Answer:
Net cash flow from the operating activities is 69,950
Explanation:
MOSS COMPANY
Cash flow from operating activities
Net income $6,600
Adjustments to reconcile net income
to operating cash flow
Depreciation expense $50,000
Decrease account receivable $14,000
(46,000 - 32,000)
Increase inventory -$11,500
( 55,500 - 67,000)
Increase account payable $11,700
(44,400 - 32,700)
Decrease income tax payable -$850
(2,750 - 3,600)
$63,350 $63,350
Net cash flow from operating activities 69,950
Emily has recently learned that she needs to reduce the duration of her project to meet an imposed deadline. She has calculated the crash cost per unit and knows the maximum units each activity can be reduced. What is the next step?
Answer:
identify the critical path
Explanation:
Based on the information provided, the logical next step for Emily would be to identify the critical path. This means identifying the sequence of project network activities that add up to the longest overall duration which in term will reveal the shortest time possible to complete this project through unnecessary parts within the critical path, and will allow her to meet the imposed deadline.
you want to buy a new ski boat 2 years from now, and you plan to save $7,000 per year, beginning one year from today. you will deposit your savings in an account that pays 6.2% interest. how much will you have just after you make your second deposit, 2 years from now
Answer:
$14,434
Explanation:
The question is asking to find the future value of making a payment of $7,000 every year for two years
The formula for finding future value =
FV = A x annuity factor
Annuity factor = {[(1+r) ^N ] - 1} / r
A = amount = $7,000
R = interest rate = 6.2%
N = 2
[(1.062) ^2 - 1 ] / 0.062 = 2.062
2.062 x $7,000 = $14,434
I hope my answer helps you
Answer: $14429
Explanation:
For this question, we will use the annuity formula to solve. The future value of an annuity is given as:
= C × ([(1+i)^n - 1] / i)
where,
C = The Cash flow per period
= $7000
i = the interest rate
= 6.2%
n = number of years
= 2
Future value of annuity will now be:
= 7000 × ([(1+0.062)²- 1]/0.062)
= 7000 × ([1.062)² - 1]/0.062)
= 7000 × [(1.1278 - 1)/0.062)]
= 7000 × (0.1278/ 0.062)
= 7000 × 2.0613
= $14429
The answer is $14429
Hampton Company reports the following information for its recent calendar year. Income Statement Data Selected Year-End Balance Sheet Data Sales $ 80,000 Accounts receivable increase $ 8,000 Expenses: Inventory decrease 3,000 Cost of goods sold 38,000 Salaries payable increase 700 Salaries expense 12,000 Depreciation expense 7,000 Net income $ 23,000 Required: Prepare the operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)
Answer:
Cash Flow From Operating Activities indicate the amount of cash and income that a company get from its ongoing day to day and regular business activities.
Operating activities from Hampton Company reports are Net income, Depreciation, Accounts receivable increase, Inventory decrease , Salaries payable increase
Cash flows from operating activities using the Indirect method
Net income 23,000
Depreciation 7,000
Accounts receivable increase -8,000
Inventory decrease 3,000
Salaries payable increase 700
Net cash provided by $25,700
operating activities
On July 14 joseph invested $12000 in a fund that was growing at 5% compound semi annually
Calculate the future value of the fund on march 15 2014
Answer:
$12,300
Explanation:
I will assume that Joseph invested in the fund on July 14, 2013.
We have to calculate the future value to March 15, 2014 (8 months later).
since the interest is compounded semi annually, it will earn interest on January 14, 2014.
Future value = $12,000 x (1 + 2.5%) = $12,300
since the fund is going to earn interests again on July 14, 2014, the value on march 14 is the same = $12,300
Green Caterpillar Garden Supplies Inc.'s income statement reports data for its first year of operation. The firm's CEO would like sales to increase by 25% next year 1.
1. Green Caterpillar is able to achieve this level of increased sales, but its interest costs increase from 10% to 15% of earnings before interest and taxes (EBIT)
2. The company's operating costs (excluding depreciation and amortization) remain at 65% of net sales, and its depreciation and amortization expenses remain constant from year to year
3. The company's tax rate remains constant at 40% of its pre-tax income or earnings before taxes (EBT)
4. In Year 2, Green Caterpillar expects to pay $100,000 and $2,432,700 of preferred and common stock dividends, respectively
Complete the Year 2 income statement data for Green Caterpillar, then answer the questions that follow. Be sure to round each dollar value to the nearest whole dollar
Green Caterpillar Garden Supplies Inc.
