Answer:
Explanation:
Let's first determine the free cash flow of the firm
Particulars Years
1 2 3
EBIT 540 680 750
Tax at 36% (0.36*540) (0.36*680) (0.36*750)
Less: 345.6 435.2 480
Net Capital -
Spending 150 170 190
Change in NWC 70 75 80
Less: 125.6 190.2 210
The terminal value at the end of T =(3 years) is:
[tex]= \dfrac{Free \ cash \ flow}{unlevered \ cost - expected \ growth \ rate}[/tex]
[tex]= \dfrac{250}{0.1643-0.04}[/tex]
[tex]= \dfrac{250}{0.1243}[/tex]
= 2011.26
Finally, the value of the firm can be computed as follows:
Years Free Cash Flow PVIF PV
1 125.6 0.6589 107.88
2 190.2 0.7377 140.31
3 210 0.6336 133.06
Terminal Value 2011.26 0.6336 1294.33
Value of the firm ⇒ $1655.58
The direct materials and direct labor budgets provide information for preparing the Group of answer choices sales budget. production budget. manufacturing overhead budget. cash budget.
Answer:
The correct answer is the last option: Cash budget.
Explanation:
To begin with, the term known as "Cash Budget" in the field of finances and business management refers to the type of budget that specifically focus on the estimation of the cash flows of the company in a particular amount of time. Therefore that this budget helps the organization to see how much of cash they are having and more importantly how it flows over a given period of time that could be either a week, a month or a year, etc. It is necessary to manage to a certain level of sales and control de expenditures in order to have a good cash flow which is monitored by the cash budget.
A user is working with the range titled "Emp_Info” as shown in the Excel file below.
outlander spices - table In cell C6, the user has typed in the function =VLOOKUP(A6,Emp_Info,5,false). If the user does a VLOOKUP using Employee ID E007, what should appear in cell C6?
A. East
B. 000-78-8906
C. Accounts
D. Melissa James
Answer:
C. Accounts
Explanation:
Took the test
Multiple Choice Questions _which level of management is responsible for establishing a vision for the organization, developing broad plans and strategies and directing of an organization set by executives?
Answer: Executive manager (Top manager)
Explanation:
Answer:
Top Level Managment
Explanation:
The level of management at which the managers are responsible for implementing and controlling the plans and strategies of the organization is Top Level Management. The top level managers are responsible to formulate plans and policies to achieve the set of organizational objectives.
A cost-of-living adjustment clause: a. is required in all government employee contracts. b. forces an employer to increase wages at the same rate of inflation. c. is not allowed for private employees. d. states that no raise can be less than the rate of inflation. e. forces an employer to increase wages at a rate higher than inflation.
Answer:
b. forces an employer to increase wages at the same rate of inflation
Explanation:
In the case when the employer wants to rise the wages but it would be increased at the similar inflation rate so this represent the clause of the living cost adjustment also the living cost adjustment would remain the same
Therefore according to the given situation, the option b is correct
And, the rest of the solutions are wrong
ellie has been working for an engineering firm and earning an annual salary of 80000 she decides to open her own engineering business her annual expenses will be
Answer:
A $185,700 revenue will yield Ellie's business $50,000 in economic profits.
Explanation:
Here is the complete question :
Ellie has been working for an engineering firm and earning an annual salary of $80,000. She decides to open her own engineering business. Her annual expenses will include $15,000 for office rent, $3,000 for equipment rental, $1,000 for supplies, $1,200 for utilities, and a $35,000 salary for a secretary/bookkeeper. Ellie will cover her start-up expenses by cashing in a $20,000 certificate of deposit on which she was earning annual interest of $500. Which of the following statements is correct?
A $185,700 revenue will yield Ellie's business $50,000 in economic profits. Ellie's annual accounting costs will equal $80,500.
A $185,700 revenue will yield Ellie's business $50,000 in accounting profits. Ellie's annual implicit costs will equal $55,200.
Accounting profit= total revenue - explicit cost
Explicit cost includes the amount expended in running the business.
