Answer: D. None of the penalties apply to this return.
Explanation:
Marilyn filed her tax return on April 15 which was the deadline for filing in 2020 until it was moved to the 15th of July 2020 on account of the ongoing pandemic. She also attached a cheque for the payment of the tax liability she owed. She filed on time and paid her liability therefore none of the penalties are applicable to her.
All automobile makers around the world are in the same strategic group because they manufacture automobiles.
a) true
b) false
Answer:
The answer is False.
Explanation:
False, all automobile maker of the world does not form the same strategic group on the basis of manufacturing the automobiles because the strategic group refers to the process to follow the same strategy. Since all around the world different automobile maker work in different economies with a different set of strategies that varies according to the economic situations. For example, the strategy to work in a developed economy will be different from the developing economy. Therefore, all automobile makers will not follow the same strategy so it will not be in the same strategic group.
Common Stockholders' Profitability Analysis A company reports the following:
net income : $375,000
Preferred dividends : 75,000
Average stockholders' equity 2,500,000
Average common stockholders' equity : 1,875,000
Determine :
(a) the rate earned on stockholders' equity
(b) the rate earned on common stockholders' equity.
Answer:
(A) Rate earned on stockholder's equity=15%
(B) Rate earned on common stockhloder's equity= 16%
Explanation:
A company reports the following profitability analysis
Net income of $375,000
Preferred dividend of $75,000
Average stockhloder's equity of $2,500,000
Average common stockhloder's equity of $1,875,000
(A) The rate earned on stockholder's equity can be calculated as follows
= Net income/Average stockholders equity
= $375,000/$2,500,000
= 0.15×100
= 15%
(B) The rate earned on common stock holder's equity can be calculated as follows
= Net income-Preferred dividend/Average common equity
= $375,000-$75,000/$1,875,000
= $300,000/$1,875,000
= 0.16×100
= 16%
Hence the rate earned on stockholder's equity and common stockhloder's equity is 15% and 16% respectively.
Units-of-Output DepreciationA tractor acquired at a cost of $420,000 has an estimated residual value of $30,000, has an estimated useful life of 25,000 hours, and was operated 1,850 hours during the year. Determine the following. If required, round your answer for the depreciation rate to two decimal places.(a) The depreciable cost $ (b) The depreciation rate $ per hour(c) The units-of-output depreciation for the year $
Answer:
a. $390,000
b. $15.6
c. $28,860
Explanation:
depreciable cost = cost of asset - salvage value = $420,000 - $30,000 = $390,000
(b) The depreciation rate $ per hour = depreciable cost / estimated useful life = $390,000 / 25,000 = $15.6
The units-of-output depreciation for the year = $15.6 x 1,850 hours = $28,860
Texas-Q Company produces and sells barbeque grills. Texas-Q sells three models: a small portable gas grill, a larger stationary gas grill, and the specialty smoker. In the coming year, Texas-Q expects to sell 20,000 portable grills, 50,000 stationary grills, and 5,000 smokers. Information on the three models is as follows:
Portable Stationary Smokers
Price $90 $200 $250
Variable cost per unit 45 130 140
Total fixed cost is $2,128,500.
Required:
1. What is the sales mix of portable grills to stationary grills to smokers?
2. Compute the break-even quantity of each product.
Answer:
1.
Sales mix
Portable grills = 20000/75000 = 4/15 or 26.67%
Stationary grills = 50000/75000 = 2/3 or 66.67%
Smokers = 5000/75000 = 1/15 or 6.67%
2.
Break even in units
Overall = 2128500 / 66 = 32250 units
Portable = 32250 * 4/15 = 8600
Stationary = 32250 * 2/3 = 21500
Smokers = 32250 * 1/15 = 2150
Explanation:
1.
