Answer: $110.25
Explanation:
Futures price is calculated by the formula:
= Strike price * e ^ (risk free interest rate - dividend yield) * annualized time to expiry
= 107 * e^(8.75% - 2.75%) * 6/12 months
= $110.25
Ravelo Corporation has provided the following data from its activity-based costing system:
Activity Cost Pools Estimated Overhead Cost Expected Activity Assembly
$ 498,520 44,000
machine-hours Processing orders $ 54,263 1,100
orders Inspection $ 77,589 1,110
inspection-hours Data concerning the company's product L19B appear below:
Annual unit production and sales 430
Annual machine-hours 990
Annual number of orders 70
Annual inspection hours 20
Direct materials cost $ 37.74 per unit
Direct labor cost $ 10.45 per unit
According to the activity-based costing system, the unit product cost of product L19B is closest to:_________
(Round your intermediate calculations to 2 decimal places.)
Answer:
$85.56 per unit
Explanation:
Assembly = $498,520 / 44,000 Machine hours
Assembly = $11.33 per machine hour
Processing orders = $54,263 / 1,100 Orders
Processing orders = $49.33 per processing orders
Inspection = $77,589 / 1,100 Inspections
Inspection = $70.54 per inspections
Total Overhead Costs = [990*$11.33] + [70*$49.33] + [20*$70.54]
Total Overhead Costs = $11,217 + $3,453 + $1,411
Total Overhead Costs = $16,081
Overhead Cost per unit = Total Overhead cost / Number of units produced
Overhead Cost per unit = $16,081 / 430 Units
Overhead Cost per unit = $37.37 Per unit
Step-3, Average cost of product L19B
Unit cost of product L19B = Direct Material cost per unit + Direct Labor cost per unit + Overhead costs per unit
Unit cost of product L19B = $37.74 + $10.45 + $37.37
Unit cost of product L19B = $85.56 per unit
Pharoah Industries collected $106,000 from customers in 2019. Of the amount collected, $24,200 was for services performed in 2018. In addition, Pharoah performed services worth $39,400 in 2019, which will not be collected until 2020. Pharoah Industries also paid $72,800 for expenses in 2019. Of the amount paid, $29,100 was for expenses incurred on account in 2018. In addition, Pharoah incurred $41,500 of expenses in 2019, which will not be paid until 2020.
Required:
a. Compute 2018 cash-basis net income.
b. Compute 2018 accrual-basis net income.
Answer:
A. $33,200
B. $35,000
Explanation:
A. Computation for 2018 cash-basis net income
2018 cash-basis net income = $106,000 - $73,800
2018 cash-basis net income= $33,200
Therefore 2018 cash-basis net income is $33,200
(b) Computation for 2018 accrual-basis net income
2018 accrual-basis net income = ($106,000 - $24,200 + $39,400) - ( $73,800 - $29,100 + $41,500))
2018 accrual-basis net income= $121,200 - $86,200
2018 accrual-basis net income= $35,000
Therefore 2018 accrual-basis net income is $35,000
The shareholders of Flannery Company have voted in favor of a buyout offer from Stultz Corporation. Information about each firm is given here:
Answer:
The answer is "$4.311".
Explanation:
Calculating the EPS after the merger:
[tex]\text{Stultz Corp Post Merger Earnings} = 220,000 + 1,000,000 \\\\[/tex]
[tex]= \$1,220,000[/tex]
[tex]\to \text{Number of Shares Post Merger:} \\\\=\frac{99,000}{3} + 250,000\\\\ = 283,000\\\\\text{EPS Post Merger} =\frac{\text{Stultz Corp Post Merger Earnings}}{\text{Number of Shares Post Merger}} \\\\[/tex]
[tex]= \frac{1,220,000}{283,000} \\\\= \$4.311[/tex]
Which theory would most likely explain why a commercial bank, which usually focuses on short-term securities, would switch to long-term securities due to a change in interest rates. pure expectation liquidity premium segmented market preferred habitat
Answer:
preferred habitat
Explanation:
According to the preferred habitat theory, if the expected returns from investment of a particular investment maturity is large enough, investors would shift from their preferred maturities.
In this question, there is a shift from the preferred maturity (short-term securities) to a long-term securities when interest rate changes
The pure expectations theory assumes that bonds of any maturity are perfect substitutes for each other. For example, if an investor buys a 10 year bond and holds it for 1 year, the return is the same as buying a 1 year bond. The theory also assumes that risk premium does not exist and a security only earns its risk free rate
Liquidity premium theory states that risk premium increases with the maturity of a bond. The theory predicts that the yield curve is upward sloping due to liquidity premium
According to the segmented market theory, each bond maturity segment can be thought of as a segment market in which yield are a function of the demand and supply for funds in that maturity.
