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
A waiter fills your water glass with ice water (containing many ice cubes) such that the liquid water is perfectly level with the rim of the glass. As the ice melts,
Answer:
As the ice melts and turns into water, the level of the liquid water will lower and it will no longer be perfectly leveled with the rim of the glass. This happens because water has a unique property, its solid state occupies a larger volume than its liquid state, i.e. as waters turns into ice, it expands and occupies more space. Generally, as liquids become solid, they will shrink and occupy less space, but that doesn't happen with water.
Explanation:
Suppose the reserve requirement ratio is 20 percent. Assuming no bank holds excess reserves and nobody withdraws cash, a $10,000 injection of new reserves by the Fed can create (in the entire mult-banking system), a maximum of:
Answer:
The maximum money created is $50000
Explanation:
The given reserve requirement ratio is = 20 percent
The injection of cash = $10000
So, first, we have to find the money multiplier and then multiply with the injected amount.
Since the reserve requirement is 20 percent so the money multiplier = 1/ 20 = 0.5 or 5.
The Fed can create the maximum money = 10,000 x 5 = 50,000
A paint manufacturing company produces three paint bases of differing quality. Due to throughput limitations (measured in gallons) at their facility, they are unable to meet total demand for their products. In determining which of their products they should produce, what should they consider?
a. The gross profit per unit for each product
b. The operating margin per unit for each product
c. The contribution margin per gallon of throughput for each product
d. None of the above
Answer:
c. The contribution margin per gallon of throughput for each product
Explanation:
contribution margin per gallon = Revenue per gallon - variable cost per gallon.
Contribution margin would enable the company to know the amount each product earns in excess after variable cost has been subtracted from revenue.
the product with the highest contribution margin should be considered.
At the beginning of the current year, Penguin Corporation (a calendar year taxpayer) has accumulated E & P of $55,000. During the year, Penguin incurs a $36,000 loss from operations that accrues ratably. On October 1, Penguin distributes $40,000 in cash to Holly, its sole shareholder.
How is Holly taxed on the distribution?
Of the $40,000 distribution, ...........................$ is taxed as a dividend and $ ....................represents a return of capital.
Answer:Of the $40,000 distribution, ....$28,000....................... is taxed as a dividend and $12,000...................represents a return of capital.
Explanation:
we will first compute dividend income for Holly
Loss from operations in the year =$36,000
Loss accrued till October 1st, since it accrues ratably
January - September= 9 months
36,000 x 9/12 = $27,000
But E&P at start of the year = $55,000
Therefore, E&P at October 1st = $55,000- $27,000 = $28,000
The remaining balance. $28,000 after the losses accrued have been deducted will be treated as dividend income
From the statement, the total cash distributed to Holly is $40,000,
$28,000 as calculated from above Is taxed as a dividend and $12,000 ( $40,000- $28,000) represents a return of capital.
Garrison Company adds direct materials at the beginning of the process and adds conversion costs throughout the process. The following data represents data in the Shaping Department WIP, April 1 7 comma 000 units Transferredminusin costs in WIP, April 1 $79,940 Direct materials (100%) in WIP, April 1 $24,420 Conversion costs (55%) in WIP, April 1 $23,400 Units transferredminusin 49 comma 000 Transferredminusin costs during April $550,900 Units completed 46 comma 000 April direct materials cost $155,500 April conversion costs $239,250 WIP, April 30 10 comma 000 units (100% for materials and 40% for conversion costs) What are the equivalent units for conversion costs?
Answer:
Equivalent Units for conversion = 50,000 units
Cost per equivalent unit for conversion = $5.253
Explanation:
WIP, April 1 = 7,000 units
Transferred-costs in WIP, April 1 = $79,940
Direct materials (100%) in WIP, April 1 = $24,420
Conversion costs (55%) in WIP, April 1 = $23,400
Units transferred = 49,000
Transferred costs during April = $550,900
Units completed = 46,000
April direct materials cost =$155,500
April conversion costs =$239,250
WIP, April 30 =10,000 units
100% for materials and 40% for conversion costs
Required = Equivalent Units for conversion cost?
Solution
Equivalent Units for conversion = 100% of units completed + 40% of units in work in process
Equivalent Units for conversion = (46000 x 100%) + ( 10,000 x 40%)
Equivalent Units for conversion = 46,000 + 4000
Equivalent Units for conversion = 50,000 units
Cost per equivalent unit for conversion = Total conversion cost/Equivalent unts for conversion
Cost per equivalent unit for conversion = (23,400+239,250) /50,000units
Cost per equivalent unit for conversion = $5.253
In October of the current year, received a $15,520 payment from a client for 32 months of security services she will provide starting on September 1 of this year. This amounts to $485 per month. Janine is a calendar-year taxpayer.
a. When must Janine recognize the income from the $17,360 advance payment for services if she uses the cash method of accounting?
1. Year 1
2. Year 2
3. Year 0
4. Year 1 and year 2
5. Year 0 and year 1
b. When must Janine recognize the income from the $17,360 advance payment for services if she uses the accrual method of accounting?
