Answers
Answer:
The answer is $30
Note: Kindly find an attached copy or image of the complete question given below
Sources: I researched the complete question from Quizlet
Explanation:
Solution
Given that
The total assets projected = $8,850 × 1.06
= $9,381.00
Projected accounts payable = $1,300 × 1.06
= $1,378.00
Projected retained earnings = $3,810 + ($399 × 1.06)
= $4,232.94
Thus
External financing need = $9,381.00 - $1,378.00 -$1,640 -$2,100 - $4,232.94 = $30
Therefore the external financing need is $30.
Related Questions
The following lots of a particular commodity were available for sale during the year Beginning inventory 9 units at $47.00 First purchase 19 units at $55.00 Second purchase 51 units at $59.00 Third purchase 19 units at $59.00 The firm uses the periodic system, and there are 26 units of the commodity on hand at the end of the year. What is the amount of inventory at the end of the year according to the LIFO method? Select the correct answer. $1,534.00 $5,598.00 $1,358.00 $1,222.00
Answers
Answer:
Ending inventory= $1,358
Explanation:
Giving the following information:
Beginning inventory 9 units at $47.00
First purchase 19 units at $55.00
Second purchase 51 units at $59.00
Third purchase 19 units at $59.00
Ending inventory in units= 26
Under the LIFO (last-in, first-out) method, the ending inventory cost is calculated using the cost of the firsts units incorporated into the inventory.
Ending inventory= 9*47 + 17*55= $1,358
Using a time line The financial manager at Starbuck Industries is considering an investment that requires an initial outlay of $27 comma 000 and is expected to produce cash inflows of $2 comma 000 at the end of year 1, $6 comma 000 at the end of years 2 and 3, $ 10 comma 000 at the end of year 4, $7 comma 000 at the end of year 5, and $6 comma 000 at the end of year 6. a. Select the time line option that represents the cash flows associated with Starbuck Industries' proposed investment. b. Which of the approacheslong dashfuture value or present valuelong dashdo financial managers rely on most often for decision making? Why?
Answers
Answer:
Please check the attached image for a picture of the timeline
Present value
This is because financial managers are making decisions at the beginning of the projects. So, it is important to know if the project is successful in the present.
Explanation:
A timeline is shows events in a chronological order. The cash flows have to be arranged in accordance to the years they occurred and according to the timing of the cash flows.
I hope my answer helps you
Denver Co. recently used 14,000 labor hours to produce 7,500 units. According to manufacturing specifications, each unit is anticipated to take two hours to complete. The company's actual payroll costs were $158,200. If the standard labor cost per hour is $11, Denver's labor efficiency variance is: Question 18 options: $11,300 (U). $11,000 (U). $11,000 (F). $11,300 (F).
Answers
Answer:
Direct labor time (efficiency) variance= $11,000 favorable
Explanation:
Giving the following information:
Denver Co. recently used 14,000 labor hours to produce 7,500 units. According to manufacturing specifications, each unit is anticipated to take two hours to complete. The standard labor cost per hour is $11.
