Answer: 75,000 units
Explanation:
Come up with an expression to solve this.
Assume the budgeted production needed is P.
P needs 2 pounds of raw materials per unit so raw materials needed are 2P.
Beginning raw materials for February have to be 30% of the needs of February;
= 30% * 2P
= 0.6P
Ending raw materials for February have to be 30% of March needs so;
= 30% * 100,000 * 2 pounds
= 60,000 pounds
So;
Budgeted raw materials purchase for February = Raw materials needed + Ending raw materials - Beginning raw materials
165,000 = 2P + 60,000 - 0.6P
1.4P = 165,000 - 60,000
P = (165,000 - 60,000) / 1.4
= 75,000 units
A share of common stock has just paid a dividend of $2.00. If the expected long-run growth rate for this stock is 15 percent, and if equity investors require a 19 percent rate of return, what is the fair price of the stock
Answer:
$57.50
Explanation:
fair value = dividend(1 + growth rate) / required rate of return - long run growth rate
$2(1.15) / 0.19 - 0.15 = $57.50
Schraeder Corporation has 20,000 shares outstanding at $30 each. The firm expects to raise $200,000 via a rights offering at a subscription price of $25. How many rights are required for each new share?
Answer:
3 right/shares
Explanation:
Price per unit of shares issued under “Rights issue” = Total proceeds from rights issue/ Subscription price of share issued under rights issue = 200,000 / $25 = 8,000
Number of new shares = 8,000
Original number of shares = 20,000
Thee number of rights required for each new share = Original number of shares / Number of new shares = 20,000 / 8,000 = 2.5 = 3 right/shares (approx)
An insurance settlement of $2.5 million must replace Trixie Eden's income for the next 45 years. What income will this settlement provide at the end of each month if it is invested in an annuity that earns 7.5%, compounded monthly
Answer:
$16,184.66
Explanation:
The computation of the income that needed at the end of the each month is shown below:
Here we use the PMT function
Given that
Present value = $2,500,000
NPER = 45 × 12 = 540
RATE = 7.5% ÷ 12 = 0.625
FV = $0
The formula is shown below:
= PMT(RATE;NPER;-PV;FV;TYPE)
After applying the above formula
The present value comes in negative
The monthly payment is $16,184.66
Consumption spending is:__________ A. spending by households, businesses, and government on all goods used up within one year. B. spending by individuals and households on both durable and nondurable goods. C. spending on goods and services by heads of households. D. spending by individuals and households on only nondurable goods, since they are used up quickly.
Answer:
b. spending by individuals and households on only non-durable goods.
Explanation:
Consumption spending is spending by individuals and households on only non-durable goods. Consumption is a component of GDP which includes spending on goods and services by individuals and households as it includes non-durable as well as durable goods on the basis of consumption patterns.
Consider the following cash flows: Year Cash Flow 0 –$ 33,000 1 13,400 2 18,300 3 10,800 What is the IRR of the cash flows? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer:
14.23%
Explanation:
Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested
IRR can be calculated with a financial calculator
Cash flow in year 0 = –$ 33,000
Cash flow in year 1 = 13,400
Cash flow in year 2 = 18,300
Cash flow in year 3 = 10,800
IRR = 14.23%
To find the IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
Carby Hardware has an outstanding issue of perpetual preferred stock with an annual dividend of $5.10 per share. If the required return on this preferred stock is 6.5%, at what price should the preferred stock sell
Answer:
PV = $78.46153 rounded off to $78.46
Explanation:
A perpetuity is an unlimited series of cash flows that are of constant amount and occur after equal intervals of time. As they are unlimited in number, we say that they are perpetual. A perpetual preferred stock can also be said to be in form of a perpetuity as it pays a constant dividend after equal intervals of time. To calculate the price of the preferred stock, we use the present value of perpetuity formula which is,
PV = Cash flow / r
Where,
r is the required rate of returnPV = 5.1 / 0.065
PV = $78.46153 rounded off to $78.46
Grant, Inc., is a fast growth stock and expects to grow at a rate of 25 percent for the next four years. It will then settle to a constant-growth rate of 10 percent. The first dividend will be paid out in year 3 and will be equal to $5.00. If the required rate of return is 18 percent, what is the current price of the stoc
Answer:
the current price of the stock is $50.59
Explanation:
The computation of the current price of the stock is shown below:
= $5.00 ÷ (1 + 18%)^3 + ($5.00 × (1 + 25%)) ÷ (1 + 18%)^4 + (($5.00 × (1 + 25%) × (1 + 10%)) ÷ (18% - 10%)) ÷ (1 + 18%)^4
= $50.59
Hence, the current price of the stock is $50.59
The same is to be considered by taking all the things given in the question
If the volume of sales is $7,000,000 and sales at the break-even point amount to $4,800,000, the margin of safety is 45.8%.
A. True
B. False
Balonek Inc.'s contribution margin ratio is 57% and its fixed monthly expenses are $41,000. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are $112,000
Answer:
The estimated net operating income in a month is $22,840
Explanation:
The computation of the net income is shown below:
= Contribution margin Ratio × Sales - Fixed cost
= 57% × $112,000 - $41,000
= $63,840 - $41,000
= $22,840
hence, the estimated net operating income in a month is $22,840
We simply applied the above formula so that the correct value could come
And, the same is to be considered