Answer:
The current price of Hubbard's common stock is $25.50.
Explanation:
This can be calculated using the Gordon growth model (GGM) formula that assumes growth is dividend will be constant as follows:
P = D1/(r - g) ............................ (1)
Where,
P = Current stock price = ?
D1 = Next dividend = D0 * (1 + g) = $1.50 * (1 + 2%) = $1.53
r = required return = 8%, or 0.08
g = growth rate = 2%, or 0.02
Substituting the values into equation (1), we have:
P = $1.53 / (0.08 - 0.02) = $25.50
Therefore, the current price of Hubbard's common stock is $25.50.
If a bank that faces a 10% reserve ratio received a deposit of $50,000 and makes a loan to a customer for $5,000, what is the consequence if the bank then deposits the rest of the funds at the Federal Reserve?
Answer:
Excess reserve increases by $40,000
Required reserve increases by $5,000
Explanation:
In order to calculate the reserve, we need to multiply the Deposit received by a required reserve ratio.
DATA
Reserve ratio = 10%
Deposit received = $50,000
Loan to customer = $5,000
Solution
Reserve = Deposit x Required reserve ratio
Reserve = $50,000 x 10%
Reserve = $5,000
After providing a $5,000 loan to the customer and keeping $5,000 as a reserve remaining $40,000 would be deposited in the Federal Reserve.
Optimal order quantities exist when the curves for the order-processing cost per unit and inventory-carrying cost per unit ________.
Answer:intersect
Explanation:
The optimal order quantity is also referred to as the economic order quantity. It is used to know the optimal quantity that need to be ordered in order to avoid wastage and also reduce cost. It is a cost-effective strategy.
Optimal order quantities exist when the curves for the order-processing cost per unit and inventory-carrying cost per unit intersect.
Assume short-run production. Indicate whether the statement below is true (T) or false (F). nothing: The difference between the total cost and the total variable cost is a constant. nothing: When total cost or total variable cost is increasing, there are increasing marginal returns to the variable input. nothing: Changes in fixed costs do not affect the shape or placement of the total cost curve. nothing: The marginal cost is the slope of the total cost curve or the total variable cost curve. nothing: The average cost curve is everywhere above the average variable cost curve. nothing: The marginal cost at a particular output level is the slope of a line from the origin to the corresponding point on the cost curve.
Answer:
1. The difference between the total cost and the total variable cost is a constant. - TRUE
The difference between the 2 is indeed constant and is the Total Fixed cost which does not change throughout the production process.
2. When total cost or total variable cost is increasing, there are increasing marginal returns to the variable input. - FALSE
With only the total cost or total variable cost given, it is not possible to tell how the Marginal returns to the input is faring.
3. Changes in fixed costs do not affect the shape or placement of the total cost curve. - FALSE
Fixed costs are part of the total cost curve so if they change they will impart the total cost curve. An increase may not change the shape but it will definitely change the placement of the Total cost curve.
4. The marginal cost is the slope of the total cost curve or the total variable cost curve. - TRUE
The slope of either the Total cost or variable cost curves are the graphical representations of a change in either which is the definition of the Marginal cost.
5. The average cost curve is everywhere above the average variable cost curve. - TRUE
As the average cost is the sum of both the average fixed and average variable costs, it will always be higher than either so it is higher than the Average variable cost.
6. The marginal cost at a particular output level is the slope of a line from the origin to the corresponding point on the cost curve. - FALSE
Marginal cost measures the difference in cost from one unit to the next. A line from the origin to the corresponding point would have measured for all units produced making it the Average cost not Marginal Cost.
ZZZ-Best, Inc. recently issued $65 par value preferred stock that pays an annual dividend of $17. If the stock is currently selling for $76, what is the expected return of this preferred stock?
Answer:
r = 0.22368 or 22.368% rounded off to 22.37%
Explanation:
The expected or required rate of return on a preferred stock is the return provided by the stock in terms of dividend as a proportion of the current market price. The expected return on a preferred stock can be calculated as follows,
r = Dividend / current market price
r = 17 / 76
r = 0.22368 or 22.368% rounded off to 22.37%
3. Explain how the employees of an American organization and Bangladeshi organization will be culturally different in terms of power distance, uncertainty avoidance, and masculinity-femininity inde
Answer:
Explanation:
POWER DISTANCE : This dimension deals with the fact that all individuals in societies are not equal – it expresses the attitude of the culture towards these inequalities amongst us. Power Distance is defined as the extent to which the less powerful members of institutions and organisations within a country expect and accept that power is distributed unequally.
