Answer:
$24.66
Explanation:
Calculation to determine the value of the stock today
First step is to calculate the PVP
PVP = $3.50 / .12
PVP= $29.17
Second step is to calculate the PV
PV = $29.17 / 1.125
PV= $16.55
Third step is to calculate the PVA
PVA = $2.25 {[1 - (1 / 1.125)] / .12}
PVA= $8.11
Now let calculate the value of the stock today
Using this formula
Price=PV+PVA
Let plug in the formula
Price = $16.55 + 8.11
Price= $24.66
Therefore the value of the stock today is $24.66
You are offered the following investments: You can invest $500 today and receive $600 in 5 years. The investment is low risk. You can invest the $500 in a bank account paying 4%. What is the implied interest rate for the first choice, and which investment should you choose
Answer:
500
Explanation:
According to current GAAP, cash flow per share statisticsa.should be disclosed only if EPS information is disclosedb.should not be disclosedc.should not be disclosed if EPS information is disclosedd.should be disclosed in all situations
Answer: b. Should not be disclosed
Explanation:
GAAP combines both the authoritative standards and accepted ways by which accounting information are recorded and accepted. The aim of GAAP is to improve the clarity, and consistency, with regards to financial information.
According to current GAAP, cash flow per share statistics should not be disclosed. The cash flow per share shouldn't be reported in the financial statement of the company.
Therefore, the correct option is B.
The systematic examination of the relationships among selling prices, volume of sales and production, costs, and profits is termed: Group of answer choices contribution margin analysis cost-volume-profit analysis budgetary analysis gross profit analysis
Answer:
cost-volume-profit analysis
Explanation:
Cost-volume-profit analysis also known as breakeven analysis can be defined as a financial accounting method or technique used for determining the number of units a business firm must sell at a specific price so as to cover all of its costs. It is a concept that allow business owners or financial experts to determine and know what they need to sell either on a monthly or annual (yearly) basis, in order to be able to cover the costs of doing the business.
Basically, it helps us to determine the amount of revenue required for the smooth operation of a business, amount of money needed to cover both fixed and variable costs. Using the breakeven analysis, production costs can be categorized as;
1. Variable costs: these are costs that usually change with respect to changes in the level of production or output. Examples are direct labor, maintenance of equipment or machines, raw materials costs etc.
2. Fixed costs: these are the costs which are not directly related to the level of production or not affected by the quantity of output in an organization. Examples are rent, depreciation, administrative cost, research and development costs, marketing costs etc.
Generally, basic break-even analysis is typically based on the principle that variable costs and revenues generated by a business firm or organization, increase in direct proportion to the volume of production i.e as the volume of production of a business firm increase, its variable cost and revenue generated also increases.
Hence, a cost-volume-profit analysis is mainly used by businesses or organizations to determine how changes in differing levels of activities such as costs and volume affect a company's operating income and net income.
Banana Electric is a public company with the following details: Risk free rate 2.0% MRP 5.0% Observed Beta 1.0 Price per share $10.00 Shares outstanding 1,000.0 Debt (market value) 200.0 Cash 1,500.0 Cost of debt 2.0% Tax rate 0.0% Question: Calculate the weighted average cost of capital.
Answer:
6.90 %
Explanation:
The weighted average cost of capital (WACC) is the cost of the sources of finance pooled together.
WACC = Cost of equity x Weight of Equity + Cost of Debt x Weight of Debt
where,
Cost of equity = Return from risk free security + Beta x Market Premium
= 2.0% + 1.0 x 5.0%
= 7.0 %
After tax cost of debt = Interest x ( 1 - tax rate)
= 2.0%
Weight of Equity = $10,000 / ($200.0 + $10,000) = 98 %
Weight of Debt = $200.0 / ($200.0 + $10,000) = 1.96 %
therefore,
WACC = 7.0 % x 0.98 + 2.0% x 0.02
= 6.90 %
thus,
The weighted average cost of capital is 6.90 %.
