Answer:
Ayayai Corp.
Horizontal Analysis:
2020 Increase 2019
Net sales $632,600 $110,700 21.2% $521,900
Cost of goods sold 463,600 53,200 13.0% 410,400
Gross Profit 169,000 57,500 51.6% 111,500
Operating expenses 79,300 32,100 68.0% 47,200
Net income $ 89,700 25,400 39.5% $64,300
Explanation:
a) Data and Calculations:
AYAYAI CORP.
Comparative Income Statement For the Years Ended December 31
2020 2019
Net sales $632,600 $521,900
Cost of goods sold 463,600 410,400
Gross Profit 169,000 111,500
Operating expenses 79,300 47,200
Net income $ 89,700 $64,300
Percentage increase or decrease = (Increase/Decrease)/Base Year's Value
A job cost sheet of Sandoval Company is given below.
Job Cost Sheet
JOB NO. 469 Quantity 2,500
ITEM White Lion Cages Date Requested 7/2
FOR Todd Company Date Completed 7/31
Date Direct Direct Labor Manufacturing
Materials Labor Overhead
7/10 700
12 900
15 440 550
22 380 475
24 1,600
27 1,500
31 540 675
Cost of completed job:
Direct materials
Direct labor
Manufacturing overhead
Total cost
Unit cost
(1) What are the source documents for direct materials, direct labor, and manufacturing overhead costs assigned to this job?
Source Documents
Direct materials pixel.gifMaterials requisition slipsPredetermined overhead rateTime tickets
Direct labor pixel.gifMaterials requisition slipsPredetermined overhead rateTime tickets
Manufacturing overhead pixel.gifMaterials requisition slipsPredetermined overhead rateTime tickets
(2) What is the predetermined manufacturing overhead rate? (Round answer to 0 decimal places e.g 135.)
Predetermined manufacturing overhead rate pixel.gif %
(3) What are the total cost and the unit cost of the completed job? (Round unit cost to 2 decimal places, e.g. 1.25.)
Total cost of the completed job $pixel.gif
Unit cost of the completed job $pixel.gif
Answer:
A. Direct materials-Materials requisition slips
Direct labor-Time tickets
Manufacturing overhead- Predetermined overhead rate
B. 125%
C. Total cost $7,760
Unit cost $3.104
Explanation:
1. Based on the information given the source documents for direct materials, direct labor, and manufacturing overhead costs assigned to this job are :
Direct materials-Materials requisition slips
Direct labor-Time tickets
Manufacturing overhead- Predetermined overhead rate
2. Calculation to determine the predetermined manufacturing overhead rate
Predetermined overhead rate=$550/$440*100
Predetermined overhead rate=125%
Therefore the predetermined manufacturing overhead rate is 125%
3. Calculation to determine the total cost and the unit cost of the completed job
TOTAL COST
Direct Material $4, 700
($700 + $900 + $1,600 + $1,500)
Add Direct Labor $1,360
($440 + $380 + $540)
Add Manufacturing Overhead $1,700
($550 + $475 + $675)
Total Cost $7,760
UNIT COST
Unit cost= $7,760/ 2,500
Unit cost=$3.104
Therefore the total cost is $7,760 and the unit cost of the completed job is $3.104
determine your targetarket
Answer:
A target market refers to a group of customers to whom a company wants to sell its products and services, and to whom it directs its marketing efforts. Consumers who make up a target market share similar characteristics including geography, buying power, demographics, and incomes.
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Effect of accruals on the financial statements
Milea Inc. experienced the following events in 2016, its first year of operations:
1. Received $20,000 cash from the issue of common stock.
2. Performed services on account for $56,000.
3. Paid the utility expense of $2,500.
4. Collected $48,000 of the accounts receivable.
5. Recorded $10,000 of accrued salaries at the end of the year.
6. Paid a $2,000 cash dividend to the stockholders.
Required:
Record the events in general ledger accounts under an accounting equation.
