Answer:
Statement of retained earnings.
Explanation:
The prior period adjustment refers to the adjustment in which there is an accounting error in the previous period and i.e to be reported in past year period but now it would be corrected in the financial statement. This adjustment we called prior period adjustment
Moreover, it should be reported in the statement of retained earnings
Hence, the second last option is correct
which of the following choices is an example of an intangible item??
-a book
-an apple
-an online editing service
-a car
Answer:
an online editing service
Explanation:
An example of an intangible item is an online editing service. An intangible item is something that does not have an actual physical presence. Take a look at the following lists to get a better understand of an intangible vs. tangible item.
intangible items:
- insurance
- software
- data
tangible items:
- food
- computers
- phones
Since an online editing service is the only item that you cannot physical touch, this is the intangible item.
Prepare journal entries to record each of the following four separate issuances of stock. A corporation issued 4,000 shares of $5 par value common stock for $35,000 cash. A corporation issued 2,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $40,000. The stock has a $1 per share stated value. A corporation issued 2,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $40,000. The stock has no stated value. A corporation issued 1,000 shares of $50 par value preferred stock for $60,000 cash.
Answer:
1. Dr Cash $35,000
Cr Common Stock $20,000
Cr Paid-in Capital in excess of par value Common Stock $15,000
2.Dr Organization expenses $40,000
Cr Common stock $2,000
Cr Paid-in cap in excess of stated value Common Stock $38,000
3.Dr Organization expenses $40,000
Cr Common stock, no-par value $40,000
4. Dr Cash 60,000
Cr Preferred stock 50,000
Cr Paid-in cap in excess of par value, preferred stock 10,000
Explanation:
1. Based on the information given we told that they issued 4,000 shares of $5 par value of common stock for the amount of $35,000, which means that the transaction will be recorded as:
Dr Cash $35,000
Cr Common Stock $20,000
(4,000 Shares *$ 5 Par Value)
Cr Paid-in Capital in excess of par value Common Stock $15,000
($35,000-$20,000)
2.Since they issued 2,000 shares of no-par common stock estimated to be worth the amount of $40,000. This means that the transaction will be recorded as:
Dr Organization expenses $40,000
Cr Common stock $2,000
(2,000 Shares*$1 stated value)
Cr Paid-in cap in excess of stated value Common Stock $38,000
(40,000-2,000)
3. Based on the information given we were told that they issued 2,000 shares of no-par common estimated to be worth the amount of $40,000 in which the stock has no stated value, this means that the transaction will be recorded as.
Dr Organization expenses $40,000
Cr Common stock, no-par value $40,000
4. Based on the information given we were told that they issued 1,000 shares of $50 par value preferred stock for the amount of $60,000 which means that the transaction will be recorded as:
Dr Cash 60,000
Cr Preferred stock 50,000
(1,000 Shares *$50 par value)
Cr Paid-in cap in excess of par value, preferred stock 10,000
(60,000-50,000)
George's Chemicals allocates overhead based on machine hours. Selected data for the most recent year follow. Estimated manufacturing overhead cost $235,000 Actual manufacturing overhead cost $244,200 Estimated machine hours 20,300 Actual machine hours 22,700 The estimates were made as of the beginning of the year, while the actual results were for the entire year. The predetermined manufacturing overhead rate per machine hour is closest to
Answer:
$11.58 per machine hour
Explanation:
Given that: Estimated Manufacturing overhead cost =$235,000, Actual manufacturing overhead cost = $244,200 Estimated machine hours = 20,300, Actual machine hours= 22,700
The predetermined manufacturing overhead rate per machine hour = Estimated manufacturing overhead cost / Estimated machine hours
= $235,000 / 20,300
= $11.5763
= $11.58 per machine hour
Consider a 11-period binomial model with R=1.02R=1.02, S_0 = 100S 0 =100, u=1/d= 1.05u=1/d=1.05. Compute the value of a European call option on the stock with strike K=102K=102. The stock does not pay dividends. Please submit your answer rounded to two decimal places. So for example, if your answer is 3.45673.4567 then you should submit an answer of 3.463.46. 1 point