To calculate the direct labor efficiency variance, we need to use the following formula:
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
Direct labor time (efficiency) variance= (2*7,500 - 14,000)*11
Direct labor time (efficiency) variance= $11,000 favorable
A customer has an individual cash account, an individual margin account, a joint cash account with his wife, and a custodial account for each of his 2 children. If the firm liquidates, Securities Investor Protection Corporation covers::________
Answers
Answer and Explanation:
The Securities Investor Protection Corporation enhance security for the registered broker and distributor customers and national securities exchanges members
In the given situation, it is mentioned that a customer has 4 accounts i.e person cash account, person margin account, cash account jointly with his wife and custodial account for two children
Now if the firm liquidates, the (Securities Investor Protection Corporation) SIPC covers all accounts but separately i.e both person accounts are count as one by adding them, the joint account as an individual and the custodial account as an individual
A large international company has two business units. Invested assets and condensed income statement data for each business unit for the past year are as follows: Compute the following for Business Unit 1: a) Operating Income Using the Dupont Formula: b) Profit Margin % (round % to 1 decimal) c) Investment Turnover (round to 2 decimals) d) Return on Investment (round 1 decimal) Compute the following for Business Unit 2: 2A) Operating Income Using the Dupont Formula: 2B) Profit Margin (round % to 1 decimal) 2C) Investment Turnover (round to 2 decimals) 2D) Return on Investment (round 1 decimal)
Answers
Answer:
1. Compute the following for Business Unit 1:
a) Operating Income = $117,500
b) Profit Margin = 20.7%
c) Investment Turnover = 0.86
d) Return on Investment = 0.2
2. Compute the following for Business Unit 2:
a) Operating Income = $69,750
b) Profit Margin = 12.2%
c) Investment Turnover = 1.18
d) Return on Investment = 0.1
Explanation:
1. Compute the following for Business Unit 1:
a) Operating Income
Operating Income = Revenue – Operating expenses = $280,000 – $162,500 = $117,500
Using the Dupont Formula:
b) Profit Margin % (round % to 1 decimal)
Net income = Operating income – Services department charges = $117,500 - $59,500 = $58,000
Profit Margin = Net income / Revenue = ($58,000 / $280,000) * 100 = 20.7%
c) Investment Turnover (round to 2 decimals)
Investment Turnover = Revenue / Invested Assets = $280,000 / $325,000 = 0.86
d) Return on Investment (round 1 decimal)
Return on Investment = Net income / Invested Assets = $58,000 / $325,000 = 0.1785 = 0.2
2. Compute the following for Business Unit 2:
a) Operating Income
Operating Income = Revenue – Operating expenses = $222,500 – $152,750 = $69,750
Using the Dupont Formula:
b) Profit Margin % (round % to 1 decimal)
Net income = Operating income – Services department charges = $69,750 - $42,625 = $27,125
Profit Margin = Net income / Revenue = ($27,125 / $222,500) * 100 = 12.2%
c) Investment Turnover (round to 2 decimals)
Investment Turnover = Revenue / Invested Assets = $222,500 / $189,000 = 1.18
d) Return on Investment (round 1 decimal)
Return on Investment = Net income / Invested Assets = $27,125 / $189,000 = 0.1435 = 0.1
he following balance sheet contains errors. Mark Brock Services Co. Balance Sheet For the Year Ended December 31 Assets Liabilities Current assets: Current liabilities: Cash $7,170 Accounts receivable $10,000 Accounts payable 7,500 Accum. depr.-building 12,525 Supplies 2,590 Accum. depr.-equipment 7,340 Prepaid insurance 800 Net income 11,500 Land 24,000 Total current assets $42,060 Total liabilities $41,365 Owner’s Equity Property, plant, and equipment: Wages payable $1,500 Building $43,700 Mark Brock, capital 88,645 Equipment 29,250 Total owner’s equity 90,145 Total property, plant, and equipment 72,950 Total assets $131,510 Total liabilities and owner’s equity $131,510 Required: Prepare a corrected balance sheet. Be sure to complete the statement heading. Refer to the lists of Accounts, Labels, and Amount Descriptions for the exact wording and order of text entries. You will not need to enter colons (:) on the Balance Sheet. "Less" or "Plus" will automatically appear if it is required.
Answers
Answer:
$97,645
Explanation:
Preparation of Mark Brock Services Co corrected balance sheet :
Mark Brock Services Co. Balance Sheet December 31
Assets
Current assets:
Cash$ 7,170
Accounts receivable10,000
Supplies2,590
Prepaid insurance800
Total current assets $20,560
Property, plant, and equipment:
Land$24,000
Building$43,700
Less accumulated depreciation( 12,525)
Equipment$29,250
Less accumumulated depreciation (7,340)
Total property, plant,and equipment 77,085
Total assets (77,085+20,560) $97,645
Liabilities
Current liabilities:
Accounts payable$ 7,500
Wages payable1,500
Total liabilities$ 9,000
Owner's Equity
Capital 88,645
Total liabilities and owner's equity (88,645+9,000) $97,645
Horgen Corporation manufactures two products: Product M68B and Product H27T. The company is considering implementing an activity-based costing (ABC) system that allocates its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products M68B and H27T.
