Answer:
d.$51,200
Explanation:
Calculation for the cash flow from operations Under the indirect method
Using this formula
Cash flow=Net income + Increased in accounts payable increased- Increased in Accounts receivable
Let plug in the formula
Cash flow =$45,500+$11,200-$5,500
Cash flow =$51,200
Therefore the cash flow from operations Under the indirect method will be $51,200
Sam owns 60 percent of the stock of Club Corporation. Unrelated individuals own the remaining 40 percent. For a stock redemption of Sam's stock to be treated as an exchange under the "substantially disproportionate" test, what percentage of Club stock must Sam own after the redemption
Answer: c. Any percentage less than 48 percent.
Explanation:
For a shareholder's distribution to be considered to be Substantially Disproportionate it needs to be the lesser of 2 criteria;
80% of their shares before the distribution50% of the total sharesSam owns 60% and 80% of that is;
= 80% * 60%
= 48%
Sam should own less than 48% after the redemption.
Gaggle, Inc. and Microhard, Inc., both large publicly held corporations, form a joint venture to develop a new smartphone operating system. Large corporations like this usually form a joint venture for
The question is incomplete:
Gaggle, Inc. and Microhard, Inc., both large publicly held corporations, form a joint venture to develop a new smartphone operating system. Large corporations like this usually form a joint venture for:
-A single transaction or project
-A stated duration of not more than one year
-An implied duration of not more than six months
-A perpetual existence
Answer:
-A single transaction or project
Explanation:
A joint venture is an agreement in which two or more companies share their resources to achieve a specific objective but each business stays as an independent entity. According to this, the answer is that large corporations like this usually form a joint venture for a single transaction or project as the companies maintain their independence and agree to work together for a specific goal or task.
The other options are not right because joint ventures don't have a specifc duration, it depends on the terms establish by the parties and the joint venture will exist for the period of time determined on the agreement.
Stylon Co., a women's clothing store, purchased $48,000 of merchandise from a supplier on account, terms FOB destination, 2/10, n/30, using the net method under a perpetual inventory system. Stylon returned merchandise with an invoice amount of $7,500, receiving a credit memo. a. Journalize Stylon's entry to record the purchase. If an amount box does not require an entry, leave it blank. b. Journalize Stylon's entry to record the merchandise return. If an amount box does not require an entry, leave it blank. c. Journalize Stylon's entry to record the payment within the discount period of 10 days. If an amount box does not require an entry, leave it blank. d. Journalize Stylon's entry to record the payment beyond the discount period of 10 days. If an amount box does not require an entry, leave it blank.
Answer:
Stylon Company.
General Journal
Net Method
The following entries have been passed using net method.
Sr. No Particulars Debit Credit
a. Merchandise Inventory 47040
Accounts Payable 47040
Purchased $48,000 of merchandise from a supplier on account, terms FOB destination, 2/10, n/30, using the net method under a perpetual inventory system
b. Accounts Payable 7350
Merchandise Inventory 7350
Stylon returned merchandise with an invoice amount of $7,500,
c. Accounts Payable 39690
Cash 39690
Stylon's entry to record the payment within the discount period of 10 days
d. Discount Lost 810
Accounts Payable 810
Accounts Payable 40500
Cash 40500
Stylon's entry to record the payment beyond the discount period of 10 days.
The green giant has 4 percent profit margin and a 30 percent dividend payout ratio. The total assets turnover is 1.2 times and the equity multiplier is 1.6. What is the sustainable rate of growth?
