Answer:
C
Explanation:
Food Shoppe Galore had the following information: Total market value of a company’s stock: $650 million Total market value of the company’s debt: $150 million What is the weighted average of the company’s debt?
Answer:
18.75%
Explanation:
Food Shoppe galore has a total market value stock of $650 million
The total market value of the company's debt is $150 million
The first step is to calculate the total market value of the company's capital
= $150,000,000 + $650,000,000
= $800,000,000
Therefore, the weighted average of the company's debt can be calculated as follows
= $150,000,000/$800,000,000
= 0.1875×100
= 18.75%
Hence the weighted average of the company's debt is 18.75%
llinois Furniture, Inc., produces all types of office furniture. The "Executive Secretary" is a chair that has been designed using ergonomics to provide comfort during long work hours. The chair sells for $130. There are 480 minutes available during the day, and the average daily demand has been 48 chairs. There are eight tasks:
Answer:
The tasks A and B will be performed together, then C, D and E will be performed one by one and then F and G will be performed to enable the final task H which will be performed last.
Total task time is 49 mins
= 4 + 7 + 6 + 5 + 6 + 7 + 8 + 6
=49 mins.
Cycle time is 10 min per chair
Production time available per day divided by units required per day
480 minutes / 50 chairs
= 10 mins per chair.
Minimum number of workstation
49 mins / 10 mins = 5 workstations
Explanation:
The tasks A and B will be performed together, then C, D and E will be performed one by one and then F and G will be performed to enable the final task H which will be performed last.
Total task time is 49 mins
= 4 + 7 + 6 + 5 + 6 + 7 + 8 + 6
=49 mins.
Cycle time is 10 min per chair
Production time available per day divided by units required per day
480 minutes / 50 chairs
= 10 mins per chair.
Minimum number of workstation
49 mins / 10 mins = 5 workstations
Internet là một thị trường hiệu quả hay không hiệu quả về giá?
Answer:
net là một thị trường hiệu quả hay không hiệu quả
Explanation:
Suppose the real interest rate is 2.8%, and the inflation rate is 7%. (1) How much do you need to invest now in order to get $100 in a year? Please show two approaches to calculate the answers. (Round your final answer to two decimal places) (2) Suppose the U.S. Treasury issues 5% coupon, 3-year TIPS (Treasury Inflation-Protected Securities). What are the real cash flows on the 3-year TIPS each year? What are the nominal cash flows on the 3-years TIPS each year? (Round your final answers to two decimal places)
Answer:
1)
approach 1, using the approximate real and nominal interest rates:
nominal interest rate = real interest rate + inflation rate = 2.8% + 7% = 9.8%
present value = $100 / (1 + 9.8%) = $91.07
approach 2, using the exact real and nominal interest rates:
(1 + i) = (1 + r) × (1 + π)
(1 + i) = (1 + 2.8%) x (1 + 7%) = 1.09996
i = 1.09996 - 1 = 0.09996 = 9.996%
present value = $100 / (1 + 9.996%) = $90.91
2)
assuming a $1,000 TIPS, nominal cash flow year 1 = $50
new face value = $1,070
nominal cash flow year 2 = $53.50
new face value = $1,144.90
nominal cash flows year 3 = $57.25 + ($1,144.90 x 1.07) = $1,282.29
assuming a $1,000 TIPS, real cash flow year 1 = $50 / 1.07 = $46.73
new face value = $1,070
real cash flow year 2 = $53.50 / 1.07² = $46.73
new face value = $1,144.90
real cash flows year 3 = [$57.25 + ($1,144.90 x 1.07)] / 1.07³ = $1,282.29 / 1.07³ = $1,046.73
On December 31 of the current year, Jerome Company has an accounts receivable balance of before any year end adjustments. The Allowance for Doubtful Accounts has a credit balance. The company prepares the following aging schedule for accounts receivable: Total Balance 130 days 3160 days 6190 days over 90 days Percent uncollectible 1% 2% % % What is the Allowance for Uncollectible Accounts at December 31 of the current year after adjustments
Answer:
I looked for the missing information and found the following:
Total Balance 1-30 days 31-60 days 61-90 days over 90 days
$329,000 $160,000 $90,000 $51,000 $28,000
% uncollectible 1% 2% 3% 20%
Allowance for Doubtful Accounts has a $1,100 credit balance before any adjustment.