Bangladesh scores high on this dimension (score of 80) which means that people accept a hierarchical order in which everybody has a place and which needs no further justification. Hierarchy in an organization is seen as reflecting inherent inequalities, centralization is popular, subordinates expect to be told what to do and the ideal boss is a benevolent autocrat MASCULINITY : A high score (Masculine) on this dimension indicates that the society will be driven by competition, achievement and success, with success being defined by the winner / best in field – a value system that starts in school and continues throughout organisational life.
A low score (Feminine) on the dimension means that the dominant values in society are caring for others and quality of life. A Feminine society is one where quality of life is the sign of success and standing out from the crowd is not admirable. The fundamental issue here is what motivates people, wanting to be the best (Masculine) or liking what you do (Feminine).
Bangladesh scores 55 on this dimension and can be considered a a Masculine society. In Masculine countries people “live in order to work”, managers are expected to be decisive and assertive, the emphasis is on equity, competition and performance and conflicts are resolved by fighting them out. UNCERTAINTY AVOIDANCE : The dimension Uncertainty Avoidance has to do with the way that a society deals with the fact that the future can never be known: should we try to control the future or just let it happen? This ambiguity brings with it anxiety and different cultures have learnt to deal with this anxiety in different ways. The extent to which the members of a culture feel threatened by ambiguous or unknown situations and have created beliefs and institutions that try to avoid these is reflected in the score on Uncertainty Avoidance.
Bangladesh scores 60 on this dimension and thus has an high score. Countries exhibiting high Uncertainty Avoidance maintain rigid codes of belief and behaviour and are intolerant of unorthodox behaviour and ideas. In these cultures there is an emotional need for rules (even if the rules never seem to work) time is money, people have an inner urge to be busy and work hard, precision and punctuality are the norm, innovation may be resisted, security is an important element in individual motivation.
A portfolio with a 20% standard deviation generated a return of 10% last year when T-bills were paying 5.0%. This portfolio had a Sharpe ratio of ____. A. 0.45 B. 0.20 C. 0.25 D. 0.15
Answer:
0.25
Explanation:
A portfolio has a standard deviation of 20%
The portfolio also generated a return of 10%
T-bills were paying 5%
Therefore, Sharpe ratio of the portfolio can be calculated as follows
Sharpe ratio= 10-5.0/20
= 5/20
= 0.25
Hence the Sharpe ratio of the portfolio is 0.25
A customer sells short 100 shares of ABC at $17 as the initial transaction in a new margin account. The customer must deposit:_______.
A. $750.
B. $1,500.
C. $2,000.
D. $3,000.
Answer: $2,000
Explanation:
Regulation T which governs such actions in the investment market would only require that the customer deposit 50% of the total amount to be called which would be;
= 50% * (100 * 17)
= $850
However, as this is a new margin account, there is a set minimum that must be reached to enable it to be open. That minimum is $2,000.
Tái chế không phải 1 phương pháp hoàn hảo để giải quyết vấn đề ô nhiễm mt
Answer:
ý thức về việc xả rác, ngưng xả rác , bỏ rác đúng nơi quy định
Due to numerous lawsuits, major chemical manufacturer has recently experienced a market reevaluation. The firm has 15-year, 8% coupon bond, paid semiannually and par value of $1,000. The required nominal rate (yield) on this debt has now risen to 10%. What is the current price of this bond?
Answer:
Bond Price = 846.2754897 rounded off to $846.28
Explanation:
To calculate the price of the bond, we need to first calculate the coupon payment per period. We assume that the interest rate provided is stated in annual terms. As the bond is a semi annual bond, the coupon payment, number of periods and semi annual YTM will be,
Coupon Payment (C) = 0.08 * 1/2 * 1000 = $40
Total periods (n)= 15 * 2 = 30
r or YTM = 10% * 1/2 = 5% or 0.05
The formula to calculate the price of the bonds today is attached.
