Answer:
You are missing the requirements. I looked them up and found the following:
Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
Standard Costs Actual Costs
Direct materials 185,000 lbs. at $6.00 183,200 lbs. at $5.80
Direct labor 18,500 hrs. at $16.50 18,930 hrs. at $16.90
Factory overhead Rates per direct labor hr., based on 100% of normal capacity of 19,310 direct labor hrs.:
Variable cost, $3.10 $56,780
variable cost Fixed cost, $4.90 $94,619 fixed cost
Each unit requires 0.25 hours of direct labor
direct materials price variance = AQ x (AP - SP) = 183,200 x ($5.80 - $6) = -$36,640 favorable variance
direct materials quantity variance = SP x (AQ - SQ) = $6 x (183,200 - 185,000) = -$10,800 favorable variance
total direct materials cost variance = (AQ X AP) - (SQ X SP) = (183,200 X $5.80) - (185,000 X $6) = $1,062,560 - $1,110,000 = -$47,440 favorable variance
or
total direct materials cost variance = direct materials price variance + direct materials quantity variance = -$36,640 - $10,800 = -$47,440 favorable variance
In the context of project management, a task duration is always the same as the amount of work (effort) it takes to finish the task. true or false?
Answer:
False
Explanation:
The statement that says that in the context of project management, a task duration is always the same as the amount of work (effort) it takes to finish the task is false because the effort is the time a person needs to finish a task while the duration is the period of time that a person has to finish it. For example, an employee has a task that takes forty hours of work to finish it but he has a month to do it. In this case, the effort is forty hours but the task duration is one month.
When there are lower prices, but waiting lines customers will often be drawn to the competing location of a Monopolistic Competitor with greater customer service and better atmosphere.
A. True
B. False
When deleting a check all of the following is true except: Multiple Choice It is better to delete the check than void the check in order to erase all records of the transaction The deleted check no longer appears in the check register QuickBooks changes the amount deducted in the check register to zero All of the choices are correct
Answer: It is better to delete the check than void the check in order to erase all records of the transaction
Explanation:
When a check is deleted, it should be noted that such check is being removed entirely from the system and also the transaction of the check will no longer be visible anywhere in the system.
Voiding a check mean that the amount of the transaction on the check will be changed to zero but it should be ited that a record of such transaction will still be kept in QuickBooks but deleting it will help remove the transaction in QuickBooks.
When a check is voided, the check details like the check number, account, payee, memo and date will be unchanged, even though the amount will change to zero.
Therefore, the option that says that it is better to delete the check than void the check in order to erase all records of the transaction isn't true.
The Jewel Golf Club Company, which recently began using a kanban system, has had problems with high inventory levels of one of the handle grips used to make several versions of its clubs. Daily demand for the grip is 3000 units, average waiting time during production is 0.20 day, processing time is 0.10 day per container, and a container holds 150 grips.Use the information in Case 6.2. How many Kanban containers would Jewel require if a 10% policy variable is used? a. three or fewer b. four or five c. five or six d. six or seven
Answer:
d. six or seven
Explanation:
Given that:
Daily demand for the grip = 3000 units
average waiting time = 0.20 day
processing time = 0.10 day / container
a container holds = 150 grips
percentage of policy used = 10% = 0.10
The objective of this question is to determine the amount of Kanban containers would Jewel require.
the amount of Kanban containers = Demand ( wasting time + processing time)(1+percentage policy)/ amount of container holding
the amount of Kanban containers = 3000( 0.2 + 0.1) ( 1+ 0.10)/ 150
the amount of Kanban containers = 3000 ( 0.30) (1.10)/150
the amount of Kanban containers = 990/150
the amount of Kanban containers = 6.6
SO we can infer that the amount of Kanban containers would Jewel require if a 10% policy variable is used falls within the range of six or seven.
If the ending inventory of a firm is overstated by $50,000, by how much and in what direction (overstated or understated) will the firm's operating income be misstated? (Hint: Use the cost of goods sold model, enter hypothetically "correct" data, and then reflect the effects of the ending inventory error and determine the effect on cost of goods sold.)
Answer:
50,000 overstated.
Explanation:
As the ending inventory is overstated by 50,000 we can conclude the implications using the inventory identity:
Beginning + Purchase = COGS + Ending
As the left side will be the correct display they will have no error.
