Answer:
C. 11.05%
Explanation:
The computation of the cost of capital under the proposed leveraging is shown below;
cost of capital is
=Debt÷ value of leverged firm × ((unlevered cost of capital × (1 - tax rate))
=800 ÷ 1600 × ((13% + (13%) × (1 - 30%)))
= 11.0500%
hence, the cost of capital is 11.05%
Star Corp., a publicly traded, accrual-method C corp., incurred the following expenses in 2020 (all of which are ordinary and neccessary unless the facts indicate otherwise):
Office rent: $50,000
CEO compensation: $1,500,000
Salary paid to janitor: $250,000
Business meals: $30,000 (100% of the amount paid)
Client entertainment: $100,000 (100% of the amount paid)
Political contribution/lobbying: $5,000
Advertising: $70,000
Taxes & licenses (state, local &
payroll tax; not fed. inc. tax): $30,000
Life insurance policy on CEO - premiums: $12,000
Federal income taxes: $250,000
Average office rents in the area run $50,000-$55,000/year for similar office space. Star Corp.'s janitor is the CEO's sister. Reasonable salary for a janitor with similar experience, job description and work hours is $20,000/year. Star Corp. is the beneficiary on the life insurance policy. What is Star Corp.'s total deductible business expenses for the year?
Answer:
Star Corp.
Star Corp.'s total deductible business expenses for the year is:
= $1,952,000.
Explanation:
Ordinary and Necessary Expenses incurred in 2020:
Office rent: $50,000
CEO compensation: $1,500,000
Salary paid to janitor: $250,000
Business meals: $30,000 (100% of the amount paid)
Client entertainment: $100,000 (100% of the amount paid)
Political contribution/lobbying: $5,000
Advertising: $70,000
Taxes & licenses (state, local &
payroll tax; not fed. inc. tax): $30,000
Life insurance policy on CEO
- premiums: $12,000
Federal income taxes: $250,000
Total expenses incurred $2,297,000
Total Deductible Business Expenses for the year:
Office rent: $50,000
CEO compensation: $1,500,000
Salary paid to janitor: $20,000
Business meals: $15,000 (50% of $30,000)
Client entertainment: $0 (0% of $100,000)
Political contribution/lobbying: $5,000
Advertising: $70,000
Taxes & licenses (state, local &
payroll tax; not fed. inc. tax): $30,000
Life insurance policy on CEO
- premiums: $12,000
Federal income taxes: $250,000
Total deductible expense = $1,952,000
impact of population growth on environmental degradation
Answer:
Explanation:
Population growth may be described in simple terms as the rate at which the number of people residing in a particular country is increasing or multiplying. Some states or countries have a higher population figure than the other and also higher rate of growth. As population increases, the resources available to people in that community suffers as the burden will also grow. The environment also will also take its own share of the effects as overcrowding seems to creep in together with increased burden on environmental resources and infrastructure. If proactive measures aren't taken in other to boost resources and infrastructure as indaquate handling of population growth will almost always result in environmental and infrastructure degradation or decline.
Companies usually buy __________ assets. These include both tangible assets such as _______________ and intangible assets such as _____________. To pay for these assets, they sell _____________ assets such as_____________. The decision about which assets to buy is usually termed the _____________ or _______________ decision. The decision about how to raise the money is usually termed the _____________ decision.
Answer:
Companies usually buy ____real______ assets. These include both tangible assets such as ___property, plant, and equipment____________ and intangible assets such as ____patents, copyrights, and brands_________. To pay for these assets, they sell ____financial_________ assets such as_____bonds________. The decision about which assets to buy is usually termed the _____investment________ or _____capital budgeting__________ decision. The decision about how to raise the money is usually termed the ____financing_________ decision.
Explanation:
Real assets can be tangible or intangible assets. They are also known as long-term or fixed assets, given their time horizon before they are fully consumed in production. Real assets, which possess intrinsic value, can be distinguished from financial assets, which are based on contractual claims or securities, including stocks and debts. In any management role, decisions are made about capital budgeting or investment. These also require financing decisions to fund the investments.
A company decides to introduce a line of crackers made with organically grown grains and vegetables. What environmental trend is the company responding to?
