Answer:
Flexible budget Report for Rooney Company
Flexed budget Actual Variance
Labour hours 12,600 12,600
Labour cost($) 226,800 222,400 4,400 Favorable
Explanation:
A flexible budget is that which is prepared to reflect the actual activity level achieved.
It is useful for a control purpose; to compare the actual result to the expected performance. The expected performance is the the flexible budget which is a revised master budget.
Also it uses the assumptions of the static budget like standard costs and prices.
Flexed budget for labour = standard hour × actual labour cost
= $18× 12,600 = $ 226,800
Flexible budget Report for Rooney Company
Flexed budget Actual Variance
Labour hours 12,600 12,600
Labour cost($) 226,800 222,400 4,400 Favorable
The problem with average-cost pricing regulation is that once it is in place, there is a tendency for the:________
a. ATC curve to shift upward.
b. MR curve to shift leftward.
c. D curve to shift leftward.
d. ATC curve to shift downward.
e. D curve to shift rightward.
Answer:
a. ATC curve to shift upward
Explanation:
Average cost pricing is a form of pricing that appears as one of the ways in which the government operates a monopoly market. The government, however, may utilize average cost pricing as a tool to oversee prices monopolists may charge.
In other words, this implies that Monopolists always incline to produce less than the optimal amount boosting the prices up.
Hence, the problem with average-cost pricing regulation is that once it is in place, there is a tendency for the: "Average Total Cost curve to shift upward." This can be a result of an increase in output and reduction price
You sold ten put contracts on Cross Town Bank stock at an option price per share of $0.85. The options have an exercise price of $39 per share. The options were exercised today when the stock price was $34 a share. What is your net profit or loss on this investment assuming that you closed out your positions at a stock price of $34
Answer:
-$4,150
Explanation:
Calculation to determine your net profit or loss on this investment
Using this formula
Net profit/Loss=(Option price per share-Exercise price+Stock price)×100×10
Let plug in the formula
Net loss = ($0.85 - $39 + $34) × 100 × 10
Net loss =-$4.15×100×19
Net loss = -$4,150
Therefore your net loss on this investment is -$4,150
Identifying the Difference Between Risk and Threat Types of Threateners
Answer:
peligro es una cosa peligroso es otra peligrosisimo es otrisima
Explanation:
Zapper has beginning equity of $293,000, net income of $69,000, dividends of $58,000 and stockholder investments of $24,000. Its ending equity is:
Answer:
$328,000
Explanation:
As we all know that:
Ending Equity = Opening Equity + Share Issues + Net Income – Net Loss – Dividends Paid
Here,
Opening Equity is $293,000
Money raised through Shares Issuance was $24,000
Net Income would be $69,000
Dividends paid were $58,000
There were no losses as their is Profit for the year (Net Income).
By putting values, we have:
Ending Equity = $293,000 + $24,000 + $69,000 - $58,000
= $328,000
Prepare journal entries to record the following four separate issuances of stock. A corporation issued 9,000 shares of $10 par value common stock for $108,000 cash. A corporation issued 4,500 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $49,500. The stock has a $1 per share stated value. A corporation issued 4,500 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $49,500. The stock has no stated value. A corporation issued 2,250 shares of $25 par value preferred stock for $105,750 cash.
Answer: Please see answer in explanation column
Explanation:
1. Being issued in excess of par value
Account titles & Explanations Debit Credit
Cash $108,000
Common stock(9,000 x 10) $90,000
paid in capital in excess of par value
Common Stock(108,000 - 90,000) $18,000
2.Being issued to promoters at stated value
Account titles & Explanations Debit Credit
Organisational expense $49,500
common stock (4500 x 1 ) $4,500
paid in capital in excess of stated value
Common stock (49,500 -4,500) $45,000
3 Being issued to promoters at no stated value
Account titles & Explanations Debit Credit
organisational expense $49,500
Common stock of no par value $49,500
4 Being issued of preferred shared in excess of par value
Account titles & Explanations Debit Credit
Cash $105,750
Preferred Stock(2,250 X $25) $56,250
paid in capital in excess of par value
of preferred stock ( $105,750- $56,250) $49,500
A group of workers normally consists of 60 men, 30 women and 20 boys. They are paid at standard hourly rates as under:
Men Rs. 280.00
Women Rs. 160.00
Boys Rs. 140.00
In a normal working week of 40 hours, the group is expected to produce 5,000 units of output.