The sales mix is the proportion of sales in units that each product holds in the in relation to the total overall sales in units of all products. The sales mix is calculated as follows,
Sales mix proportion of Product A = Sales in units Product A/Total number of sales in units of all products
The total number of sales in units of all products is,
Total sales in units = 20000 + 50000 + 5000 = 75000 units
Sales mix
Portable grills = 20000/75000 = 4/15 or 26.67%
Stationary grills = 50000/75000 = 2/3 or 66.67%
Smokers = 5000/75000 = 1/15 or 6.67%
2.
We will compute the overall break even point in units in then divide it according to the sales mix to calculate the break even in units of each product.
To calculate the overall break even in units, we need to determine the weighted average contribution per unit.
Weighted average contribution per unit = 4/15 * (90 - 45) + 2/3 * (200 - 130) + 1/15 * (250 - 140)
Weighted average contribution per unit = 66
Break even in units
Overall = 2128500 / 66 = 32250 units
Portable = 32250 * 4/15 = 8600
Stationary = 32250 * 2/3 = 21500
Smokers = 32250 * 1/15 = 2150
Suppose a five-year, $ 1 comma 000 bond with annual coupons has a price of $ 902.86 and a yield to maturity of 5.7 %. What is the bond's coupon rate?
Answer:
The coupon rate is 3.41%
Explanation:
The price of a bond is calculated as the present value of the annuity payments of its interest plus the present value of the face value of the bond. The formula to calculate the price of the bond is attached.
As the bond is an annual coupon paying bond, we determine the following,
r = 5.7%
n = 5 years or 5
The C or coupon payment is unknown. Let x be the coupon rate paid by the bond. Then C or coupon payment is 1000 * x or 1000x.
We know the current price of the bond. Thus putting in the available values for all the variables, we can calculate the value of x which is the coupon rate.
902.86 = 1000x * [(1 - (1+0.057)^-5) / 0.057] + 1000 / (1+0.057)^5
902.86 = 1000x * (4.246965615) + 757.92296
902.86 - 757.92296 = 4246.965615x
144.93704 / 4246.965615 = x
x = 0.03412 or 3.412% rounded off to 3.41%
Government organizations such as the IRS and other government regulatory agencies are interested in a firm's accounting information in order to help the firm strategize about ways to cut costs in order to minimize net income before taxes.
a. True
b. False
Answer: False
Explanation:
The role of the IRS and other Government regulatory agencies is to collect taxes as well as to ensure that companies follow the prescribed Generally Accepted Accounting Principles. This is the main purpose that they go through a firm's Accounting records. To ensure that they are paying the correct amount of taxes and to ensure that they are not engaging in illegal and unacceptable accounting practices.
2. Consumption and saving definitions Suppose Ana gets a sales bonus at her place of work that gives her an extra $600 of disposable income. She chooses to spend $480 and save the remaining $120. From this, you can tell that Ana's marginal propensity to consume (MPC) is , and her marginal propensity to save (MPS) is . Mathematically, it must always be true that: Consumption = Therefore, it must also be true that: MPC =
Answer:
From this, you can tell that Ana's marginal propensity to consume (MPC) is 0.80, and her marginal propensity to save (MPS) is 0.20. Mathematically, it must always be true that: Consumption = Therefore, it must also be true that: MPC = 1 - MPS.
Explanation:
Marginal propensity to consume refers to amount that a household decides to spend of every extra dollar that they earn. Since you either spend or save money, the marginal propensity to save is the portion that you decided not to spend, and therefore, save.
The main goal of monetary policy is to shift Choose one or more: A. aggregate demand. B. short-run aggregate supply. C. long-run aggregate supply.
Answer: aggregate demand
Explanation:
Monetary policy, is the demand side of an economic policy that is used by the government through the central bank in order to control the money supply that is available in the economy so as to achieve macroeconomic goals that will bring about economic growth.
The main goal of monetary policy is to shift the aggregate demand. Increase or decrease in money supply can either shift the aggregate demand to the right or to the left depending on whether the government wants to use the expansionary or the contractionary method.
