Answer:
a) true
Explanation:
In the changing environment companies face, they require to get valuable knowledge to be able to remain competitive in the market. To get that knowledge, they have the option to do research or train their employees but these options usually take time. When they need to do it fast, businesses can find people that already have the knowledge and that can apply it immediately in the company or acquire another organization that have what they need.
According to this, the statement that says that one of the fastest ways to acquire knowledge is to hire individuals or purchase entire companies that have valued knowledge is true.
Orwell building supplies' last dividend was $1.75. Its dividend growth rate is expected to be constant at 34.00% for 2 years, after which dividends are expected to grow at a rate of 6% forever. Its required return (rs) is 12%. What is the best estimate of the current stock price? Select the correct answer. a. $49.93 b. $49.39 c. $48.85 d. $47.77 e. $48.31
Answer:
Price of the stock today = $48.85 and option c is the correct answer.
Explanation:
The current price of the stock can be computed using the two stage dividend growth model of the DDM approach. The DDM or dividend discount model values a stock based on the present value of the expected future dividends from the stock.
The formula for the price of the stock today using the two stage growth model is attached.
Price of the stock today = 1.75 * (1+0.34) / (1+0.12) + 1.75 * (1+0.34)^2 / (1+0.12)^2 + [ (1.75 * (1+0.34)^2 * (1+0.06)) / (0.12 - 0.06) ] / (1+0.12)^2
Price of the stock today = $48.85
Although GDP is a reasonably good measure of a nation's output, it does not necessarily include all transactions and production for that nation. Which of the following scenarios are either not accounted for or measured inaccurately by either the income or the expenditure methods of calculating GDP for the United States?
a) The leisure time enjoyed by households
b) The value of babysitting services, when the babysitter is paid in cash and the transaction isn't reported to the government
c) Expenditures on federal highways
d) The loss of enjoyment people incur when scenic land is converted to commercial use
Answer:
a) The leisure time enjoyed by households
b) The value of babysitting services, when the babysitter is paid in cash and the transaction isn't reported to the government
d) The loss of enjoyment people incur when scenic land is converted to commercial use
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export
Net export = exports – imports
When exports exceeds import there is a trade deficit and when import exceeds import, there is a trade surplus.
Items not included in the calculation off GDP includes:
1. services not rendered to oneself
2. Activities not reported to the government
3. illegal activities
4. sale or purchase of used products
5. sale or purchase of intermediate products
Expenditures on federal highways is accounted for in GDP as part of government expenditures
Grays Company has inventory of 17 units at a cost of $12 each on August 1. On August 3, it purchased 27 units at $11 each. 19 units are sold on August 6. Using the perpetual FIFO inventory method, what amount will be reported as cost of goods sold for the 19 units that were sold
Answer:
Cost of goods sold =$226
Explanation:
Under the First in First Out (FIFO) method of the perpetual inventory system, it assumed that the first batch of inventory received into the store should be issued out first. Therefore, inventories are valued using the price of the oldest batch in turn according to when the batches arrive.
The 19 units of units sold in August 6 would be valued as follows:
17 units at $12 per units = 204
2 units at $11 per unit = 22
Cost of goods sold = 204 + 22 = $226
Cost of goods sold =$226
Leeway Corp. wants to pursue a business-level international strategy to export to developed countries. Which of the following strategies would Leeway most likely select?
A. MultidomesticB. Cost leadershipC. GlobalD. Transnational
Answer:
Global Strategy
Explanation:
Based on the goals that Leeway Corp. is trying to accomplish it can be said that they would most likely select a Global Strategy. That is because this strategy focuses on competing and expanding in the global market by expanding the company itself internationally. Transnational is also a form of international trade but focuses more on personalizing goods for each culture. Therefore the best strategy for Leeway Corp. would be a Global Strategy.
A shopper infers that a product must be of high quality because the manufacturer has been in business a long time. Which heuristic is this an example of
Answer:
The Compromise effect
Explanation:
Heuristic is a modelling that explains the two fundamental ways of processing information while making up an opinion.
Data and information can be processed diligently in order to form an opinion which is a more accurate way than the other type known as heuristics .This explains that opinions can also be formed based on just a mere perception of issues or based on the opinion of other people or experts , which in most cases may not give a true representation of the situation at hand.
However , it forms a part of human daily activities and can also be useful in forming the required opinions in the course of daily activities.
One of the effect as seen in the question is bias attitudes or the compromise effect.