Answer:
5.68%
Explanation:
The green giant has a 4% profit ratio
= 4/100
= 0.04
The dividend payout ratio is 30%
= 30/100
= 0.3
The total assets turnover is 1.2 times
The equity multiplier is 1.6
The first step is to calculate the return on equity
ROE= Profit margin×Total assets turnover×Equity multiplier
= 0.04×1.2×1.6
= 0.0768 or 7.68%
The next step is to calculate the Plowback ratio
b = 1-dividend payout ratio
b = 1-0.3
b = 0.7
Therefore, the sustainable growth rate can be calculated as follows
= ROE×b/(1-(ROE×b)
= 0.0768×0.7/(1-(0.0768×0.7)
= 0.05376/(1-0.05376)
= 0.05376/0.94624
= 0.05681
= 5.68%
Hence the sustainable rate of growth is 5.68%
Wilt's has earnings per share of $2.98 and dividends per share of $0.35. What is the firm's sustainable rate of growth if its return on assets is 14.6% and its return on equity is 18.2%?
Answer:
16.06%
Explanation:
According to the given situation the computation of sustainable rate of growth is shown below:-
Sustainable Growth Rate = Return on equity × (1 - Dividend payout ratio)
= 18.2% × ( 1 - 0.35 ÷ 2.98)
= 18.2% × ( 1 - 0.1174)
= 16.06%
Therefore for computing the sustainable rate of growth we simply applied the above formula.
In 2017, Costello Company performs work for a customer and bills the customer $10,000; it also pays expenses of $3,000. The customer pays Costello in 2018. If Costello uses the accrual-basis of accounting, then Costello will report:_____
a. revenue of $10,000 in 2018.
b. revenue of $10,000 in 2017.
c. net income of $7,000 in 2018.
d. expenses of $3,000 in 2018.
Answer: revenue of $10,000 in 2017
Explanation:
Accrual basis of accounting is a method that is used in accounting whereby the revenue or expenses have to be recorded when the transaction is made and not when the payment dor the transaction is made or received.
Since we are told that Costello Company performs work for a customer and bills the customer $10,000 in 2017, therefore if Costello uses the accrual-basis of accounting, then Costello will report revenue of $10,000 in 2017.
Miramar Tire and Rubber Company has capacity to produce 119,000 tires. Miramar presently produces and sells 91,000 tires for the North American market at a price of $99.00 per tire. Miramar is evaluating a special order from a South American automobile company, Ria Motors. Rio Motors is offering to buy 11,000 tires for $83.25 per tire. Miramar's accounting system indicates that the total cost per tire is as folows: Direct materials Direct labor Factory overhead (70% variable) Selling and administrative expenses (30% variable) Total 538 23 20 $95 Miramar pa s a sales commiss on equal to 5% of t e seling price on North American arders, whichis n uded in the variable portion of the selling and adm?n strative expenses. However, this special order would not havea sales comm saan. If the order was accepted, the tires would be shipped overseas for an additional shipping cost of $5.00 per tire. In addition, Rio has made the order conditional on Miramar Tire and Rubber Company receiving a Brazilian safety certification. Rio estimates that this certification would cost Miramar Tire $72,800
a. Prepare a differential analysis report for the proposed sale to Rio Motors, Round your answers to the nearest cent.
b. What is the minimum price per unit that would be financially acceptable to mirama?Round your answers to the nearest cent.
Answer:
a) spare capacity = 119,000 - 91,000 = 28,000 tires
normal sales price $99 per tire
special order for 11,000 at $83.25
Direct materials $38
Direct labor $14
Factory overhead (70% variable) $23
Selling and administrative expenses (30% variable) $20
Total $95
total avoidable costs = ($23 x 30%) + ($20 x 70%) = $20.90
total unavoidable costs = $74.10
additional costs related to the special order $5 per tire (shipping costs) + $72,800 in total
accept special reject special differential
order order amount
sales revenue $915,750 $0 $915,750
variable prod. costs ($815,100) $0 ($815,100)
variable costs ($55,000) $0 ($55,000)
associated to special order
certification costs ($72,800) $0 ($72,800)
associated to special order
total ($27,150) $0 ($27,150)
b) minimum price per unit = ($27,150 / 11,000) + $83.25 = $85.7182 ≈ $85.72
Nine years ago the Templeton Company issued 15-year bonds with a 12% annual coupon rate at their $1,000 par value. The bonds had an 8% call premium, with 5 years of call protection. Today Templeton called the bonds. Compute the realized rate of return for an investor who purchased the bonds when they were issued and held them until they were called. Round your answer to two decimal places.