1. Year 0 and Year 1
2. Year 0
3. Year 1
4. Year 1 and Year 2
5. Year 2
c. Suppose that instead of services, Janine received the payment for a security system (inventory) that she will deliver and install in year 2. When would Janine recognize the income from the advance payment for inventory sale if she uses the accrual method of accounting and she uses the deferral method for reporting income from advance payments? For financial accounting purposes, she reports the income when the inventory is delivered.
1. Year 2
2. Year 1
3. Year 0
4. Year 0 and year 1
5. Year 1 and year 2
d. Suppose that instead of services, Janine received the payment for the delivery of inventory to be delivered next year. When would Janine recognize the income from the advance payment for sale of goods if she uses the accrual method of accounting and she uses the full-inclusion method for advance payments?
1. Year 1
2. Year 1 and year 2
3. Year 2
4. Year 0 and year 1
5. Year 0
Answer:
a. When must Janine recognize the income from the $17,360 advance payment for services if she uses the cash method of accounting?
3. Year 0Cash method of accounting recognizes revenues and expenses when they are received or paid for.
b. When must Janine recognize the income from the $17,360 advance payment for services if she uses the accrual method of accounting?
1. Year 0 and Year 1
c. Suppose that instead of services, Janine received the payment for a security system (inventory) that she will deliver and install in year 2. When would Janine recognize the income from the advance payment for inventory sale if she uses the accrual method of accounting and she uses the deferral method for reporting income from advance payments? For financial accounting purposes, she reports the income when the inventory is delivered.
1. Year 2She will recognize revenue only after the merchandise is delivered.
d. Suppose that instead of services, Janine received the payment for the delivery of inventory to be delivered next year. When would Janine recognize the income from the advance payment for sale of goods if she uses the accrual method of accounting and she uses the full-inclusion method for advance payments?
5. Year 0Under this system, advanced payments are considered revenue on the year that they were received.
In the classical model of decision making, the most appropriate decision possible in light of what is believed to be the most desirable consequences for the organization is known as the _______ decision. intuitive creative heuristic subjective optimum
Answer:
Optimum
Explanation:
The Classical approach to decision making is specific on making decisions to achieve required outcome. Under this approach, decisions are rationl and geared towards one stable and sustainable goal. The most appropriate decision possible in light of what is believed to be the most desirable consequences for the organization is the Optimum. The decision maker always makes decisions based on what is the best interests of that organization.
The company had a net income of $248,462, and depreciation expenses were equal to $72,487. What is the firm's cash flow from financing activities?
Complete Question:
The complete question can be seen the in the attachment at the end of the solution of the question.
Answer:
Option B. -$182,057
Explanation:
The Cash flow from financing activities can be calculated by using the following formula:
Cash flow from financing activities = Changes in the equity finance
+ Changes in long term borrowings + Changes in short term borrowings
- Interest paid - Dividends paid
Here
Changes in the equity = $175,000 common stock in year 2008
- $125,000 common stock in year 2008 = $50,000
Changes in long term Borrowings = $61,290 - $78,445 = - $17,155
Changes in short term Borrowings = $16,753 - $12,004 = $4749
Interest paid is $0 because interest rate is not given hence we can't calculate it.
Dividends paid = $190,568 Opening Retained Earnings + $248,462 Net Profit for the year - $219,379 Closing Retained Earnings = $219,651
Now, by putting values in the above equations, we have:
Cash flow from financing activities = $50,000 - $17,155 + $4749 - 0 - $219,651 = -$182,057
Consumers have become more selective and better informed about their purchases. This macro-environmental force strongly impacts this industry.
a. True
b. False
Answer:
a. True
Explanation:
The macro-enviromental forces that impact an industry are: demographic, economic, political, ecological, socio-cultural, and technological.
In this case, we can see the socio-cultural macro-enviromental force at play, and perhaps also the demographic macro-enviromental force.
If consumers have become more selective and better informed about their purchases, it is most likely because they have change their culture or social status. Such a change in consumer behaviour can have great impact on an industry: it can boost some goods, while make other decline or disappear.
Such a change can also respond to demographic shift: for example, as consumers age, they tend to become more selective, so a good that used to be favored by a young population, might not be so anymore when that young population grows older.
The market value of which of the items would be considered double (or multiple) counting in the calculation of GDP? Indicate the following that they are included in GDP or not included in GDP.
a. a used skateboard you buy for your brother
b. the commission paid to the seller of a previously owned collectors skateboard
c. a new building for tony hawk industries
d. used copy of the tony hawk video game
e. previously owned collectors skateboard
f. ticket for the X games bought from a person on a street corner
g. new skateboard you buy for your niece
h. Wheels used to produce a skateboard that will be sold new
Answer:
Included in GDP :
b. the commission paid to the seller of a previously owned collectors skateboard
c. a new building for tony hawk industries
g. new skateboard you buy for your niece
Not Included in GDP :
a. a used skateboard you buy for your brother
d. used copy of the tony hawk video game
e. previously owned collectors skateboard
f. ticket for the X games bought from a person on a street corne
h. Wheels used to produce a skateboard that will be sold new
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export
Net export = exports – imports
When exports exceeds import there is a trade deficit and when import exceeds import, there is a trade surplus.