Managers in international businesses will need to evaluate the attractiveness of a country as a market or location for a facility or investment. Knowing how to think about events and situations will help the manager make that evaluation.
Managers can use economic and socioeconomic indicators to evaluate potential locations to conduct business
Mathc the Economic indicator to the relevant dimensions.
a. Income distribution
b. Unit labor costs
c. Private consumption
d. Age distribution
e. Gross national income (GNI)
f. Economic growth rate
g. Total population
1. Absolute size of an economy
2. Speed of economic growth
3. How a nation's income is apportioned
4. Purchase of essential vs, nonessential goods
5. Cost of production
6. Potential market size
7. Potential market segments
Answer:
1. Absolute size of an economy
e. Gross national income (GNI)
2. Speed of economic growth
f. Economic growth rate
3. How a nation's income is apportioned
a. Income distribution
4. Purchase of essential vs, nonessential goods
c. Private consumption
5. Cost of production
b. Unit labor costs
6. Potential market size
g. Total population
7. Potential market segments
d. Age distribution
Explanation:
Any entity that wishes to exploit foreign markets must of necessity determine the suitability of the country's market and its economy. To achieve this aim, entities engaging in foreign direct investments consider some factors. One of them is the country's attractiveness. A country is attractive or not depending on the following elements, among others: market size, growth of market size, per capita income, population and age distribution, existence and enforcement of contract laws, and political openness. These considerations are important to avoid regrets, including over-exposure to country risks.
Which of the following is not considered a legitimate expense of a partnership? a Interest paid to partners based on the amount of invested capital. b Depreciation on assets contributed to the partnership by partners. c Salaries for management hired to run the business d Supplies used in the partners' offices.
Answer:
a Interest paid to partners based on the amount of invested capital.
Explanation:
A partnership is formed between two parties that agree to go into a venture for mutual gain. The parties share ownership of the business entity and as such are entitled to profit from their equity holdings.
Interest paid based on invested capital is considered a distribution of profit by the business and not an expense. This is similar to sharing profit to shareholders in a company.
Legitimate expenses include: cost of sales, staff cost, administrative costs, advertising costs, and professional expenses like hiring an accountant.
Out of all the options listed, the one that is not considered a legitimate expense in a partnership is a. Interest paid to partners based on the amount of invested capital.
Some legitimate expenses in a partnership are:
Asset depreciation in the business Supplies used by the partners Salaries paid to management staffInterest on invested capital is not considered an expense and is only realized after the calculation of profit.
In conclusion, interest on partnership capital is not an expense.
Find out more at https://brainly.com/question/24100876.
Sellers allow customers to use credit cards for all of the following reasons: (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)
a) seller does not have to decide who gets credit 2
b) seller accepts the risk for extending credit to customers 2
c) seller receives cash sooner than if credit is granted directly to the customers 2
d) may allow seller to increase sales volume 2
e) seller determines which customers receive credit and how much
Answer:
The correct answer is the option D: may allow sellers to increase sales volume.
Explanation:
To begin with, the fact that sellers allow customers to use credit cards is because mainly it increases the ways that the clients can pay for the products and if those methods increase then the sales' volume will increase as well due to the fact that there is a direct relationship between the payment methods that the consumers have and the sales' volumen of the company. That is the major reason why a seller may allow the consumers to pay with credit card and to accept the risk of doing it.
"At Trent Company, there are 800 units of ending work in process that are 100% complete as to materials and 40% complete as to conversion costs. If the unit cost of materials is $3 and the total costs assigned to the 800 units is $6,000, what is the per unit conversion cost
Answer:
Conversion cost per unit =11.25
Explanation:
The cost per equivalent unit =
Total conversion cost / Total number of equivalent units
Total number of equivalent unit = Degree of completion × units
= 40%× 800= 320 units.
Total conversion cost = Total value of work in process - cost of materials
= 6,000 - (800× 3)
= 3,600
Conversion cost per unit = 3,600/320=11.25
Conversion cost per unit =11.25
Use the following information for the Quick Study below. [The following information applies to the questions displayed below.] A company is considering investing in a new machine that requires a cash payment of $45,899 today. The machine will generate annual cash flows of $18,453 for the next three years. rev: 12_17_2019_QC_CS-194037 QS 26-14 Net present value LO P3 Assume the company uses an 8% discount rate. Compute the net present value of this investment. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your present value factor to 4 decimals.)