total bad debt expense = $1,600 + $1,800 + $1,530 + $5,600 = $10,530
adjusting entry = $10,530 - $1,100 = $9,430
adjusting entry:
December 31, 202x, bad debt expense
Dr Bad debt expense 9,430
Cr Allowance for doubtful accounts 9,430
Richard Redden, the sole stockholder, contributed $71,000 in cash and land worth $132,000 in exchange for common stock to open a new business, RR Consulting. Which of the following general journal entries will RR Consulting make to record this transaction?
A. Debit Assets $203,000; credit Common Stock $203,000.
B. Debit Cash and Land, $203,000; credit Common Stock $203,000.
C. Debit cash $71,000; debit land $132,000; credit Common Stock $203,000.
D. Debit Common Stock $203,000; credit cash $71,000; credit Land $132,000.
E. Debit Common Stock $203,000; credit Assets $203,000.
Answer: C. Debit cash $71,000; debit land $132,000; credit Common Stock $203,000.
Explanation:
From the question, we are informed that Richard Redden, the sole stockholder, contributed $71,000 in cash and land worth $132,000 in exchange for common stock to open a new business, RR Consulting.
The journal entries will RR Consulting make to record this transaction will be:
Debit cash $71,000; debit land $132,000; credit Common Stock $203,000.
Answer:
C. Debit cash $71,000; debit land $132,000; credit Common Stock $203,000.
Explanation:
Recognize the Assets of Cash at $71,000, the Assets of Land at $132,000 and an Equity element - Common Stock at $203,000.
The journal entry will be as follows :
Cash $71,000 (debit)
Land $132,000 (debit)
Common Stock $203,000 (credit)
MicroTech Corporation maintains a capital structure of 40 percent debt and 60 percent common equity. To finance its capital budget for next year, the firm will sell 11% coupon bonds at par value (assume no flotation costs). The firm will finance the rest of its capital expenditures with retained earnings. MicroTech expects next year's dividend to be $1.30 per share. Dividends are expected to grow at 7% per year for the foreseeable future. The current market value of MicroTech's common stock is $30 per share. If the firm has a corporate tax rate of 21%, what is its weighted cost of capital for next year?
Answer:
weighted cost of capital for next year is 10.27 %.
Explanation:
Weighted cost of capital = Ke × (E/V) + Kd × (D/V)
Ke = Cost of Equity
= Dividend Yield + Expected growth rate
= $1.30 / $30.00 + 0.07
= 0.11333 or 11.33 %
Kd = Cost of Debt
= Interest × (1 - tax rate)
= 11% × ( 1 - 0.21)
= 8.69 %
Weighted cost of capital = 11.33 % × 60% + 8.69 % × 40%
= 10.27 %
Which of the following is not a factor that a manager should bear in mind when estimating a project's revenues and costs?
A) Sales of a product will typically accelerate, stabilize, and then decline as the product becomes outdated or faces increased competition.
B) A new product typically has its highest sales immediately after release as customers are attracted by the novelty of the product.
C) The prices of technology products tend to fall over time as newer, superior technologies emerge and production costs decline.
D) Prices and costs tend to rise with the general level of inflation in the economy.
Answer:
B) A new product typically has its highest sales immediately after release as customers are attracted by the novelty of the product.
Explanation:
When a manager is implementing and executing a project, there are certain factors to be considered for revenue and costs associated with the project.
For instance, that a new product typically has its highest sales immediately after release as customers are attracted by the novelty of the product is not a factor that a manager should bear in mind when estimating a project's revenues and costs. This is simply because it is not guaranteed that all new products introduced to the market would be accepted or attractive to customers due to economical factors such scale of preference and opportunity costs.
Ideally, the factors to be considered by a manager when estimating a project's revenues and costs are;
1. Sales of a product will typically accelerate, stabilize, and then decline as the product becomes outdated or faces increased competition.
2. The prices of technology products tend to fall over time as newer, superior technologies emerge and production costs decline.
