Shawn borrowed $132,600 at 4.25 percent for 30 years to purchase a home. Payments are to be paid monthly. If all payments are paid as agreed, how much total interest will be paid

Answers

Answer 1

Answer:

Interest payment= $ 102,176.54  

Explanation:

When a loan is to be paid over a period of time using a series of periodic equal installments, it is called loan amortization. Each equal installment is meant to liquidate the principal and the accrued interest.

Total Interest payment = total payment over the loan life - Principal amount

The monthly equal installment is calculated as follows:

Monthly equal installment-= Loan amount/Monthly annuity factor

Monthly annuity factor  

=( 1-(1+r)^(-n))/r

Monthly interest rate (r)

= 4.25%/12= 0.354 %

Number of months ( n) in 30 years

= 12* 30 = 360

Annuity factor  

= ( 1- (1.00354)^(-360)/0.00354= 203.3252575

Monthly installment = 132,600/47.03  = $652.157

Total Interest payment = total payment over the loan life - Principal amount

                  = (652.157 × 360) -  132,600=  102,176.54  

Interest payment= $ 102,176.54  


Related Questions

if a firm's total revenue is equal to $800 and its total costs are equal to $472, what are its profits?

Answers

Answer:

Gross profit= $328

Explanation:

Giving the following information:

Sales revenue= $800

Total costs= $472

To calculate the total profit of this company, all we have to do is deduct from earnings all the cost components. I will assume that total costs include both fixed and variable costs.

Gross profi= 800 - 472

Gross profit= $328

Your portfolio has a beta of 1.39. The portfolio consists of 14 percent U.S. Treasury bills, 23 percent Stock A, and 63 percent Stock B. Stock A has a risk level equivalent to that of the overall market. What is the beta of Stock B

Answers

Answer:

Beta of B = 1.84

Explanation:

A beta is a measure of systematic risk. A risk free rate has zero risk thus its beta is zero. As, the T bills are risk free, so their beta is also zero. While the beta of the market is always 1. So, the beta of stock A is 1.

The portfolio beta is a function of the weighted average of the individual stocks betas that form up the portfolio. The formula for portfolio beta is,

Portfolio beta = wA * Beta A + wB * Beta B + ... + wN * Beta N

Where,

w represents the weight of each stock in the portfolio based on the investment in that stock

1.39 = 0.14 * 0  +  0.23 * 1  +  0.63 * Beta of B

1.39 = 0 + 0.23 + 0.63 *  Beta of B

1.39 - 0.23 = 0.63 * Beta of B

1.16 / 0.63 = Beta of B

Beta of B = 1.84

Suppose ​$1 comma 500 is deposited in a bank account today​ (time 0), followed by ​$1 comma 500 deposits in years 2​, 4​, 6​, and 8. At 9​% annual​ interest, how much will the future equivalent be at the end of year 12​?

Answers

Answer:

$15,391.91

Explanation:

the first step is to find the present value of the cash flows. After the future value of the sum would be determined.

present value is the sum of discounted cash flows.

present value can be determined using a financial calculator

Cash flow in year 0 = $1500

Cash flow in year 1 = 0

Cash flow in year 2 = $1500

Cash flow in year 3 = 0

Cash flow in year 4 = $1500

Cash flow in year 5 = 0

Cash flow in year 6 = $1500

Cash flow in year 7 = 0

Cash flow in year 8 = $1500

I = 9%

PV = $5472.36

The formula for calculating future value:

FV = P (1 + r) n

FV = Future value  

P = Present value  

R = interest rate  

N = number of years  

$5472.36(1.09)^12 = $15,391.91

To find the PV using a financial calculator:

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 NPV button, input the value for I, press enter and the arrow facing a downward direction.  

3. Press compute  

When a customer deposit is recorded using the Make Deposits window, behind the screen QuickBooks converts the transactions into a journal entry that:

Answers

Answer: Debits checking account, Credits undeposited funds

Explanation:

QuickBooks is a very popular Accounting Software that is mostly used by Small to Medium Enterprises to keep their books in order.

When a customer makes a payment from a customer, QuickBooks sends this to the Undeposited Funds account and debits it. When you then use the Make Deposits window to record the deposit, the corresponding amount is taken from the Undeposited Funds account by way of a credit. It is then debited to your Checking Account (Bank account).