Therefore the COGS will compensate the mistake in the ending ivnentory
0 = COGS + 50,000
COGS = -50,000
The COGS are 50,000 lower than it should be therefore the gross profit is overstated as
Sales - COGS = Gross Profit
0 - (-50,000) = Gross Profit
+ 50,000 = Gross Profit
This also makes the operating income which, derives from gross profit to be overstated as well.
On December 31, 2016, Ditka Inc. had Retained Earnings of $270,800 before its closing entries were prepared and posted. During 2016, the company had service revenue of $171,100 and interest revenue of $82,800. The company used supplies in the amount of $89,400, advertising expenses were $16,700, salaries and wages totaled $18,750, and income tax expense was calculated as $14,300. During the year, the company declared and paid dividends of $6,300.
Required:
a. Prepare the closing entries dated December 31, 2016.
b. Record the entry for closing revenue and expense account.
c. Record the entry for closing dividend account.
Answer:
Required a
Closing Retained Earnings Balance
Retained Earnings $270,800 (debit)
Statement of Changes in Shareholders Equity $270,800 (credit)
Required b
Closing Service Revenue Balance
Sales Revenue $171,100 (debit)
Statement of Profit and Loss $171,100 (credit)
Closing Interest Revenue Balance
Interest Revenue $82,800 (debit)
Statement of Profit and Loss $82,800 (credit)
Closing Supplies Expenses Account
Statement of Profit and Loss $89,400 (debit)
Supplies Expenses $89,400 (debit)
Closing Supplies advertising expenses
Statement of Profit and Loss $16,700 (debit)
Advertising expenses $16,700 (debit)
Closing Supplies salaries and wages expenses
Statement of Profit and Loss $18,750 (debit)
Salaries and wages expenses $18,750 (debit)
Closing income tax expenses
Statement of Profit and Loss $14,300 (debit)
income tax expenses $14,300 (debit)
Required c
Closing the dividend Account
Dividend $6,300 (debit)
Retained Earnings Statement $6,300 (credit)
Explanation:
Revenues and Expenses are Closed off to the Statement of Profit and Loss.
Dividends are Closed off to the Retained Income Statement.
Adjusting Supplies Account
Supplies Expenses $89,400 (debit)
Supplies Account $89,400 (credit)
Adjusting dividend Account
Dividend $6,300 (debit)
Cash $6,300 (credit)
Structuring a Special-Order Problem Harrison Ford Company has been approached by a new customer with an offer to purchase 10,000 units of its model IJ5 at a price of $5 each. The new customer is geographically separated from the company's other customers, and existing sales would not be affected. Harrison normally produces 75,000 units of IJ5 per year but only plans to produce and sell 60,000 in the coming year. The normal sales price is $12 per unit. Unit cost information for the normal level of activity is as follows: Direct materials $1.75 Direct labor 2.50 Variable overhead 1.50 Fixed overhead 3.25 Total $9.00 Fixed overhead will not be affected by whether or not the special order is accepted.
Direct Materials $1.75
Direct Labor 2.50
Variable Overhead 1.50
Fixed Overhead 3.25
Total $9.00
Requried:
a. What are the relevant costs and benefits of the two alternatives (accept or reject the special order)?
b. By how much will operating income increase or decrease if the order is accepted?
Answer:
Effect on income= $7,500 increase
Explanation:
Giving the following information:
Special offer:
Units= 10,000
Price= $5
Production costs:
Direct Materials $1.75
Direct Labor 2.50
Variable Overhead 1.50
Because it is a special offer and there is unused capacity, we will not take into account the fixed costs.
Effect on income= number of units*unitary contribution margin
Effect on income= 10,000*(5 - 1.75 - 2.5 - 1.5)
Effect on income= $7,500 increase
Use the following information for the Exercises below. [The following information applies to the questions displayed below.] Hart Company made 3,400 bookshelves using 22,400 board feet of wood costing $315,840. The company's direct materials standards for one bookshelf are 8 board feet of wood at $14.00 per board foot. Exercise 23-14A Recording and closing materials variances LO P6 Hart Company uses a standard costing system.
(1) Prepare the journal entry to charge direct materials costs to Work in Process Inventory and record the materials variances.
(2) Assume that Hart's materials variances are the only variances accumulated in the accounting period and that they are immaterial. Prepare the adjusting journal entry to close the variance accounts at period-end.
