Answer:
year 7
Explanation:
The dividend discount model (DDM) is used to determine the value of stock by discounting the dividend to derive the present value of the stock.
Types of DDM
1.two stage : one stage of rapid growth and a stage of constant growth
3. three stage : one stage of super normal growth, followed by a stage of normal growth and then constant growth
For this company
first 5 years = o dividends
next 2 years = 15%
7th year - constant growth
Shortcomings of the DDM
It doesn't take a control perspective
It is unsuitable for firms that don't pay dividends
Excess reserves A. are loans made at above market interest rates. B. are the deposits that banks do not use to make loans. C. are reserves banks keep to meet the reserve requirement. D. are reserves banks keep above the legal requirement. Suppose the required reserve ratio is % and a bank has the following balance sheet: Assets Liabilities Reserves $ Deposits $ Loans $ This bank keeps required reserves of $ nothing and excess reserves of $ nothing. (Enter your responses as integers.)
Answer and Explanation:
The excess reserves are the reserves banks that maintain more the legal requirement. It shows the difference between the required reserve and the actual reserve
Hence, the last option is correct
Now the required reserve is
= ($11,000 × 11%)
= $1,210
And, the excess reserve is
= $2,200 - $1,210
= $990
Hence, the same would be relevant
You may file a complaint with OSHA if you believe a violation of any of the following situations exist in your workplace.
Safe conditions
Job Hazard Analysis
Imminent Danger
• No Hazards
Answer: Imminent Danger
Explanation:
A complaint with OSHA can be filed with the existence of the following workplace situation C. Imminent Danger.
What is OSHA?OSHA stands for the federal government's regulatory agency known as the Occupational Safety and Health Administration. OSHA is one of the agencies of the United States Department of Labor. It has powers to inspect, examine workplaces, and impose sanctions.
Thus, employees can file complaints with OSHA when there is an imminent danger, but they do not need to do so where safe conditions, job hazard analysis, and no hazards exist.
Learn more about filing OSHA complaints here: https://brainly.com/question/10078747
The Brisbane Manufacturing Company produces a single model of a CD player. Each player is sold for $182 with a resulting contribution margin of $71. Brisbane's management is considering a change in its quality control system. Currently, Brisbane spends $42,000 a year to inspect the CD players. An average of 1,900 units turn out to be defective: 1,520 of them are detected in the inspection process and are repaired for $75. If a defective CD player is not identified in the inspection process, the customer who receives it is given a full refund of the purchase price. The proposed quality control system involves the purchase of an x-ray machine for $210,000. The machine would last for five years and would have salvage value at that time of $18,000. Brisbane would also spend $470,000 immediately to train workers to better detect and repair defective units. Annual inspection costs would increase by $25,000. Brisbane expects this new control system to reduce the number of defective units to 400 per year. 350 of these defective units would be detected and repaired at a cost of only $41 per unit. Customers who still receive defective players will be given a refund equal to 120% of the purchase price.
Required:
a. What is the Year 3 cash flow if Brisbane keeps using its current system?
b. What is the Year 3 cash flow if Brisbane replaces its current system?
c. Assuming a discount rate of 8%, what is the net present value if Brisbane keeps using its current system?
d. Assuming a discount rate of 8%, what is the net present value if Brisbane replaces its current system?
