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%
World Class Rings produces class rings. Its best-selling model has a direct materials standard of 16 grams of a special alloy per ring. This special alloy has a standard cost of $63.30 per gram. In the past month, the company purchased 16,800 grams of this alloy at a total cost of $1,061,760. A total of 16,300 grams were used last month to produce 1,000 rings.
Requirements:
1. What is the actual cost per gram of the special alloy that World Class Rings purchased last month? (Round your answer to the nearest cent.) The actual cost per gram of the special alloy that World Class Rings purchased last month is $_____.
2. What is the direct material price variance? (Abbreviations used: DM = Direct materials) Begin by determining the formula for the price variance, then compute the price variance for direct materials.
3.·What is the direct material quantity variance? (Abbreviations used: DM = Direct materials) Determine the formula for the quantity variance, then compute the quantity variance for direct materials.
4. How might the direct material price variance for the company last month be causing the direct material quantity variance?
The_____direct material price variance might mean that World Class Rings purchased a______. As a result, the company______quantity (efficiency) variance alloy than the standard allows. This accounts for the_____quantity (efficiency) variance.
Answer:
1. What is the actual cost per gram of the special alloy that World Class Rings purchased last month? (Round your answer to the nearest cent.) The actual cost per gram of the special alloy that World Class Rings purchased last month is $_____.
= $1,061,760 / 16,800 grams = $63.20 per gram
2. What is the direct material price variance? (Abbreviations used: DM = Direct materials) Begin by determining the formula for the price variance, then compute the price variance for direct materials.
direct materials price variance = (AP - SP) x AQ = ($63.20 - $63.30) x 16,300 = -$1,630 favorable variance
3.·What is the direct material quantity variance? (Abbreviations used: DM = Direct materials) Determine the formula for the quantity variance, then compute the quantity variance for direct materials.
direct materials quantity variance = SP x (AQ - SQ) = $63.30 x (16,300 - 16,000) = $18,990 unfavorable variance
4. How might the direct material price variance for the company last month be causing the direct material quantity variance?
The FAVORABLE direct material price variance might mean that World Class Rings purchased a LOWER QUALITY MATERIAL. As a result, the company USED MORE ALLOW THAN STANDARD quantity (efficiency) variance alloy than the standard allows. This accounts for the UNFAVORABLE quantity (efficiency) variance.
Skolits Corp. has a cost of equity of 11.1 percent and an aftertax cost of debt of 4.65 percent. The company's balance sheet lists long-term debt of $375,000 and equity of $635,000. The company's bonds sell for 105.5 percent of par and market-to-book ratio is 3.01 times. If the company's tax rate is 35 percent, what is the WACC
Answer:
The WACC is 8.71%.
Explanation:
The weighted average cost of capital (WACC) is simply the average rate a firm is expected to pay as cost financing its assets to those who hold its securities.
The WACC can be computed as follows:
Total debt and equity = Debt + Equity = $375,000 + $635,000 = $1,010,000
WE = Weight of equity = Equity / Total debt and equity = $635,000 / $1,010,000 = 0.63, or 63%
WD = Weight of equity = Debt / Total debt and equity = $375,000 / $1,010,000 = 0.37, or 37%
CE = Cost of equity = 11.1%
ACD = After tax cost of debt = 4.65%
Therefore, we have:
WACC = (WE * CE) + (WD * ACD) = (63% * 11.1%) + (37% * 4.65%) = 6.99% + 1.72% = 8.71%
Therefore, the WACC is 8.71%.
Farris Company is considering a cash outlay of $500,000 for the purchase of land, which it could lease for $40,000 per year. If alternative investments are available that yield a 15% return, the opportunity cost of the purchase of the land is
Answer: $75,000
Explanation:
Opportunity cost is what an individual, firm or the government has to forgo when another different choice is made.
From the question, we are informed that Farris Company is considering a cash outlay of $500,000 for the purchase of land, which it could lease for $40,000 per year and that alternative investments are available that yield a 15% return.