A lean work center is being operated with a lot size of 50 units. Assume the demand rate is 200 parts per hour. It takes three hours to circulate a container, that includes all set up, run, move, and idle time. What is the maximum inventory that will accumulate in the system
Answer: 600
Explanation:
Based on the information given in the question, the maximum inventory that will accumulate in the system will be calculated as the product of the demand and the lead time. This will be:
= Demand × Lead Time
= 200 × 3
= 600
Therefore, the maximum inventory is 600.
Student tuition at Boehring University is $160 per semester credit hour. The state supplements school revenue by $80 per semester credit hour. Average class size for a typical 3-credit course is 50 students. Labor costs are $4,500 per class, materials costs are $18 per student per class, and overhead costs are $28,000 per class. The multifactor productivity ratio currently is 1.08 and the labor productivity ratio is $160.71 per hour if the instructors work on an average of 14 hours per week for 16 weeks for each 3-credit class of 50 students. Coach Bjourn Toulouse led the Big Red Herrings to several disappointing football seasons. Only better recruiting will return the Big Red Herrings to winning form. Because of the current state of the program, Boehring University fans are unlikely to support increases in the $192 season ticket price. Improved recruitment will increase overhead costs to $30,000 per class section from the current $28,000 per class section. The university's budget plan is to cover recruitment costs by increasing the average class size to 75 students. Labor costs will increase to $6,700 per 3-credit course. Material costs will be about $25 per student for each 3-credit course. Tuition will be $225 per semester credit, which is supplemented by state support of $80 per semester credit.
Required:
The multifactor productivity ratio with the university's plan to meet the expenses related to improving recruitment is what?
Answer:
100
Explanation:
44
Pearland, Inc. has 9,000 shares of preferred stock outstanding. The preferred stock has a $90 par value, a 14% dividend rate, and is noncumulative. If Pearland has sufficient funds to pay dividends, what is the total amount of dividends that will be paid out to preferred stockholders
Answer: $113400
Explanation:
The total amount of dividends that will be paid out to preferred stockholders will be:
= Number of shares × Par value of preferred stock × Dividend rate
= 9000 × $90 × 14%
= 9000 × $90 × 0.14
= $113400
Therefore, the total amount of dividends that will be paid out to preferred stockholders is $113400
All of the following are characteristics of a perfectly competitive market except: Group of answer choices barriers to entry perfectly elastic demand a large number of sellers a homogeneous product
Answer:
barriers to entry
Explanation:
The characteristics or attributes of the perfectly competitive market are as follows
1. There are large number of buyers and seller who purchase and sales similar kind of products
2. No transaction is involved
3. No barrier for entry and exit into the market
4. It contains the perfectly elastic demand
5. Perfect knowledge about the products
Therefore the first option is considered
You can determine a company’s cash situation by analyzing the cash flow statement. The cash flow statement also helps determine whether the company (1) is generating enough cash from its operations to make new investments and pay dividends or (2) will need to generate cash by issuing new debt or selling its assets. A firm has $100 million in revenues. Does that mean it has generated a cash flow of $100 million?
Answer:
A firm that has $100 million in revenues does not mean that the firm has generated a cash flow of $100 million.
Explanation:
The revenue could be on account, in which case, the firm has literally not generated any cash flow, but decreased the cash flow instead. To increase the cash flow by $100 million as a result of revenue, this particular firm needs to collect the amount from its customers in cash. Cash flow is generated when cash is received and not when services or goods are sold.
When 24,000 units are produced, variable costs are $12.00 per unit. Therefore, when 18,000 units are produced ________. Group of answer choices variable unit costs will increase to $16.00 per unit variable costs will remain at $12.00 per unit variable costs will total $288,000 variable unit costs will decrease to $9.00 per unit
Answer: variable costs will remain at $12.00 per unit
Explanation:
Variable costs refers to the costs that change when there's a change in the quantity of the good that's produced.