Items not included in the calculation off GDP includes:
1. services not rendered to oneself
2. Activities not reported to the government
3. illegal activities
4. sale or purchase of used products
5. sale or purchase of intermediate products
the following items aren't included in the calculation of GDP because they are used items and were included in the year they were produced. adding them to GDP would be regarded as double counting
a. a used skateboard you buy for your brother
d. used copy of the tony hawk video game
e. previously owned collectors skateboard
h. Wheels used to produce a skateboard that will be sold new aren't included in the calculation of GDP because it an intermediate product used in the production of skateboards.
ticket for the X games bought from a person on a street corner aren't included in the calculation of GDP because they have already been paid for.
If 200,000 machine‐hours are budgeted for variable overhead at a standard rate of $5/machine‐hour, but 220,000 machine‐hours were actually used at an actual rate of $6/machine‐hour, what is the variable overhead efficiency variance?
Answer:
Variable overhead efficiency variance= $100,000 unfavorable
Explanation:
Giving the following information:
200,000 machine‐hours are budgeted for variable overhead at a standard rate of $5/machine‐hour, but 220,000 machine‐hours were used.
To calculate the variable overhead efficiency variance, we need to use the following formula:
Variable overhead efficiency variance= (Standard Quantity - Actual Quantity)*Standard rate
Variable overhead efficiency variance= (200,000 - 220,000)*5
Variable overhead efficiency variance= $100,000 unfavorable
When the Variable overhead efficiency variance is = $100,000 unfavorable
What is the Efficiency variance?
Giving the following information are:
200,000 machine‐hours are budgeted for variable overhead at a standard rate of $5/machine‐hour, but [tex]220,000[/tex] machine‐hours were used. Now we calculate the variable overhead efficiency variance, Then we need to use the following formula are below mention. The variable overhead efficiency variance is= (Standard Quantity - Actual Quantity)*Standard rate. Then Variable overhead efficiency variance= [tex](200,000 - 220,000)*5[/tex]
Thus, Variable overhead efficiency variance= $100,000 unfavorable
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Virginia owns 100% of Goshawk Company. In the current year, Goshawk Company sells a capital asset (held for three years) at a loss of $40,000. In addition, Goshawk has a short-term capital gain of $18,000 and net operating income of $90,000 during the year. Virginia has no recognized capital gain (or loss) before considering her ownership in Goshawk.
Complete each lettered item below, outlining how much of the capital loss may be deducted for the year and how much is carried back or forward.
a. If Goshawk is a proprietorship, only $ _________ long-term capital loss can be deducted in the current year. The remaining $ ___________net capital loss is carried ___________ and then ____________Correct 3 of Item 1.
b. If Goshawk is a C corporation, only $ __________long-term capital loss can be deducted in the current year. The remaining $ ___________ net capital loss is carried ______________ and then _____________ of Item 2.
Answer:
a) If Goshawk is a proprietorship, only $21000 long-term capital loss can be deducted in the current year. The remaining $19000 net capital loss is carried forward and then carried back
b) If Goshawk is a C corporation, only $ 18000 long-term capital loss can be deducted in the current year. The remaining $22000 net capital loss is carried back and then forward of Item 2.
Explanation:
The gain or loss on the sale of a property is said to be the difference between between the realized value of goods and its adjusted basis. When there is a gain the realized value would be greater than the adjusted basis, while when there's loss the realized value would be less than the adjusted basis.
A) In this case, if Goshawk is a proprietorship, only $21,000 of the $40,000 long-term capital loss can be deducted in the current year. The loss will offset the short-term capital gain of $18,000 first; then, an additional $3,000 of the loss may be utilized as a deduction against ordinary income. The remaining $19,000 net capital loss is carried forward to next year and years thereafter until completely deducted. The capital loss carryover retains its character as long term.
B) If Goshawk is a C corporation, $18,000 short term capital gain can be set off for long term capital loss. Then the remaining $22,000($40,000 - $18,000) will be carried backwards
You are developing the project charter for a new project. Which of the following
is NOT part of the enterprise environmental factors?
✓
A) Lessons learned from previous projects
B) The work authorization system
C) Government and industry standards that affect your project
D) Knowledge of which departments in your company typically work on projects
Answer: A) Lessons learned from previous projects
Explanation:
Enterprise Environmental Factors (EEF) refers to all environmental factors that have a say in whether a project is successful or not. They include both internal factors such as company infrastructure, knowledge and capability (departments with the knowledge on project design and implementation) and internal project authorization systems as well as external factors such as Government standards and market conditions.
Lessons learned from previous projects, while important, are not included in this list and are not Enterprise Environmental Factors.
Which of the following is a typical complaint of host-country competitors (such as GM, Ford etc) against foreign firms (such as KIA in the US)?a) foreign firms burden the host-country with infrastructure requirements.b) foreign firms lure local workers away from host-country businesses.c) foreign firms do not have to obey host-country law and regulations.d) foreign firms receive financial support from host-country governments.