Then the opportunity cost of the purchase of the land will be:
= $500,000 × 15%
= $500,000 × 0.15
= $75,000
Discounted payback period. Given the following two projects and their cash flows, LOADING..., calculate the discounted payback period with a discount rate of %, %, and %. What do you notice about the payback period as the discount rate rises? Explain this relationship. With a discount rate of %, the cash outflow for project A is:
Answer:
the numbers are missing, so I looked for a similar question:
Cash Flow A B
Cost $10,000 $105,000
Cash flow year 1 $3,571 $21,000
Cash flow year 2 $3,571 $10,500
Cash flow year 3 $3,571 $42,000
Cash flow year 4 $3,571 $31,500
Cash flow year 5 $3,571 $5,250
Cash flow year 6 $3,571 $0
With a discount rate of 5%, 10% & 15%
Discounted cash flows for project A:
5% 10% 15%
Cost $10,000
Cash flow year 1 $3,571 $3,401 $3,246 $3,105
Cash flow year 2 $3,571 $3,239 $2,951 $2,700
Cash flow year 3 $3,571 $3,085 $2,683 $2,348
Cash flow year 4 $3,571 $2,938 $2,439 $2,042
Cash flow year 5 $3,571 $2,798 $2,217 $1,775
Cash flow year 6 $3,571 $2,665 $2,016 $1,544
discounted payback period:
5% = 3.09 years
10% = 3.46 years
15% = 3.9 years
The higher the discount rate, the longer the discounted payback period.
Discounted cash flows for project B:
5% 10% 15%
Cost $105,000
Cash flow year 1 $21,000 $20,000 $19,091 $18,261
Cash flow year 2 $10,500 $9,524 $8,678 $7,940
Cash flow year 3 $42,000 $36,281 $31,555 $27,616
Cash flow year 4 $31,500 $25,915 $21,515 $18,010
Cash flow year 5 $5,250 $4,114 $3,260 $2,610
discounted payback period:
5% = more than 5 years, the project's NPV is negative -$9,166.37
10% = more than 5 years, the project's NPV is negative -$20,901.42
15% = more than 5 years, the project's NPV is negative -$30,563.54
explain business with two Examples
Explanation:
A business is defined as an organization or enterprising entity engaged in commercial, industrial, or professional activities. ... The term "business" also refers to the organized efforts and activities of individuals to produce and sell goods and services for profit.
Example Coca-Cola, Amazon etc.
Answer:
A business is defined as an organization or enterprising entity engaged in commercial, industrial, or professional activities. ... There are various forms of a business, such as a limited liability company (LLC), a sole proprietorship, a corporation, and a partnership
Stine Inc. had 1,000,000 shares of common stock issued and outstanding at December 31, 2020. On July 1, 2021 an additional 1,000,000 shares were issued for cash. Stine also had stock options outstanding at the beginning and end of 2021 which allow the holders to purchase 300,000 shares of common stock at $28 per share. The average market price of Stine's common stock was $35 during 2021. The number of shares to be used in computing diluted earnings per share for 2021 is
The number of shares to be used in computing diluted earnings per share for 2021 is 1,560,000
Diluted earnings per share=(1,000,000* 6/12) + (2,000,000 *6/12) + [((35 – 28) ÷35) *300,000]
Diluted earnings per share=500,000+1,000,000+60,000
Diluted earnings per share= 1,560,000
Therefore The number of shares to be used in computing diluted earnings per share for 2021 is 1,560,000
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Which of the following items would be a way to manipulate the cash flow from operating activities amount on the statement of cash flows?
a.
Adding depreciation back to net income to determine cash flow from operating activities.
b.
Including interest expense and tax expense in the calculation of cash flow from operating activities.
c.
Recording an item that should be recorded as an operating activity as an investing activity.
d.
The cash flow statement cannot be manipulated.