The sales budget for Perrier Inc. is forecasted as follows:
Month Sales Revenue
May $130,000
June 150,000
July 200,000
August 130,000
To prepare a cash budget, the company must determine the budgeted cash collections from sales. Historically, the following trend has been established regarding cash collection of sales: 60 percent in the month of sale. 20 percent in the month following sale. 15 percent in the second month following sale.
5 percent uncollectible.
60 percent in the month of sale.
20 percent in the month following sale.
15 percent in the second month following sale.
The company gives a 2 percent cash discount for payments made by customers during the month of sale. The accounts receivable balance on April 30 is $22,000, of which $7,000 represents uncollected March sales and $15,000 represents uncollected April sales. Prepare a schedule of budgeted cash collections from sales for May, June, and July. Include a three-month summary of estimated cash collections.
Answer:
budgeted cash collections
May June July
sales revenue 130,000 150,000 200,000
cash sales (60% x 0.98) 76,440 88,200 117,600
accounts receivable (March) 5,250
accounts receivable (April) 7,500 5,625
accounts receivable (May) 26,000 19,500
accounts receivable (June) 30,000
total cash collections 219,190 269,825 367,100
I used net accounts receivables, that means I already discounted the 5% of collectibles.
Formal proposals are different from informal proposals in that they are used to respond to large projects and are therefore often longer. Formal proposals contain special components in addition to the six basic components of informal proposals.
a. True
b. False
Identify the internal control weakness in the following situations. State how the person can hurt the company.
A. Jerry Miller works as a security guard at ALTEX parking in Denver. Miller has a master key to the cash box where commuters pay for parking. Each night Miller prepares the cash report that shows (a) the number of cars that parked on the lot and (b) the day’s cash receipts. Sandra Covington, the ALTEX treasurer, checks Miller’s figures by multiplying the number of cars by the parking fee per car. Covington then deposits the cash in the bank.
B. Sharon Fisher is the purchasing agent for Manatee Golf Equipment. Fisher prepares purchase orders based on requests from division managers of the company. Fisher faxes the purchase order to suppliers who then ship the goods to Manatee. Fisher receives each incoming shipment and checks it for agreement with the purchase order and the related invoice. She then routes the goods to the respective division managers and sends the receiving report and the invoice to the accounting department for payment.
C. The external auditor for Mattson Financial Services takes a global view of the audit. To form his professional opinion of Mattson’s financial statements, the auditor runs no tests of Mattson’s financial statements or of the underlying transactions. Instead, the auditor computes a few ratios and compares the current-year ratio values to the ratio values a year ago. If the ratio values appear reasonable, the auditor concludes that Mattson’s financial statements are okay.
Answer:
Identification of the Internal Control Weaknesses:
A. There is no segregation of duties and there is lack of access control. Jerry Miller as a security guard is not expected to have a master key to the cash box. With this he can pilfer the cash. If he prepares the report that shows the number of cars that parked on the lot, he is not supposed to also prepare the day's cash receipts. Otherwise, he can state any number of cars as parked that he likes, and which corresponds to the cash he might leave in the Cash box since he also has a master key.
B. There is no segregation of duties and there is lack of supervision, proper reconciliations, and assets audit. Sharon Fisher handles purchase transactions from the beginning to the close all alone with a third party. This exposes the company to procurement frauds and collusion with suppliers. She can purchase assets for the company at prices that would enrich her personally.
C. Forming an audit opinion on the basis of ratio analysis of last year's comparative financial statements exposes the company to audit risks. While ratio analysis is part of the basis for forming audit opinions, it is surely not the first audit procedure to obtain audit evidence to support his audit opinion on the financial statements. An auditor is expected to obtain sufficient audit evidence and perform audit substantive tests of financial statement assertions. He or she is also expected to review the internal control system to ensure that it is operating effectively after establishing its existence and reviewing changes in internal controls.
Explanation:
Internal Controls are controls established by management in order to help it achieve business goals. There are many internal controls, including Separation of Duties, Access Controls , Authorization and Approvals, Asset Audits, Reconciliations, and Data Backups. The purposes of internal controls are to establish the reliability of financial reporting, ensure timely feedback on the achievement of operational or strategic goals, and achieve compliance with financial management laws, and accounting regulations.