They include rent , salary and cost of raw materials
Ellie's total explicit cost = office rent + rentals + supply + utilities + salary for a secretary
$15,000 + $3,000 + $1,000 + $35,000 + $1,200 = $55,200
If revenue is $185,700, accounting profit = $185,700 - $55,200 = $130,500
Economic profit = accounting profit - implicit cost
Implicit cost is the cost of the next best option forgone when one alternative is chosen over other alternatives
Ellie's implicit cost = $80,000 + $500 = $80,500
Economic profit = $130,500 - $80,500 = $50,000
Suppose you win the Publishers Clearinghouse $10 million sweepstakes. The money is paid in equal annual end-of-year installments of $333,333.33 over 30 years. If the appropriate discount rate is 5%, how much is the sweepstakes actually worth today
Answer:
the actual worth today is $5,124,150.29
Explanation:
The computation of the actual worth today is as follows:
= (Year end annual payments) ÷ (rate of interest) × (1 - (1 + rate of interest)^-time period
= ($333,333.33) ÷0.05 × (1 - (1 + 0.05)^-30
= $5,124,150.29
hence, the actual worth today is $5,124,150.29
The above formula should be applied
Larkspur, Inc. reports net income of $89,770 in 2017. However, ending inventory was understated by $7,100. Collapse question part (a) What is the correct net income for 2017
Answer:
$96,870
Explanation:
The understatement of ending inventory causes the cost of goods sold to be overstated and the gross and net income to be understated by the same amount.
If the 2017 ending inventory was understated by $7,100 then the correct net income figure for 2017 will be $7,1000 more that what was reported.
Therefore, 2017 corrected net income
= $89,770 + $7,100
= $96,870
In January, 2018, ABC. sells a gift card for $50 and receives cash. In February, 2018, the customer comes back and spends $20 of their gift card on a water bottle. What would be the appropriate journal entry for the purchase of the water bottle?3
Answer and Explanation:
The journal entry to record the purchase of the water bottle is shown below:
Deferred Revenue $20
To Sales Revenue, $20
(being the purchase of the water bottle is recorded)
The deferred revenue is debited as it decreased the liability and the sales revenue is credited as it increased the revenue
The above journal entry should be recorded
A similarity between monopoly and monopolistic competition is that in both market structures a. there are only a few buyers but many sellers. b. there are a small number of sellers. c. sellers are price makers rather than price takers. d. strategic interactions among sellers are important.
Answer:
c
Explanation:
A monopolistic competition is when there are many firms selling differentiated products in an industry. A monopolistic competition has characteristics of both a monopoly and a perfect competition. the demand curve is downward sloping. it sets the price for its goods and services.
An example of monopolistic competition are restaurants
When firms are earning positive economic profit, in the long run, firms enter into the industry. This drives economic profit to zero
If firms are earning negative economic profit, in the long run, firms leave the industry. This drives economic profit to zero
in the long run, only normal profit is earned
A monopoly is when there is only one firm operating in an industry. there are usually high barriers to entry of firms. the demand curve is downward sloping. it sets the price for its goods and services.
An example of a monopoly is a utility company
A price maker is a seller that sets the price for its goods and services. A monopoly and a monopolistic competition are price makers
Indi and Indrani are sisters who own a software development company. Demand has been increasing for their products and services and the sisters are contemplating whether to open up a satellite office in Austin. They estimate it would add $7 million in expenses and a profit of $12.5 million in total over the next 5 years (all other things equal). Indi and Indrani decide
Answer:
open an new office because the expected marginal benefit ($12.5 million over 5 years) is greater than the estimated marginal cost ($7 million)
Explanation:
The computation is shown below;
Given that
Total marginal benefit = 12.5 million
And, the Total marginal cost = 7 million
Based on the above information
We can see that the new office should be opened as the marginal benefit would be more than the marginal cost
Therefore the first option is correct
And, the rest of the options would be incorrect
A lease is a contract between a tenant and a __________ Response area. Most leases are for Response area __________ months.
ones Company elected to use the cumulative earnings approach for distributions from its equity-method investment purchased at the beginning of 20X1. During 20X1, Jones earned $200,000 on the investment and received $210,000 in dividends. In the operating activities section of the statement of cash flows prepared under the direct method, Jones reports dividends of: Multiple Choice
Answer: $210,000
Explanation:
The cash flow statement deals with actual cash being transacted. If the company received $210,000 in dividends, this came as actual cash and will therefore be the amount recorded as being received as dividends under the operating activities section of the cash flow statement.
