Answer:
Outbound logistics
Explanation:
Logistics is defined as the process by which inventory and other goods are moved from their source to locations of use or consumption.
Outbound logistics for a business is concerned with movement of finished goods from a company to the consumer. It is movement of goods outward.
Various activities involved in this are storing, collection, order processing, warehousing, and distribution.
On the other hand inbound logistics deals with inflow of required raw materials and equipment for production or operations.
The original cost of the truck was $32,000. What would be the journal entry for Combs Co. to record the disposal of the delivery truck
Answer:
Journal Entry for disposal (or) sale of Truck
Explanation:
Truck (asset) sold for cash, bank, or on credit {On loss}Cash ac dr (or) Bank ac (or) Debtor ac (Or) ac ... dr
P & L ac ... dr
to Truck ac ... 32000
Truck (asset) sold for cash, bank, or on credit {On gain}Cash ac dr (or) Bank ac (or) Debtor ac (Or) ac ... dr
to Truck ac ... 32000
To P & L ac
Karla owns a monopolistically competitive firm that has many competitors that advertise. What can Karla realistically hope to achieve if she decides to advertise as well?
Answer:
1.) Katy can educate her consumers about the differences between her store and her competitors.
2.) Katy can protect her consumer base.
Explanation:
Using advertisements, Katy can show her consumer the differences and advantages that her products have over those of her competitors thereby encouraging them to patronise her.
She can also use these adverts to protect her customer base from her competitors because when they see the adverts, they will be even more encouraged to keep buying from Katy and will thus be less likely to switch to her competitors.
The other two options are incorrect.
During a recent week, Maya Schneiderman worked 42 regular hours. She earns $9.25/hour, is paid an overtime rate of 1.5 times her regular wage rate, and has requested that 3% of her gross pay be withheld and contributed to a 401(k) retirement plan. Maya's taxable pay for federal income tax withholding is
Answer:
$385.82
Explanation:
Maya's total earnings = (40 x $9.25) + (2 x $9.25 x 1.5) = $397.75
Contributions to her 401k retirement plan reduce her taxable income (they are above the line deductions. She will contribute $397.75 x 3% = $11.93.
Her taxable income for federal income tax withholding = $397.75 - $11.93 = $385.82.
The actual amount withheld will depend on Maya's W-4 form (includes information about filing status, dependents, other income, etc.)
Sydney accepts delivery of $39,000 of merchandise it purchases for resale from Troy: invoice dated May 11, terms 3/10, n/90, FOB shipping point. The goods cost Troy $26,130.
Sydney pays $440 cash to Express Shipping for delivery charges on the merchandise.
Sydney returns $1,100 of the $39,000 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $737.
Sydney pays Troy for the amount owed. Troy receives the cash immediately.
part 2 Prepare journal entries that Troy Wholesalers (seller) records for these three transactions.
Record the merchandise sold on account.
Record the cost of goods sold.
Record the sales return.
Record the cost of sales return.
Record the cash collected for credit sales.
Answer:
39,000 Explanation:
FOB shipping point. The goods cost Troy $26,130.
Nancy Company has an idle machine that originally cost $200,000. The book value of the machine is $100,000. The company is considering three alternative uses of the idle machine: Alternative 1: Disposal of machine. Disposal value of machine is $50,000. Alternative 2: Use the idle machine to increase production of Product A. Contribution margin from additional sales of Product A is estimated to be $60,000. Alternative 3: Use the idle machine to increase production of Product B. Contribution margin from additional sales of Product B is estimated to be $70,000. When considering Alternative 2, what is the opportunity cost of the idle machine
Answer:
$10,000
Explanation:
The opportunity cost of the idle machine when considering Alternative 2 can be calculated by deducting the benefit from alternative 2 from the benefits of alternative 3
DATA
Benefits from alternative 1 = $50,000
Benefit from alternative 2 = $60,000
Benefit from alternative 3 = $70,000
Net financial benefit from Alternative 3 = Benefit from alternative 3 - opportunity cost
Net financial benefit from Alternative 3 = $70000-60000
Net financial benefit from Alternative 3 = $10000
Ivanhoe Construction Company had a contract starting April 2021, to construct a $23000000 building that is expected to be completed in September 2023, at an estimated cost of $21000000. At the end of 2021, the costs to date were $7560000 and the estimated total costs to complete had not changed. The progress billings during 2021 were $3800000 and the cash collected during 2021 was 3100000. Ivanhoe uses the percentage-of-completion method. At December 31, 2021 Ivanhoe would report Construction in Process in the amount of:
Answer:
$8280000
Explanation:
From the given information;
The percentage of the completion method used in construction is equal to the contract price multiplied by the percentage of estimated total cost incurred to date i.e.
