Answer:
A.$440,432
B.$354,400
C.$24,036
D.2017 Realized income - Birch $78,840
2018 Realized income- Birch $76,880
Explanation:
a) Calculation for December 31, 2017, balance in Aspen's Investment in Birch Company account
Consideration transferred by Aspen $364,000
Add Noncontrolling interest fair value $91,000
Birch’s business fair value $455,000
Less :Book value ($320,000)
Trade name $135,000
Life 30 years
Annual amortization $4,500
($135,000/30)
Consideration transferred for Cedar by Birch $108,000
Add Noncontrolling interest fair value $27,000
Cedar’s business fair value $135,000
Less Book value ($108,000)
Excess to trade name $27,000
Life 30 years
Annual amortization $900
(27,000/30)
Investment in Birch $364,000
Birch's reported income-2016 $44,500
($211,500 - $167,000)
Less Amortization expense $4,500
Accrual-based income $40,000
Aspen’s percentage ownership 80%
Equity accrual-2016 $32,000
(80%×$40,000)
Dividends received 2016 ($6,400)
($32,000-$40,000)
(-$8,000 x 80%)
Birch's reported income-2017 $71,000
($386,000 - $315,000)
Amortization expense -$4,500
Income from Cedar $15,040
[80% x (263,700 -244,000 - 900]
Accrual-based income $81,540
($71,000+$15,040-$4,500)
Aspen’s percentage ownership 80%
Equity accrual-2013 $65,232
(80%×$81,540)
Dividends received from Birch 2017 ($14,400)
($18,000 x 80%)
Investment in Birch Dec 31,2017 $440,432
($364,000+$32,000+$65,232-$6,400-$14,400)
b) Calculation for the consolidated net income for this business combination for 2018
Consolidated $1,754,800
LessConsolidated expenses ($1,395,000)
Less Total amortization expense ( a) ($5,400)
Consolidated net income for 2018 $354,400
c) Calculation for the net income attributable to the noncontrolling interest in 2018
Cedar’s NCI in consolidated net income
Revenues less expenses $30,000
($240,000 - $210,000)
Less Excess amortization ($900)
Accrual-based income $29,100
Noncontrolling interest percentage 20%
Cedar’s NCI in consolidated net income$5,820
(20%×$29,100)
Birch's NCI in consolidated Net income
Revenues less expenses $72,300
($622,300 - $550,000)
Less Excess amortization ($4,500)
Equity in Cedar income $23,280
[(30,000 – 900) × 80%]
Realized2014 income of Birch $91,080
($72,300+$23,280)
Noncontrolling interest percentage 20%
Birch’s NCI in consolidated net income $18,216 (80%×$91,080)
Total NCIshare of 2018 consolidated net income $24,036
($18,216+$5,820)
d) Calculation for the accrual-based net income of Birch in 2017 and 2018, respectively
2017 Realized income of Birch
prior to accounting for unrealized gross profit(a) $81,540
2016 Transfer-gross profit recognized in 2017 $13,500
Less 2017 Transfer-gross profit to be recognized in 2018 ($16,200)
2017 Realized income - Birch $78,840
2018 Realized income of Birch prior to accounting for unrealized gross profit(c) $91,080
2017 Transfer-gross profit recognized in 2018 16200
Less 2018 Transfer-gross profit to be recognized in 2019 ($30,400)
2018 Realized income-Birch $76,880
Dawson Toys, Ltd., produces a toy called the Maze. The company has recently established a standard cost system to help control costs and has established the following standards for the Maze toy:________. Direct materials: 6 microns per toy at $0.50 per micron Direct labor: 1.3 hours per toy at $8 per hour During July, the company produced 3,000 Maze toys. Production data for the month on the toy follow:________. Direct materials: 25,000 microns were purchased at a cost of $0.48 per micron. 5,000 of these microns were still in inventory at the end of the month. Direct labor: 4,000 direct labor-hours were worked at a cost of $36,000.Required:1. Compute the following variances for July:________.a. Direct materials price and quantity variances.b. Direct labor rate and efficiency variances.2. Prepare a brief explanation of the possible causes of each variance.
Answer:
a. Direct materials price and quantity variances.