3. Prices and costs tend to rise with the general level of inflation in the economy.
Innovative Products reported net income of $224,000. Beginning and ending inventory balances were $46,000 and $47,500, respectively. Accounts Payable balances at the beginning and end of the year were $38,000 and $34,000, respectively. Assuming that all relevant information has been presented, the company would report net operating cash flows of:
Answer:
$218,500
Explanation:
net operating cash flows = net income + adjustments
the adjustments include: depreciation expense (which is added), any increase in accounts receivables, inventory or prepaid expenses is subtracted, any increase in accounts payable or current liabilities is added.
net operating cash flows = $224,000 - ($47,500 - $46,000) + ($34,000 - $38,000) = $224,000 - $1,500 - $4,000 = $218,500
A small firm intends to increase the capacity of a bottleneck operation by adding a new machine. Two alternatives, A and B, have been identified, and the associated costs and revenues have been estimated. Annual fixed costs would be $38,000 for A and $31,000 for B; variable costs per unit would be $7 for A and $11 for B; and revenue per unit would be $19.
a. Determine each alternative’s break-even point in units. (Round your answer to the nearest whole amount.)
QBEP,A units
QBEP,B units
b. At what volume of output would the two alternatives yield the same profit? (Round your answer to the nearest whole amount.)
c. If expected annual demand is 10,000 units, which alternative would yield the higher profit?
Answer:
Instructions are below.
Explanation:
Giving the following information:
Machine A:
Fixed costs= $38,000
Unitary cost= $7
Machine B:
Fixed costs= $31,000
Unitary cost= $11
Revenue per unit= $19
To calculate the break-even point in units, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Machine A:
Break-even point in units= 38,000 / (19 - 7)
Break-even point in units= 3,167
Machine B:
Break-even point in units= 31,000 / (19 - 11)
Break-even point in units= 3,875
Now, we need to determine the indifference point:
Machine A= 38,000 + 7x
Machine B= 31,000 + 11x
x= number of units
We will equal both formulas and isolate x:
38,000 + 7x = 31,000 + 11x
7,000 = 4x
1,750=x
Indifference point= 1,750 units
Finally, the total cost for 10,000 units:
Machine A= 38,000 + 7*10,000= $108,000
Machine B= 31,000 + 11*10,000= $141,000
Which of the following are recommended ways to learn more about IT careers? Check all of the boxes
that apply.
scheduling an appointment with a career counselor at a school
attending an informational session
applying for an internship
renting a science fiction movie about computer viruses
contacting a professional organization, such as CompTIA
Answer:
scheduling an appointment with a career counselor at a schoolattending an informational sessionapplying for an internshipcontacting a professional organization, such as CompTIAExplanation:
To learn more about IT careers or just carriers in general, one can contact the Career counselor at school. Their job is to help students find out more abut careers so that they know which path they would like to follow.
One can also attend information sessions where they can listen to people speak on IT careers and ask questions they would like answers to as well.
A practical way to find out about IT careers is to intern at an IT firm. This way you get to see first hand what the job entails and if it is the kind of thing you would like to do.
There are also professional organizations that offer certifications in IT such as CompTIA. As they are well versed in the area, they can provide more information on IT careers including the educational background required.
Answer:
1. Scheduling an appointment with a career counselor at school.
2. Attending an informational session.
3. Applying for an internship
5. Contacting a professional organization, such as CompTIA.
Explanation: This is the correct answer on Edge 2021, just did the assignment. Hope this helps ^-^.
Piper's Pizza sold baking equipment for $25,000. The equipment was originally purchased for $72,000, and depreciation through the date of sale totaled $51,000. What was the gain or loss on the sale of the equipment?
Sale amount
Less:
Cost of the baking equipment
Book value
Answer:
$4,000 gain
Explanation:
The calculation of gain or loss on the sale of the equipment is shown below:-
Gain or loss on the sale of the equipment = Sales - Cost of the baking equipment - Accumulated Depreciation
= $25,000 - ($72,000 - $51,000)
= $25,000 - $21,000
= $4,000
Therefore for computing the gain or sale we simply applied the above formula.