The correlation between the fund returns is 0.1560. What is the expected return and standard deviation for the minimum-variance portfolio of the two risky funds?
Answer:
The answer is given below
Explanation:
The question is not complete. Given that:
[tex]E(r_s)=11\%,E(r_b)=8\%, \sigma(r_s)=33\%,\sigma(r_b)=25\%[/tex], ρ = 0.1560
From the covariance matrix, Cov (B, S) = [tex]\rho*\sigma_b*\sigma_s=0..1560*33*25=128.7[/tex]
The minimum-variance portfolio is gotten using the formula:
[tex]w_{min}(S)=\frac{\sigma_B^2-Cov(B,S)}{\sigma_S^2+\sigma_B^2-2Cov(B,S)}=\frac{(25^2)-128.7}{33^2+25^2-2(128.7)}=\frac{625-128.7}{225+1089-257.4}=0.4697\\\\w_{min}(B)=\frac{\sigma_S^2-Cov(B,S)}{\sigma_S^2+\sigma_B^2-2Cov(B,S)}=\frac{(33^2)-128.7}{33^2+25^2-2(128.7)}=\frac{1089-128.7}{225+1089-257.4}=0.9089[/tex]
the expected return for the minimum-variance portfolio is:
[tex]E(r_{min})=w_{min}S*E(r_s)+w_{min}B*E(r_b)=11*0.4697+0.9089*8=12.44\%[/tex]
the standard deviation for the minimum-variance portfolio is:
[tex]\sigma_{min}=[w_S^2\sigma_s^2+w_B^2\sigma_B^2+2w_Bw_SCov(B,S)]^\frac{1}{2} =[0.4687^2*33^2+0.9089^2*25^2+2*0.9089*0.4687*128.7]^\frac{1}{2}=29.41\%[/tex]
Your firm has net income of $260 on total sales of $1,160. Costs are $650 and depreciation is $110. The tax rate is 35 percent. The firm does not have interest expenses. What is the operating cash flow
Answer:
The answer is $650
Explanation:
Net income = $260
Total sales = $1,160
Costs = $650
Depreciation = $110
Earnings before Interest and tax(EBIT) =
Total sales - Cost - depreciation
$1,160 - $650 - $110
= $400
Tax =[260 ÷ (1 - 0.35)] - 260
$400 - $260
$140
Operating cash flow is therefore,
Earnings before Interest and tax(EBIT) + depreciation + tax
$400 + $110 + $140
= $650
g "At the current exchange rate of $1.40 per British pound, a one-day pass to Worldwide Theme Park of Florida sells for 54 pounds at travel agencies throughout Great Britain. If the exchange rate increases to $1.70 per pound, what will happen to the price of a one-day pass sold in Great Britain?"
Answer:
The price will fall to 44.47 pounds
Explanation:
Calculation for what will happen to the price of a one-day pass sold in Great Britain
Using this formula for the First step
Sales pounds × Current exchange rate
54 pounds x $1.40 = $75.6
Second step
75.6/Increase in exchange rate of $1.70
= 44.47 pounds
Therefore the price will fall to 44.47 pounds
The manufacturers of several designer purses have met and agreed not to sell their purses to Jolie's Department Store because of Jolie's practice of discounting all items 20 percent below the retail costs at other stores. The manufacturers are concerned about maintaining their images of exclusivity and quality. The agreement among the manufacturers:
Answer:
b. violates the Sherman Act because it is a boycott.
Explanation:
Since the manufacturers have decided to team boycott the Jolie's Department Store, the Sherman Act is also known as the form of civil conspiracy by just not selling their immoral and also unconstitutional and violet hand bags to them.
