Answer:
Unitary cost= $0.23 per unit
Explanation:
Giving the following information:
Standard costs (5,000 bars):
Cocoa 500 lbs. $1.40 per lb.
Sugar 100 lbs. $0.50 per lb.
Milk 250 gal. $1.60 per gal.
First, we need to calculate the total cost:
Total cost= 500*1.4 + 100*0.5 + 250*1.6
Total cost= $1,150
Now, the unitary cost:
Unitary cost= 1,150/5,000
Unitary cost= $0.23 per unit
The standard direct materials cost per bar of chocolate is $0.23 per bar.
First step is to calculate the total direct material cost for production of 5,000 bar of chocolate
Ingredient Quantity Price Cost
Cocoa 500× $1.40 =$700
Sugar 100 ×$0.50 =$50
Milk 250 ×$1.60 =$400
Total $1,150
Second step is to calculate the standard material cost per bar of chocolate
Standard material cost per=$1,150/5,000
Standard material cost per=$0.23 per bar
Inconclusion the standard direct materials cost per bar of chocolate is $0.23 per bar.
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Name any two professional training needed in profession.
1. learner management system and environment.
2. implications for pedagogy and application to resource poor environment.
Kohler Corporation reports the following components of stockholders' equity on December 31, 2009.
Common stock—$10 par value. 100,000 shares authorized.
40,000 shares Issued and outstanding $400,000
Paid-ln capital In excess of par value, common stock . 60,000
Reamed earnings 270,000
Total stockholders 730,000
In year 2010, the following transactions affected its stockholders' equity accounts.
Jan. 1 Purchased 5,500 shares of its own stock at $15 cash per share.
Jan. 5 Directors declared a $4 per share cash dividend payable on February 28 to the February 5 stockholders of record.
Feb. 28 Paid the dividend declared on January 5.July 6 Sold 2,063 of its treasury shares at $19 cash per share.
Aug. 22 Sold 3,437 of its treasury shares at $12 cash per share.
Sept. 5 Directors declared a $4 per share cash dividend payable on October 28 to the September 25 stockholders of record.
Oct. 28 Paid the dividend declared on September 5.
Dec. 31 Closed the $408,000 credit balance (from net income) in the Income Summary account to Retained Earnings.
Required
a. Prepare journal entries to record each of these transactions for 2010.
b. Prepare a statement of retained earnings for the year ended December 31, 2010.
c. Prepare the stockholders' equity section of the company's balance sheet as of December 31, 2010.
Answer:
Kohler Corporation
a. Journal Entries:
Jan.1:
Debit Treasury Stock $55,000
Debit Paid-in Capital In Excess of par $27,500
Credit Cash Account $82,500
To record the purchase of 5,500 shares of treasury stock at $15 per share.
Jan. 5:
Debit Dividends $138,000
Credit Dividends Payable $138,000
To record the declaration of a $4 per share cash dividend on 34,500 shares.
Feb. 28:
Debit Dividends Payable $138,000
Credit Cash Account $138,000
To record the payment of dividend.
July 6:
Debit Cash Account $39,197
Credit Treasury Stock $20,630
Credit Paid-in Capital In Excess of par $18,567
To record the resale of 2,063 treasury shares at $19 per share.
Aug. 22:
Debit Cash Account $41,244
Credit Treasury Stock $34,370
Credit Paid-in Capital In Excess of par $6,874
To record the resale of 3,437 treasury shares at $12 per share.
Sept. 5:
Debit Dividends $160,000
Credit Dividends Payable $160,000
To record the declaration of a $4 per share cash dividend on 40,000 shares.
Oct. 28:
Debit Dividends Payable $160,000
Credit Cash Account $160,000
To record the payment of the cash dividends.
Dec. 31:
Debit Income Summary $408,000
Credit Retained Earnings $408,000
To close the net income to the Retained Earnings.
b. Statement of Retained Earnings for the year ended December 31, 2010:
December 31, 2009 balance $270,000
Net Income 408,000
Dividends (298,000)
December 31, 2010 balance $380,000
c. Stockholders' Equity Section of the Balance Sheet as of December 31, 2010:
Common stock—$10 par value:
100,000 shares authorized.
40,000 shares Issued and outstanding $400,000
Paid-in capital In excess of par value,
common stock 57,941
Retained earnings 380,000
Total stockholders $837,941
Explanation:
a) Data and Calculations:
Stockholders' Equity Section of the Balance Sheet as of December 31, 2009:
Common stock—$10 par value:
100,000 shares authorized.
