Answers
Answer: c. 5 bolts.
Explanation:
From the graph we see that the opportunity cost of making 80 nails is 20 bolts.
Opportunity cost of making 1 nail is;
80/80 : 20/80
1 : ¼
If 1 nail has an opportunity cost of ¼ bolts then making 20 extra nails would cost;
= 20 * ¼
= 5 bolts.
Related Questions
On September 1, a company established a petty cash fund of $230. On September 10, the petty cash fund was replenished when there was $81 remaining and there were petty cash receipts for supplies, $53, and postage, $80. On September 15, the petty cash fund was increased to $320.
Required:
Prepare the journal entries, if any, required on September 1, September 10, and September 15. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answers
Answer:
September 1, petty cash fund is established
Dr Petty cash fund 230
Cr Cash 230
September 10, petty cash expenses
Dr Supplies expense 53
Dr Postage expense 80
Dr Cash short and over 16
Cr Petty cash fund 149
September 10, petty cash is replenished
Dr Petty cash fund 149
Cr Cash 149
September 15, petty cash fund in increased
Dr Petty cash fund 90
Cr Cash 90
Kerch Co. had beginning net fixed assets of $216,510, ending net fixed assets of $211,680, and depreciation of $40,435. During the year, the company sold fixed assets with a book value of $7,966. How much did the company purchase in new fixed assets?
Answers
Answer:
$43,571
Explanation:
The computation of the purchase in a new fixed asset is shown below:
Beginning net fixed assets $216,510
Less: depreciation expenses -$40,435
Net fixed assets -$176,075
Less: book value of sold assets -$7,966
Net fixed assets $168,109
Closing net fixed assets $211,680
purchases of net assets during the year $43,571 ($211,680 - $168,109)
We simply applied the above format
Ionic Charge, is a newly organized manufacturing business that plans to manufacture and sell 60,000 units per year of a new product. The following estimates have been made of the company’s costs and expenses (other than income taxes).
Fixed Variable per Unit
Manufacturing costs:
Direct materials $25
Direct labor $15
Manufacturing overhead $500,000 $8
Period costs:
Selling expenses $2
Administrative expenses $300,000
Totals $800,000 $50
Required:
a. What should the company establish as the sales price per unit if it sets a target of earning an operating income of $700,000 by producing and selling 60,000 units during the first year of operations? (Hint: First compute the required contribution margin per unit.)
b. At the unit sales price computed in part a, how many units must the company produce and sell to break even? (Assume all units produced are sold.)
c. What will be the margin of safety (in dollars) if the company produces and sells 60,000 units at the sales price computed in part a?
Answers
Answer:
a. What should the company establish as the sales price per unit if it sets a target of earning an operating income of $700,000 by producing and selling 60,000 units during the first year of operations?
$64.50b. At the unit sales price computed in part a, how many units must the company produce and sell to break even?
55,173 unitsc. What will be the margin of safety (in dollars) if the company produces and sells 60,000 units at the sales price computed in part a?
$311,341.50Explanation:
variable costs per unit:
direct materials $25
direct labor $15
manufacturing overhead $8
selling expenses $2
total $50
fixed costs per unit:
manufacturing overhead $500,000
administrative expenses $300,000
total $800,000
assuming the company actually produces and sells the 60,000 units
units sold = (fixed costs + expected profits) / contribution margin
60,000 = $870,000 / contribution margin
contribution margin = $870,000 / 60,000 = $14.50
contribution margin = sales price - variable costs
$14.50 = sales price - $50
sales price = $50 + $14.50 = $64.50
break even point = fixed costs / contribution margin = $800,000 / $14.50 = 55,172.41 ≈ 55,173 units
margin of safety = current sales - break even point = (60,000 x $64.50) - (55,173 x $64.50) = $311,341.50
Because ________ often make it possible for young firms to provide services that are equivalent or superior to an incumbent, a new entrant may be able to serve a market more effectively, with more personalized services and greater attention to product details.
Answers
Answer:
B. Digital Technologies
Explanation:
The term that goes in the blank line is Digital Technologies. These technologies are various different electronic tools, systems, devices, and resources that allow the firm to generate, store, and process data. These devices and systems give the firms the ability to compete and have an edge over the bigger firms of the industry by using them in a unique and more effective way towards accomplishing their end-goal and improving the customer's experience.