Answer:
C. Recording an item that should be recorded as an operating activity as an investing activity.
Explanation:
Hope it helped
if the fed sells $2 million of bonds to the First National bank, what happens to reserves and the monetary base
Answer:
First National bank
ASSETS
Decrease in RESERVE $2 million
Increase in SECURITIES $2 million
Federal Reserve
ASSETS:Decrease in RESERVE $2 million
LIABILITIES:Decrease in SECURITIES $2 million
Decrease in Reserve by $2 million while the Monetary Base Decrease by $2 million
Explanation:
Based on the information given if federal reserve sell the amount of $2 million of bonds to the First National bank, what will happen is that:
1. In First National bank:
Assets
RESERVE will decrease by the amount of $2 million while the SECURITIES will increase by the same amount of $2 million.
2. In Federal reserve :
Assets and Liabilities
Both the RESERVE AND SECURITIES will decrease by the amount of $2 million.
3. The Reserve will decrease by the amount of $2 million while Monetary Base will as well decrease by the same amount of $2 million.
In Summary
First National bank
ASSETS
Decrease in RESERVE $2 million
Increase in SECURITIES $2 million
Federal Reserve
ASSETS:Decrease in RESERVE $2 million
LIABILITIES:Decrease in SECURITIES $2 million
Decrease in Reserve by $2 million while the Monetary Base Decrease by $2 million
A consumer plays the role of:
A)a wage earner.
B)a saver.
C)a borrower.
D)All of these choices are correct.
Answer:
c) borrower
Explanation:
A consumer plays the role of a borrower. The consumer is the important role in the economy. Thus, option (c) is correct.
What is consumer?The term “consumer” means purchasing a product or service for the purpose of personal use. The consumer are consumed the product and services. The consumer are buying the product and services with exchange of money.
According to the role of the consumer are the played in the significant role of the economy. The business are the sale of the goods and the services are the borrower are the paid the money to the business. The economy cycle was the continue run.
As a result, the consumer plays the role of a borrower. The consumer is the significant role in the economy. Therefore, option (c) is correct.
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An organizationally-driven reason for outsourcing is that it can improve effectiveness by focusing on what the firm does best.
Answer:
True
Explanation:
Outsourcing is when a company gives some of its internal activities to an external party that takes the responsibility to get things done and one of the reasons for a company to do this is to get rid of activities that have to get done but that are not part of their core operations to be able to concentrate on their main activity and get those things done by experts which can help increase productivity. According to that, the answer is that the statement is true.
A company has evaluated several projects using net present value. All projects are similar in amount invested and risk. Rank the projects in the order they should be accepted.
Answer:
First option - $2067
second option - $340
third option - $62
not acceptable - ($615)
Explanation:
Please find attached the question used in answering this question.
Net present value is the present value of after tax cash flows from an investment less the amount invested.
Only projects with a positive NPV should be accepted. A project with a negative NPV should not be chosen because it isn't profitable.
When choosing between positive NPV projects, choose the project with the highest NPV first because it is the most profitable.
Determine which of the following situations describe games and which describe decisions. In each case, indicate what specific features of the situation caused you to classify it as you did. (a) A group of grocery shoppers in the dairy section, with each shopper choosing a flavor of yogurt to purchase (b) A pair of teenage girls choosing dresses for their prom (c) A college student considering what type of postgraduate education to pursue (d) The New York Times and the Wall Street Journal choosing the prices for their online subscriptions this year (e) A presidential candidate picking a running mate
Answer:
Situation which describes:
1. Game:
(a) A group of grocery shoppers in the dairy section, with each shopper choosing a flavor of yogurt to purchase
(Because of the attribute of each shopper choosing a flavor of yogurt.)
2. Decisions:
(b) A pair of teenage girls choosing dresses for their prom. (The prom which date and time has been fixed already)
(c) A college student considering what type of postgraduate education to pursue. (Because of decision to be educated)
(d) The New York Times and the Wall Street Journal choosing the prices for their online subscriptions this year. (Due to the various financial ability of its reader)
(e) A presidential candidate picking a running mate ( Due to the election that is upcoming)
Explanation:
Yasmin Co. can further process Product B to produce Product C. Product B is currently selling for $33 per pound and costs $28 per pound to produce. Product C would sell for $58 per pound and would require an additional cost of $25 per pound to produce. What is the differential cost of producing Product C?
Answer:
Differential cost is $0
Explanation:
A company should process further a product if the additional revenue from the split-off point is greater than than the further processing cost.