Cumulative cost to date $7560000
Estimated total cost $21000000
Percentage of completion 36% ( $7560000/ $21000000 )
The contract price for this project is $23000000
Therefore,
At December 31, 2021 Ivanhole would report construction in process in the amount of: $23000000 × 36%
= $8280000
Consider a mutual fund with $240 million in assets at the start of the year and 10 million shares outstanding. The fund invests in a portfolio of stocks that provides dividend income at the end of the year of $2.5 million. The stocks included in the fund's portfolio increase in price by 5%, but no securities are sold and there are no capital gains distributions. The fund charges 12b-1 fees of .75%, which are deducted from portfolio assets at year-end. a. What is the fund's net asset value at the start and end of the year
Answer:
Net asset value at the start of the year = $240,000,000 / 10,000,000 shares
Net asset value at the start of the year = $24
Asset in the beginning $240,000,000
Increase in value $240,000,000*5% $12,000,000
Assets at the end $352,000,000
Less: 12b-1 Charges $352,000,000 * 0.75%) $2,640,000
Asset at the end $349,360,000
Net asset value at the end of the year = $349,360,000/10,000,000 shares
Net asset value at the end of the year = $34.936
Assume that if Ivanhoe Water accepts Clifton’s offer, the company can use the freed-up manufacturing facilities to manufacture a new line of growing lights. The company estimates it can sell 80,410 of the new lights each year at a price of $13. Variable costs of the lights are expected to be $10 per unit. The timer unit supervisory and clerical staff would be transferred to this new product line. Calculate the total relevant cost to make the timer units and the net cost if they accept Clifton's offer.
Question Completion:
Question 2 Ivanhoe Water Co. is a leading producer of greenhouse irrigation systems. Currently, the company manufactures the timer unit used in each of its systems. Based on an annual production of 40,330 timers, the company has calculated the following unit costs Direct fixed costs include supervisory and clerical salaries and equipment depreciation. Direct materials Direct labor Variable manufacturing overhead Direct fixed manufacturing overhead Allocated fixed manufacturing overhead $12 10 (30% salaries, 70% depreciation) 10 Total unit cost $42 Clifton Clocks has offered to provide the timer units to Sandhill at a price of $34 per unit. If Sandhill accepts the offer, the current timer unit supervisory and clerical staff will be laid off (a1) Your answer is correct. Calculate the total relevant cost to make or buy the timer units. (Round answers to O decimal places, eg, S250.) Make Buy 100825 1371220
Answer:
Ivanhoe Water
1. Total relevant cost to make the timer units:
If Ivanhoe does not accept the Clifton's offer, its total cost = $35 * 40,330 = $1,411,5500
If it accepts Clifton's offer, the total cost = $34 * 40,330 = $1,371,220
2. Net cost = $40,330
Explanation:
a) Data and Calculations:
Cost of producing 40,330 timers
Direct materials $12
Direct labor 7
Variable manufacturing overhead 3
Direct fixed manufacturing overhead 10
Allocated fixed manufacturing overhead 10 (30% salaries, 70% depreciation)
Total unit cost $42
Clifton's offer = $34 per unit
Total relevant cost to make the timer units:
If Ivanhoe does not accept the Clifton's offer, its total cost = $35 * 40,330 = $1,411,5500
If it accepts Clifton's offer, the total cost = $34 * 40,330 = $1,371,220
Net cost = $40,330
Out of the total cost of $42, $7 for the depreciation is not considered relevant. This leaves the relevant cost at $35 per unit. Any cost that cannot be eliminated by a decision is not relevant, it is a sunk cost. The salaries of the supervisory and clerical staff can be eliminated, so it is relevant here.
Decision on Transfer Pricing Materials used by the Instrument Division of XPort Industries are currently purchased from outside suppliers at a cost of $185 per unit. However, the same materials are available from the Components Division. The Components Division has unused capacity and can produce the materials needed by the Instrument Division at a variable cost of $154 per unit. a. If a transfer price of $168 per unit is established and 33,200 units of materials are transferred, with no reduction in the Components Division's current sales, how much would XPort Industries’ total income from operations increase?