40,000 shares Issued and outstanding $400,000
Paid-in capital In excess of par value,
common stock 60,000
Retained earnings 270,000
Total stockholders $730,000
b) Paid-in Capital In Excess of par:
December 31, 2009 balance $60,000
Treasury stock:
January 1 (27,500)
July 6 18,567
Aug. 22 6,874
December 31, 2010 balance $57,941
c) Kohler's treasury stock account is a contrary account to the common stock account. It is recorded using any of the two methods: cost method or the par value method. It is assumed that Kohler Corporation uses the par value method with the above and below par values in treasury stock transactions recorded in the Paid-in Capital In Excess of par. This is unlike the cost method that records all the treasury transactions in the Treasury Stock account at their cost effects.
The Sprint vs. Verizon ads that compare the features and pricing of the two networks are examples of competitive advertising. True False
Answer:
True
Explanation:
They are trying to win over customers by comparing each others features in a competition
Competitive advertising is demonstrated by the Sprint vs. Verizon adverts, which compare the functionality and pricing of the two networks. So, it is a true statement.
What is competitive advertising?Competitive advertising is the act of showcasing or promoting one's product in comparison to the product of another company.
This form of marketing can be used to target customers who are devoted to the other brand, prompting them to reassess their purchasing patterns.
The three types of competitive advertising are:
ComparativeReminderReinforcementFor more information about competitive advertising, refer below
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Salud Company reports the following information. Use the indirect method to prepare only the operating activities section of its statement of cash flows for the year ended December 31, 2017. (Amounts to be deducted should be indicated with a minus sign.)
Selected 2017 Income Statement Data Selected Year-End 2017 Balance Sheet Data
Net income $470,000 Accounts receivable increase $40,400
Depreciation expense 87,000 Prepaid expenses decrease 16,500
Gain on sale of machinery 23,000 Accounts payable increase 10,000
Wages payable decrease 2,900
Answer:
Cash generated by operating activities is $517,200.
Explanation:
Cash flows from operating activities
Net Income $470,000
Adjustments to reconcile net income to operating cash flow
Add: Depreciation Expense $87,000
Less: Gain on Sale of Machinery $-23,000 $64,000
Change in Operating Assets and Liabilities
Accounts receivable increase $-40,400
Prepaid expenses decrease $16,500
Accounts payable increase $10,000
Wages payable decrease $-2,900 $-16,800
Cash generated by operating activities $517,200
Gretta's portfolio consists of $700,000 invested in a stock that has a beta of 1.2 and $300,000 invested in a stock that has a beta of 0.8. The risk-free rate is 6% and the market risk premium is 5%. Which of the following statements is CORRECT?
a. The required return on the market is 10%.
b. The portfolio's required return is less than 11%.
c. If the risk-free rate remains unchanged but the market risk premium increases by 2%, Gretta's portfolio's required return will increase by more than 2%.
d. If the market risk premium remains unchanged but expected inflation increases by 2%, Gretta's portfolio's required return will increase by more than 2%.
e. If the stock market is efficient, Gretta's portfolio's expected return should equal.
Answer: c. If the risk-free rate remains unchanged but the market risk premium increases by 2%, Gretta's portfolio's required return will increase by more than 2%.
Explanation:
To prove the above option, the Capital Asset Pricing Model can be used.
Required Return = Risk free rate + portfolio beta(market premium)
Portfolio Beta
This the weighted average of the individual betas.
Total portfolio value = 700,000 + 300,000 = $1,000,000
= ( 1.2 * 700,000/1,000,000) + ( 0.8 * 300,000/1,000,000)
= 0.84 + 0.24
= 1.08
Required return = 6% + 1.08 ( 5%)
= 6% + 5.4%
= 11.4%
Assuming risk-free rate remains unchanged but the market risk premium increases by 2%.
Required return = 6% + 1.08 ( 5% + 2%)
= 6% + 7.56%
= 13.56%
The change in required return
= (13.56% - 11.4%)/11.4%
= 18.9%
Proving that if the risk-free rate remains unchanged but the market risk premium increases by 2%, Gretta's portfolio's required return will increase by more than 2%.
An investment offers a total return of 12.0 percent over the coming year. Janice Yellen thinks the total real return on this investment will be only 6.0 percent. What does Janice believe the inflation rate will be over the next year?
Answer:
inflation rate= 0.06= 6%
Explanation:
Giving the following information:
Interest rate= 12%
Real rate of return= 6%
The inflation rate is counterproductive to the interest rate. The inflation rate reduces the purchasing price, therefore it decreases the interest rate effect on nominal money.