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:
Answers
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
Country Kitchen's cost of equity is 19.8 percent and its pretax cost of debt is 8.9 percent. What is the firm's weighted average cost of capital if its debt-equity ratio is 0.66 and the tax rate is 46 percent
Answers
Answer:
33.17%
Explanation:
WACC = (D/E) rd (1 - tax rate) + (E/D) re
(D/E) = Debt to equity ratio
rd = pretax cost of debt
(E/D) = equity to debt ratio
re = cost of equity
0.66 x 8.9 x 0.54 + 19.8 x 1.52 = 3.17 + 30 = 33.17%
Which of the following accounting concepts states that an accounting transaction should be supported by sufficient evidence to allow two or more qualified individuals to arrive at similar measures
a. Matching
b. Stable monetary unit
c. Verifiability
d. Periodicty
Answers
Answer:
The correct answer is the option C: Verifiability.
Explanation:
To begin with, the accounting concept of "Verifiability" indicates that the accounts of a company are verifiable in the cases when those accounts are reproducible so that indicates that given the same data and assumpitions it is understandable that an independent accountant can produce the same result the company actually did. Therefore that the verifiability is the concept that states that an accounting transaction should be supported by sufficient evidence to allow two or more qualified accountants to arrive at similar measures as it said before.
The accounting concepts states that an accounting transaction should be option c. Verifiability
What is Verifiability?It represents that the accounts of a company are verifiable at the time when those accounts are produced again in order to provide the same data and assumption. So, that verifiability is the concept that states that an accounting transaction should be supported by enough evidence to permit two or more qualified accountants.
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If P represents the price of goods and services measured in money, then 1/P is the value of money measured in terms of goods and services True False
Answers
Answer:
The answer is True
Explanation:
There is an inverse relationship between the price level and value of money (also known as purchasing power). An increase in the price level is the same as an decrease in the value of money.
As the price level decreases money is able to buy more goods and services and as the price level increases, money is able to buy less goods and services. inflation decrease the value of money or consumers' purchasing power.
Assume that the U.S. one-year interest rate is 3 percent and the one-year interest rate on Australian dollars is 6 percent. The U.S. expected annual inflation is 5 percent, while the Australian inflation is expected to be 7 percent. You have $100,000 to invest for one year and you believe that PPP holds. The spot exchange rate of an Australian dollar is $0.689. What will be the yield on your investment if you invest in the Australian market
Answers
Answer:
4%
Explanation:
you invest $100,000 today and purchase A$145,137.88
in one year, you will have A$152,394.78
since the PPP stands, the spot rate in one year should be:
0.703 US$ per A$ (since Australia's inflation rate is 2% higher than the US inflation rate, the Australian dollar will depreciate by 2%)
with your A$152,394.78, you can purchase $107,133.53
if you invested in the US instead, you would have $103,000
this means that your Australian investment yielded ($107,133.53 / $103,000) - 1 = 0.04 or 4%
Depreciation by Three Methods; Partial Years Perdue Company purchased equipment on April 1 for $86,670. The equlpment was expected to have a useful life of three years, or 6,480 operating hours, and a residual value of $2,430. The equipment was used for 1,200 hours during Year 1, 2,300 hours in Year 2, 1,900 hours in Year 3, and 1,080 hours in Year 4 Required:Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) units-of-output method, and (c) the double-declining-balance method. r A. Straight-line method Year AmountYear 1 21,060 Year 2 28,080Year 3 28,080Year 4 7,020 B. Units-of-output method Year Amount Year 1 15,600Year 2 29,900Year 3 24,700
Answers
Answer:
purchase cost $86,670
useful life 3 years, 6,480 operating hours
residual value $2,430
a. the straight-line method
depreciation expense per year = ($86,670 - $2,430) / 3 = $28,080
depreciation year 1 = $28,080 x 9/12 = $21,060 depreciation year 2 = $28,080 depreciation year 3 = $28,080 depreciation year 4 = $28,080 x 3/12 = $7,020b. units-of-output method.
depreciation per hour = ($86,670 - $2,430) / 6,480 = $13
depreciation year 1 = 1,200 x $13 = $15,600 depreciation year 2 = 2,300 x $13 = $29,900 depreciation year 3 = 1,900 x $13 = $24,700 depreciation year 4 = 1,080 x $13 = $14,040c. the double-declining-balance method.