Activity Cost Pool Activity Measure Total Cost Total Activity
Machining Machine-hours $299,000 13,000 MHs
Machine setups Number of setups $240,000 400 setups
Product design Number of products $80,000 2 products
Order size Direct labor-hours $290,000 10,000 DLHs
Activity Measure Product Product
Machine-hours M68B H27T
Number of setups 6,000 7,000
Number of products 250 150
Direct labor-hours 4,000 6,000
Using the ABC system, how much total manufacturing overhead cost would be assigned to Product H27T?
a. $291,000
b. $174,000
c. S465,000
d. $454,500
Answers
Answer: $465,000
Explanation:
The activity-based costing (ABC) is used to know the total cost of activities that is vital to make a product. In ABC system, for every activity which goes into production, a cost will be assigned.
Based on the figures in the question, the following can be deduced:
Machining:
= 299,000/13,000 × 7,000
= 23 × 7,000
= $161,000
Machine set up:
= 240,000/400 × 150
= 600 × 150
= $90000
Product design:
= 80,000/2
= $40,000
Order size:
= 290,000/10,000 × 6,000
= 29 × 6,000
= $174,000
Total = $161,000 + $90,000 + $40,000 + $174,000
= $465,000
The total manufacturing overhead cost that would be assigned to Product H27T is $465,000.
The total manufacturing overhead cost that would be assigned to Product H27T is $465,000.
Product H27T Machining = $299,000/13,000 × 7,000
Product H27T Machining = $23 × 7,000
Product H27T Machining = $161,000
Product H27T Machine set up = $240,000/400 × 150
Product H27T Machine set up = $600 × 150
Product H27T Machine set up = $90000
Product H27T Product design = $80,000/2
Product H27T Product design = $40,000
Product H27T Order size = $290,000/10,000 × 6,000
Product H27T Order size = $29 × 6,000
Product H27T Order size = $174,000
Total manufacturing overhead cost = $161,000 + $90,000 + $40,000 + $174,000
Total manufacturing overhead cost = $465,000
In conclusion, the total manufacturing overhead cost that would be assigned to Product H27T is $465,000.
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Agent Jennings makes a presentation on Medicare advertised as an educational event. Agent Jennings distributes materials that are solely educational in nature. However, she gives a brief presentation that mentions plan-specific premiums. Is this a prohibited activity at an event that has been advertised as educational?
Answers
Answer:
Yes it is
Explanation:
Yes. When an event has been advertised as educational, going ahead to discuss plan-specific premiums is impermissible
The event for which Mary made the presentation is clearly an educational event so she should have concentrated fully on only educational contents that pertains to the event. Giving a presentation that mentions plan-specific premiums no matter how brief is a deviation from the main focus of the event. Therefore it is impermissible for her to do so.
A corporation has $7,000,000 in income after paying preferred dividends of $500,000. The company has 1,000,000 shares of common stock outstanding. The market price of the stock is $56. What is the price-earnings ratio
Answers
Answer:
Price earning ratio= 8 times
Explanation:
Price earning ratio = Price per share /Earnings per share
Price per share = 56, EPS =?
Price per share =56, EPS = Total earnings available to ordinary shareholders/Number of shares
7,000,000/1,000,000= $7 per share
Price earning ratio = 56/7= 8 times
Price earning ratio= 8 times
Finch Company began its operations on March 31 of the current year. Finch has the following projected costs: May June April $159,700 890 Manufacturing costs (1) Insurance expense (2) Depreciation expense Property tax expense (3) $192,500 890 1,920 $214,400 890 1,920 1,920 440 440 440
(1) Of the manufacturing costs, three-fourths are paid for in the month they are incurred; one fourth is paid in the following month
(2) Insurance expense is $890 a month; however, the insurance is paid four times yearly in the first month of the quarter, (i.e., January, April, July, and October).