Direct materials price variance = -$500 favorable (the materials were purchased at a lower cost than budgeted)Direct materials quantity variance = $1,000 unfavorable (since they purchased cheaper materials, they probably were low quality and needed more materials per toy)b. Direct labor rate and efficiency variances.
Direct labor rate variance = $4,000 unfavorable (labor costs per hour were higher than budgeted)Direct labor efficiency variance = $800 unfavorable (this might be related to the low level materials purchased that resulted in more time per toy)Explanation:
standard rates:
direct materials: 6 microns per toy at $0.50 per micron
direct labor: 1.3 hours per toy at $8 per hour
actual production and costs:
3,000 maze toys
25,000 microns purchased (5,000 microns remaining in inventory, so actual usage was 20,000 microns) at $0.48 per micron
4,000 hours of direct labor at $9 per hour
Direct materials price variance = (AP - SP) x AQ: we have to use total microns purchased for this variance
Direct materials price variance = ($0.48 - $0.50) x 25,000 = -$500 favorable
Direct materials quantity variance = SP x (AQ - SQ) = $0.50 x (20,000 - 18,000) = $1,000 unfavorable
Direct labor rate variance = (AR - SR) x AH = ($9 - $8) x 4,000 = $4,000 unfavorable
Direct labor efficiency variance = SR x (AH - SH) = $8 x (4,000 - 3,900) = $800 unfavorable
The entry to record the flow of direct labor costs into production in a job order cost accounting system is to
Answer:
Debit : Work In Process Account and Credit : Salaries and Wages Payable Account
Explanation:
All manufacturing costs are accounted for in a Work in Process Account during manufacture. Therefore Debit the Work In Process Account to show accumulation of the manufacturing costs and Credit the Salaries and Wages Payable Account to show the utilization of labor.
"If the previous chart measures CaliMart’s revenues in millions of dollars, how much money did CaliMart make in 2005"
Answer: $12 million
Explanation:
In 2009, Cali made a revenue of $26 million.
In 2005, Cali made a revenue of $14 million.
= 26 - 14
= $12 million
Cali made $12 million more in 2009 than in 2005.
Motor vehicle services technicians usually must provide their own tools as part of their employment. These tools are the property of the technician, and service technicians generally receive an hourly wage. Some automobile dealerships split service technician wages into classifications such as tool reimbursements and wages. The result of this practice is that workers’ hours are taxed and the tool reimbursements are not because they are classified as a business expense. Should the tool reimbursement be treated as income on the service technicians W-2? Why or why not? What are some implications of this practice
Answer:
the tool reimbursements should not be treated as income on the service technicians.
Explanation:
Any Reimbursement cannot be taxed because there is no income generated if actual reimbursement is made. So in the given case Tools Reimbursement received by the Technicians are not taxable because it is the amount spend by them for providing the service and actual reimbursement is made. No income has been generated in this.
This practice will reduce the income of the government by two side. One is on the side of the company we are allowing them with a business expenses thereby reducing their tax liability by reducing the profits and other is the same cannot be charged to tax from the side of the worker because it is just a mere reimbursement of actual expenses.
If a firm is experiencing economies of scale in its production process, ______________________________. g
Answer:
its long-run average total costs will fall
Explanation:
Economies of Scale is a term used in business operation or production manufacturing to describe the cost benefits a company or firm acquired when it expands its quantity or number of output. This often leads to a decrease in average variable cost.
Hence, the right answer is this situation is If a firm is experiencing economies of scale in its production process, "its long-run average total costs will fall"
) A company determines that its marginal revenue per day is given by R'(t) = 100et , R(0) = 0, where R(t) = the revenue, in dollars, on the tth day. The company's marginal cost per day is given by C'(t) = 140 - 0.3t, C(0) = 0, where C(t) = the cost, in dollars, on the tth day. Find the total profit from t = 0 to t = 5 (the first 5 days). Round to the nearest dollar. Note: P(T) = R(T) - C(T) = T 0 ∫ [R'(t) - C'(t)] dt.