Answer: 1.76
Explanation:
Given the following :
R=1.02,
S0 = 100
u=1/d= 1.05
Strike(k) = 102
Total Payoff = (probability of upside × upside Payoff) + (probability of downside × downside Payoff)
Upside Price = u × S0 = 1.05 × 100 = 105
downside Price = S0/u = 100/1.05 = 95.24
Upside Payoff = upside price - strike rate =(105 - 102) = 3
Upside probability :
[e^(r - q) - d] / u - d
E = exponential, q = Dividend (Dividend is 0, since the stock does not pay dividend)
d = 1/d = 1/1.05 = 0.9523809
e = 2.7182818
[2.7182818^(1.02% - 0) - 0.9523809] / (1.05 - 0.9523809)
[1.0102521 - 0.9523809] / 0.0976191
0.0578712 / 0.0976191
= 0.5928266
Probability of downside = 1 - p(upside)
P(downside) = 1 - 0.5928266
P(downside) = 0.4071733
Therefore, total Payoff =
(0.5928266 × 3) + (0.4071733 × 0)
= 1.7784798
European. Call option:
Total Payoff / (1 + r%)
1.7784798 / (1 + 1.02%)
=1.7784798/ (1 + 0.0102)
= 1.7784798 / 1.0102
= 1.7605224
= 1.76
chandler Communications'CFO has provided the following information: The company's capital budget is expected to be $5,000,000. The company's target capital structure is 70 percent debt and 30 percent equity. The company's net income is $4,500,000. If the company follows a residual dividend policy, what portion of its net income should it pay out as dividends this year
Answer: $3,000,000
Explanation:
From the question, we are informed that a company's capital budget is expected to be $5,000,000 and that the company's target capital structure is 70 percent debt and 30 percent equity.
Equity = 30% × $5,000,000
= 30/100 × $5,000,000
= 0.3 × $5,000,000
= $1,500,000
Debt = 70% × $5,000,000
= 70/100 × $5,000,000
= 0.7 × $5,000,000
= $3,500,000
We are further told that the company's net income is $4,500,000 and since we be calculated the equity that will be needed to finance the capital budget as $1,500,000. Therefore, portion of its net income should it pay out as dividends this year will be:
= $4,500,000 - $1,500,000
= $3,000,000
The portion of its net income should it payout as dividends this year is $3,000,000.
Calculation of the dividend:Before that the following calculations need to be done.
Equity = 30% × $5,000,000
= 30/100 × $5,000,000
= 0.3 × $5,000,000
= $1,500,000
Now
Debt = 70% × $5,000,000
= 70/100 × $5,000,000
= 0.7 × $5,000,000
= $3,500,000
Now finally the dividend is
= $4,500,000 - $1,500,000
= $3,000,000
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A corporation issued 6,000 shares of its $2 par value common stock in exchange for land that has a market value of $84,000. The entry to record this transaction would include:
Answer:
A debit to Land for $12,000
Explanation:
The entry to record in this transaction include a debit to Land for $12,000
Particulars Debit Credit
Land $84,000
Common stock $12,000
(6,000 * $2)
Paid in capital in excess $72,000
of par, common stock
The Purple Martin has annual sales of $687,400, total debt of $210,000, total equity of $365,000, and a profit margin of 5.9 percent. What is the return on assets
Answer:
7.1%
Explanation:
Purple martin has an annual sales of $687,400
The total debt is $210,000
Total equity is $365,000
Profit margin is 5.9%
= 5.9/100
= 0.059
The first step is to calculate the net income
Net income= sales×profit margin
= $687,400×0.059
= $40,556.6
The next step is to calculate the total assets
Total assets= Total debt+Total equity
= $210,000+$365,000
= $575,000
Therefore, the return on assets can be calculated as follows
ROA= Net income/Total assets
= 40,556.6/575,000
= 0.0705×100
= 7.1%
Hence the return on assets is 7.1%
Waterway, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 50 range instruments and 200 pressure gauges were produced, and overhead costs of $87,550 were estimated. An analysis of estimated overhead costs reveals the following activities.
Activities Cost Drivers Total Cost
1. Materials handling Number of requisitions $40,800
2. Machine setups Number of setups 25,750
3. Quality inspections Number of inspections 21,000
$87,550
The cost driver volume for each product was as follows.
Cost Drivers Instruments Gauges Total
Number of requisitions 420 630 1,050
Number of setups 225 260 485
Number of inspections 265 225 490
Air United, Inc. manufactures two products: missil
Air United, Inc. manufactures two products: missil
Determine the overhead rate for each activity.
Overhead Rate
Materials handling $
Machine setups $
Quality inspections $
Answer:
Results are below.