Answer:
Year 3 cashflow:
current system: 243,360
alternative system: 102,240
Present cost:
current system PV -$971,665.9146
alternative system PV -$1,075,964.17
Explanation:
Current Scenario:
42,000 inspection cost
Repairs:
1,520 identified x $75 = 114,000
Refunds:
480 units x $182 = 87,360
Total yearly cost: 243,360
PV of an annuity of $243,360 during 5 years:
Present Value of Annuity
[tex]C \times \displaystyle \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
C 243,360
time 5
rate 0.08
[tex]243360 \times \displaystyle \frac{1-(1+0.08)^{-5} }{0.08} = PV\\[/tex]
PV $971,665.9146
New Scenario:
Inspection cost: $42,000 + $25,000 = $77,000
Repair cost: 350 units x $41 = $14,320
Refunds: 50 units x $182 x 120% = $10,920
Total yearly cost: $102,240
F0 cost:
470,000 workers trainings
210,000 purchase cost
Total F0 cost: 680,000
Present Value of Annuity
[tex]C \times \displaystyle \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
C 102,240
time 5
rate 0.08
[tex]102240 \times \displaystyle \frac{1-(1+0.08)^{-5} }{0.08} = PV\\[/tex]
PV $408,214.6742
PV of residual value:
PRESENT VALUE OF LUMP SUM
[tex]\frac{Maturity}{(1 + rate)^{time} } = PV[/tex]
Maturity 18,000.00
time 5.00
rate 0.08
[tex]\frac{18000}{(1 + 0.08)^{5} } = PV[/tex]
PV 12,250.50
Net present value:
- 680,000 -408,214.67 + 12,250.50 = 1,075,964.17
Garcia Co. sells snowboards. Each snowboard requires direct materials of $113, direct labor of $43, and variable overhead of $58. The company expects fixed overhead costs of $661,000 and fixed selling and administrative costs of $130,000 for the next year. It expects to produce and sell 11,300 snowboards in the next year. What will be the selling price per unit if Garcia uses a markup of 15% of total cost
Answer:
See
Explanation:
Total cost of 11,300 snow balls
Per unit total =
Direct material = $113 × 100
Direct labor = $43 × 262.79
Variable overhead = $58 × 194.82
Fixed overhead = $661,000
Total cost of 11,300 snow balls $2,700,000
Cost of 1 snow ball = Total cost of 11,300 snow balls / Total number of snowballs
Advantages of supermarkets?
Answer:
you can buy and get stuff in physical form.
Explanation:
Answer:
You get to see what your buying
Explanation:
:>
after one has completed a bachelor's degree what are the next three degrees one can obta
in if accepted?
Answer:
People who have finished their bachelor's degree.
The next three degrees are Master of science or arts,
Doctor of Philosophy and Master of Philosophy.
Explanation:
Hope this helps!
Crane Company offered detachable 5-year warrants to buy one share of common stock (par value $5) at $20 (at a time when the stock was selling for $30). The price paid for 700, $1,000 bonds with the warrants attached was $810000. The market price of the Crane bonds without the warrants was $710000, and the market price of the warrants without the bonds was $71800. What amount should be allocated to the warrants
Answer:
$ 74,389.87
Explanation:
It is given that :
The cost of 700, $1000 bonds with warrant attached to the bond = $810,000
The cost of Crane bonds with warrant = $710,000
The cost of market price of the warrants without bonds = $71,800
Therefore, the amount should be allocated to the warrants :
[tex]$=\frac{\$71,800}{\$71,800+\$710,000}\times \$ 810,000$[/tex]
[tex]$=\frac{\$71,800}{\$781,800}\times \$ 810,000$[/tex]
= $ 74,389.87
Problem 12-04A The income statement of Kingbird, Inc. is presented here. Kingbird, Inc. Income Statement For the Year Ended November 30, 2020 Sales revenue $7,465,900 Cost of goods sold Beginning inventory $1,868,500 Purchases 4,450,600 Goods available for sale 6,319,100 Ending inventory 1,331,800 Total cost of goods sold 4,987,300 Gross profit 2,478,600 Operating expenses 1,120,500 Net income $1,358,100 Additional information: 1. Accounts receivable increased $205,900 during the year, and inventory decreased $536,700. 2. Prepaid expenses increased $179,800 during the year. 3. Accounts payable to suppliers of merchandise decreased $345,700 during the year. 4. Accrued expenses payable decreased $105,800 during the year. 5. Operating expenses include depreciation expense of $95,300. Prepare the operating activities section of the statement of cash flows using the direct method
Answer:
Cash Flow From Operating Activities
Cash Receipt from Customers $7,260,000
Cash Paid to Suppliers and Employees ($6,294,700)
Cash Provided by Operating Activities $965,300
Explanation:
Step 1 : Cash Paid to Suppliers and Employees Calculation
Cost of goods sold $4,987,300
Add Operating expenses $1,120,500
Total $6,107,800
Adjustments :
Depreciation expense $95,300
Decrease in Inventory ($536,700)
Increase in Prepaid Expenses $179,800
Decrease in Accounts Payable $345,700
Decrease in Accrued Expense Payable $105,800
Cash Paid to Suppliers and Employees $6,294,700
Step 2 : Cash Receipt from Customers Calculation
Sales revenue $7,465,900
Less Increase in Accounts receivable ($205,900)
Cash Receipt from Customers $7,260,000
Armed only with his fingers, the owner decides that the safest forecasting approach is a linear trend line. His fingers are aching by the time he reaches May and he is worried about his ability to stuff tacos during tomorrow's dinner rush. Help him out by finding the forecast for June.