Answer:
$14038
Explanation:
The company has marginal revenue R'(t) = [tex]100e^t[/tex]. Therefore its revenue R(t) is given as;
R(t) = ∫R'(t)
R(t)= ∫ [tex]100e^t[/tex] dt = [tex]100e^t[/tex] + c
R(t) = [tex]100e^t[/tex] + c
But R(0) = 0, therefore:
R(0) = [tex]100e^0[/tex] + c = 0
[tex]100e^0[/tex] + c = 0
100 + c =0
c = -100
Also the marginal cost per day is given by C'(t) = 140 - 0.3t
C'(t) = 140 - 0.3t
C(t) = ∫C(t) = ∫ (140 - 0.3t) dt = 140t - (0.3/2) t² + C
But C(0) = 0
C(0) = 140 (0) - (0.3/2)(0)² + c = 0
c = 0
C(0) = 140t - (0.3/2) t²
Profit P(t) = R(T) - C(T) , hence the total profit from t = 0 to t = 5 is given as:
P(t) = [tex]\int\limits^0_5 {[R'(t)-C'(t)]} \, dt =\int\limits^0_5 {([100e^t-(140-0.3t)]} \, dt=\int\limits^0_5 {100e^t} \, dt +\int\limits^0_5 {-0.3t} \, dt +\int\limits^0_5 {-140} \, dt \\\\=[100e^t]_0^5+[ -140t]_0^5+[-0.3t^2/2]_0^5=[14841.316-100]+[-700]+[-3.75]=14038[/tex]
The profit is $14038
A monopolistically competitive firm usually charges more than a perfectly competitive firm because:_____.
a. it is part of a group of firms that has formally agreed to control the price and the output of a product.
b. its primary goal is to reap monopoly profits by replacing competition with cooperation.
c. producing homogenous output is more expensive than producing differentiated output.
d. producing differentiated output is more expensive than producing homogenous output.
e. it has a monopoly, but potential entrants exist in the form of contestable markets.
Answer:
a. it is part of a group of firms that has formally agreed to control the price and the output of a product.
Explanation:
A monopolistic competitive firm ensures that, the price of goods and the output of the products produced by them is controlled. This helps them to dictate the market in which they find themselves in.
The income statement and additional data of Rolling Hills Corporation follow Prepare Rolling Hills Corporation's statement of cash flows for the year ended June 30, 2018. Use the direct method. (Use parentheses or a minus sign for numbers to be subtracted. If a box is not used in the statement leave the box empty; do not select a label or enter a zero.) Complete the statement one section at a time, beginning with the cash flows from operating activities. Rolling Hills Corporation Statement of Cash Flows Year Ended June 30, 2018 Cash Flows from Operating Activities Receipts Total Cash Receipts Payments Total Cash Payments Net Cash Provided by (Used for) Operating Activities
Rolling Hills Corporation Income Statement Year Ended June 30, 2018 Net Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses $ 228,000 109,000 119,000 Salaries Expense Depreciation Expense-Plant Assets Advertising Expense Total Operating Expenses $ 44,000 22,000 14,000 80,000 39,000 Operating Income Other Income and (Expenses) Dividend Revenue Interest Expense Total Other Income and (Expenses) 7,500 (5,000) Net Income Before Income Taxes Income Tax Expense Net Income 2,500 41,500 7,000 $ 34,500
a. Collections from customers are $17,000 more than sales. b. Dividend revenue interest expense, and income tax expense equal their cash amounts. c. Payments to suppliers are the sum of cost of goods sold plus advertising expense d. Payments to employees are $1,000 more than salaries expense. e. Cash payment for the acquisition of plant assets is $104,000 f. Cash receipts from sale of land total $21,000 g. Cash receipts from issuance of common stock total $34,000 h. Payment of long-term notes payable is $20,000 i. Payment of dividends is $9,500. Cash balance at June 30, 2017, was $26,000; at June 30, 2018, it was $20,000
Answer:
Rolling Hills Corporation
Statement of Cash Flows for the year ended June 30, 2018, using the direct method:
Cash flows from operating activities:
Cash collections from customers $ 245,000
Cash paid to suppliers (123,000)
Cash to employees: ($45,000)
Income tax ($7,000)
Net Cash from operating activities $70,000
Net Cash Provided by (Used for) Operating Activities $70,000
Cash flows from investing activities:
Cash for plant acquisition ($104,000)
Cash from sale of land $21,000