Real interest rate= interest rate - inflation rate
0.06 = 0.12 - inflation rate
inflation rate= 0.12 - 0.06
inflation rate= 0.06= 6%
To arrive at an accurate balance on a bank reconciliation statement, a credit memorandum from the bank for the collection of a note and interest should be
Answer:
Must be added to the book balance.
Explanation:
The correct treatment would be to add this value to book balance because the bank has increased our bank balance by the note and interest amount. This must be accounted for as increase in the book balance because we have borrowed money and also that yearly interest income was also added to our bank checking account.
Hence it must be added to cash book balance in order to reconcile with the bank balance.
If the distribution of water is a natural monopoly, then:__________.
a. a single firm cannot serve the market at the lowest possible average total cost.
b. allowing for competition among different firms in the water-distribution industry is efficient.
c. average cost increases as the quantity of water produced increases.
d. multiple firms would likely each have to pay large fixed costs to develop their own network of pipes.
Answer:
d. multiple firms would likely each have to pay large fixed costs to develop their own network of pipes.
Explanation:
Option a is wrong because:
The initial investment is very high, therefore, the more firms competing will only increase the required investments and fixed costs associated with them, e.g. depreciation, maintenance. That is why the lowest average costs is generally achieved when only one firm serves this type of market.
Option b is wrong because:
A natural monopoly exists because it is extremely difficult for two or more competing firms to exist. Generally the required investment is very high, and the revenues are not large enough to allow two or more firms to compete.
Option c is wrong because:
Utilities require large initial investments, but once they are set up, the production costs are very small. I.e. the fixed costs are more relevant than the variable costs. Average production costs as decrease as the quantity produced increases.
In which of the following organization forms is the owners' legal responsibility for the debt of the business limited to the amount they invested in the business?
a. Cooperative
b. Sole proprietorship
c. Partnership
d. Corporation
Answer:
d. Corporation
Explanation:
The Corporation is the business form of an organization in which it has the separate legal entity from its owners. Also, there is a limited liability towards any debt that invested in the business and whenever the person think for an organization so he thinks for the long term
Here in the given situation, the corporation is the best choice as it it has the limited liability of the amount invested
Hence, the correct answer is d.
15 POINTS IF U ANSWER NOW!!!!! Which non-income factor for a potential job promotion would influence a person whose mother needs frequent medical attention? Location Personal satisfaction Independence Family
Answer:
Family
Explanation:
Because the person's mother needs medical attention and the mother is family, she would be influenced by family
An asset has had an arithmetic return of 11.9 percent and a geometric return of 9.9 percent over the last 86 years. What return would you estimate for this asset over the next 8 years? 23 years? 39 years? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer:
11.74% ; 11.38%; 11.01%
Explanation:
Given the following :
Arithmetic return (Ar) = 11.9%
Geometric return (Gr) = 9.9%
N = 86 years = Past period
A) Return in the next 8 years
T = future period = 8 years
Return = (T - 1) / (N - 1) * Geometric average + (N - T) / (N - 1) * Arithmetic average.
Return = (8 - 1) / (86 - 1) * 0.099 + (86 - 8) / (86 - 1) * 0.119
(0.0823529 * 0.099) + (0.9176470 * 0.119)
= 0.1173529301
= 0.1173529301 * 100 = 11.74%
B) over the next 23 years
T = 23 years
Return = (T - 1) / (N - 1) * Geometric average + (N - T) / (N - 1) * Arithmetic average.
Return = (23 - 1) / (86 - 1) * 0.099 + (86 - 23) / (86 - 1) * 0.119
(0.2588235 * 0.099) + (0.7411764 * 0.119)
= 0.1138235181
= 0.1138235181 * 100 = 11.38%
C.) over 39 years
F = 39 years
Return = (T - 1) / (N - 1) * Geometric average + (N - T) / (N - 1) * Arithmetic average.
Return = (39 - 1) / (86 - 1) * 0.099 + (86 - 39) / (86 - 1) * 0.119
(0.4470588 * 0.099) + (0.5529411 * 0.119)
= 0.1100588121
= 0.1100588121 * 100 = 11.01%
A company factored $45,000 of its accounts receivable and was charged a 4% factoring fee. The journal entry to record this transaction would include a:
The question is incomplete as it is missing the options. The complete question is,
A company factored $45,000 of its accounts receivable and was charged a 4% factoring fee. The journal entry to record this transaction would include a:
a. Debit to Cash of $45,000 and a Credit to Account Receivable of $45,000
b. Debit to Cash of $46,800 and a Credit to Account Receivable of $46,800
c. Debit to Cash of $45,000 and a Credit to Notes Payable of $45,000
d. Debit to Cash of $45,000, a Debit to Factoring Fee Expense of $1800, and Credit to Account Receivable of $43,200
e. Debit to Cash of $43,2000, a Debit to Factoring Fee Expense of $1,800, and Credit to Account Receivable of $45,000
Answer:
The correct answer is option e.