Additional sales revenue = Sales revenue after further processing - sales revenue after split-off point
. A company should process further a product if the additional revenue from the split-off point is greater than than the further processing cost.
Also note that all cost incurred up to the split-off point are irrelevant to the decision to process further .
$
Sales after split off point (Product C) 58
Sales at the split off point (Product B) 33
Additional sales revenue 25
Further processing cost (25)
Differential cost 0
Differential cost is $0
In terms of communicative competency, effective leaders attempt to force their own ideas into group discussions.
a. True
b. False
Answer:
False
Explanation:
Lone Wolf Technologies Inc. assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $60,400, the accumulated depreciation is $24,200, its remaining useful life is five years, and its residual value is zero. A proposal was made to replace the present manufacturing procedure with a fully automatic machine that will cost $113,800. The automatic machine has an estimated useful life of five years and no significant residual value. For use in evaluating the proposal, the accountant accumulated the following annual data on current and proposed operations: Current Operations Proposed OperationsSales $191,500 $191,500 Direct materials $65,200 $65,200 Direct labor 45,300 15,100 Power and maintenance 4,200 7,200 Taxes, insurance, etc. 1,500 5,000 Selling and administrative expenses 45,300 45,300 Total expenses $161,500 $137,800Required:Prepare a differential analysis report for the proposal to replace the machine. Include in the analysis both the net differential change in costs anticipated over the five years and the net annual differential change in costs anticipated.
Answer:
Differential analysis for 1 year
Keep old Change Differential
machine machine amount
sales revenue 191,000 191,000 0
depreciation expense -4,840 -22,760 -17,920
per year
direct materials -65,200 -65,200 0
direct labor -45,300 -15,100 30,200
power and -4,200 -7,200 -3,000
maintenance
taxes and -1,500 -5,000 -3,500
insurance
S&A expenses -45,300 -45,300 0
total 24,660 30,440 5,780
If the new machine is purchased, profits will increase by $5,780 every year.
Differential analysis for 5 years
Keep old Change Differential
machine machine amount
sales revenue 955,000 955,000 0
depreciation expense -24,200 -113,800 -89,600
per year
direct materials -326,000 -326,000 0
direct labor -226,500 -75,500 151,000
power and -21,000 -36,000 -15,000
maintenance
taxes and -7,500 -25,000 -17,500
insurance
S&A expenses -226,500 -226,500 0
total 123,300 152,200 28,900
If the new machine is purchased, profits will increase by $28,900 for the 5 year period.
A corporation is attempting to sell additional shares to its existing shareholders through a rights distribution. A shareholder who wishes to subscribe must send the purchase amount with the rights certificate to the:
Answer:
Right agent.
Explanation:
A rights agent is said to be a correlative junction, serve and also seen to be an obedient mediator and right assistance between his client and any form of third party organisation or also other clients. A right agent is sometimes seen to be reliable to a principal when he/she acts without actual authority, but with apparent authority. He is also held responsible for indemnify and also principal loss or damage resulting from his/her act. He is also keen and careful in his advise and dealing on behalf of his client is he owes certain contractual duties to his/her agent as he protect him also from wrong claims, expenses that are not worthwhile, liabilities etc.
A 12-year, 5% coupon bond pays interest annually. The bond has a face value of $1,000.__________ Fill in the blank, read surrounding text. % is the percentage change in the price of this bond if the yield to maturity rises to 6% from the current yield to maturity of 4.5%
Answer:
12.38% decrease
Explanation:
Given the following parameters
6%
Number of years = 12
Market yield I= 6 === 4.5
Present Value = 916.16 == 1045.59
PMT (annuity payment) = 50 (5%x1000)
Future value = 1000
Therefore, to solve for the percentage change, we have in the price of this bond in this situation, we have (916.16-1045.59) / 1045.59 = -0.1238
Hence, 12.38% decrease is the percentage change in the price of this bond if the market yield rises to 6% from the current yield of 4.5%,
The percentage change in the price of this bond will be -12.38%.
