Nation’s Capital Fitness, Inc. operates a chain of fitness centers in the Washington, D.C., area. The firm’s controller is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior pattern of the firm’s equipment maintenance costs must be determined. The accounting staff has suggested the use of an equation, in the form of Y = a + bX, for maintenance costs. Data regarding the maintenance hours and costs for last year are as follows:
Month Hours of Maintenance
Service Maintenance
Costs
January 520 $ 4,470
February 490 4,260
March 300 2,820
April 500 4,350
May 310 2,960
June 480 4,200
July 320 3,000
August 400 3,600
September 470 4,050
October 350 3,300
November 340 3,160
December 320 3,030
Total 4,800 $ 43,200
Average 400 $ 3,600
Required:
1-a. Using the high-low method of cost estimation, estimate the behavior of the maintenance costs incurred by Nation’s Capital Fitness, Inc.
Variable cost per hour $
Fixed cost per month $
1-b. Express the cost behavior pattern in equation form.
Maintenance cost = $ + $
2. What is the variable component of the maintenance cost?
Maintenance cost $ per hour
3. Compute the predicted maintenance cost at 590 hours of activity.
Maintenance cost $
4-a. Compute the variable cost per hour and the fixed cost per hour at 600 hours of activity.
Variable cost per hour $
Fixed cost per hour $

Answers

Answer 1

Answer:

Instructions are below

Explanation:

Giving the following information:

January 520 $ 4,470

February 490 4,260

March 300 2,820

April 500 4,350

May 310 2,960

June 480 4,200

July 320 3,000

August 400 3,600

September 470 4,050

October 350 3,300

November 340 3,160

December 320 3,030

A) To calculate the fixed and variable costs, we need to use the following formulas:

Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)

Variable cost per unit= (4,470 - 2,820) / (520 - 300)

Variable cost per unit= $7.5

Fixed costs= Highest activity cost - (Variable cost per unit * HAU)

Fixed costs= 4,470 - (7.5*520)

Fixed costs= $570

Fixed costs= LAC - (Variable cost per unit* LAU)

Fixed costs= 2,820 - (7.5*300)

Fixed costs= $570

B)

Total cost= 570 + 7.5x

x= hours of mantainance

C) x= 590

Total cost= 570 + 7.5*590

TC= $4,995

D) x= 600

Total cost= 570 + 7.5*600

TC= $5,070


Related Questions

In Year 1 Cypress, who is married but filing separately, incurred a net capital loss in the amount of $25,000. Cypress also had the following net capital gains in Year 1:
ABC stock Short-term $7,000
DEF stock Short-term 2,000
GHI stock Short-term 5,000
JKL stock Long-term 4,000
MNO stock Long-term 3,000
Total $21,000
What amount, if any, of the Year 1 capital loss will Cypress carry over to Year 2 if the Year 1 deduction is maximized?
a. $4,000
b. $1000
c. $2.500

Answers

Answer:

c. $2.500

Explanation:

The maximum capital loss deduction per year for a married person filing separately or a single filer is $1,500 per year (if filing jointly the maximum deduction is $3,000).

net capital loss/gain = -$25,000 + $7,000 + $2,000 + $5,000 + $4,000 + $3,000 = -$4,000

-$4,000 loss + $1,500 capital gains deduction = -$2,500 carryover loss

A jeans maker is designing a new line of jeans called Slims. The jeans will sell for $355 per pair and cost $262.70 per pair in variable costs to make. (Round your answers to 2 decimal places.)

Required:
a. Compute the contribution margin per pair.
b. Compute the contribution margin ratio.

Answers

Answer:

a.$92.30

b.27.55%

Explanation:

a. Computation for the contribution margin per pair

Sales 355.00 per pair

Less:Variable cost $262.70 per pair

Contribution margin $92.30 per pair

Therefore the Contribution margin per pair will be $92.30

b. Computation for the contribution margin ratio.

Using this formula

Contribution margin ratio=Contribution margin per unit/Selling price per unit

Where,

Contribution margin per unit =$92.30

Selling price per unit =$335.00

Let plug in the formula

Contribution margin ratio=$92.30/$335.00

Contribution margin ratio =27.55%

Therefore the Contribution margin ratio will be 27.55%

Net credit sales = $400,000 Net income = $100,000 Average total assets = $80,000 Average accounts receivable = $20,000 What is the average collection period in days (rounded to the nearest whole day)?

