Answer: a. no residual value and depreciate over the term of the lease
Explanation:
A bargain purchase option allows the holder of a lease to be able to purchase the leased asset at the end of the lease period. This is for finance leases not for operating leases so if there isn't one, the lease becomes operating.
When there is no such option, the company leasing the asset will not be able to record a residual value (which is the value they would have bought it at) but instead will have to depreciate the lease over its term leading to higher depreciation amounts.
Gain contingencies usually are recognized in a company's income statement when: Multiple Choice The gain is reasonably possible and the amount is reasonably estimable. The gain is certain The amount is reasonably estimable. The gain is probable and the amount is reasonably estimable.]
Answer: The gain is certain
Explanation:
A Gain contingency means that the company stands to make a gain in future if a certain event happens such as the company winning a lawsuit that would result in a good settlement figure for them.
According to U.S. GAAP, gain contingencies are not to be recognized unless it is certain that the gain is coming. If the gain is not certain and is recorded, the income is considered overstated.
Investment X offers to pay you $5,500 per year for nine years, whereas Investment Y offers to pay you $8,000 per year for five years. a. Calculate the present value for Investments X and Y if the discount rate is 5 percent. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. Calculate the present value for Investments X and Y if the discount rate is 15 percent.
Answer:
Investment X = $39,093.02
Investment Y = $34,635.81
b
Investment X =$26,243.71
Investment y =$26,817.24
Explanation:
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
Investment X
Cash flow each year from year 1 to 9 = $5,500
PV when I is 5% = $39,093.02
PV when I is 15% =$26,243.71
Investment Y
Cash flow each year from year 1 to 5 = $8,000
PV when I is 5% = $34,635.81
PV when I is 15$26,243.71% = $26,817.24
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
The price of the stock at the beginning of 2018 was $56.81 and you sold the stock at $68.14 at the end of the year. What is the dividend yield (use your answer from 3a above), capital gain(loss), and total percentage return
Question Completion:
The total dividends paid is $1,743,400 and the outstanding shares are 1,300,000.
Answer:
a. The dividend per share = $1.34
b. The dividend yield = 1.97%
c. The capital gain = $11.33
d. The total percentage return = 22.3%.
Explanation:
a) Data and Calculations:
Dividends paid = $1,743,400
Outstanding shares = 1,300,000
Dividends per share = $1.34 ($1,743,400/1,300,000)
Dividend yield = Dividend per share/Stock price
= $1.34/$68.14 = 1.97%
Capital gain = $11.33 ($68.14 - $56.81)
Total return = $12.67 ($11.33 + $1.34)
Total percentage return = Total return/Beginning Stock Price * 100
= $12.67/$56.81 * 100
= 22.3%
If 10,000 pounds of direct materials are purchased for $9,300 on account and the standard cost is $.90 per pound, the journal entry to record the purchase is Raw Materials Inventory 9,300 Accounts Payable 9,000 Materials Price Variance 300 Raw Materials Inventory 9,000 Materials Price Variance 300 Accounts Payable 9,300 Work In Process Inventory 9,300 Accounts Payable 9,000 Materials Quantity Variance 300 Raw Materials Inventory 9,300 Accounts Payable 9,300
Answer:
Raw Materials Inventory 9,000 Materials Price Variance 300 Accounts Payable 9,300
Explanation:
Based on the information given journal entry to record the purchase is
Dr Raw Materials Inventory $9,000
(10,000 pounds*$.90 per pound)
Dr Materials Price Variance $300
($9,300-$9,000)
Cr Accounts Payable $9,300
(To record purchase)
Practice Do It! Review 02 The following information is available for Sunland Company. April 1 April 30 Raw materials inventory $10,000 $13,500 Work in process inventory 5,400 3,710 Materials purchased in April $98,000 Direct labor in April 80,300 Manufacturing overhead in April 156,000 Prepare the cost of goods manufactured schedule for the month of April.