Answer:
12.39%
Explanation:
in order to determine the realized rate of return we need to calculate the yield to call:
YTC formula = {coupon + [(call price - market price)/n]} / [(call price + market price)/2]
YTC = {$120 + [($1,080 - $1,000)/9]} / [($1,080 + $1,000)/2]
YTC = $128.89 / $1,040 = 0.1239 = 12.39%
In this case, the investor's realized rate of return was actually higher than the expected yield to maturity (YTM = 12% since bonds were sold at face value).
A factory currently manufactures and sells 800 boats per year. Each boat costs $5,000 to produce. $4,000 of the per-boat costs are for materials and other variable costs, while the per-boat fixed costs (incurred on yearly rent, administrative, and other fixed costs) are $1,000. If boat orders increase to 1000 boats per year, how do per-unit costs change?
Answer:
Total unitary cost= $4,800
Explanation:
Giving the following information:
Actual units= 800
Total fixed costs= 1,000*800= 800,000
UNitary variable cost= $4,000
Units increase= 200
On unitary bases, variable costs remain constant. On the contrary, fixed costs vary at a unitary level. Now, the same amount of costs is divided by a larger number of units.
Unitary fixed overhead= 800,000/1,000= $800
Total unitary cost= 4,000 + 800= $4,800
A company had the following transactions during September, the first month of its operations: Issued 50,000 shares of common stock in exchange for $600,000. Purchased land for $400,000, using a $150,000 cash down payment and signing a note payable for the balance. Received $5,000 from a customer for services to be performed in December. Made a $60,000 payment on the note payable from the purchase of the land. Total monthly sales: Cash sales $50,000 Credit Sales: $17,000 Purchased equipment on credit for $63,000. Collected $8,000 from customers on account. Paid $2,000 for September employee wages. Received a utility bill for $500 which will be paid next month. What is net income for the month of September
Answer:
Net income for the month of September is $451,000
Explanation:
Particulars Amount
Issue of common stock 600,000
Receipt from customer 5,000
Cash sales 50,000
Collection from customer 8,000 663,000
Less:
Cash down-payment made (150,000)
Payment made on notes payable (60,000)
Employee wage paid (2,000)
Cash balance as at end of Sep. 451,000
A company had the following purchases during its first year of operations:
January: 17 units at $127
February: 27 units at $137
May: 22 units at $147
September: 19 units at $157
November: 17 units at $167
On December 31, there were 61 units remaining in ending inventory. These 61 units consisted of 9 from January, 11 from February, 13 from May, 11 from September, and 17 from November. Using the specific identification method, what is the cost of the ending inventory?
a. $8,960.
b. $7,620.
c. $9,294.
d. $9,127.
e. $7,714.
Answer:
Ending inventory value= $9,127
Explanation:
Giving the following information:
January: 17 units at $127
February: 27 units at $137
May: 22 units at $147
September: 19 units at $157
November: 17 units at $167
Using the specific identification method, we need to multiply each unit for its specific cost.
Ending inventory:
January= 9*127= 1,143
February= 11*137= 1,507
May= 13*147= 1,911
September= 11*157= 1,727
November= 17*167= 2,839
Ending inventory value= $9,127
In each succeeding payment on an installment note:_______A. The amount of interest expense increases. B. The amount of interest expense decreases. C. The amount of interest expense is unchanged. D. The amounts paid for both interest and principal increase proportionately.