Answer:
Option (d) is the correct answer to this question.
Explanation:
The nation in which those State members or organizations are involved at the request of the state and/or foreign negotiation.
A foreign country 's government, in which a representative and foreign embassies live while on duty. The diplomat and staff serve their own country's values and policies while being host country guests.
Other options are incorrect because they are not related to the given scenario.
Below is a list of activities for Jayhawk Corporation. Required: Select from the activities of Jayhawk Corporation whether the transaction increases, decreases, or has no effect on assets, liabilities, and stockholders' equity. The first item is provided as an example.
Transaction Assets = Liabilities+ Stockholders' Equity
1. Issue common stock in exchange for cash. Increase= No effect+ Increase
2. Purchase business supplies on account. = +
3. Pay for legal services for the current month. = +
4. Provide services to customers on account. = +
5. Pay employee salaries for the current month. = +
6. Provide services to customers for cash. = +
7. Pay for advertising for the current month. = +
8. Repay loan from the bank. = +
9. Pay dividends to stockholders. = +
10. Receive cash from customers in (4) above. = +
11. Pay for supplies purchased in (2) above. = +
Answer:
Jayhawk Corporation
Transaction Assets = Liabilities Stockholders' Equity
1. Issue common stock in exchange for cash. Increase= No effect + Increase
2. Purchase business supplies on account. Increase = Increase + No effect
3. Pay for legal services for the current month. Decrease = No effect + Decrease
4. Provide services to customers on account. Increase = No effect + Increase
5. Pay employee salaries for the current month. Decrease = No effect + Decrease
6. Provide services to customers for cash. Increase = No effect + Increase
7. Pay for advertising for the current month. Decrease = No effect + Decrease
8. Repay loan from the bank. Decrease = Decrease + No effect
9. Pay dividends to stockholders. Decrease = No effect + Decrease
10. Receive cash from customers in (4) above. Increase + Decrease = No effect + No effect
11. Pay for supplies purchased in (2) above. Decrease = Decrease + No effect
Explanation:
The accounting equation states that Assets are equal to Liabilities Plus Equity. This equation remains true for every business transaction, which affects two accounts on either side of the equation. This keeps the equation in equilibrium or balance with each given transaction. It is from this equation that the double entry system of accounting was developed and is based.
The impact whether the transaction increases, decreases, or has no effect on assets, liabilities, and stockholders' equity is explained below:
1. Issue common stock in exchange for cash. Increase= No effect + Increase
2. Purchase business supplies on account. Increase = Increase + No effect
3. Pay for legal services for the current month. Decrease = No effect + Decrease
4. Provide services to customers on account. Increase = No effect + Increase
5. Pay employee salaries for the current month. Decrease = No effect + Decrease
6. Provide services to customers for cash. Increase = No effect + Increase
7. Pay for advertising for the current month. Decrease = No effect + Decrease
8. Repay loan from the bank. Decrease = Decrease + No effect
9. Pay dividends to stockholders. Decrease = No effect + Decrease
10. Receive cash from customers in (4) above. Increase + Decrease = No effect + No effect
11. Pay for supplies purchased in (2) above. Decrease = Decrease + No effect
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The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.80 on December 31, 20Y2.
Marshall Inc.
Comparative Retained Earnings Statement
For the Years Ended December 31, 20Y2 and 20Y1
1 20Y2 20Y1
2 Retained earnings, January 1 $3,704,000.00 $3,264,000.00
3 Net income 600,000.00 550,000.00
4 Total $4,304,000.00 $3,814,000.00
5 Dividends:
6 On preferred stock $10,000.00 $10,000.00
7 On common stock 100,000.00 100,000.00
8 Total dividends $110,000.00 $110,000.00
9 Retained earnings, December 31 $4,194,000.00 $3,704,000.00
Marshall Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
1 20Y2 20Y1
2 Sales $10,850,000.00 $10,000,000.00
3 Cost of goods sold 6,000,000.00 5,450,000.00
4 Gross profit $4,850,000.00 $4,550,000.00
5 Selling expenses $2,170,000.00 $2,000,000.00
6 Administrative expenses 1,627,500.00 1,500,000.00
7 Total operating expenses $3,797,500.00 $3,500,000.00
8 Income from operations $1,052,500.00 $1,050,000.00
9 Other revenue 99,500.00 20,000.00
10 $1,152,000.00 $1,070,000.00
11 Other expense (interest) 132,000.00 120,000.00
12 Income before income tax $1,020,000.00 $950,000.00
13 Income tax expense 420,000.00 400,000.00
14 Net income $600,000.00 $550,000.00
Marshall Inc.