A registered representative receives an order from a corporate issuer to buy 500,000 shares of that issuer's stock in the market, 5 minutes prior to market close. The registered representative should:
Answer: C. inform the company that this is a possible market manipulation under the Securities Exchange Act of 1934
Explanation:
The Securities Exchange Act of 1934 is meant to govern the actions of issuers and their affiliates engaging in trade in the open market. One reason for this is to prevent stock price manipulation.
SEC Act Rule 10b-18 might rule this transaction as a manipulative activity because it goes against the section of it that states that securities cannot be traded within 10 minutes of the stock market closing if that stock is an actively traded one. If it is not then the trade should not be executed within 30 minutes of market close.
The client should therefore be informed that by placing an order 5 minutes before close they could run afoul of this Act because buying such huge amounts at such a time could influence the price upwards for when the market reopens.
A product with an MSRP of CNY 15.00 has a promotion allowance of 15%. How much will the distributor receive in promotion allowance for each unit
Answer: CNY 2.25
Explanation:
Promotional Allowances are discounts in price that the producers/ supplies of a product will offer to trade partners like distributors to get them to promote their products so that they sell faster.
The promotion allowance here is 15% of the Manufacturer's Suggested Retail Price of CNY 15.00 which is;
= 15% * 15
= CNY 2.25
Good strategy execution involves Multiple Choice making choices among broad or narrow low cost and differentiation strategies to compete against rivals. selecting a capable management team. team participation to perform strategy-critical activities in light of prevailing circumstances. only senior-level managers to be accomplished on a timely basis. continuous improvements in the value chain in order to maximize operating efficiency.
Answer:
The answer is: team participation to perform strategy-critical activities in light of prevailing circumstances.
Explanation:
The good execution of the strategy is mainly related to the ability of managers to involve all operational areas and all employees in the process of participating in the strategic actions that were developed to achieve the goals and objectives of the organization.
Therefore, managers have an essential role in exercising control, coordination and monitoring of the teams, so that the execution of the strategy takes place in an effective and active manner, being shared as a responsibility and efforts of the entire team.
How much will be in the Prepaid Insurance account at the end of the year, after the adjusting entries have been prepared and posted
Answer: $8,400
Explanation:
The $9,600 is for 2 years in advance. This can be apportioned per month at a rate of;
= 9,600/24
= $400 per month.
October to the end of the year is 3 months so;
= 400 * 3
= $1,200 will be recorded for the year.
Prepaid Insurance will therefore reduce to;
= 9,600 - 1,200
= $8,400
6. Why is training important?
Answer:Training is important because it represents a good opportunity for employees to grow their knowledge base and improve their job skills to become more effective in the workplace. Despite the cost of training for employees, the return on investment is immense if it is consistent.
Explanation:
A simple random sample of 20 observations is derived from a normally distributed population with a known standard deviation of 3.2. You may find it useful to reference the z table.
a. Is the condition that X−X− is normally distributed satisfied?
Yes
No
b. Compute the margin of error with 95% confidence. (Round intermediate calculations to at least 4 decimal places. Round "z" value to 3 decimal places and final answer to 2 decimal places.)
c. Compute the margin of error with 90% confidence. (Round intermediate calculations to at least 4 decimal places. Round "z" value to 3 decimal places and final answer to 2 decimal places.)
d. Which of the two margins of error will lead to a wider interval?
The margin of error with 95% confidence.
The margin of error with 90% confidence.
Answer:
1. It is satisfied
2. 1.4
3. 1.18
4. 95% confidence is wider
Explanation:
1. It is normally distributed since n<30
2. Margin of error with 95% confidence
= Alpha = 1 - 0.95
= O.05
Alpha/2 = 0.025
Z(0.025) = 1.960
Margin of error = z(1.960)*SD/√n
= 1.960*(3.2/√20)