Answers

Answer:

73 days

Explanation:

average collection period = number of days in a period / receivables turnover

receivables turnover = revenue / average receivables = $100,000 / $20,000 = 5

average collection period = 365 / 5 = 73 days

I hope my answer helps you

Two partners, Small and Big, form a partnership in which Small invested $40,000 and Big invested $60,000 for a total capital of $100,000. But Small devotes more time to the business and earns more from the firm. They have agreed to share the profits as follows:

1. The first $20,000 is allocated on the partner's capital balances.
2. The next $30,000 is allocated based on service: Small gets $20,000, and Big gets $10,000.
3. Any remaining profits are allocated equally.
4. The partnership's net income is $100,000.

Requried:
a. What is Small's portion of the net income?
b. What is Big's portion of the net income? Make the entry for this allocation.
c. What would be the right parts to the journal entry for this question?

Answers

Answer:

a. What is Small's portion of the net income?

$53,000

b. What is Big's portion of the net income? Make the entry for this allocation.

Big's portion = $47,000

Dr Income Summary 47,000     Cr Big, capital 47,000

c. What would be the right parts to the journal entry for this question?

Debit Income summary and credit capital accounts

Explanation:

partnership's net income $100,000

first $20,000

Small $8,000Big $12,000

next $30,000

Small $20,000Big $10,000

Remaining $50,000

Small $25,000Big $25,000

total Small = $53,000

total Big = $47,000

Kyle accepted a job at Brenton Manufacturing. During his training, he was told that defective and poor-quality products were unacceptable, and the goal is to manufacture goods that met 100 percent of standards. What methodology does this company use

Answers

Answer:

TQM (Total quality management)

Explanation:

Total Quality Management is process by which all members of an organisation take part in improving products, services, processes, and the culture of the workplace.

The aim of TQM is to achieve long term success of the business through customer satisfaction.

Kyle was made to understand that defective and poor-quality products were unacceptable, and the goal is to manufacture goods that met 100 percent of standards.

This is a TQM strategy that ensures customer is always satisfied with the company's product.

Joseph contributed $25,750 in cash and equipment with a tax basis of $14,800 and a fair market value of $19,500 to Berry Hill Partnership in exchange for a partnership interest.a. What is Joseph’s tax basis in his partnership interest?b. What is Berry Hill’s basis in the equipment?

Answers

Answer:

a. Joseph’s tax basis in his partnership interest=$40,550

b. Joseph contributed equipment with a tax basis of $14,800, therefore, Berry Hill’s basis in the equipment is $14,800

Explanation:

a. In order to calculate Joseph’s tax basis in his partnership interest we would have to make the following calculation:

Joseph’s tax basis in his partnership interest=amount contributed in cash+tax basis equipment

According to given data:

amount contributed in cash=$25,750

equipment tax basis =$14,800

Therefore, Joseph’s tax basis in his partnership interest=$25,750+$14,800

Joseph’s tax basis in his partnership interest=$40,550

Joseph's tax basis in his partnership interest is $40,550

b. According to the given data Joseph contributed equipment with a tax basis of $14,800, therefore, Berry Hill’s basis in the equipment is $14,800

The Internal Rate of Return (IRR) represents which of the following: Multiple Choice The discount rate that must be lower than the required rate of return. The discount rate that makes the net present value equal to zero. The discount rate that makes the net present value positive. The discount rate that makes the net present value negative. The discount rate that is affected by the cash flows external to the project.

Answers

Answer:

The discount rate that makes the net present value equal to zero.

Explanation:

The internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.

It is the discount rate that makes the net present value equal to zero.

I hope my answer helps you

Which of the following statements is CORRECT?
a. The present value of a 3-year, $150 ordinary annuity will exceed the present value of a 3-year, $150 annuity due.
b. If a loan or investment has annual payments, then the effective, periodic, and nominal rates of interest will all be different.
c. An investment that has a nominal rate of 6% with semiannual payments will have an effective rate that is smaller than 6%.
d. The proportion of the payment that goes toward interest on a fully amortized loan increases over time.
e. If a loan has a nominal annual rate of 8%, then the effective rate will never be less than 8%.

Answers

Answer:

e. If a loan has a nominal annual rate of 8%, then the effective rate will never be less than 8%.