Tanner-UNF Corporation acquired as a long-term investment $350 million of 7.0% bonds, dated July 1, on July 1, 2018. Company management has the positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 8% for bonds of similar risk and maturity. Tanner-UNF paid $320.0 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2018, was $330.0 million.

Required:
1. & 2. Prepare the journal entry to record Tanner-UNF’s investment in the bonds on July 1, 2018 and interest on December 31, 2018, at the effective (market) rate.
3. At what amount will Tanner-UNF report its investment in the December 31, 2018, balance sheet?
4. Suppose Moody’s bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2019, for $310.0 million. Prepare the journal entry to record the sale.

Answers

Answer:

1. & 2. Prepare the journal entry to record Tanner-UNF's investment in the bonds on July 1, 2018 and interest on December 31, 2018, at the effective (market) rate.

July 1, investment in UNF bonds

Dr Investment in bonds HTM 350,000,000

    Cr Cash 320,000,000

    Cr Discount on bonds 30,000,000

December 31, interest revenue from investment in bonds

Dr Cash 12,250,000

Dr Discount on bonds 550,000

    Cr Interest revenue 12,800,000

Discount on bonds = ($320,000,000 x 4%) - ($350,000,000 x 3.5%) = $12,800,000 - $12,250,000 = $550,000

3. At what amount will Tanner-UNF report its investment in the December 31, 2018, balance sheet?

Investment in bonds HTM = $350,000,000 (face value) - $29,450,000 (discount on bonds) = $320,550,000

Changes in the market value of bonds held to maturity are not considered by the company.

4. Suppose Moody's bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2019, for $310.0 million. Prepare the journal entry to record the sale.

Dr Cash 310,000,000

Dr Dr Discount on bonds 29,450,000

Dr Loss on investment in bonds HTM 10,550,000

    Cr Investment in bonds HTM 350,000,000

Your portfolio consists of 100 shares of CSH and 50 shares of EJH, which you just bought at $20 and $30 per share, respectively.What fraction of your portfolio is invested in CSH? In EJH?If CSH increases to $23 and EJH decreases to $29, what is the return on your portfolio?

Answers

Answer:

7.14%

Explanation:

Investment in CSH= $ 100*20 = $ 2000

Investment in EJH=$ 50*30 =$ 1500

Total Investment=$ 2000+$ 1500=$3500

fraction of your portfolio in CSH= $ 2000/$3500 = 0.5714

fraction of your portfolio in EJH= $ 1500/$3500 = 0.4286

If CSH increases to $23 and EJH decreases to $29,

new value of portfolio

= $23*100+$29*50

=$2300+$1450

= $3750

return in portfolio=(new value of portfolio/Total Investment)-1

return in portfolio=($3750/$3500)-1

return in portfolio=1.0714 - 1

return in portfolio=.0714=7.14%

The fraction in CSH is 0.5714.

The fraction of EJH is 0.4286.

The return on the portfolio is 7.14%.

The calculation is as follows:

Investment made in CSH= $ 100 × $20 = $2,000

Investment in EJH = $50 × 30  = $1,500

So,  

Total Investment is

= $2,000 + $1,500

= $3,500

Now  

Fraction of the portfolio in CSH is

= $2,000 ÷ $3,500

= 0.5714

Fraction of the portfolio in EJH is

= $1,500 ÷ $3,500

= 0.4286

Now

If CSH increases to $23 and EJH decreases to $29.

So,

The new value of the portfolio is  

= $23 × 100 + $29 × 50

= $2,300 + $1,450

= $3,750

Now

Return in portfolio is

= (New value of portfolio ÷ Total Investment) - 1

= ($3,750 ÷ $3,500) - 1

= 1.0714 - 1

=.0714

=7.14%

Therefore we can conclude that

The fraction in CSH is 0.5714.

The fraction of EJH is 0.4286.

The return on the portfolio is 7.14%.

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Define opportunity cost.
Select the correct answer below:
A. All possible consumption combinations of goods that someone can afford when all income is spent.
B. A cost that is made in the past and cannot be recovered.
C. All possible combinations of consumption that someone can afford given the prices of goods and the individual's income.
D. The measure of cost by what is given up in exchange for what is obtained.