Since when 24,000 units are produced, the variable costs are $12.00 per unit. It should be noted that even when 18,000 units are produced, the variable cost will still remain $12.00 per unit.
During the year ended December 31, year 8, Dalgiesh Co. had sales of $1,500, cost of goods sold of $800, and sales, general and administrative expenses of $200. In addition, Dalgiesh is involved in a restructuring process expected to last several years, and incurred restructuring costs in year 8 of $125. During the year the company also sold various investments for a net pre-tax gain of $125, and received $40 in dividends from investments. What amount of operating and nonoperating income will Dalgiesh present in its year 8 income statement
Answer:
$375 and $165
Explanation:
Calculation to determine What amount of operating and nonoperating income will Dalgiesh present in its year 8 income statement
Operating income= $1,500 - $800 - $200 - $125
Operating income= $ $375
Non Operating income=$125 + $40
Non Operating income= $165
Therefore The amount of operating and nonoperating income will Dalgiesh present in its year 8 income statement will be $375 and $165
What can you say about the packaging of cell phones? Do you find them appealing? why or why not?
In cost-volume-profit analysis, the unit contribution margin is: Group of answer choices Sales price per unit less unit total cost per unit. Sales price per unit less unit fixed cost per unit. Sales price per unit less total variable cost per unit. )Sales price per unit less cost of goods sold per unit. The same as the contribution margin ratio.
Answer: Sales price per unit less total variable cost per unit.
Explanation:
Cost-volume-profit analysis works by dividing the expenses faced by a business in the production and/ or selling of goods into fixed and variable costs.
To calculate the contribution margin in such a scenario, the Total variable cost incurred per unit is deducted from the sales price per unit. From this figure, the fixed cost can then be subtracted to find the operating income per unit.
If one wants to find the breakeven volume, you can divide the Fixed assets by the Contribution margin.
You must prepare a return on investment analysis for the regional manager of Fast & Great Burgers. This growing chain is trying to decide which outlet of two alternatives to open. The first location (A) requires a $500,000 investment and is expected to yield annual net income of $80,000. The second location (B) requires a $200,000 investment and is expected to yield annual net income of $44,000. Compute the return on investment for each Fast & Great Burgers alternative. Using return on investment as your only criterion, which location (A or B) should the company open? (The chain currently generates an 22% return on total assets.)
Answer and Explanation:
The computation of the return on investment is shown below:
For location A, it is
= $80,000 ÷ $500,000
= 16%
And, for location B it is
= $44,000 ÷ $200,000
= 23%
On the basis of the return on investment, the company should prefer for location B as it contains high return on investment
Therefore the same is to be considered
Hockey Pro budgets production of 3,900 hockey pucks during May. The company assigns variable overhead at the rate of $1.50 per unit. Fixed overhead equals $46,000 per month. Prepare a factory overhead budget for May.
Answer:
$51,850
Explanation:
Preparation of a factory overhead budget for May.
Budgeted Fix Overhead $46,000
Budgeted Variable Overhead $5,850
(3900*$1.50)
Budgeted Total Overhead $51,850
(46,000+5,850)
Therefore factory overhead budget for May is $51,850
What is the process for handling new employees, weekly payroll,
terminations?
Answer:
Staffing process
Explanation:
The process for handling new employees, weekly payroll, terminations is known as STAFFING.
The staffing process is vital to the success of a company or business. It is carried out often by a designated Human Resources Department and it involves the recruitment process, employment, training, development, orientation, retention of employees, and eventual termination if and when required. Each of these processes is categorized in various steps to manage the overall staffing process of any firm.
Hence, in this case, the correct answer is STAFFING
A company purchased $3,300 worth of merchandise. Transportation costs were an additional $290. The company returned $230 worth of merchandise and then paid the invoice within the 3% cash discount period. The total cost of this merchandise is:
Answer:
the total cost of the merchandise is $3,267.90
Explanation:
The computation of the total cost of this merchandise is shown below;
Purchase $3,300
Less Purchase return -$230
Purchase less return $3,070
Less: discount at 3% on $3,070 -$92.10
Net purchase cost $2,977.90
Add: transportation $290
Total cost $3,267.90
hence, the total cost of the merchandise is $3,267.90
A general-purpose diagnostic technique that views organization behavior not as a static pattern but as a dynamic balance of forces working in opposite directions is the _____.