Explanation:

As we know that

EAR = (1 + r ÷ n)^n -1

where,

EAR = Effective annual rate

r = interest rate

n = number of years

By applying the above formula we know that the effective annual rate should always be greater than the normal annual rate

Hence, the correct option is e.

Therefore all other options would be wrong

The core CPI looks at the price changes of a market basket without Select one: a. luxury goods b. taxes c. food and energy d. imported goods

Answers

Answer:

The correct answer is the option C: food and energy.

Explanation:

On the one hand, the concept known as "Consumer Price Index" or CPI is refered to the measure that is basically used in economics in order to obtain the variation of prices in general that happens in a certain period of time, so that means that it focus in calculating the inflation of an economy by examinating the weighted average of prices of a basket of predetermined goods.

On the other hand, the "Core CPI" calculates the inflation in the costs of goods and services of a predetermined basket by does not include the ones from the food an energy sectors.

According to the expenditure approach, if Y is GDP, C is consumption, I is investment, G is government purchases, and NX is net exports, the national income identity can be written as:

Answers

Answer:

The answer is Y = C + I + G + NX

Explanation:

National income can be represented as: Y = C + I + G + NX

where Y is the national income

C is the consumers' consumption or households' expenses on goods and services

I is the firms' investment. Investment done by businesses on procuring non-current assets used in production

G is the government expenditure.

NX is the net export. Net export is the difference between the total value of export and total value of import in a year.

A divorced woman with 2 young children has just re-entered the workforce part time and earns $3,000 from this work. She collects another $2,400 per year in alimony payments. The woman wishes to make a contribution to an Individual Retirement Account this year. Which statement is TRUE

Answers

Which statement is TRUE

A. No contribution can be made because the woman received alimony payments

B. A contribution can be made based only on the income earned from part-time work

C. A contribution can be made based only on the alimony payments received

D. A contribution can be made based on both the earned income from part-time work and the alimony payments received

Answer:

B. A contribution can be made based only on the income earned from part-time work

Explanation:

According to Individual Retirement Account regulations, contribution can only be made base on earned income and not a court-mandated allowance made to a former spouse by a divorced or legally separated person otherwise known as "Alimony". Alimony is just a means to support life and not a earned income. So, contribution can be made based only on the income earned from part-time work.

The nominal interest rate is 9 percent in Brazil and 6 percent in Japan. Applying the international Fisher effect, the Brazilian real should

Answers

Answer:

appreciate by 3%

Explanation:

the international fischer effect states that the difference between the nominal interest rate of two countries is equal to the changes in the exchange rate of their currencies.

the country with the lower interest rate appreciates by the difference between the exchange rate.

9% - 6% = 3%

the Brazilian real should appreciate by 3%

Yuhu manufactures cell phones and is developing a new model with a feature (aptly named Don't Drink and Dial) that prevents the phone from dialing an owner-defined list of phone numbers between the hours of midnight and 6:00 A.M. The new phone model has a target price of $380. Management requires a 25% profit on new product revenues.

Required:
a. Calculate the amount of desired profit.
b. Calculate the target cost.

Answers

Answer:

1. $95

2. $285

Explanation:

1) Calculate the desire profit of the company

25% profit on Product revenue

Desired Profit=Target price*25%

=380 * 0.25

= $95

The desire profit of the company is $95

2) Calculate the target cost

Total Sales Price                  $380

Less: Desired profit             ($95)

Target cost                           $285

Tru-U stock is selling for $41 a share. A 6-month call on Tru-U stock with a strike price of $45 is priced at $1.60. Risk-free assets are currently returning .29 percent per month. What is the price of a 6-month put on Tru-U stock with a strike price of $45?

Answers

Answer:

$4.82

Explanation:

Calculation for the price of the 6-month put on Tru-U stock

To find the price of a 6-month put on Tru-U stock with a strike price of $45 we are going to use Put-call parity formula to calculate it

Using this formula

Put-call parity: S + P = C + PV(E) P

Let plug in the formula

Put-call parity= $1.60 + ($45 / 1.0029^⁶) - $41 = Put-call parity=$1.60+($45/1.01752)-$41

Put-call parity=$1.60+(44.22517)-$41

Put-call parity=$45.82517-$41

Put-call parity=$4.82

Therefore the price of a 6-month put on Tru-U stock with a strike price of $45 will be $4.82

Sebastian purchases two pieces of equipment for $189,000. Appraisals of the equipment indicate that the fair market value of the first piece of equipment is $132,300 and that of the second piece of equipment is $207,900. What is Sebastian's basis in these two assets? If required, round your interim calculations to two decimal places. Use rounded amounts in subsequent computations. If required, round final answers to the nearest dollar. Sebastian's basis for the first piece of equipment is $ and $ for the second piece of equipment.