Explanation:
Giving the following information:
Activities Cost Drivers Total Cost
Materials handling Number of requisitions $40,800
Machine setups Number of setups 25,750
Quality inspections Number of inspections 21,000
Cost Drivers Instruments Gauges Total
Number of requisitions= 1,050
Number of setups= 485
Number of inspections= 490
We need to use the following formula for each activity:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Materials handling= 40,800/1,050= $38.86 per requisition
Machine setups= 25,750/485= $53.1 per setup
Quality inspections= 21,000/490= $42.86 per inspection
Arco Corporation declared a cash dividend on June 2 of $6 per common share. The company has 2,000 shares of common stock authorized, 1,000 shares issued, and 200 in the treasury. The entry to record the declaration of the cash dividend increases a(n)
Answer:
The journal entry to record the dividend declaration is:
June 2, 202x, cash dividends are declared
Dr Retained earnings 4,800
Cr Dividends payable 4,800
The journal entry to record the payment of the dividend would be:
Dr Dividends payable 4,800
Cr Cash 4,800
When we calculate dividends, only outstanding stocks are included in the distribution: total outstanding stocks = issued stocks - treasury stocks = 1,000 - 200 = 800
A company is evaluating a new 4-year project. The equipment necessary for the project will cost $3,050,000 and can be sold for $670,000 at the end of the project. The asset is in the 5-year MACRS class. The depreciation percentage each year is 20.00 percent, 32.00 percent, 19.20 percent, 11.52 percent, and 11.52 percent, respectively. The company's tax rate is 34 percent. What is the aftertax salvage value of the equipment?
Answer:
$718,606.4
Explanation:
The first step is to calculate the accumulated depreciation
=$3,050,000×(0.2+0.32+0.192+0.1152)
= $3,050,000×0.8272
= $2,522,960
The accumulated depreciation is then subtracted from the book value in purchase to get the book value on sale
= $3,050,000-$2,522,960
= $527,040
The next step is to subtract the book value on sale from the salvage value
= $527,040-$670,000
= -$142,960
Loss of - $142,960
The tax gain on disposal can be calculated as follows
= -$142,960×34/100
= -$142,960×0.34
= -$48,606.4
Therefore, the after-tax salvage value can be calculated as follows
= salvage value-tax disposal
= $670,000-(-48,606.4)
= $670,000+$48,606.4
= $718,606.4
Hence the aftertax salvage value of the equipment is $718,606.4
MC Qu. 137 Clayborn Company deposits... Clayborn Company deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of business on May 31, its Cash account shows a debit balance of $24,525. Clayborn's May bank statement shows $21,800 on deposit in the bank. Determine the adjusted cash balance using the following information: Deposit in transit $ 7,450 Outstanding checks $ 6,100 Bank service fees, not yet recorded by company $ 100 A NSF check from a customer, not yet recorded by the company $ 1,275 The adjusted cash balance should be:
Answer:
The adjusted cash balance is $23,150.
Explanation:
The correct cash balance can only be verified through preparation of a bank reconciliation statement.
The first step is to update the Cash Book Bank balance as follows ;
Debits :
Balance as at May 31 $24,525
Totals $24,525
Credits:
Bank service fees $100
Dishonored Check $1,275
Balance as per updated cash book $23,150
Totals $24,525
The next step is to prepare a Bank Reconciliation Statement.
Bank Reconciliation Statement as at May 31.
Balance at bank as per the cash book (updated) $23,150
Add Unpresented cheques $ 6,100
Less Lodgements not yet credited ($ 7,450)
Balance as per bank statement $21,800
Conclusion :
The adjusted cash balance is $23,150.
Larkspur Appliance Co. manufactures low-price, no frills appliances that are in great demand for rental units. Pricing and cost information on Larkspur main products are as follows. Item Standalone Selling Price (Cost) Refrigerator $500 ($260 ) Range 570(270 ) Stackable washer/dryer unit 690(400 ) Customers can contract to purchase either individually at the stated prices or a three-item bundle with a price of $1,800.The bundle price includes delivery and installation. Larkspur also provides installation (not a separate performance obligation). Respond to the requirements related to the following independent revenue arrangements for Larkspur Appliance Co. On June 1, 2017, Larkspur sold 100 washer/dryer units without installation to Laplante Rentals for $69,000. Laplante is a newer customer and is unsure how this product will work in its older rental units. Larkspur offers a 60-day return privilege and estimates, based on prior experience with sales on this product, 4% of the units will be returned. Prepare the journal entries for the sale and related cost of goods sold on June 1, 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)
Answer:
The journal entries to record the sale on June 1 are:
June 1, 2017, 100 units of washer/dryer to Laplante Rentals
Dr Cash 69,000
Cr Sales revenue 69,000
Dr Cost of goods sold 40,000
Cr Inventory 40,000
If the next question asks to record the return privilege and estimates, it should be recorded as both an asset (estimated returns inventory) and a liability (customer refunds payable).
