Answer:
enterprise value to EBITDA.
Explanation:
The computation of the value of the stock using P/E ratio is shown below:-
Stock value = (P/E ratio × EPS) × Number of shares outstanding
= (12.9 × $2.33) × 5.3 million
= 159.3021 million
Now, the computation of the value of the stock using EBITDA multiple is shown below:-
Stock value = (EBITDA multiple × EBITDA) - Net debt
= (7.1 × $29.3 million) - $125 million
= 208.03 - $125 million
= 83.03
There is no equivalent corporate debt. It is easier to make a comparison at the operating level and thus a better measure of valuation is the enterprise value to EBITDA.
Stockholders in a corporation entrust control over the company's daily operations to managers selected by the board of directors to run the company. True or False True False
Answer: true
Explanation: stockholders also known as shareholders are individuals or entities that own shares of stock in a corporation. They are therefore the real owners of a publicly traded business, however, management runs it. Therefore, it can be said that stockholders in a corporation entrust control over the company's daily operations to managers selected by the board of directors to run the company.
Potential output: $8 trillion Actual output: $6 trillion Actual Deficit: $ 400 billion Tax Rate: 15% What is the structural deficit in 2010
Answer:
The structural budget in 2010 is $100 billion
Explanation:
Actual deficit = Government spending - Tax Revenue Collection
i.e Actual deficit = G-T
T = (Tax rate) (Actual output)
$400 billion = G - (0.15)($6000 billion)
$400 billion = G - $900 billion
G = $400 billion + $900 billion
G = $1300 billion
Thus, Government spending is $1300 billion
Structural deficit = G - T'
T' = (Tax rate)(Potential output)
T' = (0.15)(8000 billion)
T' = $1200 billion
Structural deficit = G - T'
Structural deficit = $1300 billion - $1200 billion
Structural deficit = $100 billion
Thus, the structural budget in 2010 is $100 billion
The Year 1 selling expense budget for Apple Corporation is as follows:
Budgeted sales $275,000
Selling costs:
Delivery expenses $ 2,750
Commission expenses 5,500
Advertising expenses 2,500
Office expenses 1,500
Miscellaneous expenses 5,300
Total $17,550
Delivery and commission expenses vary proportionally with budgeted sales in dollars. Advertising and office expenses are fixed. Miscellaneous expenses include $2,000 of fixed costs. The rest varies with budgeted sales in dollars. The budgeted sales for Year 2 are $330,000.
What will be the value of miscellaneous expenses in the Year 2 selling expense budget?
A. $6,200
B. $4,200
C. $3,600
D. $3,960
Answer:
$5,960
Explanation:
Fixed portion of Miscellaneous expenses = $2,000
Variable portion of Miscellaneous expenses = ($5,300 - $2,000) / $275,000
= $3,300 / $275,000
= $0.012 of sales
Miscellaneous expenses in the Year 2 selling expense budget = (Budgeted sales * Variable portion) + Fixed portion
= ($330,000 * $0.012) + $2,000
= $3,960 + $2,000
= $5,960
Dustup, a cleaning products company, was trying to revive its old wood floor waxing product. It began offering an augmented service of a small brochure called "Ask a Wood Floor Expert" to its bottles. The brochure included information and a customer support hotline. However, shoppers removed the brochure from bottles in the store, so few bottles were purchased. At the same time, Dustup began receiving a flood of calls to its hotline. This increased Dustup’s costs 30% over projections. What question did the company forget to ask before launching its add-on?
Answer:
Dustup forgot to the consumers if the add-on will give them more satisfaction from using their product.
Explanation:
The market is always king. Getting first-hand information about what consumers need and how they need it is the best way to go about creating a product or modifying an existing one to become more profitable.
The removal of the brochures from the bottles showed that shoppers didn't necessarily want their product. What they wanted was to be able to make contact with the company and get more information on how to revive their old wooden floors.
Cheers!
Fly High Co. is expanding and expects operating cash flows of $65,000 a year for four years as a result. This expansion requires $105,000 in new fixed assets. These assets will be worthless at the end of the project. In addition, the project requires $7,000 of net working capital, which will be recovered at the end of the project. What is the net present value of this expansion project at a required rate of return of 15 percent
Answer:
The net present value of this expansion project is $77,575.87.