Hence, the correct option is b as it violates the Sherman act
Therefore all the other options are wrong
You short-sell 600 shares of Rock Creek Fly Fishing Co., now selling for $38 per share. If you want to limit your loss to $3,600, you should place a stop-buy order at ___.A. A. $32.00 B. $38.00 C. $44.00 D. $64.00
Answer:
$44.00
Explanation:
You are required to find where to place a stop-buy order
Amount received from short sale
= 600 x $38
= $22,800
Loss = $3,600 = 600p - 22,800
=3,600 + 22800 = 600p
26400 = 600p
P = 26400/600
P = $44.00
you should place a stop-buy order at $44.00
The following transactions and adjusting entries were completed by a paper-packaging company called Gravure Graphics International during 2018 and 2019. The company uses straight-line depreciation for trucks and other vehicles, double-declining-balance depreciation for buildings, and straight-line amortization for patents.
January 2,2015 Paid $87,000 cash to purchase storage shed components.
January 3;2015 Paid $3,000 cash to have the storage shed erected. The storage shed has an estimated life of 10 years and a residual value of $6,000.
April 1,2015 Paid $39,000 cash to purchase a pickup truck for use in the business. The truck has an estimated useful life of five years and a residual value of $4,000.
May 13,2015 Paid $400 cash for repairs to the pickup truck.
July 1,2015 Paid $28,000 cash to purchase patent rights on a new paper bag manufacturing process. The patent is estimated to have a remaining useful life of five years.
December 31,2015 Recorded depreciation and amortization on the pickup truck, storage shed, and patent.
June 30,2016 Sold the pickup truck for $33,000 cash. (Record the depreciation on the truck prior to recording its disposal.)
December 31,2016 Recorded depreciation on the storage shed. Determined that the patent was impaired and wrote off its remaining book value (i.e., wrote down the book value to zero).
Required:
Prepare the journal entries required on each of the above dates. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.)
Answer:
Gravure Graphics International
General Journal:
Jan 2, 2015:
Debit Storage Shed $87,000
Credit Cash Account $87,000
To record the purchase of storage shed components.
Jan 3, 2015:
Debit Storage Shed $3,000
Credit Cash Account $3,000
To record the payment for shed erection.
April 1, 2015:
Debit Pickup Truck $39,000
Credit Cash Account $39,000
To record the purchase of a pickup Truck
May 13, 2015:
Debit Truck Repair Expense $400
Credit Cash Account $400
To record the payment for repairs.
July 1, 2015:
Debit Patent Rights $28,000
Credit Cash Account $28,000
To record the purchase of patent rights.
Dec. 31, 2015:
Debit Depreciation Expense - Storage Shed $8,400
Credit Accumulated Depreciation - Storage Shed $8,400
To record the depreciation expense for the year.
Debit Depreciation Expense - Pickup Truck $5,250
Credit Accumulated Depreciation - Pickup Truck $5,250
To record the depreciation expense for the 9 months.
Debit Impairment Expense - Patent Rights $2,800
Credit Accumulated Impairment- Patent Rights $2,800
To record the impairment expense for the 6 months.
June 30, 2106:
Debit Depreciation Expense- Pickup Truck $3,500
Credit Accumulated Depreciation- Pickup Truck $3,500
To record depreciation expense for the half year.
Debit Accumulated Depreciation - Pickup Truck $8,750
Credit Sale of Truck $8,750
To transfer the balance to Sale of Truck.
Debit Sale of Truck $39,000
Credit Pickup Truck $39,000
To record the transfer to Sale of Truck.
Debit Cash Account $33,000
Credit Sale of Truck $33,000
To record the sale of the pickup truck for cash.
Dec. 31, 2016
Debit Sale of Truck $2,750
Credit Gain on Sale of Truck $2,750
To record the gain on sale of truck.
Debit Depreciation Expense - Storage Shed $8,400
Credit Accumulated Depreciation - Storage Shed $8,400
To record the depreciation expense for the year.
Debit Impairment Expense - Patent Rights $25,200
Credit Accumulated Impairment- Patent Rights $25,200
To write down the book value to zero.