Answer:
$1,029,200
Explanation:
The computation of net income increases is shown below:-
Market purchase cost = 33,200 × $185
= $6,142,000
Component division variable cost = 33,200 × $154
= $5,112,800
Net income increases = $6,142,000 - $5,112,800
= $1,029,200
hence, the net income would be increased by $1,029,000 and the same is to be considered
Heels, a shoe manufacturer, is evaluating the costs and benefits of new equipment that would custom fit each pair of athletic shoes. The customer would have his or her foot scanned by digital computer equipment; this information would be used to cut the raw materials to provide the customer a perfect fit. The new equipment costs $107,000 and is expected to generate an additional $43,000 in cash flows for five years. A bank will make a $107,000 loan to the company at a 15% interest rate for this equipment’s purchase. Compute the recovery time for both the payback period and break-even time. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)
Chart Values are Based on:
10%
Cumulative Cash Inflow Present Value of Inflow Year Present Value PV Factor (Outflow) (Outflow)
(91,000) x 1.0000- (91,000) $ (91,000) 36,000 x 36,000 x 2.5 years
Answer:
Payback period = 2.49 years
Break-even time = 3.36 years
Explanation:
a. Calculation of payback period
The payback period can be described as the amount of time it will take a firm recover its cost on a project or an investment.
The payback period can be calculated as follows:
Equipment cost = $107,000
Annual cash flow = $43,000
Payback period = Equipment cost / Annual cash flow = $107,000 / $43,000 = 2.49 years
b. Calculation of break-even time
Note: See the attached excel file for the computation of the cumulative present value of inflow (outflow).
In the attached excel, the present value (PV) factor is calculated using the following formula:
PV factor = 1/(1 + r)^n ............................... (1)
Where;
r = interest rate = 15%
n = a particular year from 1 to 5.
Break even time can be described as the amount of time that is needed for both the discounted cash flows and the initial cost of a project to be equal.
The break-even time is calculated using the following formula:
Break-even time = X + (Y / Z) .................... (2)
X = Last year with a negative cumulative cash flow = 3
Y = Absolute value of cumulative cash flow at the end of period X = $8,821.32
Z = Present value of cash inflow for the period following X = $24,585.39
Break-even time = 3 + ($8,821.32 / $24,585.39) = 3 + 0.36 = 3.36 years
he Presley Corporation is about to go public. It currently has aftertax earnings of $7,000,000, and 2,000,000 shares are owned by the present stockholders (the Presley family). The new public issue will represent 500,000 new shares. The new shares will be priced to the public at $25 per share, with a 4 percent spread on the offering price. There will also be $250,000 in out-of-pocket costs to the corporation. a. Compute the net proceeds to the Presley Corporation. (Do not round intermediate calculations and round your answer to the nearest whole dollar.)
Answer:
Missing question is "a. Compute the net proceeds to the Presley Corporation. (Do not round intermediate calculations and round your answer to the nearest whole dollar.) Net proceeds
b. Compute the earnings per share immediately before the stock issue. (Do not round intermediate calculations and round your answer to 2 decimal places.) Earnings per share
c. Compute the earnings per share immediately after the stock issue. (Do not round intermediate calculations and round your answer to 2 decimal places.) Earnings per share "
a. Net proceeds = Shares issued * Share price*(1-0.04) - Direct cost
Net proceeds = 500,000 * $25*(1-0.04) - $250,000
Net proceeds = 500,000*$24 - $250,000
Net proceeds = $12,000,000 - $250,000
Net proceeds = $11,750,000
b. EPS = Earnings / Shares
EPS = $7,000,000 / 2,000,000 shares
EPS = $3.50 per share
c. EPS = After tax earnings / Total shares
EPS = $7,000,000 / (2,000,000 + 500,000)
EPS = $7,000,000 / 2,500,000 shares
EPS = $2.80 per shares
If the interest rate this year is 8.8% and the interest rate next year will be 10.8%, what is the future value of $1 after 2 years? What is the present value of a payment of $1 to be received in 2 years?
Answer:
Results are below.