Answer:
Assets = Liabilities + Stockholders’ Equity = $71,500
Explanation:
Note: See the attached excel file for how the events are recorded in general ledger accounts under an accounting equation.
From the attached excel file, we can obtain the following:
Assets = Total assets = $63,500 + $8,000 = $71,500
Liabilities = Total liabilities = $10,000
Stockholders’ Equity = Total Stockholders’ Equity = $20,000 + $41,500 = $61,500
Liabilities + Stockholders’ Equity = $10,000 + $61,500 = $71,500
Therefore, the accounting equation holds as follows:
Assets = Liabilities + Stockholders’ Equity = $71,500
A common stock just paid a dividend (D0) of $3.35 per share. Dividends are expected to rise at the rate of 10% per year forever. If the interest rate on this stock is 14% per year, what will the price of this stock be in Year 36?
A. $0.28
B. $12.56
C. $77.96
D. $388.26
E. $1,404.64
FCIA deduction consists of
Nordstrom, Inc. operates department stores in numerous states. Suppose selected financial statement data (in millions) for 2020 are presented below.
End of Year Beginning of Year
Cash and cash equivalents $750 $81
Accounts receivable (net) 2,060 1,810
Inventory 880 830
Other current assets 570 429
Total current assets $4,260 $3,150
Total current liabilities $2,060 $1,610
For the year, net credit sales were $8,258 million, cost of goods sold was $5,328 million, and net cash provided by operating activities was $1,251 million.
Required:
Compute the current ratio, current cash debt coverage, accounts receivable turnover, average collection period, inventory turnover, and days in inventory at the end of the current year.
Answer:
Nordstrom, Inc.
Current Ratio = Current assets/Current liabilities
= $4,260/ $2,060
= 2.1
Current cash debt coverage = Net Operating Cash/Current liabilities
= $1,251/$2,060
= 0.61
Accounts receivable turnover = Net Sales/Average Receivable
= $8,258/$1,935
= 4.27
Average collection period = 365/4.27
= 85.5 days
Inventory turnover = Cost of goods sold/Average inventory
= $5,328/$855
= 6.2 times
Days in inventory = 365/Inventory turnover
= 58.9 days
Explanation:
a) Data and Calculations:
End of Year Beginning of Year
Cash and cash equivalents $750 $81
Accounts receivable (net) 2,060 1,810
Inventory 880 830
Other current assets 570 429
Total current assets $4,260 $3,150
Total current liabilities $2,060 $1,610
Net credit sales = $8,258 million
Cost of goods sold = $5,328 million
Net operating cash = $1,251 million
Average receivables = $1,935 ($2,060 + $1,810)/2
Average inventory = $855 ($880 + $830)/2
RKJ Company has provided the following: 100,000 shares of $5 par value common stock are authorized 66,000 shares were issued 61,000 shares are outstanding. Which of the following statements is correct based only on the above facts?
A) Additional-paid in capital is reported at $112,000 on the balance sheet.
B) Treasury stock is reported at $35,000 on the balance sheet.
C) Common stock is reported at $462,000 on the balance sheet.
D) Common stock is reported at $330,000 on the balance sheet.
Answer: D) Common stock is reported at $330,000 on the balance sheet.
Explanation:
The value of the common stock in the balance sheet is calculated by:
= Shares issued * Par value
= 66,000 * 5
= $330,000
If the shares were sold for higher than the par value, the excess amount would go the Additional Paid-In capital.
On July 31, 2020, Vaughn Company had a cash balance per books of $6,132.05. The statement from Dakota State Bank on that date showed a balance of $7,748.15. A comparison of the bank statement with the Cash account revealed the following facts.
1. The bank service charge for July was $25.
2. The bank collected $1,720 for Keeds Company through electronic funds transfer.
3. The July 31 receipts of $1,297.50 were not included in the bank deposits for July. These receipts were deposited by the company in a night deposit vault on July 31.