Bond Price = 40 * [( 1 - (1+0.05)^-30) / 0.05] + 1000 / (1+0.05)^30
Bond Price = 846.2754897 rounded off to $846.28
measures that can be taken to increase equilibrium level of income.
Answer:
the government directly affects the level of equilibrium in come into specific ways government purchase of goods and services (G) increase aggregate demand and taxes and transfer separate the relation between income (d) and disposal income (YD) while the income available for consumption and savings with the households.
A corporation has 12,000 shares of $20 par stock outstanding that has a current market value of $150. If the corporation issues a 4-for-1 stock split, the market value of the stock will fall to approximately $50.
a. True
b. False
Answer:
False
Explanation:
In a 4-for-1 stock split, for every 1 share held by shareholders, it is multiplied to 4.
if outstanding shares is 12,000, after the split the shares outstanding pictures becomes 12,000 x 4 = 48,000
Market value of shares outstanding = $150 / 4 = $37.50
Consider the following information and then calculate the required rate of return for the Global Investment Fund, which holds 4 stocks. The market’s required rate of return is 13.25%, the risk-free rate is 7.00%, and the Fund’s assets are as follows:(hint: market beta =1.0) Stock Investment Beta A $ 200,000 1.50 B 300,000 −0.50 C 500,000 1.25 D $1,000,000 0.75
Answer:
11.77%
Explanation:
total investment = $200,000 + $300,000 + $500,000 + $1,000,000 = $2,000,000
stock weight beta total
A $200,000 / $2,000,000 1.5 0.15
B $300,000 / $2,000,000 -0.5 -0.075
C $500,000 / $2,000,000 1.25 0.3125
D $1,000,000 / $2,000,000 0.75 0.375
Portfolio 0.7625
required rate of return = Rf + beta(Rm - Rf) = 7% + 0.7625(13.25% - 7%) = 11.7656% = 11.77%
The involvement by a company in more than one of the activities in the entire value chain from development through production, distribution, sales, and after-sales service is called ________. opportunity cost vertical integration relevant cost avoidable cost
Answer: vertical integration
Explanation: The integrating (to include as a constituent part or functionality) of successive stages in the production and marketing process under the ownership or control of a single management organization is known as vertical integration. As such, such a firm is usually involved in various activities in the entire value chain. This helps it reduce costs, ensure tighter quality control, as well as ensuring a better flow and control of information across the value chain.
Connie recently provided legal services to the Winterhaven LLC and received a 5 percent interest in the LLC as compensation. Winterhaven currently has $43,000 of accounts payable and no other debt. The current fair market value of Winterhaven’s capital is $270,000. (Leave no answer blank. Enter zero if applicable.)
a. If Connie receives a 5 percent capital interest only, how much income must she report and what is her tax basis in the LLC interest?
Income ______
Tax Basis ______
b. If Connie receives a 5 percent profits interest only, how much income must she report and what is her tax basis in the LLC interest?
Income ______
Tax Basis ______
c. If Connie receives a 5 percent capital and profits interest, how much income must she report and what is her tax basis in the LLC interest?
Income ______
Tax Basis ______
Answer and Explanation:
a. Connie registers $13,500 of ordinary revenue or 5% of the LLC's $270,000 property. Her LLC investment base is $13,500 as well.
b. Connie does not disclose any profits but will have an interest rate equal to her share of the LLC 's debt in the LLC. Since debt from the LLC is a non-recourse loan, it needs to be distributed to her through interest on earnings from Connie. Therefore her investment in the LLC is equivalent to $2,150 or 5% of the $43,000 accounts payable by the LLC.
c. Connie reports $13,500 of ordinary revenue or 5 percent of the $270,000 capital of the LLC. Her LLC interest base is $13,500, too. Her base in the LLC is $15,650 consists of the $13,500 benefit she accepts for earning her capital gain and her $2,150 non-recourse tax payable from the LLC.
consider a bond that matures in 10 years it pay9% annual coupons and $100 at maturity is the required annual rate of return on the bond i s 8% then the bond will sell today for
Answer:
Bond Price today = $106.71008 rounded off to $106.71
Explanation:
To calculate the price of the bond, we need to first calculate the coupon payment per period. We assume that the interest rate provided is stated in annual terms. As the bond is an annual bond, the coupon payment, number of periods and r or YTM will be,
Coupon Payment (C) = 0.09 * 100 = $9
Total periods (n)= 10
r or YTM = 8% or 0.08
The formula to calculate the price of the bonds today is attached.
