Answer:
Residual income =$6,700
Explanation:
Residual income is the excess of the controllable profit over the opportunity cost of capital invested.
It is used to evaluate the financial performance of a division or department.
The a positive residual value indicate a good performance, hence the higher the residual value the better
It is computed as follows:
Residual income = Controllable profit - (cost of capital× operating assets)
Controllable profit = 47,000
Interest on capital = × 13% × 310,000 = 40300
Residual income = 47,000 - 40,300 = 6700
Residual income =$6,700
A bond par value is $1,000 and the coupon rate is 5.1 percent. The bond price was $946.02 at the beginning of the year and $979.58 at the end of the year. The inflation rate for the year was 2.6 percent. What was the bond's real return for the year
Answer:
the bond's real return for the year is 6.18 %.
Explanation:
First find the nominal return of the bond then the real return as follows :
PV = - $946.02
Pmt = $1,000 × 5.10% = $51
P/yr = 1
FV = $979.58
n = 1
r = ?
Using a Financial Calculator, the nominal return of the bond, r is 8.9385 %.
Real Return = ( 1 + nominal return) / (1 + inflation rate) -1
= (1 + 0.089395) / (1 + 0.026) - 1
= 0.0618 or 6.18 %
A preferred share of Coquihalla Corporation will pay a dividend of $8 in the upcoming year and every year thereafter; that is, dividends are not expected to grow. You require a return of 7% on this stock. Using the constant-growth DDM to calculate the value of Coquihalla Corporation is worth _________. A. $13.50 B. $45.50 C. $91 D. $114.29
Answer:
$114.29
Explanation:
A preferred share of Coquihalla corporation will pay a dividend of $8
The return on the stock is 7%
= 7/100
= 0.07
Therefore, by using the constant growth DMM the worth of the corporation can be calculated as follows
Vo= 8/0.07
= $114.29
Hence the value of Coquihalla corporation is worth $114.29
TRUE OR FALSE ? WHY ? Plesae help me
1. The goods that the enterprise wants or intends to add to its capital stock are inventories.
2. In a simple economy, the gross national product is the same as the gross domestic product and the national income.
3. The central bank cannot go bankrupt because it is always able to repay depositors' withdrawals by printing new notes at a faster rate.
4. Inflation is a phenomenon of money, so just reducing the money supply will reduce inflation.
Answer:
1. True
2. False
3. True
4. True
Explanation:
1. in accounting the stock is treated as inventories
2. because the GNP considers the output of a country's citizens regardless of where that economic activity occurred. GNP expresses the total value of all goods (products and services) produced by the residents of a particular country, regardless of national borders, thus including their foreign assets. while GDP considers the activity within a national economy regardless of the residency of the producers.
3. Financing for central banks is completely different to that of commercial banks and private corporations because their commitments – banknotes and commercial banks’ overnight deposits held at central banks are the only authorized forms of payment in their jurisdiction. Central banks have a monopoly on creating money,
4. inflation is a monetary phenomenon means to control the supply of money
Let M be the number of units to make and B be the number of units to buy. If it costs $2 to make a unit and $3 to buy a unit and 4000 units are needed, the objective function is
Min 2M + 3B
Min 4000 (M + B)
Max 2M + 3B
Max 8000M + 12000B
Answer:
Min 2M + 3B
Explanation:
Data provided in the question
Let us assume M denotes the making units
B denotes the buying units
So,
Making cost per unit = $2
And, the buying cost per unit = $3
And, the total number of units required = 4,000 units
Based on the above information, the objective function is Min 2M + 3B.
This indicates the minimum total cost
Hence, the correct option is A.
wHAT is the largest private operator of health care facilities in the world with hundred of facilities in over 20 states. In 2006, private equity buyers took the company private in a $31.6 billion acquisition. In broad terms how costly do you think financial distress would be to HCA if it began to appear the company might be having difficulty servicing its debt
Answer:
Hey There!! The answer to this is HCA: Because HCA Is The Largest Private Operator Of Health Care Facilities In The World With Hundrd Of Facilities In Over 20 States. In 2006, Private Equity Buyers Took The Company Private In A $31.6 Billion Acquisition.
Hope It Helped!~ ♡
ItsNobody~ ☆
Required information [The following information applies to the questions displayed below.) Fiddle Corp. has been an S corporation since inception. Charlie has a tax basis of $18,750 in his Fiddle stock. In 2019, Charlie was allocated $23,750 of ordinary income from Fiddle. What is the amount and character of gain Charlie recognizes from end-of-the-year distributions in each of the following alternative scenarios, and what is his stock basis following each distribution? (Leave no answer blank. Enter zero if applicable. If the answer is "O", select "None"). Fiddle distributes $47.500 to Charlie.
