Byrd Company produces one product, a putter called GO-Putter. Byrd uses a standard cost system and determines that it should take one hour of direct labor to produce one GO-Putter. The normal production capacity for this putter is 135,000 units per year. The total budgeted overhead at normal capacity is $877,500 comprised of $337,500 of variable costs and $540,000 of fixed costs. Byrd applies overhead on the basis of direct labor hours.

During the current year, Byrd produced 78,100 putters, worked 87,600 direct labor hours, and incurred variable overhead costs of $152,295 and fixed overhead costs of $452,650.

Required:
Compute the predetermined variable overhead rate and the predetermined fixed overhead rate.

Answers

Answer 1

Answer:

Results are below.

Explanation:

Giving the following information:

Estimated direct labor hours= 135,000

Estimated varaible overhead= $337,500

Estimated fixed overhead= $540,000

To calculate the predetermined overhead rate, we need to use the following formula:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Variable:

Predetermined manufacturing overhead rate= 337,500/135,000= $2.5 per direct labor hour

Fixed:

Predetermined manufacturing overhead rate= 540,000/135,000= $4 per direct labor hour


Related Questions

Regulations that permit a regulated firm to cover its costs and to make a normal level of profit are commonly referred to as

Answers

Answer:

cost plus regulation

Explanation:

Cost plus regulation is generally used by the government to regulate monopolies (mainly natural monopolies like utilities, and others). The price that the monopoly can charge for its goods or services is set by the government and it should generally cover all of the company's costs plus allow it to make a "normal" profit.

Ideally, in effective marketing planning, goals should be _____ in terms of what is to be accomplished and when.

Answers

Answer:

The answer is quantified and measurable.

Explanation:

Goals need to be quantified and measurable in effective marketing planning. To determine what needs to be accomplished and when, we must put figures to it. This makes performance measurement easier where variances at the end can be analysed.

For example, one of the marketing goals for bank A might be to onboard 100 new customers every month for a year after the launching of its new mobile app.

This example is quantified and can be measured every month.

Morgan Company issues 10%, 20-year bonds with a par value of $760,000 that pay interest semiannually. The amount paid to the bondholders for each semiannual interest payment is.

Answers

Answer: $38,000

Explanation:

The company is supposed to pay bondholders an Interest of 10% per year according to the terms of the terms of the bond.

= 10% * 760,000

= $76,000

However, payments are to be made semi-annually which will be;

= 76,000 * 1/2

= $38,000

Assuming a 360 -day year the maturity value of a 15000, 9%,60-day note receivable dated February 10th is:

Answers

Answer:

the maturity value of the note receivable is $15,225, and includes both principal plus interest revenue.

Explanation:

when the note is collected on April 11, the journal entry should be:

April 11, collection of notes receivable

Dr Cash 15,225

    Cr Notes receivable 15,000

    Cr Interest revenue 225

interest revenue = $15,000 x 9% x 2/12 = $225

Endor Company begins the year with $110,000 of goods in inventory. At year-end, the amount in inventory has increased to $118,000. Cost of goods sold for the year is $1,300,000. Compute Endor’s inventory turnover and days’ sales in inventory. Assume that there are 365 days in the year

Answers

Answer:

11.40

32 days

Explanation:

Inventory turnover and days of sales of inventory are examples of activity ratios.

They are used to measure the efficiency of performing daily tasks

inventory turnover =  Cost of goods sold/ average inventory

Average inventory = ($118,000 + $110,000) / 2 = $114,000

Inventory turnover =  $1,300,000 / $114,000 = 11.40

days of sales of inventory = 365 / inventory turnover = 365 / 11.40 = 32 days


Your boss has asked you to hand deliver five invitations to a special luncheon he is hosting. When you receive the
invitations, they have only first and last names but no addresses. You remember that they all live side by side in an
apartment building on Central Street. The boss left the following information with his assistant, but it is all you have. Time to
problem-solve to figure out who lives where!
This much you know for sure Carly has Greg as one next-door neighbor and the Joneses as her other next-door
neighbors. Now it's it up to you to figure out who lives in the other apartments. It may be helpful for you to draw five boxes
to use as a visual guide. Furthermore, writing names on your drawing in pencil will allow you to keep track of the neighbors
as you place them in their homes.
1 The Smiths live in the westernmost apartment, Louis lives in the easternmost
2. Leon has Mia as one next-door neighbor with TJ on the other side.
3. Both Tami and TJ live east of the Williamses.
4. TJ lives next door to the Browns
5. Tom lives west of the Garcias and east of Carly
6. Kris and Tami are next-door neighbors. The Garcias also live next to Tami but on the other side.
7. Nikki lives east of TJ.