Explanation:
Factoring accounts receivables means selling the claims on accounts receivables to a third party in exchange of cash. Such factoring is done to receive payment for these accounts receivables instantly and selling the claims to some other company. The factoring company charges a certain portion of accounts receivable as fee and only provides cash after deducting this percentage. This fee is an expense for a company using factoring service and is debited.
So the general entry to record factoring would be,
Cash 43200 Dr
Factoring fee 1800 Dr
Accounts receivables 45000 Cr
Cash = 0.96 * 45000 = 43200
Factoring fee = 45000 * 0.04 = 1800
obligations not expected to be paid within the longer of one year or the company's operating cycle are reported as
Answer:
Long term liabilities.
Explanation:
This can be easily or mostly be used in companies and also firms. In most cases they are been tagged a non-current liability.
They are generally defined to be obligations that are not been settled for/paid off in the current year or accounting period. Therefore, debts of this kind are not due within a year. Dept of this kind ranges from notes payable to bonds payable, also mortgages and are also seen as leases in a company settings.
In as much as this is not good for a company's financial health, investors and creditors see how the company is financed through this. Current obligations are seen to be more risky than non-current debts because they will need to be paid sooner.
Following are the accounts and balances from the adjusted trial balance of stark company
Notes payable $11,000 Accumulated depreciation building $15,000
Prepaid insurance 2,500 Accounts receivable 4,000
Interest expense 500 Utilities expense 1,300
Accounts payable 1,500 Interest payable 100
Wages payable 400 Unearned revenue 800
Cash 10,000 Supplies expense 200
Wages expense 7,500 Buildings 40,000
Insurance expense 1,800 Dividends 3,000
Common stock 10,000 Depreciation expense—Buildings 2,000
Retained earnings 14,800 Supplies 800
Services revenue 20,000
Prepare the (1) income statement and (2) statement of retained earnings for the year ended December 31 and (3) balance sheet at December 31. The Retained Earnings account balance was $35,600 on December 31 of the prior year.
Answer:
STARK COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31
PARTICULARS AMOUNT $
Service Revenue 20,000
Expenses
Supplies expense 200
Interest expense 500
Insurance expense 1,800
Utilities expense 1,300
Depreciation expense 2,000
Wages expense 7,500
Total expenses 13,300
Net profit 6,700
STARK COMPANY
STATEMENT OF RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31
Amount $
Retained earnings December 31 prior year end 14,800
Add- Net income 6,700
Less- Dividends 3,000 3,700
Retained earnings, December 31 Current year end 18,500
3. STARK COMPANY
BALANCE SHEET FOR THE YEAR ENDED DECEMBER 31
Current Assets
Cash 10,000
Accounts receivable 4,000
Office supplies 800
Prepaid insurance 2,500
Total current asset 17,300
Non Current Assets
Buildings 40,000
Less- Accumulated dep. 15,000
Total Non Current Assets 25,000
Total Assets 42,300
Liabilities
Current liabilities
Accounts payable 1,500
Interest payable 100
Notes payable 11,000
Unearned revenue 800
Wages payable 400
Total Current liabilities 13,800
Long term liabilities
Common stock 10,000
Retained earnings 18,500 28,500
Total liabilities and capital 42,300
Financial statements are statements that keep a record of the various transactions of the firm. It keeps the records of the inflow and outflow of cash in the company and also maintains the sound wealth in the firm.
The income statement, balance sheet, and calculations have been attached below.
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Location Score
Factor
(100 points each) Weight A B C
Convenience .15 89 78 84
Parking facilities .20 75 93 98
Display area .18 92 90 87
Shopper traffic .27 92 93 82
Operating costs .10 93 97 84
Neighborhood .10 90 96 95
1.00
a.
Using the above factor ratings, calculate the composite score for each location. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)
Location Composite Score
A
B
C
b.
Determine which location alternative (A, B, or C) should be chosen on the basis of maximum composite score.