Answer and Explanation:
According to the given question, the computation is shown below:-
a. The amount and character of gain Charlie recognizes from end-of-the-year distributions is
Particulars Amount
Tax basis a $18,750
Ordinary income b $23,750
Stock basis $42,500
(c = a + b)
Distribution $47,500 ($42,500 + $5,000)
b. The stock basis is
Particulars Amount Character
Gain $5,000 Capital ($23,750 - $18,750)
Stock basis - None
chuyển 1 TSCĐ hữu hình thuộc nguồn
NSNN cấp do không đủ tiêu chuẩn chuyển thành CCDC, theo nguyên giá 25.000,
giá trị hao mòn lũy kế: 21.000.
If a corporation has a dividend payout ratio of 75%, the undistributed earnings (25%) will:_________.
A. increase earnings per share.
B. decrease book value.
C. increase capital in excess of par
D. increase retained earnings
Answer:
D
Explanation:
Retained earnings is what is left of net income after a company has paid out dividends to its shareholders.
A 25-year old single client has just started his own small business and is not covered by a retirement plan. He has $5,000 to invest and currently has a low level of income. He wishes to start saving for retirement. The BEST recommendation is a:
Answer:
Roth IRA
Explanation:
Based on this scenario, it can be said that the best recommendation would be a Roth IRA. This is an individual retirement account that non-deductible tax-free growth for retirement at age 59 1/2. As of 2018, the yearly limit for a Roth IRA account is $5,500 meaning that the client in this scenario would not have any problem investing the entire $5000 as soon as they open the account. And since he is in a low tax bracket he should not have any problem opening an Account.
Two investment advisers are comparing performance. Adviser A averaged a 20% return with a portfolio beta of 1.5, and adviser B averaged a 15% return with a portfolio beta of 1.2. If the T-bill rate was 5% and the market return during the period was 13%, which adviser was the better stock picker
Answer:
Based on the results, Adviser A's choice of stocks yielded a greater excess return. Thus, he was a better stock picker.
Adviser A's excess return = 3%
Adviser B's excess return = 0.04%
Explanation:
To compare the performance of the two stock advisers, we first need to determine the required or expected rate of return of both the portfolios.
Using the CAPM, we can calculate the expected rate of return for each portfolio.
The equation for CAPM is,
r = rRF + Beta * (rM - rRF)
Where,
rRF is the risk free raterM is the return on marketAdviser A
r = 0.05 + 1.5 * (0.13 - 0.05)
r = 0.17 or 17%
The required rate of return of Adviser A's portfolio was 17% while his portfolio yielded a return of 20% on average. The excess return on the portfolio was 20 - 17 = 3%
Adviser B
r = 0.05 + 1.2 * (0.13 - 0.05)
r = 0.146 or 14.6%
The required rate of return of Adviser B's portfolio was 14.6% while his portfolio yielded a return of 15% on average. The excess return on the portfolio was 15 - 14.6 = 0.04%
Based on the results, Adviser A's choice of stocks yielded a greater excess return. Thus, he was a better stock picker.
The percent change in nominal gross domestic product (GDP) minus the percent change in price level equals
Answer:
Real GDP
Explanation:
Nominal GDP less percent change in price levels equals to real GDP
Nominal GDP is GDP calculated using current year prices
Real GDP is GDP using base year prices. it has been adjusted for inflation.
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
has a target debt−equity ratio of 1.35. Its WACC is 8.3 percent, and the tax rate is 35 percent. If the company’s cost of equity is 14 percent, what is its pretax cost of debt? (Do not round intermediate calculations. Enter yo
Answer:
5.74%
Explanation:
WACC = weight of equity x cost of equity + weight of debt x cost of debt x (1 - tax rate)
weight of debt = D / (D + E) = 1.35/ (1.35 + 1) = 0.574468 = 57.4468%
weight of equity = 100% - 57.4468% = 42.5532%
let x represent pretax cost of debt
8.1% = 0.425532 x 14% +( 0.574468x) x 0.65
8.1% = 0.373404x + 5.957448%
solve for x
x = 5.74%
Assume that the following are independent situations recently reported in the Wall Street Journal.
a. General Electric (GE) 7% bonds, maturing January 28, 2018, were issued at 110.30.
b. Boeing 7% bonds, maturing September 24, 2032, were issued at 98.15.