Bond Price = 9 * [( 1 - (1+0.08)^-10) / 0.08] + 100 / (1+0.08)^10
Bond Price = $106.71008 rounded off to $106.71
The common stock of Eddie's Engines, Inc., sells for $37.13 a share. The stock is expected to pay a dividend of $3.10 per share next year. Eddie's has established a pattern of increasing their dividends by 5.2 percent annually and expects to continue doing so. What is the market rate of return on this stock?
Answer:
13.55%
Explanation:
The common stock of Eddies engines is sold at $37.13 per share
The stock is expected to make a payment of $3.10 per share next year
The growth rate is 5.2%
Therefore, the market rate of return on the stock can be calculated as follows
Market rate of return= Next dividend payment/stock price × growth rate
= $3.10/$37.13 + 5.2%
= 0.0835×100 + 5.2%
= 8.35%+5.2%
= 13.55%
Hence the market rate of return on this stock is 13.55%
Purvis Manufacturing, which produces a single product, has prepared the following standard cost sheet for one unit of the product. Direct materials (6 pounds at $2 per pound) $12 Direct labor (2 hours at $12 per hour) $24 During the month of April, the company manufactures 300 units and incurs the following actual costs.
Direct materials purchased and used (1,850 pounds) $4,070
Direct labor (620 hours) $7,130
Compute the total, price, and quantity variances for materials and labor. Identify whether the variance is favorable or unfavorable?
Answer:
1. Actual Quantity = 1,850 pounds
Actual materials cost = $4,070
Standard rate per pound = $2
Standard Quantity = 6 pounds per unit * 300 units
Standard Quantity = 1,800
Standard materials cost = Standard Quantity * Standard rate per pound
Standard materials cost = 1,800 * $2
Standard materials cost = $3,600
1a. Total Materials Variance = Actual materials cost - Standard materials cost
Total Materials Variance = $4,070 - $3,600
Total Materials Variance = $470 Unfavorable
1b. Materials Price Variance = Actual materials cost - Actual Quantity * Standard rate per pound
Materials Price Variance = $4,070 - 1,850 * $2
Materials Price Variance = $370 Unfavorable
1c. Materials Quantity Variance = Standard rate per pound * (Actual Quantity - Standard Quantity)
Materials Quantity Variance = $2.00 * (1,850 - 1,800)
Materials Quantity Variance = $100 Unfavorable
2. Actual labor hours = 620
Actual labor cost = $7,130
Standard rate per hour = $12
Standard labor hours = 2 hours per unit * 300 units
Standard labor hours = 600
Standard labor cost = Standard labor hours * Standard rate per hour
Standard labor cost = 600 * $12
Standard labor cost = $7,200
2a. Total Labor Variance = Actual Labor cost - Standard Labor cost
Total Labor Variance = $7,130 - $7,200
Total Labor Variance = $70 Favorable
2b. Labor Price Variance = Actual Labor cost - Actual labor hours * Standard rate per hour
Labor Price Variance = $7,130 - 620 * $12
Labor Price Variance = $310 Favorable
2c. Labor Quantity Variance = Standard rate per hour * (Actual labor hours - Standard labor hours)
Labor Quantity Variance = $12.00 * (620 - 600)
Labor Quantity Variance = $240 Unfavorable
Which of the following statements is true of the new product development process? Question 8 options: 1) Commercialization is the process of inviting broad communities of people such as customers, employees, and scientists into the new product innovation process. 2) The purpose of the idea screening stage is to create a large number of ideas. 3) The concept testing stage is the stage at which the product and its proposed marketing program are introduced into realistic market settings. 4) Under the business analysis stage, if the new product satisfies the company's objectives, the product then moves to the product development stage. 5) A product concept is the way consumers perceive an actual or potential product.
Answer: 4) Under the business analysis stage, if the new product satisfies the company's objectives, the product then moves to the product development stage.
Explanation:
The Business Analysis stage of the New Product Development Process is a more in-depth analysis of the product to find out the viability of the product in the market and what it means for the firm.
Here the big questions are asked such as;
The Cost of the product to produceIf adequate profit will be generatedProjected market demandExisting competitors etcOnce these questions have been answered and other analysis made and the company is satisfied, the product can then move to the Product Development Stage.