Explanation:
Giving the following information:
The interest rate this year is 8.8% and the interest rate next year will be 10.8%.
a) To calculate the future value, we need to use the following formula:
FV= PV*(1+i)^n
FV1= 1*1.088= 1.088
FV2= 1.088*1.108=$1.206
b) To calculate the present value, we need to use the following formula:
PV=FV/(1+i)^n
PV2= 1/1.108= 0.903
PV1= 0.903/1.088= $0.83
Explain the risks associated with leveling resources, compressing or crashing projects, and imposed durations or "catch-up" as the project is being implemented. Why is it critical to develop a time-phased baseline? Subscribe to unlock
Answer:
Explain the risks associated with leveling resources, compressing or crashing projects, and imposed durations or "catch-up" as the project is being implemented.
a project manager will try to level resources in order to even out the use of resources throughout the whole project, but that can result in a deficit of resources during critical times. E.g. trying to use 25% of resources during each year for a project that lasts 4 years. But some activities require a lot o resources but last a short time, while other activities might last longer and consume fewer resources. a project manager will try to compress a project's schedule because he/she wants to finish early, ideally without affecting the project's scope. The problem with compressing a project is that you might have to skip or eliminate certain activities in order to so so. E.g. a lot of pharmaceutical companies are trying to develop a vaccine that ends the current health crisis, and their rush are not following the appropriate steps. crashing activities refers to trying to finish some critical activity early by assigning more resources to it. The risks of crashing critical activities is that they might not be well done, or it might be too expensive.Why is it critical to develop a time-phased baseline?
Without a well done time-phased baseline, it is very difficult to prepare a project schedule, or at least one that actually works. It is also important because it is very useful for cost control, and projects can easily go out of control and cost more than their budget.
You and a partner are considering the purchase of a convenience store.? The store has annual sales of $500,000 and is paying annual payroll of $100,000. The cost of goods sold every year is $150,000. The firm has miscellaneous expenses (taxes, insurance, garbage, electricity, natural gas, security, maintenance, property taxes, training, advertising, accounting fees, bank charges, etc.) of roughly $68,000 per year. If depreciation is equal to $15,000 per year and the tax rate is equal to 38% then what is the net income?
Answer:
the net income is $103,540
Explanation:
The computation of the net income is shown below:
= (Annual sales - annual payroll - cost of goods sold - miscellaneous expenses - depreciation expense) × (1 - tax rate)
= ($500,000 - $100,000 - $150,000 - $68,000 - $15,000) × (1 - 38%)
= $103,540
Hence, the net income is $103,540
We simply applied the above formula
Mattress Wholesalers, Inc. is constantly trying to reduce inventory in its supply chain. Last year, cost of goods sold was $ million and inventory was $ million. This year, costs of goods sold is $ million and inventory investment is $ million. a) What was its weeks of supply last year? nothing weeks (round your response to two decimal places). b) What is its weeks of supply this year? nothing weeks (round your response to two decimal places). c) Is Mattress Wholesalers making progress in its inventory reduction effort? Since the number of weeks that cover the supply has ▼ decreased not changed increased , Mattress Wholesalers is making ▼ negative progress no progress progress in its inventory-reduction effort.
Answer:
A. Weeks supply= 10.7
B. Weeks supply= 9.53
C. Yes
DECREASED, PROGRESS
Explanation:
A. Calculation for last year’s weeks of supply
First step is to find the Average cost of sold good on week basis
Using this formula
Average cost of sold good on week basis =Cost of goods sold /Numbers of weeks in a year
Let plug in the formula
Average cost of sold good on week basis= $7.54 million/ 52
Average cost of sold good on week basis= $ 0.145 million
Last step is to find last year Weeks supply using this formula
Last year Weeks supply=Investment in inventory/ Average cost of sold good on week basis
Let plug in the formula
Last year Weeks supply=$1.46/0.145
Last year Weeks supply= 10.7
B. Calculation for weeks supply this year?
Using this formula
Average cost of sold good on week basis =Cost of goods sold /Numbers of weeks in a year
Let plug in the formula
Average cost of sold good on week basis= $8.62 million/ 52
Average cost of sold good on week basis= $ 0.165769 million
Last step is to find this year Weeks supply using this formula
This year Weeks supply=Investment in inventory/ Average cost of sold good on week basis
Let plug in the formula
This year Weeks supply=$1.58/0.165769
This year Weeks supply= 9.53
C. Yes, Mattress Wholesalers is making progress in its inventory reduction effort .
Since the numbers of weeks that cover the supply had DECREASED, Wholesalers is making PROGRESS in its inventory reduction effort
The journal entry to record the transfer of units to the next department in process accounting is a(n):
Answer:
Decrease in one asset and an increase in another asset
Explanation:
The journal entry to record the transfer of units to the next department in process accounting is a(n):
i. Decrease in one asset
ii. Increase in another asset
Oklahoma Oil Corp. paid interest of $792,000 during 2021, and the interest payable account decreased by $129,500. What was interest expense for the year
Answer:
The interest expense for the year is $662,500.