= 1.960 x 0.7156
= 1.4025
Approximately 1.4
3. At 90%
Alpha = 1 -0.9
= 0.10
Alpha/2 = 0.05
Z(0.05) =1.645
E = 1.645 x 3.2/√20
= 1.645 x 0.7176
= 1.177
Approximately 1.18
4. From the calculations in 2 and 3 it is obvious that the margin of error with 95% confidence interval is wider.
A developer is proposing to build and operate an 8 store strip mall. Each unit would rent for $3,500 per month. It is expected that vacancy would run at 15% and that the expenses would be 17.5%. The loan is to be 75% of the capitalized value. The developer has an MARR of 12.5%, the bank is charging 8.5% interest, and the Long Term Debt Service is a constant 9%. To assess the financial worth of this endeavor, determine the following:
a. CAP Rate
b. Capitalized value
c. Loan amount
d. Debt Service Coverage Ratio
e. Loan per unit
Answer:
Requirement A: CAP Rate is 12.5%
Requirement B: Capitalized Value of the Property is $1,884,960
Requirement C: Loan Amount is $1,413,720
Requirement D: Debt Service Coverage Ratio is 1.85
Requirement E: Loan per unit is $176,715 Per Unit
Explanation:
Requirement A: Find the CAP Rate
The CAP Rate will be calculated using the following formula:
CAP Rate = Annual Net Operating Income (NOI) (Step1) / Property Capitalized Value (Step2)
Here
Operating Income is $235,620 (Step1)
Property Capitalized Value (Step2)
Now, by putting values we have:
CAP Rate = $235,620 / $1,884,960 = 12.5%
Step1: Find Annual Net Operating Income (NOI)
As we know that:
Operating Income = Expected Revenue - Operating Expense
Here
Expected Revenue from 8 Strip Malls = Rent / Month * 12 Months * (1 - Vacancy Ratio) * 8 Strips Malls
= $3,500 * 12 * (1 - 15%) * 8
= $285,600
Operating Expenses = Expected Revenue * 17.5%
= $285,600 * 17.5% = $49,980
Now by putting value in the above Operating Income equation, we have:
Annual Operating Income = $285,600 - $49,980 = $235,620
Step2: Find Property Capitalized Value (It is also Requirement B)
Property Capitalized Value = Annual Operating Income / Minimum Accepted Rate of Return (MARR)
Here
Annual Operating Income is $235,620 from Step1
MARR is 12.5%
By putting values, we have:
Capitalized Value of the Property = $235,620 / 12.5% = $1,884,960
Requirement C. Find Loan Amount
It is given in the question that the Loan Amount is 75% of Property Capitalized Cost. This implies:
Loan Amount = $1,884,960 * 75% = $1,413,720
Requirement D. Debt Service Coverage Ratio
Debt Service Coverage Ratio (DSCR) = Annual Net Operating Income / Total Debt Service for the Year
Here
Annual Net Operating Income is $235,620 from Step1
Total Debt Service for the Year $127,235 (See Step3 below)
By putting values, we have:
Debt Service Coverage Ratio = $235,620 / $127,235 = 1.85
Step3: Total Debt Service for the year
Total Debt Service for the year = Loan Amount * Debt Service Rate
Here
Loan Amount is $1,413,720
Debt Service Rate is 9%
By putting values, we have:
Total Debt Service for the year = $1,413,720 * 9% = $127,235
Requirement E. Find Loan Amount
We can find loan per unit by simply dividing the loan amount by number of strip mall. Here total number of strip mall are 8. This implies that:
Loan Per Unit = $1,413,720 / 8 Units = $176,715 Per Unit
Suppose the following items are taken from the 2017 balance sheet of Yahoo! Inc. (All dollars are in millions.)
Goodwill ............................................................. $3,927
Common stock ........................................................ 6,283
Equipment .............................................................. 1,737
Accounts payable ...................................................... 152
Patents ................................................................... 234
Stock investments (long-term) ...................................... 3,247
Accounts receivable .................................................. 1,061
Prepaid rent .............................................................. 233
Debt investments (short-term) ...................................... 1,160
Retained earnings .................................................... 6,108
Cash ................................................................... 2,292
Notes payable (long-term) ............................................ 734
Unearned sales revenue ............................................... 413
Accumulated depreciation-equipment 201
Instructions
Prepare a classified balance sheet for Yahoo! Inc. as of December 31, 2017.