Income Statement for Year Ending December 31
Year 1 Year 2 (Forecasted)
Net sales $30,000,000 _ _ _
_Less: Operating costs, except depreciation and amortization 19,500,000 _ _ _
_Less: Depreciation and amortization expenses 1,200,000 1,200,000
Operating income (or EBIT) $9,300,000 _ _ _
_Less: Interest expense 930,000 _ _ _
Pre-tax income (or EBT) 8,370,000 _ _ _
_ Less: Taxes (40%) 3,348,000 _ _ _
Earnings after taxes $5,022,000 _ _ _
_Less: Preferred stock dividends 100,000 _ _ _
Earnings available to common shareholders 4,922,000 _ _ _
_Less: Common stock dividends 2,008,800 _ _ _
Contribution to retained earnings $2,913,200 $3,549,050
Given the results of the previous income statement calculations, complete the following statements:
-In Year 2, if Green Caterpillar has 5,000 shares of preferred stocks issued and outstanding, then each preferred share should expect to receive _ _ _ in annual dividends.
-If Green Caterpillas has 400,000 shares of common stock issued and outstanding, then the firm's earnings per share (EPS) is expected to change from _ _ _ in Year 1 to _ _ _ in Year 2.
-Green Caterpillar's before interest, taxes, depreciation and amortization (EBITDA) value changed from _ _ _ in Year 1 to _ _ _ in Year 2.
-It is _ _ _ to say that Green Caterpillar's net inflows and outflows of cash at the end of Tears 1 and 2 are equal to the company's annual contribution to retained earnings, $2,913,200 and $3,549,050, respectively. This is because _ _ _ of the item reported in the income statement involve payments and receipts of cash.
Answer:
Green Caterpillar Garden Supplies Inc.
a) Income Statement for Year Ending December 31
Year 1 Year 2 (Forecasted)
Net sales $30,000,000 $37,500,000
Less: Operating costs 19,500,000 24,375,000
Depreciation &amortization expenses 1,200,000 1,200,000
Operating income (or EBIT) $9,300,000 $11,925,000
Less: Interest expense 930,000 1,788,750
Pre-tax income (or EBT) 8,370,000 10,136,250
Less: Taxes (40%) 3,348,000 4,054,500
Earnings after taxes $5,022,000 $6,081,750
Less: Preferred stock dividends 100,000 100,000
Earnings to common shareholders 4,922,000 5,981,750
Less: Common stock dividends 2,008,800 2,432,700
Contribution to retained earnings $2,913,200 $3,549,050
b) In Year 2, if Green Caterpillar has 5,000 shares of preferred stocks issued and outstanding, then each preferred share should expect to receive _ $20 _ in annual dividends.
-If Green Caterpillars has 400,000 shares of common stock issued and outstanding, then the firm's earnings per share (EPS) is expected to change from _ $12.31 _ in Year 1 to _ $14.95 _ in Year 2.
-Green Caterpillar's before interest, taxes, depreciation and amortization (EBITDA) value changed from _ $10,500,000 _ in Year 1 to _ $13,125,000_ in Year 2.
-It is _ wrong _ to say that Green Caterpillar's net inflows and outflows of cash at the end of Years 1 and 2 are equal to the company's annual contribution to retained earnings, $2,913,200 and $3,549,050, respectively. This is because _ not all_ of the items reported in the income statement involve payments and receipts of cash.
Explanation:
a) The preferred dividend per share = Preferred Dividends divided the number of preferred stock shares.
b) The EPS is the Earnings Per Share and is calculated as Net Income to Common Stockholders divided by the number of common stock shares outstanding.
The operating cost figure may not be based on a cash basis. It could be accrued costs. Similarly, the net sales may as well involve sales on credit, which do not involve cash flows.