Answer:
Cost of goods manufactured=$332,490
Explanation:
Giving the following information:
April 1 April 30
Raw materials inventory $10,000 $13,500
Work in process inventory 5,400 3,710
Materials purchased in April $98,000
Direct labor in April 80,300
Manufacturing overhead in April 156,000
To calculate the cost of goods manufactured, we need to use the following formula:
cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
cost of goods manufactured= 5,400 + (10,000 + 98,000 - 13,500) + 80,300 + 156,000 - 3,710
cost of goods manufactured=$332,490
Japan has been one of China's largest sources of imports, along with South Korea and the United States. Because there is still political enmity between China and Japan due to the Japanese occupation of parts of China during World War II, the best explanation for the present Japanese trade relationship with China is
Answer: c. geographical proximity
Explanation:
The Japanese and the Chinese have not been on the best of terms for centuries and this became worse in the 20th century with Japanese attacks on the Chinese and then after those ended with the second world war, Japan was and still is firmly in the U.S. camp which China does not appreciate.
This hasn't stopped Japan and China from trading however because they are so close to each other and so logistical benefits ensure that they are some of each others' biggest trading partners.
Quantum Inc. has warrants outstanding that allow the holder to purchase 1.5 shares of stock per warrant at $30 per share (exercise price). Thus, each individual share can be purchased at $30 with the warrant. The common stock is currently selling for $36. The warrant is selling for $12.
Required:
a. What is the intrinsic (minimum) value of this warrant?
b. What is the speculative premium on this warrant?
c. What should happen to the speculative premium as the expiration date approaches?
Answer:
A. $9.00
B. $3.00
C. Decrease
Explanation:
a. Calculation to determine the intrinsic (minimum) value of this warrant
Using this formula
I = (M – E) × N
Where,
I represent Intrinsic value of a warrant
M represent Market value of common stock
E represent Exercise price of a warrant
N represent Number of shares each warrant entitles theholder to purchase
Let plug in the formula
I=($36 – $30) *1.5
I=$6*1.5
I = $9.00
Therefore the intrinsic (minimum) value of this warrant is $9.00
b. Calculation to determine the speculative premium on this warrant
Using this formula
S = W – I
Where,
S representSpeculative premium
W represent Warrant price
I represent Intrinsic value.
Let plug in the formula
S=$12-[($36 – $30) *1.5]
S=$12 – $9
S = $3.00
Therefore the speculative premium on this warrant is $3.00
c.What should happen to the SPECULATIVE PREMIUM as the expiration date approaches is for it to DECREASE and thereby approach $0.
The Town of Drexel has the following financial transactions. Prepare the journal entries necessary for the preparation of fund financial statements.
1. The town council adopts an annual budget for the general fund estimating general revenues of $1.7 million, approved expenditures of $1.5 million, and approved transfers out of $120,000.
2. The town levies property taxes of $1.3 million. It expects to collect all but 3 percent of these taxes during the year. Of the levied amount, $40,000 will be collected next year but after more than 60 days.
3. The town orders two new police cars at an approximate cost of $110,000.
4. A transfer of $50,000 is made from the general fund to the debt service fund.
5. The town pays a bond payable of $40,000 along with $10,000 of interest using the money previously set aside.
6. The Town of Drexel issues a $2 million bond at face value in hopes of acquiring a building to convert into a high school.