Answers

Answer:

1)Smiths

2)Nikki

3)Williams

4)Mia

5) Leon

6)TJ

7)Browns

8)Joneses

9)Carley

10)Greg

11)Tom

12)Garcias

13)Tami

14)Kris

15)Loise

Explanation:

All of the following are disadvantages of using the average rate of return except a.The average rate of return method does not consider the expected timing of the expected cash flows. b.The average rate of return method does not use present values. c.The average rate of return method does not use the expected cash flows from the proposal. d.All of these choices are disadvantages.

Answers

Answer:

D

Explanation:

average rate of return = average net income / average book value

an advantage of average rate of return is that it is easy to calculate.

its disadvantages include :

a.The average rate of return method does not consider the expected timing of the expected cash flows like the NPV and IRR method.

b.The average rate of return method does not use present values.

c.The average rate of return method does not use the expected cash flows from the proposal. it makes use of accounting values instead.

JG Asset Services is recommending that you invest $1,275 in a 5-year certificate of deposit (CD) that pays 3.5% interest, compounded annually. How much will you have when the CD matures

Answers

Answer:

The amount that will be received when CD matures is $1514.30

Explanation:

To calculate the amount that will be received at the maturity of the CD, we simply need to calculate the future value of the invested amount using annual compounding. The formula for the future value that we will use is,

Future value = Present value * (1+r)^t

Where,

r is the rate of interestt is the time in years

Future value = 1275 * (1+0.035)^5

Future value = $1514.30

Charger Company's most recent balance sheet reports total assets of $28,413,000, total liabilities of $16,113,000 and total equity of $12,300,000. The debt to equity ratio for the period is (rounded to two decimals):

Answers

Answer:

Debt to equity ratio is 1.31

Explanation:

Given the above inflation, the formula for debt to equity ratio is

= Total debt / Total equity

= $16,113,000 / $12,300,000

= 1.31

Therefore, debt to equity ratio is 1.31

Kansas Enterprises purchased equipment for $73,500 on January 1, 2021. The equipment is expected to have a five-year service life, with a residual value of $6,450 at the end of five years. Using the double-declining balance method, depreciation expense for 2022 would be

Answers

Answer:

The answer is $17,640

Explanation:

Equipment was bought on Jan. 1, 2022 for $73,500. This is the historical cost of the asset.

Residual value is $6,450. This is the amount the equipment is being expected to sell for at the end of its useful life.

Useful life is 5 years.

To know the percentage to be used for the depreciation, we have:

100percent / 5 years

= 20 percent

Double-declining is 40 percent(20 percent x 2)

Depreciation for 2021 is

$73,500 x 40 percent

= $29,400.

Carrying amount at the end of 2021 which will also be for the beginning of 2022 is $44,100 ($73,500 - $29,400)

Depreciation for 2022:

$44,100 x 40 percent

$17,640.

Therefore, the depreciation for 2022 is $17,640.

Net sales for the year were $1,050,000 and cost of goods sold was $735,000 for the company’s existing products. A new product is presently under development and will have an expected selling price of not more than $68 per unit in order to remain competitive with similar products in the marketplace. Required: a. Calculate gross profit and the gross profit ratio for the year.

Answers

Answer:

The answer is:

Gross profit is $315,000

Gross profit ratio is 30 percent

Explanation:

Gross profit equals net sales minus cost of sales

Net sales - $1,050,000

Cost of sales - ($735,000)

Gross profit -. $315,000

Gross profit ratio is:

(Gross profit / net sales) x 100 percent

($315,000 / $1,050,000) x 100 percent

0.3 x 100 percent

30 percent.

So we have:

Gross profit is $315,000

Gross profit ratio is 30 percent

"One of the ten IG principles is a Continuous improvement. What is the importance of this principle to the organization program"

Answers

Answer:

the importance is to provide periodic program review and necessary adjustments against gaps and it short comings

Explanation:

Information governance is a full way of managing information in a corporation by the implementation of a series of processes, controls and roles. It can be simply said to be a process of managing information assets as this will cause a balance between security and usage.

continuous improvement is one of its 10 principles. And it simply means that programs in information governance have to go through continuous reviews and updates as doing such will help to reduce shortcomings.