Answers

C) All possibilities combination of consumption that.. I just hope it helps

Answer:

the measure of cost by what is given up in exchange for what is obtained

Explanation:

The idea behind opportunity cost is that the cost of one item is the lost opportunity to do or consume something else. In short, opportunity cost is the value of what we give up in order to have it.

Assume that the number of people affected by these external costs is large. If the government wishes to establish an optimal allocation of resources in this market, it should

Answers

Answer:

tax producers so that the market supply shift leftward (upward)

Explanation:

Since S is the market supply curve, and S1 is the supply curve composed of all the other costs of production even external costs.

We recognize that external costs are the expenses involved when such goods and services are generated by third parties (who were not a part of the transaction).

A company's output imposes higher external costs on the people and hence the people most affected by such external costs is large.

Therefore, if the government needs to launch an appropriate resource allocation wherein resources are efficiently allocated at least contribute, the producers should be taxed.

The costs of production rise whenever the producers are taxed, which reduces the quantity given.

This will upward shift the supply curve from S to S1 to the left.

Which of the following is an incorrect statement? a If individual audit risk remains the same, detection risk bears an inverse relationship to inherent and control risk. b The greater the inherent and control risk the auditor believes exist the less detection risk that can be accepted. c The auditor might make separate or combined assessments of inherent risk and control risk. d Detection risk cannot be changed at the auditor’s discretion.

Answers

Answer:

d Detection risk cannot be changed at the auditor’s discretion.

Explanation:

Audit risk can be defined as the risk that financial reports issued by an auditor are materially incorrect due to fraud or errors, despite the fact that the inappropriate audit opinion states that the financial reports are void of any material misstatements. There are two (2) main components of an audit risk, these are;

1. Detection risk: this deals with the fact that procedures used by the auditor will not detect any material misstatement as a result of errors.

2. Risk of material misstatement: this deals with the material misstatements of financial statements before auditing. There are two main types namely, inherent and control risks.

The following statements are true and correct;

A. If individual audit risk remains the same, detection risk bears an inverse relationship to inherent and control risk.

B.The greater the inherent and control risk the auditor believes exist the less detection risk that can be accepted.

C. The auditor might make separate or combined assessments of inherent risk and control risk.

However, saying that detection risk cannot be changed at the auditor’s discretion is false. Since it is arises as a result of error, if the auditor conducts a proper sampling procedure it can be detected and eventually changed.

In the manufacture of 10,000 units of a product, direct materials cost incurred was $135,700, direct labor cost incurred was $82,000, and applied factory overhead was $37,500. What is the total conversion cost

Answers

Answer:

The total conversion cost is $119,500.

Explanation:

Conversion cost refers to all the costs of converting or turning raw materials into finished goods. Conversion cost can therefore be obtained by deducting the cost of raw materials from  the cost of production. This implies that conversion cost is the the addition of direct labor costs and manufacturing costs.

Based on the above explanation, total conversion cost for this question can therefore be calculated as follows:

Total conversion cost = Direct labor cost + Applied factory overhead = $82,000 + $37,500 = $119,500

Therefore, the total conversion cost is $119,500.

Payback period The Ball Shoe Company is considering an investment project that requires an initial investment of $ 544,000 and returns​ after-tax cash inflows of ​$77,624 per year for 10 years. The firm has a maximum acceptable payback period of 8 years. a. Determine the payback period for this project. b. Should the company accept the​ project?

Answers

Answer:

Payback period is  7.01   years

The project should be accepted

Explanation:

The payback period is the time taken for the initial cash outlay of $544,000 to recoup itself, in other words,the length of time taken for the company to receive cash inflows equivalent to the amount invested initially.

payback period=initial capital outlay/annual after-tax cash inflows

payback period=$544,000/$77,624= 7.01   years.

It shows that the project's payback is lesser than the company's target,hence,the project should be accepted

Amos Rubber company manufactures tires. They reported the following information from their operations last period: Cost of Direct Materials used in production: $35,000 Cost of Direct Labor wages: $40,000 Variable Manufacturing Overhead: $30,000 Fixed Manufacturing Overhead: $75,000 Total units produced and sold: 50,000 Under absorption costing, the per-unit cost is greater than the variable per-unit cost by how much?

Answers

Answer:

The per-unit cost under absorption costing is greater than the variable per-unit cost by $1.50.