7. The two police cars are received with an invoice price of $112,000. The voucher has been approved but not yet paid.
8. The town purchases the building for the high school for $2 million in cash and immediately begins renovating it.
9. Depreciation on the new police cars is computed as $30,000 for the period.
10. The town borrows $100,000 on a 30-day tax anticipation note.
Answer:
1. A. FUND: GENERAL FUND
Dr Estimated Revenues control $1,700,000
Cr Appr. Control $1,500,000
Cr Est. OFU control $120,000
Cr Budgetary Fund Balance 80,000
GOVERNMENT
No journal entry
2. FUND: GENERAL FUND
Dr Property Tax Receivable $1,300,000
Cr Allowance for uncollectible taxes $39,000
Cr Deferred Revenue $40,000
Cr Revenues-Property taxes $1, 221,000
GOVERNMENT: GOVERNMENTAL ACTIVITIES
Dr Property Tax Receivable $1,300,000
Cr Allowance for uncollectible taxes $39,000
Cr Revenues - Property taxes $1,261,000
3. FUND: GENERAL FUND
Dr Encumbrances control $110,000
Cr Fund-balance: reserve for Encumbrances
$110,000
GOVERNMENT
Commitments are not reported
4. FUND: GENERAL FUND
Dr OFU: transfer out $50,000
Cr Cash $50,000
FUND: DEBT SERVICES FUND
Dr Cash $50,000
Cr OFU: Transfer in $50,000
GOVERNEMNT
No journal entry
5. FUND: DEBT SERVICES FUND
Dr Expenditures - Principal $40,000
Dr Expenditures - Interest $10,000
Cr Cash $50,000
GOVERNMENT
Dr Bonds Payable $40,000
Dr Interest Expense $10,000
Cr Cash $50,000
6. FUND:CAPITAL PROJECTS FUND
Dr Cash $2,000,000
Cr Other Financing Sources-Bond Proceeds
$2,000,000
GOVERNMENT
Dr Cash $2,000,000
Cr Bonds Payable $2,000,000
7. FUND: GENERAL FUND
Dr Fund balance- reserve for Encumbrances $110,000
Cr Encumbrances control $110,000
Dr Expenditure: police vehicles $112,000
Cr Vouchers payable $112,000
GOVERNMENT
Dr Police Cars $112,000
Cr Vouchers Payable $112,000
8. FUND: CAPITAL PROJECTS FUND
Dr Expenditures - Building $2,000,000
Cr Cash $2,000,000
GOVERNMENT
Dr Building $2,000,000
Cr Cash $2,000,000
9. FUND
No journal entry
GOVERNMENT
Dr Depreciation Expense $30,000
Cr Accumulated Depreciation $30,000
10. FUND: GENERAL FUND
Dr Cash $100,000
Cr Tax Anticipation Note Payable $100,000
GOVERNMENT
Dr Cash $100,000
Cr Tax Anticipation Note Payable $100,000
Explanation:
Preparation of the journal entries necessary for the preparation of fund financial statements
1. FUND: GENERAL FUND
Dr Estimated Revenues control $1,700,000
Cr Appr. Control $1,500,000
Cr Est. OFU control $120,000
Cr Budgetary Fund Balance $80,000
($1,700,000-$1,500,000-$120,000)
GOVERNMENT
No journal entry
2. FUND: GENERAL FUND
Dr Property Tax Receivable $1,300,000
Cr Allowance for uncollectible taxes $39,000
(3%*1,300,000)
Cr Deferred Revenue $40,000
Cr Revenues-Property taxes $1, 221,000
($1,300,000-$39,000-$40,000)
GOVERNMENT: GOVERNMENTAL ACTIVITIES
Dr Property Tax Receivable $1,300,000
Cr Allowance for uncollectible taxes $39,000
(3%*1,300,000)
Cr Revenues - Property taxes $1,261,000
($1,300,000-$39,000)
3. FUND: GENERAL FUND
Dr Encumbrances control $110,000
Cr Fund-balance: reserve for Encumbrances
$110,000
GOVERNMENT
Commitments are not reported
4. FUND: GENERAL FUND
Dr OFU: transfer out $50,000
Cr Cash $50,000
FUND: DEBT SERVICES FUND
Dr Cash $50,000
Cr OFU: Transfer in $50,000
GOVERNEMNT
No journal entry
5. FUND: DEBT SERVICES FUND
Dr Expenditures - Principal $40,000
Dr Expenditures - Interest $10,000
Cr Cash $50,000
($40,000+$10,000)
GOVERNMENT
Dr Bonds Payable $40,000
Dr Interest Expense $10,000
Cr Cash $50,000
($40,000+$10,000)
6. FUND:CAPITAL PROJECTS FUND
Dr Cash $2,000,000
Cr Other Financing Sources-Bond Proceeds
$2,000,000
GOVERNMENT
Dr Cash $2,000,000
Cr Bonds Payable $2,000,000
7. FUND: GENERAL FUND
Dr Fund balance- reserve for Encumbrances $110,000
Cr Encumbrances control $110,000