All sales are on account. 35% of the sales are collected in the month of sale, 45% in the following month, the remainder in the second following month. Budgeted sales for Jan., Feb., Mar. are $50,000; $60,000; $40,000. How much cash is collected in March
Answer:
Total cash collection March= $51,000
Explanation:
Giving the following information:
All sales are on account.
35% of the sales are collected in the month of sale, 45% in the following month, the remainder in the second following month.
Cash collection March:
Sales on account from March= (40,000*0.35)= 14,000
Sales on account from February= (60,000*0.45)= 27,000
Sales on account from January= (50,000*0.2)= 10,000
Total cash collection March= $51,000
An analyst gathered the following information about a company: 01/01/04 - 50,000 shares issued and outstanding at the beginning of the year 04/01/04 - 5% stock dividend 10/01/04 - 10% stock dividend What is the company's weighted average number of shares outstanding at the end of 2004
Answer:
Company A
The company's weighted average number of shares outstanding at the end of 2004 is:
= 53,188 shares.
Explanation:
a) Data and Calculations:
Date Description Weight Weighted Average
01/01/04 - 50,000 shares issued
and outstanding 12/12 = 50,000
04/01/04 - 5% stock dividend (2,500) 9/12 = 1,875
10/01/04 - 10% stock dividend (5,250) 3/12 = 1,313
Total weighted average number of shares = 53,188
The condensed financial statements of Ness Company for the years 2016 and 2017 are presented below.
NESS COMPANY
Balance Sheets
December 31 (in thousands)
2017 2016
Current assets
Cash and cash equivalents $330 $360
Accounts receivable (net) 47 400
Inventory 46 390
Prepaid expenses 130 160
Total current assets 1,390 1,310
Property, plant, and equipment (net) 410 380
Investments 10 10
Intangibles and other assets 530 510
Total assets $2,340 $2,210
Current liabilities $820 $790
Long-term liabilities 480 380
Stockholders’ equity—common 1,040 1,040
Total liabilities and stockholders’ equity $2,340 $2,210
NESS COMPANY
Income Statements
For the Year Ended December 31 (in thousands)
2017 2016
Sales revenue $3,800 $3,460
Costs and expenses
Cost of goods sold 970 890
Selling & administrative expenses 2,400 2,330
Interest expense 10 20
Total costs and expenses 3,380 3,240
Income before income taxes 420 220
Income tax expense 168 88
Net income $ 252 $ 132
Compute the following ratios for 2017 and 2016. (Round current ratio and inventory turnover to 2 decimal places, e.g 1.83 and all other answers to 1 decimal place, e.g. 1.8 or 12.6%.)
(a) Current ratio.
(b) Inventory turnover. (Inventory on December 31, 2015, was $340.)
(c) Profit margin.
(d) Return on assets. (Assets on December 31, 2015, were $1,900.)
(e) Return on common stockholders’ equity. (Equity on December 31, 2015, was $900.)
(f) Debt to assets ratio.
(g) Times interest earned.
Answer:
Ness Company
2017 2016
(a) Current ratio = 1.70 1.66
(b) Inventory turnover = 4.45 2.44
(c) Profit margin = 6.63% 3.82%
(d) Return on assets. (Assets on December 31, 2015, were $1,900.)
= 10.77% 5.97%
(e) Return on common stockholders’ equity. (Equity on December 31, 2015, was $900.)
= 24.23% 12.69%
(f) Debt to assets ratio = 0.56 0.53
(g) Times interest earned = 43X 12X
Explanation:
Condensed Financial Statements:
NESS COMPANY
Balance Sheets
December 31 (in thousands)
2017 2016
Current assets
Cash and cash equivalents $330 $360
Accounts receivable (net) 47 400
Inventory 46 390
Prepaid expenses 130 160
Total current assets 1,390 1,310
Property, plant, and equipment (net) 410 380
Investments 10 10
Intangibles and other assets 530 510
Total assets $2,340 $2,210
Current liabilities $820 $790
Long-term liabilities 480 380
Stockholders’ equity—common 1,040 1,040
Total liabilities and stockholders’ equity $2,340 $2,210
NESS COMPANY
Income Statements
For the Year Ended December 31 (in thousands)
2017 2016
Sales revenue $3,800 $3,460
Costs and expenses
Cost of goods sold 970 890
Gross profit $2,830 $2,570
Selling & administrative expenses 2,400 2,330
EBIT $430 $240
Interest expense 10 20
Total costs and expenses 3,380 3,240
Income before income taxes 420 220
Income tax expense 168 88
Net income $ 252 $ 132
(a) Current ratio = Current assets/Current liabilities
= $1,390/$820 = 1.70 1.66 (1,310/$790)
(b) Inventory turnover. (Inventory on December 31, 2015, was $340.)