Answers

Answer:

Sebastian basis in first piece of assets is $73,500 and second piece of assets is $115,500

Explanation:

Calculation of the total fair market value

Total fair market value = Fair market value of first piece of equipment + Fair market value of second piece of equipment

Total fair market value = $132,300 + $207,900

Total fair market value = $340,200

Therefore, the total fair market value is $340,200.

Calculation of Sebastian “S” basis in assets:

“S” basis in assets in first piece of assets  = Fair market value of first piece of equipment  / Total fair market value * Purchase cost

= $132,300 / $340,200 *  $189,000

= $73,500

“S” basis in assets in second piece of assets  = Fair market value of second piece of equipment  / Total fair market value * Purchase cost

= $207,900 / $340,200 *  $189,000

= $115,500

“S” basis in first piece of assets is $73,500 and second piece of assets is $115,500.

At an output level of 6,000 units, you have calculated that the degree of operating leverage is 2.3. The operating cash flow is $12,000 in this case. a. Ignoring the effect of taxes, what are fixed costs

Answers

Answer: $15,600

Explanation:

The following information can be gotten from the question:

Output level = 6,000 units

Degree of operating leverage = 2.3

Operating cash flow = $12,000

Contribution margin = Degree of operating leverage × Operating cash flow

= 2.3 × $12,000

= $27,600

Fixed cost = contribution margin - Operating cash flow

= $27,600 - $12,000

= $15,600

A bank has excess reserves of $1 million and makes a new loan for $500,000. If the bank faces a 10% required reserve ratio, by how much could the money supply increase when the loan is made

Answers

Answer:

With a 10% required reserve ratio, the money supply could increase by $500,000/r when the loan is made.

This equals $5,000,000 ($500,000/0.1) where r = 10%

Explanation:

a) The money multiplier is the amount of money that banks generate with each dollar of reserves. Reserves is the amount of deposits that the Federal Reserve requires banks to hold and not lend.

b) The formula for the money multiplier is simply 1/r, where r = the reserve ratio.

c) The reserve ratio, also known as Cash Reserve Ratio, is the percentage of deposits which commercial banks are required to keep as cash according to the directions of the central bank.  It is used by the central bank to control the supply of money in the economy.  When the central bank wants to increase the money supply, it lowers the reserve ratio and vice versa.

d) According to wikipedia.com, "the money supply is the total value of money available in an economy at a point of time."  It is usually defined as currency in circulation plus demand deposits.  It is the demand deposits that give commercial banks the ability to create money using the reserve ratio.

J.C Coats Inc. carefully develops standards for its coat making operation. Its specifications call for 2 square yards of wool per coat. The budgeted price of wool is $50 per square yard. The actual price for the wool was $38 and the usage was only 1.6 yards of wool per coat. What would be the standard cost per output for the​ wool?

Answers

Answer:

$100 per coat

Explanation:

Standard ;

Wool required = 2 yard square per coat

Budgeted price = $50 per square yard

Therefore,

We will need to multiply the total direct material quantity per unit for its unitary cost in order to arrive at the standard cost per unit.

Total standard cost per coat = Wool per coat × Cost per square yard,

= 2 × $50

= $100 per coat

The owner of a building supply company has requested a cash budget for June. After examining the records of the company, you find the following:
A. Cash balance on June 1 is $736.
B. Actual sales for April and May are as follows:
April May
Cash sales $10,000 $18,000
Credit sales 28,900 35,000
Total sales $38,900 $53,000
C. Credit sales are collected over a three-month period: 40% in the month of sale, 30% in the second month, and 20% in the third month. The sales collected in the third month are subject to a 2% late fee, which is paid by those customers in addition to what they owe. The remaining sales are uncollectible.
D. Inventory purchases average 64% of a month's total sales. Of those purchases, 20% are paid for in the month of purchase. The remaining 80% are paid for in the following month.
E. Salaries and wages total $11,750 per month, including a $4,500 salary paid to the owner.
F. Rent is $4,100 per month.
G. Taxes to be paid in June are $6,780.
The owner also tells you that he expects cash sales of $18,600 and credit sales of $54,000 for June. No minimum cash balance is required. The owner of the company doesn't have access to short-term loans.
Prepare a cash budget for June. Include supporting schedules for cash collections and cash payments. Round calculations and final answers to the nearest dollar.