During the week ending on March 21, 2021 the group consisted of 70 men, 25 women, and 25 boys. The actual wages paid were Rs. 270, Rs. 165 and Rs. 130 respectively. 4,500 units were produced.
The Company is using Flexible Budgeting.
Calculate:
2(a) Labour cost variance
2(b)Labour rate variance
2(c) Labour efficiency variance
Given:
Standard Number of men = 60
Standard Number of women = 30
Standard Number of boys = 20
Standard hour rate for men = R.s 280
Standard hour rate for women = R.s 160
Standard hour rate for boys = R.s 140
Weekly working hour = 40 hours
Expected unit = 5,000 units
Number of men in march week = 70
Number of women in march week = 25
Number of boy in march week = 25
Actual wage for men = R.s 270
Actual wage for women = R.s 165
Actual wage for boys = R.s 130
Actual units = 4,500 units
Find:
Labour cost varianceLabour rate varianceLabour efficiency varianceComputation:
Labour cost variance = [SC for AO] - AC
Labour cost variance = [( 70 × 280) + (25 × 160) + (25 × 140)] - [(70 × 270) + (25 × 165) + (25 × 130)] × 40
Labour cost variance = (27,100 - 26,275 ) × 40
Labour cost variance = R.s 33,000 (F)
Labour rate variance = (SR - AR) × AH worked
Labour rate variance = [(280 - 270)70 + (160 - 165)25 + (140 - 130)25]40
Labour rate variance = [700 - 125 + 250]40
Labour rate variance = [825]40
Labour rate variance = R.s 33000 (F)
Labour efficiency variance = (SH allowed - AH worked)SR
Labour efficiency variance = (0 - 0)SR
Labour efficiency variance = 0
Learn more;
https://brainly.com/question/22856853?referrer=searchResults
Which one of the following is NOT included in the Marketing Mix?
Select one:
a. Promotion
b. Product
c. Distribution
d. Price
e. Personalization
C : Distribution is not included in the marketing mix
Using the percentageofsales method, the estimated total uncollectible accounts are . The Allowance for Uncollectible Accounts prior to adjustment has a debit balance of . The Accounts Receivable balance is . The amount of the adjusting entry for UncollectibleAccounts Expense is:
Answer:
the main part of ur question hasbeen left out so no one could help but i got a answer anyways
Explanation:
it's b
$7,322 + $2,635
= $9,957
What is a commodity?
The correct answer is D. Something of value that can be bought, sold, or traded
Explanation:
The word "commodity" is used in economics to refer to any good or product that has an economic value and due to this, can be part of the market. This means any commodity can be traded, sold, or bought. Moreover, this concept is mainly applied to raw materials such as coal, timber, or wheat that can be used to make other manufactured products such as plastics, furniture, or flour. According to this, the option that correctly describes the word commodity is option D.
Answer:
D. Something of value that can be bought, sold, or traded
Exercise 7-9 Variable and Absorption Costing Unit Product Costs and Income Statements [LO7-1, LO7-2, LO7-3]
Walsh Company manufactures and sells one product. The following information pertains to each of the company’s first two years of operations:
Variable costs per unit:
Manufacturing:
Direct materials $ 25
Direct labor $ 15
Variable manufacturing overhead $5
Variable selling and administrative $2
Fixed costs per year:
Fixed manufacturing overhead $250,000
Fixed selling and administrative expenses $80,000
During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of operations, it produced 40,000 units and sold 50,000 units. The selling price of the company’s product is $60 per unit.