Explanation:
The Net Present Value of the Expansion can be calculated as follows
($112,000) CFj
$65,000 CFj
$65,000 CFj
$65,000 CFj
$72,000 CFj
I/YR 15%
Shift NPV $77,575.87
1. What is occupational education? Show the three differences between medium
and higher level education.
Answer and Explanation:
Occupational education refers to the learning capability of the student according to their interest, skills, knowledge, opportunity that are based on future plans. This represents the positive attitude towards the work and labor
The difference is as follows
Medium level education High level education
1. In this, the person moved 1. In this, the person moved to
to the past entry level but the past entry level also it reached
do not reach to to its end i.e selection
its end i.e selection
2. The person has less knowledge 2. The person has more knowledge
and skills and skills
3. Due to this, the person 3. Due to this, the person is able to
is not able to get high package get high package and opportunities
The wage rate for all units of labor is $10/hr. You have spent $160,000 on developing a production process (Process X) that will allow you to produce 8 units for every unit of labor. If you use this production process, the accounting profits will cover the initial investment within 6 months. If you use your normal production process (not Process X), you can produce 10 units for every unit of labor. Both processes are fully scalable, so the marginal product of labor is fixed for any reasonable amount of labor you could hire. Based on this information, what should you do?
Answer:
The normal production process should be followed.
Explanation:
The normal process should be used because when it uses the process “X” then the marginal productivity of labor (MPL) is 8 units and the wage of labor is $10 per hour. Secondly, when it uses a normal production process then the marginal productivity of labor is 10 units and the wage rate is the same that is $10 per hour. Therefore, the normal production process is giving the greater marginal productivity of labor, accordingly this process should be followed.
On February 3, 1969, New York lawyer and businessman _______________ was appointed the Beatles' business manager, as John was impressed by what the man had done financially for the Rolling Stones.
Answer:
Allen B. Klein
Explanation:
Allen B. Klein was an American businessman that became a powerful person in the music industry because he managed several artists and became well known for helping them increase their income and he worked with Sam Cooked, the Rolling Stones and The Beatles who hired in him in 1969 as their manager. According to this, the answer is that on February 3, 1969, New York lawyer and businessman Allen B. Klein was appointed the Beatles' business manager, as John was impressed by what the man had done financially for the Rolling Stones.
Calculate the monthly implicit costs for a business owner who devotes 200 hours per month to his business that could be spent working at $50/hour for someone else.
Answer:
Implicit cost = $10,000
Explanation:
Implicit cost is the opportunity cost of using resources a business already owns.
This business owner passes this income by being in a business for himself
200 hours per month multiplied by $50/hour
200 x 50
= 10000
Implicit cost = $10,000
A company purchased property for a building site. The costs associated with the property were: What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building?
Answer:
The question is incomplete, below is a possible match of the complete question:
a company purchased property for a building site. the costs associated with the property were:
purchase price $175,00
real estate commisions $15,000
legal fees 800
expenses of clearing the land 2,000
expenses to remove old building 1,000
what portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building?
Answer:
cost allocated to land = $193,800
cost allocated to new building = $0
Explanation:
The expenses associated with the ost of land purchase are all the necessary expenses made in the purchase of the land and in getting the land ready for use. These include legal fees, cost of clearing the land, cost of removing old structures etc. Therefore cost allocated to land is calculated as follows:
cost of land = purchase price + real estate commissions + legal fees + expenses of clearing the land + expenses to remove old building.