4. Company check No. 2480 issued to L. Taylor, a creditor, for $391 that cleared the bank in July was incorrectly entered as a cash payment on July 10 for $319.
5. Checks outstanding on July 31 totaled $1,866.60.
6. On July 31, the bank statement showed an NSF charge of $576 for a check received by the company from W. Krueger, a customer, on account.
Required:
Prepare the bank reconciliation as of July 31.
Answer and Explanation:
The preparation of the bank reconciliation as of July 31 is presented below;
Cash balance as per bank statement $7,748.15
Add: deposit in transit $1,297.50
Less: outstanding checks $1,866.60
Adjusted cash balance per bank $7,179.05
Cash balance as per books $6,132.05
Add: electronic fund transfer received $1,720
Less: error ($391 - $319) -$72
Less: service charges - $25
Less: NSF charges - $576
Adjusted bank balance per books $7,179.05
Expansion of trade has made the nations of the world more
0isolated
0insensitive
O interdependent
O suspicious
PLZ AWNSER ASAP NEED IT IN 30 minutes
Answer:
O interdependent
Explanation:
Expansion is an activity to expand a business characterized by creating new markets, expanding facilitation, increasing the economy and growing the business world. The purpose of expansion is to become bigger or wider. Expansion will not occur if there are no interdependents, because cooperation is needed
Pharoah provides environmentally friendly lawn services for homeowners. Its operating costs are as follows.
Depreciation $1,500 per month
Advertising $450 per month
Insurance $3,330 per month
Weed and feed materials $20 per lawn
Direct labor $13 per lawn
Fuel $3 per lawn
Pharoah charges $80 per treatment for the average single-family lawn.
(a) Determine the company's break-even point in number of lawns serviced per month o per Break-even point lawns
(b) Determine the company's break even point in dollars.
Answer:
Results are below.
Explanation:
Giving the following information:
Advertising $450 per month
Insurance $3,330 per month
Total fixed costs= $3,780
Weed and feed materials $20 per lawn
Direct labor $13 per lawn
Fuel $3 per lawn
Total unitary varaible cost= $36
Selling price per unti= $80
To calculate the break-even point in units, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 3,780 / (80 - 36)
Break-even point in units= 86
Now, in dollars:
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 3,780 / (44 / 80)
Break-even point (dollars)= $6,873
Examples of successfulness of the competition policy in South Africa
Explanation:
By Kgomotso Ramotsho
The Competition Law Committee of the Law Society of the Northern Provinces held its last Annual Gala Breakfast in October 2018 in Johannesburg. The gala breakfast was organised and hosted by ENSafrica. Members of the panel discussed ‘Experiencing twenty years of competition practice’. The Competition Commission Commissioner, Tembinkosi Bonakele, said South Africa (SA) has challenges in the economic front and added that employment growth numbers were not impressive.
Mr Bonakele said this is a challenge and added that there can be talks about what the Competition Commission can contribute, however, there are concerns about the structure of the economy and concentration levels in the economy. He pointed out that another challenge, is with regards to developing competition experts. He said that SA could have done better in developing experts. He pointed out that when looking at who the experts are, the economic front is dominated by European experts, instead of local experts.
Mr Bonakele said it was easy for legal practitioners to make the transition into competition law. However, he added that another challenge is with economists. He said universities should produce a pool of economists that can help in the industry. Full-time member of the Competition Tribunal, Yasmin Carrim, added that the industry was not doing enough and that the pool of economists is small. She pointed out that it was not only up to universities to produce expert economists. She said the industry needed to grab the opportunity and utilise different strategies, such as giving practical training or internships to students, so that when they graduate they would have a sense of the work environment.
Full-time member of the Competition Tribunal, Yasmin Carrim, listed the quality of work done by competition law legal practitioners and economists in South Africa as one of the successes in the industry. She spoke at the last annual gala breakfast held in Johannesburg by the Competition Law Committee of the Law Society of the Northern Provinces.