It is true that under the business analysis stage, if a new product satisfies the company's objectives, it moves to the product development stage.
In a New Product Development Process, the Business Analysis stage entails in-depth analysis of the product to find out the viability of the product in the market and what it means for the firm.
The questions asked in the Business Analysis stage includes:
The Cost of the product to produce If adequate profit will be generated Projected market demand Existing competitorsIn conclusion, it is true that under the business analysis stage, if a new product satisfies the company's objectives, it moves to the product development stage.
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The classical dichotomy is the separation of real and nominal variables. The following questions test your understanding of this distinction. Eleanor spends all of her money on paperback novels and mandarins. In 2012, she earned $27.00 per hour, the price of a paperback novel was $9.00, and the price of a mandarin was $3.00. Which of the following give the nominal value of a variable? Check all that apply. The price of a mandarin is 0.33 paperback novels in 2012. Eleanor's wage is 3 paperback novels per hour in 2012. The price of a mandarin is $3.00 in 2012. Which of the following give the real value of a variable? Check all that apply. The price of a paperback novel is $9.00 in 2012. Eleanor's wage is $27.00 per hour in 2012. The price of a paperback novel is 3 mandarins in 2012. Suppose that the Fed sharply increases the money supply between 2012 and 2017. In 2017, Eleanor's wage has risen to $54.00 per hour. The price of a paperback novel is $18.00 and the price of a mandarin is $6.00. In 2017, the relative price of a paperback novel is . Between 2012 and 2017, the nominal value of Eleanor's wage , and the real value of her wage . Monetary neutrality is the proposition that a change in the money supply nominal variables and real variables.
Answer:
In 2012, she earned $27.00 per hour, the price of a paperback novel was $9.00, and the price of a mandarin was $3.00. Which of the following give the nominal value of a variable? Check all that apply.
The price of a mandarin is $3.00 in 2012.Nominal values are expressed in terms of current money. real variables are represented in terms of other goods or services.
Which of the following give the real value of a variable? Check all that apply.
The price of a paperback novel is 3 mandarins in 2012.Nominal values are expressed in terms of current money. real variables are represented in terms of other goods or services.
Suppose that the Fed sharply increases the money supply between 2012 and 2017. In 2017, Eleanor's wage has risen to $54.00 per hour. The price of a paperback novel is $18.00 and the price of a mandarin is $6.00. In 2017, the relative price of a paperback novel is still 3 mandarins.
Between 2012 and 2017, the nominal value of Eleanor's wage doubled, and the real value of her wage remained constant.
Monetary neutrality is the proposition that a change in the money supply affects nominal variables and does not affect real variables.
Today’s business headlines frequently cite pensions being underfunded, thus costing companies more in contributions to their pension fund as well as pensioners risking not receiving what they had planned for retirement. This has been caused by underperformance of the pension fund itself and the over promising of benefits to retirees. Take the following example:_______.
Assume $20m was invested today to provide for pension payments for a group of employees. Assume also that the average return on these funds was 8.5%
1. How big will the fund be in 25 years?
2. Suppose at year 12 the fund decreased in value by 30%. What returns would be required for the next 13 years to achieve the 25 year amount?
3. Advisor's counseled the company that a conservative investment return of 6% annually for the next 13 years would be advisable and that the company would have to contribute annually to make up the shortfall. How much would have to be contributed annually beginning year 13 if the fund earned 6% in order to achieve the 25 year goal?
Please show the method used to solve this problem.