Inventory items received should be compared against: Multiple Choice Sales receipt Purchase order Sales order Supplies inventory
Answer:
Purchase order
Explanation:
To verify existence and accuracy of inventory items received, the receiving division must compare the quantities, amounts and descriptions of the items received against the Purchase order.
Watson Company purchased assets of Holmes Ltd. at auction for $1,390,000. An independent appraisal of the fair value of the assets acquired is listed below:
Land $ 304,000
Building 380,000
Equipment 608,000
Inventories 228,000
Prepare the journal entry to record the purchase of the assets.
Answer:
Dr land $278,000
Dr building $347,500
Dr equipment $556,000
Dr inventories $208,500
Cr cash $1,390,000
Explanation:
The total amount spent in acquiring the assets is $1,390,000 which needs to be shared between the assets acquired on the basis of individual values of the assets
Total of individual assets' values=$304000+$380000+ $608000+$228000=$ 1,520,000.00
Cost attributable to land:$304000/$1520000*$1,390,000=$ 278,000.00
Cost attributable to Building:$380000/$1520000*$1390000=$ 347,500.00
cost attributable to equipment=$608000/$1520000*$1390000=$556,000.00
cost attributable to inventories=$228000/$1520000*$1390000 =$208,500.00
The following totals for the month of April were taken from the payroll register of Magnum Company. Use this information to answer the question that follow. Salaries $12,000 FICA taxes withheld 900 Income taxes withheld 2,500 Medical insurance deductions 450 Federal unemployment taxes 32 State unemployment taxes 216 The journal entry to record the monthly payroll on April 30 would include a:_______. a. debit to Salaries Payable for $7,902 b. debit to Salaries Expense for $7,902 c. debit to Salaries Payable for $8,150 d. credit to Salaries Payable for $8,150
Answer:
The journal entry to record the monthly payroll on April 30 would include a credit to Salaries Payable for $8,150. The right answer is d.
Explanation:
In order to prepare The journal entry to record the monthly payroll on April 30 we would have to calculate the Salaries Payable as follows:
Salaries Payable=Salaries-FICA taxes withheld+Income taxes withheld+Medical insurance deductions
Salaries Payable=$12,000-$900+$2,500+$450
Salaries Payable=$8,150
Therefore, journal entry to record the monthly payroll on April 30 would be as follows:
Debit Credit
Salaries $12,000
FICA withheld $900
Income taxes withheld $2,500
Medical insurance deductions $450
salaries payable $8,150
So, The journal entry to record the monthly payroll on April 30 would include a credit to Salaries Payable for $8,150
Novak Company had the following two transactions related to its delivery truck. 1. Paid $150 for an oil change. 2. Paid $700 to install a special gear unit, which increases the operating efficiency of the truck.Prepare Novak's journal entries to record these two transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) No Account Titles and Explanation Debit Credit 1. 2.
Answer and Explanation:
The Journal entries are shown below:-
1. Maintenance and Repairs Expense Dr, $150
To Cash $150
(Being cash paid is recorded)
For recording this we debited the maintenance and Repairs Expense as there is increased in expenses and credited the cash as assets are decreased
2) Equipment $700
To Cash $700
(Being cash paid is recorded)
For recording this we debited the equipment as it increased the assets and credited the cash as assets are decreased
The Company uses a periodic inventory system. For specific identification, ending inventory consists of 215 units, where 190 are from the January 30 purchase, 5 are from the January 20 purchase, and 20 are from beginning inventory. Determine the cost assigned to ending inventory and to cost of goods sold using (a) specific identification, (b) weighted average, (c) FIFO, and (d) LIFO.