Comparative Balance Sheet December 31, 20Y2 and 20Y1
1 20Y2 20Y1
2 Assets
3 Current assets:
4 Cash $1,050,000.00 $950,000.00
5 Marketable securities 301,000.00 420,000.00
6 Accounts receivable (net) 585,000.00 500,000.00
7 Inventories 420,000.00 380,000.00
8 Prepaid expenses 108,000.00 20,000.00
9 Total current assets $2,464,000.00 $2,270,000.00
10 Long-term investments 800,000.00 800,000.00
11 Property, plant, and equipment (net) 5,760,000.00 5,184,000.00
12 Total assets $9,024,000.00 $8,254,000.00
13 Liabilities
14 Current liabilities $880,000.00 $800,000.00
15 Long-term liabilities:
16 Mortgage note payable, 6% $200,000.00 $0.00
17 Bonds payable, 4% 3,000,000.00 3,000,000.00
18 Total long-term liabilities $3,200,000.00 $3,000,000.00
19 Total liabilities $4,080,000.00 $3,800,000.00
20 Stockholders' Equity
21 Preferred 4% stock, $5 par $250,000.00 $250,000.00
22 Common stock, $5 par 500,000.00 500,000.00
23 Retained earnings 4,194,000.00 3,704,000.00
24 Total stockholders' equity $4,944,000.00 $4,454,000.00
25 Total liabilities and stockholders' equity $9,024,000.00 $8,254,000.00
Determine the following measures for 20Y2 round to one decimal place, including percentages, except for pre-share amounts):
1. Working Capital
2. Current ratio
3. Quick ratio
4. Accounts receivable turnover
5. Number of days' sales in receivables
6. Inventory turnover
7. Number of days' sales in inventory
8. Ratio of fixed assets to long-term liabilities
9. Ratio of liabilities to stockholders' equity
10. Times interest earned
11. Asset turnover
12. Return on total assets
13. Return on stockholders' equity
14. Return on common stockholders' equity
15. Earnings per share on common stock
16. Price-earnings ratio
17. Dividends per share of common stock
18. Dividend yield
Answer:
Marshall Inc.
Ratios:
1. Working Capital = Current assets - Current liabilities
= $2,464,000 - 880,000 = $1,584,000
2. Current ratio = Current Assets/Current Liabilities
= $2,464,000/880,000 = 2.8 : 1
3. Quick ratio = (Current Assets - Inventory)/Current Liabilities
= ($2,464,000 - 420,000)/880,000
= $2,044,000/880,000 = 2.3 : 1
4. Accounts receivable turnover = Average Accounts Receivable / Net Sales
= $542,500/10,850,000 = 0.05 times
Average receivables = ($585,000 + 500,000)/2 = $542,500
5. Number of days' sales in receivables = Days in the year/Accounts receivable turnover
= 365/0.05 = 7,300 days
6. Inventory turnover = Cost of goods sold / Average Inventory
= $6,000,000/400,000 = 15 times
Average Inventory = (Beginning inventory + Ending inventory) / 2
= ($420,000 + 380,000)/2 = $400,000
7. Number of days' sales in inventory = Number of days in a year divided by Inventory turnover ratio = 365 /15 = 24.3 days
8. Ratio of fixed assets to long-term liabilities = Fixed Assets/Long-term Liabilities = $5,760,000/3,200,000 = 1.8 : 1
9. Ratio of liabilities to stockholders' equity = Total Liabilities/Stockholders' equity = $4,080,000 / $4,944,000 = 0.83 or 80%
10. Times interest earned = Earnings before Interest and Taxes / Interest Expense = $1,152,000/132,000 = 8.7 times
11. Asset turnover = Sales Revenue / Average Total Assets
= $6,000,000/$8,639,000 = 0.7 or 70%
Average Total Assets = Beginning total assets + Ending total assets, all divided by 2
= ($9,024,000 + 8,254,000)/2 = $8,639,000
12. Return on total assets = EBIT/Average Total Assets
= $1,152,000/$8,639,000 = 13%
13. Return on stockholders' equity = Earnings after tax/Shareholders' equity = $600,000/$4,944,000 x 100 = 12%
14. Return on common stockholders' equity = EAT/Common Shareholders' Equity = $600,000 - 10,000/($4,944,000 - 250,000) x 100
= 12.6%
15. Earnings per share (EPS) on common stock = Net Income divided by the number of outstanding common shares = $600,000/100,000 = $6 per share.
16. Price-earnings ratio = Market price of shares/EPS = $82.80/$6 = 13.8
17. Dividends per share of common stock = Dividends/Common Stock shares = $100,000/100,000 shares = $1
18. Dividend yield = Dividend per share / Market price per share = $1/$82.80 = 1.2%
Explanation:
1. Working Capital is the difference between current assets and current liabilities.
2. Current ratio is a liquidity ratio of current assets over current liabilities.
3. Quick ratio is the current ratio modified with the subtraction of inventory.
4. Accounts receivable turnover is an accounting measure that shows how quickly customers pay for the credit sales.
5. Number of days' sales in receivables measures the number of days it takes a company to collect its credit sales. It is a function of the number of days in a year divided by the accounts receivable turnover ratio.
6. Inventory turnover is a ratio showing how many times a company has sold and replaced its inventory during a given period.