Answer:
$1,656.2263
Explanation:
The computation of the net present value is shown below:
= Cash inflows of the project - cash outflows or initial investment
= $18,453 × PVIFA factor for 3 years at 8% - $45,899
= $18,453 × 2.5771 - $45,899
= $47,555.2263 - $45,899
= $1,656.2263
Refer to the PVIFA factor table for the discounting factor
Cusic Music Company is considering the sale of a new sound board used in recording studios. The new board would sell for $25,300, and the company expects to sell 1,700 per year. The company currently sells 2,050 units of its existing model per year. If the new model is introduced, sales of the existing model will fall to 1,720 units per year. The old board retails for $23,700. Variable costs are 57 percent of sales, depreciation on the equipment to produce the new board will be $675,000 per year, and fixed costs are $3,400,000 per year. If the tax rate is 25 percent, what is the annual OCF for the project
Answer:
$24,635,865
Explanation:
total cash inflows = ($25,300 x 1,700) + ($23,700 x 1,720) = $83,774,000
variable costs = $83,774,000 x 57% = $47,751,180
fixed costs = $3,400,000
depreciation expense = $675,000
tax rate = 25%
operating cash flow = [($83,774,000 - $47,751,180 - $3,400,000 - $675,000) x (1 - 25%)] + $675,000 = $23,960,865 + $675,000 = $24,635,865
Hoi Chong Transport, Ltd., operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven 153,000 kilometers during a year, the average operating cost is 12.5 cents per kilometer. If a truck is driven only 102,000 kilometers during a year, the average operating cost increases to 15.4 cents per kilometer.
Required:
1. Using the high-low method, estimate the variable and fixed cost elements of the annual cost of the truck operation. (Do not round your intermediate calculations. Round the Variable cost per kilometer to 3 decimal places and Fixed cost answer to nearest whole dollar amount.)
2. Express the variable and fixed costs in the form Y = a + bX. (Do not round your intermediate calculations. Round the Variable cost per kilometer to 3 decimal places.)
3. If a truck were driven 127,000 kilometers during a year, what total cost would you expect to be incurred? (Do not round intermediate calculations.)
Answer:
Instructions are below.
Explanation:
Giving the following information:
Highest cost= 153,000*12.5= $1,912,500
Lowest cost= 102,000*15.4= $1,570,800
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= (1,912,500 - 1,570,800) / (153,000 - 102,000)
Variable cost per unit= $6.7
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 1,912,500 - (6.7*153,000)
Fixed costs= $887,400
Fixed costs= LAC - (Variable cost per unit* LAU)
Fixed costs= 1,570,800 - (6.7*102,000)
Fixed costs= $887,400
Now, we can formulate the cost formula:
Total cost= 887,400 + 6.7x
x= kilometers driven
Finally, the total cost of 127,000 kilometers.
Total cost= 887,400 + 6.7*127,000
Total cost= $1,738,300
You find that the bid and ask prices for a stock are $14.25 and $15.45, respectively. If you purchase or sell the stock, you must pay a flat commission of $30. If you buy 100 shares of the stock and immediately sell them, what is your total implied and actual transaction cost in dollars
Answer:
$180
Explanation:
The bid price of a stock is $14.25
The ask-price of a stock is $15.45
A flat commission of $30 must be paid in the stock
100 shares of stock are bought
Therefore, the total implied and actual transaction costs can be calculated as follows
= Commission+(ask price-bid price)×number of shares
= 30×2+($15.45-$14.25)×100
= 60+ 1.2×100
= 60+120
= $180
Hence the total implied and actual transaction cost is $180
You purchased a share of SPCC for $100 and expect to receive a dividend of $5 in one year. If you expect the price after the dividend is paid to be $110, what total return will you have earned over the year
Answer:
The answer is 15%
Explanation:
(P1 - Po) / Po + D
Where P1 is the price of the share at the end of the year
Po is the price of the share at the beginning of the year
D is the Dividend receceived
P1 is $110
Po is $100
And Dividend is 5%
($110 - $100) / $100 + 5 %
$10/100 + 5%
10% + 5%
= 15%
The total return will you have earned over the year for the purchase of a share of SPCC is 15%
A stock is expected to pay a dividend of $0.75 in the next year. The required rate of return is rs = 10.5%, and the expected constant growth rate is g = 6.4%. What should be the fair value of the stock
Answer:
$18.29
Explanation:
From the question above, the dividend payment next year (D1) is $0.75
The required rate of return (rs) is 10.5%
= 10.5/100
= 0.105
The growth rate is 6.4%
= 6.4/100
= 0.064
Therefore, the fair value of the stock can be calculated as follows
Po= D1/(rs-g)
Po= 0.75/(0.105-0.064)
Po= 0.75/0.041
Po= $18.29
Hence the fair value of the stock is $18.29
If actual manufacturing overhead costs are less than the applied manufacturing overhead, then manufacturing overhead is:
Answer:
Under applied
Explanation:
Actual manufacturing overhead costs are those amounts of overhead costs that are incurred by a firm during production processes.