Answers

Answer and Explanation:

The Preparation of the cash budget for June is prepared below:-

                                      Cash Budget

                                For the month of June

Particulars                                                   Amount

Begining cash                                             $736

Add:

Collections:

Cash sales                                                  $18,600

Credit sales

Current month                                          $21,600   ($54,000 × 30%)

May credit                                                 $10,500    ($35,000 × 30%)

Credit sales of April                                   $5,896  (explained in note 1)

Total cash available                                   $57,332

Less: Disbursement

Purchase of inventory

Current month                                              $9,293 (explained in note 2)

($46,464 × 20%)

Prior month                                                   $27,136  (explained in note 2)

($33,920 × 80%)

Salary                                                             $11,750 (explained in note 3)

Rent                                                                $4,100

Taxes                                                              $6,780

Need's total                                                    -$1,727

Excess for cash available

over needs

Note:-

1. Amount which is received in June is

= $28,900 × 20%

= $5,780

Late fees = $5,780 × 2%

= $116

June receipts is

= $5,780 + $116

= $5,896

2. Purchase of inventory is

= $53,000 × 64%

= $33,920

Total sales = Cash + Credit sales

= $72,600

Puchase of inventory = $72,600 × 64%

= $46,464

3. Entirely amount is taken of salaries and wages if it paid or not.

In the development of a SFAS matrix, the first step is to:____________.
A) enter the ratings of how the company's management is responding to each of the strategic factors.
B) calculate the weighted scores.
C) list the most important EFAS and IFAS items.
D) indicate short-term goals for the duration.
E) enter the weights for all of the internal factors.

Answers

Answer:

its A

Explanation:

I promise trust me

A bank has $10,000 in excess reserves and the required reserve ratio is 20 percent. This means the bank could have __________ in checkable deposit liabilities and __________ in total reserves.

Answers

Answer: $100,000; $30,000

Explanation:

The reserve rate is the amount of money that is made compulsory by the central bank of a country to the commercial banks to keep with them. It is a way of controlling the money in circulation.

A bank has $10,000 in excess reserves and the required reserve ratio is 20 percent. This means the bank could have $100,000 in checkable deposit liabilities and $30,000 in total reserves.

Since deposit is $100,000 and reserved rate is 20%, this will give an amount of: 20% × $100,000 = $20,000. Adding the $10,000 excess reserve will make $30,000 to which is the total reserve

The jewelry department has an initial markup of 55.6%, with total retail reductions of 15%. There are no alteration costs or cash discounts. What is the maintained markup percentage and the gross margin percentage

Answers

Answer:

Maintained markup percentage = 48.9%

Gross margin percentage = 48.9%

Explanation:

Given:

Initial markup = 55.6%

Total retail reductions = 15%

To find the maintained markup percentage use the formula below:

%MMU = Initial MU% - Retail reductions% (100% - Initial MU%)

Substitute figures:

%MMU = 55.6% - 15% (100% - 55.6%)

= 55.6% - 15% (44.4%)

= 55.6% - 6.66%

= 48.9%

Therefore, the maintained markup percentage = 48.9%

To find the gross margin percentage, use the formula below:

GM% = (Net sales - Total cost of goods) /Net sales

We can also use this formula below to find the maintained markup percentage:

MMU% = (Net sales - Gross cost of goods) /Net sales

But we are told that there are no alteration costs or cash discounts here. Therefore the gross cost is the same as the total cost of goods.

This means that the mantained markup percentage and the gross margin percentage are equal.

GM% = 48.9%

When organizations, in an attempt to prevent _____ asks customers to not enter characters but instead select them one by one from boxes, intruders may counter with

Answers

Answer: a. keyloggers, screen scrapers

Explanation:

When organizations, in an attempt to prevent keyloggers asks customers to not enter characters but instead select them one by one from boxes, intruders may counter with screen scrapers

Keyloggers is a program that allows another person to record the keys struck on a keyboard without the person typing knowing. The person recording can them compile the information to find out very confidential information. By asking customers to select characters this can be mitigated.