On March 1, Bartholomew Company purchased a new stamping machine with a list price of $70,000. The company paid cash for the machine; therefore, it was allowed a 5% discount. Other costs associated with the machine were: transportation costs, $1,300; sales tax paid, $3,120; installation costs, $1,000; routine maintenance during the first month of operation, $1,200. What is the cost of the machine
Answer:
$73,120
Explanation:
Bartholomew company purchased a new stamping machine with a list price of $70,000
They were given a discount of 5%
Other costs that are associated with the machine include
Transportation costs= $1,300
Sales tax= $3,120
Installation costs= $1,000
Routine maintenance during the first month= $1,200
Then, the cost of the machine can be calculated as follows
(70,000-5/100×70,000) + $1,300+$3,120+$1,000+$1,200
$66,500+$1,300+$3,120+$1,000+$1,200
= $73,120
Hence the cost of the machine is $73,120
1.List the three steps of the planning phase of the strategic marketing process. Briefly describe the core elements and the purpose of the three steps. 2.Which demographic cohorts are also known as the Millennial and Z Generations? Describe the interests and lifestyles of each cohort and explain why it is important to marketers. 3.Explain the actions and considerations that relate to the five stages of the consumer purchase decision process.
Answer:
1.List the three steps of the planning phase of the strategic marketing process.
The three sepecifc steps are:
Defining target audience - in this step, a segment of the market is chosen as the target for the good or service. (for example, young people, old people, wealthy people, poor people, etc).Setting measurable goals - in this step, a specific sales volume goal is determined.Developing budget - in this step, a detailed budget is developed in order to carry out the strategy that should help the company reach its marketing goal (previous step).2.Which demographic cohorts are also known as the Millennial and Z Generations?
Millenials: those born between 1981 and 1996. They tend to be progressive, and be interested in social media, internet culture, and technology.
Generation Z: those born between 1996 and and the early 2010s. They are much like millenials but even more so: more progressive, more interested in technology, and in social justice causes.
This information is crucial for marketers because they help complete the first step in the marketing planning process: targeting an audience. The demographic cohorts are in fact, market segments, albeit very broad ones.
3.Explain the actions and considerations that relate to the five stages of the consumer purchase decision process.
Problem or need recognition: in this stage, the customer becomes aware of a need that has not been met.
Information search: the customer looks for a product or service that can meet his needs.
Evaluation of alternatives: the customer chooses among the goods or services that could meet his needs.
Purchase: the customer completes the market transaction: the purchase of the good or service.
Post-purchase behaviour: the customer makes use of the product, or service, and decides whether his need was satisfied or not. ALso decides whether to buy the same good or service in the future or not.
he following balance sheet contains errors. Mark Brock Services Co. Balance Sheet For the Year Ended December 31 Assets Liabilities Current assets: Current liabilities: Cash $7,170 Accounts receivable $10,000 Accounts payable 7,500 Accum. depr.-building 12,525 Supplies 2,590 Accum. depr.-equipment 7,340 Prepaid insurance 800 Net income 11,500 Land 24,000 Total current assets $42,060 Total liabilities $41,365 Owner’s Equity Property, plant, and equipment: Wages payable $1,500 Building $43,700 Mark Brock, capital 88,645 Equipment 29,250 Total owner’s equity 90,145 Total property, plant, and equipment 72,950 Total assets $131,510 Total liabilities and owner’s equity $131,510 Required: Prepare a corrected balance sheet. Be sure to complete the statement heading. Refer to the lists of Accounts, Labels, and Amount Descriptions for the exact wording and order of text entries. You will not need to enter colons (:) on the Balance Sheet. "Less" or "Plus" will automatically appear if it is required.