Required:
a. Were GE and Boeing bonds issued at a premium or a discount?
b. The General Electric bonds were issued at a___________ and the Boeing bonds were issued at a__________
Answer:
a. Were GE and Boeing bonds issued at a premium or a discount?
GE bonds were issued at a premium, at 110.3%, while Boeing bonds were issued at a discount, at 98.15%
b. The General Electric bonds were issued at a premium (at $1,103) and the Boeing bonds were issued at a discount (at $981.50).
When bonds are issued at a value higher than face value, they are issued at a premium. When bonds are issued at a value lower than face value, they are issued at a discount.
Tasty Doughnuts has computed the net present value for capital expenditure at two locations. Relevant data related to the computation are as follows: Des Moines Cedar Rapids Total present value of net cash flow $712,500 $848,000 Amount to be invested (750,000) (800,000) Net present value $(37,500) $ 48,000 a. Determine the present value index for each proposal. Round your answers for the present value index to two decimal places.
Answer:
0.95 and 1.06
Explanation:
The computation of the present value index is shown below:
Present value index = Present Value of net cash Flow ÷ Amount invested
So for each projects, it would be
Particulars Des Moines Cedar Rapids
Total present value of
net cash flow (A) $712,500 $848,000
Amount invested (B) $750,000 $800,000
Present value index (A ÷ B) 0.95 1.06
In which of the following scenarios would enforcement of specific performance be appropriate? Multiple Choice Your bookstore agrees to order a textbook for you but breaches its contract with you by canceling the order the next day. You order 3 gallons of white ceiling paint from a local store, and the store breaches by not delivering or making available to you the 3 gallons. You own the pistol used by Hamilton and contract to buy the pistol used by Burr in the Hamilton-Burr duel to complete your set, but despite the contract the Burr pistol owner refuses to sell at the last minute. You order a current-model, name-brand television from a department store, and a few days later the store breaches by not ordering it from the manufacturer.
Answer:
Correct Answer:
2. You order 3 gallons of white ceiling paint from a local store, and the store breaches by not delivering or making available to you the 3 gallons.
3. You own the pistol used by Hamilton and contract to buy the pistol used by Burr in the Hamilton-Burr duel to complete your set, but despite the contract the Burr pistol owner refuses to sell at the last minute.
1. Your bookstore agrees to order a textbook for you but breaches its contract with you by canceling the order the next day.
Explanation:
In enforcement of specific performance is applied in situations where there there is an established contract that has was not honored. This bridge of contract would then trigger performance enforcement.
If you could purchase IBM stock and simultaneously sell the stock for $5 more, you would be involved in one type of economic activity?a. indifference principleb. arbitragec. carry traded. marked to markete. none of the above
Answer:
arbitrage
Explanation:
Arbitrage can be defined as an act or process of buying buying and selling an asset simultaneously. Purchasing IBM stock and selling it for 5 dollar more simultaneously is an example of arbitrage. Such a seller is going to cash in on the price difference in buying and selling this stock. It is simply taking advantage of the difference in price that is gotten from buying and reselling this stock at 5dollars.
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? A.) Location (im pretty sure its not A) B.) Personal satisfaction C.) Independence D.)Family
Answer:
D. Family
Explanation:
We are evaluating a project that costs $874,800, has a nine-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 85,000 units per year. Price per unit is $55, variable cost per unit is $39, and fixed costs are $765,000 per year. The tax rate is 24 percent, and we require a return of 11 percent on this project. Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within ±10 percent.
Calculate the best-case and worst-case NPV figures
Answer:
best case scenario:
project outlay = $874,800
yearly cash flows:
projected sales = 85,000 x 110% = 93,500sales price = $55 x 110% = $60.50variable costs = $39 x 90% = $35.10fixed costs = $765,000 x 90% = $688,500depreciation costs = $874,800 / 9 = $97,200tax rate = 24%yearly cash flows = {[(93,500 x $60.50) - (93,500 x $35.10) - $688,500 - $97,200] x (1 - 24%)} + $97,200 = $1,304,992
using a financial calculator, NPV = $6,351,002.73
worst case scenario:
project outlay = $874,800
yearly cash flows:
projected sales = 85,000 x 90% = 76,500sales price = $55 x 90% = $49.50variable costs = $39 x 110% = $42.90fixed costs = $765,000 x 110% = $841,500depreciation costs = $874,800 / 9 = $97,200tax rate = 24%yearly cash flows = {[(76,500 x $49.50) - (76,500 x $42.90) - $841,500 - $97,200] x (1 - 24%)} + $97,200 = -$232,488
using a financial calculator, NPV = -$2,071,211.79
A 65-year old widow that is in a low tax bracket and that has a low risk tolerance wishes to make an investment that will provide income. Which is the BEST recommendation
Answer:
Bank Certificate of Deposit (CD)
Explanation:
For the 65-year old widow in this scenario, the best recommendation would be a Bank Certificate of Deposit (CD). A traditional Bank CD is a time-bound deposit, in which you enter into an agreement to let the bank use your money for a fixed period of time, and in return, the bank pays you a higher interest rate than it would for a traditional savings account. Thus providing a good income with very low risk.