Suppose that XTel currently is selling at $30 per share. You buy 800 shares using $18,000 of your own money, borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 8%.
a. What is the percentage increase in the net worth of your brokerage account if the price of XTel immediately changes to (a) $33; (b) $30; (c) $27? (Leave no cells blank - be certain to enter "0" wherever required. Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.)
b. If the maintenance margin is 25%, how low can XTel’s price fall before you get a margin call? (Round your answer to 2 decimal places.)
c. How would your answer to requirement 2 would change if you had financed the initial purchase with only $12,000 of your own money? (Round your answer to 2 decimal places.)
d. What is the rate of return on your margined position (assuming again that you invest $18,000 of your own money) if XTel is selling after one year at (a) $33; (b) $30; (c) $27? (Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.)
e. Continue to assume that a year has passed. How low can XTel’s price fall before you get a margin call?
Assuming that periodic inventory records are kept, the ending inventory on a LIFO basis is Group of answer choices $16,440. $17,160. $17,880. $16,640. None of these answer choices are correct.
Answer:
$16,440.
Explanation:
Please find attached the data used in answering this question
LIFO means last in first out. It means that it is the last purchased inventory that is the first to be sold.
the ending inventory would consist of earlier purchased goods
total sales is 20800
total purchases = 26,000
ending inventory = 26,000 - 20800 = 5200
this price of the ending inventory = 3200 x 3.2) + (2000 x 3.1) = $16,440.
An outside supplier offers to provide Epsilon with all the units it needs at $63.05 per unit. If Epsilon buys from the supplier, the company will still incur 35% of its overhead. Epsilon should choose to:
Answer:
Make since the relevant cost to make it is $59.05
Explanation:
Calculation to determine what Epsilon should choose to:
Relevant costs to make = 8.20 + 24.20 + [41*(100%-35%)]
Relevant costs to make = 8.20 + 24.20 + (41*65%)
Relevant costs to make = 8.20 + 24.20 + 26.65
Relevant costs to make =$59.05
Therefore Epsilon should choose to: MAKE SINCE THE RELEVANT COST TO MAKE IT IS $59.05
E-Eyes has a new issue of preferred stock it calls 20/20 preferred. The stock will pay a $20 dividend per year, but the first dividend will not be paid until 20 years from today. If you require a return of 9.75 percent on this stock, how much should you pay today
Answer:
You would pay approximately $35.00 today
Explanation:
The cost of the stock at the beginning of the year 20
= 20/9.75%
= 20/0.0975
= 205.13 dollars
We find the current price of the stock
= Fv/(1+r)^n
= 205.13/(1+9.75%)¹⁹
= 205.13/1.0975¹⁹
= 205.13/5.86
= $35.00
From this calculation you have to pay 35 Dollars today.
You sell one December futures contracts when the futures price is $1,010 per unit. Each contract is on 100 units and the initial margin per contract that you provide is $2,000. The maintenance margin per contract is $1,500. During the next day the futures price falls to $1,008 per unit. What is the balance of your margin account at the end of the day? a. $3,700b. $1,800c. $2,200d. $1,500
Answer:
b. $1800
Explanation:
Calculation to determine the balance of your margin account at the end of the day
Margin account balance=$2,000-[100*($1008-$1010)]
Margin account balance=$2,000-(100*$2)
Margin account balance=$2,000-$200
Margin account balance=$1,800
Therefore the balance of your margin account at the end of the day is $1,800
Dave's Duds reported cost of goods sold of $1,600,000 this year. The inventory account increased by $130,000 during the year to an ending balance of $465,000. What was the cost of merchandise that Dave's purchased during the year?
Answer:
$1,730,000
Explanation:
Calculation to determine the cost of merchandise that Dave's purchased during the year
COGS $1,600,000
Add: Increase in inventories $130,000
Purchases $1,730,000
($1,600,000+$130,000)
Therefore the cost of merchandise that Dave's purchased during the year is $1,730,000
Antitrust regulators are likely to prohibit two firms from merging if: __________.
a. There are sizable synergies to the combination
b. The combined firm will have a large share of the market
c. There are many other firms in industry
d. The combined firm will undercut competitiors with lower prices
Answer:
If the combined firm will have a large share of the market.
Explanation:
A separate company unit responsible for its own cost and revenue is referred to as which of the following?