Answer and Explanation:
The Journal entries is shown below:-
1. Goods in Process Inventory Dr, (3,400 × 8 × $14) $380,800
Direct Materials Price Variance $2,240
$22,400 × ($14.00 - $315,840 ÷ $22,400))
To Direct Materials Quantity Variance $67,200
$14.00 × ((3,400 × 8) - 22,400)
To Raw Materials Inventory $315,840
(Being direct material charged is recorded)
2. Direct Materials Quantity Variance $67,200
To Direct Materials Price Variance $2,240
To Cost of Goods Sold $64,960
(being the closing is recorded)
After deciding to acquire a new car, you can either lease the car or purchase it with a three-year loan. The car you want costs $38,000. The dealer has a leasing arrangement where you pay $105 today and $505 per month for the next three years. If you purchase the car, you will pay it off in monthly payments over the next three years at an APR of 6 percent. You believe that you will be able to sell the car for $26,000 in three years. a. What is the present value of leasing the car
Answer:
The present value of leasing the car is $16,704.86 and the break even sale price is $25483.48.
Explanation:
Solution
Given that
The monthly rate =0.06/12 =(6%/12)
the number of period = 3 * 12 =23
Now
The present value of leasing the car is computed below:
Payment day =$105
add: Present value of future monthly payment = 505 * (1-(1+(0.06/12))^-36/(0.06/12)
= 166,599,86
Present value of the car =$105 +$166,599,86
=$16,704.86
Thus
The present value of purchasing the car:
Purchase cost = $38,000
Less: present value of resale = 26000/(1+(0.06/12))^-36
=21,726.77
Present value of purchasing the car is $38,000 + $21,726.77
=$16,273.23
Now
The break even sale price
Let the resale price be x
38000 -(x/((1+(0.06/12))^-36 =16704.86
(x/((1+(0.06/12))^-36 = 38000 - 16704.86
(x/((1+(0.06/12))^-36 = 21295.14
x = ((1+(0.06/12))^-36 * 212954.14
x = 25483.48
Therefore the present value of leasing the car is $16,704.86 and the break even sale price is $25483.48
Ryan works at a community college and the college requires all employees to contribute to a pension fund. At this time, he is not too worried about the safety of this contribution because
Answer:
pension funds usually make conservative investments
Explanation:
Pension funds are pools of investment that are used to prepare an employee for retirement. Pension contributions are made either by the employer or the employee.
These funds are collected and invested by Pension Fund Administrators (PFA).
Primarily pension funds are invested in stocks and bonds.
The aim of the investments is to make low risk profit on the funds. So Ryan is not worried about the safety of his pension contributions because they are put in conservative investments that have low risk of loss.
"Total revenue equals the price multiplied by the quantity. The relative change price and quantity is given by the concept of ________________."
Answer:
Elasticity
Explanation:
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.
If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes.
Demand is inelastic if a small change in price has little or no effect on quantity demanded.
Demand is unit elastic if a small change in price has an equal and proportionate effect on quantity demanded.
I hope my answer helps you
Skolits Corp. issued 15-year bonds 2 years ago at a coupon rate of 7.3 percent. The bonds make semiannual payments. If these bonds currently sell for 103 percent of par value, what is the YTM?
Answer:
6.94%
Explanation:
The yield to maturity can be computed using excel rate function found below:
=rate(nper,pmt,-pv,fv)
nper is the coupons that bond has left to pay i.e 26 semiannual coupons in 13 years
pmt is the semiannual coupon amount i.e $1000*7.3%*6/12=36.5
pv is the current market price i.e 103%*$1000=$1030
fv is the face value of $1000
=rate(26,36.5,-1030,1000)=3.47%
semiannual yield =3.47%
annual yield =3.47% *2=6.94%
Allowance for Doubtful Accounts has a debit balance of $800 at the end of the year (before adjustment), and bad debt expense is estimated at 3% of credit sales. If credit sales are $556,000, the amount of the adjusting entry to record the estimate of the uncollectible accounts
Answer:
$15,880
Explanation:
The Bad Debt Expense = $16,680 ($556,000 x 3%)
This will be credited to the Allowance for Doubtful Accounts and debited to the Bad Debt Expense account. When balancing the Allowance for Doubtful Accounts (the Uncollectible Accounts), the $800 debit balance will be netted off to arrive at $15,880 as the balance.
Allowance for Doubtful Accounts is a contra asset (Accounts Receivable) account. It is a way for prudently providing for credit losses. The Bad Debt Expense account is the account where the expense for uncollectibles for the period is charged.