7. Number of days' sales in inventory is the result of dividing the days in the period by the inventory turnover formula. It shows the number of days inventory is held before being sold.
8. Ratio of fixed assets to long-term liabilities shows how much of long-term liabilities is represented in fixed assets.
9. Ratio of liabilities to stockholders' equity is a financial leverage ratio that shows the relationship between liabilities and stockholders' equity.
10. Times interest earned (TIE) ratio measures the ability of a company to settle its debt obligations based on its current income. To calculate the TIE number, take the Earnings before interest and taxes (EBIT) and divide by the total interest expense.
11. Asset turnover is a ratio of sales over average assets, which shows company's efficiency in using assets to generate sales.
12. Return on total assets measures the percentage of earnings before interest and taxes over the average total assets. It can be obtained by multiplying profit margin with total asset turnover.
13. Return on stockholders' equity is a financial ratio that is calculated by dividing a company's earnings after taxes (EAT) by the total shareholders' equity, and then multiplying the result by 100.
14. Return on common stockholders' equity measures the ratio of earnings after taxes less Preferred Stock Dividend over the common shareholders' equity.
15. Earnings per share on common stock is the ratio of earnings divided by the number of outstanding common stock shares. It measures the earnings per share that the company has generated for the common stockholders.
16. Price-earnings ratio is a ratio of the market price of shares over the earnings per share. It is used to determine if a company's share is overvalued or undervalued.
17. Dividends per share of common stock is the dividend paid divided by the number of outstanding common stock.
18. Dividend yield is the ratio of the dividend per share over the market price per share.
Boatler Used Cadillac Co. requires $890,000 in financing over the next two years. The firm can borrow the funds for two years at 11 percent interest per year. Ms. Boatler decides to do forecasting and predicts that if she utilizes short-term financing instead, she will pay 7.25 percent interest in the first year and 12.55 percent interest in the second year. Assume interest is paid in full at the end of each year.
A. Determine the lot al two-year interest cost under each plan.
Interest Cost
Long term fixed-rate plan
Short term variable-rate
B. Which plan is less costly?
1. Long term fixed-rate plan
2. Short-term variable-rate plan
Answer:
A. Total two-year interest cost under long term fixed-rate plan is $195,800; while total two-year interest cost under short term variable-rate is $176,220.
B. Short-term variable-rate plan is less costly.
Explanation:
A. Determine the total two-year interest cost under each plan.
This can be determined for each of the plan as follows:
For Long term fixed-rate plan
Total two-year interest cost under long term fixed-rate plan = Amount required * Interest rate per year * Number of years = $890,000 * 11% * 2 = $195,800
For Short term variable-rate
First year interest cost under short term variable-rate = Amount required * First year interest rate = $890,000 * 7.25% = $64,525
Second year interest cost under short term variable-rate = Amount required * Second year interest rate = $890,000 * 12.55% = $111,695
Total two-year interest cost under short term variable-rate = First year interest cost + Second year interest cost = $64,525 + $111,695 = $176,220
Therefore, we have:
Interest Cost
Long term fixed-rate plan $195,800
Short term variable-rate $176,220
B. Which plan is less costly?
Since the total two-year interest cost under short term variable-rate of $176,220 is less than $195,8000 total two-year interest cost under long term fixed-rate plan, the Short-term variable-rate plan is therefore less costly.
Which of the following represented a business unit that shows rapid growth but poor profit margins?
a. Star.
b. Cash cow.
c. Problem child.
d. Loss leader.
e. Dog.
Answer:
Option B
Explanation:
In simple words, A cash cow refers to one of the 4 dimensions (quadrants) throughout the growth-share vector, BCG matrix describing a business, line of products, or enterprise with significant market share inside a mature field.
A cash cow is described as a reference to a company, commodity, or asset that will generate continuous investment returns throughout its lifetime until it is purchased and paying off.
The term refers to a company that is equally low-maintenance too. Modern days cash cows need minimal capital investment to have consistently sufficient cash flow that can be distributed within a company to other departments. They 're lower - risk projects, potentially high profits.
"Hindi Co. started 3,000 units during the period. Its beginning inventory is 500 units one-fourth complete as to conversion costs and 100% complete as to materials costs. Its ending inventory is 300 units one-fifth complete as to conversion costs and 100% complete as to materials costs. How many units were transferred out this period
Answer: 3,200 units
Explanation:
The Units transferred out during the year will be those that were inherited from the previous period as well as those started during the year less the closing inventory still in progress.
The formula to calculate the units is therefore;
= Opening inventory + Started during the year - Closing Inventory
= 500 + 3,000 - 300
= 3,200 units
On December 31, 2018, Wintergreen, Inc., issued $150,000 of 7 percent, 10-year bonds at a price of 93.25. Wintergreen received $139,875 when it issued the bonds (or $150,000 × .9325). After recording the related entry, Bonds Payable had a balance of $150,000 and Discounts on Bonds Payable had a balance of $10,125. Wintergreen uses the straight-line bond amortization method. The first semiannual interest payment was made on June 30, 2019.Complete the necessary journal entry for June 30, 2019 by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.