(3) Property tax is paid once a year in November The cash payments expected for Finch Company in the month of May are
a. $224 225
b. $144,375
c. $184,300
d. $39,925
Answers
Answer:
$184,300
Explanation:
1 There will be no cash payment for insurance expense because it has been already paid.
2 Depreciation is not a cash expense
3 Property tax will be paid in November
4 Only the manufacturing cost is to be paid in May
Manufacturing cost = May(75%) + April(25%)
Manufacturing cost = ($192,500 x 75%) + ($159,700 x 25%)
Manufacturing cost = $184,300
In December of 2021, XL Computer's internal auditors discovered that office equipment costing $800,000 was charged to expense in 2019. The asset had an expected life of 10 years with no residual value. XL would have recorded a half year of depreciation in 2019.
Required:
Prepare the necessary correcting entry that would be made in 2016 (ignore income taxes), and the entry to record depreciation for 2021.
Answers
Answer and Explanation:
The Journal entries are shown below:-
1. Office equipment Dr, $800,000
To Accumulated depreciation-equipment $120,000
To Retained earnings $680,000
(Being office equipment is recorded)
Here we debited the office equipment as assets is increasing and we credited the accumulated depreciation-equipment as assets is decreasing and retained earning as stockholder is increasing.
2. Depreciation expenses Dr, $80,000
To Accumulated depreciation-equipment $80,000
(Being depreciation expenses is recorded)
Here we debited the depreciation expenses as it increasing the expenses and we credited the accumulated depreciation-equipment as decreases the assets.
Working note
Depreciation
For 2019
= $800,000 ÷ 10 years
= $80,000 × 6 ÷ 12
= $40,000
For 2020
= $800,000 ÷ 10 years
= $80,000
Total = $40,000 + $80,000
= $120,000
For 2018, Rest-Well Bedding uses machine-hours as the only overhead cost-allocation base. The direct cost rate is $6.00 per unit. The selling price of the product is $21.00. The estimated manufacturing overhead costs are $275,000 and estimated 40,000 machine hours. The actual manufacturing overhead costs are $350,000 and actual machine hours are 50,000. Using job costing, the 2018 actual indirect-cost rate is ________.
Answers
Answer:
Predetermined manufacturing overhead rate= $6.875 per machine-hour
Explanation:
Giving the following information:
The estimated manufacturing overhead costs are $275,000 and an estimated 40,000 machine hours.
To calculate the predetermined manufacturing overhead rate we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 275,000/40,000
Predetermined manufacturing overhead rate= $6.875 per machine-hour
Standard Product Cost, Direct Materials Variance Condiments Company uses standards to control its materials costs. Assume that a batch of ketchup (2,300 pounds) has the following standards: Standard Quantity Standard Price Whole tomatoes 3,800 lbs. $0.46 per lb. Vinegar 210 gal. 2.80 per gal. Corn syrup 18 gal. 10.20 per gal. Salt 84 lbs. 2.60 per lb. The actual materials in a batch may vary from the standard due to tomato characteristics. Assume that the actual quantities of materials for batch 08-99 were as follows: 4,000 lbs. of tomatoes 202 gal. of vinegar 19 gal. of corn syrup 83 lbs. of salt a. Determine the standard unit materials cost per pound for a standard batch. If required, round amounts to the nearest cent.
Answers
Answer:
Standard unit materials cost per pound=$1.11 per pound
Explanation:
The standard material cost for a standard batch = Total material cost / standard qty (in pounds)
Total material cost = (3,800× $0.46) + (210× 2.80) (84×2.60)=$2554.4
Total standard quantity = 2,300 pounds
Standard unit materials cost per pound =$2554.4/ 2,300 pounds=$1.11 per pounds
standard unit materials cost per pound=$1.11 per pound
The following information is available for a company's maintenance cost over the last seven months.
Month Maintenance Hours Maintenance Cost
June 9 $5,200
July 18 $6,650
August 12 4,850
September 15 5,750
October 21 6,650
November 24 6,950
December 6 3,350
Using the high-low method, estimate both the fixed and variable components of its maintenance cost.