Explanation:
The following are given in the question:
Interest paid during the year 2021 = $792,000
Amount of decrease in interest payable account = $129,500
The interest expense for the year can be calculated as follows:
Interest expense for the year = Interest paid during the year 2021 - Amount of decrease in interest payable account = $792,000 - $129,500 = $662,500
Therefore, the interest expense for the year is $662,500.
Which of the following best describes why German firms were nationalized after World War II?
A. Extract money.
B. Job preservation.
C. Ideology.
D. Happenstance.
Answer:
D. Happenstance.
Explanation:
The fact that German firms were nationalized has often been regarded as mere happenstance; meaning it just occurred based on the circumstances they were in immediately after World War II.
It thus encompasses several factors such as the cost of operations, changes in government, etc, not just one factor.
German firms were nationalized after World War II because of Happenstance.
World War II:The fact that German companies were nationalized has frequently been dismissed as a coincidence, implying that it happened simply because of the circumstances in which they found themselves following World War II.
It thus incorporates multiple aspects, not just one, such as operational costs, government changes, and so on.
So, option "D" is the correct answer to the following question.
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Revenues and gains included in arriving at net income that do not provide cash.
Answer:
Non-cash revenues.
Explanation:
Non-cash revenues can be defined as revenues and gains included in arriving at net income that do not provide cash.
Basically, on the statement of cash-flow, non-cash revenues are considered not to be a real cash-flow because they don't add to the total inflow of cash.
Some examples of noncash revenues are amortization of premium relating to bonds payable, cash flow from investments that are carried under the equity method, accrued revenues, and gains from disposals of non-current assets.
For a country A, the GDP growth rate is 8 percent and inflation is 4 percent. If the velocity of money remains constant, what is the change in real money balances
Answer:
The change in the real money balance is 12%
Explanation:
As per gievn data
GDP growth rate = 8%
Inflation = 4%
The real money change is as follow
Equation
Delta M + Delta V = Delta P + Delta Y
Where
Delta M = Real money change = ?
Delta V = Change in velocity = 0
Delta P = Inflation rate = 4%
Delta Y = GDP growth rate = 8%
Placing values in the above equation
Delta M + 0 = 4% + 8%
Delta M = 12%
Hence the money balance will increase by 12%.
At the end of the current year, Leer Company reported total liabilities of $319,000 and total equity of $119,000. The company's debt ratio on the last year-end was:___________.
a. 72.8%.
b. 268%.
c. 3-68%.
d. 37.3%.
e. $438,000
Answer:
72.8%
Explanation:
The first step is to calculate the total assets
Total assets= Total liabilities + total equity
= $319,000 + $119,000
= $438,000
Therefore the debt ratio can be calculated as follows
= Total liabilities/total assets
= $319,000/$438,000
= 0.728×100
= 72.8%
On December 31, 2019, The Bates Company's revenue is $440,000 and expenses total $340,000 before consideration of the following: Accrued wages total $21,000; Accrued revenues total $56,000; Depreciation expense is $27,000; Rental revenue of $7,000 was earned; the rent from a tenant was initially recorded by Bates as unearned rent revenue; The income tax rate is 40% of income before income taxes. What is Bates' net income after consideration of the above information
Answer:
Explanation:
Revenue = $440,000
Expenses = $340000
Accrued wages = $21000
Accrued revenues = $56000
Depreciation exp = $27000
Rental value earned but not recorded = $7000
Income tax rate = 40%
Total revenue = 440000 +56000 + 7000 = $503000
Total expenses = 340000 + 21000 + 27000 = $388000
Income before tax = 503000 - 388000 = $115000
income tax = 115000 x .4 = $46000
Net income = 115000 - 46000 = $69000 .