Answer:
Yahoo! Inc.Classified balance sheet as of December 31, 2017:Assets: ($ million)
Current Assets:
Cash $2,292
Accounts receivable 1,061
Prepaid rent 233
Debt investments (short-term) 1,160
Total Current Assets $4,746
Non-current Assets:
Stock investments (long-term) 3,247
Equipment 1,737
Accumulated depreciation 201 1,536
Patents 234
Goodwill 3,927
Total non-current assets $8,924
Total Assets $13,690
Current Liabilities:
Unearned sales revenue 413
Accounts payable 152 $565
Non-current Liabilities:
Notes payable (long-term) 734
Total Liabilities $1,299
Stockholders' Equity:
Common stock 6,283
Retained earnings 6,108 12,391
Total liabilities + equity $13,690
Explanation:
a) This Yahoo!'s 2017 classified balance sheet shows the current assets, current liabilities, non-current assets, non-current liabilities, and the stockholders' equity with their separate totals. It helps in calculating important financial ratios and in making comparisons in absolute dollar terms from one period to the other or from one company to another entity.
Which of the following is an example of a disruptive innovation?
Answer: C. Use of smartphones with Internet access replacing use of landlines
Explanation:
A disruptive innovation is one that when initiated, has a significant effect on the way an industry works such that if participants do not adapt, they will probably find themselves at a disadvantage.
An example is how digital photography replaced the use of chemicals to print photographs and also how video streaming online replaced the need for video rentals from shops which led to the closure of shops like Blockbuster.
For this question, the use of smartphones which also have internet access instead of landlines is a disruptive innovation. Smartphones provide a very convenient means to communicate with others in more ways than a landline could especially with it's access to the internet. This saw most people moving away from the use of landlines in favor of smartphones.
The correct option to an example of disruptive innovation will be use of smartphones with internet access replacing the use of landlines. The correct option is C.
Disruptive innovation refers to a condition where the innovation of a product completely destroys the purpose of the existing technology in such a way that the usage of such product almost becomes extinct.
The landlines were an important innovation for humans as it enabled the wired routes to communicate with people on their unique line. It saved a lot of time and manpower.This invention itself was a disruptive invention as it replaced the letter and postcards for communication. However, with the invention of smartphones with internet access enabled wireless communication.The invention of a smartphone with internet access were not restricted just to calling but important features like texting, instant messaging, surfing, browsing and sending multimedia files as well.
Hence, the correct option is C that the use of smartphones with internet access replaced the use of landlines is an example of disruptive innovation.
To know more about disruptive innovation, refer to the link below.
https://brainly.com/question/25609554
Electronic Arts is a video game company that competes with Activision Blizzard. A condensed balance sheet for Electronic Arts and a partially completed vertical analysis are presented below.Cash and Short-term Investments $1,680 33% Accounts Payable $136 2%Accounts Receivable, Net 312 6 Accrued Liabilities 658 Inventories 42 1 Notes Payable (long-term) 2,009 40Other Current Assets 291 Total Liabilities 2,803 Intangibles 1,974 Common Stock 2,246 44Property and Equipment, Net 548 Retained Earnings 21 1Other Assets 223 4 Total Stockholders' Equity 2,267 45Total Assets $5,070 100% Total Liabilities & Stockholders' Equity $5,070 100%Required: a. Complete the vertical analysis by computing each line item as a percentage of total assets.b. What percentages of Electronic Arts' assets relate to intangibles versus property and equipment?
Answer:
a. Computation of percentages for Vertical Analysis
Other current Assets -- (Other current assets/Total Assets) * 100 -- ($291/$5070)*100 -- 6%
Intangible -- (Intangibles/Total assets) * 100 --($1,974/$5,070)*100--39%
Property and Equipment,Net -- (Property and equipment,Net/Total assets)*100-- ($548/$5070)100 -- 11%
Accrued Liabilities -- (Accrued liabilities / Total liability and stockholders Equity)*100 -- ($658/$5070)*100-- 13%
Total Liabilities -- (Total liability/Total liabilities and stock holders Equity) * 100 -- ($2803/$5070) * 100 -- 55%
b. Percentage of intangible and Property and Equipment
Intangibles -- (Intangibles / Total assets) * 100 -- ($1,976/$5070 * 100) -- 39%
Property and Equipment -- (Property and Equipment, Net/Total Assets) * 100 -- ($548/$5070 * 100) -- 11%
Braxton's Cleaning Company stock is selling for $33.25 per share based on a required return of 11.7 percent. What is the the next annual dividend if the growth rate in dividends is expected to be 4.5 percent indefinitely?