High-Low method Calculation of variable cost per unit
Total cost at the high point ____
Variable costs at the high point
Volume at the high point: ____
Variable cost per unit ____
Total variable costs at the high point ____
Total fixed costs ____
Total cost at the low point ____
Variable costs at the low point
Volume at the low point ____
Variable cost per unit
Total variable costs at the low point
Total fixed costs ____
Answers
Answer:
Variable cost per unit= $240
Fixed costs= $1,910
Explanation:
Giving the following information:
June 9 $5,200
July 18 $6,650
August 12 4,850
September 15 5,750
October 21 6,650
November 24 6,950
December 6 3,350
To calculate the variable and fixed costs under the high-low method, 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= (6,950 - 3,350) / (21 - 6)
Variable cost per unit= $240
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 6,950 - (240*21)
Fixed costs= $1,910
Fixed costs= LAC - (Variable cost per unit* LAU)
Fixed costs= 3,350 - (240*6)
Fixed costs= $1,910
Given the following information, calculate the debt ratio percentage: Liabilities = $25,000Liquid assets = $5,000Monthly credit payments = $800Monthly savings = $760Net worth = $75,000Take-home pay = $2,300Gross income = $3,500Monthly expenses = $2,050
Answers
Answer:
33.33%
Explanation:
The debt ratio percentage is calculated as:
Liabilities / Net worth = Debt Ratio Percentage
$25,000 / $75,000 = 0.3333
0.3333 * 100 = 33.33%
The debt ratio is easy to calculate and is calculated by dividing the total liabilities of a person with the total net worth of the person. Dividing both gives a figure in decimal which is then multiplied by 100 to derive a percentage.
An investment will pay $200 at the end the year, $250 at the end of the next year, $400 at the end of the third year, and $500 at the end of the 4th year. Other investments of equal risk earn 6%. How much is this investment worth today
Answers
Answer:
PV= $1,143.03
Explanation:
Giving the following information:
An investment will pay $200 at the end of the year, $250 at the end of the next year, $400 at the end of the third year, and $500 at the end of the 4th year. Other investments of equal risk earn 6%.
To calculate the present value, we need to use the following formula on each cash flow:
PV= FV/(1+i)^n
Cf1= 200/1.06= 188.68
Cf2= 250/1.06^2= 222.50
Cf3= 400/1.06^3= 335.85
Cf4= 500/1.06^4= 396
PV= $1,143.03
Morrow City Inc. manufactures small flash drives and is considering raising the price by 75 cents a unit for the coming year. With a 75-cent price increase, demand is expected to fall by 7,000 units. Current Projected Demand 79,000 units 72,000 units Selling price $8.50 $9.25 Incremental cost per unit $5.80 $5.80 If the price increase is implemented, operating profit is projected to ________.
Answers
Answer:
Operating profit is projected to be $35,100
Explanation:
Morrow City International
Analysis of the Current and Projected demand to determine the Operating Profit
Particulars Current Projected Changes in
Demand Demand Demand
Selling price $8.50 $9.25 0.75
Less: Cost Price $5.80 $5.80 0
Contribution $2.7 $3.45 0.75
Margin
Unit Sold 79,000 72,000 -7000
Total $213,300 $248,400 $35,100
Contribution
Note: Total contribution = Unit sold * Contribution margin
There are many diet aids on the market. They promise immediate weight loss without exercise or a change in diet. Each is accompanied by a testimonial from a satisfied user. If you pay close attention, you will notice that each ad also contains the statement, "Results may vary." Most likely this statement is included to prevent the Federal Trade Commission (FTC) from requiring the dietary aid distributor from having to:_______.
Answers
Answer:
run corrective advertising
Explanation:
This was likely included to prevent the Federal Trade Commission (FTC) from requiring the dietary aid distributor from having to run corrective advertising. This is a sort of punishment placed on an ad company that has made an ad with false or misleading information, in order to correct this they must add a message that is placed on their ads in order to right this wrong. This message can badly hurt the company as it advises the viewers that the company has spread false information.