Required:
1. Assume the company uses variable costing:
a. Compute the unit product cost for Year 1 and Year 2.
b. Prepare an income statement for Year 1 and Year 2.
2. Assume the company uses absorption costing:
a. Compute the unit product cost for Year 1 and Year 2.
b. Prepare an income statement for Year 1 and Year 2.
3. Reconcile the difference between variable costing and absorption costing net operating income in Year 1.
Answer:
1 a. Year 1 unit product cost = 45
Year 2 unit product cost = 45
Notes: Unit product cost = Direct materials + direct labor + Variable manufacturing overhead = 25 + 15 + 5 = 45 units
1 b. Income statement
Year 1 Year 2
Sales 2,400,000 3,000,000
(40000*60); (50000*60)
Less:
Variable cost of goods sold 1,800,000 2,250,000
Variable selling and adm. 80,000 100,000
Contribution margin 520,000 650,000
Less:
Fixed manufacturing overhead 250,000 250,000
Fixed selling & adm expense 80,000 80,000
Net income $190,000 $320,000
2 a. Notes
Year 1 Year 2
Direct materials 25 25
Direct labor 15 15
Variable manufacturing overhead 5 5
Fixed manufacturing overhead 5 6.25
(250,000/50,000); (250,000/40000)
Unit product cost 50 51.25
b. Income statement
Year 1 Year 2
Sales 2400000 3000000
Less: cost of goods sold 2000000 2550000
Gross margin 400,000 450,000
Less: Selling and 160,000 180,000
administrative expense
Net income 240,000 270,000
Workings
Cost of goods sold for year 2 = (10,000* 50) + (40000 * 51.25)
= 500,000 + 2,050,000
= 25,500,000
3. Reconciliation Year 1 Year 2
Variable costing net operating 190,000 320,000
income (loss)
Add: Deferred fixed overhead 50,000
in ending inventory (10000*5)
Less: Fixed overhead realized -50,000
in beginning inventory(10000*5)
Absorption costing net operating $240,000 270,000
income (loss)
Answer 1:
Part a
Unit product cost = Direct materials + direct labor + Variable manufacturing overheadUnit product cost = 25 + 15 + 5 Unit product cost = 45 unitsYear 1 -unit product cost = 45
Year 2 -unit product cost = 45
Part b :
Income statement
Year 1 Year 2
Sales 2,400,000 3,000,000
(40000*60) (50000*60)
Less:
Variable cost of goods sold 1,800,000 2,250,000
Variable selling and adm. 80,000 100,000
Contribution margin 520,000 650,000
Less:
Fixed manufacturing overhead 250,000 250,000
Fixed selling & adm expense 80,000 80,000
Net income $190,000 $320,000
Answer 2 :
Part a
Year 1 Year 2
Direct materials 25 25
Direct labor 15 15
Variable manufacturing overhead 5 5
Fixed manufacturing overhead 5 6.25
(250,000/50,000); (250,000/40000)
Unit product cost 50 51.25
Part b.
Income statement
Year 1 Year 2
Sales 2400000 3000000
Less: cost of goods sold 2000000 2550000
Gross margin 400,000 450,000
Less: Selling and 160,000 180,000
Net income 240,000 270,000
An income statement for Year 1 - 240,000and Year 2-270,000.
(Working Notes):
Cost of goods sold for year 2 = (10,000* 50) + (40000 * 51.25)
Cost of goods sold for year 2 = 500,000 + 2,050,000
Cost of goods sold for year 2 = 25,500,000
Answer 3:
The difference between variable costing and absorption costing net operating income in Year 1.