depreciation year 1 = 2 x 1/3 x $86,670 x 9/12 = $43,335 depreciation year 2 = $14,445 + (2 x 1/3 x $28,890 x 9/12) = $28,090 depreciation year 3 = $4,815 + (2 x 1/3 x $9,630 x 9/12) = $9,630 depreciation year 4 = $1,605 + ($3,210 - $2,430) = $2,385The accourtant for Mega Stores, Inc, should have recorded the following correct entry Jan 15 Notes Receivable 243 Equipment 243he misunderstood the transaction and recorded an incorrect entry, Which of the following w rong entries pertaining to this transaction could have been detected as erroneous when using a trial balance? A) Jan 15 Equipment 243 Notes Receivable 243B) Jan 15 Notes Payable 243 Cash 243C) Jan 15 Notes Receivable 243 Equipment 234 D) Jan 15 Notes Receivable 234 Equipment 234
Answers
Answer:
C) Jan 15 Notes Receivable 243 Equipment 234
Explanation:
The trial balance is a summary of all the balances of the various transactions used by an entity. It is expected that the credits should equal the debits in a trial balance as the saying goes, "for every credit, there must be a corresponding debit"
A review of the options given shows that option C) Jan 15 Notes Receivable 243 Equipment 234 would show an error detectible by a trial balance as the credit does not correspond to the debit.
Assume for a perfectly competitive firm, the market price of one box of tissues is $2. What is the marginal revenue when sales increase from 100 boxes to 200 boxes?
Answers
Answer:
The marginal revenue = $2
Explanation:
Firstly we calculate the value in dollars for the number of boxes sold
For 100 boxes, we have 100 * 2 = $200
For 200 boxes, we have 200 * 2 = $400
Mathematically, the marginal revenue = (cost of 200 boxes- cost of 100 boxes)/difference in quantity
= (400-200)/(200-100) = 200/100 = $2
Thus affirms the fact that for a perfectly competitive firm, marginal revenue MR = P (price)
Look at the tables below, which show, respectively, the willingness to pay and willingness to accept of buyers and sellers of bags of oranges. For the following questions, assume that the equilibrium price and quantity will depend on the indicated changes in supply and demand. Assume that the only market participants are those listed by name in the two tables.
Person Max Actual
bob 13 8
barly 12 8
bill 11 8
bart 10 8
brent 9 8
betty 8 8
Person Minimum Actual
carlos 3 8
courtney 4 8
chunk 5 8
cindy 6 8
craig 7 8
chad 8 8
Required:
a. Given that the equilibrium price is $8, what is the equilibrium quantity given the data displayed in the two tables?
b. What if, instead of bags of oranges, the data in the two tables dealt with a public good like fireworks displays? If all the buyers free ride, what will be the quantity supplied by private sellers?
c. Assume that we are back to talking about bags of oranges (a private good), but that the government has decided that tossed orange peels impose a negative externality on the public that must be rectified by imposing a $2-per-bag tax on sellers. What is the new equilibrium price?
Answers
Answer and Explanation:
a. The equilibrium quantity for the given two tables is
As if the equilibrium price is $8 so the six consumers i.e bob, barly,bill,bart, brent, betty) are paying more than the equilibrium price and on the other hand six producers (carlos, courtney, chunk, cindy, craig, chad) are accepted the price as the equilibrium price is more than the accepted price
Hence, the equilibrium quantity is 6
b. Now if all the buyers are free to ride so the quantity supplied by private sellers is 0 as the minimum accepted price is more than the willingness price as producers is not able to produced
c. At imposing $2 per bag tax on sellers, the new equilibrium price is $9 as the price rise to $9
Schwiesow Corporation has provided the following information:_________. Cost per Unit Cost per PeriodDirect materials $ 7.05 Direct labor $ 3.50 Variable manufacturing overhead $ 1.65 Fixed manufacturing overhead $ 11,000Sales commissions $ 1.00 Variable administrative expense $ 0.40 Fixed selling and administrative expense $ 5,500For financial reporting purposes, the total amount of product costs incurred to make 5,000 units is closest to:A. $72,000B. $61,000C. $11,000D. $77,000
Answers
Answer:
Total product cost= $72,000
Explanation:
Giving the following information:
Direct materials $7.05
Direct labor $3.50
Variable manufacturing overhead $1.65
Total unitary variable cost= $12.2
Fixed manufacturing overhead $11,000
The product costs are the sum of direct material, direct labor, and total manufacturing overhead:
Total product cost= 5,000*12.2 + 11,000
Total product cost= $72,000
A corporation has operating income of $75,000. What is its taxable income if it receives a $20,000 dividend from another corporation in which it has the following ownership?
a. 10% is:
b. 65% is:
c. 90% is:
Answers
Answer:
Taxable income is $ 85000, $82000, and $75000
Explanation:
Given operating income = $75000
The dividend received from other corporations = $20000
Dividend received is taxable as, if the percentage of ownership is less than 20 percent then the deduction is 50 percent. If between 20 percent to 80 percent then 65 percent deduction. If more than 80 percent then 100 percent deduction.
a.10 percent ownership.