= Cost of goods sold/Average Inventory
= $970/$218 = 4.45 2.44 ($890/$385)
Average inventory for 2016 = $365 ($390 + $340)/2
Average inventory for 2017 = $218 ($46 + $390)/2
Cost of goods sold for 2017 = $970 and 2016 = $890
(c) Profit margin = Net income/Sales
= 6.63% ($252/$3,800 *100) 3.82% ($132/$3,460 * 100)
(d) Return on assets. (Assets on December 31, 2015, were $1,900.)
= Net income/Total assets
= 10.77% ($252/$2,340 * 100) 5.97% ($132/$2,210 * 100)
Average assets for 2017 = $2,275 ($2,340 + $2,210)/2
Average assets for 2016 = $2,055 ($2,210 + $1,900)/2
(e) Return on common stockholders’ equity. (Equity on December 31, 2015, was $900.)
= Net income/Common stockholders' equity
= 24.23% ($252/$1,040 * 100) 12.69% ($132/$1,040 * 100)
(f) Debt to assets ratio = Total Debt/Total Assets
= 0.56 ($1,300/$2,340) 0.53 ($1,170/$2,210)
(g) Times interest earned = EBIT/Interest
= 43X ($430/$10) 12X ($240/$20)
Which firm will have a higher level of economic performance: a) a firm with valuable, rare, and costly-to imitate resources and capabilities operating in a very attractive industry or b) a firm with valuable, rare, costly-to-imitate resources and capabilities operating in a very unattractive industry
Answer: a) a firm with valuable, rare, and costly-to imitate resources and capabilities operating in a very attractive industry.
Explanation:
Companies that have valuable, rare and costly to imitate resources and capabilities will see a better economic performance overall because they are offering the market something that not a lot of companies are offering which gives them the opportunity to increase profitability.
This would be even more effective if the company was in an attractive industry. An attractive industry means that there are a lot of buyers and sellers but because the company has costly to imitate resources, they will worry less about the sellers and gain more buyers thereby helping them to perform better.
Necesito un susario de la uanl de aspirante con admisión rechazada
Answer:
ta bueno pue
Explanation:
HELPPPPPPPPP During a busy morning, you decide to buy a 35$ Starbucks coffee (Hey, I do not judge) instead of making one on your own at home. Which of the following represents the opportunity cost of your decision?
a
Going to Starbucks
b
The tax paid on the bill
c
The coffee
d
The benefits of something else that you could have bought
Answer:
A
Explanation:
because you lost yo chance of making it at home by deciding to go out and buy a $35 cup of coffee
In a portfolio problem, X1, X2, and X3 represent the number of shares purchased of stocks 1, 2, and 3, which have selling prices of $15, $47.25, and $110, respectively. The investor has up to $50,000 to invest. The stockbroker suggests limiting the investments so that no more than $10,000 is invested in stock 2 or the total number of shares of stocks 2 and 3 does not exceed 350, whichever is more restrictive. How would this be formulated as a linear programming constraint
Answer:
The correct solution is "[tex]x_1 \leq 0.35 (x_1 + x_2 + x_3)[/tex]".
Explanation:
According to the question,
Let,
For stock 1,
The number of shares to be purchased will be "[tex]x_1[/tex]".
For stock 2,
The number of shares to be purchased will be "[tex]x_2[/tex]".
For stock 3,
The number of shares to be purchased will be "[tex]x_3[/tex]".
then,
The cumulative number of shares throughout stock 1 would be well over or equivalent towards the approximate amount of all the shares or stocks for the set limit.
i.e., [tex]x_1+x_2+x_3[/tex]
Thus the correct equation is "[tex]x_1 \leq 0.35(x_1+x_2+x_3)[/tex]".