Answer:
Force field analysis.
Explanation:
In Business management, a force field analysis can be defined as a multipurpose diagnostic model that is mainly focused on the consideration of various factors that include both the degrees of cooperation and collaboration in an organization.
This ultimately implies that, a force field analysis is a change model, technique or framework that views and analyzes a problem as a product of many forces working in different but often opposite directions i.e action-reaction force pairs.
Hence, it is a general-purpose diagnostic technique that is designed and developed to view organizational behavior not as a static pattern but as a dynamic balance of forces working in opposite directions is the force field analysis.
Julius builds dining chairs that he sells for $200 a chair. His fixed costs are $1,000 (for workshop equipment). Each chair costs him $50 in materials to produce plus an extra $25 for each previous chair made that day, which reflects Julius's increasing exhaustion. (Thus, the first chair cost $50, the second costs $75, the third cost $100, etc.) Assume time requirements in producing a chair are not a factor. How many chairs should Julius produce each day?
Answer:
7 chairs
Explanation:
The computation of the no of chairs that produced each day is shown below:
We know that
The optimum production is Marginal revenue = Marginal Cost
the Marginal cost is increasing with output and Marginal revenue remains constant at $200
So,
Quantity MC
1 50
2 75
3 100
4 125
5 150
6 175
7 200
Therefore Julius produce 7 chairs
A buyer who accepts goods but notifies the seller the goods are non-conforming a. cannot recover any damages. b. can recover the difference between the goods as promised and as delivered, plus incidental and consequential damages. c. cannot recover incidental damages. d. cannot recover consequential damages.
Answer:
B)can recover the difference between the goods as promised and as delivered, plus incidental and consequential damages.
Explanation:
Nonconfirming goods can be regarded as goods which did not meet specification that is been provided in a contract, in this case A buyer has the entitlement order for rejection of tender of the goods. the acceptance of the nonconfirming goods can also be revoked by the buyer. In a case, whereby a buyer accepts goods but notifies the seller the goods are non-conforming, he/she can recover the difference between the goods as promised and as delivered, plus incidental and consequential damages.
1. Hayes Enterprises began 2003 with a retained earnings balance of $820,000. During 2003, the firm earned $470,000 after taxes. From this amount, preferred stockholders were paid $47,000 in dividends. At year-end 2003, the firm's retained earnings totaled $1,040,000. The firm had 120,000 shares of common stock outstanding during 2003.
a. Prepare a statement of retained earnings for the year ended December 31, 2003, for Hayes Enterprises. (Note: Be sure to calculate and include the amount of cash dividends paid in 2003.)
b. Calculate the firm's 2003 earnings per share (EPS).
c. How large a per-share cash dividend did the firm pay on common stock during 2003?
Answer:
Hayes Enterprises
a. A Statement of Retained Earnings for the year ended December 31, 2003
January 2003 Retained Earnings Balance $820,000
After taxes earnings during 2003 470,000
Retained earnings available = $1,290,000
Preferred dividends = (47,000)
Retained earnings available for common $1,243,000
Common stock dividends = (203,000)
Retained Earnings Balance = $1,040,000
b. 2003 Earnings per share (EPS) = $1.69
c. The company paid $1.69 cash dividend to common stock during 2003.
Explanation:
a) Data and Calculations:
January 2003 Retained Earnings Balance $820,000
After taxes earnings during 2003 470,000
Retained earnings available = $1,290,000
Preferred dividends = (47,000)
Retained earnings available for common $1,243,000
Common stock dividends = (203,000) ($1,243,000 -$1,040,000)
Retained Earnings Balance = $1,040,000
Outstanding common stock shares = 120,000
Suppose you've just inherited $10,000 from a relative. You're trying to decide whether to put the $10,000 in a non-interest-bearing account so that you can use it whenever you want (that is, hold it as money) or to use it to buy a U.S. Treasury bond.