Ms Carrim, however, said that from her personal experience, one of the successes in the industry has been the quality of work done by both legal practitioners and economists in the country. Mr Bonakele added that SA has made strides in establishing itself as a respected jurisdiction with locally developed practices and sharpened skills in the competition area, he noted that these were good signs. Judge President of the Competition Appeal Court, Dennis Davis, posed a question to Mr Bonakele with regards to work done by experts outside SA.
Mr Bonakele said the Competition Commission has relied on local experts. However, he pointed out that the issue is with the number of local experts. He noted that the country has knowledgeable experts even though they are few in numbers. He added that even though foreign experts are brought in to work in SA, they should team up with local experts as they understand the local conditions, they are open minded and are trained by the best in the world.
Kgomotso Ramotsho Cert Journ (Boston) Cert Photography (Vega) is the news reporter at De Rebus.
This article was first published in De Rebus in 2019 (Jan/Feb) DR 11.
ECB Co. has 1.25 million shares outstanding selling at $25 per share. It plans to repurchase 97,000 shares at the market price. What will be its market capitalization after the repurchase? What will be its stock price? The market capitalization after the repurchase is million. (Round to three decimal places.)
Answer:
Market cap = 28.825 million
Stock price = $25
Explanation:
Current outstanding shares = 1,250,000
Current price per share = $25
So, ECB current market cap = 1,250,000 × $25 = $31,250,000
Repurchase shares = 97,000
So repurchase value = 97,000 × $25 = $2,425,000
Hence, Market capitalization after repurchase = current market cap - repurchase value
= $31,250,000 - $2,425,000 = 28,825,000 or 28.825 million
Stock price = $25
You have been asked to estimate the market value of an income-producing property. The table below provides 5 years of projected cash flows for the property. Use the discounted cash flow approach to income valuation to calculate the market value. Assume that you sell the property at the end of year 5 and that the net proceeds from the sale are $5.0 million. Also assume that the discount rate is 7.5%.
Year 1 Year 2 Year 3 Year 4 Year 5
PGI $750,000 $780,000 $811,200 $843648 $877394
EGI $627500 $663000 $717,101 $689,520 $745785
NOI $318715 $331,500 $334,760 $358,550 $372,892
a. $4.18 million
b. $6.11 million
c. $4.12 million
d. $4.40 million
If we will assume that that the discount rate is 7.5%. then the answer is $4.18 million.
What is discount rate?The discount rate of return applied in corporate finance to reduce future cash flows to their present value is known as a discount rate. This rate is commonly a company's Weighted Average Cost of Capital (WACC), needed rate of return, or the minimum rate that investors hope to attain in order to assess the risk of the investment.
Seven annual free cash flow are received from the investment, each worth $100. An analyst uses a five percent hurdle rate to evaluate the investment's net present value, arriving with a value of $578.64. This contrasts with a whole cash flow of $700 that is not discounted.
Shareholders are essentially saying, "I don't care if I get $578.64 at once and today or $100 a year for 7 years." This claim takes into consideration the investor's perception of the investment's risk profile and a multiplier effect that indicates the earning potential on other investments.
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Super-Tees Company plans to sell 12,000 T-shirts at $16 each in the coming year. Product costs include: Direct materials per T-shirt $5.75 Direct labor per T-shirt $1.25 Variable overhead per T-shirt $0.60 Total fixed factory overhead $43,000 Variable selling expense is the redemption of a coupon, which averages $0.80 per T-shirt; fixed selling and administrative expenses total $19,000.
Required:
1. Calculate the following values Round dollar amounts to the nearest cent and round ratio values to three decimal places
a. Variable product cost per unit
b. Total variable cost per unit
c. Contribution margin per unit
d. Contribution margin ratio
e. Total fixed expense for the year ).