Applied manufacturing overhead costs are those costs that are added to jobs as they near completion. Usually, as work or job nears completion during the year, the predetermined overhead rate and actual activity level are used to apportion them.
In general, manufacturing overhead costs are those costs that are not direct labor costs or direct material costs; which is made of expenses like equipment and lightening. It could either be under or over applied. It is under applied as in the above while it is over applied when the actual manufacturing overhead costs are more than the applied manufacturing overhead costs.
The effects of tariffs and quotas are: a(n) __________ in the prices of imported goods to domestic consumers, and a(n) __________ in imports.
Answer:
Increase
Reduction
Explanation:
A tariff is a tax on import or export of goods and services.
Tariffs increases the prices of products and thus reduce the amount of imports.
Quotas is when the government or an agency of the government limits the amount of goods and services that can be imported or exported.
Due to the reduced inflow of goods due to quotas, the price of goods imported would rise.
I hope my answer helps you
Which one of the following is not a factor that influences a business's control environment? a. personnel policies b. management's philosophy and operating style c. organizational structure d. proofs and security measures
Answer:
d. Proofs and security measures.
Explanation:
A business control environment are those policies and procedures that assist management in directing the business operations towards achieving it's goals. The aim is to protect the company's assets from misuse by member of staff and also ensure that the business information is accurate and up to date.
Top management create a business control environment to ensure that the policies and procedures guiding each business units are adhered to by members of staff. A business control environment otherwise known as internal control is influenced by it's personnel policies, Management's philosophy and operating style and also it's organizational structure.
White Supplies' total material costs are $30,000 and total conversion costs are $20,000. Equivalent units of production for materials are 10,000, and 5,000 for conversion costs.
Compute the unit costs for materials, conversion costs, and total manufacturing costs for the month.
COSTS
Unit costs Materials Conversion Costs Total
Costs incurred
Equivalent units
Unit costs
Answer:
Material Conversion cost
Cost per unit $3 per unit $4 per unit
Explanation:
Cost per equivalent unit is computed by dividing the the total cost of each expenditure type by its the total total equivalent units.
Equivalent is a notional whole unit which represent incomplete and is used t to apportion cost between work in progress and completed work
The cost per equivalent units= total cost of expenditure type / total equivalent units
Material Conversion cost
Total cost 30,000 20,000
Equivalent units 10,000 5,000
Cost per unit $30,000/10000 $20,000/5000
= $3 per unit $4 per unit
Material Conversion cost
Cost per unit $3 per unit $4 per unit
A company traded an old forklift for a new forklift, receiving a $10,500 trade-in allowance and paying the remaining $37,200 in cash. The old forklift cost $39,000 and straight-line accumulated depreciation of $27,200 had been recorded as of the exchange date under the assumption it would last five years and have a $5,000 salvage value. a. What was the book value of the old forklift on the date of the exchange
Answer: $11,800
Explanation:
The Book Value is calculated as the Cost price less the accumulated depreciation on the asset.
Book Value of old forklift = Asset Cost - Accumulated Depreciation
Book Value of old forklift = 39,000 - 27,200
Book Value of old forklift = $11,800
A(n)__________innovation project includes rigorous risk analysis and contingency plans; planned evaluation and decision points where the project may be killed, redirected, or continued; and extra resources that can be quickly redeployed.
Answer:
flexible.
Explanation:
A flexible innovation project is an active management approach to the risks inherent in the project, but it has an execution methodology focused on making the processes involved more flexible, which ensures a redesign of the project scope in order to ensure that the project objectives are met. achieved through an improved strategy if significant innovations are taken to reduce time, costs and conduct aligned and proactive management.