a. 497.4
b. 482.8
c. 583.5
d. 588.0
Answer:
c. 583.5
Explanation:
The forecast for the Tacos in the month of June will be 583.5. The forecasting technique help the businessmen to plan and organize their business activities according to the expected demand. There can be slight deviation from forecast or in some case there can be major deviation due to unexpected events. Seasonal effects are also considered when forecasting sales for the product.
Large Stock Dividend and Forward Stock Split Low Corporation has 50,000 shares of $40 par value common stock outstanding and retained earnings of $1,500,000. The company declares a 100 percent stock dividend. The market price at the declaration date is $40 per share. a. Prepare the journal entries for (1) the declaration of the dividend and (2) the issuance of the dividend.
Answer:
Part 1
Debit : Dividends $50,000
Credit : Shareholders for dividends $50,000
Part 2
Debit : Shareholders for dividends $50,000
Credit : Cash $50,000
Explanation:
When dividends are declared and not paid, raise a Liability - Shareholders for Dividends to depict the Company`s Present obligation to its shareholders.
When dividends are issued, derecognize the liability - Shareholders for Dividends and recognize a Cash outflow to depict the outflow of cash resources as a result of the distribution.
Dividends Calculation :
Dividends = 50,000 shares x 100% = $50,000
Black Horse Transportation's sales budget for the first quarter follows: January$125,000 February 300,000 March290,000 All sales are on account (credit) with 50% collected in the month of sale, 30% collected in the following month after sale, and 20% collected in the second month after sale. There are no uncollectable accounts. The March cash receipts are:
Answer:
$260,000
Explanation:
Cash Receipts Calculation - March
March Credit Sales ($290,000 x 50%) $145,000
February Credit Sales ($300,000 x 30%) $90,000
January Credit Sales ($125,000 x 20%) $25,000
Total $260,000
Therefore,
The March cash receipts are $260,000
5 years ago, Barton Industries issued 25-year noncallable, semiannual bonds with a $1,000 face value and a 9% coupon, semiannual payment ($45 payment every 6 months). The bonds currently sell for $896.87. If the firm's marginal tax rate is 25%, what is the firm's after-tax cost of debt? Do not round intermediate calculations. Round your answer to two decimal places.
Answer: 7.67%
Explanation:
To solve this, the financial calculator will be needed
Present value = -896.87
Future Value = 1,000
N = [(25 - 5years) × 2 = 40
PMT = $45
Given the above information, we will press the financial calculator as we'll press CPT after which we then press I/Y and we'll get 5.11%
Then, the the firm's after-tax cost of debt will be:
= (5.11% x 2 )(1 - 0.25)
= (0.0511 × 2) (0.75)
= 0.07665
= 7.665%
= 7.67%
Buzz Lightyear has been offered an investment in which he expects to receive payments of $4,000 at the end of each of the next 10 years in return for an initial investment of $10,000 now. a. What is the IRR of the proposed investment
Answer:
IRR= 21.86%
Explanation:
Giving the following information:
Initial investment (PV)= $10,000
Cash flows (PMT)= $4,000 per year
Number or years (n)= 4
It is extremely difficult to calculate the IRR using the formula. We will use the financial calculator.
