quarterly coupon payments = $40
Remaining coupon payments = 12
Bond maturity period = 3 years (12/4)
Promised returns per quarter = 3%
The implication is that the bond's annual interest rate = 12% (3% * 4 quarters)
Par value of bond = Quarterly premium/Quarterly returns in percentage = $1,333 ($40/0.03)
Check this out: 3% of $1,333 = $40
Bob listened to a new song and did not like it at all. Shortly thereafter, this song was used by a company as its new advertising jingle, and the song was played over and over, so Bob was repeatedly exposed to the song. You would expect Bob
Answer:
I would expect Bob to complain to the businesses owner that the song is driving him crazy
Explanation:
:)
MAD Inc. has a capital structure consisting of 40 percent debt and 60 percent common equity financing. The company has $400 million in net income and plans to pay out 25 percent of their earnings as dividends. What is the maximum amount of new financing that the company can raise without selling new common stock
Answer:
$500 million
Explanation:
Retained earnings = Income * (1 - Dividend payout percentage)
Retained earnings = $400 million * (1-0.25)
Retained earnings = $400 million * 0.75
Retained earnings = $300 million
Amount that can be raise without selling new stock: Retained earnings / % of equity financing in total capital
= $300 million / 60%
= $300 million / 0.60
= $500 million
Recording Transactions Affecting Stockholders’ Equity
King Corporation began operations in January 2014. The charter authorized the following capital stock:
Preferred stock: 10 percent, $10 par, authorized 40,000 shares
Common stock: $5 par, authorized 85,000 shares
During 2014, the following transactions occurred in the order given:
a. Issued 22,000 shares of common stock to each of the three organizers and collected $9 cash per share from each of them.
b. Sold 9,000 shares of the preferred stock at $20 per share.
c. Sold 1,000 shares of the preferred stock at $20 and 2,500 shares of common stock at $10 per share.
Required:
Give the journal entries indicated for each of these transactions.
Answer:
King Corporation
Journal Entries:
a. Debit Cash $594,000
Credit Common stock $330,000
Credit Additional Paid-in Capital- Common $264,000
To record the issuance of 22,000 shares of common stock to each of the three organizers at $9 per share.
b. Debit Cash $180,000
Credit 10% Preferred stock $90,000
Credit Additional Paid-in Capital - Preferred $90,000
To record the issuance of 9,000 shares of the preferred stock at $20 per share.
c. Debit Cash $45,000
Credit 10% Preferred stock $10,000
Credit Additional Paid-in Capital- Preferred $10,000
Credit Common stock $12,500
Credit Additional Paid-in Capital-Common $12,500
To record the issuance of 1,000 shares of the preferred stock at $20 and 2,500 shares of common stock at $10 per share.
Explanation:
Data and Analysis:
a. Cash $594,000 Common stock $330,000 Additional Paid-in Capital- Common $264,000
22,000 shares of common stock to each of the three organizers and collected $9 cash per share from each of them.
b. Cash $180,000 10% Preferred stock $90,000 Additional Paid-in Capital - Preferred $90,000
9,000 shares of the preferred stock at $20 per share.
c. Cash $45,000 10% Preferred stock $10,000 Additional Paid-in Capital- Preferred $10,000 Common stock $12,500 Additional Paid-in Capital-Common $12,500
1,000 shares of the preferred stock at $20 and 2,500 shares of common stock at $10 per share.
Your opinion is that CSCO has an expected rate of return of 0.15. It has a beta of 1.3. The risk-free rate is 0.04 and the market expected rate of return is 0.115. According to the Capital Asset Pricing Model, this security is
Answer:
Overpriced
Explanation:
The computation is shown below;
As we know that
Expected rate of return = risk free rate + beta × ( expected market rate of return - risk free rate )
= 0.04 + 1.3 × (0.115 - 0.04)
= 0.1375
As the return of the security is 0.1375 i.e. more than the expected rate of return i.e. 0.115
Hence, it is overpriced
A firm currently has a 43 day cash cycle. Assume that the firm changes its operations such that it increases its receivables period by 2 days, decreases its inventory period by 1 day and increases its payables period by 3 days. What will the length of the cash cycle be after these changes
Answer:
41 days
Explanation:
Calculation to determine What will the length of the cash cycle be after these changes
Using this formula
Cash cycle Length=Cash cycle+Increases in receivables period -Decreases in inventory period -Increases in payables period
Let plug in the formula
Cash cycle Length = 43 days+2 days -1 days - 3 days
Cash cycle Length= 41 day
Therefore What will the length of the cash cycle be after these changes is 41 days
Does anyone know how much netflix Approximately pay for a movie to be on netflix ?