Taxable income = 75000 + 20000(1 – 50%) = 85000
b.65 percent ownership.
Taxable income = 75000 + 20000(1 – 65%) = 82000
c.90 percent ownership.
Taxable income = 75000 + 20000(1 – 100%) = 75000
Indicate whether the following actions would increase, decrease, or not affect Indigo Inc.'s total assets, liabilities, and stockholders' equity:
Question Assets Liabilities Stockholders Equity
1. Authorizing and issuing stock certificates in a stock split
2. Declaring a stock dividend
3. Issuing stock certificates for the stock dividend declared in (2)
4. Declaring a cash dividend
5. Paying the cash dividend declared in (4)
Answers
Answer:
Assets Liabilities Stockholder's Equity
1. Authorizing and issuing Not affect Not affect Not affect
stock certificates in a
stock split
2. Declaring a stock Not affect Not affect Not affect
dividend
3. Issuing stock certificates Not affect Not affect Not affect
for the stock dividend
declared in (2)
4. Declaring a cash dividend Not affect Increase Decrease
5. Paying the cash dividend Decrease Decrease Not affect
declared in (4)
26) A tenant wants to lease a building for $50,000 per year. She signs a five-year rental agreement that states that she will pay $25,000 every six months for the next five years. Draw the timeline for her rental payments, assuming she makes the first payment immediately?
Answers
Answer:
Please check the attached image for time line
Explanation:
A time orders series of event in a chronological order.
Because the tenant is paying money, it is cash outflow and thus would have a negative sign in front of it.
I hope my answer helps you
Your company is trying to decide which of the two following devices should be selected.
Device A: costs $1,000 but can save $300 annually
Device B: costs $1,350 but can save $300 the first year, but savings is increased $50 annually thereafter.
Both devices have 5-year useful life and no salvage value
a) Draw cash flow diagram for each option
b) If interest rate is 7%, which device should your company purchase?
Answers
Answer:
a) Find the attached jpeg file for the cash flow diagram
b) The company should purchase Device B.
Explanation:
a) Draw cash flow diagram for each option
A project cash flow diagram is a tool that is used to present a visual representation of the cost of a project and cash it is expected to generate over a specified period of time. On the diagram, x-axis represents the year, and y-axis represents cash out flows and/or inflows.
Note: See the attached jpeg for the cash flow diagram.
b) If interest rate is 7%, which device should your company purchase?
To determine this, we compare the Net Present Value (NPV) of the 2 devices.
Note: See the attached excel file for the calculation of the NPVs of the two devices.
From the attached excel file, we have:
NPV of Device A = $230
NPV of Device B = $262
Decision: Since $262 NPV of Device B is greater than the $230 NPV of Device A, the company should purchase Device B.
It is based on perceived characteristics such as style, fashion or peer acceptance.
Answers
Answer:
Consumer buying behavior
Explanation:
Due to various factors that affect consumer's purchase decision, crucial among them is emotional factors.Thus, many consumer marketing put more efforts in creating a stimulating discretionary buying behavior through catchy and enticing advertisement to create and increase demand.
Hence, considering that often times consumer goods are discretionary products people may want but don’t necessarily need, such as entertainment services and vacation travel, it can be concluded that CONSUMER BUYING BEHAVIOR is based on perceived characteristics such as style, fashion or peer acceptance.
A structural engineering consulting company is examining its cash flow requirements for the next 6 years. The company expects to spend $18,000 two years from now, $22,000 three years from now, and $8,000 five years from now. What is the present worth of the planned expenditures at an interest rate of 10% per year, compounded semiannually
Answers
Answer:
The total present value of the expenditures= $36,136.7
Explanation:
Giving the following information:
Cash flows:
Cf2= $18,000
Cf3= $22,000
Cf5= $8,000
We need to calculate the present value of the planned expenditures at an interest rate of 10% per year, compounded semiannually.
i= 0.10/2= 0.05
We will use the following formula on each cash flow:
PV= FV/(1+i)^n
Cf2= 18,000/(1.05^4)= $14,808.65
Cf3= 22,000/(1.05^6)= $16,416.74
Cf5= 8,000/(1.05^10)= $4,911.31
The total present value of the expenditures= $36,136.7
What do economists call the period when prices are rising even through the
quantity of goods and services remains constant?