Function: CMPD
n= 4
I%= SOLVE = 21.86%
PV= 10,000
PMT= -4,000
IRR= 21.86%
Riverbed Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $4,320,000 on March 1, $2,880,000 on June 1, and $7,200,000 on December 31. Riverbed Company borrowed $2,400,000 on March 1 on a 5-year, 10% note to help finance construction of the building. In addition, the company had outstanding all year a 12%, 5-year, $4,800,000 note payable and an 11%, 4-year, $8,400,000 note payable. Compute avoidable interest for Riverbed Company. Use the weighted-average interest rate for interest capitalization purposes.
Answer:
total capitalized interests = $572,727
Explanation:
weighted expenditures:
$4,320,000 x 10/12 = $3,600,000
$2,880,000 x 7/12 = $1,680,000
$7,200,000 x 0/12 = $0
total = $5,280,000
$2,400,000 x 10/12 x 10% = $200,000
Capitalized interests = $200,000 (for $2,000,000)
weighted interests
$4,800,000 x 12/12 x 12% = $576,000
$8,400,000 x 12/12 x 11% = $924,000
weighted interest rate = $1,500,000 / $13,200,000 = 11.36%
Capitalized interests = ($5,280,000 - $2,000,000) x 11.36% = $372,727
total capitalized interests = $572,727
Oakwood Financial Inc. was organized on February 28. Projected selling and administrative expenses for each of the first three months of operations are as follows:
March $132,700
April 124,700
May 113,500
Depreciation, insurance, and property taxes represent $28,000 of the estimated monthly expenses. The annual insurance premium was paid on February 28, and property taxes for the year will be paid in June. 73% of the remainder of the expenses are expected to be paid in the month in which they are incurred, with the balance to be paid in the following month.
Prepare a schedule indicating cash payments for selling and administrative expenses for March, April, and May.
Answer:
Results are below.
Explanation:
First, we must deduct the depreciation expense from each month. Depreciation is not a cash disbursement, and insurance and taxes are paid once a year.
March= 132,700 - 28,000= 104,700
April= 124,700 - 28,000= 96,700
May= 113,500 - 28,000= 85,500
Now, the cash disbursements for each month:
March:
Selling and administrative costs from March= 104,700*0.73= 76,431
Total cash disbursement= 76,431
April:
Selling and administrative costs from March= 104,700*0.27= 28,269
Selling and administrative costs from April= 96,700*0.73= 70,591
Total cash disbursement= $98,860
May:
Selling and administrative costs from May= 85,500*0.73= 62,415
Selling and administrative costs from April= 96,700*0.27= 26,109
Total cash disbursement= $88,524
Carradine Corporation uses a job-order costing system with a single plantwide predetermined
overhead rate based on machine-hours. The company based its predetermined overhead rate for
the current year on total fixed manufacturing overhead cost of $105,000, variable manufacturing
overhead of $3.00 per machine-hour, and 70,000 machine-hours. The company recently
completed Job P233 which required 60 machine-hours. The amount of overhead applied to Job
P233 is closest to:
A) $90
B) $270
C) $450
D) $180
Answer:
Answer:
Amount of overhead applied is $270
correct option is (a) $270
Explanation:
given data
overhead cost = $105,000
overheat rate = $3 per machine hour
manufacturing overhead = 70000 machine hour
required = 60 machine hours
to find out
The amount of overhead applied to Job P 233 is closest to
solution
we find manufacturing overhead rate here that is
manufacturing overhead rate =
put here value
manufacturing overhead rate =
manufacturing overhead rate = 1.5 per machine hour
and
Total manufacturing overhead rate will be for overheat rate $3
Total manufacturing overhead rate = (3 + 1.5) = $4.5 per machine hour
so we can say that Amount of overhead is job P 233 is
Amount of overhead applied = 60 × $4.5 = 270
so here correct option is (a) $270
Explanation:
At the end of 2019, Wildhorse Co. has accounts receivable of $731,300 and an allowance for doubtful accounts of $65,400. On January 24, 2020, the company learns that its receivable from Megan Gray is not collectible, and management authorizes a write-off of $6,900. On March 4, 2020, Wildhorse Co. receives payment of $6,900 in full from Megan Gray. Prepare the journal entries to record this transaction.