One of the least desirable and routine tasks members of your team must do is taking minutes (notes) at team meetings. Proof that this task is disagreeable can be seen in the repeated arguments among team members before every meeting about who should take the minutes. Which of the following would be the most effective way for the team to address this stuation?
A. Ask your manager to decide in order to minimize any personal bias among team members.
B. Randomly assign a person to bé the official note taker at the beginig of each meeting
C. Create a rotating assignment so each team member shares note taking.
D. Assign note taking to whichever person enters last at each
Answer:
C. Create a rotating assignment so each team member shares note taking.
Explanation:
In the case noted in the question above, there is a situation that could be unpleasant if it were decided by some type of bias.
Therefore, the most appropriate alternative for the team to address this situation would be to create a rotating assignment for each team member to share the notes. This way it would not happen that a team member is always chosen to perform a task that causes dissatisfaction in the whole team. Creating a rotating assignment to carry out the task would guarantee the uniformity of the task assignment and avoid possible dissatisfactions, inequalities and interpersonal conflicts that could arise.
Find the operating cash flow for the year for Harper Brothers, Inc. if it had sales revenue of , cost of goods sold of , sales and administrative costs of , depreciation expense of , and a tax rate of .
Answer:
$101,960,000
Explanation:
For the computation of operating cash flow first we need to follow some steps which are shown below:-
Step 1
EBIT = Sales - Cost of goods sold - Sales and administrative costs - Depreciation
= $302,100,000 - $135,900,000 - $39,600,000 - $65,000,000
= $61,600,000
Step 2
Net income = EBIT - Tax
= $61,600,000 - ($61,600,000 × 40%)
= $61,600,000 - $24,640,000
= $36,960,000
and finally
Operating cash flow = EBIT - Taxes + Depreciation
= $61,600,000 - $24,640,000 + $65,000,000
= $101,960,000
Jasper makes a $27,000, 90-day, 8.0% cash loan to Clayborn Co. Jasper's entry to record the collection of the note and interest at maturity should be: (Use 360 days a year.)
Answer:
Dr Cash $25,500
Cr Interest Revenue $500
Cr Notes Receivable $25,000
Explanation:
Based on the information we were told Jasper makes the amount of $27,000 which include 90-day and 8.0% cash loan to Clayborn Co, which means that Jasper's Journal entry to record the collection of the note and interest at maturity should be:
Dr Cash $25,500
(25,000+500)
Cr Interest Revenue $500
(25,000*8%*90/360)
Cr Notes Receivable $25,000
What value does a gender analysis add to the study of the global political economy?
Gender analysis provides information that recognizes that gender, and its relationship with race, ethnicity, culture, class, age, disability, and/or other status, is important in understanding the different patterns of involvement, behaviour and activities that women and men have in economic, social and legal.The essay concludes that a gender analysis is fundamental to IPE because it demonstrates the centrality of the differential valorisation of the masculine and the feminine to the functioning of the global political economy, and thus creates opportunities for political activism and resistance.
21. A noncancelable lease contains an option to purchase a leased asset at a price that is sufficiently lower than the asset's expected fair value so that the exercise of the option appears reasonably certain. The fair value of the asset exceeds the lessor's cost of the asset. Therefore, the lease will be accounted for by the lessor as a(n):
Answer: A. Sales-type lease
Explanation:
A Sales type lease is one where the present value of all the lease payments of the Asset being leased is more than the cost/ carrying amount of the Asset.
The present value of the lease Payments is the Fair Value of the asset and as seen from the question, the fair value of the asset is more than the cost of the Asset. The lease will therefore be accounted for as a Sales type lease by the lessor.