Currently, the price of Mattco stock is $30 a share. You have $30,000 of your own funds to invest. Using the maximum margin allowed of 50%, what is your percentage profit or loss if you purchase the stock and it rises to $33 a share
Answers
Answer:
The percentage profit or loss if you purchase the stock and it rises to $33 a share is 20%
Explanation:
In order to calculate the percentage profit or loss if you purchase the stock and it rises to $33 a share we would have to make the following calculation:
percentage profit or loss=Total Gain/Amount invested
Amount invested=$30,000
According to the given data we have the following:
Share price=$30
Amount invested=$30000
Therefore, Number of shares purchased= ($30,000/50% *1/30)=$2,000
Gain per share ($33-$30)=$3
Therefore, Total Gain=$2,000*$3=$6,000
Therefore, percentage profit or loss= $6,000/$30,000
percentage profit or loss=20%
The percentage profit or loss if you purchase the stock and it rises to $33 a share is 20%
Hamilton company uses a periodic inventory system, at the end of the annuanl accounting period, December 31,2015, the accounting records provided the following information for product 1:
Unit Unit Cost
Inventory, December 31, 2014 2000 $5
For the year 2015:
Purchase, March 21 6000 4
Purchase, August 1 4000 2
Inventory, December 31, 2015 3000
Required:
Compute ending inventory and cost of goods sold under FIFO, LIFO, and average cost inventory costing methods.
Answers
Answer:
FIFO : Ending Inventory = $6,000, Cost of Goods Sold = $36,000
LIFO : Ending Inventory = $36,000, Cost of Goods Sold = $28,000
Weighted Average Cost Method : Ending Inventory = $10,500, Cost of Goods Sold = $31,500
Explanation:
FIFO
Assumes that the first goods received by business will be the first ones to be delivered to the final customer.
Ending Inventory
Ending Inventory = Units left × Earliest Price
= 3000 units × $2
= $6,000
Cost of goods sold
Cost of goods sold : 2000 units × $5 = $10,000
6000 units × $4 = $24,000
1000 units × $2 = $2,000
Total = $36,000
LIFO
Assumes that the last goods purchased are the first ones to be issued to the final customer.
Ending Inventory
Ending Inventory 2000 units × $5 = $10,000
6000 units × $4 = $24,000
1000 units × $2 = $2,000
Total = $36,000
Cost of goods sold
Cost of goods sold : 4000 units × $2 = $8,000
5000 units × $4 = $20,000
Total = $28,000
Weighted Average Cost Method
The average cost of goods held is recalculated each time a new delivery of goods is received Issues are then priced out at this weighted average cost.
First Calculate the Average Cost
Average Cost = Total Cost / Total Units
= (2000 × $5 + 6000 × $4 + 4000 × $2) / 12,000
= $42,000 / 12,000
= $3.50
Ending Inventory
Ending Inventory = Units left × Average Price
= 3000 units × $3.50
= $10,500
Cost of goods sold
Ending Inventory = Units Sold × Average Price
= 9,000 units × $3.50
= $31,500
On January 1, 2021, Pharoah, Inc. signed a 10-year noncancelable lease for a heavy duty drill press. the lease stipulated annual payments of $340,000 starting at the beginning of the first year, with title passing to Pharoah at the expiration of the lease. Pharoah treated this transaction as a finance lease. The drill press has an estimated useful life of 15 years, with no salvage value. Pharoah uses straight-line depreciation for all of its plant assets. Aggregate lease payments were determined to have a present value of $2,002,339, based on implicit interest of 11%.In its 2021 income statement, what amount of interest expense should Pharoah report from this lease transaction
Answers
Answer:
$182,857.29
Explanation:
Here, Pharoah, Inc. average lease payments have a present value of $2,002,339
First lease payment = $340,000
Interest rate = 11%
To find the interest rate, first deduct the first lease payment.
$2,002,339 - $340,000
= $1,662,339
This is deducted so as to reduce total lease liability.