Explanation:

Units costs under variable costing include only the variable manufacturing costs.

Manufacturing Costs - Variable Costing

Direct Materials used in production:   $35,000

Cost of Direct Labor wages:                $40,000

Variable Manufacturing Overhead:     $30,000

Total Costs                                           $105,000

Unit Cost = $105,000/ 50,000

                = $2.10

Units costs under absorption costing include both the variable manufacturing costs and fixed manufacturing costs.

Manufacturing Costs - Absorption Costing

Direct Materials used in production:   $35,000

Cost of Direct Labor wages:                $40,000

Variable Manufacturing Overhead:     $30,000

Fixed Manufacturing Overhead:          $75,000

Total Costs                                           $180,000

Unit Cost = $180,000/ 50,000

                = $3.60

Difference :

Unit Cost - Absorption Costing      $3.60

Less Unit Cost - Variable Costing  $2.10

Difference                                        $1.50

Conclusion :

The per-unit cost under absorption costing is greater than the variable per-unit cost by $1.50.

The per-unit cost under absorption costing is greater than the variable per-unit cost by $1.50.

Calculation of per-unit as follows:

Units costs under variable costing involved only the variable manufacturing costs.

So,

Manufacturing Costs - Variable Costing

Direct Materials used in production:   $35,000

Cost of Direct Labor wages:                $40,000

Variable Manufacturing Overhead:     $30,000

Total Costs                                           $105,000

Now

Unit Cost = $105,000/ 50,000

               = $2.10

Unit costs under absorption costing involve both the variable manufacturing costs and fixed manufacturing costs.

So,

Manufacturing Costs - Absorption Costing

Direct Materials used in production:   $35,000

Cost of Direct Labor wages:                $40,000

Variable Manufacturing Overhead:     $30,000

Fixed Manufacturing Overhead:          $75,000

Total Costs                                           $180,000

Unit Cost = $180,000/ 50,000

               = $3.60

Now the difference is

Unit Cost - Absorption Costing      $3.60

Less Unit Cost - Variable Costing  $2.10

Difference                                        $1.50

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"A company offers ID theft protection using leads obtained from client banks. Four employees work 40 hour a week on the lead, at a pay rate of $35 per hour per employee. Each employee identifies an average of 3500 potential leads a week from a list of 6000. An average of 3 percent actually sign up for the service, paying a one-time fee of $60. Material costs are $1500 per week, and overhead costs are $8000 per week. What is the multi-factor productivity for this operation in fees generated per dollar of input (rounded to 2 decimals)?"

Answers

Answer:

1.67

Explanation:

The computation of multi-factor productivity is shown below:-

Multi-factor productivity = Potential leads × Number of workers × Fee × Conversion percentage ÷ Labor cost + Material cost + Overhead cost

= 3,500 × 4 × $60 × 0.03 ÷ 4 × 40 × $35 + $1,500 + $8,000

= 25,200 ÷ 15,100

= 1.67

Therefore for computing the multi-factor productivity we simply applied the above formula.

The Physical Inventory Worksheet is used when: Multiple Choice inventory items are physically placed in the warehouse All of the choices are correct the computer system goes down taking a physical count of inventory on hand

Answers

Answer:

taking a physical count of inventory on hand

Explanation:

The Physical Inventory Worksheet is used when taking a physical count of inventory on hand. This is the only way to tell how many items are really available for sale and allows a business to do it efficiently. An example would be counting the number of steaks the restaurant has on hand on a Saturday afternoon. This also allows the business to analyze the expected sales with the actual inventory in order to determine whether or not they need more.

how to calculate WACC using the CAPM​

Answers

Answer:

The CAPM formula is widely used in the finance industry. It is vital in calculating the weighted average cost of capital. The WACC formula is = (E/V x Re) + ((D/V x Rd) x (1-T)).

On August 1, 2017, Gonzaga Corporation issued $600, 000, 7%, 10-year bonds at face value. Interest is payable annually on August 1. Gonzaga's year-end is December 31.
1. Prepare journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
2. Prepare journal entry to record the accrual of interest on December 31, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
3. Prepare journal entry to record the payment of interest on August 1, 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Answers

Answer: Please see answers in the explanation column

Explanation:

journal entry to record the issuance of the bonds.