Answer and Explanation:
The journal entry to record the transaction is shown below:
Accounts receivable $6,900
To allowance for doubtful accounts $6,900
(Being reversing the write off is recorded)
Here account receivable is debited as it increased the assets and credited the allowance as it decreased the assets
Cash $6,900
To Accounts receivable $6,900
(Being cash collection from write off account is recorded)
Here the cash is debited as it decreased the assets and credited the account receivable as it decreased the assets
Muscat Sayarati Co. uses a job-order costing system with a single plantwide predetermined overhead rate based on labor-hours . The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $525,000, variable manufacturing overhead of $6.00 per labor -hour, and 35,000 abor-hours. The job sheet of Job G828 shows that the number of units in this job order is 45 units which incurred total of 90 labor-hours. This job consumed \$14/unit of direct materials cost and \$64/unit of direct labor costs. What would be the ?total cost for Job G828 approximately
Answer:
$810
Explanation:
Calculation to determine cost for Job G828
Estimated total manufacturing overhead cost = $525,000 + ($6.00× 35,000) = 315,000
Predetermined overhead rate = $315,000 ÷ 35,000 = $9
Overhead applied to a particular job = $9×90 = $810.
A public good rev: 04_09_2018 Multiple Choice generally results in substantial negative externalities. can never be provided by a nongovernmental organization. costs essentially nothing to produce and is thus provided by the government at a zero price. cannot be provided to one person without making it available to others as well.
Answer:
cannot be provided to one person without making it available to others as well.
Explanation:
A public good is a good that is non excludable and non rivalrous. It cannot be provided to one person without making it available to others as well. If one person is using it, it does not stop other people from using it also. An example of a public good is roads.
Public goods contrasts with club goods and private goods
A club good is a type of public good. It is excludable but non-rivalrous. For example paid streaming services are an example of a club good. Those who do not subscribe are excluded from using the service. But all subscribers have equal assess to the service
A private good is a good that is excludable and rivalrous.e.g. a privately owned car
On 20/07/2019, "ABC" Company sold goods to customer "X" with a total value of $120.000 The customer pad
40% cash, and signed a 80 days, 10% note for the reaming balance.
Instructions:
Based on the above given information answer the following questions, assuming the company has a fiscal year
ending 31/8:
1)
What is the amount of sales revenue that "ABC" Company must record on August 10 2019
2) on 31/8/2020 « ABC » company must a note
receivable with an amount on statement of
financial position?
Help me with these two questions please
Answer:
1) total sales revenue = $120,000
this amount holds regardless of how much money was collected in cash or if an account/note receivable was recorded
2) the company must recognize interest revenue:
principal = $72,000
interest revenue = $72,000 x 10% x 40/360 days = $800
Dr Interest receivable 8000
Cr Interest revenue 800
What is marketing?explain the concept of marketing
Answer:
Marketing is the process of getting the right goods or services or ideas to the right people at the right place, time, and price, using the right promotion techniques and utilizing the appropriate people to provide the customer service associated with those goods, services, or ideas.