Screen Scrapers on the other hand are more lethal because they record that is being displayed on a screen and transmit it to another person thereby enabling them to see what the target is doing even if they select characters from boxes.

Bonner Corp.'s sales last year were $345,000, and its year-end total assets were $355,000. The average firm in the industry has a total assets turnover ratio (TATO) of 2.4. Bonner's new CFO believes the firm has excess assets that can be sold so as to bring the TATO down to the industry average without affecting sales. By how much must the assets be reduced to bring the TATO to the industry average, holding sales constant? Use the year-end balance in your calculations. Select the correct answer. a. $211,325 b. $211,175 c. $211,101 d. $211,250 e. $211,026

Answers

Answer:

  d.  $211,250

Explanation:

The TATO is the ratio of sales to assets:

  TATO = sales/assets

Filling in the desired numbers, we can find the desired level of assets:

  2.4 = 345,000/assets

  assets = 345,000/2.4 = 143,750

Starting with assets of 355,000 the reduction necessary to bring assets down to 143,750 is ...

  $355,000 -143,750 = $211,250 . . . . matches choice D

Kano International Publishing, headquartered in Berlin, Germany, is a leading global publisher of scientific, technical, and medical journals and books for researchers in academia, scientific institutions, and corporate R&D departments. For print publications, assume that Kano owns a Didde press (now manufactured by Graphic Systems Services) that was acquired at an original cost of $330,000. It is being depreciated on a straight-line basis over a 20-year estimated useful life and has a $43,000 estimated residual value. At the end of the prior year, the press had been depreciated for a full five years. At the beginning of January of the current year, a decision was made, on the basis of improved maintenance procedures, that a total estimated useful life of 25 years and a residual value of $83,000 would be more realistic. The accounting period ends December 31.Required:a. Compute the amount of depreciation expense recorded in the prior year.b. Compute the book value of the printing press at the end of the prior year.c. Compute the amount of depreciation that should be recorded in the current year.d. Prepare the adjusting entry for depreciation at December 31 of the current year.

Answers

Answer:

a. Compute the amount of depreciation expense recorded in the prior year.

$71,750

b. Compute the book value of the printing press at the end of the prior year.

$258,250

c. Compute the amount of depreciation that should be recorded in the current year.

$8,762.50

d. Prepare the adjusting entry for depreciation at December 31 of the current year.

December 31, 202x, depreciation expenseDr Depreciation expense 8,762.50     Cr Accumulated depreciation - Didde press 8,762.50

Explanation:

depreciation expense per year of Didde press = ($330,000 - $43,000) / 20 years = $14,350 per year

accumulated depreciation = 5 years x $14,350 = $71,750

net book value = $258,250

adjusted useful life of 25 years, 20 remaining

new residual value of $83,000

depreciation expense per year = ($258,250 - $83,000) / 20 years = $8,762.50 per year

As a financial manager for WillPower, Inc, you have the following information: a) The company follows a residual dividend policy; b) The total capital budget for next year is likely to be $8,000,000; c) The forecasted level of earnings next year is $8,000,000; d) The target or optimal capital structure is a debt ratio of 40%;

Answers

Answer:

a. Amount funded with equity is $4,800,000

b. Dividend is $3,200,000

c. Dividend Payout ratio is 40.00%

Explanation:

Note: This question is incomplete, and the complete one is as follows:

As a financial manager for WillPower, Inc, you have the following information: a) The company follows a residual dividend policy; b) The total capital budget for next year is likely to be $8,000,000; c) The forecasted level of earnings next year is $8,000,000; d) The target or optimal capital structure is a debt ratio of 40%;

Please answer the following questions:

a. What will be the amount funded with equity for the project ? (Keep the answer to a whole number. Example of answer format: $1,000,000)

b. Compute the amount of the dividend . (Keep the answer to a whole number. Example of answer format: $1,000,000)

c. Compute the dividend pay-out ratio . (Keep the answer to two decimals. Example of the answer format: 55.55%)

The following are therefore the explanation of the answers to the question:

a. What will be the amount funded with equity for the project ? (Keep the answer to a whole number. Example of answer format: $1,000,000)

Given that the target or optimal capital structure is a debt ratio of 40%, this implies that there will be 40% debt finance and 60% (100% - 40%) equity finance. Therefore, we have:

Amount funded with equity = Total capital budget for next year * Percentage of equity finance = 8,000,000 * 60% = $4,800,000

b. Compute the amount of the dividend. (Keep the answer to a whole number. Example of answer format: $1,000,000)

Since the company follows a residual dividend policy, it implies that the earnings available are employed to finance capital expenditure budget first before dividends are paid to the shareholders.