A. Stagnation
B. Contraction
C. Disinflation
D. Inflation
Answers
Answer:
D. Inflation
Explanation:
Inflation-a general increase in prices and fall in the purchasing value of money
The situation when prices are rising even through the quantity of goods and services remains constant, is known as inflation. Thus, the correct option is D). Inflation.
What does the term inflation mean?In economics, the term inflation generally refers to the general increase in the prices of goods and services in an economy. It is the rate of increase in prices over a given period of time.
When the general price level rise in an economy, then the particular and each unit of currency buys fewer goods and services that directly means the inflation corresponds to a reduction in the purchasing power of money.
Thus, it can be said the period when prices are rising even through the quantity of goods and services remains constant, the economists call that period inflation.
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Direct Materials Purchases Budget
Langer Company produces plastic items, including plastic housings for humidifiers. Each housing requires about 15 ounces of plastic costing $0.08 per ounce. Langer molds the plastic into the proper shape. Langer has budgeted production of the housings for the next four months as follows:
Units
July 3,500
August 4,400
September 4,900
October 6,300
Inventory policy requires that sufficient plastic be in ending monthly inventory to satisfy 30% of the following month's production needs. The inventory of plastic at the beginning of July equals exactly the amount needed to satisfy the inventory policy.
Required:
Prepare a direct materials purchases budget for July, August, and September, showing purchases in units and in dollars for each month and in total.
Langer Company
Direct Materials Purchases Budget
For July, August and September
July August September Total
Units to be produced
Direct materials per unit (ounces)
Production needs
Desired ending inventory (ounces)
Total needs
Less: Beginning inventory
Direct materials to be purchased (ounces)
Cost per ounce $0.1 $0.1 $0.1 $0.1
Total purchase cost $ $ $ $
Answers
Answer:
Direct Materials Purchases Budget For July, August and September
July August September
Units to be produced 3,500 4,400 4,900
Direct materials per unit (ounces) 15 15 15
Production needs 52,500 66,000 73,500
Desired ending inventory (ounces) 19,800 22,050 28,350
Total needs 72,300 88,050 101,850
Less: Beginning inventory 0 (19,800) (22,050)
Direct materials to be purchased 72,300 68,250 79,800
Cost per ounce $0.1 $0.1 $0.1
Total purchase cost $7,230 $6,825 $7,980
Explanation:
A purchases budget budget is used to determine the quantities and cost of purchases required for resale or use in production.
Thus shows quantities that must be purchased to meet expected production plus any increase in inventory levels that might be required.
A store has 5 years remaining on its lease in a mall. Rent is $1,900 per month, 60 payments remain, and the next payment is due in 1 month. The mall's owner plans to sell the property in a year and wants rent at that time to be high so that the property will appear more valuable. Therefore, the store has been offered a "great deal" (owner's words) on a new 5-year lease. The new lease calls for no rent for 9 months, then payments of $2,600 per month for the next 51 months. The lease cannot be broken, and the store's WACC is 12% (or 1% per month).
A. Should the new lease be accepted? (Hint: Be sure to use 1% per month.)
B. If the store owner decided to bargain with the mall's owner over the new lease payment, what new lease payment would make the store owner indifferent between the new and the old leases?
C. The store owner is not sure of the 12% WACC. It could be higher or lower. At what nominal WACC would the store owner be indifferent between the two leases?
Answers
Answer:
A. Should the new lease be accepted?
No, since the PV of the new deal is much higher than the PV of the current deal.
current deal's PV = $1,900 x annuity factor (1%, 60 periods) = $1,900 x 44.40459 = $84,368.72
new deal's PV:
$2,600 x annuity factor (1%, 51 periods) = $2,600 x 39.79814 = $104,475.16
$104,475.16 / 1.01⁹ = $95,525.80
B. If the store owner decided to bargain with the mall's owner over the new lease payment, what new lease payment would make the store owner indifferent between the new and the old leases?