2. Prepare a contribution-margin-based income statement for Super- Tees Company for the coming year 1f required, round your per unit answers to the nearest cent Super-Tees Company Contribution-Hargin-Based Operating Income Statement For the Coming Year Per Unt
Answer: See explanation
Explanation:
1a. Variable product cost per unit = 5.75 + 1.25 + 0.60 = 7.60
b. Total variable cost per unit = 5.75 + 1.25 + 0.60 + 0.80 = 8.40
c. Contribution margin per unit = Selling price - Total Variable cost per unit
= 16 - 8.40
= 7.60
d. Contribution margin ratio = (7.6/16) × 100 = 47.5
e. Total fixed expense for the year = 43000 + 19000 = 62000
2. Price per unit. Total
Sales 16. 192000
Less: variable cost 8.40. (100800)
Less: cont. marg per unit (62000)
Net operating Income = 29200
What are the requirements for something to be used as money?
When inventories go down in value, accountants adjust the value of the inventory that is recorded on the balance sheet. Sometimes inventory goes up in value. Do accountant's ever adjust the value of inventory upwards? What are the general guidelines that accountant's follow in recording inventory value?
Answer:
Accountants do not adjust the value of inventory upwards. The general guidelines in recording inventory value are to recognize the ending inventory value at the lower of cost or market value and to ensure that transactions are recorded in accordance with the conservatism principle of generally accepted accounting principles.
Explanation:
The conservatism principle requires that all probable losses are recognized as soon as they can be reasonably estimated, while gains should be recognized only when they are fully realized. The lower of cost or market value (LCM) method states that inventory should be recorded at the lower of either the historical cost or the market value. The LCM is in line with the conservatism principle.
Splish Brothers Inc. gathered the following reconciling information in preparing its August bank reconciliation:______.
Cash balance per books, 8/31 $33600 Deposits in transit 1400 Notes receivable and interest collected by bank 8200 Bank charge for check printing 190 Outstanding checks 19200 NSF check 1630
The adjusted cash balance per books on August 31 is:_______.
a. $38580.
b. $22040.
c. $23580
d. $39980.
Answer:
d. $39,980
Explanation:
Given the above information, the adjusted cash balance per books on August 31
= Cash opening + Collection by bank - Bank charge check printing - NSF check
The next step is to fix in the values as given above.
= $33,600 + $8,200 - $190 - $1,630
= $39,980
Therefore, the adjusted cash balance per books on August 31 is $39,980
On September 11, 2016, Home Store sells a mower for $550 cash with a one-year warranty that covers parts. Warranty expense is estimated at 7% of sales. On July 24, 2017, the mower is brought in for repairs covered under the warranty requiring $39 in materials taken from the Repair Parts Inventory.
Prepare the September 11, 2016, entry to record the mower sale, and the July 24, 2017, entry to record the warranty repairs. (Round your answers to 2 decimal places.)
