Answer: 14.72%
Explanation:
Risk premium is the amount of return that an investment provides over the risk free return of the market. This is to cater for the higher risk that an investor would incur for investing in the stock.
Risk premium for small company stocks = Average return for small stocks - Risk free rate
= 17.25% - 2.53%
= 14.72%
If the actual output of a piece of equipment during an hour is 500 units and its best operating level is at a rate of 400 units per hour, which of the following is the capacity utilization rate?
a. 1.33
b. 1.00
c. 0.75
d. 1.25
Answer:
d. 1.25
Explanation:
In a business context, the capacity utilization rate is a value that allows the company know how well they are performing compared to what the recorded optimal levels are. In order to calculate this value we simply divide the current operating level for a specific time-period by the optimal level of that same time period, which in this case would be 1 hour. Therefore, in this case we would divide 500 by 400 which would give us 1.25.
You currently have $150,000 in an IRA designated for retirement. If you save an additional $100 at the end of every month and expect to earn an annual return of 12 percent, how much do you expect to have in the IRA in 10 years?
Answer:
$518,061.90
Explanation:
The value of the retirement savings at retirement date is the future value of both its current balance of $150,000 and future value of $100 per month for 10 years compounded at the monthly rate of return
FV=PV*(1+r)^n+ monthly savings*(1+r)^n-1/r
PV=$150,000
r=monthly rate of return=12%/12=1%=0.01
monthly savings=$100
n=number of monthly savings in 10 years=10*12=120
FV=$150000*(1+0.01)^120+$100*(1+0.01)^120-1/0.01
FV=$150000*(1.01)^120+$100*(1.01)^120-1/0.01
FV=$150000*3.30038689+$100*(3.30038689-1)/0.01
FV=$150000*3.30038689+$100*2.30038689/0.01
FV=$495,058.03+$ 23,003.87
FV=$518,061.90
Maxim manufactures a hamster food product called Green Health. Maxim currently has 15,500 bags of Green Health on hand. The variable production costs per bag are $2.90 and total fixed costs are $21,000. The hamster food can be sold as it is for $10.00 per bag or be processed further into Premium Green and Green Deluxe at an additional cost. The additional processing will yield 15,500 bags of Premium Green and 4,100 bags of Green Deluxe, which can be sold for $9 and $7 per bag, respectively. The incremental revenue of processing Green Health further into Premium Green and Green Deluxe would be:_________.
a. $163,200.
b. $13,200.
c. $8,200.
d. $5,000.
e. $168,200.
Answer:
b. $13,200.
Explanation:
Revenue from the sale of Green Health bags = Number of bags * Selling price
Revenue from the sale of Green Health bags = 15,500 bags * $10
Revenue from the sale of Green Health bags = $155,000
Revenue from Premium Green = Number of bags * Selling price
Revenue from Premium Green = 15,500 bags * $9
Revenue from Premium Green = $139,500
Revenue from Green Deluxe = Number of bags * Selling price
Revenue from Green Deluxe = 4,100 bags * $7
Revenue from Green Deluxe = $28,700
Incremental revenue = Revenue from Premium Green + Revenue from Green Deluxe - Revenue from Green Health\
Incremental revenue = $139,500 + $28,700 - $155,000
Incremental revenue = $13,200
So, the incremental revenue of processing Green Health further into Premium Green and Green Deluxe would be $13,200.
Krenshaw Company reported total sales revenue of $80,000, total expenses of $72,000, and net income of $8,000 for the year ended December 31, 2009. During 2009, accounts receivable increased by $3,000, merchandise inventory decreased by $2,000, accounts payable increased by $1,000, and $5,000 in depreciation expense was recorded. Assuming no other adjustments to net income are needed, the net cash inflow from operating activities using the indirect method was:
Answer: $13000
Explanation:
Following the information provided in the question, the net cash inflow from operating activities using the indirect method will be calculated as follows:
Net Income = $8,000
Add: Depreciation expense = $5,000
Add: Decrease in inventory = $2,000
Add: Increase in account payable = $1,000
Less: Increase in account receivable (3,000)
Cash inflow from operating activities = $13000
The following department data are available: Total materials costs $172000 Equivalent units of production - materials 50000 Total conversion costs $105000 Equivalent units of production - conversion costs 30000 What is the total manufacturing cost per unit
Answer:
6.94
Explanation:
The total cost of materials is $172,000
The equivalent unit of production materials is 50,000
The total conversion costs are $105,000
The equivalent unit of production is 30,000
Therefore the total manufacturingg costs per unit can be calculated as follows
172,000/50,000
= 3.44
105,000/30,000
= 3.5
3.44+3.5
= 6.94
Physical-world observations are a type of information available to businesses today and include information gathered through Multiple Choice point of sale information. global positioning systems. enterprise resource planning data. customer relationship management systems.
Answer:
Option D (Customer relationship management systems) is the right option.