B
C
A
Answer and Explanation:
The computation of composite score for each location is shown below:-
Composite score for A is
= 0.15 × 89 + .20 × 75 + 0.18 × 92 + 0.27 × 92 + 0.10 × 93 + 0.10 × 90
= 88.05
Composite score for B is
= 0.15 × 78 + .20 × 93 + 0.18 × 90 + 0.27 × 93 + 0.10 × 97 + 0.10 × 96
= 90.91
Composite score for C is
= 0.15 × 84 + .20 × 98 + 0.18 × 87 + 0.27 × 82 + 0.10 × 84 + 0.10 × 95
= 87.90
Therefore for computing the composite score for each location we simply multiply weight with A location and in the same manner of A, B and C
b. The maximum composite score from A, B and C is B
The Clifford Corporation has announced a rights offer to raise $17 million for a new journal, the Journal of Financial Excess. This journal will review potential articles after the author pays a nonrefundable reviewing fee of $6,000 per page. The stock currently sells for $42 per share, and there are 2.9 million shares outstanding. a. What is the maximum possible subscription price? What is the minimum? (Leave no cells blank - be certain to enter "0" wherever required.) b. If the subscription price is set at $34 per share, how many shares must be sold? How many rights will it take to buy one share? (Do not round intermediate calculations. Round your rights needed answer to 2 decimal places, e.g., 32.16.) c. What is the ex-rights price? What is the value of a right? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) d. A shareholder with 2,000 shares before the offering has no desire (or money) to buy additional shares offered as rights. What is his portfolio value before and after the rights offer? (Do not round intermediate calculations and round your answers to nearest whole number, e.g., 32.)
Answer:
A.Maximum possible subscription price $42 per shares
Minimum price $0
B.Number of new shares $500,000
Numbers of right needed 5.8
C.Ex-rights price $40.82
Value of a right $1.18
D.Portfolio value before the right offer $84,000
Portfolio value after the right offer $84,000
Explanation:
A.
The maximum possible subscription price based on the information given will be $42 per Shares
The minimum price will be anything that is greater or higher that $0
B. Calculation for how many shares must be sold
Using this formula
Number of new shares =Journal of Financial Excess amount /Subscription price per share
Let plug in the formula
Number of new shares=$17,000,000/ $34 per share
Number of new shares=$500,000
Calculation for how many rights will it take to buy one share
Using this formula
Numbers of right needed=Shares Outstanding/Number of new Shares
Let plug in the formula
Numbers of right needed=$2,900,000/$500,000
Numbers of right needed=5.8
C. Calculation for the ex-rights price
Using this formula
Ex-rights price=(Numbers of right needed*Maximum possible subscription price +Subscription price per share)/(Numbers of right needed+ One shares)
Let plug in the formula
Ex-rights price=(5.8*$42+$34)/(5.8+1)
Ex-rights price=$277.6/6.8
Ex-rights price=$40.82
Calculation for the value of a right
Using this formula
Value of a right =maximum possible subscription price-Ex-rights price
Let plug in the formula
Value of a right=$42-$40.82
Value of a right=$1.18
D. Calculation for What is his portfolio value before the right offer
Using this formula
Portfolio value before the right offer= Shareholders Shares *Maximum possible subscription price
Let plug in the formula
Portfolio value before the right offer=2,000*42
Portfolio value before the right offer=$84,000
Calculation for What is his portfolio value after the right offer
Using this formula
Portfolio value after the right offer=(Shareholders Shares*Ex-rights price) +(Shareholders Shares*Value of a right)
Let plug in the formula
Portfolio value after the right offer=(2,000*40.82)+(2,000*1.18)
Portfolio value after the right offer=$81,640+$2,360
Portfolio value after the right offer=$84,000
Pfd Company has debt with a yield to maturity of , a cost of equity of , and a cost of preferred stock of . The market values of its debt, preferred stock, and equity are million, million, and million, respectively, and its tax rate is . What is this firm's after-tax WACC? Note: Assume that the firm will always be able to utilize its full interest tax shield.
Pfd Company has debt with a yield to maturity of 7.5%, a cost of equity of 13.5%, and a cost of preferred stock of 9.5%. The market values of its debt, preferred stock, and equity are $10.5 million, $3.5 million, and $24.5 million, respectively, and its tax rate is 40%. What is this firm's weighted average cost of capital (WACC)?