Date               Account           Debit                  Credit

August 1st         Cash           $600, 000

2017                Bonds payable                           $600, 000

2, journal entry to record the accrual of interest on December 31, 2017.

Date               Account                          Debit                  Credit

Dec 31st         Interest Expense          $17,500

2017               Interest  payable                                     $17,500

Calculation =

Interest = P X T X R

From August - December31st = 5 months

600,000 x 5/12 x 7%= 600,000 x 0.07 x5/12= $17,500

3. journal entry to record the payment of interest on August 1, 2018

Date               Account                          Debit                  Credit

Aug 1st         Interest Expense          $24,500

2018            Interest  payable           $17,500

                    Cash                                                             $42,000

Calculation =

Interest = P X T X R

From January- August `1st= 7 months

600,000 x 7/12 x 7%= 600,000 x 0.07 x7/12= $24,500

The detailed day-to-day operational decisions essential to the overall success of marketing strategies are referred to as

Answers

Answer:

Marketing tactics.

Explanation:

The detailed day-to-day operational decisions essential to the overall success of marketing strategies are referred to as marketing tactics.

Marketing tactics can be defined as both a strategic short-term and long-term actions employed by an organization to promote its goods and services with the intention of increasing sales and achieving a competitive market advantage by satisfying customers wants or need.

Hence, the purpose of a marketing tactics is to achieve substantial level of customer satisfaction as well as using the organization's limited financial resources efficiently in order to boost the effective promotion and sales of its products.

Some examples of marketing tactics are;

1. An organization sending newsletters or emails to its new and existing customers.

2. Participating in the exhibition of products in a trade fair.

3. Promotion of products on social media platforms.

Ashley is an attorney who specializes in family law. She uses the cash method of accounting and is a calendar-year taxpayer. Last year, she represented a client in a lawsuit and billed the client $5,000 for her services. Although she made repeated attempts, Ashley was unable to collect the outstanding receivable. Finally, in November of the current year, she finds out that the individual has moved without leaving any forwarding address. Ashley’s attempts to locate the individual are futile. What is the amount, if any, of the deduction that she may claim in connection with this bad debt?

Answers

Answer:

The Answer is explained below

Explanation:

Ashley is unable to collect the outstanding receivable after repeated attempts. In order to claim any deduction in connection with this bad debt Ashley has to record the income first but Ashley is using the cash method of accounting here. Therefore she can only claim any deduction when she receives any payment.

Virginia owns an interior design company and hires freelance decorators to help with large jobs. In this way, she is able to keep costs low by only employing staff when they are needed. However, over time Virginia has added full‐time staff members as the company grows. How would you classify Virginia’s company? Group of answer choices As an investment center As a profit center As a cost center but not a profit center As both a cost center and a profit center, but not an investment center

Answers

Answer: As an investment centre

Explanation:

Based on the question, we are told that Virginia owns an interior design company and hires freelance decorators to help with large jobs and that by doing this, she is able to keep costs low by only employing staff when they are needed. Virginia's company is an investment centre.

An investment center is a business unit that is within an entity that is responsible for its own assets, revenue, and expenses and its financial results will be based on these factors. An investment center focuses on how it will minimize costs.

Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next nine years, because the firm needs to plow back its earnings to fuel growth. The company will pay a dividend of $14 per share 10 years from today and will increase the dividend by 5 percent per year thereafter.

Required:
If the required return on this stock is 14 percent, what is the current share price?

Answers

Answer:

we have to divide the money

Explanation:

as it is written its

Explain the steps that should be taken by an internal accountant/CMA when there is a difference of opinion with one's supervisor on an accounting or financial reporting manner.

Answers

Answer:

1. Understand difference in the reporting manner for Management Accountants and Financial Accountants.

2. Refer to Company policy documents and International Reporting Standards to clearly expose the difference.

3. Consult with other co-workers on who the information is intended and agree on whose opinion to base the reporting.

Explanation:

Management Accountants or CMA prepare Financial Statements for Management use and there are no Statotory or Strict guidelines on how these  statements are prepared.

Whilst Financial Accountants prepare Financial Statements for External reporting and have to abide by the Reporting Standards (either GAAP or IFRS).

So, they will be always be differences in the manner of reporting.

The solution is to understand the user of those statements that are being prepared and take the opinion that meets those users needs.