It is worthy of note that this entry affects only the lessor.
In determining whether a company's financial condition is improving or deteriorating over time, horizontal analysis of financial statement data would be more useful than vertical analysis.a. True
b. False
Answer:
a. True.
Explanation:
In determining whether a company's financial condition is improving or deteriorating over time, horizontal analysis of financial statement data would be more useful than vertical analysis.
In Financial accounting, Horizontal analysis can be defined as an analysis and evaluation of a financial statement which illustrates or gives information about changes in the amount of corresponding financial statement items, benchmarks or financial ratio over a specific period of time. It is one of the most important technique that is used to measure how a business is doing financially. Hence, it is also referred to as the trend analysis.
Under the horizontal analysis of financial statement, we use the financial statements of two or more periods; earliest and latter periods.
Generally, the earliest is chosen as the base period while all other items on the statement for a latter period will be compared with the items on the statement of the base period.
Concord Corporation has 34000 units in beginning finished goods. If sales are expected to be 140000 units for the year and Concord desires ending finished goods of 40000 units, how many units must the company produce
Answer:
146,000 units
Explanation:
The computation of units must the company produce is shown below:-
As we know that
Units sold = opening inventory + units produced - Closing inventory
So,
Units Produced = Units sold - opening inventory + Closing inventory
= 140,000 - 34,000 + 40,000
= 146,000 units
Hence, the number of units produced by the company is 146,000 units
has a target debt−equity ratio of .50. Its cost of equity is 15 percent, and its cost of debt is 6 percent. If the tax rate is 34 percent, what is the company’s WACC?
Answer:
11.35%
Explanation:
The calculation of WACC is shown below:-
WACC = Cost of equity × (equity ÷ (Debt + Equity)) + cost of debt × (debt ÷ (Debt + Equity)) × (1 - tax rate)
= 0.15 × (1 ÷ 1.50) + 0.06 × (0.50 ÷ 1.50) × (1 - 0.34)
= 0.15 × 0.67 + 0.06 × 0.33 × 0.66
= 0.1005 + 0.013068
= 11.35%
Therefore for computing the WACC we simply applied the above formula.
Telecom Systems can issue debt yielding 7 percent. The company is in a 30 percent bracket. What is its aftertax cost of debt
Answer:
After tax cost of debt = 0.049 or 4.9%
Explanation:
The after tax cost of debt is the rate of debt after deducting the benefit from tax savings due to interest payments required by the debt which are deductible before calculating tax. The after tax cost of debt is somewhat an effective cost of debt. It is calculated using the following formula,
After tax cost of debt = Cost of debt * (1 - tax rate)
After tax cost of debt = 0.07 * (1 - 0.3)
After tax cost of debt = 0.049 or 4.9%
Dairy Wishes, a local ice cream store, finds
that it sells out of ice cream sandwiches at the current price of $1. It raises the price to increase its
revenues and finds that no one buys ice cream sandwiches anymore
The demand for icecream sandwiches is
a. inelastic.
b. elastic.
c. perfectly inelastic.
d. perfectly elastic.
e. unitary elastic.
Answer:
d. perfectly elastic.
Explanation:
Demand is perfectly elastic if it at the current price, the product is sold out but if there is a change in price demand falls to zero. the demand curve is horizontal
Demand in perfectly inelastic if there is no change in quantity demanded regardless of the change in price.
If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes.
Demand is inelastic if a small change in price has little or no effect on quantity demanded. The absolute value of elasticity would be less than one
Demand is unit elastic if a small change in price has an equal and proportionate effect on quantity demanded.
Glacier Trails manufactures backpacks for adventurers. The backpacks come in two types: Daytripper, and Excursion. Glacier anticipates the following sales volumes for the coming period:
Daytripper: 2,000 backpacks
Excursion: 1.200 backpacks
If total budgeted revenue for the period is $250,000 and the sales price for Daytripper backpacks is $50, what is the budgeted sales price for Excursion backpacks?
a. $ 78.
b. $125.
c. $5130.
d. $158.
e. none of the above.
Answer:
the budgeted sales price for Excursion backpacks is b. $125.
Explanation:
Total Budgeted Revenue = Daytripper Budgeted Revenue + Excursion Budgeted Revenue
Therefore,
Let the budgeted sales price for Excursion backpacks be $y
$250,000 = 2,000 × $50 + 1.200 × $y
$150,000 = $1,200 y
$125 = y
Therefore, the budgeted sales price for Excursion backpacks is $125.