The price of the bond at 4.5% is calculated thus:
Yield to maturity = 4.50%Years left to maturity = 12Annual coupon rate = 5%Face value = $1000.Annual coupon payment = $50Price of the bond at 4.5% = $1045.59The price of the bond at 6.0% is calculated thus:
Yield to maturity = 6.00%Years left to maturity = 12Annual coupon rate = 5%Face value = $1000.Annual coupon payment = $50Price of the bond at 6.0% = $916.16The percentage change in price will be:
= (916.16 - 1045.59) / 1045.59
= -12.38%
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Conner Manufacturing has two major divisions. Management wants to compare their relative performance. Information related to the two divisions is as follows:
Division 1:
Sales: $200,000
Expenses: $150,000
Asset investment: $950,000
Division 2:
Sales: $45,000
Expenses: $35,000
Asset investment: $200,000
Based on ROI, which division is more profitable?
a. Division 1
b. Both divisions have the same ROI ratio
c. Division 2
Answer:
The correct answer is:
Division 1 (a.)
Explanation:
Return on investment (ROI) is a financial ratio used to calculate the benefit earned on an investment cost.
Mathematically, it is represented as:
[tex]ROI = \frac{Net\ Income}{original\ cost\ of\ investment} \times 100[/tex]
where:
Net income = Sales - expenses
Original cost of investment = asset invested
Now let us calculate the ROI for each division:
Division 1 :
Net income = Sales - Expenses = 200,000 - 150,000 = $50,000
Asset investment = $950,000
[tex]ROI = \frac{50,000}{950,000} \times 100\ \\\\ROI = 5.26\%[/tex]
Division 2:
Net income = 45,000 - 35,000 = $10,000
Asset investment = $200,000
[tex]ROI = \frac{10,000}{200,000} \times 100\\\\= ROI = 0.05\ \times\ 100\ = 5\%[/tex]
Therefore, based on the ROI for both divisions, Division 1 has a greater ROI (5.26%) than Division 2 (5%) hence, Division 1 is more profitable.
On December 18, 2017, Stephanie Corporation acquired 100 percent of a Swiss company for 4.0 million Swiss francs (CHF), which is indicative of book and fair value. At the acquisition date, the exchange rate was $1.00 = CHF 1. On December 18, 2017, the book and fair values of the subsidiary’s assets and liabilities were:
Cash CHF 814,000
Inventory 1,314,000
Property, plant & equipment 4,014,000
Notes payable 2,128,000
Stephanie prepares consolidated financial statements on December 31, 2017. By that date, the Swiss franc has appreciated to $1.10 = CHF 1. Because of the year-end holidays, no transactions took place prior to consolidation.
Required:
a. Determine the translation adjustment to be reported on Stephanie’s December 31, 2017, consolidated balance sheet, assuming that the Swiss franc is the Swiss subsidiary’s functional currency. What is the economic relevance of this translation adjustment?
b. Determine the remeasurement gain or loss to be reported in Stephanie’s 2017 consolidated net income, assuming that the U.S. dollar is the functional currency. What is the economic relevance of this remeasurement gain or loss?
Answer:
a. Translation adjustment = $401,400
b. Remeasurement loss = –$131,400
Explanation:
a. Determine the translation adjustment to be reported on Stephanie’s December 31, 2017, consolidated balance sheet, assuming that the Swiss franc is the Swiss subsidiary’s functional currency. What is the economic relevance of this translation adjustment?
This can determined as follows:
Step 1: Calculation of beginning net asset in
Particular Amount (CHF)
Cash CHF 814,000
Inventory 1,314,000
Property, plant & equipment 4,014,000
Notes payable (2,128,000)
Beginning net asset 4,014,000
Beginning net asset in USD = Beginning net asset in Swiss francs (CHF) * Beginning exchange rate = CHF4.014,000 * $1 = $4,014,000
Step 2: Calculation of ending net asset
Ending net asset in USD = Beginning net asset in Swiss francs (CHF) * Ending exchange rate = CHF4.014,000 * $1.10 = $4,415,400
Step 3: Calculation translation adjustment
Translation adjustment = Ending net asset in USD - Beginning net asset in USD = $4,415,400 - $4,014,000 = $401,400
Economic relevance of this translation adjustment
The positive translation adjustment implies that the equity of stockholders has increased by $401,000.