Answer:
So, the next annual dividend will be $2.394
Explanation:
The constant growth model of DDM is used to calculate the price of a stock today whose dividend growth rate is expected to be constant forever. The price of such a stock is calculated using the formula for price under the constant growth model of DDM,
P0 = D1 / (r - g)
Where,
P0 is price todayD1 is the next annual dividend that will be paid by the stockr is the required rate of return g is the growth rate in dividendsTo calculate the next annual dividend, we will input the available values for P0, r and g in the formula,
33.25 = D1 / (0.117 - 0.045)
33.25 * (0.072) = D1
2.394 = D1
So, the next annual dividend will be $2.394
Explain how you would value a stock. Provide an example of a valuation of a stock based on retrieved real data. Include evidence of the retrieved data in your answer. Compare your valuation with the actual price of the stock at the designated time for your valuation.
Answer with Explanation:
There are numerous stock valuing models but here, I will use Dividend Valuation Model which is based on finding the intrinsic value of Stock which is the present value of the stock at a required rate of return. The formula to calculate Intrinsic value of stock is given as under:
P0= D0 * (1 + g) / (ke - g)
Here
P0 is the intrinsic value of the stock
D0 is the dividend just paid
g is the growth rate
ke is the investor's required rate of return
The model doesn't holds if the company doesn't pays Dividend.
Now suppose that the Dividend just paid by Apple is $20 per stock. The anticipated growth rate of dividend is 10% and the required rate of return is at 15%.
By putting values in the above equation, we have:
P0= $20 * (1 + 10%) / (15% - 10%)
= $20 / (15% - 10%)
= $400 per share
The value of stock of Apple is $400 per share which must be its fair market value as per the Dividend Valuation Model.
As per the model, if the value of stock is higher as per dividend valuation model then we must purchase the stock as it will generate higher value and vice versa. The inherent limitation of the model is that it assumes that the dividend is growing at constant rate and is consistently paid. The main disadvantage of Dividend valuation model is that it doesn't account for political factors, economical factors, evolving business risks, technological factors, etc.
Cheyenne Corp. had the following transactions that took place during the year:I.Recorded credit sales of $2250II.Collected $1350 from customersIII.Recorded sales returns of $450 and credited the customer's account.What is the total effect of these transactions on free cash flow?a) No Effectb) Cannot be determinedc) Increased) Decrease
Answer:
The correct option is d) Decrease.
Explanation:
Free cash flow (FCF) can be described as the cash that is generated by a company after cash outflows required to support operations and maintain the capital assets of the company have been accounted for.
Therefore, FCF can be calculated by adjusting for non-cash expenses, changes in working capital, and capital expenditures to reconcile net income.
The total effect of these transactions on free cash flow can be determined by first calculating the account receivable for the year as follows:
Calculation of account receivable for the year:
Particular Amount ($)
Credit sales 2,250
Cash collected from the customer (1,350)
Sales returns (450)
Account receivable 450
A partial free cash flow statement can therefore be prepared as follows:
Cheyenne Corp.
Free cash flow statement (Partial)
Particular Amount ($)
Net income xx
(Increase) decrease in non-cash current assets:
Increase in account receivable (450)
Free cash flow (450)
Since the free cash flow is negative or minus $450, it therefore implies that the total effect of these transactions on free cash flow is a decrease.
Therefore, the correct option is d) Decrease.