What will a bond be worth on the day it matures? Group of answer choices $0 $100 its face value (plus remaining coupon, if applicable) its remaining coupon, if applicable
Answer: Its face value (plus remaining coupon
Explanation:
On the day a bond matures it is to be paid back to the investors therefore it will be at it's face value to reflect the amount owed to investors. The last coupon may still have to be paid so it also be added to the bond on this date.
For example, if a bond is issued at $100 face value and will.mature in 5 years but is currently trading at $95, at the end of the 5th year it will be trading at $100 because that it what the Issuer of the bond will pay back.
Given the following data for Glennon Company, compute (A) total manufacturing costs and (B) costs of goods manufactured:
A B
Direct materials used $270,000 Beginning work in process $40,000
Direct labor 200,000 Ending work in process 20,000
Manufacturing overhead 300,000 Beginning finished goods 50,000
Operating expenses 350,000 Ending finished goods 30,000
A) $750,000 $790,000
B) $770,000 $750,000
C) $790,000 $810,000
D) $770,000 $790,000
2) Carr Company is considering two capital investment proposals. Estimates regarding each project are provided below:
Project Soup Project Nuts
Initial investment $400,000 $600,000
Annual net income 30,000 46,000
Net annual cash inflow 110,000 146,000
Estimated useful life 5 years 6 years
Salvage value -0- -0-
The company requires a 10% rate of return on all new investments.
Present Value of an Annuity of 1
Periods 9% 10% 11% 12%
5 3.890 3.791 3.696 3.605
6 4.486 4.355 4.231 4.111
The annual rate of return for Project Soup is:
A) 55%.
B) 7.5%.
C) 27.5%.
D) 15.0%.
Answer:
1. Glennon Company
Total manufacturing costs and costs of goods sold:
C) $790,000 $810,000
2. Carr Company
Annual Rate of Return for Project Soup:
B) 7.5%.
Explanation:
1A) Total Manufacturing costs
Direct materials used $270,000
Beginning work in process 40,000
Direct labor 200,000
Ending work in process (20,000 )
Manufacturing overhead 300,000
Total manufacturing costs $790,000
1B) Costs of goods sold:
Beginning finished goods 50,000
Costs of goods manufactured 790,000
less Ending finished goods (30,000)
Cost of goods sold $810,000
2) Project Soup Project Nuts
Initial investment $400,000 $600,000
Annual net income 30,000 46,000
Net annual cash inflow 110,000 146,000
Annual Rate of Return = Annual net income/Initial Investment
= $30,000/$400,000 x 100 = 7.5%
Footsteps Co. has a bond outstanding with a coupon rate of 5.4 percent and annual payments. The bond currently sells for $1,007.49, matures in 18 years, and has a par value of $1,000. What is the YTM of the bond
Answer: 5.33%
Explanation:
Use a financial calculator to get this faster.
On the calculator input the following.
FV = 1,000 because when it matures in 18 years it will be worth this
PV = -1007.49 as that is the current value. Should be in negative.
PMT = 54 because the coupon payments are 5.4% from the par of $1,000 which is $54.
N = 18
Click compute / CPT and then click I/Y.
You should get a YTM of 5.33%.
In large organizations, the potential exists for different parts of an organization to pursue its own goals rather than the overall company goals. Proper _______ can help to resolve conflicts when they arise
Answer:
Objectives
Explanation:
Generally, organizations are required to set short or medium-term objectives to ensure there's an effective customer relationships management, improve worker's efficiency or productivity and more importantly to increase their revenues and profits. These objectives are usually drafted by the executive or top management of an organization and it's mandatory that all the employees are diligently working towards achieving this set goals.
In large organizations, the potential exists for different parts of an organization to pursue its own goals rather than the overall company goals. Proper objectives can help to resolve conflicts when they arise.
For instance, the sales department in a bid to meet daily or monthly targets may result to unauthorized marketing channels and procedures which may be in contrast to the objectives of the human resources department.
With proper objectives such as policies and guidelines, conflicts of goals would be mitigated as various departments would ensure their activities are in tandem with the overall company goals. This can be easily achieved by appointing functional managers who have an oversight function of supervising the employees in their departments at all times.