The opportunity cost of holding the inheritance as money depends on the interest rate on the bond.
For each of the interest rates in the following table, compute the opportunity cost of holding the $10,000 as money.
Interest Rate on Government Bond (Percent) Opportunity Cost (Dollars per year)
8 _____ (10,000.00 / 800.00 / 0.08 / 8.00 / 125,000.00)
10 _____ (10,000.00 / 10.00 / 100,000.00 / 1,000.00 / 0.10)
What does the previous analysis suggest about for money?
a. The quantity of money demanded decreases as the interest rate rises.
b. The quantity of money demanded increases as the interest rate rises.
c. The supply of money is independent of interest rate.
Answer:
A. $800
B. $1,000
C. a. The quantity of money demanded decreases as the interest rate rises
Explanation:
A. Computation for the opportunity cost of holding the $10,000 as money if Interest Rate is 8%
Opportunity Cost for 8% interest rate=$8%*$10,000
Opportunity Cost for 8% interest rate= $800
Therefore the opportunity cost of holding the $10,000 as money if Interest Rate is 8% will be $800
B. Computation for the opportunity cost of holding the $10,000 as money if Interest Rate is 10%
Opportunity Cost for 10% interest rate =10%*$10,000
Opportunity Cost for 10% interest rate = $1,000
Therefore the opportunity cost of holding the $10,000 as money if Interest Rate is 10% will be $1,000
C. Based on the information given the previous analysis suggest about for money: THE QUANTITY OF MONEY DEMANDED DECREASES AS THE INTEREST RATE RISES.
Eric and Ginny Gaffney live in Swarthmore, PA. Ginny's father, Kenji, lives in Sweden. For each of the following transactions that occur in their lives, identify whether it is included in the calculation of U.S. GDP as part of consumption (C), investment (I), government purchases (G), exports (X), or imports (M).
a. Ginny's father in Sweden orders a bottle of Vermont maple syrup from the producer's website.
b. Ginny gets a new video camera made in the United States.
c. Eric buys a bottle of Italian wine.
d. The state of Pennsylvania repaves highway PA 320, which goes through the center of Swarthmore.
e. Eric's employer upgrades all of its computer systems using U.S.-made parts.
Wilson Co. produces tennis rackets. A customer has offered Wilson Co. $400 per unit for 200 units. To fill the order, Wilson would incur unit-level costs of $300 per unit and batch-level costs of $1,000. Wilson also incurred $10,000 of product-level costs to design the racket and $100,000 of facility-level costs. Calculate the amount of differential revenue.
Answer:
$80,000
Explanation:
Calculation to determine the amount of differential revenue
Using this formula
Differential revenue=Per units*Number of units
Let plug in the formula
Differential revenue=$400 x 200 units
Differential revenue= $80,000
Therefore the amount of differential revenue is $80,000
Which of the following is NOT an identified criterion of a good brand name? Group of answer choices distinctive or unique easily pronounceable extendable all of the above
Answer: All of the above
Explanation:
Brand name refers to the brand element through which a customer can be able to identify and differentiate a particular product from the other products.
A good brand name should be unique, easy to pronounce, extendable, give an idea about the qualities and benefits of the product, capable of registration and legal protection, should not give a bad image etc.
Therefore, the correct option is "All of the above".