Find the amount of interest expense:
$1,662,339 × interest rate
= $1,662,339 × 11%
= $182,857.29
In its 2021 income statement, the amount of interest expense Pharoah should report from this lease transaction is $182,857.29
Present Value of an Annuity of 1 Periods 8% 9% 10% 1 .926 .917 .909 2 1.783 1.759 1.736 3 2.577 2.531 2.487 A company has a minimum required rate of return of 8%. It is considering investing in a project that costs $97116 and is expected to generate cash inflows of $39000 each year for three years. The approximate internal rate of return on this project is
Answers
Answer:
9.92%
Explanation:
Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested
IRR can be calculated using a financial calculator:
Cash flow in year 0 = $-97116
Cash flow each year from year 1 to 3 = $39000
IRR = 9.92%
To find the IRR using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
I hope my answer helps you
One-year Treasury securities yield 4%. The market anticipates that 1-year from now 1-year Treasury securities will yield 2.1%. If the pure expectations theory is correct, what should be the yield today for 2-year Treasury securities? Write your answer as a percentage, i.e. for example write 8% as 8.
Answers
Answer:
3.05%
Explanation:
According to Pure Expectation Theory, the future short term interest rates are actually the forward rates.
Mathematically,
(1 + r2,0)^2 = (1 + r1,0)^1 * (1 + r1,1)^1
Here,
r2,0 is the rate of interest for 2 year treasury security from today
r1,0 is the rate of the interest for 1 year treasury security from today
r1,1 is the rate of the interest for 2 year treasury security from Year 1
By Putting Values, we have:
(1 + r2,0)^2 = (1 + 0.04)^1 * (1 + 0.021)^1
(1 + r2,0)^2 = 1.06184
By taking square-root on both sides, we have:
(1 + r2,0) = 1.0305
r2,0 = 3.05%
Beamish Inc., which produces a single product, has provided the following data for its most recent month of operations: Number of units produced 3,700 Variable costs per unit: Direct materials $ 132 Direct labor $ 93 Variable manufacturing overhead $ 5 Variable selling and administrative expense $ 12 Fixed costs: Fixed manufacturing overhead $148,000 Fixed selling and administrative expense $288,600 There were no beginning or ending inventories. The absorption costing unit product cost was:
Answers
Answer:
Absorption costing unit product cost = $270 per unit
Explanation:
Absorption costing values unit produced using the full cost per unit.
It categories cost as production and non-production cost
Full cost per unit =Direct labour cost + direct material cost + Variable production overhead + fixed production overhead
Fixed prod overhead per unit = Total fixed production overhead/Number of units
= $148,000/3,700 units=$40 per unit
Full cost per unit = 132+ 93+ 5 + 40 = $270 per unit
Absorption costing unit = $270 per unit
Sumner sold equipment that it uses in its business for $31,800. Sumner bought the equipment a few years ago for $79,100 and has claimed $39,550 of depreciation expense. Assuming that this is Sumner's only disposition during the year, what is the amount and character of Sumner's gain or loss
Answers
Answer:
Sumner's has a loss of $-7750 from the sale of the equipment
Explanation:
Solution
Given that:
We compute the amount of profit and loss, few steps will be taken which is given below:
Step 1: we compute the book value of the equipment which is shown below:
Book value = purchase price - depreciation claimed
= $79,100 -$39,550
= $39550
Therefore then book value is $39,550
Step 2: we calculate the amount of Sumner's gain or loss which is shown below:
The gain (loss) is = the value (sale) - book value
= $31,800 - 39550
= -7750
Therefore the loss from the sale of the equipment is -$7750
Which implies that Sumner's has a loss of $-7750
Nuzum Corporation has two divisions: Division M and Division N. Data from the most recent month appear below: Total Company Division M Division N Sales $557,000 $254,000 $303,000 Variable expenses 144,910 81,280 63,630 Contribution margin 412,090 172,720 239,370 Traceable fixed expenses 273,000 128,000 145,000 Segment margin 139,090 44,720 94,370 Common fixed expenses 94,690 43,180 51,510 Net operating income $ 44,400 $ 1,540 $ 42,860 Management has allocated common fixed expenses to the Divisions based on their sales. The break-even in sales dollars for Division N is closest to:
Answers
Answer:
$ 183,544.30 = $ 183,544
Explanation:
Nuzum Corporation
Total Division M Division N
Sales $557,000 $254,000 $303,000
Variable expenses 144,910 81,280 63,630
Contribution margin 412,090 172,720 239,370
Traceable fixed expenses 273,000 128,000 145,000
Segment margin 139,090 44,720 94,370
Common fixed expenses 94,690 43,180 51,510
Net operating income $ 44,400 $ 1,540 $ 42,860
First we find the Segment CM ratio by the following formula:
Segment Contribution Margin Ratio= Segment Sales- Segment Variable Expenses/ Sales
Segment Contribution Margin Ratio= 303,000 -63630/303000
Segment Contribution Margin Ratio= 239370/303000=0.79
Then we find the break even sales in dollars.