Answer:
Ending inventory:
(a) specific identification = $2,720(b) weighted average = $2,810.05(c) FIFO = $2,687.50(d) LIFO = $3,010Cost of goods sold:
(a) specific identification = $6,495(b) weighted average = $6,404.95(c) FIFO = $6,527.50(d) LIFO = $6,205Explanation:
Date Activity Units Cost Total
Jan. 1 Beg. inventory 215 $14 $3,010
Jan. 10 Sales 165
Jan. 20 Purchase 160 $13 $2,080
Jan. 25 Sales 190
Jan. 30 Purchase 330 $12.50 $4,125
total Purchases 705 $13.07 $9,215
Ending inventory:
(a) specific identification = (190 x $12.50) + (5 x $13) + (20 x $14) = $2,720
(b) weighted average = 215 x $13.07 = $2,810.05
(c) FIFO = 215 x $12.50 = $2,687.50
(d) LIFO = 215 x $14 = $3,010
Cost of goods sold:
(a) specific identification = $9,215 - $2,720 = $6,495
(b) weighted average = $9,215 - $2,810.05 = $6,404.95
(c) FIFO = $9,215 - $2,687.50 = $6,527.50
(d) LIFO = $9,215 - $3,010 = $6,205
1. Characteristics of oligopoly An oligopolistic market structure is distinguished by several characteristics, one of which is market control by a few large firms. Which of the following are other characteristics of this market structure? Check all that apply. Either similar or identical products Difficult entry Neither mutual interdependence nor mutual dependence No entry Mutual interdependence
Answer:
----Either similar or identical products --------Difficult entry
----Mutual interdependence
Explanation: An Oligopolistic market is a market characterized by few sellers of large firms who sell either similar or differentiated products. Here, Each firm is mutually interdependent as any action from any firms influences the actions of the rest of the competing firms , therefore decisions are made using strategic planning and consideration as competing firms are ready to counter react to any change in any new market action.
Market entry is difficult Because of the already established customer base of the successful operating firms dominating the market.Also venturing into the market requires high capital, technology or additional government licences. Examples of Oligopolistic firms are oil and gas firms, airlines, mass media etc
Market entry is difficult Because of the already established customer base of the successful operating firms dominating the market.
Also venturing into the market requires high capital, technology, or additional government licenses.
The correct options are:
Either similar or identical productsDifficult entry Mutual interdependence
An Oligopolistic market is a market characterized by few sellers of large firms who sell either similar or differentiated products. Each firm is mutually interdependent as any action from any firm influences the actions of the rest of the competing firms.
Therefore decisions are made using strategic planning and consideration as competing firms are ready to counter-react to any change in any new market action.
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You plan to borrow $35,000 at a 7.5% annual interest rate. The terms require you to amortize the loan with 7 equal end-of-year payments. How much interest would you be paying in Year 2
Answer:
$2,250
Explanation:
Since terms require you to amortize the loan with 7 equal end-of-year payments, it implies that interest will be paid on the amount outstanding balance for a whole year.
The would be paid in Year 2 can therefore be calculated as follows:
Equal amount of the loan principal = Loan amount / Number of equal end-of-year payments = $35,000 / 7 = $5,000
Loan balance outstanding throughout Year 2 = Loan amount - Year 1 end-of-year payment = $35,000 - $5,000 = $30,000
Year 2 interest payable = Loan balance outstanding throughout Year 2 * Annual interest rate = $30,000 = 7.5% = $2,250.
Therefore, you would be paying $2,250 interest in Year 2.
Identify each person below as structurally, frictionally, or cyclically unemployed.
a. Jake recently lost his job as a dishwasher. Minimum-wage legislation keeps employers from adding more of the low-skill positions for which he qualifies, so he has been unable to find work.
b. Rosa is a real estate agent. House sales in her area have declined because the region has been going through a recession. She has no clients and is currently looking for a new full-time job.
c. Latasha just graduated from college and is looking for a full-time position with an investment banking firm.
Answer and Explanation:
Structurally unemployed: It refers to mismatch between both the available jobs and the unemployed skills
Frictionally unemployed: This condition occurs when the workers or labors are not employed and looking for the work
Cyclically unemployed: It arise when where the aggregate demand for goods and services can not encourage full employment in an economy. This takes place during times of sluggish economic growth or times of economic contraction
Based on the explanation, the classification is as follows
a. Structurally unemployed
b. Cyclic unemployed
c. Frictionally unemployed
If the Wet Dog Surf Company borrows $11,000 at 3.00% and there are 4 compounding periods per year, calculate Wet Dog's Effective Annual Rate (APY) of interest.