Return on investment is usually an unrealized figure which means that it is a non-cash transaction and so will not reflect in the cashflow statement.
Currently Digby is paying a dividend of $16.13 (per share). If this dividend stayed the same, but the stock price rose by 10% what would be the dividend yield
Answer: 14.66%
Explanation:
Dividend yield = Dividend / Share price
The dividend being paid is $16.13 per share. As there is no share price given, I shall assume that the share price is $100. The new share price will be:
= 100 * (1 + 10%)
= $110
The Dividend yield would then become:
= 16.13 / 110
= 14.66%
(Use the above method and the share price in the question to find the specific answer to your question).
When an interviewer says, “Tell me about yourself,” you should feel free to talk openly about your personal life.
False
True
Answer:
False
Explanation:
You should tell them about your personality and how others see you. Take for example your strengths and weaknesses as a person, or about your traits. If they ask you about your personal life keep it brief, they don't need too much info about that rather a small aspect of it.
Answer:
TRUE
Explanation:
Sarratt Corporation contribution margin ratio is 75% and its fixed monthly expenses are $55,000. Assume that the company's sales for May are expected to be $114,000. Required: Estimate the company's net operating income for May, assuming that the fixed monthly expenses do not change.
Answer:
$30,500
Explanation:
Given that;
Sales revenue = $114,000
Variable costs = $114,000 × (1 - 75%)
= $114,000 × 0.25
= $28,500
Fixed costs = $55,000
Therefore, net operating income = Sales revenue - Variable costs - Fixed costs
= $114,000 - $28,500 - $55,000
= $30,500
The estimated net operating income for May is $30,500
Which performance management evaluation criterion reflects the extent to which a performance measure assesses all the relevant - and only the relevant - aspects of performance
Answer:
E. Validity
Explanation:
This are options for the question
A. Reliability
B. Strategic congruence
C. Acceptability
D. Specificity
E. Validity
Performance evaluation can be regarded as process whereby manager or consultant carry out examination or evaluatation of an employee's work behavior through comparisons of it with preset standards, then the results of the comparison is documentd and uses to provide feedback to the employees and point where improvements are needed as well as reason why. Validity which is one of criterion for performance management evaluation gives reflection of the extent that a performance measure is been assessed with all the relevance aspects of performance
New shoes are on SALE. You find a pair you like for $85 dollars. But you only have $45 with you. So, you pay $40 and
Answer:
Explanation:Answer:
The balance amount owned in six months is $ 46.8
Explanation:
Given as :
The price of new shoes = $85
The amount paid for the shoes = $ 40
The balance amount for the shoes = $85 - $40 = $ 45
The rate of interest = 8%
the time period = 6 months = 0.5 years
From simple method
Simple interest =
or, Simple interest =
Or, Simple interest = = $1.8
So, Amount = Principal + Interest
or, Amount = $45 + $1.8 = $ 46.8
Xavier Co. wants to purchase a machine for $36,600 with a four year life and a $1,200 salvage value. Xavier requires an 8% return on investment. The expected year-end net cash flows are $11,600 in each of the four years. What is the machine's net present value
Answer:
$2702.71
Explanation:
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
Cash flow in year 0 = $-36,600
Cash flow in year 1 - 3 = $11,600
Cash flow in year 4 = $11,600 + $1,200
I = 8%
NPV = 2702.71
To find the NPV 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
Marsh Company had 150 units of product A on hand at January 1, year 2, costing $21 each. Purchases of product A during the month of January were as follows: Units Unit cost Jan. 10 200 $22 18 250 23 28 100 24 A physical count on January 31, year 2, shows 250 units of product A on hand. The cost of the inventory at January 31, year 2, under the LIFO method is
Answer:
$5,850
Explanation:
Calculation to determine what The cost of the inventory at January 31, year 2, under the LIFO method is
Using this formula
Cost of inventory= January 28 units * Cost per unit + Remaining units *Cost per unit
Let plug in the formula
Cost of inventory= 100 units * $24 + 150 units *$23
Cost of inventory= $2,400 + $3,450
Cost of inventory= $5,850
Therefore The cost of the inventory at January 31, year 2, under the LIFO method is $5,850
Indicate the effect each separate transaction has on investing cash flows. (Amounts to be deducted should be indicated with a minus sign.)