Answer:
forming a work team. A company unit responsible for its own costs and profits is referred to as______ -departmentalization. -specialization.
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A consumer has $180 in monthly income to spend on two goods, D and G, where D is on the y-axis. The price of good D, PD is $6, and the marginal rate of transformation is -2. How many units of good G can be purchased if all income is used to purchase good G
Answer:
The number of units of good G that can be purchased if all income is used to purchase good G is 15 units.
Explanation:
Since D is on the y-axis, indicating G is on the x-axis, the formula for calculating the marginal rate of transformation (MRT) is given as follows:
MRT = - PG / PD …………………. (1)
Where:
MRT = Marginal rate of transformation = -2
PG = Price of good G = ?
PD = Price of good D = $6
Substituting the relevant values into equation (1) and solve for PG, we have:
-2 = - PG / $6
PG = -2 * (-6) = $12
Therefore, we have:
Number units of good G if all income is spent on it = Monthly income / PG = $180 / $12 = 15
Therefore, the number of units of good G that can be purchased if all income is used to purchase good G is 15 units.
what are the similarities and differences between clv and customer equality these two measures? discuss the strengths and weaknesses of these approaches for measuring customer value. of
Answer:
Customer equity is the sum of all of our CLV's
Explanation:
CLV or customer lifetime value represents the profit that our customers give the company during their commercial relationship with us, while the customer equity is the sum of all of our CLV's, meaning that one is a macro and the other one is a micro reality, both are a statistics that can give us better information for decision making when we are targeting and creating products.
Consider the telecommunications, networking, and wireless technologies you use today as a consumer and student. Does your comfort level with changes in these technologies in your personal life influence how comfortable you would be with adapting to new technologies in the workplace? Why or why not?
Answer:
Yes, people´s comfort level with changes in technology in their personal lives has a great influence over how comfortable they can be with adapting to new technologies in the workplace.
Explanation:
Telecommunications, networking, and wireless technologies are used regularly by most students, as those who are in studying years have grown with those technologies already developed. However, the rapid changes in technology that are common these days can become quite overwhelming, as they require users to constantly readapt to them. For example, our use of email has changed so much in the past years, with so many new lines of communication and new softwares that one has to learn how to use. And the more we get used to readapting, the more comfortable we can be when those changes become part of the workplace. It´s important to be prepared and to have the proper training to ensure the effective use of technology in such a fast-paced technological era.
The real risk-free rate of interest is 3 percent. Inflation is expected to be 4 percent this coming year, jump to 5 percent next year, and increase to 6 percent the year after (Year 3). Assume maturity risk premium is zero, what should be the interest rate on 2-year, treasury securities today
Answer: 7.5%
Explanation:
Interest rate on 2 year treasury security:
= Real interest rate + Average inflation rate + Maturity risk premium
Average inflation rate = (Inflation rate coming year + Inflation rate next year) / 2
= (4% + 5%) / 2
= 4.5%
Interest rate on 2-year treasury security is:
= 3% + 4.5% + 0%
= 7.5%
Which element of a command economy is also used in a mixed economy
Answer:
Governments can regulate businesses
Explanation:
I hope that this helped :)
Answer:
Prices also are dictated by supply and demand rather than by the government, as in the command economy. The profitability of producer and innovation are also key elements of the mixed economic system.
Explanation:
The type of income statement that reports a series of subtotals such as gross profit, operating income, and income before taxes is a ______ income statement.
A. multiple-step
B. classified
C. single-step
D. current
Answer:
A. multiple-step
Explanation:
The Multiple-Step Income statement is used to reports a series of subtotals such as gross profit, operating income, and income before taxes. This allows the users to identify income generated form Primary and Secondary Activity of the Business.
On January 1, 2021, Baltimore Company issued $200,000 face value, 5%, 10-year bonds at 103. Baltimore uses the straight-line method for amortization. Use this information to determine the dollar value of the annual bond premium amortization. Round your answer to the nearest whole number (no cents).
Answer:
the dollar value of the annual bond premium amortization is $600
Explanation:
The computation of the dollar value of the annual bond premium amortization is shown below:
Interest paid ($200,000 × 5%) $10,000
Less: premium amortization ($200,000 × 0.03) ÷ 10) -$600
Dollar value of the interest expense $9,400
So, the dollar value of the annual bond premium amortization is $600
Annual bond premium amortized using straight-Line Method is $600.
What is straight-Line Method of Amortization of Bond?In the straight-Line Method, the bond premium or discount is charged/disbursed equally over the life of the bonds.