The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.55 per share on its stock. The dividends are expected to grow at a constant rate of 6 percent per year indefinitely. Investors require a return of 14 percent on the company's stock. a. What is the current stock price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What will the stock price be in 3 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What will the stock price be in 7 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
(A) 20.54
(B) 24.46
(C) 30.88
Explanation:
(A) The current stock price can be calculated as follows
Po= 1.55(1+6/100)/(14/100-6/100)
= 1.55(1+0.06)/(0.14-0.06)
= 1.55(1.06)/0.08
=1.643/0.08
= 20.54
(B) The stock price after 3 years can be calculated as follows
Po = 1.55(1+6/100)^4/(14/100-6/100)
= 1.55(1+0.06)^4/(0.14-0.06)
= 1.55(1.06)^4/0.08
= 1.55(1.2624)/0.08
= 1.9567/0.08
= 24.46
(C) The stock price after 7 years can be calculated as follows
Po= 1.55(1+6/100)^8/(14/100-6/100)
= 1.55(1+0.06)^8/(0.14-0.06)
= 1.55(1.06)^8/(0.08)
= 1.55(1.5938)/0.08
= 2.470/0.08
= 30.88
g Larry recorded the following donations this year: $540 cash to a family in need $2,440 to a church $540 cash to a political campaign To the Salvation Army household items that originally cost $1,240 but are worth $340. What is Larry's maximum allowable charitable contribution if his AGI is $60,400
Answer:
$2780
Explanation:
Given the following donations by Larry:
Cash to family in need $540
Cash to political campaign = $540
Church donation = $2440
Donation to salvation Army household = $340 (worth)
The allowable charitable contribution when applied to the an individual's adjustable Gross income. These contribution must be made to qualified charitable organizations in other to become eligible for deduction. In the scenario above, the qualified charitable organization include the donation to church and the salvation Army household :
Hemce, maximum allowable charitable contribution is :
$(2,440 + 340) = $2780
Donald is an agent representing Xmart, a large department store chain. Xmart has sent him to deal with Fred in regard to purchasing Fred's land in order to erect a new store. When Donald first meets Fred, Fred calls Xmart to verify that Donald is in fact an agent authorized to deal on Xmart's behalf. Xmart sends Fred a written confirmation of Donald's authorization to act as its agent and states that a contract signed by Donald will be honored by Xmart. Donald and Fred meet every other day during the negotiations. While the negotiations are still ongoing, Donald is fired by Xmart because it doesn't feel that he is making sufficient progress. Why is it important for Xmart to communicate with Fred regarding Donald's firing
Answer:
If Xmart doesn't notify Fred that Donald is not there agent anymore, then any agreement made between Donald and Fred will be valid and binding to Xmart.
Donald is no longer Xmart's agent, but unless Fred is notified, he still may act as an apparent agent. Apparent agents are people that someone could assume are acting on behalf of a principal, e.g. a person that wears a store's uniform inside a store is presumably a salesperson or someone that works for the store, therefore, he/she is an apparent agent. You do not ask for employment contracts when you enter a store.
Simpkins Corporation does not pay any dividends because it is expanding rapidly and needs to retain all of its earnings. However, investors expect Simpkins to begin paying dividends, with the first dividend of $2.00 coming 3 years from today. The dividend should grow rapidly - at a rate of 80% per year - during Years 4 and 5. After Year 5, the company should grow at a constant rate of 5% per year. If the required return on the stock is 13%, what is the value of the stock today (assume the market is in equilibrium with the required return equal to the expected return)
Answer:
The answer is "$ 52.17"
Explanation:
Third-year dividend, [tex]D_3 = \$ \ 2.00[/tex] Increasing at [tex]80 \ \%[/tex] per year in years 4 and 5.