a. Sold a truck costing $40,000, with $22,000 of accumulated depreciation, for $8,000 cash. The sale results in a $10,000 loss.
b. Sold a machine costing $10,000, with $8,000 of accumulated depreciation, for $5,000 cash. The sale results in a $3,000 gain.
c. Purchased stock investments for $16,000 cash. The purchaser believes the stock is worth at least $30,000.
Answer:
a. Increase $8,000
b. Increase $5,000
c. Decrease $16,000
Explanation:
We focus on Investment Activities only
Sale of a Truck
Sale of a Machine
Purchase of Stock Investment
reasons why managers may be reluctant to participate fully in setting budgets??
Answer:
Some managers are reluctant to participate in budgeting because they do not like to discuss financial matters. They may also feel like developing a budget stops flexibility.
Managers may be reluctant to fully participate in setting budgets due to several reasons. First, they may fear that by actively participating, they will be held accountable for meeting the budget targets, leading to increased pressure and scrutiny.
Second, managers may have limited knowledge or experience in financial matters, making them hesitant to engage in budgeting discussions. Third, they may perceive budgeting as a time-consuming process that distracts them from their primary responsibilities.
Additionally, managers might have concerns that their departmental needs and priorities will not be adequately considered, resulting in inadequate resource allocation. Overall, these factors can contribute to their reluctance to actively engage in the budgeting process.
Learn more about budgets here
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Over the past several years, the beverage industry has been rapidly changing. New drinks are constantly being invented, and more and more companies are looking to market healthy drinks, with less sugar and fewer artificial sweeteners. This type of environment demands that a company have a structure that is more:
Answer:
Flexible
Explanation:
Flexible organisational structure is one that is informal and lacks management layers (flat structure).
This helps an organisation make decisions faster without waiting for approval at various levels of heirachy or departments within the organisation.
In the given scenario new drinks are constantly being invented, and more and more companies are looking to market healthy drinks, with less sugar and fewer artificial sweeteners.
Quick decisions on product change are needed and this is provided for by the flexible organisation structure.
On August 5, 2021, Wildhorse Furniture shipped 30 dining sets on consignment to Furniture Outlet, Inc. The cost of each dining set was $320 each. The cost of shipping the dining sets amounted to $1710 and was paid for by Wildhorse Furniture. On December 30, 2021, the consignee reported the sale of 20 dining sets at $820 each. The consignee remitted payment for the amount due after deducting a 5% commission, advertising expense of $570, and installation and setup costs of $750. The total profit on units sold for the consignor is
Answer:
$6,150
Explanation:
Calculation to determine what The total profit on units sold for the consignor is
Total profit=[ (20)×($820 - $320 )] - (20 × $820)(.05) - $1,710 - $570 - $750
Total profit=(20*$500)-($16,400*.05)-$1,710-$570-750
Total profit=$10,000-$820-$1,710-$570-750
Total profit=$6,150
Therefore The total profit on units sold for the consignor is $6,150
Geraldine, an attorney, rendered legal services in organizing an oil and gas partnership in the current year. Instead of submitting a bill for her services. Geraldine accepted a 10% capital interest in the partnership. Geraldine's normal charge for the services performed would have been $10,000. The fair market value of the 10% interest received by Geraldine was $12,000. How much should Geraldine report on her current year's income tax return
Answer:
Geraldine
The amount that Geraldine should report on her current year's income tax return as income from the above exchange is:
= $10,000.
Explanation:
a) Data and Calculations:
Geraldine's normal charge for the services performed = $10,000
The fair market value of the 10% interest received by Geraldine = $12,000
Geraldine's partnership interest = 10%
This is because $10,000 is also her basis in the partnership interest and not $12,000 the fair market value of the 10% interest.