Dr Expenditure: police vehicles $112,000
Cr Vouchers payable $112,000
GOVERNMENT
Dr Police Cars $112,000
Cr Vouchers Payable $112,000
8. FUND: CAPITAL PROJECTS FUND
Dr Expenditures - Building $2,000,000
Cr Cash $2,000,000
GOVERNMENT
Dr Building $2,000,000
Cr Cash $2,000,000
9. FUND
No journal entry
GOVERNMENT
Dr Depreciation Expense $30,000
Cr Accumulated Depreciation $30,000
10. FUND: GENERAL FUND
Dr Cash $100,000
Cr Tax Anticipation Note Payable $100,000
GOVERNMENT
Dr Cash $100,000
Cr Tax Anticipation Note Payable $100,000
indirect materials are those used that enter into and become a major part of the finished product true or false
Oriole Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $280000 and credit sales are $2810000. Management estimates that 5% of accounts receivable will be uncollectible. What adjusting entry will Oriole Company make if the Allowance for Doubtful Accounts has a credit balance of $2800 before adjustment
Answer:
Dr. Bad debt expense. $11,200
---------To Allowance for doubtful accounts $11,200
Explanation:
Given that:
Accounts receivable balance = $280,000
Total credit sales = $2,810,000
5% of accounts receivables will be bad debt = $280,00 × 5% = $14,000
Credit balance allowance for doubtful account = $2,800 and it must increase to $14,000 I.e $14,000 - $2,800 = $11,200
Adjusting journal entry
Dr Bad debt expense $11,200
-------- Cr Allowance for doubtful accounts $11,200
Top Line Electronics has a piece of machinery that costs $600,000 and is expected to have a useful life of 4 years. Residual value is expected to be $100,000. Using the double-declining-balance method, what is depreciation expense for the first year
Answer:
Annual depreciation= $250,000
Explanation:
Giving the following information:
Purchase price= $600,000
Salvage value= $100,000
Useful life= 4 years
To calculate the annual depreciation, we need to use the following formula:
Annual depreciation= 2*[(book value)/estimated life (years)]
Annual depreciation= 2*[(600,000 - 100,000) / 4]
Annual depreciation= $250,000
Too Young, Inc., has a bond outstanding with a coupon rate of 6.7 percent and semiannual payments. The bond currently sells for $948 and matures in 24 years. The par value is $1,000. What is the company's pretax cost of debt
Answer:
4%
Explanation:
The company's pretax cost of debt is 4%
Lake Incorporated purchased all of the outstanding stock of Huron Company paying $961,000 cash. Lake assumed all of the liabilities of Huron. Book values and fair values of acquired assets and liabilities were: Book Value Fair Value Current assets (net) $ 130,300 $ 124,700 Property, plant, equip. (net) 614,000 769,000 Liabilities 151,800 175,000 Lake would record goodwill of:
Answer:
$242,300
Explanation:
Goodwill = Purchase Price - Net Assets taken over at Fair Value
where,
Purchase Price = $961,000
Net Assets taken over at Fair Value = $ 124,700 + $769,000 - $175,000 = $718,700
therefore,
Goodwill = $961,000 - $718,700 = $242,300
conclusion :
Lake would record goodwill of $242,300
Bernie is a former executive who is retired. This year Bernie received $190,000 in pension payments and $15,200 of Social Security payments. What amount must Bernie include in his gross income
Answer:
$202,920
Explanation:
Calculation to determine determine What amount must Bernie include in his gross income
Using this formula
Gross income=Pension payments Received+85% of social security benefits
Let plug in the formula
Gross income=$190,000 + ($15,200 * 85%)
Gross income=$190,000+$12,920
Gross income=$202,920
Therefore The amount that Bernie must include in his gross income is $202,920
A very large company would be most likely to have a(n) ___ at the ahead of its accounting department.