The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company.

1.NELSON COMPANY Debit Credit
2. Cash $1,000
3. Merchandise Inventory 12,500
4. Store supplies. 5,800
5. Prepaid Insurance. 2,400
6. Store equipment. 42,900
7. Accumulated depreciation - Store equipment $15,250
8. Accounts payable 10,000
9.J. Nelson, Capital 32,000
10.J. Nelson, Withdrawal 2,200
11. Sales. 111,950
12. Sales discounts 2,000
13. Sales returns and allowances 2,200
14. Cost of goods sold 38,400
15. Depreciation expense- Store equipmen 0
16. Salaries expense 35,000
17. Insurance expense 0
18. Rent expense 15,000
19. Store supplies expense 0
20. Advertising expense 9,800
21. Totals $169,200 169,200


Nelson company uses a perpetual inventory system. It categorizes the following accounts as selling expenses:

Required:
1. Prepare adjusting journal entries to reflect each of the following:

a. Store supplies still available at fiscal year-end amount to $1,750.
b. Expired insurance, an administrative expense, for the fiscal year is $1,400.
c. Depreciation expense on store equipment, a selling expense is $1,525 for the fiscal year.
d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,900 of inventory is still available at fiscal year-end.

2. Prepare a multiple-step income statement for fiscal year 2015.
3. Comple the statement of retained earnings and the balance sheet.
4. Compute the current ratio, acid-test ratio, and gross margin ratio as of January 31, 2015. (Round ratios to two decimals.)

Answers

Answer:

1)

a. Store supplies still available at fiscal year-end amount to $1,750.

Dr Supplies expense 4,050

    Cr Supplies 4,050

b. Expired insurance, an administrative expense, for the fiscal year is $1,400.

Dr Insurance expense 1,400

    Cr Prepaid insurance 1,400

c. Depreciation expense on store equipment, a selling expense is $1,525 for the fiscal year.

Dr Depreciation expense on store equipment 1,525

    Cr Accumulated depreciation: store equipment 1,525

d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,900 of inventory is still available at fiscal year-end.

Dr Cost of goods sold 1,600

    Cr merchandise inventory 1,600

2) Income statement

Sales                                                             $111,950

Sales discounts                                    $2,000 Sales returns and allowances             $2,200

Net sales                                                    $107,750

- Cost of goods sold                                  $40,000

Gross profit                                                 $67,750

Operating expenses:Depreciation expense $1,525Salaries expense $35,000 Insurance expense $1,400 Rent expense $15,000 Store supplies expense $4,050 Advertising expense $9,800            $66,775

Operating income                                           $975

3) Statement of owner's equity (the company doesn't have retained earnings)

J. Nelson, Capital, at January 1, 202x                 $32,000

Net income 202x                                                       $975

Subtotal                                                                 $32,975

- Withdrawals                                                          $2,200

J. Nelson, Capital, at December 31, 202x           $30,775

Balance sheet

Assets:

Cash $1,000

Merchandise Inventory $10,900

Store supplies $1,750

Prepaid Insurance $1,000

Store equipment, net $26,125

Total assets $40,775

Liabilities + owner's equity:

Accounts payable $10,000

J. Nelson, Capital $30,775

Total liabilities + owner's equity $40,775

4) current ratio = $14,650 / $10,000 = 1.465

acid test ratio = $3,750 / $10,000 = 0.375

gross margin ratio = $67,750 / $107,750 = 0.629

You manufacture wine goblets. In mid- June you receive an order for 10,000 goblets from Japan. Payment of ¥400,000 is due in mid- December. You expect the yen to rise from its present rate of $1=¥107 to $1 to ¥120 by December 2020. You can borrow yen at 6% a year. What should you do?

Answers

Answer:

I will borrow yen at 6% a year.

Explanation:

a) Data and Calculations:

Payment for 10,000 = ¥400,000

Spot rate = $1 = ¥107

Forward rate = $1 to ¥120

Borrow ¥400,000, the interest cost = ¥24,000 = $224.30/2 (¥24,000/107) = $112.15 for six months

Value of ¥400,000 borrowed in dollars = $3,738.32 (¥400,000/107)

Loan Repayment of ¥400,000 in dollars = $3,333,33 (¥400,000/120)

Gain from forward contract = $404.99

Interest cost for borrowing =      112.15

Overall debt hedging gain =  $292.84

By borrowing yen at 6% per annum, you will make an overall gain of $292.84.  This is not comparable to the foreign exchange loss of $404.99 that you will incur without borrowing yen.  Taking advantage of the the debt hedging, the supplier is able to save foreign exchange loss.