Feedback is important in improving our performance, and we should solicit feedback, and not just wait until someone provides us with feedback
a. True
b. False
Marketing covers several elements and concepts. At the center of all marketing efforts is:
At the center of all marketing efforts is the customer for understanding and meeting customer needs, wants and preferences is the primary focus of marketing.
The customer centric involves identifying target markets, conducting market research and developing products or services that resonate with consumers.
The effective marketing strategies aim to create value for customers, build strong relationships, and satisfy their demands better than competitors.
The customer serves as the guiding force that shapes marketing strategies and determines their success in the ever-evolving marketplace.
To know more about marketing here,
https://brainly.com/question/33994447
#SPJ6
You want to communicate the 15 percent sales growth goals to each of the store managers. At the same time, you want to share some of your ideas for how store managers can make this happen. Which of the following is most true of a phone call to each sales manager in this situation?
a. It is high in richness and medium in planning.
b. It is low in richness and low in planning.
c. It is medium in richness and medium in planning.
d. It is medium in richness and high in planning.
Answer:
Option a (It is..........planning) is the appropriate choice.
Explanation:
If indeed the respondents are satisfied to approach the 15% revenue generation by telephone as well as offer certain thoughts.This same degree of wealth is significant since the relationship is immediate and preparation can be moderate, considering correspondence is carried on both sides with delays out of another end.The question wasn’t connected to certain other alternatives. Thus, the response seems to be the right one.
my sister (laugh) at my story
Answer:
no
Explanation:
Answer:
My sister laughed at my story.
Explanation:
Erika would like to hire a financial advisor. The financial advisor that she has been considering indicated that she would charge $2,500 to write a financial plan and 1% of any asset she manages. The financial advisor that Erika is considering is using what type of compensation model
Answer:
Fee-only
Explanation:
The financial advisor that Erika is considering is using the fee only compensation model. An advisor who uses this model of compensation is one who receives payment for his or her services rendered directly as fees and not through any forms of commissions. This payment could be based on a particular percentage of your assets that they are in charge of, or it could be hourly.
Answer:
Plato Users
Explanation:
The first drop down is risk and the second one is liquid got 100% on the test.
Bonds A, B, and C all have a maturity of 15 years and a yield to maturity of 9%. Bond A's price exceeds its par value, Bond B's price equals its par value, and Bond C's price is less than its par value. Which of the following statements is CORRECT?
a) Bond A has the most interest rate risk.
b) If the yield to maturity on the three bonds remains constant, the prices of the three bonds will remain the same over the next year.
c) If the yield to maturity on each bond increases to 8%, the prices of all three bonds will decline.
d) Bond C sells at a premium over its par value.
e) If the yield to maturity on each bond decreases to 6%, Bond A will have the largest percentage increase in its price.
Answer:
is b
Explanation:
porque si porque yo así la hise
A young investment manager tells his client that the probability of making a positive return with his suggested portfolio is 80%. If it is known that returns are normally distributed with a mean of 8%, what is the risk, measured by standard deviation, that this investment manager assumes in his calculation
Answer:
9.5%
Explanation:
we solve for the z value using
z = barX - μ/σ
= 0-0.08/σ
= p(x>0) = 0.80
1-0.80 = 0.20
0-0.08/σ = 0.20
using the z calculator we find the z score using a p value of 0.20
= -0.842
0-0.08/σ = -0.842
-0.08 = -0.842σ
Divide through by -0.842
0.08/0.842 = σ
0.095 = σ
The risk measured by the standard deviation at 80%= 9.5%
Thank you
Tyron is saving up money for a down payment on a motorcycle. He currently has $2979, but knows he can get a loan at a lower interest rate if he can put down $3830. If he invests the $2979 in an account that earns 3.8% annually, compounded continuously, how long will it take Tyrion to accumulate the $3830
Answer:
6.6 Years
Explanation:
Number of years = [tex]\frac{In(\frac{FV}{PV}) }{r}[/tex]
FV = future value
PV = present value
r = interest rate
[tex]\frac{In(\frac{3830}{2979}) }{0.038}[/tex] = 6.6 years
what are expansionary ficalpolicy? Contrationary fiscal policy, What do you mean by automatic stabilizer?
subject Macroeconomics, please please help...
Answer:
Here is your answer : )
Explanation:
Contractionary fiscal policy means when the government taxes more than it spends.