A. Executive vice president
B. Controller
C. Chief financial officer
D. Accounting manager
A very large company would be most likely to have a Chief financial officer as the head of its accounting department.
The Chief Financial Officer (CFO) would most likely be in charge of the accounting division of a very large corporation. A company's Chief Financial Officer (CFO) is in charge of all financial operations, including accounting, budgeting, financial reporting, and forecasting. The day-to-day accounting activities of a corporation are managed by the controller, who holds a mid-level role. The basic duties of the accounting manager include leading a group of accountants and supervising the creation of financial statements and reports. Even though the executive vice president may be in charge of the entire organization, they could not have specific knowledge of accounting and finance.
A Chief Financial Officer (CFO) is a senior executive accountable for directing the financial actions of a firm. Monitoring cash flow, assessing the firm's financial advantages and disadvantages, and creating strategies for financial expansion are all tasks assigned to the CFO. Also, they are in charge of supervising the creation of predictions and current financial reports. In conclusion, the CFO is essential to the efficient management of a company's finances.
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When the general level of prices rises, the economy is experiencing ____.
Larance Detailing's cost formula for its materials and supplies is $1,910 per month plus $10 per vehicle. For the month of November, the company planned for activity of 86 vehicles, but the actual level of activity was 51 vehicles. The actual materials and supplies for the month was $2,430. The materials and supplies in the flexible budget for November would be closest to:
Answer:
$2,420
Explanation:
Calculation to determine what The materials and supplies in the flexible budget for November would be closest to:
Using this formula
Cost = Fixed cost + (Variable cost per unit × q)
Let plug in the formula
Cost= $1,910 + $10 × 51
Cost= $2,420
Therefore The materials and supplies in the flexible budget for November would be closest to:$2,420
Terps Corp.'s comparative balance sheet at December 31, 2021 and 2020 reported accumulated depreciation balances of $1,245,000 and $900,000, respectively. Property with a cost of $75,000 and a carrying amount of $57,000 was the only property sold in 2021. Depreciation charged to operations in 2021 was
Answer:
See below
Explanation:
Depreciation charged to operations in 2021 is computed as;
=
Clampett, Incorporated, converted to an S corporation on January 1, 2020. At that time, Clampett, Incorporated, had cash ($40,000), inventory (FMV $60,000, basis $30,000), accounts receivable (FMV $40,000, basis $40,000), and equipment (FMV $60,000, basis $80,000). In 2021, Clampett, Incorporated, sells its entire inventory for $60,000 (basis $30,000). Assume the corporate tax rate is 21 percent. Clampett, Incorporated's taxable income in 2021 would have been $1,000,000 if it had been a C corporation. How much built-in gains tax does Clampett, Incorporated, pay in 2021
Answer:
$2,100
Explanation:
Particulars Fair market value Basis Differences
Inventory $60,000 $30,000 $30,000
Account receivables $40,000 $40,000 $0
Equipment $60,000 $80,000 ($20,000)
Taxable gain $10,000
Tax rate 21%
Built in gains tax $2,100
So therefore, the built-in-gains tax that Clampett (Incorporated) will pay in 2021 is $2,100.
Outdoor Company is located in Kirkland, Washington, where the city and the state have minimum wage laws. Outdoor pays its starting employees the legal minimum rate, which, among the governing laws, is Group of answer choices the federal minimum wage. the city minimum wage. the highest of the minimum wages. the state minimum wage.