Reconciliation Year 1 Year 2
Variable costing net operating 190,000 320,000
income (loss)
Add: Deferred fixed overhead 50,000in ending inventory (10000*5)
Less: Fixed overhead realized -50,000in beginning inventory(10000*5)
Absorption costing net operating $240,000 270,000
The difference between variable costing and absorption costing net operating income in Year 1 is $2,40,000.
know more :
https://brainly.com/question/13893889?referrer=searchResults
In an emergency situation, such as a life-threatening trauma in an emergency room, a supervisor must be:_______.
a. sensitive to employees' feelings.b. an empathetic communicator.c. an apprehensive communicator.d. direct and assertive.
Answer:
d. direct and assertive.
Explanation:
In an emergency situation, such as a life-threatening trauma in an emergency room, a supervisor must be direct and assertive.
When there's an emergency situation, this ultimately implies a life and death situation which is typically characterized by having someone being in a very critical and dangerous condition. In order to be able to save such an individual or situations, it is very important and essential to have a direct and assertive supervisor who is in charge or control of the emergency situation and capable of making quick decisions that would most likely salvage the situation.
A supervisor who is assertive is confident, bold and positive about his or her instructions in any situation, which is a prerequisite quality to overcome emergencies.
Bailey and Sons has a levered beta of 1.10, its capital structure consists of 40% debt and 60% equity, and its tax rate is 40%. What would Bailey's beta be if it used no debt, i.e., what is its unlevered beta? a. 0.79 b. 0.67 c. 0.71 d. 0.64 e. 0.75
Answer:
Option A. 0.79
Explanation:
All we have to do is convert the levered beta into unlevered beta (100% equity financed). So we will use the following formula to find unlevered beta:
Unlevered Beta = Levered Beta / (1 + (1+T)* D/E)
Here,
Tax rate is 40%
Debt is 40%
Equity is 60%
And Levered Beta is 1.10
Now by putting values, we have:
Unlevered Beta = 1.10 / (1 + (1 - 0.4)* 40% / 60%)
Unlevered Beta = 1.10 / (1 + 0.6 * .667)
Unlevered Beta = 1.10 / (1 + 0.4)
Unlevered Beta = 1.10 / (1.4)
Unlevered Beta = 0.786 which after rounding off we have 0.79
A small town with one hospital has two ambulances to supply ambulance service. Requests for ambulances during nonholiday weekends average .45 per hour and tend to be Poisson-distributed. Travel and assistance time averages two hours per call and follows an exponential distribution. Find:
a. System utilization.
b. The average number of customers waiting.
c. The average time customers wait for an ambulance.
d. The probability that both ambulances will be busy when a call comes in.
Explanation:
Given: -
The number of ambulances is(m) = 2.
Arrival rate = 0.45 per hour
Service time = 2 per hour
Service rate =?
service time = 2 (Travel and assistance time averages two hours per call)
Therefore, Service rate will be 1/2 = 0.5 per hour.
a). System utilization(p) = arrival rate/mean of ambulances*service time
p = 0.45/2×0.5 = 0.45.
(b) :- The average number of customer waiting or waiting time for an ambulance is equal to:-
Arrival rate divided by the service rate ( on its corresponding service time as per table value)
I.e. Arrival time = 0.45 ÷ service rate =0.5
= 0.9 ( see table value for 0.9 with service rate as 2)
It comes to 0.229.
Therefore, the average number of customers waiting. 0.229.
(c) :- The average time customers wait for an ambulance is equal to :
No. of customers waiting for ÷ arrival rate
0.229 ÷ 0.45 = 0.508
Or 0.509 (approx. )
D) probability of Both ambulances is idle is Po = 0.378 (from the table for the value of and M=2)
So Probability of both ambulance is busy = 1-Po
= 1 - 0.378
= 0.622
Indicate the type of Deferred Tax account created by Unearned Revenues and Prepaid Expenses, respectively:
Answer:
The answer is Deferred tax asset and Deferred tax liability.
Explanation:
Unearned revenue creates deferred tax asset. In here, taxes have been paid because income has been received but have not been recognized on the income statement because according to the revenue recognition, the services for the revenue has not been rendered.