Metaline Corp. uses the weighted average method for inventory costs and had the following information available for the year. The number of units transferred to finished goods during the year is:
Beginning Work in Process (30% complete, $1,600) 250 units
Ending inventory of Work in Process (70% complete) 450 units
Total units started during the year 3,700 units
a. 3,900 units.
b. 4,190 units.
c. 3,710 units.
d. 3,700 units.
e. 3,500 units.
Answer:
Total equivalent units= 4,190
Explanation:
Giving the following information:
Beginning Work in Process (30% complete, $1,600) 250 units
Ending inventory of Work in Process (70% complete) 450 units
Total units started during the year 3,700 units
We need to calculate the number of units completed and transferred out.
Beginning work in process= 250*0.7= 175
Units started and completed= 3,700
Ending work in process equivalent units= 450*0.7= 315
Total equivalent units= 4,190
You and your friend Joe have identical tastes. At 2 p.m., you go to the Ticketmaster outlet and buy a $30 nonrefundable ticket to a basketball game to be played that night in Syracuse, 50 miles north of your home in Ithaca. Joe plans to attend the same game, but because he cannot get to the Ticketmaster outlet, he plans to buy his ticket at the game. Tickets sold at the game cost only $25 because they carry no Ticketmaster surcharge. (Many people nonetheless pay the higher price at Ticketmaster, to be sure of getting good seats.) At 4 p.m., an unexpected snowstorm begins, making the prospect of the drive to Syracuse much less attractive than before (but ensuring the availability of good seats.)
Is one of you more likely to attend the game than the other?
Briefly explain with consideration of relevant cost(s).
Answer:
1.Joe should be less likely to make the trip.
2. The ticket cost for Joe which is the amount of $25 changes whether he goes or not, and will therefore the only cost that should be considered.
Explanation:
1. Joe should therefore be less likely to go for the trip.
Since the ticket has been already, this means the $30 that you spent on it is a sunk cost because It is the money you cannot recover, and in deciding whether you want see the game or not, this means you should compare the benefit of seeing the game which is measured by the biggesr dollar amount you would be willing and ready to pay to see it .
Hence only those additional costs must be incur to see the game which is the opportunity cost of your time which is why in Cost-Benefit, only the costs that will actually change with your decision will be considered, which is not the case with the $30 that you wont see again whether you go to the game or not.
2.Joe must try to weigh the opportunity cost of his time in making his decision on whether he need to attend the game or not and he must as well weigh the $25 he will spend for his ticket.
Hence, when deciding, the additional costs Joe have to incur in other to see the game are $25 higher than that of the remaining costs for you. Hence, Joe should be less likely to make the trip.
Lastly You might as well think that the cost of seeing the game is higher for you, since your ticket cost $30, in which Joe's will cost only $25 which means at the decision making moment, the ticket cost for Joe which is $25 changes whether he goes or not and will therefore be the only cost that should be considered.
"Which of the following is a significant operation interface that distinguishes a service supply chain from a product supply chain?"
a. service performance management
b. customer relationship management
c. supplier relationship management
d. demand management
Way Cool produces two different models of air conditioners. The company produces the mechanical systems in their components department. The mechanical systems are combined with the housing assembly in its finishing department. The activities, costs, and drivers associated with these two manufacturing processes and the production support process follow. (Round your intermediate calculations and round "Cost per unit and OH rate" answers to 2 decimal places.) Process Activity Overhead Cost Driver QuantityComponents Changeover $ 459,500 Number of batches 810 Machining 301,600 Machine hours 7,680 Setups 227,500 Number of setups 80 $ 988,600 Finishing Welding $ 180,500 Welding hours 4,900 Inspecting 222,000 Number of inspections 815 