Answer:
$97,645
Explanation:
Preparation of Mark Brock Services Co corrected balance sheet :
Mark Brock Services Co. Balance Sheet December 31
Assets
Current assets:
Cash$ 7,170
Accounts receivable10,000
Supplies2,590
Prepaid insurance800
Total current assets $20,560
Property, plant, and equipment:
Land$24,000
Building$43,700
Less accumulated depreciation( 12,525)
Equipment$29,250
Less accumumulated depreciation (7,340)
Total property, plant,and equipment 77,085
Total assets (77,085+20,560) $97,645
Liabilities
Current liabilities:
Accounts payable$ 7,500
Wages payable1,500
Total liabilities$ 9,000
Owner's Equity
Capital 88,645
Total liabilities and owner's equity (88,645+9,000) $97,645
A company had service revenue of $257,000, rent expense of $10,700, utility expense of $4,200, salary expense of $19,200, depreciation expense of $9,700, advertising expense of $4,570, dividends in the amount of $18,700, and a beginning balance in retained earnings of $18,600. What is the balance in the income summary account before it is closed for the period
Answer:
Income summary has a $208,630 credit balance before being closed
Explanation:
The closing entries should be:
Dr Service revenue 257,000
Cr Income summary 257,000
Dr Income summary 48,370
Cr Rent expense 10,700
Cr Utility expense 4,200
Cr Salary expense 19,200
Cr Depreciation expense 9,700
Cr Advertising expense 4,570
Income summary
Debit Credit
18,370 257,000
208,630
In order to close income summary:
Dr Income summary 208,630
Cr Retained earnings 208,630
If you want to close dividends:
Dr Retained earnings 18,700
Cr Dividends 18,700
Assume initially that the price of X (the quantity of which is measured on the horizontal axis) is $9 and the price of Y (the quantity of which is measured on the vertical axis) is $4. If the price of X now declines to $6, the budget line will
Answer: decrease/decline
Explanation:
Sumner sold equipment that it uses in its business for $31,800. Sumner bought the equipment a few years ago for $79,100 and has claimed $39,550 of depreciation expense. Assuming that this is Sumner's only disposition during the year, what is the amount and character of Sumner's gain or loss
Answer:
Sumner's has a loss of $-7750 from the sale of the equipment
Explanation:
Solution
Given that:
We compute the amount of profit and loss, few steps will be taken which is given below:
Step 1: we compute the book value of the equipment which is shown below:
Book value = purchase price - depreciation claimed
= $79,100 -$39,550
= $39550
Therefore then book value is $39,550
Step 2: we calculate the amount of Sumner's gain or loss which is shown below:
The gain (loss) is = the value (sale) - book value
= $31,800 - 39550
= -7750
Therefore the loss from the sale of the equipment is -$7750
Which implies that Sumner's has a loss of $-7750
The accounting scandals of the early 2000s led many people to question the legitimacy of: ratio analysis as a means of evaluating the performance of a firm. relying on the recommendations of tax accountants to find ways of reducing the taxes owed by a business organization. publishing financial information about a firm on the Internet. allowing an accounting firm to do both consulting and auditing work for the same company.
Answer:
The accounting scandals of the early 2000sled many people to question the legitimacy of:
allowing an accounting firm to do both consulting and auditing work for the same company.
Explanation:
1) Enron and WorldCom fell from grace during the scandal. And Sarbanes Oxley Act of 2002 was introduced to regulate the practise of auditing, which was before self-regulated.
2) People felt that accounting firms were getting so much revenue from consulting that they did not pay much attention to their auditing work.
3) They also felt that the consulting relationship was jeopardizing their responsibilities and commitments as independent auditors.
4) Since they were involved in consulting and offering management services, they paid a lip service to their main responsibilities and directly compromised their positions as verifiers of the truth and fairness in the presentation of financial statements.
5) According to Paul Krugman of The New York Times, “the Enron debacle is not just the story of a company that failed; it is the story of a system that failed. And the system didn’t fail through carelessness or laziness; it was corrupted.” People felt that the corruption arose from the performance of these separate services by the same auditing personnel and firm.
Murray Company reports net income of $731,000 for the year. It has no preferred stock, and its weighted-average common shares outstanding is 340,000 shares. Compute its basic earnings per share.
Answer:
$2.15 Per share
Explanation:
The earnings per share (EPS) shows the earning per each common shares. It can be calculated as the below
EPS= (Net Income- Preferred Dividend) / Weighted Average common share outstanding
EPS= $731,000 - $0 / $340,000
EPS= $731,000 / $340,000
EPS= $2.15 Per share
The basic earnings per share is $2.15
On September 1, 2021, Southwest Airlines borrows $39.4 million, of which $6.8 million is due next year. Show how Southwest Airlines would record the $39.4 million debt on its December 31, 2021, balance sheet.
Answer:
Southwest Airlines
Partial Balance Sheet December 31, 2021
Current Liabilities
Current portion of long-term debt $6,800,000
Long Term Liability
Notes Payable $32,600.000
(39,4000,000-6,800,000)
Total Liabilities $39,400,000
At Nice Price for the Ice, an ice cream parlor, customers routinely buy a scoop of ice cream for $2.75. If consumers purchase one scoop of ice cream at $2.75, then why don't they keep buying more and more scoops for $2.75 until the store sells out?