cost of land = 175,000 + 15,000 + 800 + 2,000 + 1,000 = $193,800
∴ cost of land = $193,800
cost of new building = $0
There is no transaction associated directly with setting up the new building, all the costs were associated with the acquisition of the land, hence the cost os the new building is $0
Following are several figures reported for Allister and Barone as of December 31, 2018:
Allister Barone
Inventory $530,000 $330,000
Sales 1,060,000 860,000
Investment income not given
Cost of goods sold 530,000 430,000
Operating expenses 245,000 315,000
Allister acquired 70 percent of Barone in January 2017. In allocating the newly acquired subsidiary's fair value at the acquisition date, Allister noted that Barone had developed a customer list worth $70,000 that was unrecorded on its accounting records and had a 4-year remaining life. Any remaining excess fair value over Barone's book value was attributed to goodwill. During 2018, Barone sells inventory costing $126,000 to Allister for $172,000. Of this amount, 20 percent remains unsold in Allister's warehouse at year-end. Determine balances for the following items that would appear on Allister's consolidated financial statements for 2018:
Amounts
Inventory
Sales
Cost of goods sold
Operating expenses
Net income attributable to noncontrolling interest
Answer and Explanation:
The computation of inventory, sales, cost of goods sold, Operating expenses and Net income attributable to non-controlling interest is shown below:-
But before that we need to determine the following calculations
Unrealized profit on inventory = ($172,000 - $126,000) × 10%
= $4,600
Customer list amortization = $70,000 ÷ 4
= $17,500
Inventory = $530,000 + $330,000 - $4,600
= $855,400
Sales = $1,060,000 + $860,000 - $172,000
= $1,748,000
Cost of goods sold = $530,000 + $430,000 + $4,600 - $172,000
= $792,600
Operating expenses = $245,000 + $315,000 + $17,500
= $577,500
Net income attributable to non-controlling interest = 10% × ($860,000 - $430,000 - $315,000 - $4,600 - $17,500)
= 10% × $92,900
= $9,290
White says, “We live in a world where success is defined by income.” Do you agree with this statement? Discuss examples in your life that support or negate this idea.
Answer:
yes i agree coz nowadays even in my family, the outsiders give more respect and praise my big brother as he earns big income
The decision that could be made regarding the statement that "In the modern world, income has turned equivalent to success" would be:
Yes.
The reason to agree with this statement is due to the increased importance that the modern world has provided to money.For example, a person is considered successful only when he earns a handsome amount while a person with a lower or average income but greater satisfaction level is considered unsuccessful. However, there is also a saying that "money can't buy happiness" which suggests that people can be sad even after having money and vice versa.Thus, it depends on the individual's perception and the way they equate success with happiness or material possessions.Learn more about "Income" here:
brainly.com/question/14732695
Suppose selected comparative statement data for the giant bookseller Barnes & Noble are presented here. All balance sheet data are as of the end of the fiscal year (in millions).
2020 2019
Net sales $5,200 $5,500
Cost of goods sold 3,484 3,830
Net income 78 123
Accounts receivable 82 103
Inventory 1,146 1,262
Total assets 2,990 3,510
Total common stockholders’ equity 992 1,031
Required:
Compute the following ratios for 2020.
Answer:
Profit margin = net profit / total sales = $78 / $5,200 = 1.5%
Asset turnover = total sales / average total assets = $5,200 / ($2,990 + $3,510) = 1.6
Return on assets = net income / average total assets = $78 / $3,250 = 2.4%
Return on common stockholders’ equity = net income / average stockholders' equity = $78 / ($992 + $1,031) = 7.71%
Gross profit rate = gross profit / total sales = $1,716 / $5,200 = 33%
Irene’s Dairy is deciding whether or not to enter the market for ice cream, currently monopolized by Mattie’s Ice-cream. If it enters the market, Mattie’s can either accommodate him and share his 10million in profits equally with Irene or fight him and cause a 5million loss for each in a price war. Given that Mattie could convincingly threatens to always fight, what would be Irene’s best response Group of answer choices
Group of answer choices:
Given that Mattie could convincingly threaten to always fight, what would be Irene’s best response
a. Not Enter
b. Run
c. Hide
d. Enter
Answer:
Given that Mattie could convincingly threaten to always fight, Irene's best response would be:
d. Enter
Explanation:
Irene Dairy should enter the market despite Mattie's threat to always fight. If Irene Dairy does not enter the market out of fear of Mattie's threat to fight, other firms are likely to enter and share the market with Mattie. Mattie should never be given the privileges of a monopolist. Irene Dairy should ensure that its ice creams are of higher quality and sustain the fight with Mattie, which cannot forever shed its profits in the name of fighting a competitor.
Harry Company sells 20,000 units at $42 per unit. Variable costs are $26.88 per unit, and fixed costs are $105,800. Determine (a) the contribution margin ratio, (b) the unit contribution margin, and (c) income from operations.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Harry Company sells 20,000 units at $42 per unit. Variable costs are $26.88 per unit, and fixed costs are $105,800.