The following information for Cooper Enterprises is given below: December 31, 2021Assets and obligations Plan assets (at fair value) $600,000 Accumulated benefit obligation 1,110,000 Projected benefit obligation 1,200,000Other Items Pension asset / liability, January 1, 2021 30,000 Contributions 360,000 Accumulated other comprehensive loss 503,700 There were no actuarial gains or losses at January 1, 2021. The average remaining service life of employees is 10 years. What is the amount that Cooper Enterprises should report as its pension liability on its balance sheet as of December 31, 2021
Answer:
$600,000
Explanation:
Calculation to determine the amount that Cooper Enterprises should report as its pension liability on its balance sheet as of December 31, 2021
Using this formula
Pension liability = Projected benefit obligation - plant asset at fair value
Let plug in the formula
Pension liability = $1,200,000 - $600,000
Pension liability = $600,000
Therefore the amount that Cooper Enterprises should report as its pension liability on its balance sheet as of December 31, 2021 is $600,000
Social Security Multiple Choice Is a Defined Benefit Pension Plan Is offered by local governments Is an optional Pension Plan Is a Defined Contribution Pension Plan g
Answer:
In simple words, Retired, incapacity, as well as survivor payments are all part of the Social Security program. In its nature, it is very much like a defined benefit pension plan.
Most employees contribute Social Security levies on their income to apply for many of these claims; claimants' advantages are dependent on the wages earner's payments. Aside from that, benefits like Supplemental Security Income (SSI) are dependent on use.
SegR-7268 Corporation has two divisions, East and West. The following information was taken from last year's income statement segmented by division: East Division West Division Sales $3,700,000 $2,300,000 Contribution margin $1,650,000 $1,000,000 Divisional segment margin $1,100,000 $350,000 Net operating income last year for SegR-7268 Corporation was $600,000. In last year's income statement segmented by division, what were SegR-7268's total common fixed expenses?
a. $2,050,000
b. $850,000
c. $2,300,000
d. $1,200,000
Answer:
b. $850,000
Explanation:
Divisional Segment Margin = $1,100,000 + $350,000
Divisional Segment Margin = $1,450,000
Net Operating Income = $600,000
Common fixed expenses = Divisional Segment Margin - Net Operating Income
Common fixed expenses = $1,450,000 - $600,000
Common fixed expenses = $850,000
So, SegR-7268's total common fixed expenses will be $850,000.
Net credit sales $120,000 Average accounts receivable 20,000 Cash collections on credit sales 100,000 What is the receivables turnover ratio
Answer:
6:1
Explanation:
Net credit sales is $120,000
Account receivable is $20,000
Cash collection on credit sales is $100,000
.
Therefore the receivables turnover ratio can be calculated as follows
= 120,000/20,000
= 6:1
Hence receivable turnover ratio is 6:1
An outside supplier has offered to make the part and sell it to the company for $29.80 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including the direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company, none of which would be avoided if the part were purchased instead of produced internally. In addition, the space used to make part U16 could be used to make more of one of the company's other products, generating an additional segment margin of $25,000 per year for that product. The annual financial advantage (disadvantage) for the company as a result of buying part U16 from the outside supplier should be:
Answer:
-$79000
Explanation:
The computation of the annual financial advantage (disadvantage) is shown below;
Particulars Per unit Total 13000 units
Make Buy Make Buy
Direct materials 2.90 37700
Direct labor 7.50 97500
Variable manufacturing
overhead 8.00 104000
Supervisor's salary 3.40 44200
Contribution margin 25000
Purchase cost 29.80 387400
Total 308400 387400
Now the finacial disadvantage is
= 308400 - 387400
= -$79000
Daniel was surprised his store ran out of marshmallows so quickly. This typically does not happen during the spring, so he runs a(n) ________ to gather unplanned information to support if he should stock up on marshmallows.
Answer:
Ad-hoc report
Explanation:
From the question we are informed about how Daniel was surprised his store ran out of marshmallows so quickly. This typically does not happen during the spring, so in this case, he runs an Ad-hoc report to gather unplanned information to support if he should stock up on marshmallows.
Ad hoc report can be regarded as
a report that is created just for a one-time-use I e for a specific purpose.
With the use of BI tool there is possibility of anyone in an organization answering a specific business question and give presentation of that data in a visual format, even without given IT staff problems, Ad hoc report is different from structured report.