Explanation:
a) Depreciation / Impairment Expenses:
1) Storage Shed = $8,400 ($87,000 + 3,000 - 6,000) / 10
2) Pickup Truck = $7,000 ($39,000 - 4,000) / 5
for 2015 = $5,250 ($7,000 x 9/12)
3) Patent Rights = $5,600 ($28,000/5)
for 2015 = $5,600 /2 = $2,800
4) Truck for 2016: $7,000/2 = $3,500
5) Depreciation is an accounting method for expensing the cost of a fixed asset over its useful life. It is based on estimate and there are many methods for estimating the depreciation expense for the various fixed assets.
6) Impairment is like depreciation as a method for expensing cost of an asset. The difference is that while depreciation is used for tangible non-current assets, impairment is for intangible non-current assets. Another difference is that impairment is determined at the end of the period when the asset is checked for impairment based on fair value.
Which of the following statements regarding a firm’s optimal capital structure is true? The optimal capital structure maximizes the firm’s earnings per share (EPS). The optimal capital structure maximizes the firm’s cost of equity. The optimal capital structure maximizes the firm’s cost of debt. The optimal capital structure maximizes the firm’s stock price.
Answer: The optimal capital structure maximizes the firm’s stock price.
Explanation:
The Capital Structure of a company refers to the proportion of debt vs equity that it chooses to use to fund its Assets and operations.
The goal of management is to use the capital structure to fund the company in such a way that the market value of a company increases.
The Market value is reflected by the firm's stock price so the optimal capital structure is meant to maximize the firm’s stock price.
You have just taken out a $ 23 comma 000 car loan with a 4 % APR, compounded monthly. The loan is for five years. When you make your first payment in one month, how much of the payment will go toward the principal of the loan and how much will go toward interest? (Note: Be careful not to round any intermediate steps less than six decimal places.)
Answer:
Interest = $75.90
Principal = $347.64
Explanation:
First find the payment that is required per month. It will be an Annuity payment as the present value of the loan is given.
The loan is for 5 years compounded monthly so period is;
= 5 years * 12 months
= 60
Interest = 4/12
Present Value of Annuity= Payment * (1 - (1 + r) ^ -n)/r
23,000 = Payment * (1 - ( 1 + 4/12%) ^ -⁶⁰)/ 4/12%
23,000 = Payment * 54.304
Payment = 23,000/54.304
= $423.54
Interest Payment is;
= 4/12% * 23,000
= $75.90
Amount going towards Principal;
= 423.54 - 75.90
= $347.64
. The set of activities used to obtain a sufficient number of the right people at the right time in order to select those who best meet the needs of the organization is called
Answer:
Interview
Explanation:
This set of activities done by an organization is called an Interview. All companies/organizations do this in order to find the best candidate for a specific position within their company. Although there are different types of interviewing methods (face-to-face, group interview, online interview, etc.) all of which include a set of questions or activities that show the employer/hiring manager that you can complete the tasks and responsibilities that the job position demands.
A company has net income of $199,000, a profit margin of 9.50 percent, and an accounts receivable balance of $106,108. Assuming 74 percent of sales are on credit, what is the company's days' sales in receivables
Answer:
Receivables days = 25 days
Explanation:
The receivable days is the average length of time it takes a business to receive cash from customers in respect of credit sales made.
It is calculated as follows:
Receivables days = Receivables / Credit sales × 365 days.
The credit sales is missing , hence we need to work it out as follows:
Net income =profit margin × total sales revenue
let sales value be represented by "y"
199,000 = 9.50% × y
y = 199,000/0.095
y= 2,094,736.84
Total sales revenue = 2,094,736.84
Credit sales = 74% × total sales revenue
= 74% × 2,094,736.84=1,550,105.263
Receivables days =106,108/1,550,105.26× 365 days= 24.98
Receivables days = 25 days
An investor has sold short stock worth $20,000 in a margin account, depositing the Regulation T margin requirement. If the market value of the stock falls to $16,000, what is the Selling Power in the account
Answer:
The selling power in the account is $20,000.