Explanation:
(hope this helps)
Your purpose for writing a formal business letter should be clearly stated in _____.
a postscript following your signature
the first paragraph
the salutation
the conclusion of the letter
Answer:
the answer is C hope this helps
The company has just hired a new marketing manager who insists that unit sales can be dramatically increased by dropping the selling price from $8 to $7. The marketing manager would like to use the following projections in the budget:
Data Year 2 Quarter Year 3 Quarter
1 2 3 4 1 2
Budgeted unit sales 45,000 70,000 120,000 75,000 80,000 90,000
Selling price per unit $7
Accounts receivable,
beginning balance $65,000
Sales collected in the
quarter sales are made 75%
Sales collected in the quarter
after sales are made 25%
Desired ending finished
goods inventory is 30% of the
budgeted unit sales
of the next quarter
Finished goods
inventory, beginning 12,000 units
Raw materials required
to produce one unit 5 pounds
Desired ending inventory
of raw materials is 10% of the next
quarter's production
needs
Raw materials
inventory, beginning 23,000 pounds
Raw material costs $0.80 per pound
Raw materials
purchases are paid 60% in the quarter the
purchases are made and
40% in the quarter
following purchase
Accounts payable for
raw materials, beginning
balance $81,500
A. What are the total expected cash collections for the year under this revised budget?
B. What is the total required production for the year under this revised budget?
C. What is the total cost of raw materials to be purchased for the year under this revised budget?
D. What are the total expected cash disbursements for raw materials for the year under this revised budget?
E. After seeing this revised budget, the production manager cautioned that due to the current production constraint, a complex milling machine, the plant can produce no more than 90,000 units in any one quarter. Is this a potential problem?
Answer:
Year 2
A. Total expected cash collections $2,077,500
B. Total required production 312,000 units
C. Total cost of raw materials to be
purchased for the year $1,262,800
D. Total expected cash disbursements for raw materials = $1,220,860
E. There is a potential problem in quarter 3. This can be resolved by producing more units in the previous quarters.
Explanation:
a) Data and Calculations:
Old selling price per unit = $8
New selling price per unit = $7
Year 2 Year 3
Quarter Quarter
1 2 3 4 1 2
Budgeted
unit sales 45,000 70,000 120,000 75,000 80,000 90,000
Sales $315,000 $490,000 $840,000 $525,000 $560,000 $630,000
Accounts receivable, beginning balance = $65,000
Desired ending finished goods inventory is 30% of the budgeted unit sales of the next quarter
Finished goods inventory, beginning = 12,000 units
Raw materials required to produce one unit = 5 pounds
Desired ending inventory of raw materials = 10% of the next quarter's production needs
Raw materials inventory, beginning = 23,000 pounds
Raw material costs $0.80 per pound
Raw materials payments:
60% in the quarter purchases are made
40% in the quarter following purchase
Accounts payable for raw materials, beginning balance = $81,500
1 2 3 4 Total
Cash collections
Sales collected:
75% in the quarter $236,250 $367,500 $367,500 $630,000 $1,601,250
25% second quarter 65,000 78,750 122,500 210,000 476,250
Total collections $301,250 $446,250 $490,000 $840,000$2,077,500
Production budget:
Year 2 Year 3
Quarter Quarter
1 2 3 4 1 2
Budgeted unit sales 45,000 70,000 120,000 75,000 80,000 90,000
Ending inventory 21,000 36,000 22,500 24,000 27,000
Goods available 66,000 106,000 142,500 99,000 107,000
Beginning inventory 12,000 21,000 36,000 22,500 24,000
Production units 44,000 85,000 106,500 76,500 83,000
Total production units for the year = 312,000 units
(44,000 + 85,000 + 106,500 + 76,500)
Purchase of raw materials:
Year 2 Year 3
Quarter Quarter
1 2 3 4 1
Production units 44,000 85,000 106,500 76,500 83,000
Ending inventory 42,500 53,250 38,250 41,500
Raw materials needs 220,000 425,000 532,500 382,500 415,000