After Xavier and Alyssa deposited nearly $55,000 in a savings account at Bigbux Bank, the bank failed and filed for bankruptcy. Because the Bigbux was an FDIC member bank, Xavier and Alyssa:
a. will beible 15 recover 80 percent of the value of their depon, $2,500 deductible.
b. should be protected because their account is fully insured by the FDIC
c. will lose their savings because the FDIC only insures business deposite
d. can recover up to $25,000, but they will probably lose the test since the deposits exceed the maximum coverage offered by the FDIC
Answer:
B
Explanation:
The Federal Deposit Insurance Corporation (FDIC) was established after the great depression. Bank run was attributed to be one of the causes of the great depression. The FDIC increases confidence of depositors in banks because they insure the deposit of bank customers. In the case a bank fails, customers are assured that they would not lose their monies deposited
The FDIC provides protection for up to $250,000 of deposits
$55,000 is less than $250,000, thus the depositors would receive full protection
It costs Sheffield Company $26 per unit ($18 variable and $8 fixed) to produce its product, which normally sells for $38 per unit. A foreign wholesaler offers to purchase 7800 units at $21 each. Sheffield would incur special shipping costs of $2 per unit if the order were accepted. Sheffield has sufficient unused capacity to produce the 7800 units. If the special order is accepted, what will be the effect on net income?
Answer:
$7,800 Increase
Explanation:
Calculation to determine what will be the effect on net income If the special order is accepted,
Effect on net income= ((7,800 x $21) - [($18 + $2) x 7,800]
Effect on net income=$163,800-($20*7,800)
Effect on net income=$163,800-$156,000
Effect on net income= $7,800 Increase
Therefore If the special order is accepted, what will be the effect on net income is $7,800 Increase
Which of the following statements about annuities are true?
a. Ordinary annuities make fixed payments at the end of each period for a certain time period.
b. An annuity due is an annuity that makes a payment at the end of each period for a certain time period.
c. A perpetuity is a constant, infinite stream of equal cash flows that can be thought of as an infinite annuity.
d. An annuity due earns more interest than an ordinary annuity of equal time.
Answer:
A
B
D
Explanation:
An annuity is a monetary product that pays out a settled stream of installments to a person. So, options a, b, and d. statements are true about annuities.
Ordinary annuities make fixed payments at the end of each period for a certain time period which means an ordinary annuity could be an arrangement of customary installments made at the end of each period, such as monthly or quarterly.
An annuity due is an annuity that makes a payment at the beginning of each period for a certain time period which means the annuity begins and ends on certain fixed dates
An annuity due earns more interest than an ordinary annuity of equal time. The interest earned will depend on the interest rate and the time period.
Therefore, statement c. is false and a, b, and d statements are true about annuities.
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Yappy Company is considering a capital investment of $320,000 in additional equipment. The new equipment is expected to have a useful life of 8 years with no salvage value. Depreciation is computed by the straight-line method. During the life of the investment, annual net income and cash inflows are expected to be $22,000 and $62,000, respectively. Yappy requires a 10% return on all new investments.
Present Value of an Annuity of 1
Period 8% 9% 10% 11% 12% 15%
8 5.747 5.535 5.335 5.146 4.968 4.487
Compute each of the following:
a. Cash payback period.
b. Net present value.
c. Profitability index.
d. Internal rate of return.
e. Annual rate of return.
Answer:hi
Explanation:
hi
Athens Company's salaried employees earn two weeks of vacation per year. The company estimated and must expense $6,600 of accrued vacation benefits for the year. Which of the following is the necessary year-end adjusting entry to record accrued vacation benefits?
A.) Debit Vacation Benefits Payable $6,600; credit Vacation Benefits Expense $6,600.
B.) Debit Vacation Benefits Payable $16,500; credit Vacation Benefits Expense $16,50
C.) Debit Vacation Benefits Expense $16,500; credit Vacation Benefits Payable 16,500.
D.) Debit Vacation Benefits Expense $6,600; credit Vacation Benefits Payable
E.) Debit Vacation Benefits Expense $17,160; credit Vacation Benefits Payable $17,160
Answer: Debit Vacation Benefits Expense $6,600; credit Vacation Benefits Payable
Explanation:
Based on the information given in the question, the journal entry will be:
Debit Vacation benefits expense $6600
Credit Vacation benefits payable $6600
Therefore, the correct option is D.