Answer:
10.68%
Explanation:
As we know that:
WACC = Ke * Ve / (Ve + Vpref + Vd (1-Tax))
+ Kd * Vd*(1-tax) / (Ve + Vpref + Vd*(1-Tax))
+ Kpref * Vpref / (Ve + Vpref + Vd (1-Tax))
Here
Ke is 13.5%
Pre tax Kd is 7.5%
Kpref is 9.5%
Ve is value of equity and is $24.5 million
Vpref is value of equity $3.5 million
Vd is $10.5 million
Tax rate is 40%
By putting the values, we have:
WACC = 13.5% *$24.5 / ($24.5m + $3.5m + $10.5m (1-40%))
+ 7.5% * (1-40%) * $45m / ($24.5m + $3.5m + $10.5m (1-40%))
+ 9.5% * $3.5m / ($24.5m + $3.5m + $10.5m (1-40%))
WACC = 0.045 * 0.273 + 0.095 * 0.091 + 0.135 * 0.636
= 10.68%
"A mutual fund manager of a "high technology" fund feels that the market for this sector will remain flat in the next coming months and he wishes to generate some additional income against his portfolio. The best strategy is to sell:"
Answer: C. narrow-based calls
Explanation:
Narrow based calls would include calls from one industry. The mutual fund is an "High technology" firm which means that it is a narrow based fund for instance as it is interested only in one industry being the High Tech industry.
The manager should invest in Narrow based calls that focus on the sector if he anticipates that the market will remain flat for the sector. Narrow based Calls are more volatile because they are specific and with the volatility comes higher premiums to be charged.
Should he wish to make income against the portfolio, he should sell these knowing that the options will not be called as the market will remain flat.
Currently Baldwin is paying a dividend of $1.10 (per share). If this dividend stayed the same, but the stock price rose by 10% what would be the dividend yield
Answer:
Dividend yield = 227.06%
Explanation:
Assuming the Closing stock market summary for Baldwin company is $44.05
Dividend yield = Dividend * 100 / (Price* (1 + growth rate) )
Dividend yield = 1.10 * 100 / (44.05 * (1+0.10) )
Dividend yield = 1.10 * 100 / (44.05 * 1.10)
Dividend yield = 110 / 48.455
Dividend yield = 2.2706
Dividend yield = 227.06%
The most powerful of the five competitive forces is usually: Select one: a. The competitive pressures that stem from ready availability b. The competitive pressures associated with rivalry among competing sellers in the industry for buyer patronage c. The competitive pressures associated with the potential entry of new competitors d. The bargaining power and leverage that large customers are able to exercise
Answer:
b. The competitive pressures associated with rivalry among competing sellers in the industry for buyer patronage.
Explanation:
The Porter’s five forces of competition is a framework developed by Michael E. Porter in 1979, it is used to measure and analyze an organization's competitiveness in a business environment.
The Porter's five forces of competition framework are:
1. The bargaining power of suppliers.
2. The bargaining power of customers.
3. Threat posed by substitute products.
4. Threats posed by new entrants.
5. Threats posed by existing rivals in the industry.
The most powerful of the five competitive forces is usually the competitive pressures associated with rivalry among competing sellers in the industry for buyer patronage. When the amount of competitors (sellers), as well as the quantity of goods and services they provide are large, the lesser their competitive strengths or advantage in the market because the customers have a large pool of finished goods and services to choose from and vice-versa.
On July 1, Shady Creek Resort borrowed $320,000 cash by signing a 10-year, 11.5% installment note requiring equal payments each June 30 of $55,480. What amount of interest expense will be included in the first annual payment
Answer:
$36,800
Explanation:
The total amount of interest expense included in the first annual principal
= Principal's balance × yearly interest rate
= $320,000 × 11.5%
= $36,800
The principal's balance after the first payment is
= $320,000 - $36,800
= $283,200
The interest expense included in the second payment is
$283,200 × 11.5%
= $32,568
A retail operation has an average gross margin of 35%. If the average monthly sales for the store is $200,000.00, what is the cost of goods sold?
Answer:
COGS= $130,000
Explanation:
Giving the following information:
A retail operation has an average gross margin of 35%.
Sales= $200,000.00
To calculate the cost of goods sold, we need to use the following formula:
Gross margin= sales - COGS
COGS= sales - gross margin
COGS= 200,000 - (200,000*0.35)
COGS= $130,000
On May 1, 2010, Ziek Corp. declared and issued a 10% common stock dividend. Prior to this dividend, Ziek had 100,000 shares of $1 par value common stock issued and outstanding. The fair value of Ziek 's common stock was $20 per share on May 1, 2010. As a result of this stock dividend, Ziek's total stockholders' equity:_________
Answer: did not change
Explanation:
From the question, we are informed that On May 1, 2010, Ziek Corp. declared and issued a 10% common stock dividend and that prior to this dividend, Ziek had 100,000 shares of $1 par value common stock issued and outstanding. We are further informed that the fair value of Ziek 's common stock was $20 per share on May 1, 2010.