Flaherty is considering an investment that, if paid for immediately, is expected to return $146,000 five years from now. If Flaherty demands a 15% return, how much is she willing to pay for this investment? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round PV factor to 4 decimals.)
Answer:
PV= $72,587.80
Explanation:
Giving the following information:
Flaherty is considering an investment that, if paid for immediately, is expected to return $146,000 five years from now.
To calculate the present worth, we need to use the following formula:
PV= FV/(1+i)^n
FV= $146,000
Interest rate= 15% = 0.15
Number of periods= 5
PV= 146,000 / (1.015^5)
PV= $72,587.80
Gullett Corporation had $32,000 of raw materials on hand on November 1. During the month, the Corporation purchased an additional $81,000 of raw materials. The journal entry to record the purchase of raw materials would include a:
Answer:
Dr Raw materials $81, 000
Cr Accounts payable $81,000
Explanation:
Preparation of the journal entry to record the purchase of raw materials for Gullett Corporation
Since we were told that the Corporation already had the amount of $32,000 of raw materials on hand in which they later purchased an additional amount of $81,000 of the raw materials this means we are going to record the Journal entry by Debiting Raw materials with the amount of $81, 000 which is the additional amount of the raw materials purchased and to Credit Accounts payable with the same amount of $81,000.
Dr Raw materials $81, 000
Cr Accounts payable $81,000
(To record purchase of raw materials)
Gates Appliances has a return-on-assets (investment) ratio of 19 percent. a. If the debt-to-total-assets ratio is 20 percent, what is the return on equity
Answer:
23.8%
Explanation:
Gates appliances has a return-on-assets(investment) of 19%
The debt-to-total-assets ratio is 20%
Therefore, the return on equity can be calculated as follows
Return on equity= Return on assets(investment)/(1-debt/asset)
= 19/(1-20/100)
= 19/(1-0.2)
= 19/0.8
= 23.8%
Hence the return on equity is 23.8%
"Suppose a firm wants to take advantage of an upward-sloping yield curve. If the firm believes that interest rates will stay constant and it wants to use the current yield curve to bolster profits, which approach should the firm follow?"a. Conservative approach b. Aggressive approach c. Maturity matching approach
Answer: b. Aggressive approach
Explanation:
The Aggressive approach refers to using short term finance to finance temporary working capital and some of permanent working capital.
When facing an upward sloping yield curve which means that interest rates are expected to.rise in future, it is better to use the current rates to bolster profit. By engaging in an Aggressive approach, the company can borrow now to fund their operations as the Aggressive approach involves using short term financing to cater for working capital. This will keep interest costs at a minimum because they will.not be calculated based on the impending increase in interest rates but rather on current short term rates.
All of the following statements regarding stock dividends are true except : A. Stock dividends provide evidence of management's confidence that the company is doing well. B. Directors can use stock dividends to keep the market price of the stock affordable. C. Stock dividends decrease the number of shares outstanding. D. Stock dividends do not reduce assets or equity. E. Stock dividends transfer a portion of equity from retained earnings to contributed capital.
Answer: Stock dividends decrease the number of shares outstanding.
Explanation:
A stock dividend does not affect the total equity, but rather the transfer amounts that exists between the components of the equity.
Stock dividends also shows evidence of the confidence of the management that the company is doing well and that the directors can use it to keep market price of stock affordable.
The option that Stock dividends decrease the number of shares outstanding is not true.
Given the following selected information on McMillen's Chocolate, Inc., calculate Cash Flow from Operating Activities for 2012. Show your work.
2011 2012
EAT $ 600,000 800,000
Depreciation Exp. 100,000 120,000
Dividends 400,000 550,000
Accounts Receivable 1,500,000 1,000,000
Inventory 3,500,000 4,100,000
Accts. Payable 350,000 350,000
Accruals 250,000 200,000
Long-Term Debt 2,300,000 2,000,000
Common Stock 2,200,000 3,000,000
Interest expenses 50,000 60,000
Retained Earnings 6,150,000 6,400,000
Answer:
Cash flow from operating activities for the Year 2012 = $770000.
Explanation:
Particulars Amount ($)
Earnings after tax (EAT) 800,000
+ Depreciation (Non-cash expenditure) 120,000
Operating profit before working 920,000
capital changes
+ Decrease in accounts receivable 500,000
(1,500,000 - 1,000,000)
- increase in inventory 600,000
(4,100,000 - 3,500,000)
- Decrease in accrual 50,000
(250,000 - 200,000)
Cash flow from operating activities 770,000
Conclusion:- Cash flow from operating activities for the Year 2012 = $770000.