Answer:
3.039%
Explanation:
Effective annual interest = ( 1 + periodic interest/ m)^m - 1
M = number of compounding per year
(1 + 0.03 / 4)^4 -1 = 0.03039 = 3.039%
I hope my answer helps you
Accounts Receivable has a balance of $ 5 comma 000, and the Allowance for Bad Debts has a credit balance of $ 420. The allowance method is used. What is the net realizable value of Accounts Receivable after a $ 140 account receivable is written off?
Answer:
$4,580
Explanation:
since we are using the allowance method, the journal entry to record the write off is:
Dr Allowance for bad debts 140
Cr Accounts receivable 140
So the accounts receivable balance = $5,000 - $140 = $4,860
the allowance for bad debts balance = $280
accounts receivable net balance = $4,860 - $280 = $4,580
Allowance for bad debts accounts is a contra asset account that reduces the balance of accounts receivable.
A recent survey of 280 small firms (with annual revenue less than $12 million) asked whether an increase in the minimum wage would cause the firm to decrease capital spending. Possible responses to the survey question were: "Yes," "No," or "Don’t Know." This data is best classified as
Answer:
nominal scale
Explanation:
nominal scale are scales that are used to assign events into discrete classifications.
Nominal scales have no order and there is no means to measure the distance between the possible responses. they are just classifications.
TwitterMe, Inc., is a new company and currently has negative earnings. The company’s sales are $2.1 million and there are 130,000 shares outstanding. a. If the benchmark price-sales ratio is 4.3, what is your estimate of an appropriate stock price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What if the price-sales ratio were 3.6? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
a. $69.46
b. 58.15
Explanation:
a. Price = Benchmark PS ratio × Sales per share
Sales per Share
= Sales / Shares outstanding
= 2,100,000/130,000
= $16.15
Price = 4.3 * 16.15
Price = $69.46
b. PS Ratio is 3.6
Price = Benchmark PS ratio × Sales per share
Price = 3.6 * 16.15
Price = $58.15
You purchased an airplane for $500,000 and will depreciate it using a 7-year an MACRS. Salvage value in year 4 is expected to be $250,000. The airplane is expected to increase revenues by $200,000 per year, however, O&M costs are expected to be $30,000 per year. Your company is in a 40% tax bracket and your MARR is 15%. Show the end of year cash flows for this project for years 0 through 4. What is the Net Present Worth of this investment?
Year 0_____
Year 1____
Year 2______
Year 3_____
Year 4______
NPW_____
Answer:
Year 0 = -$500,000
Year 1 = $130,580
Year 2 = $150,980
Year 3 = $136,980
Year 4 = $433,260
NPV = $65,495
Explanation:
depreciation expense per year under 7 year MACRS table:
year 1 = $500,000 x 14.29% = $71,450
year 2 = $500,000 x 24.49% = $122,450
year 3 = $500,000 x 17.49% = $87,450
year 4 = $500,000 x 12.49% = $62,450
cash flow year 1 = [($200,000 - $30,000 - $71,450) x (1 - 40%)] + $71,450 = $130,580
cash flow year 2 = [($200,000 - $30,000 - $122,450) x (1 - 40%)] + $122,450 = $150,980
cash flow year 3 = [($200,000 - $30,000 - $87,450) x (1 - 40%)] + $87,450 = $136,980
cash flow year 4 = [($200,000 - $30,000 - $62,450 + $93,800 gain on sale) x (1 - 40%)] + $62,450 + $250,000 = $433,260
MARR = 15%
using a financial calculator, NPV = $65,495
A stock has an expected return of 15.0 percent, its beta is 0.90, and the risk-free rate is 5.3 percent. What must the expected return on the market be
Answer:
16.07%
Explanation:
The computation of the expected return on the market is shown below
As we know that
Expected Return on stock = Risk free return + beta ( Expected Market Rate of Return - Risk free return )
15 % = 5.3% + 0.90 × (Expected Market Rate of Return - 5.3%)
15 % - 5.3% ÷ 0.90 = Expected Market Rate of Return - 5.3%
10.77% = Expected Market Rate of Return - 5.3 %
So, expected market rate of return is
= 10.77 + 5.3%
= 16.07%
We simply applied the above formula
An associate professor of physics gets a $200 a month raise. She figures that with her new monthly salary she can buy more goods and services than she could buy last year.
a. Her real and nominal salary have risen.
b. Her real and nominal salary have fallen.
c. Her real salary has risen and her nominal salary has fallen.
d. Her real salary has fallen and her nominal salary has risen.