Cash from Dividend revenue $7,500
Net Cash flows from investing (75,500) (75,500)
Cash flows from financing activities:
Cash from issuance of common stock $34,000
Payment for long-term notes payable (20,000)
Dividends payment (9,500)
Interest (5,000)
Net Cash flows from financing activities (500) (500)
Net cash outflows (6,000)
Explanation:
a) Data and Calculations:
Rolling Hills Corporation Income Statement Year Ended June 30, 2018
Net Sales Revenue $ 228,000
Cost of Goods Sold 109,000
Gross Profit 119,000
Operating Expenses:
Salaries Expense $ 44,000
Depreciation Expense
-Plant Assets 22,000
Advertising Expense 14,000
Total Operating Expenses 80,000
Operating Income 39,000
Other Income and (Expenses)
Dividend Revenue 7,500
Interest Expense (5,000)
Total Other Income
and (Expenses) 2,500
Net Income Before Taxes 41,500
Income Tax Expense 7,000
Net Income $ 34,500
b) Cash collections from customers:
Net Sales Revenue $ 228,000
More than 17,000
Total cash collections $ 245,000
c) Cash from Dividend revenue = $7,500
d) Cash Payment:
Interest = $5,000
Income tax = $7,000
Suppliers: $123,000
e) Payment to suppliers:
Cost of goods sold 109,000
Advertising 14,000
Cash payments $123,000
f) Payment to employees:
Cash to employees: = $45,000 ($44,000 + 1,000)
g) Cash for plant acquisition = $104,000
h) Cash from sale of land = $21,000
i) Cash from issuance of common stock = $34,000
j) Payment for long-term notes payable = $20,000
k) Dividends payment = $9,500
l) Rolling Hills Corporation can use the direct method for preparing its Statement of Cash Flows for the year ended June 30, 2018. It is one of the two methods in use. The other is the indirect method. The direct method uses only the actual cash receipts and payments to prepare the statement, under the three classifications of cash flows into operating, investing, and financing activities sections.
The most important strategic issue for companies to resolve when competing in international markets is
Answer:
analyze the entry requirements necessary for the international market, mainly bureaucratic requirements such as regulations, policies and initial capital.
Explanation:
Before expanding the business to an international market, a company must analyze essential strategic issues, in order to know the viability of business internationally, because although internationalization is a competitive and strategic factor for the gain of positive results, there are important barriers to considered.
The first strategic issue to be analyzed is the bureaucratic process when establishing business in a different country, as there are regulations, policies and capital requirements that vary from one country to another and the company must analyze whether such barriers will be an impediment to organizational success, or they can be beneficial to the business.
Puffy's Pastries generates five cents of net income for every $1 in equity. Thus, Puffy's has _______ of 5 percent.
Answer: return on equity
Explanation:
The return on equity is simply a measure of how profitable a business will be when it's being compared to its equity. Return on equity is the net income divided by the equity. It can also be gotten when liabilities is deducted from assets.
In the above analysis, return on equity equals 5% because 100 cents make 1 dollar. Therefore, 5/100 × 100 gives 5%.
Washington Company is preparing its statement of cash flows using the indirect method. Refer to the following portion of the comparative balance sheet: Washington Company Comparative Balance Sheet December 31, 2019 and 2018 2019 2018 Increase/(Decrease) Accounts Payable $9,000 $5,000 ($4,000) Accrued Liabilities 3,000 1,400 1,600 Long=term Notes Payable 55,000 66,000 (11,000) Total Liabilities $67,000 $72,400 $(5,400) Additional information provided by the company includes the following: 1. During 2019, the company repaid $35,000 of long-term notes payable. 2. During 2019, the company borrowed $24,000 on a new long-term note payable. Based on the above information only, what amount of net cash flow would be shown in the financing section of the statement of cash flows?