To calculate the contribution margin ratio, we need to use the following formula:
contribution margin ratio= contribution margin / selling price
contribution margin ratio= (42 - 26.88) / 42
contribution margin ratio= 0.36
Now, the contribution margin:
Contribution margin= 42 - 26.88= $15.12
Finally, income from operations:
Contribution margin= 20,000*15.12= 302,400
Fixed costs= (105,800)
Net operating income= 196,600
a. Monetary Policy involves changing_______________ the money supply. In the United States, Monetary Policy is implemented by the____________.
1. taxes and government spending
2. the design of currency
3. exports
4. Federal Reserve
5. President and Congress
6. Secretary of the Treasury/ states.
b. _______________ can be used to address a Recessionary Gap; while _________ can be used to address an Inflationary Gap.
1. Contractionary Monetary Policy
2. Lower prices
3. Expansionary MonetaryPolicy
4. Larger coins
5. smaller coins
6. higher prices
c. To enact Contractionary Monetary Policy, the central bank will _________bonds. This ____________the amount of cash in the economy. This will cause bond prices to ____________and interest rates to _____________. The change in interest rates causes investment and consumption to___________ shifting ____________.
1. fall
2. stay the same
3. rise,
4. Short-Run Aggregate Supply
5. Aggregate Demand
6. Long-Run Aggregate Supply
7. Outward
8. inward
9. buy
10. sell
11. increase
12. decrease
Answer:
In the United States, Monetary Policy is implemented by the - 4. Federal Reserve
The Federal Reserve of the United States is in charge of implementing the Monetary Policy of the country. It is also in charge of regulating the financial industry, and acting as lender of the last result to prevent financial crisis.
3. Expansionary MonetaryPolicy - can be used to address a Recessionary Gap
During times of economic downturn, monetary policy tends to be expansionary: expanding the money supply to lower the interest rate, so that investment becomes cheaper, and the economy reactivates.
1. Contractionary Monetary Policy - can be used to address an Inflationary Gap.
When the money supply is too high, or has grown too fast, inflation often starts. For this reason, the fed usually implements contractionary monetary policy (less money supply, higher interest rate), in order to keep inflation from increasing.
c. To enact Contractionary Monetary Policy, the central bank will - sell bonds
When the fed sell bonds, it takes money from the market, reducing the money supply.
This - reduces - the amount of cash in the economy.
As explained above.
This will cause bond prices to - fall - and interest rates to - rise
The change in interest rates causes investment and consumption to - fall
shifting - Aggregate Demand
Contractionary monetary policy will cause interest rates to rise, making investment more expensive, and causing price hikes, this will reduce consumption.
This in turn will shift the Aggregate Demand curve to the left or inward.
Calculate the cost of goods manufactured using the following information: Direct materials used $ 298,800 Direct labor used 132,300 Factory overhead costs 264,300 General and administrative expenses 85,800 Selling expenses 49,100 Work in Process inventory, January 1 118,800 Work in Process inventory, December 31 126,200 Finished goods inventory, January 1 232,400 Finished goods inventory, December 31 239,000
Answer:
$687,100
Explanation:
Cost of Goods Manufactured = Raw Materials Used + Direct Labor + Factory Overhead +Beginning Work in Process - Ending Work in ProcessCost of Goods Manufactured = $298,500 + $132,000 + $264,000 + $118,500 - $125,900 =$687,100
HOPE IT HELPS MARK IT BRAINLIEST!!!!!!
Kathy fields wants to buy a condominium selling for $95,000. The bank is requiring 20% down and is charging 9.5% interest for a 25 year loan. determine the amount required down payment and the amount of the monthly payment for the principal and interest.