Explanation:
Credit - Short market value = Equity %
Sale $20,000 $20,000
Margin $10,000 $10,000
Total $30,000 $20,000 $10,000 50%
If the market value falls to $16,000, the account will show;
Credit - Short market value = Equity %
$30,000 $16,000 $14,000
To support a $16,000 stock position at 50% margin, equity of $8,000 is required. Since the account has $14,000 of equity, the excess of $10,000 may be borrowed and it's the
SMA amount. With $10,000 of SMA amount, twice this amount may be purchased or sold short in other marginal securities.
Henri earned a salary of $50,000 in 2001 and $70,000 in 2006. The consumer price index was 177 in 2001 and 265.5 in 2006. Henri's 2006 salary in 2001 dollars is
Answer:
Henri's 2006 salary in 2001 dollars =$46,666.66
Explanation:
A rise in the price index implies inflation
Inflation is the increase in the general price level. Inflation erodes the value of money.
This price index is the weighted average price of a basket of goods and services consumed by a typical consumer. It is used to measure the rate of inflation.
So we can determine the salary in the base year value as follows:
2006 Salary in the base year terms=
CPI base year/CPI in the current year × salary in the current year
CPI base year- 177, CPI in the current yea- 256.5,
Salary in the current year - 70,000
Henri 2006 Salary in 2001 Dollar
=177/265.5 ×70,000/265.5 = 46,666.66
Henri's 2006 salary in 2001 dollars =$46,666.66
g "Which philosophy in setting budgeted amounts assumes both the complete elimination of inefficiencies and a level of absolute efficiency?"
Answer:
The total quality management approach
Explanation:
This philosophy is the total quality management approach.
Total quality management has to do with the efforts to enforce and make sustainable climate where employees can continuous to improve their ability to provide on demand products and give those services that customers perceive to be of particular value when they demand for them.
The implication of the expectations theory that expected returns for a holding period must be the same for bonds of different maturities depends on the assumption that________.
1. Yiels curves usually slope downward
2. Yiels curves usually slope downward
3. Instruments with different maturities are perfect subtitute
4. Savers are usually risk averse
Answer:
i think the answer is intruments with different matuirties are perfect subtitute. i'm not sure but i think this is the answer.
Explanation:
When you take your first job, you decide to start saving right away for your retirement. You put $5,000 per year into a saving plan, which interest rate 10% per year. Five years later, you move to another job and stop making contributions to the saving plan. If the first plan continued to earn interest for another 35 years, determine the future worth in year 40.
Answer:
FV= $857,840.94
Explanation:
Giving the following information:
First investment:
Annual deposit= $5,000 per year
Interest rate= 10%
Number of years= 5
Second investment:
Number of years= 35
Interest rate= 10%
Lumpsum= first investment
First, we need to calculate the future value of the first investment. We will use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {5,000*[(1.1^5) - 1]} / 0.10
FV= $30,525.5
Now, the future value of the second investment.
FV= PV*(1+i)^n
FV= 30,525.5*(1.1^35)
FV= $857,840.94
Advertising expenses are a significant component of the cost of goods sold. Listed below is a frequency distribution showing the advertising expenditures for 40 manufacturing companies. Estimate the mean, median, and standard deviation of advertising expense.
Advertising Expenditure ($millions) Number of companies
$20 to under $30 9
30 to under 40 13
40 to under 50 21
50 to under 60 18
60 to under 70 14
Total 75
Answer:
Mean = 47
Median = 47.38
Standard Deviation = 12.73
Explanation:
Note: You wrote " 40 manufacturing companies, but the total number of companies you actually listed is 75, definitely you meant 75.