Explanation:
A management technique aimed at developing, strengthening, and strengthening connections with carefully scripted users just to optimize value proposition, business profitability but instead wealth maximization.It must be commonly used mostly for technology firms and technologies that assist throughout the management of external client contacts.The other three options are not related to the given scenario. So option D is the correct one.
The available information for today's business such as Physical-world observations are information that can be assessed by D:Customer relationship management.
Customer relationship management can be regarded as technology that is needed to manage the company's relationships as well as interactions with customers. This system helps companies in having firm connection to customers for improved profitability.Therefore, option D is correct.
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MC Qu. 85 Gladstone Co. has expected sales of... Gladstone Co. has expected sales of $362,000 for the upcoming month and its monthly break even sales are $345,000. What is the margin of safety as a percent of sales, rounded to the nearest whole percent
Answer:
Margin of safety= $17,000
Explanation:
Giving the following information:
Expected sales= $362,000
Monthly break-even sales= $345,000
To calculate the margin of safety in dollars, we need to use the following formula:
Margin of safety= (current sales level - break-even point)
Margin of safety= 362,000 - 345,000
Margin of safety= $17,000
Which of the following is a false statement?
A. Certain states have no state income tax.
B. Depending on where you live, you may pay no state income taxes.
C. All states have a flat state tax.
D. Most states have state income tax
Answer:Its C.
Explanation:
Its C because only 11 states have flat taxes at the moment.
Epsilon Co. can produce a unit of product for the following costs: Direct material $ 8 Direct labor 24 Overhead 40 Total costs per unit $ 72 An outside supplier offers to provide Epsilon with all the units it needs at $60 per unit. If Epsilon buys from the supplier, the company will still incur 40% of its overhead. Epsilon should choose to:
Answer:
If the company produces the units, it will save $4.
Explanation:
First, we need to calculate the relevant cost of making the units in-house. We will consider only the incremental overhead cost:
Make in-house:
Direct material= 8
Direct labor= 24
Avoidable Overhead= 40*0.6= 24
Total cost= $56
Buying:
Total cost= $60
If the company produces the units, it will save $4.
Consider an auctioneer who is selling an item through an auction. It is known that the 25 risk-neutral bidders have affiliated values that are distributed between $0 and $500 million. Based on this information, the auction type that will maximize expected revenue is:____.
1. English auction.
2. second-price, sealed-bid auction.
3. first-price, sealed-bid auction and Dutch auction.
4. English auction and second-price, seal-bid auction.
Answer:
2. second-price, sealed-bid auction.
Explanation:
In the given situation, it is mentioned that there is 25 risk -neutral bidders that contains the affiliated values and the same is to be allocated between $0 and $500 million
So, here the type of an action that could maximize the expected revenue is the second price i.e. sealed bid auction as in this the bidder provides the maximum price that received the good in the second maximum price
Therefore, the second option is correct
The F. Mercury, Capital account has a credit balance of $42,000 before closing entries are made. Total revenues for the period are $60,200, total expenses are $42,300, and withdrawals are $11,000. What is the correct closing entry for the expense accounts
Answer: Debit Income Summary $42,300; Credit Expense accounts $42,300
Explanation:
It should be noted that the expense accounts have a normal debit balance and therefore in such case will be closed by crediting of the accounts.
In such case, the income summary account will be debited, and the expenses account will then be credited.
Based on the information given, the correct closing entry for the expense accounts will be:
Debit Income Summary $42,300
Credit Expense accounts $42,300.
Suppose that the owner of Boyer Construction is feeling the pinch of increased premiums associated with workersâ compensation and has decided to cut the wages of its two employees (Albert and Sid) from $25 per hour to $21 per hour. Assume that Albert and Sid view income and leisure as "goods," that both experience a diminishing rate of marginal substitution between income and leisure, and that the workers have the same before- and after-tax budget constraints at each wage. Albert and Sid's opportunity set is presented below:What is the value of A when the wage is $25?What is the value of A when the wage is $21?At the wage of $25 per hour, both Albert and Sid are observed to consume 14 hours of leisure (and equivalently supply 10 hours of labor). After wages were cut to $21, Albert consumes 12 hours of leisure and Sid consumes 16 hours of leisure. Determine the number of hours of labor each worker supplies at a wage of $21 per hour:Albert's supply of labor = _______Sid's supply of labor = ________How can you explain the seemingly contradictory result that the workers supply a different number of labor hours?A. Albert has no income effect, and Sid has no substitution effect when the wage declines to $21.B. Albert's substitution effect dominates his income effect when the wage declines to $21, and vice versa for Sid.C. Albert has no substitution effect, and Sid has no income effect when the wage declines to $21.D. Albert's income effect dominates his substitution effect when the wage declines to $21, and vice versa for Sid.
What is probability and non probability sampling?
Explanation:
I hope this will help you.
Which feature prevents a company from uilizing the private assets of its shareholders for the payment of its leabiities?
Answer: Limited Liability
Explanation: Business owners' liability for debts is restricted to the amount they put into the business.