To determine which lease value would make the store owner indifferent between the two options, we have to determine the future value of the first 9 payments that are not paid. Then that value should be equal to the present value of the increase in rent for the next 51 months:
step 1, calculate future value of 9 payments:
F V = payment x [(1 + r)ⁿ - 1] / r
payment = $1,900 r = 1% n = 9F V = $1,900 x [(1 + 0.01)⁹ - 1] / 0.01 = $17,800
step 2, calculate the present value of the increase in rent:
PV = payment / {1 - [1 / (1 + r)ⁿ] / r}
payment = $17,800r = 1% n = 51PV = $19,674 / ({1 - [1 / (1 + 0.01)⁵¹]} / 0.01) = $17,800 / 39.8 = $447.24
the new lease payment for which the store owner would be indifferent = $1,900 + $447.24 = $2,347.24
C. The store owner is not sure of the 12% WACC. It could be higher or lower. At what nominal WACC would the store owner be indifferent between the two leases?
in order to determine at what WACC would the store owner be indifferent between both alternatives, I used an excel spreadsheet to determine the IRR of the differential amount between both lease amounts:
periods 1 - 9 = -$1,900
periods 10 - 50 = $700
this results in a monthly IRR = 2.74%
WACC = 2.74% x 12 = 32.88%
" When marketing research came back with the observation that customers were staying away from his bookstore because of a lack of services like gift cards, return policies and doing special orders, David was shocked. "We have the most generous policies of any store in the region. What more do they want
Answers
When marketing research came back with the observation that customers were staying away from his bookstore because of a lack of services like gift cards, return policies and doing special orders, David was shocked. "We have the most generous policies of any store in the region. What more do they want? Nobody asks about them or uses them." David and his bookstore are likely suffering from a:
A. knowledge gap.
B. standards gap.
C. retail policy gap.
D. delivery gap.
E. communications gap.
Answer:
A. knowledge gap.
Explanation:
Knowledge gap is term in business or marketing which describes the difference between the customers' expectations of the service and the company's perception of those expectations.
Hence, knowledge gap arises when a management fails to understand exactly the expectations of customers.
Knowledge gap could occur due to various reasons, some of which are:
1. Lack or inadequate market research.
2. Lack of management and customer interaction.
3. Inability to heed customer complaints.
Hence, in this case, David and his bookstore are likely suffering from a KNOWLEDGE GAP.
ZNet co. is a web based retail company. The company reports the following for the past year. The company's CEO believes that sales for next year will increase by 10% and both profit margin and the level of average invested assets will be the same as for the past year
1. Compute return on investment for 20172. Compute profit margin for 20173. If the CEO's forecast is correct, what will return on investment equal for 2018?4. If the CEO's forecast is correct, what will investment turnover equal for 2018?
Answers
Answer:
1. 17%
2. 42.5%
3. $2,748,900
4. 44%
Explanation:
1. Return on Investment for 2017
= [tex]\frac{Operating Income}{Average Invested Assets}[/tex]
= [tex]\frac{2,499,000}{14,700,000}[/tex]
= 17%
2. Profit Margin 2017
= [tex]\frac{Operating Income}{Sales}[/tex]
= [tex]\frac{2,499,000}{5,880,000}[/tex]
= 42.50%
3. Should the sales increase by 10% in 2018 then the new sales figure will be;
= $5,880,000 + ($5,880,000 *10%)
= $6,468,000
Profit = Sales * Profit Margin
= 6,468,000 * 42.5%
= $2,748,900
Return on Investment for 2018
= [tex]\frac{Operating Income}{Average Invested Assets}[/tex]
= [tex]\frac{2,748,900}{14,700,000}[/tex]
= 18.7%
4. Investment turnover equal for 2018
= [tex]\frac{ Sales}{Average Invested Assets}[/tex]
= [tex]\frac{6,468,000}{14,700,000}[/tex]
= 44%
A stock just paid an annual dividend of $0.40 per share. The firm expects to increase the dividend by 20 percent per year for the next four years and 3 percent per year thereafter. The discount rate is 11 percent. Which one of these is correct regarding the two-stage growth formula?
Answers
Answer:
12.78
Explanation:
Two stage dividend growth model enables us to identify dividend value by incorporating the effect of multiple growth rates. This model assumes that dividend will pass out through 2 stages of growth. In first stage the dividend grows at a constant rate to a specified time then dividend grows at a further rate.