Prepaid expenses give rise to deferred tax liability. In here, taxes have been recognized on income statement but the actual tax has not been paid. Income tax expense on income statement is greater than taxes payable
A machine with a cost of $133,000 and accumulated depreciation of $86,500 is sold for $53,000 cash. The amount that should be reported in the operating activities section reported under the direct method is:
Answer:
Zero, because the selling of fixed asset is reported as cash inflow under investing activity.
Explanation:
Cash flow from investing activities includes all the investments in the long term assets and sale of investments or individual assets. The investment items may include Property, Plant and Equipment.
So this means that it will not be included in the Cash from Operating Activities because it is a Cash from Investing Activities.
In the Solow model with constant technological knowledge (A), if the economy is initially below its steady-state capital stock:
Answer: catching up growth will occur
Explanation:
In the Solow model with constant technological knowledge (A), if the economy is initially below its steady-state capital stock,. catching up growth will occur.
This is because, we are informed in the question that the Solow model has a constant technological knowledge. This implies that no innovation took place for that period, hence, the catching up growth will occur.
In insurance, an offer is usually made wheN
Answer: the insurance application has been submitted.
Explanation:
Insurance is a contract which is typically represented by a policy, whereby an individual will receive financial protection in case there are losses against the thing that was insured.
Since the insurance is a contract, an offer can be made when there has been an application for the insurance which would have been submitted.
A company is considering replacing an old piece of machinery, which cost $400,000 and has $175,000 of accumulated depreciation to date, with a new machine that has a purchase price of $550,000. The old machine could be sold for $250,000. The annual variable production costs associated with the old machine are estimated to be $72,500 per year for eight years. The annual variable production costs for the new machine are estimated to be $24,000 per year for eight years.
Required:
a. Prepare a differential analysis dated May 29 to determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine.
b. What is the sunk cost in this situation?
Answer:
Company A
a. Differential Analysis dated May 29
Alternative 1 Alternative 2
Opportunity cost $250,000 $550,000
Variable production costs 580,000 192,000
Total cost $830,000 $742,000
b. Sunk cost in this situation is: $225,000 ($400,000 - $175,000) cost of the old machine.
Explanation:
Company A's relevant cost for the old machine is the opportunity cost that it will lose if it continues with Alternative 1 or continued use of the old machine and the additional cost for the new machine for Alternative 2. Also relevant is the variable production costs that would be incurred if the old or new machine is used.
Company A's sunk cost is the cost of the old machine minus accumulated depreciation. Sunk cost is not relevant for decision making under differential analysis.
Company A's differential analysis is a managerial tool that is used to differentiate one decision alternative from another. In this analysis, only relevant costs are considered. A relevant cost in this case is cost that its inclusion or elimination makes a difference in the decision outcome.
A company estimates that it can sell 5,000 headphone each week if it prices each set of headphones at $20. However, its weekly number of sales will increase by 1000 units for each $1 decrease in price. At what price is revenue maximum? What is the maximum revenue and how many sets of headphones should the company expect to sell? Write your conclusions in a sentence.
Answer:
At what price is revenue maximum?
$13 and $12 per unit (maximum revenue $156,000)What is the maximum revenue and how many sets of headphones should the company expect to sell?
$156,000Write your conclusions in a sentence.