Answer: the highest of the minimum wages.
Explanation:
The company will have the pay the minimum wage that is the highest because they are under the authority of all three governments and paying the highest minimum wage would ensure that they automatically follow the minimum wages set by the other two authorities.
For instance; the federal minimum wage is $7.25 per hour, the state minimum wage is $10 per hour and the city minimum is $12 per hour. When the company pays $12 an hour, they would be adhering to the city minimum and automatically adhering to the Federal and State minimums as well.
What would be the maximum an investor should pay for the common stock of a firm that has no growth opportunities but pays a dividend of $1.36 per year? The required rate of return is 12.5 percent.
a. $11.24
b. $9.52
c. $10.88
d. $10.64
e. $11.47
Answer:
$10.88
Explanation:
Calculation to determine What would be the maximum an investor should pay for the common stock of a firm that has no growth opportunities
Using this formula
Maximum payment for common stock=Dividend/Required rate of return
Let plug in the formula
Maximum payment for common stock=$1.36/.125 Maximum payment for common stock= $10.88
Therefore What would be the maximum an investor should pay for the common stock of a firm that has no growth opportunities is $10.88
Jiffy Co. expects to pay a dividend of $3.00 per share in one year. The current price of Jiffy common stock is $60 per share. What is the cost of internal common equity (retained earnings) if the long-term growth in dividends is projected to be 9 percent indefinitely
Answer:
the cost of the internal common equity is 14%
Explanation:
The computation of the cost of internal common equity is shown below;
Stock Price = Dividend per share ÷ (required rate of return - growth rate)
$60 = $3 ÷ (required rate of return - 0.09)
60 required return - $5.4 = $3
60 required return = $8.4
So, the required return is
= 8.4 ÷ 60
= 14%
Hence, the cost of the internal common equity is 14%
In response to dwindling sales of organic meats, Hain Celestial executives decided to promote the sale of organically grown nuts as an alternative source of protein, which is an excellent example of a firm's:
Answer:
Product substitute
Explanation:
Product substitute is defined as one that meets similar needs of the consumer. As demand for one of such goods rises the demand of the other tends to fall as the meet similar needs.
In the given scenario organic meats are seen as being substituted by organically grown nuts as a source of protein.
So when Hain Celestial has dwindling sales of organic meats they were considering organically grown nuts as a different product to give to customers
Silver Corporation incurred costs of $600,000 for managing the wholesale division during the year. The customer details of the company were as follows: X Y Z Sales $600,000 $400,000 $200,000 COGS $40,000 $20,000 $15,000 How much cost will be allocated to customer Y, if a cause-effect relationship cannot be established with any cost driver
Answer: $200,000
Explanation:
The cost will be allocated to customer Y, if a cause-effect relationship cannot be established with any cost driver will be calculated thus:
Total sales = $600,000 + $400,000 + $200,000 = $1,200,000
The percentage of Y on total sales will be:
= $400,000/$1,200,000 × 100
= 1/3 × 100
= 33.33%
Therefore, the cost that's allocated to Y will then be:
= $600,000 × 33.33%
= $600,000 × 0.3333
= $200,000
Therefore, the correct answer is $200,000
The net income reported on the income statement for the current year was $245,000. Depreciation was $40,000. Account receivable and inventories decreased by $12,000 and $35,000, respectively. Prepaid expenses and accounts payable increased, respectively, by $1,000 and $8,000. How much cash was provided by operating activities
Answer:
$339,000
Explanation:
Computation of operating activity as is as seen below;
= Net income + Depreciation + Accounts receivable + Inventories decrease - Prepaid expenses + Accounts payable increase
= $245,000 + $40,000 + $12,000 + $35,000 - $1,000 + $8,000
= $339,000
Therefore, the sum of $339,000 was provided as cash for operating activities.
spectrum corp desires a 25% target gross profit after covering all product costs: considering the total product costs assigned to the products c and d, what would spectrum have to charge the customer to achieve that gross profit
Answer:
Note: "The full question is attached as picture below"
Required selling price for product = Total product cost / Product cost as a percentage of selling price
Note: When the gross profit rate is 25%, this means that Product cost as a percentage of selling price is 75%
Total cost assigned for product C = $1,396
Total cost assigned for product D = $3,158
What would Oak have to charge the customer to achieve that gross profit?