Let y represent the range of advertising expenditure, f represent the number of companies, x represent the midpoint of the range of advertising expenditure.
y f x fx fx²
$20 to under $30 9 25 225 5625
$30 to under $40 13 35 455 15925
$40 to under $50 21 45 945 42525
$50 to under $60 18 55 990 54450
$60 to under $70 14 65 910 59150
n = 75 [tex]\sum fx = 3525[/tex]
[tex]\sum fx^2 = 177675[/tex]
Mean, [tex]\bar{X} = \frac{\sum fx}{n}[/tex]
[tex]\bar{X} = \frac{3525}{75} \\\bar{X} = 47[/tex]
Standard Deviation:
[tex]SD = \sqrt{\frac{n \sum fx^2 - (\sum fx)^2}{n(n-1)} } \\SD = \sqrt{\frac{(75*177675) - (3525)^2}{75(75-1)} }\\SD = 12.73[/tex]
Median:
Get the cumulative frequencies(cf)
y f cf
$20 to under $30 9 9
$30 to under $40 13 22
$40 to under $50 21 43
$50 to under $60 18 61
$60 to under $70 14 75
N = 75
Median = Size of (N/2)th item
Median = Size of (75/2)th item
Median = Size of (37.5)th item
The median class = 40 to under 50
Lower limit, L₁ = 40
Cumulative frequency, cf = 22
f = 21
Class Width, h = 10
Median = [tex]L_1 + \frac{ (N/2) - cf}{f} * h\\[/tex]
Median = [tex]40 + \frac{ (75/2) - 22}{21} * 10\\[/tex]
Median = 47.38
Twist Corp. has a current accounts receivable balance of $457,615. Credit sales for the year just ended were $2,940,600.a. What is the company's receivables turnover? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)
b. What is the company's days' sales in receivables? (Use 365 days a year. Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)
c. How long did it take on average for credit customers to pay off their accounts during the past year? (Use 365 days a year. Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)
Answer and Explanation:
The computations are as follows
a. For company receivable turnover
As we know it is
= Credit Sales ÷ current account receivable balance
= $2,940,600 ÷ $457,615
= 6.43 times
b.
Now
company's days' sales in receivables is
= 365 ÷ Receivables turnover ratio
= 365 ÷ 6.43
= 56.77 days
c. Therefore the average collection period is the same as days sales in receivable i.e 56.77 days
Company A is a manufacturer with current sales of $3,700,000 and a 60% contribution margin. Its fixed costs equal $1,810,000. Company B is a consulting firm with current service revenues of $3,800,000 and a 20% contribution margin. Its fixed costs equal $330,000.Compute the degree of operating leverage (DOL) for each company.Identify which company benefits more from a 20% increase in sales.Company ACompany B
Answer:
Company A 5.41
Company B 1.76
Company A benefits more from a 20% increase in sales.
Explanation:
The computation of the degree of operating leverage is shown below:-
Particulars Company A Company B
Sales $3,700,000 $3,800,000
Less:
Variable cost $1,480,000 $3,040,000
($3,700,000 × 40%) ($3,800,000 × 80%)
Contribution
margin $2,220,000 $760,000
($3,700,000 × 60%) ($3,800,000 × 80%)
Less:
Fixed cost $1,810,000 $330,000
Pretax income $410,000 $430,000
After this we need to go further so that we can find out the degree of operating leverage For both company
For Company A
= Contribution margin ÷ Pretax income
= $2,220,000 ÷ $410,000
= 5.41
For company B
= Contribution margin ÷ Pretax income
= $760,000 ÷ $430,000
= 1.76
So, from the above calculation we can see that Company A is higher than Company B.
Lincoln Restaurants reported net income in 2019 of $48.10 million and depreciation expense of $51.00 million. It also reported additions to property and equipment of $165.10 million. Using the indirect method of preparing the statement of cash flows, how will these items impact the 2019 statement of cash flows
Answer and Explanation:
The impact of each item is as follows
Net income reported = shown in the operating activities
Depreciation expense = added to the net income and shown in the operating activities
Additions to the property and equipment = Since there is an addition that means the property and equipment are purchased so it would be shown in the investing activities under the negative sign as it is cash outflow