During the month of March, Blossom Company’s employees earned wages of $60,000. Withholdings related to these wages were $4,590 for Social Security (FICA), $7,031 for federal income tax, $2,906 for state income tax, and $375 for union dues. The company incurred no cost related to these earnings for federal unemployment tax but incurred $656 for state unemployment tax.
1. Prepare the necessary March 31 journal entry to record salaries and wages expense and salaries and wages payable. Assume that wages earned during March will be paid during April.
2. Prepare the entry to record the company’s payroll tax expense.

Answers

Answer:

1.

March 31,

DR Salaries and Wages Expense ....................$60,000  

CR FICA taxes payable ........................................................$4,590

CR Federal income tax payable .........................................$7,031

CR State income tax payable ..............................................$2,906

CR Union dues payable .......................................................$375

CR Salaries and Wages payable ..........................................$45,098

Working

Salaries and Wages payable = 60,000 - 4,590 - 7,031 - 2,906 - 375

= $45,098

2.

DR Payroll taxes payable ...................................$5,246  

FICA taxes payable .................................................................$4,590

State unemployment taxes payable ....................................$656

Working

Payroll taxes payable = 4,590 + 656

= $5,246

Knowing she has sold 5,000 pairs, assume the company wants to launch a Black Friday promotion, where she would discount her shoes by 10%. How many more shoes would she have to sell to justify this promotion

Answers

Revenue: $500,000

Shoes: $250,000

Shoe boxes: $1,000

Advertising: $500

Rent: $1,000

Depreciation: $25

Knowing she has sold 5,000 pairs, assume the company wants to launch a Black Friday promotion, where she would discount her shoes by 10%. How many more shoes would she have to sell to justify this promotion?

A. 25.13% more shoes

B. 20.08% more shoes

C. None of the above, but I could calculate this with the information I am given.

D. None of the above, I cannot calculate this with the information I am given.

Answer:

Option A. 25.13% more shoes

Explanation:

Cost Benefit analysis would be useful here to acknowledge what percentage of shoe sales is required to justify the promotion.

The Benefit drawn before 10% promotion proposal:

Revenue:                           $500,000

Shoes:                               ($250,000)

Shoe boxes:                         ($1,000)

Advertising:                           ($500)

Rent:                                     ($1,000)

Depreciation:                          ($25)

Profit                                    $247,475

The Benefit drawn before 10% promotion proposal:

Revenue:                           $450,000

Shoes:                               ($250,000)

Shoe boxes:                        ($1,000)

Advertising:                          ($500)

Rent:                                    ($1,000)

Depreciation:                         ($25)

Profit                                   $197,475

Now we can calculate how much additional sales must be required to justify the promotion.

Sales Increase Required = (Initial Profit - Before Promotion) / Profit After Promotion

Sales Increase Required = ($247,475  - $197,475) / $197,475

Sales Increase Required = 25.31% which is close to option 1, hence Option 1 is correct here.

Promotion is termed as the activity that involves the spreading or publicizing of information regarding the products and services. It is a part of marketing that involves publicity and public relations between the customers.  

The correct option is A. 25.13% more shoes

Cost Benefit analysis would be useful here to acknowledge what percentage of shoe sales is required to justify the promotion.

The Benefit drew before 10% promotion proposal:

Revenue:                           $500,000

Shoes:                               ($250,000)

Shoe boxes:                         ($1,000)

Advertising:                           ($500)

Rent:                                     ($1,000)

Depreciation:                          ($25)

Profit                                    $247,475

The Benefit drew before 10% promotion proposal:

Revenue:                           $450,000

Shoes:                               ($250,000)

Shoe boxes:                        ($1,000)

Advertising:                          ($500)

Rent:                                    ($1,000)

Depreciation:                         ($25)

Profit                                   $197,475

Now we can calculate how much additional sales must be required to justify the promotion.

Sales Increase Required = [tex]\frac{\text{Initial Profit - Before Promotion}}{\text{Profit After Promotion}}[/tex]

Sales Increase Required = [tex]\frac{\$247,475-\$197,475}{\$197,475}[/tex]

Sales Increase Required = 25.31% which is close to option 1, hence Option 1 is correct here.