We obtained a positive value because the net position of the subsidiary in Switzerland is CHF4,014,000 and there was a Swiss franc appreciation of $0.10 (i.e. $1.10 - $1.00 = $0.10).
The translation adjustment of $401,000 does not however implies that it was made as a dollar cash flow. The only condition that can make to turn to a profit is if this operation is sold at CHF4,014,000 on December 31 and the amount realized as a proceed is changed to dollars at ruling exchange rate of $1.10 to a Swiss franc on December 31, 2017.
b. Determine the remeasurement gain or loss to be reported in Stephanie’s 2017 consolidated net income, assuming that the U.S. dollar is the functional currency. What is the economic relevance of this remeasurement gain or loss?
This can be determined as follows:
Beginning net liabilities in Swiss franc = Cash - Note payable = CHF814,000 - CHF2,128,000 = –CHF1,314,000
Beginning net liabilities in USD = Beginning net liabilities in Swiss franc * Beginning exchange rate = –CHF1,314,000 * $1.00 = –$1,314,000
Ending net liabilities in USD = Beginning net liabilities in Swiss franc * Ending exchange rate = –CHF1,314,000 * $1.10 = –$1,445,400
Remeasurement loss = Ending net liabilities in USD – Beginning net liabilities in USD = [–$1,445,400] – [–$1,314,000] = –$131,400
Economic relevance of this remeasurement gain or loss
There is a negative remeasurement or remeasurement lost because the net monetary liability position of the Swiss subsidiary is CHF 1,314,000. The appreciation of the Swiss franc by $0.10 results in a loss of $131,400] that not is unrealized.
The readjustment loss of $131,400 does not however implies that it was a dollar cash outflow. The only condition that can make it to turn to a loss is if this operation is sold on December 31. This will lead to the realization of a transaction gain of $81,400 [i.e. CHF814,000 x ($1.10 - $1.00)].
Also, the Swiss franc note payable will be paid off by using the US dollar. This will bring about the realization of a truncation loss of $212,800 [i.e. CHF2,128,000 x ($1.10 - $1.00)].
In September 2009 a U.S. investor chooses to invest $500,000 in German equity securities at a then current spot rate of $1.30/euro. At the end of one year the spot rate is $1.35/euro.
1. Refer to Instruction, how many euros will the U.S. investor acquire with his initial $500,000 investment?
A) €650,000B) €370,370C) €500,000D) €384,6152. Refer to Instruction, at an average price of €60/share, how many shares of stock will the investor be able to purchase?A) 8333 sharesB) 6410 sharesC) 6173 sharesD) 10,833 shares3. Refer to Instruction, at the end of the year the investor sells his stock that now has an average price per share of €57. What is the investor's average rate of return before converting the stock back into dollars?A) 5.0%B) -3.0%C) -5.0%D) 3.0%
4. Refer to Instruction, at the end of the year the investor sells his stock that now has an average price per share of €57. What is the investor's average rate of return after converting the stock back into dollars?A) -1.35%B) 5.0%C) -5.0%D) -7.24%
Answer:
1. Refer to Instruction, how many euros will the U.S. investor acquire with his initial $500,000 investment?
D) €384,615$500,000 / $1.30 = €384,615.38
2. Refer to Instruction, at an average price of €60/share, how many shares of stock will the investor be able to purchase?
B) 6410 shares€384,615 / €60 = 6,410.25
3. Refer to Instruction, at the end of the year the investor sells his stock that now has an average price per share of €57. What is the investor's average rate of return before converting the stock back into dollars?
C) -5.0%(€57 - €60) / €60 = -5%
4. Refer to Instruction, at the end of the year the investor sells his stock that now has an average price per share of €57. What is the investor's average rate of return after converting the stock back into dollars?
A) -1.35%[(6,410 x €57) + €15] x $1.35 = $493,269.75
($493,269.75 - $500,000) / $500,000 = -1.35%
According to the lecture video on building dynamic charts, which of the following Excel functions are used in the "Refers to:" formula in Name Manager?