As a result of this stock dividend, Ziek's total stockholders' equity did not change. The accounts involved belong to the stockholders' equity, therefore, there will be no change on the total stockholders equity.
One year ago, you purchased a stock at a price of $55.20 per share. Today, you sold your stock at a loss of 18.63 percent. Your capital loss was $12.62 per share. What was the total dividends per share paid on this stock over the year
Answer:
Dividend = $2.34
Explanation:
Purchase Price = $55.20
Loss on stock = 18.63% of $55.20 = $10.28
Capital Loss = $12.62
Dividend = Capital Loss - Total Loss
Dividend = $12.62 - $10.28
Dividend = $2.34
Assume that your parents wanted to have a 170,000 saved for college by your 18th birthday and they started saving on your first birthday. They saved the same amount each year on your birthday and earned 6.5% per year on their investmenets.Required:a. How much would they have to save each year to reach their goal?b. If they think you will take five years instead of four to graduate to graduate and decide to have $140,000 saved just in case, how much more would they have to save each year to reach their new goal?
Answer:
a. They will have to save $5,245.28 each year to reach their goal of $170,000.
b. They will have to save $925.63 less to reach their new goal of $140,000.
Note: The answer to part b is based on the information in the question. Therefore, the correct answer is "they will have to save $925.63 less" not "save more" as suggested in the question. Kindly confirm this from your teacher.
Explanation:
a. How much would they have to save each year to reach their goal?
Since the saving started on your first birthday to have $170,000 saved, it implies the saving will be on your every birthday for 18 years. Therefore, the relevant formula to use to determine this is the formula for calculating the Future Value (FV) of an Ordinary Annuity as follows:
FV = M * {[(1 + r)^n - 1] / r} ................................. (1)
Where,
FV = Future value of the amount after your 18th birthday = $170,000
M = Yearly saving to have $170,000 = ?
r = interest rate = 6.5%, 0.065
n = number of years this savings will be made = 18
Substituting the values into equation (1) and solve for M, we have:
$170,000 = M * {[(1 + 0.065)^18 - 1] / 0.065}
$170,000 = M * 32.4100673759666
M = $170,000 / 32.4100673759666
M = $5,245.28
Therefore, they will have to save $5,245.28 each year to reach their goal of $170,000.
b. If they think you will take five years instead of four to graduate to graduate and decide to have $140,000 saved just in case, how much more would they have to save each year to reach their new goal?
First, we have to calculate how much they will save each year, by also using the Future Value (FV) for calculating an Ordinary Annuity as follows:
FVn = Mn * {[(1 + r)^n - 1] / r} ................................. (1)
Where,
FV1 = New future value of the amount after your 18th birthday = $140,000
M1 = New yearly saving to have $140,000 = ?
r = interest rate = 6.5%, 0.065
n = number of years this savings will be made = 18
Substituting the values into equation (1) and solve for M1, we have:
$140,000 = M1 * {[(1 + 0.065)^18 - 1] / 0.065}
$140,000 = M1 * 32.4100673759666
M1 = $140,000 / 32.4100673759666
M1 = $4,319.65
Therefore, they will have to save $4,319.65 each year to reach their goal of $140,000.
To obtain difference in yearly savings, we have:
Difference in yealy saving = M - M1 = $5,245.28 - $4,319.65 = $925.63
Since $5,245.28 each year to reach their goal of $170,000 is greater than $4,319.65 each year to reach their goal of $140,000, it therefore implies that they will have to save $925.63 less to reach their new goal of $140,000.
You notice that Coca-Cola has a stock price of $41.86 and EPS of $1.88. Its competitor PepsiCo has EPS of $3.65. But, Jones Soda, a small batch Seattle-based soda producer has a P/E ratio of 34.2. Based on this information, what is one estimate of the value of a share of PepsiCo stock?
Answer:
Value of share of Pepsi Co. stock = $82
Explanation:
Stock price of Coca-cola = $41.86
EPS = $1.88
P/E ratio = MPS / EPS
P/E ratio = $41.86 / 1.88
P/E ratio = 22.27
Jones soda P/E ratio = 34.2
Pepsi Co stock EPS = $3.65
Value of share of Pepsi Co. stock = EPS * P/E ratio
Value of share of Pepsi Co. stock = $3.65 * 22.27
Value of share of Pepsi Co. stock = $81.2855
Value of share of Pepsi Co. stock = $82
If the economy booms, RTF, Inc., stock is expected to return 9 percent. If the economy goes into a recessionary period, then RTF is expected to only return 4 percent. The probability of a boom is 68 percent while the probability of a recession is 32 percent. What is the variance of the returns on RTF, Inc., stock
Answer:
Variance = 5.44
Explanation:
The variance of a portfolio is a measure of the deviation of the returns of the assets making up the portfolio. Using the standard deviation, the variance can be worked out.