1. Record the mower sales.
2. Record the estimated warranty expense.
3. Record the cost of warranty repairs.
Answer:
2
Explanation:
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Economics question please help :))
Answer:
c 8 bushes of wheat
Explanation:
The following information is available for the XYZ Company for the month of July:
Static Budget Actual
Units 7,000 6,650
Sales revenue $60,000 $55,715
Variable manufacturing costs $15,000 $14,250
Fixed manufacturing costs $20,000 $17,000
Variable selling & administrative expense $10,000 $10,500
Fixed selling & administrative expense $15,000 $12,000
The total sales-volume variance for operating income for the month of July would be:__________
Answer:
XYZ Company
The total sales-volume variance for operating income for the month of July would be:__________
$3,765 Favorable
Explanation:
a) Data and Calculations:
Static Budget Actual
Units 7,000 6,650
Sales revenue $60,000 $55,715
Variable manufacturing costs $15,000 $14,250
Fixed manufacturing costs $20,000 $17,000
Variable selling & administrative exp. $10,000 $10,500
Fixed selling & administrative expense $15,000 $12,000
Flexible Budget Actual
Units 6,650 6,650
Sales revenue = $57,000($60,000/7,000 * 6,650) $55,715
Variable manufacturing costs = $14,300 ($15,000/7,000 * 6,650) $14,250
Fixed manufacturing costs $20,000 $17,000
Variable selling & administrative exp. =$9,500 ($10,000/7,000 * 6,650) $10,500
Fixed selling & administrative expense $15,000 $12,000
Flexible Budget Actual Variance
Units 6,650 6,650
Sales revenue $57,000 $55,715 $1,285 U
Variable manufacturing costs $14,300 $14,250 50 F
Fixed manufacturing costs $20,000 $17,000 3,000 F
Variable selling & administrative exp. $9,500 $10,500 1,000 U
Fixed selling & administrative expense $15,000 $12,000 3,000 F
Operating income ($1,800) $1,965 $3,765 F
A person states , The $100 billion program passed by Congress last week benefits thousands of people . " What
Answer:
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Explanation:
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Teal Mountain Industries produces a product that requires 2.6 pounds of materials per unit. The allowance for waste and spoilage per unit is 0.3 pounds and 0.1 pounds, respectively. The purchase price is $2 per pound, but a 2% discount is usually taken. Freight costs are $0.10 per pound, and receiving and handling costs are $0.07 per pound. The hourly wage rate is $12.00.00 per hour, but a raise which will average $0.30 will go into effect soon. Payroll taxes are $1.20 per hour, and fringe benefits average $2.40 per hour. Standard production time is 2.5 hour per unit, and the allowance for rest periods and setup is 0.1 hours and 0.2 hours, respectively. The standard direct materials price per pound is:______.
Answer:
$2.127.
Explanation:
According to the scenario, computation of the given data are as follows,
Purchase price per pound = $2
Freight (Add) = $0.10
Handling cost (Add) = $0.07
Total cost = $2.17
Discount (Less) = (2% × $2.17) = $0.043
Direct material price = $2.127
Hence, standard direct materials price per pound is $2.127.
MARIN INC. Income Statement For the Year Ended December 31, 2020
Sales revenue $425,500
Cost of goods sold 240,400
Gross profit 185,100
Expenses (including $12,000 interest and $26,000 income taxes) 75,400
Net income $109,700
Additional information:
1. Common stock outstanding January 1, 2022, was 26,300 shares, and 36,100shares were outstanding at December 31, 2022.
2. The market price of Marin stock was $14 in 2022.
3. Cash dividends of $24,000 were paid, $3,600 of which were to preferred stockholders.
Compute the following measures for 2022:
a. Earnings per share
b. Price-earnings ratio
c. Payout ratio
d. Times interest earned
Answer:
MARIN INC.
a. Earnings per share = $106,100/36,100 = $2.94
b. Price-earnings ratio = $14/$2.94 = 4.76 times
c. Payout ratio = $20,400/$106,100 = 0.19
d. Times interest earned = EBIT/Interest expense
= ($185,100 - $37,400)/$12,000
= $147,700/$12,000
= 12.31 times
Explanation:
A) Data and Calculations:
MARIN INC. Income Statement For the Year Ended December 31, 2020
Sales revenue $425,500
Cost of goods sold 240,400
Gross profit 185,100
Expenses:
Operating expenses $37,400
Interest $12,000
Income taxes $26,000
Total expenses 75,400
Net income $109,700
Preferred stock dividends 3,600
Available to common stock $106,100
Additional information
1. Outstanding common stock:
January 1, 2022 = 26,300 shares
December 31, 2022 = 36,100 shares
Additional issues = 9,800 shares
2. Market price of stock = $14
3. Cash dividends:
Preferred stock $3,600
Common stock 20,400
Total dividends paid $24,000
A 2 kg object traveling at 5 m/s on a frictionless horizontal surface collides head-on with and sticks to a 3 kg object initially at rest. Which of the following correctly identifies the change in total kinetic energy and the resulting speed of the objects after the collision?