Answer:
The down payment is 19000 and monthly payment is 664.009
Explanation:
The purchase price of condominium = $95000
Down payment = 20%
Interest charged = 9.5 %
Time period = 25 years
Down payment amount = 95000 × 20% = 19000
Remaining loan amount = $76000
Below is the calculation of monthly payment:
[tex]\text{Present vlaue of annuity} =\frac{A(1-(1+r)^{-n})}{r} \\A = monthy \ installment \\76000 = \frac{A(1-(1+ 0.095/12)^{-25\times 12})}{ 0.095/12} \\A(0.906112) = 601.667 \\A = 664.009[/tex]
Exercise 10-2 Straight-Line: Amortization of bond discount LO P2 Tano issues bonds with a par value of $180,000 on January 1, 2017. The bonds' annual contract rate is 8%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 10%, and the bonds are sold for $170,862. 1. What is the amount of the discount on these bonds at issuance
Answer:
bonds' face value $180,000
coupon rate 8%, semiannual = 4%
maturity 3 years x 2 = 6 periods
market interest rate = 10% or 5% semiannual
the journal entry to record the issuance of the bonds:
January 1, 2017, bonds issued at a discount
Dr Cash 170,862
Dr Discount on bonds payable 9,138
Cr Bonds payable 180,000
the amortization of the bond discount should be $9,138 / 6 = $1,523 on every coupon payment.
Journal entry to record payment of first coupon:
June 30, 2017, first coupon payment
Dr Interest expense 8,723
Cr Cash 7,200
Cr Discount on bonds payable 1,523
What is the payback period of a project with average annual cash outflows of $8,000, average annual cash inflows of $10,000 and an initial investment of $13,000
Answer:
It will take 3 years and 219 days to cover for the initial investment.
Explanation:
Giving the following information:
Annual cash flow= 13,000 - 8,000= $5,000
Initital investment= $13,000
The payback period is the time required to cover for the initial investment:
Year 1= 5,000 - 13,000= -8,000
Year 2= 5,000 - 8,000= -3,000
Year 3= 5,000 - 3,000= 2,000
To be more accurate:
(3,000/5,000)*365= 219 days
It will take 3 years and 219 days to cover for the initial investment.
Use the following to answer the questions.
Star Supplies, Inc. manufactures commercial-grade floor cleaners, such as vacuums and floor polishers. The firm has recently begun manufacturing other janitorial-related product lines, such as paper products and chemical cleaners. Star Supplies distributes its products in two ways. It sells its vacuum, floor polisher, and janitorial supply products to an independent business that takes title to the products and then sells them to various small businesses throughout the region. Also, Star has a list of large businesses that it distributes to directly, on an as-needed basis. These businesses keep very little inventory and purchase janitorial supplies in small quantities. Recently, Star has decided to add two new service product lines-paper shredding and a uniform rental service. Clint Rodriguez, the marketing manager, is conducting a meeting to discuss the ways in which Star can strategically manage these new businesses. Star has the choice of marketing the paper shredding service to their large business clients, by picking up the paper as they drop off the other janitorial supplies, or they can buy a small paper shredding business and market to both large and small business customers. With regard to the uniform rental service, Star can either pick up and deliver the uniforms to the small businesses themselves, or contract that out to a third party.
Refer to scenario Currently, Star is using the ____ approach to distributing its janitorial supplies to its large customers.
A. intensive
B. just-in-time
C. segmented
D. outsourcing
E. exclusive
Answer:
B. just-in-time
Explanation:
Just in time (JIT) is an inventory management approach that is used by companies that want to reduce their inventory costs and they purchase their materials in smaller quantities whenever their productive system needs them. The goal is to keep the lowest possible inventory levels.
Windhoek Mines, Ltd., of Namibia, is contemplating the purchase of equipment to exploit a mineral deposit on land to which the company has mineral rights. An engineering and cost analysis has been made, and it is expected that the following cash flows would be associated with opening and operating a mine in the area:
Cost of new equipment and timbers $ 380,000
Working capital required $ 120,000
Annual net cash receipts $ 135,000
Cost to construct new roads in year three $ 44,000
Salvage value of equipment in four years $ 69,000
Receipts from sales of ore, less out-of-pocket costs for salaries, utilities, insurance, and so forth.
The mineral deposit would be exhausted after four years of mining. At that point, the working capital would be released for reinvestment elsewhere. The company’s required rate of return is 18%.
Required:
Determine the net present value of the proposed mining project. (Any cash outflows should be indicated by a minus sign.
Answer:
The net present value of the proposed mining project is - $163,621.41.