Answer:
Consumers would not keep buying ice cream at $2.75 because after purchasing a certain amount of ice cream, utility would be maximised and consumers would not value ice cream at $2.75 anymore. Consumers would not purchase a product it the marginal utility that would be derived from consuming the product is less than the price.
According to the law of diminishing marginal utility, as more units of a product is increased, total utility increases but at a decreasing rate.
Explanation:
Marginal utitiy is the increase in utility that is derived from consuming one more unit of a product.
Listed below are accounts to use for transactions (a) through (1), each identified by a number. Following this list are the transactions. You are to indicate for each transaction the accounts that should be debited and credited by placing the account number(s) in the appropriate box.
1. Accounts Payable
2. Accounts Receivable
3. Accumulated Depreciation - Office Equipment
4. Building
5. Common Stock
6. Cash
7. Depreciation Expense-Office Equipment
8. Dividends
9. Fees Earned
10. Insurance Expense
11. Insurance Payable
12. Interest Expense
13. Interest Payable
14. Interest Receivable
15. Land
16. Notes Payable
17. Office Supplies
18. Office Supplies Expense
19. Prepaid Insurance
20. Unearned Fees
21. Utilities Expense
22. Utilities Payable Transactions Account(s) Debited Account(s) Credited
a. Utility bill is received; payment will be made in 10 days.
b. Paid the utility bill previously recorded in transaction (a).
c. Bought a three-year insurance policy and paid in full.
d. Made an entry to adjust for the expired portion of the insurance premium.
e. Received $7,000 from a contract to perform accounting services over the next two years.
f. Made an entry to adjust for half of the services performed in (e).
g. Purchased office supplies, paying part cash and charging the balance on account.
h. Borrowed money from a bank and signed a note payable due in six months.
i. Recorded one month's accrued interest on the note payable
j. Depreciation is recorded on office equipment.
Answer:
The accounts to use for transactions is shown below. it also indicates which transaction is placed either in the debit or credit side.
Explanation:
Solution
Accounts Debited Accounts Credited
a. Utilities Expense Utilities Payable
b. Utilities Payable Cash
c. Prepared insurance Cash
d. Insurance Expense Prepared insurance
e. Cash Unearned Cash
f Unearned Fees Fees Earned
g. Office supplies Cash, Accounts Payable
h Cash Notes Payable
i Interest Expense Interest Payable
j Depreciation Expense-Office
(Office Equipment) Accumulated Depreciation
(Office Equipment)
One-year Treasury securities yield 4%. The market anticipates that 1-year from now 1-year Treasury securities will yield 2.1%. If the pure expectations theory is correct, what should be the yield today for 2-year Treasury securities? Write your answer as a percentage, i.e. for example write 8% as 8.
Answer:
3.05%
Explanation:
According to Pure Expectation Theory, the future short term interest rates are actually the forward rates.
Mathematically,
(1 + r2,0)^2 = (1 + r1,0)^1 * (1 + r1,1)^1
Here,
r2,0 is the rate of interest for 2 year treasury security from today
r1,0 is the rate of the interest for 1 year treasury security from today
r1,1 is the rate of the interest for 2 year treasury security from Year 1
By Putting Values, we have:
(1 + r2,0)^2 = (1 + 0.04)^1 * (1 + 0.021)^1
(1 + r2,0)^2 = 1.06184
By taking square-root on both sides, we have:
(1 + r2,0) = 1.0305
r2,0 = 3.05%
Roses, Incorporated made a batch of flower arrangements that were sold to grocery stores for Valentine's Day. The standard and actual costs of the roses used in each arrangement are as follows:
Standard Actual
No of roses per arrangement 6 6.1
Price per rose .60 .58
A. The company made and sold 1,000 of the Valentine's Day arrangement. Based on this informaton the materials price variance was:________.
a. $122 favorable.
b. $122 unfavorable.
c. $60 favorable.
d. $60 unfavorable.
B Based on this informaton the materials usage variance was:_______.
a. $122 favorable.
b. $122 unfavorable.
c. $ 60 favorable.
d. $60 unfavorable.