= Do (1 + g) + D1 (1 +g) + D2 (1 +g) + D3 (1 +g) + D3 * (1 +g2) / (r - g2)
0.4 * 1.2 + 0.48 * 1.2 + 0.6 * 1.2 + 0.7 *1.2 + 0.83 * 1.03 / 11 - 3
= 12.78.
Assume the total cost of a college education will be $395,000 when your child enters college in 18 years. You presently have $65,000 to invest. What annual rate of interest must you earn on your investment to cover the cost of your child’s college education?
Answers
Answer:
8.87%
Explanation:
Calculation for the annual rate of interest you must earn on your investment to cover the cost of your child’s college education
Using this formula
FV = PV(1 + r)t
Based on the information we were told to calculate for annual rate of return, this means we would be Solving for r
r = (FV / PV)1 / t– 1
Where,
FV =$300,000
PV=$65,000
=1 / t =1/18 years
Let plug in the formula
r = ($300,000 / $65,000)1/18– 1
r=(4.6153846)^0.055555 -1
r=1.08867-1
r= 0.0887 *100
r=8.87%
Therefore the annual rate of interest you must earn on your investment to cover the cost of your child’s college education will be 8.87%
Which of the following is true regarding the effect of a debtor offering to pay a different type of payment, for example, goods instead of money, on a debt for which there is not a dispute over the amount or existence of the debt, and the creditor agrees?
A. A liquidated debt is involved, and there is an accord and satisfaction.
B. A liquidated debt is involved, and there is an accord but no satisfaction.
C. A liquidated debt is involved, and there is not a satisfaction or an accord.
D. An un-liquidated debt is involved, and there is an accord and satisfaction.
E. An un-liquidated debt is involved, and there is an accord but not satisfaction.
Answers
Answer:
D. An un-liquidated debt is involved, and there is an accord and satisfaction.
Explanation:
The impact when debtor offers to pay the different type of payment like goods instead of money, non dispute debt arises when the unliquidated debt is involved that means the amount is owed as mentioned in the contract or it is under dispute
Plus it also accord and satisfaction
Therefore the correct option is d.
At the date of the business combination, the book values of Spice’s assets and liabilities approximated fair value except for inventory, which had a fair value of, and land, which had a fair value of
Answers
Answer:
$830,000.
Explanation:
Step one: determine or Calculate the total number of assets.
Total number of assets = Retained Earnings + inventory(spice) + cash + land fair value + inventory (pumpkin)
Total number of assets = 180,000 + 25,000 + 15,000 + 95,000 + 30,000 = $345,000.
Step two : Calculate or determine the total liabilities.
Total liabilities = retained earnings + bonds payable + Account payable (pumpkin) +
Total liabilities = 180,000 + 40,000 + 10,000 = $230,000.
Step three: determine the value for the total amount of goodwill.
Total amount of Goodwill = A - B
Where A = paid consideration + non controlling interest fair value.= $(210000 + 90000) = $300, 000.
B= acquired Assets - assumed liabilities. = $(345,000 - 230,000) = $115,000.
Total amounts of Goodwill = A - B = $185,000.
Step four: determine the consolidated sheet;
185,000 + 95,000 + 65,000 + 360,000 + 30,000 + 95,000 = $830,000.
A customer wishes to place a buy order for a security that has not been registered with the SEC. The security may be purchased if the security:
Answers
Complete Question:
A customer wishes to place a buy order for a security that has not been registered with the SEC. The purchase order can be filled if the security:
A. is exempt from SEC registration
B. is traded by at least 2 market makers
C. has been trading in the market for at least 1 year
D. is sold to professional investors
Answer:
Is exempt from SEC registration
Explanation:
The Securities and Exchange Commission (SEC) is a regulatory agency that is saddled with the responsibility of regulating the capital market and ensuring investors are well protected by making sure standard rules are followed.
If a customer wishes to place a buy order for a security that has not been registered with the Securities and Exchange Commission (SEC). The security may be purchased if the security is exempt from SEC registration.
By standard, the SEC states and implore investors to purchase only securities that are registered with the securities and exchange commission (SEC) or only when an exemption is made available. If securities have been trading for about a year or is being traded by a minimum of two companies, no exemption would be given by the SEC.
Also, there isn't any exemption for securities that is sold only to professional investors.
However, investors can purchase municipal and government securities even without it being registered with the securities and exchange commission.
In a nutshell, the customer can only purchase a security that has not been registered only if it is exempted from SEC registration.