To know more about the promotional activities, refer to the link below:

https://brainly.com/question/15869831

At Jacobson Company, indirect labor is a variable cost that varies with direct labor-hours. Last month’s performance report showed that actual indirect labor cost totaled $5,780 for the month and that the associated spending variance was $245 Favorable. If 24,100 direct labor-hours were actually worked last month, then the flexible budget cost formula for indirect labor must be (per direct labor-hour):

Answers

Answer:

Flexible budget cost formula for indirect labor is  $0.25 per DL hours

Explanation:

Flexible budget cost for indirect labor = Actual indirect labor cost + Associated spending variance

= $5,780 + $245

= $6,025

Flexible budget cost formula for indirect labor= Flexible budget cost for indirect labor / Direct labor-hours

= $6,025 / 24,100 DL hours

= $0.25 per DL hours

dazzle, inc. produces beads for jewelry making use the journal entry to record production activities for direct labor usage is

Answers

Answer:

Debit Work in Process Inventory $180,000; credit Factory Wages Payable $180,000.

Explanation:

The journal entry to record the direct labor usage is shown belwo:

Work in process inventory Dr

          To factory wages payable

(Being the direct labor usage is recorded)

For recording this we debited the work in process as it increased the assets and credited the factory wages payable as it also increased the liabilities

Moreover, when the wages is applied in the production level so the respective account is debited and credited

Cameroon Corp. manufactures and sells electric staplers for $15.30 each. If 10,000 units were sold in December, and management forecasts 3.3% growth in sales each month, the number of electric stapler sales budgeted for March should be:

Answers

Answer:

Electric stapler sales budgeted for March should be: 11,023 units.

Explanation:

Apply the growth of 3.30% to each month starting December as follows :

December Sales = 10,000 units

January Sales     = 10,000 × (1.033)^1  = 10,330 units

February Sales   = 10,000 × (1.033)^2 = 10,671 units

March Sales        = 10,000 × (1.033)^3 = 11,023 units

Wing CompanyCash- $234,000 Accounts payable- $97,000Inventories- $121,000 Notes payable (due 2020)- $211,000Land- $453,000 Accounts receivable- $46,000Refer to the information provided for Wing Company. Calculate current assets.a. $498,000b. $401,000c. $854,000d. $709,000

Answers

Answer:

b. $401,000

Explanation:

Currents assets refer to assets that are possible to be employed, exhausted, consumed, or sold withing a one year during the normal business activities of a company.

Current assets therefore include cash, cash equivalent and other assets that are expected to be changed to cash within one year.

From the question, we have;

Cash- $234,000

Accounts payable- $97,000

Inventories- $121,000

Notes payable (due 2020)- $211,000

Land- $453,000

Accounts receivable- $46,000

Therefore, current assets of Wing Company can be computed as follows:

Current assets = Cash + Inventories + Accounts receivable = $234,000 + $121,000 + $46,000 = $401,000

Therefore, the correct option is b. $401,000.

The following data relate to factory overhead cost for the production of 10,000 computers: Actual: Variable factory overhead $262,000 Fixed factory overhead 90,000 Standard: 14,000 hrs. at $25 350,000 If productive capacity of 100% was 15,000 hours and the total factory overhead cost budgeted at the level of 14,000 standard hours was $356,000, determine the variable factory overhead controllable variance, fixed factory overhead volume variance, and total factory overhead cost variance. The fixed factory overhead rate was $6.00 per hour. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Answers

Answer:

Calculation of variable overhead controllable variance

Standard hours allowed for 10,000 computers = 14,000 hours

Budgeted variable expense = Standard hours allowed * variable overhead rate

= 14,000 * ($25 - $6)

= $266,000

Variable overhead controllable variance = Actual variable overhead expense - Budgeted variable overhead expense

= $262,000 - $266,000

=$4,000 (Unfavorable)

Calculation of fixed overhead volume variance:

Applied overhead = Number of computers produced * Fixed overhead rate

= 10,000 * $6.00

= $60,000

Budgeted fixed overhead = $90,000

Fixed overhead volume variance = Budgeted fixed overhead - Applied fixed overhead

 = $90,000 - $60,000

= $30,000 (Favorable)

Calculation of Total factory overhead volume variance:

Total factory overhead cost variance = Variable overhead controllable variance + Fixed overhead volume variance

= - $4,000 + $30,000

= $26,000 (Favorable)

In which of the following scenarios would enforcement of specific performance be appropriate? Multiple Choice Your bookstore agrees to order a textbook for you but breaches its contract with you by canceling the order the next day. You order 3 gallons of white ceiling paint from a local store, and the store breaches by not delivering or making available to you the 3 gallons. You own the pistol used by Hamilton and contract to buy the pistol used by Burr in the Hamilton-Burr duel to complete your set, but despite the contract the Burr pistol owner refuses to sell at the last minute. You order a current-model, name-brand television from a department store, and a few days later the store breaches by not ordering it from the manufacturer.