Answer:
b. $122 unfavorable.
d. $60 unfavorable.
Explanation:
The computation is shown below:
As we know that
Material Price Variance = (Standard price - Actual price ) × Actual quantity of Roses
where,
Actual quanity is
= 6.1 × 1,000 arrangements
= 6,100 roses
And,
Standard price = 0.6 and Actual price = 0.58
So, the material price variance is
= ($0.6 - $0.58 ) × 6,100 roses
= $122 Favorable
2, Now the material usage variance is
Material usage variance = (Standard Quantity - Actual Quantity) Standard price per rose
= ($6 × 1,000 - 6,100) × 0.6
= $60 Unfavorable
6. Achieving lower pollution Suppose a political candidate criticizes a government pollution permit policy that she says lets corporations buy and sell the right to pollute. She argues that our right to breathe and the future of our planet require real regulation instead of this type of government policy. Which of the following describes why most economists would disagree with her statement? A corrective tax would result in a more efficient outcome than either tradable permits or government regulation would. The environment is so important that it should be protected as much as possible, regardless of the cost. A free market in tradable pollution permits is typically more efficient than government regulation. Clean air is a fundamental right, and government regulation will allow too much pollution.
Answer:
A free market in tradable pollution permits is typically more efficient than government regulation.
Explanation:
In this scenario, most economists would disagree with the political candidate's statement because a free market in tradable pollution permits is typically more efficient than government regulation.
Most economists would disagree because a free market in tradable pollution permits, is basically giving manufacturing companies and individuals the legal right to pollution of the environment. For example, XYZ company is purchasing the permit of 500 units of carbon dioxide (CO2) pollution annually, this simply means it is permitted to pollute the environment by 500 units of CO2 annually.
Therefore, her submission is in contrast or conflicts with the concept of real regulations as government regulation may not necessarily be more effective and efficient than the former.
Additionally, a free market in tradable pollution permits has some sort of benefits as companies can resell their unused permits or devise a cheaper means of reducing pollution. It also compensate companies that significantly reduces its pollution of the environment.
Gates Corporation reported the following information concerning its direct materials: Direct materials purchased (actual) $ 673,000 Standard cost of materials purchased $ 688,000 Standard price times actual amount of materials used $ 444,000 Actual production 22,000 units Standard direct materials costs per unit produced $ 20Required: Compute the direct materials cost variances.
Answer:
The answer is 15000 F
Explanation:
Solution
Given that:
Direct materials purchased = $673,000
Standard cost of materials purchased = $688,000
Actual production = 22,000 unit
Standard price times real amount of materials = $ 444,000
Now we find the direct materials cost variances.
Thus
Direct material price variance = (444000-673000)
= 229000 U
Then
Direct material efficiency variance = (688000-444000)
= 244000 F
Total cost variance = (688000-673000)
= 15000 F
Therefore the direct materials variances is 15000 F
A customer has an individual cash account, an individual margin account, a joint cash account with his wife, and a custodial account for each of his 2 children. If the firm liquidates, Securities Investor Protection Corporation covers::________
Answer and Explanation:
The Securities Investor Protection Corporation enhance security for the registered broker and distributor customers and national securities exchanges members
In the given situation, it is mentioned that a customer has 4 accounts i.e person cash account, person margin account, cash account jointly with his wife and custodial account for two children
Now if the firm liquidates, the (Securities Investor Protection Corporation) SIPC covers all accounts but separately i.e both person accounts are count as one by adding them, the joint account as an individual and the custodial account as an individual
In the short run, the quantity of output that firms supply can deviate from the natural level of output if the ___________ level in the economy deviates from the expected price level. Several theories explain how this might happen.
For example, the ___________ asserts that output prices adjust more quickly to changes in the price level than wages do, in part because of long-term wage contracts. Suppose a firm signs a contract agreeing to pay its workers $15 per hour for the next year, based on an expected price level of 100 Year.
Answer:
1. Actual Price
2. Misperceptions theory.
Explanation:
In the short run, the quantity of output that firms supply can deviate from the natural level of output if the ACTUAL PRICE level in the economy deviates from the expected price level. Several theories explain how this might happen.