Rework 60,700 Rework orders 230 $ 463,200 Support Purchasing $ 135,500 Purchase orders 525 Providing space 31,550 Number of units 4,800 Providing utilities 60,110 Number of units 4,800 $ 227,160 Additional production information concerning its two product lines follows. Model 145 Model 212Units produced 1,600 3,200 Welding hours 2,000 2,900 Batches 405 405 Number of inspections 485 330 Machine hours 2,280 5,400 Setups 40 40 Rework orders 130 100 Purchase orders 350 175 Required:1. Using a plantwide overhead rate based on machine hours, compute the overhead cost per unit for each product line.2. Determine the total cost per unit for each products line if the direct labor and direct materials costs per unit are $200 for Model 145 and $130 for Model 212.Overhead Assigned Activity Driver Plantwide OH rate Total Overhead Cost Units Produced OH Cost per unitModel 145 Model 212 Model 145 Model 212 3. Assume if the market price for Model 145 is $732 and the market price for Model 212 is $490, determine the profit or loss per unit for each model. Model 145 Model 212 Market price
Answer:
Way Cool:
1. Overhead cost per unit for each product line:
Model 145 Model 212
Machine hours 2,280 5,400
Numbers of units 1,600 3,200
Total costs $498,441.25 $1,180,518.75
Overhead cost
per unit $311.53 $368.91
2. Total cost per unit if the direct labor and direct materials costs per unit are $200 for Model 145 and $130 for Model 212
Model 145 Model 212
Overhead cost
per unit $311.53 $368.91
Direct material &
labor cost per unit $200.00 $130.00
Total cost per unit $511.53 $498.91
3. Determination of profit or loss per unit if market price for Model 145 is $732 and $490 for Model 212:
Model 145 Model 212
Sales price $732.00 $490.00
Cost of sales $511.53 $498.91
Profit (Loss) per unit $220.47 ($8.91)
Explanation:
a) Data and Calculations:
Process Activity Overhead Driver Quantity Plant Wide Rate
Components C/over 459,500 No. of batches 810 $567.28
Machining 301,600 M. hours 7,680 $39.27
Setups 227,500 No. of setups 80 $2,843.75
Sub-Total $988,600
Finishing welding 180,500 Welding hours 4,900 $36.84
Inspecting 222,000 Number of
inspections 815 $272.39
Rework 60,700 Rework orders 230 $263.91
Sub-Total $463,200
Support Purchasing 135,500 Purch. orders 525 $258.10
Providing space 31,550 No. of units 4,800 $6.57
Providing utilities 60,110 No. of units 4,800 $12.52
Sub-Total $ 227,160
Total overhead $1,678,960
Additional production information concerning its two product lines follows.
Model 145 Model 212 Total
Units produced 1,600 3,200 4,800
Welding hours 2,000 2,900 4,900
Batches 405 405 810
Number of inspections 485 330 815
Machine hours 2,280 5,400 7,680
Setups 40 40 80
Rework orders 130 100 230
Purchase orders 350 175 525
b) Calculation of Plantwide overhead rate based on machine hours:
Total overhead costs/machine hours = $1,678,960/7,680
= $218.6146 per machine hour
c) Activity Based Costing system is a system that accumulates and allocates production or service costs based on the activities undertaken for the production or service. The activities are regarded as the cost drivers and therefore better bases for accumulating and allocating costs.
The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.80 on December 31, 20Y2.
Marshall Inc.
Comparative Retained Earnings Statement
For the Years Ended December 31, 20Y2 and 20Y1
1 20Y2 20Y1
2 Retained earnings, January 1 $3,704,000.00 $3,264,000.00
3 Net income 600,000.00 550,000.00
4 Total $4,304,000.00 $3,814,000.00
5 Dividends:
6 On preferred stock $10,000.00 $10,000.00
7 On common stock 100,000.00 100,000.00
8 Total dividends $110,000.00 $110,000.00
9 Retained earnings, December 31 $4,194,000.00 $3,704,000.00
Marshall Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
1 20Y2 20Y1
2 Sales $10,850,000.00 $10,000,000.00
3 Cost of goods sold 6,000,000.00 5,450,000.00
4 Gross profit $4,850,000.00 $4,550,000.00
5 Selling expenses $2,170,000.00 $2,000,000.00
6 Administrative expenses 1,627,500.00 1,500,000.00
7 Total operating expenses $3,797,500.00 $3,500,000.00
8 Income from operations $1,052,500.00 $1,050,000.00
9 Other revenue 99,500.00 20,000.00
10 $1,152,000.00 $1,070,000.00
11 Other expense (interest) 132,000.00 120,000.00
12 Income before income tax $1,020,000.00 $950,000.00
13 Income tax expense 420,000.00 400,000.00
14 Net income $600,000.00 $550,000.00
Marshall Inc.