Answer:
Explanation:
Yess
Mattola Company is giving each of its employees a holiday bonus of $125 on December 16 (a non payday). The company wants each employee's check to be $125. The supplemental tax percent is used. Round your calculations and answers to the nearest cent.
a. What will be the gross amount of each bonus if each employee pays a state income tax of 2.8% (besides the other payroll taxes)?
b. What would the net amount of each bonus check be if the company did not gross-up the bonus?
Answer:
a. $193.65
b. $80.69
Explanation:
The computation is shown below:
a) The gross amount of each bonud is
= Holiday bonus ÷ (1 - supplemental tax rate - OSADI tax rate - HI rate - state tax rate)
= $125 ÷ (1 - 0.25 - 0.062 - 0.0145 - 0.028)
= $125 ÷ 0.6455
= $193.65
b) Now the Net amount of each bonus check is
= Holiday bonus - (Holiday bonus × supplemental tax rate - Holiday bonus × OSADI tax rate - Holiday bonus × HI rate - Holiday bonus × state tax rate)
= $125 - ($125 × 0.25) - ($125 × 0.062) - ($125 × 0.0145) - ($125 × 0.028)
= $125 - $31.25 - $7.75 - $1.8125 - $3.5
= $80.69
Refer to the different tax table rate
A stock has an expected return of 10.2 percent, the risk-free rate is 3.9 percent, and the market risk premium is 7.2 percent. What must the beta of this stock be? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
Beta= 0.88
Explanation:
The Capital Asset pricing Model (CAPM) can be used to determined the beta.
According to the Capital Asset pricing Model the return on equity is dependent on the level of reaction of the the equity to changes in the return on a market portfolio.
These changes are captured as systematic risk. The magnitude by which a stock is affected by systematic risk is measured by beta.
Under CAPM, Ke= Rf + β(Rm-Rf)
Rf-risk-free rate (treasury bill rate), β= Beta, Rm= Return on market.
Ke- expected return.
Note that (Rm-Rf) is known as equity risk premium
Using this model,
10.2%= 3.9% + β× (7.2%)
0.102=0.039 + 0.072β
collect like terms
0.072β = 0.102 -0.039
0.072β = 0.063
Divide both sides by 0.072
β = 0.063 /0.072
β= 0.875
Beta= 0.88
You’re trying to save to buy a new $245,000 Ferrari. You have $50,000 today that can be invested at your bank. The bank pays 4.3 percent annual interest on its accounts. How long will it be before you have enough to buy the car?
Answer:
38 years
Explanation:
You want to find n such that the multiplier over n years gets you from 50,000 to 245,000.
245,000 = 50,000(1 +4.3%)^n
4.9 = 1.043^n
log(4.9) = n·log(1.043)
n = log(4.9)/log(1.043) ≈ 37.7
It will be about 38 years before you will have enough to afford the car at today's price.
_____
Comment on car prices
The rate of inflation of car prices has been about 1.67% since 1953, so taking that into account, you will need much more than $245000 to buy the car. It will take more than 62 years for your bank account to catch up to the price of the car.
Broussard Skateboard's sales are expected to increase by 20% from $7.6 million in 2016 to $9.12 million in 2017. Its assets totaled $4 million at the end of 2016. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2016, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 4%, and the forecasted payout ratio is 70%. What would be the additional funds needed? Do not round intermediate calculations. Round your answer to the nearest dollar. $ Assume that an otherwise identical firm had $5 million in total assets at the end of 2016. The identical firm's capital intensity ratio (A0*/S0) is higher than than Broussard's; therefore, the identical firm is -Select- capital intensive - it would require -Select- increase in total assets to support the increase in sales.