For example, the MISPERCEPTIONS THEORY asserts that output prices adjust more quickly to changes in the price level than wages do, in part because of long-term wage contracts. Suppose a firm signs a contract agreeing to pay its workers $15 per hour for the next year, based on an expected price level of 100 Year.
The above explanations is the reason why the aggregate supply curve slopes upward in the short run
A large international company has two business units. Invested assets and condensed income statement data for each business unit for the past year are as follows: Compute the following for Business Unit 1: a) Operating Income Using the Dupont Formula: b) Profit Margin % (round % to 1 decimal) c) Investment Turnover (round to 2 decimals) d) Return on Investment (round 1 decimal) Compute the following for Business Unit 2: 2A) Operating Income Using the Dupont Formula: 2B) Profit Margin (round % to 1 decimal) 2C) Investment Turnover (round to 2 decimals) 2D) Return on Investment (round 1 decimal)
Answer:
1. Compute the following for Business Unit 1:
a) Operating Income = $117,500
b) Profit Margin = 20.7%
c) Investment Turnover = 0.86
d) Return on Investment = 0.2
2. Compute the following for Business Unit 2:
a) Operating Income = $69,750
b) Profit Margin = 12.2%
c) Investment Turnover = 1.18
d) Return on Investment = 0.1
Explanation:
1. Compute the following for Business Unit 1:
a) Operating Income
Operating Income = Revenue – Operating expenses = $280,000 – $162,500 = $117,500
Using the Dupont Formula:
b) Profit Margin % (round % to 1 decimal)
Net income = Operating income – Services department charges = $117,500 - $59,500 = $58,000
Profit Margin = Net income / Revenue = ($58,000 / $280,000) * 100 = 20.7%
c) Investment Turnover (round to 2 decimals)
Investment Turnover = Revenue / Invested Assets = $280,000 / $325,000 = 0.86
d) Return on Investment (round 1 decimal)
Return on Investment = Net income / Invested Assets = $58,000 / $325,000 = 0.1785 = 0.2
2. Compute the following for Business Unit 2:
a) Operating Income
Operating Income = Revenue – Operating expenses = $222,500 – $152,750 = $69,750
Using the Dupont Formula:
b) Profit Margin % (round % to 1 decimal)
Net income = Operating income – Services department charges = $69,750 - $42,625 = $27,125
Profit Margin = Net income / Revenue = ($27,125 / $222,500) * 100 = 12.2%
c) Investment Turnover (round to 2 decimals)
Investment Turnover = Revenue / Invested Assets = $222,500 / $189,000 = 1.18
d) Return on Investment (round 1 decimal)
Return on Investment = Net income / Invested Assets = $27,125 / $189,000 = 0.1435 = 0.1
A corporation has $7,000,000 in income after paying preferred dividends of $500,000. The company has 1,000,000 shares of common stock outstanding. The market price of the stock is $56. What is the price-earnings ratio
Answer:
Price earning ratio= 8 times
Explanation:
Price earning ratio = Price per share /Earnings per share
Price per share = 56, EPS =?
Price per share =56, EPS = Total earnings available to ordinary shareholders/Number of shares
7,000,000/1,000,000= $7 per share
Price earning ratio = 56/7= 8 times
Price earning ratio= 8 times
Consider once again the project with the cash flows described below. Determine whether this is a simple or non- simple investment AND how many possible values of i* exist using the Accumulated Cash Flow Sign Test.
A0 = -$7,500, A1 = 4,200, A2 = 3,675, A3 = -2,625, A4 = 5,250, A5 = -1,050, A6 = 1,575, A7 = 675, A8 = -3,000, A9 = 750, A10 = 750
Simple investment, at most 1 i* value
Non-simple investment, at most 1 i* value
Simple investment, at most 3 i* values
Non-simple investment, at most 3 i* values
Simple investment, at most 7 i* values
Answer:
The correct option is (D)
Explanation:
Using the accumulated cash flow sign test,
- This investment is a non-simple investment.
This is because the net cash flow changes sign (to positive and back to negative) more than once, during the study period.
- There are at most 3 i* values. That is values for Internal Rate of Return. This is owing to the multiple change in sign during the period.