Answer:
Depends on the ranking
Explanation:
The 10-year bond of Crown Electronics is selling at $960 each. The bond has a coupon rate of 8% and par value of $1,000. The firm will incur a $20 flotation cost for each bond issued. If the firm's tax rate is 40%, what is the after tax-cost of the firm's debt
Answer: 5.36%
Explanation:
The after-tax cost of debt refers to the interest that is paid on debt which is then less the income tax savings as a result of the deductible interest expenses.
When calculating the after-tax cost of debt, the effective tax rate of a company should be subtracted from 1, after which the difference will be multiplied by the cost of debt. This will therefore be:
= Rate (10,8% × 1000, -960 + 20, 1000) × (1-40%)
=5.36%
Which factors are considered when deciding how to make goods and services?
Answer:
determining who has the greatest need
finances of prospective buyers(X)
methods traditionally used to make a good
ways to produce items at a lower cost or higher quality (X)
ways to make the biggest profit (X)
Explanation:
Flint Corporation issues $440,000 of 9% bonds, due in 9 years, with interest payable semiannually. At the time of issue, the market rate for such bonds is 10%. Click here to view factor tables. Compute the issue price of the bonds
Answer:
$414,282.91
Explanation:
The issue price of the bonds is also known as the Present Value (PV) or current price of the Bonds and is calculated as :
FV = $440,000
PMT = ($440,000 x 9%) ÷ 2 = $19,800
P/yr = 2
N = 9 x 2 = 18
I/yr = 10%
PV = ?
Using a Financial calculator to input the values as above, the PV or issue price will be $414,282.91
A stock is expected to return 8% in a normal economy, 12% if the economy booms, and lose 3% if the economy moves into a recessionary period. Economists predict a 56% chance of a normal economy, a 25% chance of a boom, and a 19% chance of a recession. The expected return on the stock is __%.
Answer: 6.91%
Explanation:
Expected return = Sum of (Probability of state of economy * Return given state of economy)
= (56% * 8%) + (12% * 25%) + (19% * -3%)
= 4.48% + 3% - 0.57%
= 6.91%
A maker of computer games expects to sell games at a price of per game. These units cost to produce. Selling, general, and administrative expenses are million and depreciation is . What is the EBIT break-even point for the number of games sold in this case?
Answer:
$33,684 units
Explanation:
Calculation to determine the EBIT break-even point for the number of games sold in this case
Using this formula
Units sold=(Selling, general, and administrative expenses+Depreciation)/(Price per game-Units cost)
Let plug in the formula
Units sold=($1,000,000+$280,000)/($48-$10)
Units sold = $1,280,000 / $38
Units sold= $33,684 units
Therefore the EBIT break-even point for the number of games sold in this case will be $33,684 units
Consider a trader who takes a long position in a six-month forward contract on the euro. The forward rate is $1.75 = €1.00; the contract size is €62,500. At the maturity of the contract the spot exchange rate is $1.65 = €1.00. A. The trader has lost $625. B. The trader has lost $6,250 C. The trader has made $6,250 D. The trader has lost $66,287.88
Answer:
B. The trader has lost $6,250
Explanation:
Calculation to determine the amount the trader has loss
First step
You will buy at $1.75 and spend= (1.75 × 62,500) You will buy at $1.75 and spend= $109,375
Second step
But you could buy and spend= (1.65 × 62,500)
But you could buy and spend= $103.125
Now let calculate the amount the trader has loss
Loss=$103,125 - $109,375
Loss = -$6,250
Therefore The trader has lost $6,250
Cromartie Ltd. prepares its financial statements according to International Financial Reporting Standards. During 2021 the company incurred $1,245,000 in research expenditures to develop a new product. An additional $756,000 in development expenditures were incurred after technological and commercial feasibility was established and after the future economic benefits were deemed probable. The project was successfully completed and the new product was patented before the end of the 2021 fiscal year. Sale of the product began in 2020. What amount of the above expenditures would Cromartie expense in its 2021 income statement
Answer: $1,245,000
Explanation:
Going by IFRS standards, Research and Development Costs should be expensed as incurred so long as commercial feasibility has not been established.