Answers

Answer:

Correct Answer:

2. You order 3 gallons of white ceiling paint from a local store, and the store breaches by not delivering or making available to you the 3 gallons.

3. You own the pistol used by Hamilton and contract to buy the pistol used by Burr in the Hamilton-Burr duel to complete your set, but despite the contract the Burr pistol owner refuses to sell at the last minute.

1.  Your bookstore agrees to order a textbook for you but breaches its contract with you by canceling the order the next day.

Explanation:

In enforcement of specific performance is applied in situations where there there is an established contract that has was not honored. This bridge of contract would then trigger performance enforcement.

Finding operating and free cash flows Consider the following balance sheets and selected data from the income statement of Keith Corporation.
Keith Corporation Balance Sheets December 31
Assets 2015 2014
Cash $ 1,500 $ 1,000
Marketable securities 1,800 1,200
Accounts receivable 2,000 1,800
Inventories 2,900 2,800
Total current assets $ 8,200 $ 6,800
Gross fixed assets $ 29,500 $ 28,100
Less: Accumulated depreciation 14,700 13,100
Net fixed assets $ 14,800 $ 15,000
Total assets $ 23,000 $ 21,800
Liabilities and stockholders' equity
Accounts payable $ 1,600 $ 1,500
Notes payable 2,800 2,200
Accruals 200 300
Total current liabilities $ 4,600 $ 4,000
Long-term debt 5,000 5,000
Total liabilities $ 9,600 $ 9,000
Common stock $ 10,000 $ 10,000
Retained earnings 3,400 2,800
Total stockholders' equity $ 13,400 $ 12,800
Total liabilities and stockholders' equity $ 23,000 $ 21,800
Keith Corporation Income Statement Data (2015)
Depreciation expense $1,600
Earnings before interest and taxes (EBIT) 2,700
Interest expense 367
Net profits after taxes 1,400
Tax rate | 40%
Required
a. Calculate the firm's net operating profit after taxes (NOPAT) for the year ended December 31, 2015
b. Calculate the firm?s operating cash flow (OCF) for the year ended December 31, 2015
c. Calculate the firm?s free cash flow (FCF) for the year ended December 31, 2015
d. Interpret, compare, and contrast your cash flow estimates in parts b and c.

Answers

Answer:

a. NOPAT = EBIT * (1-t)

NOPAT = $2,700 * (1-0.40)

NOPAT = $1,620

b. OCF = NOPAT + Depreciation

OCF = $1,620 + $1,600

OCF = $3,220

c. FCF = Net fixed asset investment - Net current asset investment

FCF = $3,320 - $1,400 -  $1,400

FCF = $420

Note:

Net fixed asset investment = Change in net fixed assets + depreciation

= ($14,800- $ 15,000) + $1,600

= $1,400

Net current asset investment = Change in current assets - Change in accounts payable and accurals

= ($8,200 - $6,800) - {($1,600 + $200) - ($1,500 - $300)}

= $1,400

d. FCF is meaningful as it shows that OCF is able to cover Operating expenses as well as Investment in Fixed and Current Assets

Deployment Specialists pays a current (annual) dividend of $1.00 and is expected to grow at 20% for 2 years and then at 4% thereafter. If the required return for Deployment Specialists is 8.5%, what is the intrinsic value of its stock? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Answers

Answer:

$30.80

Explanation:

Intrinsic value

V0=D1/1+k +D2/(1+k)^2 +DH+PH/(1 +k)^H

Let plug in the formula

First step

V0=$1 × 1.2/(1+0.085) +($1 × 1.2)^2/(1+0.085)^2 +($1 × 1.2)^2*1.04/(0.085-0.04)*(1+0.085)^2

Second step

V0=1.2/1.085+1.44/1.007225+1.44*1.04/0.045*1.177225

Third step

V0=1.2/1.085+1.44/1.007225+1.4976/0.052975

Fourth step

V0=1.10599+1.42967+28.26993

V0=$30.80

Therefore the intrinsic value of its stock will be $30.80

The involvement by a company in more than one of the activities in the entire value chain from development through production, distribution, sales, and after-sales service is called ________. opportunity cost vertical integration relevant cost avoidable cost