Answer:
Washington Corporation
Financing Activities Section of the Statement of Cash Flows for the year ended December 31, 2019 will show a net cash flow of:
($11,000)
Explanation:
a) Data and Calculations:
Washington Company Comparative Balance Sheet December 31, 2019 and 2018:
2019 2018 Increase/(Decrease)
Accounts Payable $9,000 $5,000 ($4,000)
Accrued Liabilities 3,000 1,400 1,600
Long-term Notes Payable 55,000 66,000 (11,000)
Total Liabilities $67,000 $72,400 $(5,400)
Repaid $35,000 of long-term notes payable
Borrowed $24,000 on new long-term notes payable
b) Financing Section:
Repayment of Long-term notes ($35,000)
Borrowing from Long-term notes 24,000
Net cash flow from financing ($11,000)
You have a machine that is staffed 8 hours per day. The average throughput rate is 28 batches per day, and the setup time is 5 minutes per batch. The plant operates 16 hours per day but the machine is staffed for 8 hours. Calculate:a. Average processing time per unitb. MTT per unit
Answer:
The average processing time per unit = 1.46 minutes per unit
MTT per unit 0.25 minutes per unit
Explanation:
Given that:
number of hours per day for a machine = 8 hours per day
The average throughput rate = 28 batches per day
the setup time = 5 minutes per batch
Plant operating hours = 16 hours per day
To calculate:
a. Average processing time per units is determined by evaluating the average processing time per batch.
Using the following formula:
Average processing time per units = Total available time ÷ batches per day
where;
Total available time = Operating time per day - batches setup time
Total available time = (16 × 60 )minutes - (28 batches × 5 minutes)
= 960 - 140 = 820 minutes per day
∴
Average processing time per batch = 820 minutes ÷ 28 batches = 29.29
NOW, Average processing time per units = Average processing time per batch ÷ batch size
= 29.29 ÷ 20 = 1.46 minutes per unit
b) MTT per unit
The MTT per unit can be computed by using the formula
MTT per unit = Setup time ÷ batch size
MTT per unit = 5 minutes ÷ 20 minutes
MTT per unit = 0.25 minutes per unit
Other things equal, the price of a stock call option is positively correlated with which of the following factors?
a. the stock price.
b. the stock volatility
c. the exercise price.
d. the time to expiration.
e. cannot be determined.
Answer:
a. the stock price.
b. the stock volatility
d. the time to expiration.
Explanation:
The price of the Call Option is positively correlated with the price of the underlying stock because a Call option gives the holder the right to buy a stock at a certain price so if the underlying stock increases in value, the call option will increase in value as well as it means that the holder might be able to buy the stock at a lower price.
Volatility also moves in the same direction as the call option price because a high volatility means there is a chance that the stock will increase past the exercise price.
Time to maturity for non-European call options is also directly related to call option price because it means that there will be more time for the stock to change in value potentially for the better thereby increasing the call option returns.
_________ variability is not one of the five sources of customer-induced variability.a. Arrival b. Capability c. Effort d. Demand
Answer:
Demand
Explanation:
customer-induced variability in finance can be explained as kind of co- creation that exist in customer and the service script.
It should be noted that the five sources of customer-induced variability are;
1)arrival of customers
2) Capability variability
3) effort
4) Request from customer
5) subjective reffrence
The arrival of customers shows what customers have in their own plan.
The capability variability gives the ideal about the strength of the customer concerning the service
Effort describe how willing the customer is, to give their support.
Hence among the given option only demand variability is not one of the five sources of customer-induced variability.
Explain why high-performance value-added salespeople earn much more than high- performance transactional salespeople g
Answer with Explanation:
The Value-added salespersons are the one with better qualification, trainings, experience and have thorough understanding how the sales mechanism would better work in different circumstances and thus are far much better than the transaction salespeople. Furthermore, they are the one who knows what the customer is desiring and this helps them in adding value to their operations and product. Whereas transactional salesperson add very little value to sell the product because the customer knows about the product features and the presence of the transactional salesperson doesn't have any significant impact on the customer perception.
Micca ensures that all of her employees understand and follow through on the
expectations set by the business. Which technique for building positive customer
relations in Micca using?
Understand that each customer has unique needs
Set and achieve high standards
Provide quality service
Listen to and engage your customers
Answer:
Set and achieve high standards
Explanation:
Micca makes sure that all of her employees understand and follow through with the expectations set by the business and the technique for building positive customer relations that Micca uses is Set and achieve high standards.
This technique means that if a high enough standard is set and achieved by a business, then it will promote positive customer relations because the customers will be getting value for money.
Gwyneth owns a firm and wants to minimize the cost of producing output Q. Her production function is Q
Answer:
The answer is "1".
Explanation:
Some of the data is missing in the question, that will be defined in the attached file. please find it.