Answer:
1) in 25 years, the pension fund should equal:
future value = present value x (1 + interest rate)ⁿ
FV = $20,000,000 x (1 + 8.5%)²⁵ = $153,735,247
2) the value in 12 years = $20,000,000 x (1 - 30%) = $14,000,000
future value = present value x (1 + interest rate)ⁿ
$153,735,247 = $14,000,000 x (1 + interest rate)¹³
(1 + interest rate)¹³ = $153,735,247 / $14,000,000 = 10.981
¹³√(1 + interest rate)¹³ = ¹³√10.981
1 + interest rate = 1.2024
interest rate = 1.2024 - 1 = 20.24%
3) if the fund only earns 6%, in 13 years it will be worth:
FV = $14,000,000 (1 + 6%)¹³ = $29,860,996
so you need $153,735,247 - $29,860,996 = $123,874,251 more
we need to use the future value of an annuity formula:
FV of an annuity = annuity payment x annuity factor
FV of an annuity = $123,874,251annuity payment = ?annuity factor (6%, 13 periods) = 18.882annuity payment = $123,874,251 / 18.882 = $6,560,441
Suppose the 2020 adidas financial statements contain the following selected data (in millions). Current assets $4,575 Interest expense $200 Total assets 9,000 Income taxes 178 Current liabilities 3,050 Net income 236 Total liabilities 5,670 Cash 800 Compute the following values. (a) Working capital. $ millions (b) Current ratio. (Round to 2 decimal places, e.g. 6.25:1.) :1 (c) Debt to assets ratio. (Round to 0 decimal places, e.g. 62%.) % (d) Times interest earned.
Answer:
a. $1,525 million
b. 1.50 times
c. 29 %
Explanation:
Working capital = Current Assets - Current Liabilities
= $4,575 million - $3,050 million
= $1,525 million
Current Ratio = Current Assets ÷ Current Liabilities
= $4,575 million ÷ $3,050 million
= 1.50 times
Debt to Asset ratio = Interest bearing Debt / Total Assets × 100
= ($ 5,670 - $3,050) / $9,000 × 100
= 29 %
In a short-run model of a large open economy with a floating exchange rate, net capital outflow ______ as the domestic interest rate increases and is just equal to the ______ in net exports. Group of answer choices increases; decrease decreases; increase increases; increase decreases; decrease
Answer:
1. decreases
2. decrease
Explanation:
When Domestic interest rate increases, as a result of floating exchange rate, the net capital outflow decreases which in turn leads to most goods to be used internally, instead of exporting it abroad, there by reducing the level of exports.
Hence, All things being equal, it is assumed or believed that, In a short-run model of a large open economy with a floating exchange rate, net capital outflow DECREASES as the domestic interest rate increases and is just equal to the DECREASE in net exports.
At a decision point in a decision tree, which machine would you select when trying to maximize payoff when the anticipated benefit of selecting machine A is $45,000 with a probability of 90%; the expected benefit of selecting machine B is $80,000 with a probability of 50% and the expected benefit of selecting machine C is $60,000 with a probability of 75%
Answer:
Machine to select for maximum payoff:
Expected Outcomes:
A = $45,000 x 90% = $40,500
B = $80,000 x 50% = $40,000
C = $60,000 x 75 % = $45,000
C has the highest expected outcome of $45,000
Choose C.
Explanation:
Anticipated benefits:
A = $45,000 with pr = 90%
B = $80,000 with pr = 50%
C = $60,000 with pr = 75%
The expected benefit or outcome Machine A is obtained by multiplying the anticipated benefit with its probability of occurrence. This gives a value that has been weighed. The decision rule is to choose the machine with the highest outcome.
One significant way that blacks were able to enjoy economic independence was by settling in the West on federally provided public land.