Answers

Answer: vertical integration

Explanation: The integrating (to include as a constituent part or functionality) of successive stages in the production and marketing process under the ownership or control of a single management organization is known as vertical integration. As such, such a firm is usually involved in various activities in the entire value chain. This helps it reduce costs, ensure tighter quality control, as well as ensuring a better flow and control of information across the value chain.

The firm receives an average of $20,000 in checks per day. The weighted average delay in clearing the checks received is 3 days. Meanwhile, the firm writes an average of $17,000 in checks to pay its suppliers per day. The usual clearing time for the checks the firm wrote is 2 days. The current interest rate is 0.015 percent per day. What is the most the firm should be willing to pay today (in a lump sum today) to eliminate its float entirely? A) 3000 B) 26000 C) 34000 D) 37000 E) 60000

Answers

Answer:

$26000

Explanation:

from the question;

check per day; 20000

delay: 3 days

checks to pay suppliers; 17000

clearing time 2 days

we first calculate collection flaot:

collection flaot = average amount of check x outstanding days

= 20000 x 3

= 60000

now we have to calculate disbursements float:

average amount of check x days to clear

= 17000 x 2

= 34000

with these two values we can get the net float

= collection flaot - disbursements float

= 60000 - 34000

= $26000

If the current interest rate is 5% and your semi-annual coupon paying bond has a duration of 5.33 years, how much will the price of the bond change if the interest rate increases by 1 basis point?

Answers

Answer:

Percentage change in price = -5.33 * 0.00005

Explanation:

Percentage change in price = - modified duration * (Change in yield in BP/100)

Percentage change in price = -5.33 * ((0.01/2)/100)

Percentage change in price = -5.33 * (0.005/100)

Percentage change in price = -5.33 * 0.00005

A publisher is deciding whether or not to invest in a new printer. The printer would cost $900, and would increase the cash flows in year 1 by $500 and in year 3 by $800. Cash flows do not change in year 2.If the interest rate is 12% Is the investment in the new printer feasible?

Answers

Answer:

Yes, since NPV>0

Explanation:

The computation of the net present value is shown below:

= Present value of cash inflows - initial investment

where,

Present value of cash inflows is

= $500 ÷ (1 + 0.12)^1 + $800 ÷ (1 + 0.12)^3

= $446.43 + $569.42

= $1,015.85

And the intial investment is $900

So, the net present value is

= $1,015.85 - $900

= $115.85

Since the net present value comes in positive so the investment in new printer is feasible

What is the beta for a company with a 12% expected return, while treasury bills are yielding 5% and the market risk premium is 7%

Answers

Answer:

The beta for the company is 1.

Explanation:

A beta is the measure of systematic risk associated to a stock or the portfolio. Systematic risk is the market risk that affects all the stocks in the market due to factors that are uncontrollable. Such a risk is what the companies compensate the investors for. Using the CAPM equation, we calculate the expected rate of return of a stock. The equation is,

r = rRF + Beta * rpM

Where,

rRF is the risk free raterpM is the risk premium on market

We already have the values for r, rRF and rpM. Plugging them in the formula, we calculate the beta to be,

0.12 = 0.05  +  Beta * 0.07

0.12 - 0.05 = Beta * 0.07

0.07/ 0.07 = Beta

Beta = 1

(Table) If Jake and Sue are the only buyers of the local pizzeria's pizza, what is the market demand for pizzas at each of the prices listed, starting at the market price of $5? QJ is the quantity demanded at each price by Jake, and QS is the quantity demanded at each price by Sue.

Answers

Answer:

This is the table that the question is referring to:

Price       QJ         QS

5              4             2

10             3             1

15             2            0

20            1             0

Total market demand is the sum of the individual market demands. In this market, it is the sum of the market demand of Jake and Sue.

Market demand at the price of $5 is 7 pizzas.

Market demand at the price of $10 is 4 pizzas.

Market demand at the price of $15 is 2 pizzas.

Market demand at the price of $20 is 1 pizza.

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