Expansionary fiscal policy means when the government spends more than it taxes.
Automatic stabilizers means features of the tax and transfer systems that temper the economy when it overheats and stimulate the economy when it slumps without direct intervention by policymakers.
Hope it helps you
Some portion of fixed assets and the nonseasonal portion of current assets are financed with long-term capital, and all seasonal needs of current assets and the remaining portion of fixed assets are financed with short-term loans. Which current asset financing policy is consistent with this statement
Answer: Aggressive approach
Explanation:
With an Aggressive approach to financing, the management is trying to take advantage of the fluctuations in interest rates by using short term loans to finance some parts of fixed assets as well as current assets. This is what is happening here so the management must be using aggressive financing.
This is unlike the conservative approach where fixed assets are financed with long term financing like stocks and bonds with the logic being that both of them have similar lifetimes and so will supply adequate cashflow for the payment of interest overtime.
You made a $500,000 loan at 10% interest when the CPI was 120. The loan was repaid five years after that, when the CPI was 130. Assume the tax on interest income is 20%. Calculate the tax you owe the government.
Answer:
10000 before inflation, 10833 after inflation
Explanation:
P = 500000
1 = 10%
Interest calculated = 500000x0.1
= $50000
20%x50000 = $10000
Rate of inflation = (130-120)/120 = 0.833
0.833x100%
= 8.333%
What has to be paid to government
= 10000+(8.333*10000)
= 10833
Before inflation, you owe $10000
After inflation you owe $10833
Chris Anderson bought a Honda Civic for $17,345. He put down $6,000 and financed the rest through the dealer at an APR of 8.6 percent for four years. What is the effective annual interest rate (EAR) if the loan payments are made monthly
Chris Anderson bought a Honda Civic for $17,345. He put down $6,000 and financed the rest through the dealer at an APR of 8.6 percent for four years. The effective annual interest rate (EAR) if the loan payments are made monthly as calculated below.
The formula to find the monthly interest rate (MIR) from the annual percentage rate (APR) is as follows,
[tex]MIR = (1 + APR)^(1/12) - 1[/tex]
Given,
APR = 8.6 percent,
we convert it to a decimal by dividing by 100:
APR = 8.6% = 0.086
Now, calculate the Monthly Interest Rate (MIR),
[tex]MIR = (1 + 0.086)^(1/12) - 1[/tex] = 0.006997
To convert the MIR to EAR, we use the following formula.
[tex]EAR = (1 + MIR)^12 - 1[/tex]
Now, calculate the EAR,
[tex]EAR = (1 + 0.006997)^12 - 1[/tex]
=0.0851 or 8.51%
Therefore, the effective annual interest rate (EAR) for the loan with an APR of 8.6 percent where the payments are made monthly is approximately 8.51%
To know more about effective annual interest rate here,
https://brainly.com/question/20631001
#SPJ2
When leaders of an organization compete and debate for scarce resources. They are operating within which frames of reference?
SAJDJKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKDSAAAAAAAAAAAAA
A person who establishes a trust is known as the __________ , whereas the person who is entitled to the income and other distributions from the trust is known as the ___________. g
Answer:
grantor; trustee
Explanation:
A trust can be defined as a fiduciary relationship between two party in which one of the parties referred to as a grantor (trustor) grants another party known as the trustee, the express permission, right or authority to hold title to assets or properties for the benefit of a third party. Also, this third party is typically referred to as a beneficiary.
This ultimately implies that, a grantor typically refers to an individual or person that establishes a trust while the person (individual) who is entitled to the income and other distributions as a beneficiary from the trust is generally referred to as the trustee.
In conclusion, a trust refers to a fiduciary entity that is mainly focused on holding and administering a corpus for other individuals or third parties (beneficiaries).
Nathan's Athletic Apparel has 2,000 shares of 6%, $100 par value preferred stock the company issued at the beginning of 2020. All remaining shares are common stock. The company was not able to pay dividends in 2020, but plans to pay dividends of $25,000 in 2021.
Required:
Assuming the preferred stock is cumulative and noncumulative, how much of the $25,000 dividend will be paid to preferred stockholders and how much will be paid to common stockholders in 2021?