a. True
b. False
Booker Corporation had the following comparative current assets and current liabilities: Dec. 31, 2019 Dec. 31, 2018 Current assets Cash $60,000 $30,000 Short-term investments 40,000 10,000 Accounts receivable 55,000 95,000 Inventory 110,000 90,000 Prepaid expenses 35,000 20,000 Total current assets $300,000 $245,000 Current liabilities Accounts payable $140,000 $110,000 Salaries payable 40,000 30,000 Income tax payable 20,000 15,000 Total current liabilities $200,000 $155,000 During 2019, credit sales and cost of goods sold were $750,000 and $400,000, respectively. Compute the following liquidity measures for 2019:
Answer:
1. 1.5 Times
2.$100,000
3.0.775 Times
4.$75,000
5.$100,000
Explanation:
Liquidity ratios can be found by just simply putting the given values in their appropriate formulas. All you have to memorize is the simple formulas
1.Current Ratio
CURRENT RATIO = CURRENT ASSETS/CURRENT LIABILITIES
CURRENT RATIO = $300,000/$200,000
CURRENT RATIO = 1.5 Times
2. Working Capital
WORKING CAPITAL= CURRENT ASSETS- CURRENT LIABILITIES
WORKING CAPITAL= $300,000 - $200,000
WORKING CAPITAL= $100,000
3. Acid ratio
ACID RATIO = CURRENT ASSETS - INVENTORY - PREPAID EXPENSES/CURRENT LIABILITIES
ACID RATIO = ($300,000 - $110,000 - $35,000)/$200,000
ACID RATIO = 0.775 Times
4. Receivable turnover
RECEIVABLE TURNOVER = CREDIT SALES/AVERAGE RECEIVABLE
RECEIVABLE TURNOVER = $750,000/$75,000
RECEIVABLE TURNOVER = 10 Times
Working
AVERAGE RECEIVABLE = (Opening receivables+Closing receivables)/2
AVERAGE RECEIVABLE = ($55,000 + $95,000) / 2 = $75,000
5. Inventory Turnover
INVENTORY TURNOVER = COST OF GOODS SOLD / AVERAGE INVENTORY
INVENTORY TURNOVER = $400,000 / $100,000
INVENTORY TURNOVER = 4 Times
Working
AVERAGE INVENTORY = (Opening inventories+Closing inventories)/2
AVERAGE INVENTORY = (110,000 + 90,000)/2
AVERAGE INVENTORY = $100,000
The cost-recovery method of recognizing profit for accounting purposes is permitted if a. collections in the year of sale do not exceed 30% of the total sales price. b. an unrealized profit account is credited. c. there is no reasonable basis for estimating collectibility. d. the method is consistently used for all sales of similar merchandise.
Answer:
Correct Answer:
c. there is no reasonable basis for estimating collectibility.
Explanation:
The cost recovery method of revenue recognition is a concept in accounting that refers to a method in which a business does not recognize income related to a sale until the cash collected exceeds the cost of the good or service sold. When a situation present itself where there is no reasonable basis for estimating collectibility, it justifies the use of the cost recovery method of revenue and profit recognition.
Some managers use _____, which provides four indicators with which organizations can set goals and measure performance.
Answer:
balanced scorecard
Explanation:
The term that is being mentioned in this question is known as a balanced scorecard. This is a strategic management performance metric that is used to measure and provide feedback to a company's management by identifying and improving different internal business functions and their outcomes, usually in regards to the employees themselves. An example of a balanced scorecard can be seen in the attached photo.
A process of making decisions by constructing simplified models that extract the essential features from problems without capturing all their complexity is known as
Answer:
Bounded rationality.
Explanation:
This is explained to be a model that is been used in making choices between alternatives. Models of this kind brings about use of logic, analysis and objectivity always which appear over subjectivity and insight. In this particular model, approaches like Formulating of goal, decision making, identification of criteria for decision making, performing analysis etc are seen to make this model a better type of its kind. Here individuals who are seen to posses high cognitive ability are seen handling of decisions and making quality arrangements towards its actualization.
In a lot of cases, it is seen to not consider factors that cannot be quantified, such as ethical concerns or the value of altruism.
Which of the following are assumptions of the sustainable (self-supporting) growth model? Check all that apply. The firm maintains a constant net profit margin. The firm’s liabilities and equity must increase at the same rate. The firm pays no dividends. The firm maintains a constant ratio of liabilities to equity.
Answer:
The firm maintains a constant ratio of liabilities to equity
Explanation:
"Frank bought a house for $100,000. He put 20% down and borrowed the rest from the bank. However, the value of the house has now increased to $160,000 and he has paid off $20,000 of the bank loan. What is the equity that Frank has in his home
Answer:
$100,000
Explanation:
The computation of the equity in his home is shown below;
Given that
Increased in the value of the house = $160,000
And, the amount he has to paid is
= Borrowed amount - down payment
= $80,000 - ($100,000 × 20%)
= $80,000 - $20,000
= $60,000
So, the equity is
= $160,000 - $60,000
= $100,000
hence, the equity value is $100,000
Answer:
The equity that Frank has in his home is $100000
Explanation:
The purchase price of house = $100000
The down payment = 20% or $100000 ×20% = $20000
The remaining amount paid by bank = $80000
The increased value of house = $160,000
Payment of loan amount = $20000
The Value of house is $160000 and he pays $20000 to the bank as a part of loan payment so reaming amount that he has to pay the bank is ($80000-20000) = $60000.
Thus, his equity will be $100000.