Since amount funded with equity is $4,800,000 as obtained in part a, it implies that this must be deducted first from the forecasted level of earnings next year to obtain the residual that will be paid as dividend as follows:

Dividend = Forecasted level of earnings next year - Amount funded with equity = $8,000,000 - $4,800,000 = $3,200,000

c. Compute the dividend pay-out ratio . (Keep the answer to two decimals. Example of the answer format: 55.55%)

Dividend payout ratio refers to the percentage of the earnings or net income of a company that is paid by the company to its shareholders as dividend. This can therefore be calculated

Dividend Payout ratio = Dividend / Earnings = $3,200,000 / $8,000,000 = 0.40, or 40.00%

Therefore, WillPower, Inc is expected to pay 40% of its earnings as dividend to its shareholders.

Mobile visual search (MVS) apps generate graphic images that are superimposed on pictures of real things (e.g., people, rooms, buildings, roads, and so on). For instance, a mobile phone user might point her phone camera at an office building and activate an app that generates the logos of all foodservice outlets (e.g., Starbucks, Subway, McDonalds) inside the building. True or False

Answers

Answer: False

Explanation:

Mobile Visual Apps were made.more along the lines of linking different content from a single picture. For instance, a single picture of a logo could link the user to the social media pages, products and other content belonging to the owner of the logo.

The product described in the text above is ' Augmented Reality '.

Magnolia, Inc. manufactures bedding sets. The budgeted production is for 31,600 comforters this year. Each comforter requires 7 yards of material. The estimated January 1 beginning inventory is 4,980 yards with the desired ending balance of 4,200 yards of material. If the material costs $3.10 per yard, determine the materials budget for the year.

Answers

Answer:

$683,302

Explanation:

The computation of the materials budget for the year is shown below:-

Total Material required = Budgeted production units × Material Required per unit

= 31,600 × 7

= 221,200

Material to be purchased (Yards) = Total Material required + Desired Ending material inventory - Beginning Material inventory

= 221,200 + 4,200 - 4,980

= 220,420

Cost of Material to be purchased = Material to be purchased (Yards) × Price Per yard

= 220,420 × $3.10

= $683,302

Currently, a U.S. trader notes that in the 6-month forward market, the Japanese yen is selling at a premium (that is, you receive more dollars per yen in the forward market than you do in the spot market), while the British pound is selling at a discount. Which of the following statements is correct?
a) If interest rate parity holds among the three countries, the United States should have the highest 6-month interest rates and Britain should have the lowest rates.
b) If interest rate parity holds among the three countries, the United States should have the highest 6-month interest rates and Japan should have the lowest rates.
c) If interest rate parity holds among the three countries, Japan should have the highest 6-month interest rates and Britain should have the lowest rates.
d) If interest rate parity holds, 6-month interest rates should be the same in the U.S., Britain, and Japan.
e) If interest rate parity holds among the three countries, Britain should have the highest 6-month interest rates and Japan should have the lowest rates.

Answers

Answer:

Hence correct answer is option e) If interest rate parity holds among the three countries, Britain should have the highest 6-month interest rates and Japan should have the lowest rates.

Explanation:

Determine the uniform annual value for the cash flow below at an interest rate of 11% per year.
Year 0 1 2 3 4 5 6 7 8 9
Cash Flow, 0 $ 30,000 30,000 30,000 30,000 45,000 45,000 45,000 45,000 45,000
a. $38,474
b. $37,744
c. $36,595
d. $39,595

Answers

Answer:

$36,595

Explanation:

The computation of the uniform annual value is shown below:;

Before that we need to find out the present worth which is

= $30,000 × (P/A , 11%, 4) + $45,000 × (P/A , 11%, 4) × (P/F , 11%, 4)

= $30,000 × (3.1025) + $45,000 × (3.69590) (0.65873)

= $202,630.51

Now the annual worth is

= Present value × (A/P, 11%,9)

= $202,630.51 × 0.18060

= $36,595

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