Given:
Face value of 5% bonds= $200,000
Maturity period= 10 years
Issue price of 5% bonds=103
Value of the annual bond premium amortization=
Interest paid=5% of $200,000=$10,000
Premium amortized= ($200,000 × 0.03) ÷ 10=$600
Interest expense=Interest paid-premium amortization
=$10,000-$600
=$9,400
Therefore, the annual bond premium amortization is $600
Learn more about straight-Line Method of Amortization of Bond here:
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2) Excellent Mugs Inc. produced 1,600,000 units in 2017 at a units of output per dollar of input cost was $0.09. Its cost of input at 2017 prices that would have been used in 2016 was $20,000,000. How much did the total factor productivity (TFP) increase as a result of 2017 operations
Answer:
the total factor productivity (TFP) increase as a result of 2017 operations is 12.5%
Explanation:
The computation of the total factor productivity (TFP) increase as a result of 2017 operations is given below;
The Unit produced in 2016 is
= $20,000,000 x $0.09
= 1,800,000
Now
Total factor productivity increase for the year 2017 is
= (1,800,000 - 1,600,000) ÷ 1,600,000
= 12.5%
Hence, the total factor productivity (TFP) increase as a result of 2017 operations is 12.5%
incurred $10,000 of portfolio income. Its corporate trustee paid fiduciary fees of $1,000 therefrom, and also paid $1,000 in premiums for a life insurance policy on Marcia, the grantor of the trust. How much gross income does Marcia include with respect to these trust activities
Answer:
$1000
Explanation:
Portfolio income = $10,000
Fiduciary fees = $1,000
premiums paid for life insurance on Marcia = $1000
Fiduciary fees are fees charged by trustees and executors for services that they rendered
Therefore The amount of gross income Marcia will include being the grantor of the trust = $1000 ( 10% of portfolio income )
In order to present an accurate picture of the financial health of his company, Bob reported all of the expenses that had been incurred, even if they had not been paid yet. Bob is practicing the __________ principle.
a.) matching
b.) measurement/cost
c.) time period
d.) full disclosure
Answer:
a.) matching
Explanation:
Matching principle is the accounting principle in which the expenses incurred should be recorded at the same period when the revenues are earned. Also the business incurred the expenses in order to earn the revenues
So as per the given situation since Bob recognized the expenses but it is not paid so here he is using the matching principle
Therefore the option a is correct
One year ago, Peyton purchased 7,200 shares of Broncos stock for $329,640. Today, he sold those shares for $58.92 a share. What is the total return on this investment if the dividend yield is 2.2 percent
Answer:
30.90%
Explanation:
total return = dividend yield + price appreciation
price appreciation = (current price per share / previous price per share) - 1
Previous price per share = $329,640 / 7,200 = $45.78
price appreciation = ( $58.92 / $45.78) - 1 = 0.287 = 28.70%
total return = 28.70% + 2.2% = 30.90%
You consider buying a share of stock at a price of $12. The stock is expected to pay a dividend of $1.60 next year, and your advisory service tells you that you can expect to sell the stock in 1 year for $14. The stock's beta is 1.2, rf is 15%, and E[rm] = 25%. What is the stock's abnormal return?
Answer:
3%
Explanation:
The computation of the abnormal return of the stock is shown below:
= Rf + Beta (Rm - Rf)
= 15% + 1.2 (25% - 15%)
= 15% + 12%
= 27%
Now actual return is
=[ $1.60 + ($14 - $12)] ÷ $12
= 0.3
= 30%
ANd, finally the abnormal return is
= 30% - 27%
= 3%
______ consists of the activities that managers perform to plan for, attract, develop, and retain an effective workforce.
a) Arbitration
b) Formal appraisal
c) Human capital
d) Orientation
e) Human resource management
Your engineering team improved one of your core products, in the context of this course you should immediately:
a. File for patent protection.
b. Consider the market
c. Perform some due dilgence to make sure you remain in compliance with the laws, rules, and regulations.
d. Begin looking at the Institutional views of the Host location.
e. Start analyzing the Resurces and capabilities needed in the Host.
Answer:
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Explanation:
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Burnham Brothers, Inc. has no retained earnings since it has always paid out all of its earnings as dividends This same situation is expected to persist in the future. The company uses CAPM to calculate its cost of equity and its target capital structure consists of common stock, preferred stock, and debt. Which of the following events would reduce its WACC?
a. The flotation costs associated with issuing new common stock increase.
b. The company's beta increases.
c. Expected inflation increases.
d. The market risk premium declines.
Answer: d. The market risk premium declines.