Kinetic Energy Speed
(A) Increases 2 m/s
(B) Increases Soold 3.2 m/s
(C) Decreases 2 m/s
(D) Decreases 3.2 m/s
Answer:
Decreases 2 m/s
Explanation:
This is an inelastic collision :
m1u1 + m2u2 = (m1 + m2)v
Where ;
m1 and u1 = mass and initial velocity of object 1
m2 and u2 = mass and initial velocity of object 2
v = final velocity of the objects
m1 = 2kg ; m2 = 3kg ; u1 = 5 m/s ; u2 = 0 ; v =?
m1u1 + m2u2 = (m1 + m2)v
(2*5) + (3*0) = (2 + 3)v
10 + 0 = 5v
10 = 5v
v = 10/5
v = 2m/s
Waterway Industries estimates its sales at 240000 units in the first quarter and that sales will increase by 26000 units each quarter over the year. They have, and desire, a 25% ending inventory of finished goods. Each unit sells for $35. 40% of the sales are for cash. 70% of the credit customers pay within the quarter. The remainder is received in the quarter following sale. Cash collections for the third quarter are budgeted at:
a. $5,735,800.
b. $11,574,800.
c. $8,380,400.
d. $10,056,200.
Answer:
d. $10,056,200.
Explanation:
The computation of the cash collection for the third quarter is shown below;
Sales in quarter 1 is 240,000 units
Sales in quarter 2 is 240,000 + 26000 units = 266,000 units
And, the sales in quarter 3 is 266,000 units + 24000 units = 292,000 units
Now
= (292,000 units × $35 × 40%) + (292,000 × $35 × 60% × 70%) + (266,000 units × $35 × 60% × 30%)
= $4,088,000 + $4,292,400 + $1,675,800
= $10,056,200
The Aleander Company plans to issue $10,000,000 of 20-year bonds at par next June, with semiannual interest payments. The company's current cost of debt is 10 percent. However, the firm's financial manager is concerned that interest rates will increase in coming months, and has decided to take a short position in U. S. government t-bond futures. See the settlement data below for t-bond futures. (Note: One standard futures contract is $100,000).
a. Calculate the present value of the corporate bonds if rates increase by 2 percentage points.
b. Calculate the gain or loss on the corporate bond position.
c. Calculate the number of contracts required to cover the bond position. Then calculate the current value of the futures position.
d. Calculate the implied interest rate based on the current value of the futures position.
e. Interest rates increase as expected, by 2 percentage points. Calculate the present value of the futures position based on the rate calculated above plus the 2 points.
f. Calculate the gain or loss on the futures position.
g. Calculate the overall net gain or loss.
h. Is this problem an example of a perfect hedge or a cross hedge? Is it an example of speculation or hedging? Why?
Delivery Month Open High Low Settle Change Open Interest
(1) (2) (3) (4) (5) (6) (7)
Dec 103'14 103'14 102'11 102'17 -6 678,000
Mar 102'11 102'23 100'28 101'01 -5 135,855
June 101'14 101'26 100'02 100'12 -5 17,255
I have tried to explain it in extremely simple words and kept it precise too. I have made an excel file and compiled the answer in that clearly. All the parts are clearly mentioned. Please download the document and understand clearly. All the parts are solved independantly. Please find the attached file. Thanks.
Revenue and expense data for Bluestem Company are as follows:
Year 2 Year 1
Administrative expenses $37,720 $20,300
Cost of goods sold 360,000 319,900
Income tax 41,000 32,200
Sales 820,000 700,000
Selling expenses 154,160 109,900
Required:
Prepare a comparative income statement, with vertical analysis, stating each item for both years as a percent of sales.
Answer and Explanation:
The preparation of a comparitive income statement, with vertical analysis, stating each item for both years as a percent of sales is prepared below with the help of the attached spreadsheet:-
The formula that we have used is shown below:-
Gross profit percent = Gross profit / Sales revenue
Cost of goods sold percent = Cost of goods sold / Sales revenue
and in a similar way operating expenses items.