Standard deviation is measure of the total risks of an investment. It measures the volatility in return of an investment as a result of both systematic and non-systematic risks.
Non-systematic risk includes risk that are unique to a company like poor management, legal suit against the company .
The variance would be determined as follows:
Variance = Sum of P×(R- r )^2
P- probality
R- return on each asset
r- Expected return on portfolio
r =( Wa*Ra) + (Wb*Rb)
Expected return (r) = (9% × 0.68 ) + (4% × 0.32) = 7.4 %
Outcome R (R- r )^2 P×(R- r )^2
Recession 9 2.56 1.74
Boom 4 11.56 3.70
Total 5.44
Variance = Sum of P×(R- r )^2
Variance = 5.44
The government is looking to double the living standards of its population in 18 years, what rate of GDP growth would it need to achieve that? Group of answer choices
Answer:
4%
Explanation:
The rule of 72 is used to calculate the number of years it takes for GDP to double
72 / growth rate = number of years
18 = 72 / growth rate
growth rate = 72 / 18 = 4%
A profit maximizing firm selects output such that A. average profit is maximized. B. total profit is maximized. C. marginal profit is maximized. D. Both A and B.
Answer:
B. total profit is maximized.
Explanation:
This is explained to be the long run or the short run process in which a firm is seen to determine the cost of sales revenue of the said firm this can be directly explained to be in the duration of a year. Economic models have explained to us that in various forms of market structure such as perfect competition, monopoly, monopolistic competition, microeconomic theory is seen to detail extensively the determination of price and output by assuming that firm’s aim is to maximise current or short run profits. This model of profit maximizing approach also are seen to directly select output on the basis that total output is maximized.
The firm's profit-maximizing output level is \(q = \frac{1}{4}\). The profit-maximizing output level for a monopolistic firm can be determined by setting marginal revenue equal to marginal cost.
To find the firm's marginal revenue, we need to calculate the derivative of the demand function. The derivative of the demand function \(Q(p) = 100 - 2p\) with respect to price \(p\) is \(\frac{dQ}{dp} = -2\). This derivative represents the rate at which quantity demanded changes with respect to price.
Since the monopolistic firm is the sole producer in the market, the market demand is equal to the firm's demand. Thus, the firm's marginal revenue (\(MR\)) is given by \(MR = \frac{dQ}{dp} = -2\).
To find the firm's marginal cost (\(MC\)), we need to calculate the derivative of the cost function. The derivative of the cost function \(C(q) = 100 + 4q^2\) with respect to quantity \(q\) is \(\frac{dC}{dq} = 8q\). This derivative represents the rate at which cost changes with respect to quantity.
Setting \(MR = MC\), we have \(-2 = 8q\). Solving for \(q\), we get \(q = -\frac{2}{8} = -\frac{1}{4}\).
Since quantity cannot be negative, we discard the negative value and take the positive value, \(q = \frac{1}{4}\).
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Miller Fruit wants to expand and needs $1.6 million to do so. Currently, the firm has 465,000 shares of stock outstanding at a market price per share of $32.50. The firm decided on a rights offering with one right granted for each share of outstanding stock. The subscription price is $28 a share. How many rights are needed to purchase one new share of stock in this offering?Miller Fruit wants to expand and needs $1.6 million to do so. Currently, the firm has 465,000 shares of stock outstanding at a market price per share of $32.50. The firm decided on a rights offering with one right granted for each share of outstanding stock. The subscription price is $28 a share. How many rights are needed to purchase one new share of stock in this offering?
Answer:
Rights needed for each new share = 8.14 rights
Explanation:
Amount needed to expand = $1.6 million
465,000 shares of stock outstanding at a market price per share of $32.50
The subscription price = $28
Number of rights issued = 1 right per share × 465,000 shares
Number of rights issued = 465,000 rights
Number of shares needed = $1,600,000 / $28
Number of shares needed = 57,142.857
Rights needed for each new share = Number of rights issued / Number of shares needed
Rights needed for each new share = 465,000 / 57,142.857
Rights needed for each new share = 8.14 rights