Comparative Balance Sheet December 31, 20Y2 and 20Y1
1 20Y2 20Y1
2 Assets
3 Current assets:
4 Cash $1,050,000.00 $950,000.00
5 Marketable securities 301,000.00 420,000.00
6 Accounts receivable (net) 585,000.00 500,000.00
7 Inventories 420,000.00 380,000.00
8 Prepaid expenses 108,000.00 20,000.00
9 Total current assets $2,464,000.00 $2,270,000.00
10 Long-term investments 800,000.00 800,000.00
11 Property, plant, and equipment (net) 5,760,000.00 5,184,000.00
12 Total assets $9,024,000.00 $8,254,000.00
13 Liabilities
14 Current liabilities $880,000.00 $800,000.00
15 Long-term liabilities:
16 Mortgage note payable, 6% $200,000.00 $0.00
17 Bonds payable, 4% 3,000,000.00 3,000,000.00
18 Total long-term liabilities $3,200,000.00 $3,000,000.00
19 Total liabilities $4,080,000.00 $3,800,000.00
20 Stockholders' Equity
21 Preferred 4% stock, $5 par $250,000.00 $250,000.00
22 Common stock, $5 par 500,000.00 500,000.00
23 Retained earnings 4,194,000.00 3,704,000.00
24 Total stockholders' equity $4,944,000.00 $4,454,000.00
25 Total liabilities and stockholders' equity $9,024,000.00 $8,254,000.00
Determine the following measures for 20Y2 round to one decimal place, including percentages, except for pre-share amounts):
1. Working Capital
2. Current ratio
3. Quick ratio
4. Accounts receivable turnover
5. Number of days' sales in receivables
6. Inventory turnover
7. Number of days' sales in inventory
8. Ratio of fixed assets to long-term liabilities
9. Ratio of liabilities to stockholders' equity
10. Times interest earned
11. Asset turnover
12. Return on total assets
13. Return on stockholders' equity
14. Return on common stockholders' equity
15. Earnings per share on common stock
16. Price-earnings ratio
17. Dividends per share of common stock
18. Dividend yield
Answer:
Marshall Inc.
Ratios:
1. Working Capital = Current assets - Current liabilities
= $2,464,000 - 880,000 = $1,584,000
2. Current ratio = Current Assets/Current Liabilities
= $2,464,000/880,000 = 2.8 : 1
3. Quick ratio = (Current Assets - Inventory)/Current Liabilities
= ($2,464,000 - 420,000)/880,000
= $2,044,000/880,000 = 2.3 : 1
4. Accounts receivable turnover = Average Accounts Receivable / Net Sales
= $542,500/10,850,000 = 0.05 times
Average receivables = ($585,000 + 500,000)/2 = $542,500
5. Number of days' sales in receivables = Days in the year/Accounts receivable turnover
= 365/0.05 = 7,300 days
6. Inventory turnover = Cost of goods sold / Average Inventory
= $6,000,000/400,000 = 15 times
Average Inventory = (Beginning inventory + Ending inventory) / 2
= ($420,000 + 380,000)/2 = $400,000
7. Number of days' sales in inventory = Number of days in a year divided by Inventory turnover ratio = 365 /15 = 24.3 days
8. Ratio of fixed assets to long-term liabilities = Fixed Assets/Long-term Liabilities = $5,760,000/3,200,000 = 1.8 : 1
9. Ratio of liabilities to stockholders' equity = Total Liabilities/Stockholders' equity = $4,080,000 / $4,944,000 = 0.83 or 80%
10. Times interest earned = Earnings before Interest and Taxes / Interest Expense = $1,152,000/132,000 = 8.7 times
11. Asset turnover = Sales Revenue / Average Total Assets
= $6,000,000/$8,639,000 = 0.7 or 70%
Average Total Assets = Beginning total assets + Ending total assets, all divided by 2
= ($9,024,000 + 8,254,000)/2 = $8,639,000
12. Return on total assets = EBIT/Average Total Assets
= $1,152,000/$8,639,000 = 13%
13. Return on stockholders' equity = Earnings after tax/Shareholders' equity = $600,000/$4,944,000 x 100 = 12%
14. Return on common stockholders' equity = EAT/Common Shareholders' Equity = $600,000 - 10,000/($4,944,000 - 250,000) x 100
= 12.6%
15. Earnings per share (EPS) on common stock = Net Income divided by the number of outstanding common shares = $600,000/100,000 = $6 per share.