Answer:
$510,560
Explanation:
AFN = (A/S) x (Δ Sales) - (L/S) x (Δ Sales) - (PM x FS x (1-d))
A = assets = $4,000,000S = sales = $7,600,000L = liabilities that vary according to sales level = $450,000 + $450,000 = $900,000Δ Sales = change in sales = $9,120,000 - $7,600,000 = $1,520,000PM = profit margin = 4%FS = forecasted sales = $9,120,000d = payout ratio = 70%AFN = ($4,000,000/$7,600,000) x ($1,520,000) - ($900,000/$7,600,000) x ($1,520,000) - (4% x $9,120,000 x (1 - 70%)) = $800,000 - $180,000 - $109,440 = $510,560
On January 1, 2021, an investor paid $296,000 for bonds with a face amount of $316,000. The contract rate of interest is 12% while the current market rate of interest is 15%. Using the effective interest method, how much interest income is recognized by the investor in 2022 (assume annual interest payments and amortization)
Answer:
$45,372
Explanation:
The computation of the interest income using the effective interest method is shown below
Interest Income is
= [Paid amount + (Paid amount × current market rate of interest) - (face value of the bond × contract rate of interest)] × current market rate of finterest
= [$296,000 + ($296,000 × 15%) - ($316,000 × 12%)] × 15%
= [$296,000 + $44,400 - $37,920)} × 15%
= $45,372
We simply applied the above formula
The problem of ________________ in insurance markets is that insurance companies are unable to ______________ . Group of answer choices
Answer:
adverse selection, differentiated those with high risk and low risk
Explanation:
Adverse selection refers to the selection in which an individual gained the insurance at a cost but it is below the level of risk. In other words we can say that the applicant pay the lower amount of premium in case of higher premium charged by the company as the company is not aware of the fact
In the given case, the problem of adverse selection is there that unable to differentiate between a high level of risk and lower level of risk
Fred owns a small manufacturing plant. His friend Paul also owns a manufacturing plant and has talked to Fred about issues he has found so far with his system. What is Paul likely to say
Answer:
Please refer to the below explanation.
Explanation;
With regards to the above, Paul is likely to say that Fred should beware of the high price to buy and maintain the cost accounting system. Although there are faults or issues in the small manufacturing plant owned by Fred, yet he must estimate the cost of buying new plant for profitability purpose.
Paul is also likely to tell Fred that he should inform his accountant to conduct reconciliations inorder to ensure that the rates in the system makes sense when compared to actual rate. Fred's accountant would also ensure that the rate loaded in their system correspond with actual rates dispensed by the system. This is to ensure that the anomaly in the system is constantly monitored.
Adam Smith believed that incentives to seek personal gain would create wealth, but that the government must then step in to make sure that this wealth is equitably distributed.
a. True
b. False
Answer:
b. False
Explanation:
Adam Smith believed that incentives to seek personal gain would create wealth. He did not believe in active government intervention in order to redistribute wealth in an equitable manner. Adam Smith favored capitalism and the accumulation of wealth by individuals, he did not favor socialism and the redistribution of wealth.
The _____ dictates that an importer must pay a specified amount of money by a specific date.
A. bill of exchange
B. drawee
C. lease agreement
D. letter of credit
E. bill of lading
Answer:
A bill of exchange
Explanation:
This is the answer google bill of exchange and it matches this description very close i think at least
The following list includes selected permanent accounts and all of the temporary accounts from the December 31, 2017, unadjusted trial balance of Emiko Co. Use these account balances along with the additional information to journalize: a. Adjusting entriesb. Closing entries. Emiko Co. uses a perpetual inventory system. Debit CreditMerchandise inventory $30,000 Prepaid selling expenses 5,600 K. Emiko, Withdrawals 33,000 Sales $529,000Sales returns and allowances 17,500 Sales discounts 5,000 Cost of goods sold 212,000 Sales salaries expense 48,000 Utilities expense 15,000 Selling expenses 36,000 Administrative expenses 105,000 Additional Information: Accrued and unpaid sales salaries amount to $1,700. Prepaid selling expenses of $3,000 have expired. A physical count of year-end merchandise inventory is taken to determine shrinkage and shows $28,700 of goods still available.
Answer:
Emiko Co.
a) Adjusting Journal Entries:
Debit Sales Salaries Expense $1,700
Credit Sales Salaries Payable $1,700
To record unpaid salaries expense.