A) SUMIF
B) COUNTIF
C) OFFSET
D) COUNT
Answer:
OFFSET
COUNT
Explanation:
two options are correct, select both.
Answer:
Option C and D are correct
Explanation:
OFFSET - From a cell or a range of cells, returns a reference to a range with a specified number of rows and columns.
COUNT - To determine the number of entries in a number field that is part of a range or array of values, use the COUNT function.
Used Car Problems. Marcy purchased a used car from ABC Motors. Six months later, the police seized the car from Marcy because it was a stolen vehicle. Marcy asked for her money back from ABC Motors. The manager there told her that the car was not stolen; that even if it were stolen, ABC Motors acted in good faith with no knowledge of a theft; therefore, no refund was legally required. ABC Motors had also sold a used car to Frank, who wrote a bad check for the car and left town but not before he sold the car to Betty, who paid a fair price for the car believing that Frank had all rights to sell it. ABC Motors asked Betty to return the car, but she told ABC to forget it. Assuming that ABC Motors was an innocent purchaser from the thief, which of the following is true regarding the manager's statement that Marcy is not due a refund?
A. The manager is correct, but only if ABC Motors can prove that it had never been charged with dealing in stolen merchandise.
B. The manager is correct, but only if ABC Motors can prove that none of its representatives were negligent in disregarding evidence of the theft at any time prior to its resale to Marcy.
C. The manager is correct.
D. The manager is incorrect, but only if Marcy can prove that she specifically asked if there was any problem with the car prior to her purchase and was affirmatively told that the title was good.
E. The manager is incorrect.
Answer:
E. The manager is incorrect.
Explanation:
Since the car was stolen, ABC Motors never had good title of it. A car comes with a title and before ABC bought it from someone it should have verified that the title was good. They are merchants and their normal job is to deal with this kind of things. A car dealership cannot sell cars without a good title, and if they do, they will get in legals problems for doing so.Their problems will not only involve the buyer, but they will also be investigated to check if they were involved in the theft.
Mayan Company had net income of $37,380. The weighted-average common shares outstanding were 8,900. The company's earnings per share is: Multiple Choice $7.48. $5.36.
Answer:
$4.20.
Hie, the question you have provided is not complete, as it is missing all choices of options.
However important information to answer the question is provided below :
Earnings per share = Earnings Attributable to Holders of Common Shares ÷ Weighted Average Number of Common Shares
= $37,380 ÷ 8,900
= $4.20
Conclusion :
The company's earnings per share is: $4.20
"A customer has an existing margin account and wants to write five covered calls against 500 shares of stock in the account. The margin requirement to write the calls is:"
Answer: 0
Explanation: The sale of the stock call, would be covered by the ownership of the stock ( someone who owns the said stock). The required margin needed to sell the stock would be ‘0’ since there is no evidence that points to any available risks on the short calls. as short calls helps to predict of prices would drop or not.
Fowler, Inc., just paid a dividend of $2.70 per share on its stock. The dividends are expected to grow at a constant rate of 4.5 percent per year, indefinitely. Assume investors require a return of 9 percent on this stock. a. What is the current price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What will the price be in six years and in thirteen years? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Answer:
Fowler, Inc.a. Current price = Current Dividend/r - g
where r = Required Rate of Return
and g = growth rate
= $2.70/0.09 - 0.045
= $2.70/0.045
= $60
b. The price in six years' time, growing at 4.5%
= Current price x (1 + g)^6
= $60 x 1.30226
= $78.14
c. The price in thirteen years' time, growing at 4.5%
= $60 x 1.772196
= $106.33
Explanation:
a) Data and Calculations:
Current Dividend = $2.70
Dividends' constant growth rate = 4.5% p.a. indefinitely
Investors' required rate of return = 9%
Fowler, Inc.'s stock prices calculated using the dividend, growth rate, and investors required rate of return gives the intrinsic values of the stock for the current year, in six and thirteen years' time. The intrinsic value calculation eliminates the need to value the stock subjectively.