In the given EOS the C-D function:
[tex]= [\frac{d(\frac{K }{ L})}{d \ MRTS} \times \frac{MRTS}{(\frac{K}{L})}][/tex]
The MRTS value = [tex]\frac{1}{2} \times \frac{K-1}{2L} \times \frac{1}{4} \times \frac{1}{4} \times \frac{K1}{2L} - \frac{3}{4}[/tex]
[tex]= \frac{K}{2L}[/tex]
Rearrange it
[tex]\to \frac{K }{ L} = 2 \times MRTS \\\\ \to \frac{d(\frac{K}{L})}{d(MRTS) }= 2\\\\[/tex]
Replace the values in formula elasticity:
[tex]=2 \times \frac{( \frac{K}{2L})}{(\frac{K}{L})} \\\\ =2 \times \frac{K}{2L} \times \frac{L}{K} \\\\ =2 \times \frac{1}{2} \\\\= 1[/tex]
Donna, a single taxpayer, purchased an antique rug for $20,000 on April 1, 2015. On November 8, 2019, she sold the rug for $25,000. Donna's 2019 taxable income is $185,000, so her marginal tax rate is 32%. Donna's gain on the sale of the rug will be taxed at a rate of:_______ a. 15% b. 20% c. 28% d. 32%
Answer:
a. 15%
Explanation:
Donna'a gain should be considered a long term capital gain because she "invested" in an antique rug that she was able to sell later with a gain. Since the holding period was longer than a year, it is considered a long term capital gain. Donna's tax rate is 15% since her AGI is less than $434,550 (in 2019).
PharmY, Inc., is a U.S. GAAP reporter that is in the pharmaceutical industry. In the current year, PharmY incurred expenditures related to laboratory experiments designed to discover a new drug. The expenditures were as follows:
Laboratory equipment that will be used for this project only $1,000,000
Materials that will be used for this project only 750,000
Wages for employees involved exclusively in the project 500,000
Search the Codification to determine how to record each type of cost. Write a memo to the file to commu- nicate your results
Answer with Explanation:
Tangible assets fall under the scope of International Accounting Standard IAS-36 Property, Plant and Equipment which says that assets that qualify following conditions, must be capitalized:
Assets that have life expectancy of more than a year.Benefits of the Assets are controlled by the entity that will flow towards the company.Now here, the life expectancy of laboratory equipment is unknown and also that we don't know if the asset can be resold in the market or not. This means, if the asset has life expectancy is no more than a year and that the future benefits will flow towards the company then it must be capitalized otherwise it must be expensed out as per the guidelines of International Accounting Standard IAS-38 Intangible Assets, which says that the research cost prior to the development expenditure must be expensed out.
The other two costs are revenue expenditure and must be expensed out under the name research and development cost as per the guidelines of IAS-38.
Portions of the financial statements for Peach Computer are provided below.
PEACH COMPUTER
Income Statement
For the year ended December 31, 2018
Net sales $1,725,000
Expenses:
Cost of goods sold $1,020,000
Operating expenses 530,000
Depreciation expense 47,000
Income tax expense 37,000
Total expenses 1,634,000
Net income $ 91,000
PEACH COMPUTER
Selected Balance Sheet Data
December 31
2018 2017 Increase (I)
or
Decrease (D)
Cash $99,000 $83,500 $15,500 (I)
Accounts receivable 46,300 50,500 4,200 (D)
Inventory 72,000 53,500 18,500 (I)
Prepaid rent 2,700 4,400 1,700 (D)
Accounts payable 42,000 35,500 6,500 (I)
Income tax payable 4,700 8,500 3,800 (D)
Required:
Prepare the operating activities section of the statement of cash flows for Peach Computer using the DIRECT method. (List cash outflows as negative amounts.)
Answer:
$128,100
Explanation:
PEACH Computer
Statement of cash flow using direct method for the year ended 31 December 2018.
Cash flows from operating activity
Net income. $91,000
Adjustment to reconcile net income to net cash from operations
Depreciation expense. $47,000
Changes in working capital
Decrease in accounts re. $4,200
Increase in inventory. ($18,500)
Decrease in prepaid rent $1,700
Increase in accounts Payable $6,500
Decrease in Income tax Payable ($3,800)
Net cash flow from operating activities
$128,100
""The average daily rate charged by member banks for overnight loans of reserves" best describes the:"
Answer:
Federal funds rate
Explanation:
Federal funds rate is the interest rate at which commercial banks borrow and lend their excess reserves to each other overnight.