Debit Selling Expenses $3,000
Credit Prepaid Selling Expenses $3,000
To record expired expenses.
b) Closing Journal Entries:
Debit Income Summary $30,000
Credit Beginning Inventory $30,000
To close the beginning inventory to the Income Summary.
Debit Sales $529,000
Credit Sales Returns and Allowances $17,500
Credit Sales Discount $5,000
Credit Income Summary $506,500
To close sales, sales returns & allowances & discount.
Debit Income Summary $212,000
Credit Cost of goods sold $212,000
To close cost of goods sold to the income summary.
Debit Income Summary $208,700
Credit Sales Salaries $49,700
Credit Utilities $15,000
Credit Selling expenses $39,000
Credit Administrative expenses $105,000
To close expenses to the income summary.
Explanation:
Adjusting journal entries are often used to make some changes in the accounts at the end of the reporting period in order to ensure that transactions are reported on the accrual basis. Entries made under this journal are usually accrued expenses and income, prepaid expenses and deferred revenue, depreciation charges.
On the other hand, closing journal entries are used to differentiate the temporary accounts from the permanent accounts. Temporary accounts are closed at the end of the accounting period to the Income Summary. Permanents accounts are carried over to the next accounting period. Their accounts make up the balance sheet and their opening balances of the next reporting period.
The Alfa Co. has a 6% coupon bond outstanding that pays annual interest. Calculate the annual interest payment on a $1,000 face value bond. Group of answer choices.
Answer: $60
Explanation:
The Annual Interest payment is also known as the Coupon payment.
The Issuers of the bond pay this to the Holders in periods until the bond matures.
Annual Interest Payment = Face value of bond * Coupon rate
= 1,000 * 6%
= $60
A company has $600 in inventory, $1,885 in net fixed assets, $276 in accounts receivable, $125 in cash, and $322 in accounts payable. What are the company's total current assets
Answer:
The answer is $1001
Explanation:
Solution
Given that:
A company inventory is = $600
Net fixed assets =$1,885
Cash =$125
Accounts payable = $322
Now we have to find the company's total current assets
Thus
Inventory =$ 600
Accounts receivable=$276
Cash=$125
Total current assets =$1001
Hence the total assets of the company is $1001
Swiss Group reports net income of $40,000 for 2019. At the beginning of 2019, Swiss Group had $200,000 in assets. By the end of 2019, assets had grown to $300,000. What is Swiss Group's 2016 return on assets? How would you assess its performance if competitors average an 11% return on assets?
Answer:
For the tear 2019, net income is 40,000
Beginning of the year 2019, asset of the S are 200,000
Ending of the year 2019, asset of the S are 300,000
Average asset for 2019= Beginning assets + Closing assets / 2
Average asset for 2019= 200,000 + 300,000 / 2
Average asset for 2019= $250,000
Return on assets = Net income / Average assets * 100%
= 40,000 / 250,000 * 100
=16%
Thus, the return on assets is 16%
Conclusion: If the average return of assets of the competitors are 11%, It means S uses the assets efficient manner, so performance of the S is very good ad return of the S is higher than competitors on asset
If the total revenue variance is favorable and the revenue price variance is unfavorable, then the revenue volume variance must a.exceed the revenue price variance and be favorable b.be less than the revenue price variance and be favorable c.be less than the revenue price variance and be unfavorable d.be equal to the revenue price variance and be favorable
Answer: a.exceed the revenue price variance and be favorable
Explanation:
Revenue Volume x Revenue Price = Total Revenue
From the above formula, for the Total Revenue to be variated positively and yet the Revenue Price is of Negative Variance, it would follow logically that the other variable in the transaction contributed to the favorable variance of the Total Revenue apart from the Revenue Price.
The only other variable is the Revenue Volume. The Revenue volume must therefore have been large and favorable enough to offset the Negative Variance of the Revenue Price.