Break Even Sales in Dollars= Traceable Fixed Expense/ Segment Contribution Margin Ratio
Break Even Sales in Dollars =145,000/0.79= $ 183,544.303
Lease A does not contain a bargain purchase option, but the lease term is equal to 90% of the estimated economic life of the leased property. Lease B does not transfer ownership of the property to the lessee by the end of the lease term, but the lease term is equal to 75% of the estimated economic life of the leased property. Based on this information alone, how should the lessee classify these leases
Answers
Answer: Lease A Capital lease
Lease B Capital lease
Explanation:
A Capital lease is known as a lease agreement in which the lessor ( someone giving out the property) agrees to transfer the ownership rights to the lessee ( someone acquiring or needing the services of the property). After completion of the agreed lease period.
In a capital lease, the lessor is usually mandated to transfer the ownership rights of the asset to the lessee upon the end of the agreed lease term between both parties.
If annual demand is 12,000 units, the ordering cost is $6 per order, and the holding cost is $2.50 per unit per year, which of the following is the optimal order quantity using the fixed-order quantity model?
A. 421
B. 234
C. 78
D. 26
E. 312
Answers
Answer:
240 units
Explanation:
We can find Optimal order quantity easily by Optimal order quantity formula using the fixed order quantity formula
Formula:: Optimal order quantity = [tex]\sqrt[2]{\frac{2CoD}{Ch} }[/tex]
Where
Co = Ordering cost per order
D = Annual demand
Ch = Holding cost per unit
Calculations
Lets put in the values
Optimal order quantity = [tex]\sqrt[2]{\frac{2CoD}{Ch} }[/tex]
Optimal order quantity = [tex]\sqrt[2]{\frac{2*6*12000}{2.5} }[/tex]
Optimal order quantity = 240 units
Note: There must have been a mistake in question options the answer is 240 and closest to 240 is option B
On March 1, Bartholomew Company purchased a new stamping machine with a list price of $70,000. The company paid cash for the machine; therefore, it was allowed a 5% discount. Other costs associated with the machine were: transportation costs, $1,300; sales tax paid, $3,120; installation costs, $1,000; routine maintenance during the first month of operation, $1,200. What is the cost of the machine
Answers
Answer:
$73,120
Explanation:
Bartholomew company purchased a new stamping machine with a list price of $70,000
They were given a discount of 5%
Other costs that are associated with the machine include
Transportation costs= $1,300
Sales tax= $3,120
Installation costs= $1,000
Routine maintenance during the first month= $1,200
Then, the cost of the machine can be calculated as follows
(70,000-5/100×70,000) + $1,300+$3,120+$1,000+$1,200
$66,500+$1,300+$3,120+$1,000+$1,200
= $73,120
Hence the cost of the machine is $73,120
Suppose you are trying to decide whether to invest in a company that generates a high expected ROE, and you want to conduct further analysis on the company’s performance. If you wanted to conduct a comparative analysis for the current year, you would: Compare the firm’s financial ratios for the current year with its ratios in previous years Compare the firm’s financial ratios with other firms in the industry for the current year
Answers
Answer:
Compare the firm’s financial ratios with other firms in the industry for the current year
Explanation:
return on equity (ROE) = net income / stockholders' equity
it measures how profitable the company is according the amount of money that stockholders' invested in it.
Since you are trying to conduct a comparative analysis for the current year, it doesn't make sense to compare the current financial ratios with the financial ratios of previous years. If you want to compare the current year, you must compare the current financial ratios to the ratios of other companies in the same industry or the industry as a whole.