Raw materials available 262,500 478,250 570,750 424,000
Beginning inventory 23,000 42,500 53,250 38,250 41,500
Purchases 239,500 435,750 517,500 385,750
Purchase costs $191,600 $348,600 $414,000 $308,600
Total purchases = $1,262,800
Cash Disbursements for raw materials:
Year 2 Year 3
Quarter Quarter
1 2 3 4 1
60% in the quarter $114,960 $209,160 $248,400 $185,160
40% in the ffg quarter 81,500 76,640 139,440 165,600
Total disbursements $196,460 $285,800 $387,840 $350,760
Total expected cash disbursements for raw materials = $1,220,860
Parking lot staff budget Adventure Park is a large theme park. Staffing for the theme park involves many different labor classifications, one of which is the parking lot staff. The parking lot staff collects parking fees, provides directions, and operates trams. The staff size is a function of the number of daily vehicles. Adventure Park has determined from historical experience that a staff member is needed for every 200 vehicles. Adventure Park estimates staff for both school days and nonschool days. Nonschool days are higher attendance days than school days. The number of expected vehicles for each day is as follows:
School Days Nonschool Days
Number of vehicles per day 3,000 8,000
Number of days per year 165 200
Parking fees are $10 per vehicle. Each parking lot employee is paid $110 per day.
Required:
a. Determine the annual parking lot staff budget for school days, nonschool days, and total.
b. Determine the parking revenue for school days, nonschool days, and total.
c. If depreciation expense and other expenses for running the parking lot were estimated to be $2 million per year, determine the parking lot's budgeted profit.
Answer: See explanation
Explanation:
a. Determine the annual parking lot staff budget for school days, nonschool days, and total.
For school days:
Number of staff required per day = 3000/20 = 15
Number of staff days per year = 15 × 165 = 2475
Annual parking lot staff budget = 2475 × $110 = $272250
For non school days:
Number of staff required per day = 8000/20 = 40
Number of staff days per year = 40 × 200 = 8000
Annual parking lot staff budget = 800 × $110 = $880,000
Total annual parking lot staff budget = $272250 + $880000 = $1152250
b. Determine the parking revenue for school days, nonschool days, and total.
For school days:
Total number of vehicles per year = 3000 × 165 = 495000
Parking revenue = 495000 × $10 = $4950000
For non school days:
Total number of vehicles per year = 8000 × 200 = 1600000
Parking revenue = 1600000 × $10 = $16000000
Total parking revenue = $4950000 + $16000000 = $20950000
c. If depreciation expense and other expenses for running the parking lot were estimated to be $2 million per year, determine the parking lot's budgeted profit.
Parking revenue = $20,950,000
Less: Parking lot staff payroll = $1152250
Less: Depreciation and other expenses = $2000000
Budgeted profit = $177977500
TaeHwan Company accrues bad debt expense during the year at an amount equal to 3% of credit sales. At the end of the year, a journal entry adjusts the allowance for uncollectible accounts to a desired amount based on an aging of accounts receivable. At the beginning of 2018, the allowance account had a credit balance of $18,000. During 2018, credit sales totaled $480,000 and receivables of $14,000 were written off. The year-end aging indicated that a $21,000 allowance for uncollectible accounts was required. TaeHwan's bad debt expense for 2018 would be:
Answer: $17000
Explanation:
TaeHwan's bad debt expense for 2018 would be calculated as the difference between the desired year end balance and the beginning balance written off. This will be:
= $21000 - ($18000 - $14000)
= $21000 - $4000
= $17000
Therefore, TaeHwan's bad debt expense for 2018 would be $17000.
A company issues $14500000, 5.8%, 20-year bonds to yield 6% on January 1, 2020. Interest is paid on June 30 and December 31. The proceeds from the bonds are $14164836. Using effective-interest amortization, what will the carrying value of the bonds be on the December 31, 2020 balance sheet?