Cainas Cookies purchased a commercial oven on 1/1/14 for a total cost of 35,000. Estimated useful life is 6 years, with a salvage value of 5,000 at the end of that time. Cainas estimates that the equipment will be used for 12,000 baking hours. For the first year of operations, Cainas had 2,500 backing hours. For the second year Cainas had 1,700 hours. Compute the depreciation for YEAR 2. Group of answer choices
Answer:
Units of production = $4250
Straight line depreciation expense = $5,000
Double declining method = $7.777
Explanation:
The depreciation method to he used wasn't stated, so I calculated the depreciation expense using 3 depreciation methods
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
(35,000 - 5,000) / 6 = $5,000
The depreciation expense each year would be $5000
Depreciation expense using the double declining method = Depreciation factor x cost of the asset
Depreciation factor = 2 x (1/useful life)
2 / 6 = 0.3333
Deprecation expense in year 1 = 0.3333 x $35,000 = $11,666.67
Book value = $35,000 - $11,666.67 = $23,333.33
Depreciation expense in year 2 = $23,333.33 × 0.3333 = $7.777
Depreciation expense using units of production = ( hours used in year / total estimated hours of the machine) x (Cost of asset - Salvage value)
(1,700 / 12,000) x (35,000 - 5,000) = $4250
I hope my answer helps you
The Cainas Cookies' depreciation expense for year 2 is C. $4,250.
The correct choice of answer is not A. $7,292 , B. $6,250 , or D. $4,598.
Data and Calculations:
Cost of commercial oven = $35,000
Salvage value = $5,000
Depreciable amount = $30,000 ($35,000 - $5,000)
Estimated useful life = 12,000 baking hours
Depreciation rate per baking hour = $2.50 ($30,000/12,000)
Depreciation expense for Year 2 = $4,250 ($2.50 x 1,700)
Thus, the depreciation expense for year 2 is $4,250.
Learn more: brainly.com/question/17312012
Helen worked for ABC Motors for 25 years. The president of ABC said to her: "In consideration of your past service for 25 years, I promise to give you a new car next week." However, he did not give the car. Is this promise legally enforceable
Answer:
No, legal consideration is absent
Explanation:
According to the given situation, the President of ABC company was promised to Helen to give a new car next week as Helen worked for 25 years. But the president did not give the car as he promised to the Helen.
In this case, there was a promise which was verbal, not in the way of legal consideration, which means there is no proof so that Helen can claim from the president.
Therefore the correct answer is No, legal consideration is absent
You are an analyst working for a mutual fund. Your job is to select stocks for the fund. You want to select only one of the following tech stocks to add into your current portfolio: Appscale, Bitwise, and Carbivore. All three stocks are similar along many metrics. They are all in the technology space and have been growing very fast over the past few years. However, it is hard to get all the information for those three stocks, and so far you have collected only the following relevant information to help you make the decision: Appscale is a tech firm that focuses on developing and integrating mobile apps. Reading through analyst reports and based on your own judgement, you think the cost of equity for Appscale is 12%. Appscale estimated earnings per share next year are $10. It pays all its earnings as dividends. Bitwise is a fintech company that is involved in Bitcoin and blockchain technology. Currently, Bitwise stock is trading at $100/share, with estimated earnings next year of $10/share. You read from their management disclosure and financial report that Bitwise retains 40% of their earnings for investments. Its reinvestment rate of return is 10%. Carbivore is a biotech firm that promotes and advocates sustainable food choices. The one period holding return is 10%.
What is the current price of Appscale?
a. $120/share
b. $83/share
c. Not enough information
Answer:
a. $120/share
Explanation:
The market value of a company is total value of a business. It is calculated by multiplying number of outstanding share with market value per share. This is also known as Market Capitalization. Cost of equity is the rate of return required by the equity holders of the company. The company decides its cost of equity based on the risk level of its business. The market price for Appscale will be:
Ke 12%
EPS $10
Market value is $120/share
(12% * $10 per share)
Hudson Corporation will pay a dividend of $3.60 per share next year. The company pledges to increase its dividend by 4.60 percent per year indefinitely. If you require a return of 7.00 percent on your investment, how much will you pay for the company's stock today
Answer:
The maximum that should be paid for the stock of the company today is $146.64
Explanation:
The current price of the stock can be calculated using the constant growth model of DDM. The DDM values the stock based on the present value of the expected future dividends from the stock.