Suppose that Country A has 200 workers and Country B has 100 workers. Given their workforce,Country A can produce 200 bushels of corn or 800 barrels of maple syrup. Similarly, with their workforce, Country B can produce 250 bushels of corn or 500 barrels of maple syrup. Suppose the two countries trade with each other. Which of the following are true?
I. Country A has an absolute advantage in maple syrup.
II. Country B has an absolute advantage in maple syrup.
III. Country A specializes in corn.
IV. Country B specializes in corn.
A. I and III.
B. I and IV.
C. II and III.
D. II and IV.
Answer:
D. II and IV.
Explanation:
A country has absolute advantage in the production of a good if it produces more quantity of the good when compared with other countries.
A country should specialise in the production of a good for which it has comparative advantage.
A country has comparative advantage in production if it produces at a lower opportunity cost when compared with other countries.
For country A,
One worker would produce = 200 / 200 = 1 bushel of corn
One worker would produce = 800 / 200 = 4 barrels of maple syrup.
For country B,
One worker would produce = 250 / 100 = 2.5 bushels of corn
One worker would produce = 500 / 100 = 5 barrels of maple syrup.
It can be seen that country B has absolute advantage in the production of both products because it produces more quantities of the good when compared to country A.
For country A
Opportunity cost of producing 1 bushel of corn = 4 / 1 = 4
Opportunity cost of producing 1 barrel of syrup = 1 / 4 = 0.25
For country B
Opportunity cost of producing 1 bushel of corn = 5 / 2.5 = 2
Opportunity cost of producing 1 barrel of syrup = 0.5
Country b has a lower opportunity cost when compared with country A in the production of corn. So, country B should specialise in the production of corn.
I hope my answer helps you
Gentleman Gym just paid its annual dividend of $4 per share, and it is widely expected that the dividend will increase by 5% per year indefinitely.
Requried:
a. What price should the stock sell at if the discount rate is 15% (Do not round intermediate calculations. Round your answer to 2 decimal places.)
b. What price should the stock sell at if the discount rate is 12%. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Answer:
a) Price of stock = $42
b) Price of stock = $60
Explanation:
The price of a share can be calculated using the dividend valuation model
According to this model the value of share is equal to the sum of the present values of its future cash dividends discounted at the required rate of return.
If dividend is expected to grow at a given rate , the value of a share is calculated using the formula below:
Price=Do (1+g)/(k-g)
Where Do- Dividend now, g- growth rate, k- required rate of return(cost of equity)
a) Where discount rate is 15%
Price of stock = 4× (1.05)/(0.15-0.05) = 42
Price of stock = $42
b) Where discount rate is 12%
Price of stock =4× (1.05)/(0.12-0.05)= 60
Price of stock = $60
The standard rate of pay is $10 per direct labor hour. If the actual direct labor payroll was $39,200 for 4,000 direct labor hours worked, the direct labor price variance is: a. $800 unfavorable. b. $800 favorable. c. $1,000 unfavorable. d. $1,000 favorable.
Answer:
j,utiy5t54e3w25p0l8tuegtr3129lo,ukthngtrf234567ui6klu,khjmhntgf23
Explanation:
uio.,tukwgtw345678oolukmtee3e234567o97kitwr3e45678o08lkiygre32
Examples of cash equivalents include all of the following except:
a. U.S. Treasury bills.
b. notes issued by major corporations (referred to as commercial paper).
c. currency and coins.
d. long-term notes receivable.
Answer:
d. Long-term Notes Receivable.
Explanation:
Cash and cash equivalent are those financial instruments which can be converted into cash easily and within a short period of time. Cash and cash equivalent includes the treasury bills, commercial papers( notes issued by major corporation), bills, currencies and coins but it does not include the long term notes receivable.
All the equivalents are easy to convert to cash easily except the Long term notes receivables because it requires to wait for some long period before such note can be converted into money.