Once this is established however, the costs after that are to be capitalized. In this scenario, the costs before feasibility are $1,245,000 so these costs are going to be expensed as periodic costs.
Which of the following statements about corporate governance in China is false? a. The state still uses direct and/or indirect controls to influence the strategies employed by most firms. b. The Chinese governance system may be tilting toward the Western model. c. Firms with higher state ownership tend to have lower market value and more volatility in those values over time. d. Private firms seek to establish political ties with the government to increase market value and avoid potential conflict between the principals.
Answer: D. Private firms seek to establish political ties with the government to increase market value and avoid potential conflict between the principals.
Explanation:
Corporate governance refers to a system of policies and rules, which dictate how the operations of an organization are manageed. The statements that are true about corporate governance in China include:
• The state still uses direct and/or indirect controls to influence the strategies employed by most firms.
• The Chinese governance system may be tilting toward the Western model.
• Firms with higher state ownership tend to have lower market value and more volatility in those values over time.
Therefore, the answer to the question will be option D as it's not true about corporate governance in China.
Why would an investor prefer purchasing bonds to purchasing stocks?
A. Unlike stocks, bonds are guaranteed to return a profit to the
investor.
B. Bonds are typically less risky than stocks.
O C. Unlike stocks, when an investor owns bonds, they own a tiny part
of the company
D. Bonds are more likely than stocks to make huge profits.
Answer:
B. Bonds are typically less risky than stocks.
Explanation:
Answer: B. Bonds are typically less risky than stocks
Explanation:a. p. e. x. (just took the test)
Jason and Katrina work on the loading dock for Longhaul Transport Company. Jason has a disability. Katrina has seniority. Jason asks for a transfer, which would represent an accommodation for his disability. Longhaul gives the transfer to Katrina on the basis of her seniority. Jason files a suit against Longhaul for discrimination on the basis of his disability. The court is most likely to rule that:___.
1. Jason’s disability is a sufficient basis for relief.
2. Katrina’s seniority is a good defense.
3. Longhaul’s action was a business necessity.
4. Longhaul’s action was a reasonable accommodation.
Answer:
Katrina's seniority is a good defense.
Explanation:
Industrial Jurisprudence
This is refered to as a system of rules and regulations that is used by labor and management fashion to show their specific employment rights and obligations in the work environment.
Seniority System
This is refered to as different rules and procedures usually within an agreement that shows the allocation of certain job situations including promotion, layoff and recall, as well as certain economic benefits based on length of service. This is application to many organizations.
Seniority
This very important measure of employee job security and it start with acquiring seniority on the date & time of hire (cannot be awarded until completion of probationary period).
Jason may lose the case as a result of the seniority system.
On January 1, 2021, Red Inc. issued stock options for 210,000 shares to a division manager. The options have an estimated fair value of $4 each. To provide additional incentive for managerial achievement, the options are not exercisable unless divisional revenue increases by 5% in three years. Red initially estimates that it is probable the goal will be achieved. Ignoring taxes, what is compensation expense for 2021
Answer:
$280,000
Explanation:
Fair value = $4
Options granted = 210,000 shares
Total compensation = Fair value*Options granted
Total compensation = $4 * 210,000
Total compensation = $840,000
Number of years = 3
Compensation per year = Total compensation / Number of years
Compensation per year = $840,000 / 3
Compensation per year = $280,000
Santana Rey, owner of Business Solutions, decides to diversify her business by also manufacturing computer workstation furniture.
Required:
1. Classify the following manufacturing costs of Business Solutions as (a) variable or fixed and (b) direct or indirect.
A. Monthly flat fee to clean workshop
B. Laminate coverings for desktops
C. Taxes on assembly workshop
2. Prepare a schedule of cost of goods manufactured for Business Solutions for the month ended January 31, 2018. Assume the following manufacturing costs:
Direct materials: $2,300
Factory overhead: $550
Direct labor: $1,200
Beginning work in process: none (December 31, 2019)
Ending work in process: $550 (January 31, 2020)
Beginning finished goods inventory: none (December 31, 2019)
Ending finished goods inventory: $320 (January 31, 2020)
3. Prepare the cost of goods sold section of a partial income statement for Business Solutions for the month ended January 31, 2018.