Explanation:
The Weighted Average Cost of Capital (WACC) takes into account the cost of equity and debt which means that if either of these costs increase, the WACC will increase as well and if any decrease, WACC will follow suit.
Market risk premium is used in the calculation of the cost of equity when using CAPM in the following manner:
= Risk free rate + Beta * Market risk premium
As can be inferred from the above formula, if the market risk premium declines, a lower cost of equity will result which would then reduce the WACC as well.
7. Liqin fixes up old cars and sells them to supplement his retirement income. Liqin came across a beat-up 1955 Corvette that she is considering rebuilding and selling. She estimates a 0.2 probability that she will gain 15% on the deal, a 0.2 probability that she will gain 10%, and a 0.6 probability that she will gain 5%. Liqin's expected return for fixing up and selling the Corvette is ____%. a. 8 b. 11 c. 20 d. 30
Answer:
a. 8%
Explanation:
Expected Return = [(Return*Probability)+(Return*Probability)+(Return*Probability) * 100%]
Expected Return = [{(15%*0.2)+(10%*0.2)+(5%*0.6)} * 100]%
Expected Return = [{(0.15*0.2)+(0.1*0.2)+(0.05*0.6)} * 100]%
Expected Return = [{0.03+0.02+0.03} * 100]%
Expected Return = [{0.08 * 100}]%
Expected Return = 8%
So, Liqin's expected return for fixing up and selling the Corvette is 8%.
Cool Sky reports the following costing data on its product for its first year of operations. During this first year, the company produced 42,000 units and sold 34,000 units at a price of $120 per unit.
Manufacturing costs
Direct materials per unit $ 48
Direct labor per unit $ 18
Variable overhead per unit $ 6
Fixed overhead for the year $ 420,000
Selling and administrative cost
Variable selling and administrative cost per unit $ 12
Fixed selling and administrative cost per year $ 110,000
1a. Assume the company uses absorption costing. Determine its product cost per unit.
1b. Assume the company uses absorption costing. Prepare its income statement for the year under absorption costing.
2a. Assume the company uses variable costing. Determine its product cost per unit.
2b.
Assume the company uses variable costing. Prepare its income statement for the year under variable costing.
Answer:
1a. Product cost per unit if absorption costing is used by the company is $82 per unit.
1b. Net operating income if absorption costing is used by the company is $774,000.
2a. Product cost per unit if variable costing is used by the company is $72 per unit.
2b. Net operating income if variable costing is used by the company is $694,000.
Explanation:
1a. Assume the company uses absorption costing. Determine its product cost per unit.
Fixed overhead per unit = Fixed overhead for the year / Units produce for the year = $420,000 / $42,000 = $10
Product cost per unit = Direct materials per unit + Direct labor per unit + Variable overhead per unit + Fixed overhead per unit = $48 + $18 + $6 + $10 = $82
Therefore, product cost per unit if absorption costing is used by the company is $82 per unit.
1b. Assume the company uses absorption costing. Prepare its income statement for the year under absorption costing.
Note: See number 1b of the attached excel file for the income statement for the year under absorption costing.
From number 1b of the attached excel file, we have:
Net operating income = $774,000
Therefore, net operating income if absorption costing is used by the company is $774,000.
2a. Assume the company uses variable costing. Determine its product cost per unit.
Product cost per unit = Direct materials per unit + Direct labor per unit + Variable overhead per unit = $48 + $18 + $6 = $72
Therefore, product cost per unit if variable costing is used by the company is $72 per unit.
2b. Assume the company uses variable costing. Prepare its income statement for the year under variable costing.
Note: See number 2b of the attached excel file for the income statement for the year under variable costing.
From number 2b of the attached excel file, we have:
Net operating income = $694,000
Therefore, net operating income if variable costing is used by the company is $694,000.
Consider single-server Q with LIFO (last-infirst-out) services. Suppose that three customers show up at times 5, 6, and 8, and that they all have service times of 4. When does customer 2 leave the system?
a. 3
b. 9
c. 13
d. 17
e. 19a
Answer:
d. 17
Explanation:
The computation is shown below;
Here the time started i.e. t=0
Therefore there was no customer upto t=5 hour
At t=5
The client first came and as there was no other customer available so we begins service to customer 1
Now
As service off is 4 hour so service to client 1 will end at
t=9 hour.
Also mid-time at t = 6
That means the client 2 came and at t = 8 the client 3 came.
Now at t = 9 the service begins for client 3 and end at t = 13 ( 9 + 4)
At t=13 hour, so after four hours it should be 17