If you were evaluating an investment opportunity, which technique would you use and why?
The weighted average cost of capital can consist of debt, preferred stock and equity. Which of these sources is the most expensive and the least expensive and why?
Answer:
1. Net Present Value
First off it is important to note that every investment is different and should be evaluated by a method that will take into account it uniqueness. However, I would choose the Net Present Value method of evaluation because it combines some very useful features from other methods to make it the best one in general.
The Net Present Value checks when an project will be able to pay back the investment that was put into it given the cash inflows from the project and it uses the present value of the cash inflows to do so. This means that in using the NPV method, the time value of money is factored in so that real analysis can be done.
The risk factor of the project is also reflected in the rate used which will enable one know if it is a project they would be interested in in case the rate is too high considering their company's cost of capital.
2. The most expensive form of capital is Equity. This is because it does not have a fixed cost and this varies depending on the profits that the company makes. It is also not tax deductible like debt.
The least expensive form of capital is Debt. Debt has a fixed rate which can be planned for. It is also tax deductible which means that paying off debt reduces tax expense thus making it cheaper.
Would a depositor prefer an APR of 8% with monthly compounding or an APR of 8.5% with semiannual compounding?
Answer:
Therefore depositor would prefer an APR of 8.5% with semiannual compounding
Explanation:
First determine the Effective Interest Rate of the two Returns, then compare the Rates.
The Effective Annual Rate of Interest is the Annual rate that if compounded once a year, would give us the same result as the interest per period compounded a number of times.
1. APR of 8% with monthly compounding
Calculation of Effective Annual Rate of Interest using a Financial Calculator:
8 % Shift NOM %
12 Shift P/YR
Shift EFF % = 8.3 %
2. APR of 8.5% with semiannual compounding
Calculation of Effective Annual Rate of Interest using a Financial Calculator:
8.5 % Shift NOM %
2 Shift P/YR
Shift EFF % = 8.6806 or 8.68 %
Conclusion.
Choose the APR giving greater Effective Annual Rate.
Comparing the 2 Effective Annual Rate of Interest, it can be seen that an APR of 8.5% with semiannual compounding gives a greater Effective Annual Rate of Interest.
Therefore depositor would prefer an APR of 8.5% with semiannual compounding
a company with a high level of productivity is able to a. Operate without much investment b. Avoid high opportunity cost c. produce goods and services efficiently d. expand without taking on debt
Answer is C to produce goods and services efficently
Explanation:
A company that has a high rate of productivity can generate goods and services quickly. So, the correct option is C.
What is Productivity?Productivity is a measure of how effectively commodities or services are produced. Productivity is sometimes represented as a ratio of the whole product to a single input or the total input utilized during a production process, or production per unit of input, usually over a predetermined time period.
An economy may create and consume additional goods and services with the identical amount of effort when productivity is growing. Individuals (workers and consumers), corporate executives, and analysts value productivity (for example policymakers and government statisticians).
Therefore, the correct option is C.
Learn more about Productivity, here:
https://brainly.com/question/30333196
#SPJ7
The position of a company with regard to pricing, promotion, advertising, product design and distribution is referred to as _______________.
a. planning
b. marketing strategy
c. organizing
d. restructuring
Answer:
b. marketing strategy
Explanation:
Marketing strategy is a mix of all factors which affect the 4 Ps which are Product (Design and Packaging) , Price (Pricing Policy / Techniques), Place (Distribution) and Promotion (all awareness activities).
The Blooming Flower Co. has earnings of $1.48 per share. a. If the benchmark PE for the company is 15, how much will you pay for the stock?
Answer:
$22.20
Explanation:
Using the equation to calculate the price of a share of stock with the PE ratio:
P = Benchmark PE ratio * EPS
So, with a PE ratio of 15
P = 15*($1.48)
P = $22.20
Generally, as the proportion of middle-income households in a country increases, the nation's purchasing power __________.
Answer:
Increases
Explanation:
Generally, as the proportion of middle-income households in a country increases, the greater (an increase) nation's purchasing power.