Explanation:
The Summary of Cash flows is as follows :
Year 0 : - ($ 380,000 + $ 120,000) = - $500,000
Year 1 : $ 135,000
Year 2: $ 135,000
Year 3: $ 135,000 - $ 44,000 = $91,000
Year 4: $ 135,000 + $ 69,000 + $ 120,000 = $324,000
Determine the Net Present Value of the mining project as follows :
Using a Financial Calculator, entries will be as follows
- $500,000 CFj
$ 135,000 CFj
$ 135,000 CFj
$91,000 CFj
$ 135,000 CFj
18 % I/YR
SHIFT NPV - $163,621.41
NIKE, Inc., is the best-known sports shoe, apparel, and equipment company in the world because of its association with athletes such as LeBron James, Roger Federer, and Madison Keys. Some of the items included in its recent statement of cash flows presented using the indirect method are listed here. Indicate whether each item is disclosed in the operating activities (O), investing activities (I), or financing activities (F) section of the statement or use (NA) if the item does not appear on the statement.1. Additions to long-term debt.2. Depreciation3. Additions to equipment.4. Increase (decrease) in notes payable. (The amount is owed to financial institutions.)5. (Increase) decrease in other current assets6. Cash received from disposal of equipment.7. Reductions in long-term debt.8. Issuance of stock.9. (Increase) decrease in inventory.10. Net income
Answer and Explanation:
The statement of cash flow involves 3 kinds of activities mentioned below:
1. Operating activities: Many transactions are based that affect the working capital following net income. It would increase the growth in current assets and a decrease in current liabilities, whereas adding the decrease in current properties and an increase in current liabilities.
This should mitigate any work capital shifts. Furthermore, the cost of depreciation is attributed to the net income and the loss on the sale of assets is attributed while the benefit on the sale of assets is deducted
2. Investing: it monitors activities involving the acquisition and selling of long-term assets. The purchase is cash outflow while the selling is cash inflow
3. Financing activities: it monitors activities that impact on the shareholders' long-term debt and equity balance. Share issue is cash inflow whereas cash outflows are redemption and dividend.
Therefore based on the above explanation, the classification is as follows
1 Financing Activity
2. Operating activity
3 Investing activity
4 Financing Activity
5 Operating activity
6 Investing activity
7 Financing Activity
8 Financing Activity
9 Operating activity
10 Operating activity
A benevolent social planner would prefer that the output of good x be decreased from its current level if, at the current level of output of good x_________
a. social cost = private cost = private value < social value.
b. private cost < social cost = private value = social value.
c. social value = private value = private cost < social cost.
d. social cost = private cost = private value = social value.
Answer:
c
Explanation:
social value = private value = private cost < social cost.
A benevolent social planner would prefer that the output of good x be decreased from its current level if, at the current level of output of good x social value = private value = private cost < social cost. Thus, option (c) is correct.
What is the cost?
The term cost refers to the actual money are spent on the manufacturing of the product. The product are manufacture to spend on money are raw material, transportation, wages, salary, and other expenses add. The all expenses are added to identify the cost.
According to the system composed, the primary impact of the output of goods are the multiplied by the reduced from its present state are the primary effect of the output of products are the calculation where the social value equals the societal value. The private cost is lower than the societal cost.
As a result, the significance of the social cost are the aforementioned. Therefore, option (c) is correct.
Learn more about on cost, here:
https://brainly.com/question/15135554
#SPJ5
Innovation efforts of the firm often benefit from partnering with non-business entities such as universities and government agencies.
A. True
B. False
1. Determine the total incremental cost of making 51,000 units of RX5. 2. Determine the total incremental cost of buying 51,000 units of RX5. 3. Should the company make or buy RX5
Answer with Explanation:
Requirement 1:
Incremental cost of making RX5:
Always remember that the direct costs are always incremental cost because these are the variable cost and will not be incurred if the decision is not taken related to making of the product RX5.
Incremental Cost of Making RX5:
Direct Material ($4 * 51,000 Units) $204,000
Direct Labor ($8 * 51,000 Units) $408,000
Variable Overheads ($9* 20% * 51,000 Units) $91,800
Total incremental cost of making 51000 units $703,800
Requirement 2:
Incremental Cost of Buying RX5:
Purchase Cost ($19 per Unit * 51,000 Units) $969,000
The total incremental cost of making 51000 units is $969,000
Requirement 3:
The Cost of buying is higher than making RX5, hence the company should Make RX5.