The correct answer is option D - Non simple investment with at most 3 values for internal rate of return (i*)
An insurance policy sells for $1200. Based on past data, an average of 1 in 100 policyholders will file a $10 comma 000 claim, an average of 1 in 250 policyholders will file a $40 comma 000 claim, and an average of 1 in 400 policyholders will file an $80 comma 000 claim. Find the expected value (to the company) per policy sold. If the company sells 30 comma 000 policies, what is the expected profit or loss?
Answer:
Expected Value = $740
Expected profit = $22.2m
Explanation:
We can easily calculate the expected value and expected profit/loss in this situation by some minor working
Expected values = Expected Claim - per policy cost
Expected profit/loss = (Expected claim - per policy cost) x number of policies
As you can see per policy cost and no of policies are given in the question data we just need to find expected claim for calculation of expected profit or loss and expected value
Expected Claim = (1/100x$10,000)+(1/250x$40,000)+(1/400x$80,000)
Expected Claim = 100 + 160 + 200
Expected Claim = 460
Now we have a value of expected claim lets put it into Expected profit/loss formula and expected value formula
Expected value = 460-1200
Expected value = -740
-$740 is the value per policy
Expected profit/loss = (460 - $1200 per policy) x 30,000
Expected profit or loss = -22,200,000
Expected loss to the customer = -$22.2 m
Expected profit for the company = $22.2m
Au Sable Corporation reported taxable income of $760,000 in year 2 and paid federal income taxes of $176,500. Not included in the computation was a disallowed penalty of $42,000, and life insurance proceeds of $185,000. Included in the computation of taxable income is a deduction for the bargain element of exercised nonqualified stock options of $67,000. The corporation's current earnings and profits for year 2 would be:
Answer:
$726,500
Explanation:
The computation of current earnings and profits for year 2 is shown below:-
current earnings and profits for year 2 = Profit as per Income Tax - Penalty disallowed + Life insurance proceed - Tax Expenses
= $760,000 - $42,000 + $185,000 - $176,500
= $945,000 - $42,000 - $176,500
= $726,500
Therefore we have applied the above formula to reach out the current earnings and profits for year 2.
On January 1, 2021, Pharoah, Inc. signed a 10-year noncancelable lease for a heavy duty drill press. the lease stipulated annual payments of $340,000 starting at the beginning of the first year, with title passing to Pharoah at the expiration of the lease. Pharoah treated this transaction as a finance lease. The drill press has an estimated useful life of 15 years, with no salvage value. Pharoah uses straight-line depreciation for all of its plant assets. Aggregate lease payments were determined to have a present value of $2,002,339, based on implicit interest of 11%.In its 2021 income statement, what amount of interest expense should Pharoah report from this lease transaction
Answer:
$182,857.29
Explanation:
Here, Pharoah, Inc. average lease payments have a present value of $2,002,339
First lease payment = $340,000
Interest rate = 11%
To find the interest rate, first deduct the first lease payment.
$2,002,339 - $340,000
= $1,662,339
This is deducted so as to reduce total lease liability.
Find the amount of interest expense:
$1,662,339 × interest rate
= $1,662,339 × 11%
= $182,857.29
In its 2021 income statement, the amount of interest expense Pharoah should report from this lease transaction is $182,857.29
g ____________________________ the income tax would be counter-cyclical fiscal policy if the economy were _________________________.Group of answer choicesRaising; at potential incomeRaising; below potential incomeRaising; above potential incomeReducing; above potential income
Answer:
Raising; above potential income
Explanation:
The courter policy refers to the strategy of the government to take control over the recession by the use of fiscal measures and thus works to stabilize the economy and thus increase public taxes and reduces public expenditure during the recession.in g Management of a local catering company would like the Food Division to transfer 10,000 containers of its final product to the Restaurant Division for $41.00. The Food Division sells the product to customers for $98.00 per unit. The Food Division's variable cost per unit is $37.00 and its fixed cost per unit is $25.00. If the Food Division has 10,000 units of available capacity, what is the minimum transfer price the Food Division should accept?
Answer:
The minimum transfer price is $25.
Explanation:
The number of containers to be transferred = 10000 containers.
The rate of its container = $41.00
The selling price of food to customers = $98 per unit.
The variable cost per unit for food division = $37 per unit
The fixed price per unit = $25
The transfer price should be a minimum of $25 that is equal to variable cost because as per the rule the transfer price between the organization should be equal to variable cost or marginal cost. therefore, the minimum transfer price is $25.