Actually, the purchasing capability increases in proportion to an increase in the income of households.
Purchasing power is known as the currency value which is usually seen in the amount of goods or services that a unit of money can buy.
A large electric utility company spews million tons of greenhouse gases (mostly carbon dioxide) into the environment each year. This company has committed to spending $ billion in capital over the next five years to reduce its annual emissions by %. More will be spent after five years to reduce greenhouse gases further. a. What is the implicit cost of a ton of greenhouse gas
This question is incomplete, the complete question is;
A large electric utility company spews 62 million tons of greenhouse gases (mostly carbon dioxide) into the environment each year. This company has committed to spending $2.7 billion in capital over the next five years to reduce its annual emissions by 4%. More will be spent after five years to reduce greenhouse gases further.
a. What is the implicit cost of a ton of greenhouse gas
b. if the United states produces 4 billion tons of greenhouse gases each year, how much capital must be spent to reduce total emission by 2% over the next five years based on your answer in part a).
Answer:
a) The implicit cost of greenhouse gas is $ 1,088.7097 per ton
b) $87.096 billion of capital must be spent to reduce total emissions by 2% over the next five years.
Explanation:
Given that;
Annual Emission = 62 million tons
Capital Spending = $2.7 billion
Annual Emission reduction = 5%
partA
Reduction in Emission = 62 million tons per year × 4/100 = 2.48 million tons of greenhouse gas per year
Implicit cost of reducing 1 ton of carbon dioxide = Cost invested / Annual gas release after reduction.
= $2.7 billion / $2.48 million = 2.7 × 10⁹ / 2.48 × 10⁶ = 1088.709 7
∴ The implicit cost of greenhouse gas is $ 1088.7097 per ton
part B
Reduction in Emission = 4 billion tons per year × 2/100 = 80,000,000 tons
Total Cost = 1088.709 × 80,000,000 = $87.096 billion
∴ $87.096 billion of capital must be spent to reduce total emissions by 2% over the next five years.
a) The implicit cost of greenhouse gas is $ 1,088.7097 per ton
b) $87.096 billion of capital must be spent to reduce total emissions by 2% over the next five years.
Given that;
Annual Emission = 62 million tons Capital Spending = $2.7 billion Annual Emission reduction = 5%
(a)
Reduction in Emission = 62 million tons per year × 4%
= 2.48 million tons of greenhouse gas per year
Now
Implicit cost of reducing 1 ton of carbon dioxide = Cost invested ÷ Annual gas release after reduction.
= $2.7 billion ÷ $2.48 million
= 2.7 × 10⁹ ÷ 2.48 × 10⁶
= 1088.709 7
(b)
Reduction in Emission = 4 billion tons per year × 2%
= 80,000,000 tons
Total Cost = 1088.709 × 80,000,000
= $87.096 billion
Learn more: https://brainly.com/question/17429689?referrer=searchResults
Consider the single factor APT. Portfolio A has a beta of 1.8 and an expected return of 21%. Portfolio B has a beta of .8 and an expected return of 21%. The risk-free rate of return is 12%. If you wanted to take advantage of an arbitrage opportunity, you should take a short position in portfolio __________ and a long position in portfolio _________.
A: A;A
B: A;B
C: B;B
D: B;A
Answer:
... you should take a short position in portfolio A and a long position in portfolio B.
B: A;BExplanation:
Portfolio A:
21% = 12% + 1.8F
1.8F = 9%
F = 5%
Portfolio B:
21% = 12% + 0.8F
0.8F = 9%
F = 11.25%
Since Portfolio B's F = 11.25% > Portfolio A's F = 5%, then you should take a short position in Portfolio A and a long position in Portfolio B.
Under the gross method, ________. A. the processing fees charged are deducted from the company's bank account by the credit card processor B. the total sales plus the processing fee assessed equals the net amount of cash deposited C. the proceeds from debit and credit card transactions are deposited on the last day of the month D. there will be no fee charged by the credit card processor for the transaction
Answer: . A. the processing fees charged are deducted from the company's bank account by the credit card processor
Explanation:
Gross method is simply used for recording purchases made by th customers at full invoice price. It should be noted that there are no deduction in cash discounts.
Under the gross method, the processing fees charged are deducted from the company's bank account by the credit card processor.