Alvarez Company’s output for the current period yields a $22,000 favorable overhead volume variance and a $52,900 unfavorable overhead controllable variance. Standard overhead applied to production for the period is $226,000. QS 23-16 Overhead cost variances LO P4 What is the actual total overhead cost incurred for the period?

Answers

Answer:

$256,900

Explanation:

The computation of actual total overhead cost is shown below:-

The Actual overhead cost incurred

= Standard overhead cost + Unfavorable overhead controllable variance - Favorable overhead volume variance

= $226,000 + $52,900 - $22,000

= $278,900 - $22,000

= $256,900

Therefore for computing the actual total overhead cost we simply applied the above formula.

On June 8, Alton Co. issued an $77,774, 12%, 120-day note payable to Seller Co. Assuming a 360-day year for your calculations, what is the maturity value of the note? When required, round your answer to the nearest dollar. Select the correct answer. $87,107 $80,885 $9,333 $77,774

Answers

Answer:

The correct option is $80,885

Explanation:

Maturity value is the amount that the issuer of notes payable, Alton Co. would pay to the beneficiary of the notes, Seller Co. after 120days.

Maturity value=face value+(face value*120days/360days*12%)

i.e face value plus 120-day interest

Maturity value=$77,774+($77,774*120/360)*12%

maturity value=$77,774+$3110.96

maturity value=$80,884.96  

sysyster corp. has an ROE of 16 percent and a payout ratio of 24 percent. what is its sustainable growth rate?

Answers

Answer:

The answer is 13.84 percent

Explanation:

The formula for sustainable growth rate is:

(Return on equity(ROE) x retention rate)/1 - Return on equity(ROE) x retention rate

Retention rate = 1 - payout ratio.

So, retention rate = 1 - 0.24

= 0. 76

Return on equity(ROE)= 0.16

(0.16 x 0.76) / 1 - ( 0.16 x 0.76)

= 0.1216 / 1 - 0.1216

0.1216/0.8784

=0.1384

Expressed as a percentage:

13.84percent

The ____ the existing spot price relative to the strike price, the ____ valuable the call options will be.

Answers

Answer:

The Higher the existing spot price relative to the strike price the more valuable the call options will be.

Explanation:

Spot price simply refers to how much a particular stock is trading in the market (that is, Market Price of the Stock).

Strike Price, also known as exercise price, is the price at which a person (corporate or individual) can purchase security.

Call options refers to the option to purchase an asset at an agreed price prior to/or at a particular day.

If for instance an employee is presented with Stock Options at a particular price, it will be more attractive for him or her if the price at which it is being offered is lower than it's actual market value. That way, he or she has already made a profit.

For example, if the spot price for the stock of Google is $2000/Unit and it is offered to an employee at $1450, if he elects to buy it at that time, he stands a chance to make $550 on each unit that if he sells whilst the spot price is still reasonable.

Cheers!

Answer:

The higher the existing spot price relative to the strike price, the less valuable the call options will be.

Explanation:

Call options refer to financial contracts in which the buyer of the option has the right, but not obligation, to buy asset or instrument at an already agreed price on or before a particular date. The particular date is also known as the expiration date.

The strike price is refers to the price at which a put or call option can be exercised on or  before a particular date.

The spot price refers the current market price at which an instrument or asset is bought or sold now for immediate payment and delivery.

The relationship between the strike price and the spot price is that a call option is most valuable when the strike price is higher than the spot price. At this point, the call option is said to be in the money (ITM). On the other hand, a call option is least valuable when the strike price is lower than the spot price. At this point, the call option is said to be out of the money (OTM).

Based on the explantion above, therefore, the higher the existing spot price relative to the strike price, the less valuable the call options will be.

A local swimming pool charges nonmember $10 per visit. If you join the pool, you can swim for $5 per visit but you have to pay an annual fee of F. Use an optimal choice model to find the value of F such that you are indifferent between joining and not joining. Suppose that the pool charged you exactly that F. Would you go to the pool more or fewer times than if you did not join? For simplicity, assume that the price of all other goods is $1.

Answers

Answer:

The answer is below

Explanation:

Using an optimal choice model to find the value of F such that you are indifferent between joining and not joining.

Let N be the number of visits per year

1) N-number of visits per year 10N=5N+F

Given that 10N=5N+F

Hence F=5N

F = 5N

2) Therefore, Would I go to the pool more or fewer times than if i did not join?