Answer: Please see explanation column
Explanation:
Journal entry for June 30
Date Amount Debit Credit
June 30 Bond Interest expense $5,756
Discount on Bonds Payable $506
Cash $5,250
Calculation:
Cash = 150,000 x 7%x 6/12 = $5,250
10-year bonds pay interest semiannually indicates 20 interest periods
Straight line Amortization of the discount =$10,125/20 = $506
Bond interest expense= Interest + amortization on discount
Interest = $150,000 x 7% x 6/12 = $5,250 + 506= $5,756.
The difference between actual hours times the actual pay rate and actual hours times the standard pay rate is the labor _________________ variance.
Answer:
"Labor price variance " is the correct choice.
Explanation:
The variation throughout the labor rate represents the distance between real as well as anticipated labor costs. These were measured by taking the difference, based upon the number of additional hourly wages, between some of the real labor amount charged as well as the minimum amount.Absolute variation in the labor rate is equivalent to absolute variation in the price of the commodity.The open-ended question post-project evaluation meeting should contain an opportunity to talk about possible additional projects and assume permission to use the customer as a reference with potential customers.
a. True
b. False
Answer:
B. False.
Explanation:
In the rightful manner, this meeting type is said to typically happen in different formats though most of it happens to appear in different video calls, conference or zoom which is popular in recent times. This meeting should contain or entertain the ability for opportunity talks which could yield possibilities in adding works that can benefit the parties involved. But in the case above, assuming the permission to use the customer as a reference with potential customers is totally out of the line so it is said to not totally fall in as post project evaluation.
"An 8% corporate bond with 20 years left to maturity is currently trading at 120. The bond is callable in 4 years at 104. If a client buys the bond and then the issuer calls it in 4 years, the yield to call will be:"
Answer:
The yield to call will be 6%.
Explanation:
Yield to call (YTC) refers to the return a bondholder will receive in the event that he holds the bond until the call date which is sometime before the maturity date.
The YTC can be calculated using the following formula:
YTC = (C + (CP - P) / t) / ((CP + P) / 2) .......................... (1)
Where:
YTC = YTW = yield to call or yield to worst = ?
C = Annual coupon interest payment = Bond interest rate * Bond face value = 8% * $100 = $8.00
CP = Callable price of the bond = $104
P = Current price of the bond = $120
t = time in years remaining until the call date = 20 - 4 = 16 years
Substituting the values into equation (1), we have:
YTC = ($8 + ($104 - $120) / 16) / (($104 + $120) / 2)
YTC = $7 / $112 = 0.06, or 6%.
Therefore, the yield to call will be 6%.
Rollins Corporation is estimating its WACC. Its target capital structure is 20 percent debt, 20 percent preferred stock, and 60 percent common equity. Its bonds have a 12 percent coupon, paid semiannually, a current maturity of 20 years, and sell for $1,000. The firm could sell, at par, $100 preferred stock which pays a 12 percent annual dividend, but flotation costs of 5 percent would be incurred. Rollins' beta is 1.2, the risk-free rate is 10 percent, and the market risk premium is 5 percent. Rollins is a constant-growth firm which just paid a dividend of $2.00, sells for $27.00 per share, and has a growth rate of 8 percent. The firm's policy is to use a risk premium of 4 percentage points when using the bond-yield-plus-risk-premium method to find rs. The firm's marginal tax rate is 40 percent. What is Rollins' cost of preferred stock? Select one: a. 10.0% b. 11.0% c. 12.0% d. 12.6% e. 13.2%
Answer:
d. 12.6%
Explanation:
Rollins Corporation will receive $100 - ($100 x 5% flotation costs) = $100 - $5 = $95 net for each preferred stock issued
Since it will have to pay $12 on preferred dividends, the cost of preferred stocks = preferred dividend per preferred stock / net amount received per preferred stock = $12 / $95 = 0.1263 = 12.6%
Flotation costs are costs that a corporation incurs when issuing new stocks or bonds, and they include legal fees, underwriting fees, etc.
Answer:
d. 12.6
Explanation:
Dudley is a manager at the SuperCuts franchise. He has had to fire two employees because they were treating walk-in customers with disdain and thus turning away business. Once those employees were gone, he trained new employees on how to greet customers. Business has been improving and he has realized how important personnel are for a retail business. What role do the personnel play at his SuperCuts franchise?
Answer:
they are the interface between the brand and the customer
Explanation:
Based on the information provided within the question it can be said that the personnel in SuperCuts are the interface between the brand and the customer. The personnel are the ones that interact on a daily basis with the shoppers and provide all the information that they need regarding the SuperCut's brand in order to generate sales.
Which of the following products is most likely to be produced in a process operations system?
A. Airplanes
B. Cereal Bridges
C. Designer bridal gowns
D. Custom cabinets
Answer:
Cereal
Explanation:
Process operations system which is also known as either process manufacturing or process production can be defined as the way of producing a product in mass, by making use of mass production method and this product are often produce in a continuous flow.