Absolute Company has a manufacturing facility in Brooklyn that manufactures robotic equipment for the auto industry. For Year 1, Absolute collected the following information from its main production line:Actual quantity purchased 200 unitsActual quantity used 110 unitsUnits standard quantity 100 unitsActual price paid $8 per unitStandard price $10 per unitAbsolute isolates price variances at the time of purchase. What is the materials price variance for Year 1?a. $400 favorableb. $400 unfavorablec. $220 favorabled. $220 unfavorable
Answer:
Direct material price variance= $400 favorable
Explanation:
Giving the following information:
Actual quantity purchased 200 units
Actual price paid $8 per unit
Standard price $10 per unit
To calculate the direct material price variance, we need to use the following formula:
Direct material price variance= (standard price - actual price)*actual quantity
Direct material price variance= (10 - 8)*200
Direct material price variance= $400 favorable
A bond with a par value of $1,000 and an annual coupon has a yield to maturity of 5.60% and a current price of $975. If the bond has 18 years to maturity, what is its current yield?
Answer:
Current Yield is 5.74%
Explanation:
Current yield is the ratio of coupon payment of a bond to its current market price. It is calculated by using coupon payment and the current market value of the bond.
Coupon Payment = $1,000 x 5.6% = $56
Current market price = $975
Formula for Current yield is as follow
Current Yield = Annual Coupon Payment / Current Market Price
Current Yield = $56 / $975
Current Yield = 0.0574% = 5.74%
BPO Services is in the business of digitizing information from forms that are filled out by hand. In 2006, a big client gave BPO a distribution of the forms that it digitized in house last year, and BPO estimated how much it would cost to digitize each form.
Form Type Mix of Forms Form Cost
A 0.2 $0.40
B 0.2 $0.20
C 0.2 $0.20
D 0.2 $0.80
E 0.2 $0.40
a. The expected cost of digitizing a form is $_______ .
b. Suppose that after the agreement, the client sends an equal mix of forms of types D and E only. The expected digitization cost per form of the forms sent by the client is $________ . This leads to an expected loss of $_______ per form for BPO.
Child Play Inc. manufactures electronic toys within a relevant range of 20,000 to 150,000 toys per year. Within this range, the following partially completed manufacturing cost schedule has been prepared: Complete the cost schedule. When computing the cost per unit, round to two decimal places.
Toys produced 40,000 80,000 120,000
Total costs:
Total variable costs $720,000 d. $ j. $
Total fixed costs 600,000 e. k.
Total costs $1,320,000 f. $ l. $
Cost per Unit
Variable cost per unit a. $ g. $ m. $
Fixed cost per unit b. h. n.
Total cost per unit c. $ i. $ o. $
Answer:
Toys produced 40,000 80,000 120,000
Total costs:
Total variable costs $720,000 $1,440,000 $2,160,000
Total fixed costs $600,000 $600,000 $600,000
Total costs $1,320,000 $2,040,000 $2,760,000
Cost per Unit
Variable cost $18 $18 $18
Fixed cost $15 $7.50 $5
Total cost $33 $25.50 $23
Fixed costs do not change with total output, they are the same regardless so the number of units produced. Variable costs change proportionally to any change in total output. If total output increases, variable costs will increase.
What is the yield to maturity on a bond that pays annual coupon rate of 14%, has a par value of $1,000, matures in 10 years, and is selling for $911?
Answer:
Yield to Maturity =15.6%
Explanation:
The Yield to maturity is the discount rate that equates then price of the bonds to the present of cash inflows expected from the bond
The yield on the bond can be determined as follows using the formula below:
YM = C + F-P/n) ÷ 1/2 (F+P)
YM-Yield to maturity-
C- annual coupon
F- Face Value
P- Current Price
n- number of years
DATA
Coupon = coupon rate × Nominal value = 1,000 × 14%=140
Face Value = 1000
YM-?, C- 140, Face Value - 1,000, P-911 , n- 10
YM = (140 + (1000-911)/10) ÷ ( 1/2× (1000 + 911) )
YM = 0.156 × 100 = 15.6%
Yield to Maturity =15.6%