16. Price-earnings ratio = Market price of shares/EPS = $82.80/$6 = 13.8
17. Dividends per share of common stock = Dividends/Common Stock shares = $100,000/100,000 shares = $1
18. Dividend yield = Dividend per share / Market price per share = $1/$82.80 = 1.2%
Explanation:
1. Working Capital is the difference between current assets and current liabilities.
2. Current ratio is a liquidity ratio of current assets over current liabilities.
3. Quick ratio is the current ratio modified with the subtraction of inventory.
4. Accounts receivable turnover is an accounting measure that shows how quickly customers pay for the credit sales.
5. Number of days' sales in receivables measures the number of days it takes a company to collect its credit sales. It is a function of the number of days in a year divided by the accounts receivable turnover ratio.
6. Inventory turnover is a ratio showing how many times a company has sold and replaced its inventory during a given period.
7. Number of days' sales in inventory is the result of dividing the days in the period by the inventory turnover formula. It shows the number of days inventory is held before being sold.
8. Ratio of fixed assets to long-term liabilities shows how much of long-term liabilities is represented in fixed assets.
9. Ratio of liabilities to stockholders' equity is a financial leverage ratio that shows the relationship between liabilities and stockholders' equity.
10. Times interest earned (TIE) ratio measures the ability of a company to settle its debt obligations based on its current income. To calculate the TIE number, take the Earnings before interest and taxes (EBIT) and divide by the total interest expense.
11. Asset turnover is a ratio of sales over average assets, which shows company's efficiency in using assets to generate sales.
12. Return on total assets measures the percentage of earnings before interest and taxes over the average total assets. It can be obtained by multiplying profit margin with total asset turnover.
13. Return on stockholders' equity is a financial ratio that is calculated by dividing a company's earnings after taxes (EAT) by the total shareholders' equity, and then multiplying the result by 100.
14. Return on common stockholders' equity measures the ratio of earnings after taxes less Preferred Stock Dividend over the common shareholders' equity.
15. Earnings per share on common stock is the ratio of earnings divided by the number of outstanding common stock shares. It measures the earnings per share that the company has generated for the common stockholders.
16. Price-earnings ratio is a ratio of the market price of shares over the earnings per share. It is used to determine if a company's share is overvalued or undervalued.
17. Dividends per share of common stock is the dividend paid divided by the number of outstanding common stock.
18. Dividend yield is the ratio of the dividend per share over the market price per share.
Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 25 percent for the next 3 years, with the growth rate falling off to a constant 6 percent thereafter. If the required return is 12 percent and the company just paid a $1.30 dividend. what is the current share price
Answer:
$36.81
Explanation:
Div₀ = $1.30
Div₁ = $1.625
Div₂ = $2.03125
Div₃ = $2.5390625
Div₄ = $2.6914 at a constant g of 6%
first we need to determine the terminal value in year 3:
P = $2.6914 / (12% - 6%) = $44.86
the current stock price, P₀ = $1.625/1.12 + $2.03125/1.12² + $2.5390625/1.12³ + $44.86/1.12³ = $1.45 + $1.62 + $1.81 + $31.93 = $36.81
The difference between actual hours times the actual pay rate and actual hours times the standard pay rate is the labor _________________ variance.
Answer:
"Labor price variance " is the correct choice.
Explanation:
The variation throughout the labor rate represents the distance between real as well as anticipated labor costs. These were measured by taking the difference, based upon the number of additional hourly wages, between some of the real labor amount charged as well as the minimum amount.Absolute variation in the labor rate is equivalent to absolute variation in the price of the commodity.The value of the goods and services Australia purchases from the U.S. are less than the value of goods and services the U.S. purchases from Australia. The U.S. has
Answer:
The answer is The U.S has a negative net exports with Australia and trade deficit with Australia
Explanation:
Net exports is the difference between the total value of a nation's exports and the nation's imports.
Net exports are positive when exports are greater(Australia)than imports and negative when exports are less than imports(The U.S). Also, positive net export number indicates a trade surplus, while a negative number means a trade deficit.
The above values represent a PPF of production for one day's work. What is the opportunity cost of producing the first two pounds of beets
Answer:
The values that the question is making reference to are these:
Carrots Beets
(Pounds) (Pounds)
0 6
5 4
10 2
15 0
What is the opportunity cost of producing the first two pounds of beets
The opportunity cost is what is given up to do something instead. In this case, the opporutnity cost is the amount of carrots that are not produced when choosing to produce beets instead.
As we can see from the table, if we produce 0 pounds of beets, we can produce 15 pounds of carrots. However, if we decide to produce the first 2 pounds of beets, we can only produce 10 pounds of carrots.
These 5 pounds of carrots that we cannot produce anymore, is the opportunity cost.