Answer:$14,709,481
Explanation:
$14,709,481
$14,703,108 + [($14,703,108 × .04) - $585,000] + [$14,706,232 × .04) - $585,000] = $14,709,481.
Rupali’s financial advisor tells her that she needs a personal balance sheet. Rupali has no idea what this is. What should the financial advisor tell her about a personal balance sheet?
a) Her bank can print one out for her if she requests it.
b) Emergency expenses are listed at the top of this document.
c) It ultimately will show her what her net worth totals.
d) It describes her cash flow situation over the past few months.
Answer:
d) It describes her cash flow situation over the past few months.
Explanation:
Balance sheet is a statement of account of an individual, which showcases the cash flow situation of that particular individual. That is, the debt and the credit associated with the bank account statement of the individual in question.
It is used to keep track of the financial growth and net-worth which helps in making a balanced decision. In her case, assuming she is applying for a loan, the cash flow situation of hers would enable the financial advisor in a bank to be clear on the actual amount she could eligible to get as a loan.
Answer:
It ultimately will show her what her net worth totals.
Explanation:
Correct for Gradpoint
As 2017, Buttle Corp. has $10 par, 2% preferred stock, 6,500 shares outstanding, and $1 par common stock with 32,000 shares outstanding. The preferred stock is cumulative and preferred stockholders last received a dividend in 2014. If the company wants to distribute $4 per share to the common stockholders in 2017, what is the total amount of dividends that the company must pay at the end of the current year
Answer:
$131,900
Explanation:
Th computation of the total amount of dividend is shown below:
dividend per year for preferred stock is
= (10 × 6500) × 2%
= $1300
Now the total dividend for preferred stock is
= ($1300 × 3)
= $3900
And, the Total common dividend is
= (4 × 32,000)
= $128,000
So, the total dividend to be paid is
= $3,900 + $128,000
= $131,900
Luther Industries has no debt and expects to generate free cash flows of $48 million each year. Luther believes that if it permanently increases its level of debt to $100 million, the risk of financial distress may cause it to lose some customers and receive less favorable terms from its suppliers. As a result, Luther's expected free cash flows with debt will be only $44 million per year. Suppose Luther's tax rate is 40%, the risk-free rate is 6%, the expected return of the market is 14%, and the beta of Luther's free cash flows is 1.25 (with or without leverage). The value of Luther with leverage is closest to:_______.
A) 11.5%.
B) 10.8%.
C) 9.8%.
D) 13.0%.
Answer: $315 million
Explanation:
First find the cost of capital as a required rate of return using CAPM:
= Risk free rate + Beta * (Market return - Risk free rate)
= 6% + 1.25 *(14% - 6%)
= 16%
Value of Luther with leverage:
= (Cash flows with debt / required return) + (Debt * Tax)
= (44 million / 16%) + (100 million * 40%)
= $315 million
Options do not represent value.
Pilgrim Industries scheduled its annual sales meeting at Celestial City Resort from January 5-10. In addition to meeting and hotel rooms, the resort was to provide an ice-skating pond for the Pilgrim's annual employee hockey game. In the weeks before the meeting, the resort is hit with its worst heat wave on record. Although hotel and meeting rooms are available, there is no possibility of ice skating at the site. If a court finds that the one of Pilgrim's principal purposes in the agreement was the inclusion of an ice-skating pond, the Pilgrim-Celestial contract could be discharged via the doctrine of:
Answer:
If a court finds that the one of Pilgrim's principal purposes in the agreement was the inclusion of an ice-skating pond, the Pilgrim-Celestial contract could be discharged via the doctrine of:
Frustration of Purpose.
Explanation:
The doctrine of Frustration of Purpose occurs when there is a change of circumstances that is not the fault of either Pilgrim Industries or Celestial City Resort. Since these two parties did not cause the circumstances that made it legally, physically, or commercially impossible to fulfil the contract, the contract can be discharged by the court based on this doctrine. It is also known as Force Majeure.