Lacy Technology transferred items with $12,600 of cost out of the Assembly Department because the items were finished and ready to be sold. What journal entries correctly reflects this transaction?
Answer:
Dr Finished Goods Inventory 12,600
Cr Work in Process - Assembly 12,600
Explanation:
Based on the information given we were told that the company transferred items that cost the amount of $12,600 from the Assembly Department because the items were finished and ready to be sold which means that the journal entries will be recorded as:
Dr Finished Goods Inventory 12,600
Cr Work in Process - Assembly 12,600
What is the internal rate of return of a project costing $3,000; having after-tax cash flows of $1,500 in each of the two years of its two-year life; and a salvage value of $800at the end of the second year in addition to the $1,500 cash flow
Answer:
Internal rate of return = 16.3%
Explanation:
The IRR is the discount rate that equates the present value of cash inflows to that of cash outflows. At the IRR, the Net Present Value (NPV) of a project is equal to zero
If the IRR greater than the required rate of return , we accept the project for implementation
If the IRR is less than that the required rate , we reject the project for implementation
IRR = a% + ( NPVa/(NPVa + NPVb)× (b-a)%
Step 1 : Calculate NPVa at 10%
NPV = PV of cash inflow - Initial cost
PV of cash inflow = 1500× ( 1- 1.1^(-2))/0.1=2,603.31
PV of salvage value = 800× 1.1^(-2) =661.16
NPV = 2,603.31 + 6,661.16 - 3000= 264.46
Step 2 :Calculate NPVb at 20%
PV of cash inflow = 1500× ( 1- 1.2^(-2))/0.2=2291.67
PV of salvage value = 800× 1.2^(-2) =555.56
NPV =2291.67 + 555.56 - 3,000 = -152.78
Step 3 : Calculate IRR
IRR = 10% + (264.46/(264.46+152.78))× (20-10)%= 16.3%
Internal rate of return = 16.3%
a. Balance according to the bank statement at December 31, $283,000.b. Balance according to the ledger at December 31, $245,410.c. Checks outstanding at December 31, $68,540.d. Deposit in transit, not recorded by bank, $29,500.
Answer and Explanation:
The preparation of the bank reconciliation statement is presented below:
Balance as per bank statement as on Dec 31 $2,83,000.00
Add: Deposit in transit $29,500.00
less: cheques outstanding $68,540.00
Adjusted Balance as on 31st December $2,43,960.00
Balance as per Ledger as on Dec 31 $2,45,410.00
Less: Bank debit memo for service charges 750
less: payment of invoice wrongly recorded 700
Adjusted Balance as per 31st December $ 2,43,960.00
Use the following information to calculate the dollar cost of using a money market hedge to hedge 200,000 British pounds of payables due in 180 days. Assume the firm has no excess cash. Assume the spot rate of the pound is $2.02, and the 180-day forward rate is $2.00. The British interest rate is 5 percent, and the U.S. interest rate is 4 percent over the 180-day period.
Answer:
The dollar cost of using a money market hedge to hedge 200,000 British pounds of payable due in 180 days is $400,152.38.
Explanation:
A money market hedge refers to a method that employed to to preserve the value of a foreign currency transaction in the domestic currency of a company in order to reduce the exchange rate or currency risk that is associated with business transactions with a foreign company.
For this question, the dollar cost of using a money market hedge can be calculated as follows:
Amount needed to invest in British pounds = Amount needed to hedge / (1 + British interest rate) = £200,000 / (1 + 0.05) = £190,476.19
Since this is in British pounds, we have to convert to the US dollars to obtain the amount of the US dollars that is needed to exchange as follows:
Amount needed to invest in the US dollars = Amount needed to invest in British pounds * Spot rate of the pound = £190,476.19 * $2.02 = $384,761.90
We can now calculate the amount needed to repay loan after 180-day as follow:
Amount needed to repay loan after 180-day = Amount needed to invest in the US dollars * (1 + U.S. interest rate) = $384,761.90 * (1 + 0.04) = $400,152.38
Therefore, the dollar cost of using a money market hedge to hedge 200,000 British pounds of payable due in 180 days is $400,152.38.