Therefore CEREAL is the products that is most likely to be produced in a process operations system because the production of Cereal is mostly carried out or produce in a process operations system.
6. ABC Company announced today that it will begin paying annual dividends next year. The first dividend will be $0.10 a share. The following dividends will be $0.20, $0.30, $0.40, and $0.50 a share annually for the following 4 years, respectively. After that, dividends are projected to increase by 2.0 percent per year. How much are you willing to pay to buy one share of this stock today if your desired rate of return is 8.0 percent
Answer:
The amount willing to pay to buy one share is $6.92.
Explanation:
The announcement by company to pay annual dividend = $0.10
2nd year divident amount = $0.20
3rd year divident amount = $0.30
4th year divident amount = $0.40
5th-year divident amount = $0.50
The increase in dividend = 2 percent.
The desired rate of return = 8%
Value after year 5 = (D5 × Growth rate) / (Required rate-Growth rate)
=(0.5 × 1.02) / (0.08-0.02)
=8.5
Therefore, the current value = Future dividend and value × Present value of discounting factor(rate%,time period)
=0.1/1.08 + 0.2/1.08^2 + 0.3/1.08^3 + 0.4/1.08^4 + 0.5/1.08^5 + 8.5/1.08^5
=$6.92.
During 2021, Farewell Inc. had 500,000 shares of common stock and 50,000 shares of 6% cumulative preferred stock outstanding. The preferred stock has a par value of $100 per share. Farewell did not declare or pay any dividends during 2021. Farewell's net income for the year ended December 31, 2021, was $2.5 million. The income tax rate is 25%. Farewell granted 10,000 stock options to its executives on January 1 of this year. Each option gives its holder the right to buy 20 shares of common stock at an exercise price of $29 per share. The options vest after one year. The market price of the common stock averaged $30 per share during 2021.
What is Farewell's diluted earnings per share for 2021, rounded to the nearest cent?
A) $3.14.
B) $4.90.
C) $4.34.
D) Cannot determine from the given information.
Blue Cab Company had 50,000 shares of common stock outstanding on January 1, 2021. On April 1, 2021, the company issued 20,000 shares of common stock. The company had outstanding fully vested incentive stock options for 5,000 shares exercisable at $10 that had not been exercised by its executives. The end-of-year market price of common stock was $13 while the average price for the year was $12. The company reported net income in the amount of $269,915 for 2021. What is the diluted earnings per share (rounded)?
A) $3.60.
B) $4.10.
C) $4.50.
D) $3.81.
Answer:
a) c. $4.34
b) b. $4.10
Explanation:
a) Find Farewell's diluted earnings per share for 2021.
Use the formula below:
Diluted EPS = (Net income after tax - preferred dividend) / diluted common stock
[tex]= \frac{2,500,000 - (50,000*100*0.06)}{500,000+(200,000 - ((29*10,000)/30))}[/tex]
[tex] = \frac{2,500,000 - 300,000}{500,000 + (200,000 - 193,333)} [/tex]
[tex] = \frac{220,000}{506,667} [/tex]
[tex] = 4.34 [/tex]
Diluted EPS = $4.34 per share
b) stock options = 5,000
Value in current shares = 500,000/12 = $4,167
Diluted shares = 5000 - 4167 = 833
Use the formula below to find the diluted earnings per share:
Diluted EPS = Net income/share outstanding
[tex]= \frac{269,915}{50,000 +(20,000-5,000) + 833)}[/tex]
[tex] = \frac{269,915}{50,000 + 15,000 + 833} [/tex]
[tex] = \frac{269,915}{65,833} [/tex]
[tex] = 4.10 [/tex]
Diluted EPS = $4.10 per share
Consider the following hypothetical data for an open economy (in millions):
Assets owned inside the U.S. by U.S. citizens = $140, 000140,000
Assets owned outside the U.S. by U.S. citizens = $23,35723,357
Assets owned outside the U.S. by foreign citizens = $110,000110,000
Assets owned inside the U.S. by foreign citizens = $22,78622,786
The value of the International Investment Position (IIP) of the U.S. is__________ $ nothing million.
Answer: $571 million
Explanation:
International Investment Position (IIP) is an Economic measure that is calculated to see the assets owned by the citizens of a country outside the country versus the assets owned by foreigners in the country in question. It is informally referred to as a nation's Balance Sheet with other countries.
It is calculated by;
Value of the International Investment Position of the US = Assets owned outside the US by the US citizens - Assets owned inside the US for the foreign citizens
= 23,357 - 22,786
= $571 million
Dividends are expected to grow at 25% per year during the next three years, 15% over the following year and then 6% per year indefinitely. The required return on this stock is 9% and the stock currently sells for $79 per share. What is the projected dividend for the second year
Answer:
$1.56
Explanation:
Lets assume the dividend paid for year zero is $1. The growth for the first 3 years is 25% which is given in the question. Now we will find the value of the Projected dividend for year 2 using the compounding formula, as under:
The Projected dividend for year 1 = $1 * (1 + 25%)^ 2 years = $1.56