Answer:
Business Solutions
1. Costs Classification:
A. Monthly flat fee to clean workshop = fixed / indirect
B. Laminate coverings for desktops = variable / direct
C. Taxes on assembly workshop = fixed / indirect
2. A Schedule of Cost of Goods Manufactured:
Direct materials: $2,300
Factory overhead: $550
Direct labor: $1,200
Beginning work in process: 0
Ending work in process: (550)
Cost of goods manufactured $3,500
3. Cost of goods sold:
Beginning finished goods inventory: $0
Cost of goods manufactured $3,500
Ending finished goods inventory: $320
Cost of goods sold = $3,180
Explanation:
a) Data and Calculations:
Direct materials: $2,300
Factory overhead: $550
Direct labor: $1,200
Beginning work in process: none (December 31, 2019)
Ending work in process: $550 (January 31, 2020)
Beginning finished goods inventory: none (December 31, 2019)
Ending finished goods inventory: $320 (January 31, 2020)
b) Variable costs are input or direct costs that change with the level of output. Fixed costs are indirect costs that do not change based on the units produced.
The Neptune Company offers network communications systems to computer users. The company is planning a major investment expansion but is unsure of the cost of equity capital as it has no publicly-traded equity. Your assignment is to determine an appropriate equity cost. List and explain the steps you will need to take to complete this assignment.
Answer:
Collect estimates of beta for firms in the same businessExplanation:
A company projects an increase in net income of $135,000 each year for the next five years if it invests $900,000 in new equipment. The equipment has a five-year life and an estimated salvage value of $300,000. What is the annual rate of return on this investment
Answer:
the annual rate of return is 22.50%
Explanation:
The computation of the annual rate of return is shown below:
Average investment is
= ($900,000 + $300,000) ÷ 2
= $600,000
Now
Annual rate of return is
= Annual net income ÷ Average investment
= $135,000 ÷ $600,000
= 22.50%
hence, the annual rate of return is 22.50%
he exercise price equals the $4 market price of the common stock on the grant date. The options cannot be exercised before January 1, 2024, and expire December 31, 2025. Each option has a fair value of $1 based on an option pricing model. What is the total compensation cost for this plan
Answer:
$63,500
Explanation:
Missing word "Wall Drugs offered an incentive stock option plan to its employees. On January 1, 2021, options were granted for 63,500 $1 par common shares. The exercise price equals the $4 market price of the common stock on the grant date. The options cannot be exercised before January 1, 2024, and expire December 31, 2025. Each option has a fair value of $1 based on an option pricing model"
On January 1, 2021, options were granted for 84,000 $1 par common shares
The exercise price equals the $4 market price of the common stock on the grant date.
Each option has a fair value of $1 based on an option pricing model.
Total compensation cost for this plan = Estimated Fair value per option* Option granted
Total compensation cost for this plan = 63,500 * $1
Total compensation cost for this plan = $63,500
The cost of purchasing 310 trees and processing them up to the split-off point to yield 180,000 sheets of paper and 180,000 pencil casings is $12,500. Kenton's accounting department reported no beginning inventory. What is the total sales value at the split-off point for paper
Answer: $36000
Explanation:
You didn't complete the question but based on what I got online, the price was given as $0.20. Therefore, the total sales value at the split-off point for paper will be calculated as:
= Total sheets × Price
= 180000 × $0.20
= $36000
Therefore, the total sales value at the split-off point for paper is $36000
Vick Vickers has a large consulting practice. New clients are required to pay one-half of the consulting fees up front. The balance is paid at the conclusion of the consultation. How does Vickers account for the cash received at the end of the engagement
Answer:
Vick Vickers
Vickers accounts for the cash received at the end of the engagement by debiting Cash account and crediting Consulting Fees (Revenue).
Explanation:
Then the fees received upfront, which were earlier credited to the Deferred Service Revenue account, are then closed by a debit to the Deferred Service Revenue and a credit to the Consulting Fees (Revenue) account. This is in line with the double-entry system of financial accounting and the new Revenue from Contracts with Customers, IFRS 15 or the ASC 606 equivalent.