Answer:
Cumulative Noncumulative
Preferred Dividend 2021 $12,000 $12,000
Preferred Dividend in arrears for 2020
$12,000 $0
Remaining dividend for common Stock holders $1,000 $13,000
Explanation:
Calculation to determine how much of the $25,000 dividend will be paid to preferred stockholders and how much will be paid to common stockholders in 2021
First step is to calculate the Dividend to be paid to preferred stock holders
Dividend to be paid to preferred stock holders=(2000*$100)*6%)
Dividend to be paid to preferred stock holders=$12,000
Now let determine how much of the $25,000 dividend will be paid to preferred stockholders and how much will be paid to common stockholders in 2021
CUMULATIVE NONCUMULATIVE
Preferred Dividend 2021 $12,000 $12,000
Preferred Dividend in arrears for 2020
$12,000 $0
Remaining dividend for common Stock holders $1,000 $13,000
($25,000-$12,000+$12,000=$1,000)
($25,000-$12,000=$13,000)
Total Dividend $25,000 $25,000
Altira Corporation provides the following information related to its merchandise inventory during the month of August 2021:
Aug.1 Inventory on hand—2,500 units; cost $6.60 each.
8 Purchased 12,500 units for $6.00 each.
14 Sold 10,000 units for $12.50 each.
18 Purchased 7,500 units for $5.20 each.
25 Sold 9,000 units for $11.50 each.
28 Purchased 4,500 units for $5.80 each.
31 Inventory on hand—8,000 units.
Using calculations based on a perpetual inventory system, determine the inventory balance Altira would report in its August 31, 2021, balance sheet and the cost of goods sold it would report in its August 2021 income statement using last-in, first-out (LIFO).
Answer:
Please find the complete solution in the attached file.
Explanation:
Earnings per share Financial statement data for the years 20Y5 and 20Y6 for Black Bull Inc. follow: 20Y5 20Y6 Net income $1,324,000 $2,630,000 Preferred dividends $50,000 $50,000 Average number of common shares outstanding 70,000 shares 120,000 shares a. Determine the earnings per share for 20Y5 and 20Y6. Round to two decimal places. 20Y5 20Y6 Earnings per Share $fill in the blank 1 $fill in the blank 2 b. Is the change in the earnings per sha
Question Completion:
b. Is the change in the earnings per share from 20Y5 to 20Y6 favorable or unfavorable?
Answer:
Black Bull Inc.
20Y5 20Y6
1. Earnings per share (EPS) $18.20 $21.50
2. The change in the earnings per share from 20Y5 to 20Y6 is favorable.
More revenue and profits were generated in 20Y6 and despite the increased number of shares outstanding, the EPS for 20Y6 performed better than 20Y5's.
Explanation:
a) Data and Calculations:
20Y5 20Y6
Net income $1,324,000 $2,630,000
Preferred dividends $50,000 $50,000
Earnings available to common
stockholders $1,274,000 $2,580,000
Average number of
common shares outstanding 70,000 shares 120,000 shares
Earnings per share (EPS) $18.20 $21.50
($1,274,000/70,000) ($2,580,000/120,000)
Q2. Why can the distinction between fixed costs and variable costs be made in the short run? Classify the following as fixed or variable costs: advertising expenditures, fuel, interest on company-issued bonds, shipping charges, payments for raw materials, real estate taxes, executive salaries, insurance premiums, wage payments, sales taxes, and rental payments on leas
Answer:
Variable costs vary with the volume of production and can be changed in the short run.
Fixed costs do not vary with the volume of production and cannot be changed in the short run. Only in the long run can they be changed.
Variable costs:
Advertising expendituresFuelShipping chargesPayments for raw materialsWage paymentsSales taxesFixed costs:
Interest on company issued bonds Real estate taxesExecutive salaries Insurance premiums Rental payments on leased office machinery.Assuming that NIKE has $3.4 billion in long term debt. Issue Amount $(Mil) Maturity Date Yield To Maturity NIKE 4.375% 750 1/15/2025 4.25% NIKE 5.7% 800 1/15/2035 6.45% NIKE 5.4% 800 1/15/2033 5.93% NIKE 3.875% 500 12/1/2040 3.47% NIKE 6.7% 550 12/1/2036 6.96% What is the weighted average cost of debt (average pre-tax
Answer:
The answer is "5.49%".
Explanation:
please find the complete solution in the attached file.