Purple Panda Products Inc. is considering a project that will require $650,000 in assets. The project will be financed with 100% equity. The company faces a tax rate of 30%. Assuming that the project generates an expected EBIT (earnings before interest and taxes) of $170,000, then Purple Panda’s anticipated ROE (return on equity) for the project will be:
a. 14.65%
b. 18.31%
c. 11.90%
d. 10.99%
Answer:
18.31%
Explanation:
Purple panda products incorporation has a shareholder's equity of $650,000
The tax rate is 30%
=30/100
= 0.3
The EBIT is $170,000
The first step is to calculate the net income
Net income= EBIT - tax
= $170,000-(0.3×170,000)
= $170,000-51,000
= 119,000
Therefore, the ROE can be calculated as follows
ROE= Net income/shareholder's equity
= 119,000/650,000
= 0.1831×100
= 18.31%
Hence the ROE is 18.31%
The following data relate to factory overhead cost for the production of 10,000 computers: Actual: Variable factory overhead $262,000 Fixed factory overhead 90,000 Standard: 14,000 hrs. at $25 350,000 If productive capacity of 100% was 15,000 hours and the total factory overhead cost budgeted at the level of 14,000 standard hours was $356,000, determine the variable factory overhead controllable variance, fixed factory overhead volume variance, and total factory overhead cost variance. The fixed factory overhead rate was $6.00 per hour. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
Answer:
Calculation of variable overhead controllable variance
Standard hours allowed for 10,000 computers = 14,000 hours
Budgeted variable expense = Standard hours allowed * variable overhead rate
= 14,000 * ($25 - $6)
= $266,000
Variable overhead controllable variance = Actual variable overhead expense - Budgeted variable overhead expense
= $262,000 - $266,000
=$4,000 (Unfavorable)
Calculation of fixed overhead volume variance:
Applied overhead = Number of computers produced * Fixed overhead rate
= 10,000 * $6.00
= $60,000
Budgeted fixed overhead = $90,000
Fixed overhead volume variance = Budgeted fixed overhead - Applied fixed overhead
= $90,000 - $60,000
= $30,000 (Favorable)
Calculation of Total factory overhead volume variance:
Total factory overhead cost variance = Variable overhead controllable variance + Fixed overhead volume variance
= - $4,000 + $30,000
= $26,000 (Favorable)
Explain the 3 primary ingredients of Just in Time, and how it can be used in a transportation company.
Explanation:
Just in time can be understood as a strategic system that fundamentally seeks to achieve continuous improvement of processes by reducing costs and waste.
Its principles are total quality management, respect for people and just in time manufacturing.
Just in time can be understood as a strategic system that fundamentally seeks to achieve continuous improvement of processes by reducing costs and waste.
Its principles are total quality management, respect for people and just in time manufacturing.
In this strategy, the focus is that all activities must be carried out at the exact time, that is, eliminating any waste such as raw material, stock, production, etc., which eliminates costs and reduces failures, increasing all processes organizational changes that guarantee an increase in total quality.
The principle of respect for people is also given by the flexibility that this system gives to employees, by the management of total quality that gives a more dynamic work that guarantees the greatest engagement of employees.
In a transport company, the Just in time system would be effective if it were integrated into all operational areas of the company, involving all work hierarchies.
It would also be essential to have changes in internal policies to ensure that processes are improved in order to eliminate waste, which would require adequate training of employees, the implementation of control technologies, the adoption of a more effective and faster value chain , etc., in order to eliminate waste and increase total quality.
Explain how you decided whether payments on foreign investment and government transfers counted on the positive or the negative side of the current account balance for the United Kingdom in 2001.
Answer:
The payments on foreign investment and the government transfers counted on the negative side of the current account balance for the United Kingdom in 2001.
Explanation:
A national records the nation's transactions with the rest of the world on exporting, importing, foreign incomes and current transfers, over a defined period of time. The country's current account balance can be positive as a surplus or negative as a deficit. Typically, the payments on foreign investments and the government transfers like foreign aids are rated as negative because they are monies transferred out of the country in a particular period of a time.
Macklin Company forecasts that total overhead for the current year will be $13,500,000 with 500,000 total machine hours. Year to date, the actual overhead is $14,000,000 and the actual machine hours are 530,000 hours. If Macklin Company uses a predetermined overhead rate based on machine hours for applying overhead, as of this point in time (year to date), the overhead is
Answer:
Instructions are below.
Explanation:
Giving the following information:
Macklin Company forecasts that total overhead for the current year will be $13,500,000 with 500,000 total machine hours.
Year to date, the actual overhead is $14,000,000 and the actual machine hours are 530,000 hours.
First, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 13,500,000/500,000
Predetermined manufacturing overhead rate= $27 per machine-hour
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 27*530,000= 14,310,000
Finally, the under/over allocated overhead:
Under/over applied overhead= real overhead - allocated overhead
Under/over applied overhead= 14,000,000 - 14,310,000
Under/over applied overhead= 310,000 overallocated