Charge to the customer for Product C:
= $1,396 / 0.75
= $1861.333333333333
= $1,861.33
Charge to the customer for Product D:
= $3,158 / 0.75
= $4210.666666666667
= $4,210.67
Consumers buy goods or services they want or need.
True
False
Answer:
True
Explanation:
Consider a stock with current year dividend equal to $2.00 per share. You believe the dividend will grow 15% per year for 10 years and 4% per year thereafter.The required equity rate of return (and your hurdle rate) is 10%. What is the fair price of the stock? Assuming the market price of the stock is $70, what is the expected return?
Answer:
a. Fair price of the stock = $79.82
b. The expected return is 7.29%
Explanation:
a. What is the fair price of the stock?
Note: See the attached file for the calculation of present values (PV) of dividends for year 1 to 10.
From the attached excel file, we have:
Previous year dividend in year 1 = Current year dividend = $2
Total of dividends from year 1 to year 10 = $25.74793130208810
Year 10 dividend = $8.09111547141582
Therefore, we have:
Year 11 dividend = Year 10 dividend * (100% + Dividend growth rate in year 11) = $8.09111547141582 * (100% + 4%) = $8.41476009027245
Share price at year 10 = Year 11 dividend / (Required equity rate of return - Perpetual dividend growth rate) = $8.41476009027245 / (10% - 4%) = $140.246001504541
PV of share price at year 10 = Price at year 10 / (100% + required equity rate of return)^Number of years = $140.246001504541 / (100% + 10%)^10 = $54.0709047493998
Therefore, we have:
Fair price of the stock = Total of dividends from year 1 to year 10 + PV of share price at year 10 = $25.74793130208810 + $54.0709047493998 = $79.82
b. Assuming the market price of the stock is $70, what is the expected return?
This can be calculated using the dividend discount model formula as follows:
P = D1 / (r - g) ............................ (1)
Where,
P = Market price of the stock = $70
D1 = Next dividend = Current dividend * (100% + Dividend growth rate in perpetuity) = $2 * (100% + 4%) = $2.30
r = Expected return = ?
g = Dividend growth rate in perpetuity = 4%, or 0.04
Substituting the values into equation (1) and solve for r, we have:
70 = 2.30 / (r - 0.04)
70(r - 0.04) = 2.30
70r - 2.80 = 2.30
70r = 2.30 + 2.80
70r = 5.10
r = 5.10 / 70
r = 0.0729, or 7.29%
Therefore, the expected return is 7.29%.
Scientific management were more concerned with the problems at the.........a. operational b.High level
Answer:
The correct option is a. operational level.
Explanation:
Scientific management is a management theory that examines and combines workflows. Its fundamental goal is to increase economic efficiency, particularly worker productivity at thee operational level.
Operational level is a level at which operational activities of a business are carried out. Operational activities are company functions that are directly tied to supply of goods and/or services to the market. Basic business activities include producing, distributing, marketing, and selling a product or service.
Therefore, the correct option is a. operational level. That is, scientific management were more concerned with the problems at the operational level.
As a marketing term, __________ generally includes not only physical goods, but also services and ideas. Multiple Choice marketing invention merchandise product concept
Answer:
product
Explanation:
The product is an item that the company offer to its customer for buying the product. It is not only the goods that to be kept physically but it also consist of the services and ideas so that it become differentiate with the competitor. The product can be differentiate in terms of cost, quality, quantity, presentable form via having the innovative ideas
So, the 2nd last option is correct