When the price is higher than $12 per unit, demand is elastic, which means any decrease in price will result in a larger proportional increase in quantity demanded. This in turn increases total revenue. Below $12 per unit, demand is inelastic, which means that a decrease in price will result in a smaller increase in quantity demanded.Explanation:
price quantity demanded total revenue
$20 5000 $100000
$19 6000 $114000
$18 7000 $126000
$17 8000 $136000
$16 9000 $144000
$15 10000 $150000
$14 11000 $154000
$13 12000 $156000
$12 13000 $156000
$11 14000 $154000
$10 15000 $150000
$9 16000 $144000
$8 17000 $136000
$7 18000 $126000
$6 19000 $114000
$5 20000 $100000
$4 21000 $84000
3 22000 $66000
2 23000 $46000
1 24000 $24000
The following data relate to direct materials costs for February: Materials cost per yard: standard, $1.93; actual, $2.03 Standard yards per unit: standard, 4.68 yards; actual, 4.96 yards Units of production: 9,400 Calculate the direct materials price variance. a.$4,399.20 favorable b.$940.00 unfavorable c.$4,662.40 favorable d.$4,662.40 unfavorable
Answer:
d.$4,662.40 unfavorable
Explanation:
Calculation for direct materials price variance
The first step is to find the Actual quantity variance using the formula
Actual quantity variance =Actual units produced* Actual yard used
Let plug in the formula
Actual quantity variance=9,400*4.96 yards
Actual quantity variance=$46,624
Second step is to calculate for the Direct material price variance using this formula
Direct material price variance= ( Standard price -Actual price)* Actual quantity used
Let plug in the formula
Direct material price variance=($1.93-$2.03)*$46,624
Direct material price variance=(-0.1*46,624)
Direct material price variance=-$4,662.40 Unfavorable
Therefore the Direct material price variance will be $4,662.40 Unfavorable
Hankins, Inc., is considering a project that will result in initial aftertax cash savings of $5.3 million at the end of the first year, and these savings will grow at a rate of 3 percent per year indefinitely. The firm has a target debt-equity ratio of .52, a cost of equity of 13.2 percent, and an aftertax cost of debt of 6.6 percent. The cost-saving proposal is somewhat riskier than the usual project the firm undertakes; management uses the subjective approach and applies an adjustment factor of 1 percent to the cost of capital for such risky projects.Required:a. Calculate the WACC.b. What is the maximum cost the company would be willing to pay for this project?
Answer:
a.
WACC - Company = 10.94%
WACC - Project = 11.94%
b.
The maximum that the company will be willing to pay for this project is $61.0626 million
Explanation:
a.
To calculate the maximum cost that the company will be willing to pay today, we first need to find out the company and project WACC.
The WACC or weighted average cost of capital is the cost of a company's capital structure. It is calculated as follows,
WACC = wD * rD * (1 - tax rate) + wP * rP + wE * rE
Where,
d, p and e represents debt, preferred stock and common equityw represents the weight of each componentr represents the cost of each componentWeightage of debt and equity
Total assets = debt + equity
Total assets = 0.52 + 1 = 1.52
wD = 0.52/1.52
wE = 1/1.52
WACC - Company = 0.52/1.52 * 0.066 + 1/1.52 * 0.132
WACC - Company = 0.1094 or 10.94%
WACC of project is 1% more than WACC of company. So WACC of project is 10.94% + 1% = 11.94%
b.
The maximum that must be paid for this project can be calculated by calculating the present value of the cash flows provided in form of saving by this project.
Using the constant growth model of cash flow approach,
Present value = 5.3 * (1+0.03) / (0.1194 - 0.03)
Present value = $61.0626 million
Titan Mining Corporation has 7.6 million shares of common stock outstanding, 280,000 shares of 4.5% preferred stock outstanding, and 165,000 bonds with a semi-annual coupon rate of 5.9% outstanding, par value $2,000 each. The common stock currently sells for $61 per share and has a beta of 1.15, the preferred stock has a par value of $100 and currently sells for $95 per share, and the bonds have 19 years to maturity and sell for 109% of par. The market risk premium is 7.1%, T-bills are yielding 3.5%, and the company’s tax rate is 25%.
A. What is the firm’s market value capital structure?
B. If the company is evaluating a new investment project that has the same risk as the firm’s typical project, what rate should the firm use to discount the project’s cash flows?