A 15-year maturity bond with par value of $1,000 makes annual coupon payments at a coupon rate of 10%. Find the bond equivalent and effective annual yield to maturity of the bond for the following bond prices.
List Bond Equivalent Annual Effective annual
bond prices Yield to maturity Yield to maturity
a $940 % %
b $1,000 % %
c $1,040 % %
Answer:
A. Bond equivalent 10.82%
Effective annual yield to maturity of the bond 11.11%
B. Bond equivalent 10%
Effective annual yield to maturity of the bond 10.25%
C. Bond equivalent 9.49%
Effective annual yield to maturity of the bond 9.73%
Explanation:
A. Calculation to Find the bond equivalent
We would determine the yield to maturity on a semi-annual basis using Financial Calculator which is:
N = 10*2 = 30
PV = -940
PMT = [10%/2]*1000 = 50
FV = 1000
Press CPT, then I/Y, which gives us 5.41%
Bond equivalent yield to maturity=5.41% × 2
Bond equivalent yield to maturity= 10.82%
Calculation to determine the Effective Annual Yield To Maturity of the bond
Effective annual yield to maturity = (1+.0541)^2– 1
Effective annual yield to maturity = (1.0541)^2– 1
Effective annual yield to maturity =1.1111 – 1
Effective annual yield to maturity = 0.1111 *100
Effective annual yield to maturity = 11.11%
Therefore the bond equivalent and effective annual yield to maturity of the bond will be:
Bond equivalent 10.82%
Effective annual yield to maturity of the bond 11.11%
b. Calculation to determine the bond equivalent
Based on the information given the bond is selling at par which therefore means that the yield to maturity on a semi annual basis will be the same as the semi annual coupon 5%.
Bond equivalent yield to maturity =5%*2
Bond equivalent yield to maturity= 10%.
Calculation to determine Effective annual yield to maturity
Effective annual yield to maturity = (1+.05)^2– 1
Effective annual yield to maturity = (1.05)^2– 1
Effective annual yield to maturity=1.1025-1
Effective annual yield to maturity=.1025*100
Effective annual yield to maturity =10.25%
Therefore the bond equivalent and effective annual yield to maturity of the bond will be:
Bond equivalent 10%
Effective annual yield to maturity of the bond 10.25%
c.Calculation to determine the bond equivalent
N = 10*2 = 30
PV = -1,040
PMT = [10%/2]*1000 = 50
FV = 1000
Bond equivalent yield to maturity=9.49%, or 4.75% on a semi-annual basis.
Calculation to determine the Effective Annual Yield To Maturity of the bond
Effective annual yield to maturity = (1+.0475)^2– 1
Effective annual yield to maturity = (1.0475)^2– 1
Effective annual yield to maturity =1.0973– 1
Effective annual yield to maturity = 0.0973*100
Effective annual yield to maturity = 9.73%
Therefore the bond equivalent and effective annual yield to maturity of the bond will be:
Bond equivalent 9.49%
Effective annual yield to maturity of the bond 9.73%
Professional sales skills
how should the price quotation in your proposal be titled?
A. Investment
B. Price
C. Cost
D.Estimate
Sam visits Mexico for a business meeting. At the meeting, Sam addresses the vice president of the firm by his first name rather than using his title. This is considered offensive. In the context of Hofstede's cultural dimensions, this difference in cultures is part of the _____ dimension.
A. power distance
B. uncertainty avoidance
C. long-term–short-term orientation
D.masculinity-femininity
E. individualism-collectivism
Answer:
A. power distance
Explanation:
In the context of Hofstede's cultural dimensions, this difference in cultures is part of the power distance dimension, which corresponds to the hierarchical position of the members of an organization and the appropriate relationship form for each hierarchy in an organization that occurs in certain cultures, reinforced by an inequality that already occurs in society.
To avoid offensive behavior in multinational businesses, it is necessary to have multicultural skills that include ethics, respect and knowledge of a new culture and its rules.