Then, if F is fixed and I join the local Swimmng pool member, I would go more times.

A system of rewarding managers by linking bonuses to income computed under absorption costing may result in:

Answers

Answer:

excess inventory buildup

Explanation:

The absorption costing is the costing which covers full costing i.e direct costing and indirect costing

Here directing costing could be in terms of direct material, direct labor

While the indirect costing could be in terms of manufacturing overhead or indirect cost

In the given case since the managers who are rewarding in order to link bonus to income so it would be results in building excess inventory and the same is to be considered

Increased use of portfolio and performance assessment techniques in the schools has been suggested to:

Answers

Answer:

Reduce the pressure to test for only fact and specific skills

Explanation:

PORTFOLIO assessments techniques can be defined as a form of assessment that help to focus on the self-reflection as well as the evidence of growth over time , and this is carried out through the samples of work products.

PERFORMANCE assessments techniques can be defined as the type of assessment that require the students to directly apply all what they might have learned in realistic situations.

Therefore Increased use of the portfolio as well as the performance assessment techniques in the schools has been suggested to help reduce the pressure on the students to test only fact and specific skills thereby enhancing their performance.

"Clauss Company transfers out 14,000 units and has 2,000 units of ending work in process that are 25% complete. Materials are entered at the beginning of the process and there is no beginning work in process. Assuming unit materials costs of $3 and unit conversion costs of $5, what are the costs to be assigned to units (a) transferred out and (b) in ending work in process

Answers

Answer:

a. $112,000

b.    $7,500

Explanation:

(a) transferred out

Units transferred out are 100% complete for both materials and conversion costs, thus multiply the Total Cost per Equivalent units with the number of units transferred.

Cost of units transferred out = $8 × 14,000 units

                                               = $112,000

(b) in ending work in process

Units of ending work in process are 100% complete in terms of materials ( since materials are entered at the beginning of the process) whilst 25% complete in terms on conversion cost (applied uniformly during production).

Cost of ending work in process

Materials ($3 × 2,000 units)                  = $6,000

Conversion ($3 × (2,000 units × 25%)) =  $1,500

Total Cost                                               = $7,500

Swifty Corporation purchased from its stockholders 5,500 shares of its own previously issued stock for $275,000. It later resold 1,700 shares for $53 per share, then 1,700 more shares for $48 per share, and finally 2,100 shares for $42 per share. Prepare journal entries for the purchase of the treasury stock and the three sales of treasury stock.

Answers

Answer: The answer is given below

Explanation:

A journal is a book that is used in accounting to record the transactions that takes place in a company.

It should be noted that in the attached file, the amount that was paid in capital from the treasury stock was calculated as:

= 5,100 - 3,400

= 1,700

The retained earnings was also calculated as:

= 105,000 - 88,200 - 1,700

= 15,100

Check the attached file for further information.

Answer with its Explanation:

1. The repurchase of 5,500 shares from the sharesholders will be recorded as under:

Dr Treasury Stock           $275,000  

Cr Cash                                $275,000

 

2. The sale of 1,700 shares at $53 per share would be recorded as under:

Dr Cash ( 1,700 shares * $53 )             $90,100  

Cr Treasury Stock ( 1,700 shares * $50 )              $85,000

Cr Paid in capital ( 1,700 shares * $3 )                $5,100

 

3. The Selling of the 1,700 shares at $48 each will be recorded as under:

Dr Cash ( 1,700 Shares * $48)                          $81,600

Dr Paid in capital (  1,700 shares * $2)             $3,400

Cr Treasury Stock ( 1,700 shares * $ 50 )                  $85,000

4. The selling of 2,100 shares at $42 will be recorded as under:

Dr Cash ( 2,100 shares * $ 42 )             $88,200

Dr Paid in capital from treasury stock       $1,700 ........ Step 1

Dr Retained Earnings                              $15,100 ...... Balancing Figure

Cr Treasury Stock ( 2,100 shares * $ 50 )            $105,000

 

Step 1. Paid in capital from Treasury Stock

Paid in capital from Treasury Stock = 5,100 - 3,400 = $1,700 Paid In capital

Retained Earnings will be Balancing Figure = 105,000 - 88,200  - 1,700 Paid In capital = $15,100

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