Answer:
A. The Capital structure is : 4.23 % - Equity, 6.59 % - Preferred Shares and 89.17 % - Debt
B. The firm should discount the project’s cash flows at 4.45 %.
Explanation:
Total Market Value = Market Value of Equity + Market Value of Debt + Market Value of Preferred Shares
Market Value of Equity = 280,000 shares × $61
= $17,080,000
Market Value of Preferred Shares = 280,000 shares × $95
= $26,600,000
Market Value of Debt = 165,000 bonds × $2,000 × 109%
= $359,700,000
Total Market Value = $403,380,000
Capital Structure :
Weight of Equity = $17,080,000 / $403,380,000 × 100
= 4.23 %
Weight of Preferred Shares = $26,600,000 / $403,380,000 × 100
= 6.59 %
Weight of Debt = $359,700,000 / $403,380,000 × 100
= 89.17 %
Thus, the market value capital structure is : 4.23 % - Equity, 6.59 % - Preferred Shares and 89.17 % - Debt
Firms use the Weighted Average Cost of Capital (WACC) to discount the project’s cash flows.
Cost of Debt, r
PV = $2000 × 109 % = - $2,100
PMT = ($2,000 × 5.9%) ÷ 2 = $59
n = 19 × 2 = 38
P/YR = 2
FV = $2,000
r = ?
Using a Financial Calculator, Pretax cost of debt, r is 5,47 %
After tax cost of debt = Interest × ( 1 - tax rate)
= 5,47 % × ( 1 - 0.25)
= 4.10 %
Cost of Equity
Cost of Equity = Return on Risk Free Security + Beta × Return on Risk Premium Portfolio
= 3.5 % + 1.15 × 7.1%
= 11.67 %
Cost of Preference Stock
Cost of Preference Stocks = 4.5%
WACC = ke(W/V) + kd(D/V) + kp(P/V)
= 11.67 % × 4.23 % + 4.10 % × 89.17 % + 4.5% × 6.59 %
= 4.45 %
If a company would still have a cash flow item even if they rejected potential new Project A, should this particular cash flow item be included in Project A's cash flow analysis?
Answer: No
Explanation:
When computing a project analysis for a project, only relevant cash flow should be included in the Project's cash flow analysis. Relevant cash-flow are those that will only occur if the project was embarked on.
If the cash flow in question is still going to occur even if the project wasn't initiated as is the case with Project A, it is not a relevant cash-flow and should not be included in the cash-flow analysis.
Taunton's is an all-equity firm that has 152,000 shares of stock outstanding. The CFO is considering borrowing $245,000 at 6 percent interest to repurchase 21,000 shares. Ignoring taxes, what is the value of the firm
Answer:
The value of the firm is $1,773,333
Explanation:
Calculation of Value of each share
Amount borrowed (A) $245,000
No. of shares repurchased (B) 21,000
Value for each share (C) $11.67
No. of shares outstanding after repurchase(A) 131,000
(152,000 - 21,000)
Value for each share(B) $11.67
Equity value after repurchase(A*B) $1,528,333
Add: Amount borrowed $245,000
Firm value after this transaction $1,773,333
Wing CompanyCash- $234,000 Accounts payable- $97,000Inventories- $121,000 Notes payable (due 2020)- $211,000Land- $453,000 Accounts receivable- $46,000Refer to the information provided for Wing Company. Calculate current assets.a. $498,000b. $401,000c. $854,000d. $709,000
Answer:
b. $401,000
Explanation:
Currents assets refer to assets that are possible to be employed, exhausted, consumed, or sold withing a one year during the normal business activities of a company.
Current assets therefore include cash, cash equivalent and other assets that are expected to be changed to cash within one year.
From the question, we have;
Cash- $234,000
Accounts payable- $97,000
Inventories- $121,000
Notes payable (due 2020)- $211,000
Land- $453,000
Accounts receivable- $46,000
Therefore, current assets of Wing Company can be computed as follows:
Current assets = Cash + Inventories + Accounts receivable = $234,000 + $121,000 + $46,000 = $401,000
Therefore, the correct option is b. $401,000.