[tex]\to D_4 = 2.00(1.80)=3.6\\\\\to D_5 = 3.6 (1.80) = 4.48\\\\[/tex]
Now, rising at a steady rate of 5 percent per year in year 6
[tex]\to D_6 = 6.48(1.05) =6.804[/tex]
[tex]\text{Price of the stock} = \frac{Expected \ dividend}{(Required \ return - growth \ rate)}[/tex]
[tex]=\frac{6.804}{(0.13 - 0.05)}\\\\ =\frac{6.804}{(0.08)}\\\\ = \$ \ 85.05[/tex]
The present value of all flows of cash:
[tex]= \frac{2.00}{(1.13)^3} + \frac{3.6}{(1.13)^4} + \frac{(4.48+ 85.05)}{(1.13)^5}\\\\ = \frac{2.00}{1.442897} + \frac{3.6}{1.63047361} + \frac{(4.48+ 85.05)}{1.84243518}\\\\ = \frac{2.00}{1.442897} + \frac{3.6}{1.63047361} + \frac{(89.53)}{1.84243518}\\\\= 1.38 +2.20+ 48.59\\\\=52.17[/tex]
What is the beta for a 2 stock portfolio with a 0.54 weight in Walmart stock and the remainder in Amazon
Answer: 0.73
Explanation:
Walmart Beta = 0.3616
Amazon's beta = 1.1634
The beta of the portfolio will be a weighted average of the portfolio beta;
= (Walmart beta * Walmart weight) + ( Amazon beta * Amazon weight)
= (0.3616 * 0.54) + ( 1.1634 * (1 - 0.54))
= 0.730428
= 0.73
Simpleton, Inc. budgeted a material cost of $10 per lb. They ended up purchasing 2,300 lbs at $16 per lb. and using 1,800 lbs for production. The material price variance is:
Answer:
Direct material price variance= $13,800 unfavorable
Explanation:
Giving the following information:
Simpleton, Inc. budgeted a material cost of $10 per lb.
Actual:
2,300 lbs at $16 per lb.
To calculate the direct material price variance, we need to use the following formula:
Direct material price variance= (standard price - actual price)*actual quantity
Direct material price variance= (10 - 16)*2,300
Direct material price variance= $13,800 unfavorable
Tim is the vice president of western operations for Maroon Oil Company and is stationed in San Francisco. He is required to live in an employer-owned home, which is three blocks from his company office. The company-provided home is equipped with high-speed Internet access and several telephone lines. Tim receives telephone calls and e-mails that require immediate attention any time of day or night because the company's business is spread all over the world. A full-time administrative assistant resides in the house to assist Tim with the urgent business matters. Tim often uses the home for entertaining customers, suppliers, and employees. The fair market value of comparable housing is $9,000 per month. Tim is also provided with free parking at his company's office. The value of the parking is $350 per month.
The amount associated with the free parking that Tim must include in his gross income per month is?
Answer:
$80 (in 2020)
Explanation:
I will assume that this question takes place during the current year (2020). An employee is required to include as income all transportation benefits that exceed $270 per month. In this case, free parking is considered a transportation benefit and Tim must report $350 - $270 = $80 as taxable benefits. The exclusion amount varies depending on the year, e.g. it was $265 in 2019.
The amount that should be included in the gross income per month should be $80.
Calculation of the amount:The employee should needed to involved the income in terms of transportation benefits that should be more than $270 per month. Since the free parking should be considered as the transportation benefit
So here the amount associated should be
= $350 - $270
= $80
hence, The amount that should be included in the gross income per month should be $80.
Learn more about amount here: https://brainly.com/question/24316713
"The fund is earning a low, but safe, 3% per year. The withdrawals will take place annually starting today. How soon will the fund be exhausted if Debbie withdraws $40,000 each year?"
Answer:
The question is missing the amount that Debbie's fund has, so I looked for similar questions and the number I found was $368,882.
we can use the present value of an annuity due formula to determine how long it will take Debbie to empty her account.
present value of annuity due = (payment / i) x {1 - [1 / (1 + i)ⁿ]} x (1 + i)
368,882 = (40,000 / 0.03) x {1 - [1 / (1 + 0.03)ⁿ]} x (1 + 0.03)
368,882 = 1,333,333.33 x 1.03 x {1 - [1 / (1 + 0.03)ⁿ]}
368,882 = 1,373,333.33 x {1 - [1 / (1 + 0.03)ⁿ]}
1 - [1 / (1.03)ⁿ] = 368,882 / 1,373,333.33 = 0.268603398
1 - 0.268603398 = [1 / (1.03)ⁿ]
0.731396601 = 1 / (1.03)ⁿ
1.03ⁿ = 1 / 0.731396601 = 1.367247261
n = log 1.367247261 / log 1.03 = 0.135847062 / 0.012837224 = 10.58 years
Debbie will exhaust the fund in 10.58 years. That means that Debbie will be able to withdraw $40,000 for 10 years, and then the last withdrawal will be lower.
Explanation: