Answer:
The answer is 1.15%
Explanation:
The difference between the year of 2010 and 1980 is 30 years.
Per capita GDP for 2020 is $1,025
Per capita GDP for 1989 is $728
Formula for growth rate is:
[(Per capita GDP for 2020/Per capita GDP for 1989)^1/30] - 1
[($1,025 ÷ $728)^1/30] - 1
(1.4080^1/30) - 1
0.0115
Expressed as percentage
1.15%
Assume that you have a marginal tax rate of 28 percent, a state income tax rate of 4 percent, and have a city income tax rate of 1 percent. The tax for Social Security and Medicare is 7.65 percent. What would be the effective marginal tax rate on your last dollar of earnings
Answer: 40.65%
Explanation:
The Effective Marginal Tax rate is the amount of a person's additional dollar in income that is taken as taxes.
This means therefore, that all the taxes applicable to an additional dollar are added up to find the Effective Marginal Tax Rate.
= Marginal tax rate + State income tax rate + City income tax rate + Social Security and Medicare
= 28 + 4 + 1 + 7.65
= 40.65%
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)
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)
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
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.
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
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.
Learn more about inflation here:-
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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?
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
The Molding Department of Sheffield Company has the following production data: beginning work in process 25100 units (70% complete), started into production 475500 units, completed and transferred out 449400 units, and ending work in process 51200 units (30% complete). Assuming conversion costs are incurred uniformly during the process, the equivalent units for conversion costs are:
Answer:
Equivalent units= 464,760
Explanation:
Giving the following information:
beginning work in process 25100 units (70% complete)
completed and transferred out 449400 units
ending work in process 51200 units (30% complete).
To calculate the equivalent units for conversion costs, we need to use the following structure:
Beginning work in process = beginning inventory* %incompleted
Units started and completed = units completed - beginning WIP
Ending work in process completed= Ending WIP* %completed
=Number of equivalent units
Beginning work in process = 25,100*0.3= 7,530
Units started and completed = 449,400 - 7,530= 441,870
Ending work in process completed= 51,200*0.3= 15,360
= 464,760
When advertising a test product, should test locations in particular markets be isolated from media with a far reach, such as television?
Answer:
Yes
Explanation:
In a test scenario such as this one, the test locations should be isolated from media with a far reach, such as television. This is mainly due to the fact that if media advertising reaches areas outside the market being tested, it will eventually attract customers from outside the test population which will in term contaminate the data. This can lead to false results, such as a product selling more than it really will.
An individual has $20,000 invested in a stock with a beta of 0.4 and another $65,000 invested in a stock with a beta of 1.8. If these are the only two investments in her portfolio, what is her portfolio's beta
Answer:
Beta= 1.478
Explanation:
Giving the following information:
An individual has $20,000 invested in a stock with a beta of 0.4 and another $65,000 invested in a stock with a beta of 1.8.
To calculate the portfolio beta, we need to use the following formula:
Beta= (proportion of investment A*beta A) + (proportion of investment B*beta B)
The proportion of investment:
A= 20,000/85,000= 0.23
B= 65,000/85,000= 0.77
Beta= (0.23*0.4) + (0.77*1.8)
Beta= 1.478
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?
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%
The Polaris Company uses a job-Exercise 3-5 Journal Entries and T-accounts [LO3-1, LO3-2] The Polaris Company uses a job-order costing system. The following transactions occurred in October:order costing system. The following transactions occurred in October:
a. Raw materials purchased on account, $210,000.
b. Raw materials used in production, $189,000 ($151,200 direct materials and $37,800 indirect materials).
c. Accrued direct labor cost of $49,000 and indirect labor cost of $20,000.
d. Depreciation recorded on factory equipment, $106,000.
e. Other manufacturing overhead costs accrued during October, $130,000.
f. The company applies manufacturing overhead cost to production using a predetermined rate of $8 per machine-hour. A total of 76,400 machine-hours were used in October.
g. Jobs costing $511,000 according to their job cost sheets were completed during October and transferred to Finished Goods.
h. Jobs that had cost $452,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 34% above cost.
Required:
a. Prepare journal entries to record the transactions given above.
b. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $36,000.
Answer:
Required a
a.
Raw Materials $210,000 (debit)
Account Payable $210,000 (credit)
b.
Work In Process : Direct Materials $151,200 (debit)
Work In Process : Indirect Materials $37,800 (credit)
Raw Materials $189,000 (credit)
c.
Work In Process : Direct Labor $49,000 (debit)
Work In Process : Indirect Labor $20,000 (credit)
Salaries Payable $69,000 (credit)
d.
Work In Process : Depreciation $106,000 (debit)
Accumulated Depreciation $106,000(credit)
e.
Manufacturing Overheads $130,000 (debit)
Accounts Payable $130,000 (credit)
f.
Work In Process $611,200 (debit)
Manufacturing Overheads $611,200 (credit)
g.
Finished Goods Inventory $511,000 (debit)
Work In Process $511,000 (credit)
h.
Accounts Receivable $605,680 (debit)
Cost of Goods Sold $452,000 (debit)
Sales Revenue $605,680 (credit)
Finished Goods Inventory $452,000 (credit)
Required b.
Manufacturing Overhead T- Account
Debit :
Indirect Materials $37,800
Indirect Labor $20,000
Depreciation $106,000
Accounts Payable $130,000
Over-Applied $317,400
Totals $611,200
Credit :
Work In Process $611,200
Totals $611,200
Totals
Work in Process T- Account
Debit :
Opening Balance $36,000
Direct Materials $151,200
Direct Labor $49,000
Manufacturing Overheads $611,200
Totals $847,400
Credit :
Finished Goods Inventory $511,000
Closing Balance $336,400
Totals $847,400
Explanation:
Manufacturing Cost Accumulate in the Work In Process Account.
When Goods are completed the cost is De-recognized from Work In Process Account to Finished Goods Inventory Account.
It is from this Finished Goods Inventory Account that Cost of Sales for Goods Sold are determined.
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
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
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.
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.
A manager who possesses the skills to account for every task and resource in his department excels at which of the four management functions?
Multiple Choice Question
Answer: Controlling
Explanation:
Identified by Henry Fayol, being able to be in Control is considered a very useful management function because it involves being able to account for the resources that a manager has under them due to the constant monitoring of said resources including employee and work resources.
The end goal of the Controlling function is to ensure that the resources are being put towards the ultimate goals that the business has set forth and to make any corrections when needed.
Tobin Supplies Company expects sales next year to be $380,000. Inventory and accounts receivable will increase $100,000 to accommodate this sales level. The company has a steady profit margin of 25 percent with a 35 percent dividend payout. How much external financing will Tobin Supplies Company have to seek
Answer:
$38,250
Explanation:
Calculation for how much external financing will Tobin Supplies Company have to seek.
First step
Net Income $95,000
(Sales $380,000×25%)
Less:Dividends ($33,250)
(35%×$95,000)
Increase in retained earnings $61,750
($95,000-$33,350)
Second step
Increase in assets$100,000
Less Increase in retained earnings($61,750)
External funds needed $38,250
Therefore the amount of external financing that Tobin Supplies Company have to seek will be $38,250
For each part below, determine whether the following actions will increase or decrease productivity, and name the component of productivity that each affects.
Impact on Component of
productivity productivity
a. The local government builds a new school.
b. Teachers in the new school hold classes for young students.
c. A manufacturer installs robots on its assembly line.
d. A research team designs a more efficient system of irrigation.
e. A soft drink company discovers a new source of underground water that can be used to make its products.
f. A professor writes a new and improved economics textbook.
g. A large number of people have less access to health care.
h. A worker receives on-the-job training to be a mechanic.
The impact on productivity options are: increase or decrease
The component of productivity options are: Technology, Natural Resources, Human Capital, Physical Capital
Answer:
a - Increase productivity by adding physical capital to the economy in the present and increasing the human capital in the future.
b - Increase the productivity of the economy by adding more jobs and stimulate the education by increasing the human capital of the future.
c - Increase the productivity of the economy by adding physical capital that is basically technology.
d - Increase the productivity of the economy by adding technology.
e - Increase the productivity by adding new natural resources to the production.
f - Increase the productivity by adding education and increasing the human capital of the future.
g - Decrease the productivity by affecting directly to the human capital and its ability to produce regarding the fact that is the most important factor of production.
h - Increase the productivity by adding more education to the workers and therefore increasing the human capital capacities.
Explanation:
To begin with, all of the actions, except one, will increase the productivity of the economy due to the fact that all of them focus on a way to increase it by adding more value to the workforce or adding more physical capital to the production process of the companies. There is only one action that will decrease the productivity and it does it by affecting directly to the workforce.
One of the objectives of facility location analysis is to select a site with the lowest cost. Is suppliers one of the hidden costs?
Answer: No it is not.
Explanation:
The 2 main hidden costs to watch out for when selecting a site are;
Movement of Pre-production Material between locations.If the site is located such that the movement of goods to be manufactured from one site to the other would be quite expensive, this is a hidden cost that should be included in the analysis.
Becoming less responsive to the customer.This can happen if the site is located too far from where the Customers are primarily based. Should this happen, the distance will make responding to the customer harder and responsiveness will invariably become less.
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
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?
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
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?
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 the balance of an equity account, like Capital Stock, increases, it means that the account has been: Multiple Choice Deposited None of the choices are correct Credited Debited
Answer:
Credited
Explanation:
Equity Account increase on the credit side and decrease on the debit side.
So, when the account increased, we say it has been credited. This means further stock has been issued to new or existing owners.
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:
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
A customer calls his agent on Friday after the markets have closed and tells him to sell his position in XYZ stock when the market opens on Monday. The customer is holding the XYZ shares at his home, but is leaving tomorrow on a 2 week vacation. The customer asks the broker to come over to his house tonight to pick up the securities. Under the Uniform Securities Act, the agent should:
Answer:
Explanation:
Under the Uniform Securities Act, the agent should not take custody of the securities but should have the customer send the securities directly to the brokerage firm by registered mail or delivery service. The agent should never take custody of physical security assets since many unfortunate events can occur which may result in the loss of those assets. Therefore sending it by registered mail would be the safest and fastest option will still maintaining the responsibility of those assets to the owner.
Fast Spirit Calendars imprints calendars with college names. The company has fixed expenses of $1,095,000 each month plus variable expenses of $4.00per carton of calendars. Of the variable expense, 71%is cost of goods sold, while the remaining 29% relates to variable operating expenses. The company sells each carton of calendars for $12.00.
Requirement:
1. Compute the number of cartons of calendars that Fast Spirit Calendars must sell each month to breakeven.
2. Compute the dollar amount of monthly sales Fast Spirit Calendars needs in order to earn $312,000 in operating income.
3. Prepare the company's contribution margin income statement for June for sales of 455,000 cartons of calendars.
4. What is June's margin of safety (in dollars)? What is the operating leverage factor at this level of sales?
5. By what percentage will operating income change if July's sales volume is 11% higher?
Original volume (cartons)Add: Increase in volumeNew volume (cartons)Multiplied by: Unit contribution marginNew total contribution marginLess: Fixed expensesNew operating incomevs. Operating income before change in volumeIncrease in operating incomePercentage change
Answer and Explanation:
1. The computation of the number of cartons is shown below:-
Operating income = Sales - Variable expenses - Fixed expense
The break-even sales = Fixed expenses ÷ (Selling price - Variable cost)
= $1,095,000 ÷ (12 - 4)
= $136,875
2. The computation of the dollar amount of monthly sales is shown below:-
Contribution margin ratio = Contribution ÷ Sales
= $8 ÷ 12
= 66.6666%
Target sales in dollars = (Fixed expenses + Operating income) ÷ Contribution margin ratio
= ($1,095,000 + $312,000) ÷ 66.6666%
= $2,110,500
3. The preparation of the company's contribution margin income statement for June is shown below:-
Particulars Amount
Sales (455,000 × $12) $5,460,000
Less: Variable cost of goods sold
(4 × 71% × 455,000) -$,1292,200
Gross contribution margin $4,167,800
Less: Variable operating expenses -$527,800
(4 × 29% × 455,000)
Net contribution margin $3,640,000
Less: Fixed expenses -$1,095,000
Net operating income $2,545,000
4. The computation of June's margin of safety and operating leverage factor is shown below:-
Margin of safety (in dollars) = Total sales - Break-even sales
= $5,460,000 - ($12 × 136,875)
= $3,817,500
Operating leverage factor = Contribution margin ÷ Net operating income
= $3,640,000 ÷ $2,545,000
= 1.430
4. The computation of percentage will operating income is shown below:-
If volume rises by 11%, then operating income increase by
= 11% × 1.430
= 15.73%
Particulars Amount
Original volume of cartons $455,000
Add: Increase in volume $50,050 ($455,000 × 11%)
New volume of cartons $505,050
Unit contribution margin $8
New total contribution margin $4,040,400
($505,050 × $8)
Less: Fixed expense ($1,095,000)
New operating income $2,945,400
Operating income before
change in volume $2,545,000
Increase in operating income $400,400
Percentage change 15.73%
What seems to be the main source of conflict between supervisors and the HR department at Sands Corporation? Explain.
Answer:
The main source of conflict that occured between the supervisors and the HR departments at Sand Corporation was the division of power that occurred between the Supervisors and the HR departments
Explanation:
The main source of conflict between the supervisors and the HR departments at Sand Corporation was the division of power that occurred between the Supervisors and the HR departments reason been that the supervisors feel that the power and authority that should have been with them or vested on them for hiring, compensation, appraisal, as well as training and pay increases has been appropriated and carried out by the HR departments.
WHILE the HR managers or HR departments on the other hand want to keep the authority to themselves because they believed and known that authority is a source of power.
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?
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.
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
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.
g Pluto Company owns 80 percent of the common stock of Star Corporation. During the year, Pluto reported sales of $1,000,000, and Star reported sales of $500,000, including sales to Pluto of $80,000. The amount of sales that should be reported in the consolidated income statement for the year is:
Answer:
The answer is $1,420,000
Explanation:
Consolidated income statement is the combination of both Pluto and Star individual income statement.
Pluto sales for the year is $1,000,000
Star reported sales $500,000
Sales from star to Pluto $80,000
The amount of sales that will be reported in the consolidated income statement for the year is therefore,
$1,000,000 + $500,000 - $80,000
=$1,420,000
It is based on perceived characteristics such as style, fashion or peer acceptance.
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.
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?
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%
According to Colgate’s 2013 10-K, what factors led to lower effective non-GAAP tax rate during the year as compared to the company’s effective GAAP tax rate?
Answer:
2012 restructuring program
Venezuela devaluation charge
Business realignment and other cost saving initiatives
Charge associated with European competition law matter.
Explanation:
Colgate has been through restructuring program in 2012, which has contributed to reduced non-GAAP tax rate. There was Venezuela devaluation charge, Sale of land in Mexico and charge with European competition law matter. These all contributed to effective lower non-GAAP tax rate of the company.