Answer:
a. Her real and nominal salary have risen
Explanation:
Her nominal salary is the amount she earns. the $200 increase is an increase in her nominal salary.
Her real salary is calculated in the amount of goods and service she can purchase given her income. Since with the $200, she can buy more goods and services, her real salary has also increased.
1. The roles of money Brian is heading out to lunch. He goes to the bank and withdraws $30 from his savings account. He heads to a local deli that sells half sub sandwiches for $4.99 and whole subs for $7.99. Brian decides that he's pretty hungry and goes for the whole. He pays with a $10 bill and tells the cashier to keep the change. Identify what role money plays in each of the following parts of the story. Hint: Select each role only once. Role of Money Medium of Exchange Unit of Account Store of Value Brian can easily determine that the whole sandwich, while twice as long as the half, is priced at less than twice as much. Brian accumulates money in his savings account for future purchases. Brian buys his lunch with a $10 bill.
Answer:
Brian can easily determine that the whole sandwich, while twice as long as the half, is priced at less than twice as much.
unit of accountBrian accumulates money in his savings account for future purchases.
Store of valueBrian buys his lunch with a $10 bill.
Medium of exchangeExplanation:
Money's four functions are:
Medium of exchange = you can use money to purchase or sells goods and services. Unit of account = money helps us to understand the relative value of goods and services, since the higher the price, the higher the value of a good or service is. Store of value = you can save money for future useStandard of deferred payment = money allows people to take or hand out loans that will be repaid in the futureIdeally, you should develop a risk management plan for a specific project because _________
A. Engaging in planning activities demonstrates professionalism
B. Your boss is committed to using project management techniques in every project
C. The scale of a particular project â the size and complexity â require it
D. The Project Management Institute recommends it
Answer: Option B
Explanation:
A risk management plan is a document which is prepared by the project manager to eliminate the risks and chances of any loss or issues related to the project.
Every project has to follow the risk management plan to ensure the safety of the people and capital invested in the project.
It is also contained in the documents of the risk assessment plan which has to be followed by project manager and people.
It is decided during the baseline, the risks and the cures related to the project. As the boss and the project manger is committed to follow the risk management techniques it should be considered on a priority basis.
Identify the phase (Phillips, stagflation, or recovery) the economy is in, and suggest what change in aggregate demand or aggregate supply might have caused it.
a. "President Nixon expressed satisfaction with last yearâs economic performance. He said that with inflation and unemployment heading down, the nation âis on the right course."
b. "The nationâs inflation rate rose to a record high last month, the government reported yesterday. The consumer price index jumped 0.3% in January. Coupled with the announcement earlier this month that unemployment had risen by 0.5 percentage points, the reports suggested that the first month of President Nixonâs second term had gotten off to a rocky start."
c. "President Carter expressed concern about reports of rising inflation but insisted the economy is on the right course. He pointed to recent reductions in unemployment as evidence that his economic policies are working."
Answer:
a. "President Nixon expressed satisfaction with last year's economic performance. He said that with inflation and unemployment heading down, the nation is on the right course."
⇒ RECOVERY. Economic recovery refers to the economy starting to grow again after a period of recession. A rightward shift in the aggregate supply curve should decrease unemployment and reduce inflation.
b. "The nation's inflation rate rose to a record high last month, the government reported yesterday. The consumer price index jumped 0.3% in January. Coupled with the announcement earlier this month that unemployment had risen by 0.5 percentage points, the reports suggested that the first month of President Nixon's second term had gotten off to a rocky start."
⇒ STAGFLATION. Stagflation refers to a combination of high inflation and high unemployment. A leftward shift in the aggregate supply curve can result in stagflation.
c. "President Carter expressed concern about reports of rising inflation but insisted the economy is on the right course. He pointed to recent reductions in unemployment as evidence that his economic policies are working."
⇒ PHILLIPS. According to the Phillips curve, inflation and unemployment are inversely correlated. if inflation goes up, unemployment should go down. Phillips theory was discredited due to stagflation occurring during Nixon's presidency. Nixon created stagflation for the first time in the US since it isn't normal that inflation rises as unemployment increases. That shows you how good a president he was, he even invented new things for Americans to enjoy.