Product differentiation and advertising are profitable ventures only when:
the market is monopolistic
both revenues and costs increase
they do not affect entry barriers
the gain in total revenue outweighs the extra cost
the market is oligopolistic
Answer:
Product differentiation and advertising are profitable ventures only when:
the gain in total revenue outweighs the extra cost
Explanation:
When Company XYZ differentiates its product from competitors' through trademarks and other differentiating factors and embarks on advertising, it must watch out for cost overrun. The undertaking for the product differentiation and advertising should be able to generate more revenue than the costs. This will make Company XYZ determine that its differentiation and advertising make economic meaning by producing positive NPV.
Product differentiation as well as advertising can be considered as profitable ventures in a case whereby D: the gain in total revenue outweighs the extra cost.
Product differentiation can be regarded as activity that us been carried out by producer so that his product/service stand out to target audience. Advitisement on the other hand helps in promoting the goods/services .However, they a profitable ventures when the extra cost in production is less than the gain.Therefore, option D is correct.
Learn more at:
You want to save $98,000 to buy an boat by making an equal, end of year payment into a brokerage account for the next 9 years. If you expect to earn an annual interest rate of 7.75% on your account, how much do you need to deposit each year into your account?
Answer:
Annual deposit= $7,930.11
Explanation:
Giving the following information:
FV= $98,000
n= 9 years
i= 0.0775
To calculate the annual deposit, we need to use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
Isolating A:
A= (FV*i)/{[(1+i)^n]-1}
A= (98,000*0.0775) / [(1.0775^9) - 1]
A= $7,930.11
Answer: $7,930
Explanation:
The payments are to be equal so this is an annuity. The expected value is to be $98,000 in 9 years so this is a future value of an Annuity.
The formula is;
FV = [tex]P * \frac{[1 + i]^n-1}{i}[/tex]
98,000 = [tex]P * \frac{[1 + 0.075]^9-1}{0.075}[/tex]
98,000 = P * 12.3581
P = 98,000/12.3581
P = $7,930
Which of the following statement is NOT TRUE about advantages of using primary data?
А. The researchers can decide the type of method they will use in collecting the data
B. The researchers can focus the data collection on specific issues of the research. С. The researchers would know in detail how the data were gathered and will be able to present original data.
D. The researchers will have to collect large volume of data since they will interact with different people and environments.
Answer:
A. false
B. false
C. true
D. true
Moped, Inc. purchased machinery at a cost of $44,000 on January 1, 2017. The expected useful life is 5 years and the asset is expected to have salvage value of $4,000. Moped depreciates its assets using the double-declining balance method. What is the firm's depreciation expense for the year ended December 31, 2017?
Answer:
Annual depreciation= $16,000
Explanation:
Giving the following information:
Purchase price= $44,000
Useful life= 5 years
Salvage value= $4,000
To calculate the depreciation expense under the double-declining balance, we need to use the following formula:
Annual depreciation= 2*[(book value)/estimated life (years)]
Annual depreciation= 2*[(44,000 - 4,000) / 5]
Annual depreciation= 16,000
You have a $46,000 portfolio consisting of Intel, GE, and Con Edison. You put $20,800 in Intel, $10,400 in GE, and the rest in Con Edison. Intel, GE, and Con Edison have betas of 1.3, 1, and .8, respectively. What is your portfolio beta? Multiple Choice 1.071 0.976 0.824 1.393
Answer: 1.071
Explanation:
The portfolio beta is the weighted average of the constituent stock betas.
Intel Weight
= 20,800/46,000
= 0.45217
GE Weight
= 10,400/46,000
= 0.22609
Con Edison
= (46,000 - 20,800 - 10,400) / 46,000
= 0.32174
Portfolio Beta;
= (0.45217 * 1.3) + (0.22609 * 1) + (0.32174 * 0.8)
= 0.587821 + 0.22609 + 0.257392
= 1.071303
= 1.071