The formula for the price of the stock today under the constant growth model is,
P0 = D0 * (1+g) / (r - g)
Where,
D0 is the most recent dividend paid
D0 * (1+g) is the dividend expected to be paid next period
r is the required rate of return
g is the growth rate in dividends
As we don't have a D0 but instead are given a D1, the constant growth rate will be applied from year 2 and we will calculate the price of the stock at year 1 using the constant growth model and discount is back one year to calculate the price of the stock today.
P1 = D1 * (1+g) / r - g
P1 = 3.6 * (1+0.046) / (0.07 - 0.046)
P1 = $156.9
Price of the stock today is,
P0 = P1 / (1+r)
P0 = 156.9 / (1+0.07)
P0 = $146.635514 rounded off to $146.64
An underpinning of all commerce is effective communications, knowledge of where goods and services exit and where they are needed and the ability to communicate instantaneously across vast distances. Facilitation this movement into the future one can observe which shifts in examining world population and telecommunications?
Explanation:
Analyzing the historical context, it is possible to see how the new communication technologies were essential for the development of commerce. We currently live in the digital age, where almost every individual has access to a cell phone with internet and can communicate within seconds with any part of the world.
This technological revolution also had a great economic impact, generating new business models.
Companies have to adapt to this reality and insert themselves in the new market based on the internet, in creating relationships with consumers, in the practice of positive social and environmental attitudes, etc. Some companies needed to reinvent themselves to adapt to the new economic context, or they would lose strength in the market and would cease to exist.
The fact is that the technological revolution has impacted commercial relations around the world, today the consumer seeks the solution to his problems and desires, not being restricted to local consumption, which causes a new redesign of commerce and manages impacts on the economy of the world.
A seller lists property with a multimillion-dollar broker. The broker's agreement calls for him to enter the listing into the MLS within three working days. On the second day, the broker shows the property to a prospective buyer, who loves it. The buyer is leaving town the next day but will be back in one week to purchase it if it is still on the market. The broker wants to double his commission by selling his own listing, so he withholds the information from the MLS for 10 days. Based on this information, the broker ______________.
Answer: B) may be liable to the seller for violating duties required by the listing agreement.
Explanation:
The Multiple Listing Service (MLS) is a database that allows brokers to cooperate in finding buyers for homes. They list the properties for sale and if other brokers know people who need such a house they will reach out and buy it. The listing broker and the selling broker will then share commissions.
This is what the broker was trying to avoid by withholding the information from the MLS.
However, the broker is in violation of the listing agreement which stated that he should post it on the MLS within 3 working days and as such there is a very real chance that he is liable to the seller for this violation.
A North Face retail store in Chicago sells 500 jackets each month. Each jacket costs the store $100 and the company has an annual holding cost of 25 percent. The fixed cost of a replenishment order (including transportation cost) is $100. The store currently places a replenishment order for Q.
1. What is the annual holding and ordering cost?
2. On average, how long does a jacket spend in inventory?
3. If the retail store wants to minimize ordering and holding cost, what order size do you recommend?
4. How much would the optimal order reduce holding and ordering cost relative to the current policy?
Answer:
(1) The annual holding cost is =$6250, The ordering costs is = 500 units
(2) The total cost is = $7450
(3)224 unit
(4) $1,864.30
Explanation:
Solution
Given that:
The annual demand = 520 units * 12
= 6,240 units
The cost per order = $100 per order
The Carrying Cost = 0.25% * $100
= 25 per unit per year
Thus
(1) The Ordering quantity = 500 units every month
The annual holding cost =0.5*quantity ordered*holding cost
The Annual Holding cost = 0.5*500*25
Annual Holding cost =$6250
(2) The ordering (Annual)cost = number of orders *cost per order
Annual ordering cost =(500*12/500)*100
Annual ordering cost =$1200
Total cost = 6250+1200=7450
(3)Thus
EOQ=(2*D*S/h)^0.5
EOQ=(2*6240*100/25^)0.5
EOQ=223.43
=224 unit
(4)The ordering cost =(6240/224)*100=2785.70
Holding cost=0.5*224*25
=2800
Total cost= 2785.70+2800
Total cost=5585.70
Total savings = 7450 - 5585.70
= $1,864.30