Able, Baker, and Charlie are the only three stocks in an index. The stocks sell for $90, $200, and $108, respectively. If Baker undergoes a 2-for-1 stock split, what is the new divisor for the price-weighted index
Answer:
2.25
Explanation:
Divisor = (Sum of prices after split) * Number of stocks / Sum of prices before split
Divisor = ($90 + $200/2 + $108) * 3 / $90 + $200 + $108
Divisor = $298*3 / $398
Divisor = $894 / $398
Divisor = 2.246231155778894
Divisor = 2.25
So, the new divisor for the price-weighted index is 2.25.
If a sales increase is forecasted, how will it affect expenses on the pro forma income statement if market conditions are expected to remain stable? There will be no effect on expenses. Expenses will decrease. It depends on the type of product being sold. Expenses will increase.
Answer:
Expenses will increase.
Explanation:
In this method, the revenue should be rised according to the forecasting method also the expense contains the similar percentage of revenue that was for the previous periods
So in the case when the revenue is increased so the expense should also be increased with the real terms
Therefore the last option is correct
Qualcomm (QCOM) is expected to generate annual earnings per share of $3.70 and is currently trading for $62.64. Assuming that investors require a return of 13% for QCOM stock, what is the approximate fractional amount of the current stock price reflected in PVGO
Answer: 0.55
Explanation:
Based on the information given, the approximate fractional amount of the current stock price reflected in PVGO will be calculated thus;
Earning per share, EPS = $3.70
Price per share, P= $62.64
Rate of return, k = 13%
Therefore,
PVGO = Price per share - (Earnings per share/Rate of return)
PVGO = P-EPS/k
= 62.64 - 3.70/13%
= 62.64- 28.46
= $34.18
Since it's to be represented as a fraction, this Will be:
= 34.18/62.64
= 0.55
Based upon the following data for a business with a periodic inventory system, determine the cost of merchandise sold for August. Merchandise inventory, August 1 $ 96,610 Merchandise inventory, August 31 100,530 Purchases 254,660 Purchases returns and allowances 13,340 Purchases discounts 6,320 Freight in 4,070Cost of Merchandise Sold for August = ______.
Answer:
Cost of merchandise = $235150
Explanation:
Below is the calculations:
Cost of merchandise = Opening inventory - ending inventory + purchases - purchase return - purchase discount + freight
Now plug the value in the above formula:
Cost of merchandise = 96610 - 100530 + 254660 - 13340 - 6320 +4070
Cost of merchandise = $235150
When the company assigns factory labor costs to jobs, the direct labor cost is debited to Factory Labor. Manufacturing Overhead. Work in Process Inventory. Direct Labor.
Answer: work in process inventory
Explanation:
The direct labor costs refers to the costs that is incurred by a company which has to do with the payment to the employees involved in the production activities of the company.
When a company assigns factory labor costs to jobs, then the direct labor cost is debited to the work in process inventory.
Select the correct answer.
Why does an organization prepare a Balance Sheet?
A.
to reveal what the organization owns and owes at a point in time
B.
to reveal how well the company utilizes its cash
C.
to calculate retained earnings for a given accounting period
D.
to calculate gross profit for a given accounting period
Answer:
d
Explanation:
to calculate gross profit for a given accounting period
The following information is available for Carter Corporation: Materials inventory decreased $4,000. Materials inventory on December 31 was 50% of materials inventory on January 1. Beginning work in process inventory was $145,000. Ending finished goods inventory was $65,000. Purchases of direct materials were $154,700. Direct materials used were 2.5 times the cost of direct labor. Total manufacturing costs incurred were $246,400, which is 80% of cost of goods manufactured and $156,000 less than cost of goods sold. Note to students: The answers are not necessarily calculated in alphabetical order. a. Compute finished goods inventory on January 1.
Answer: $159,400
Explanation:
Finished goods inventory on January 1 is:
= Cost of goods sold + Ending finished goods inventory - Cost of goods manufactured
Cost of goods sold = Manufacturing cost + 156,000
= 246,400 + 156,000
= $402,400
Cost of goods manufactured = Manufacturing costs / 80%
= 246,400 / 80%
= $308,000
Finished goods inventory = 402,400 + 65,000 - 308,000
= $159,400
Based on the information given the finished goods inventory on January 1 is $159,400.
Cost of goods sold = 246,400 + $156,000
Cost of goods sold= $402,400
Cost of goods manufactured = 246,400 /.80
Cost of goods manufactured = $308,000
Finished goods inventory=Cost of goods sold+ Ending finished goods inventory-Cost of goods manufactured
Finished goods inventory =$402,400 + $65,000 - $308,000
Finished goods inventory= $159,400
Inconclusion the finished goods inventory on January 1 is $159,400.
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Price of beni’s house increased from 100,000 to 200,000 in the last decade. Cost of living quadrupled ( increased 4 times as much). What can you say about Beni’s house?
Answer:
Answer to type following question is as follows;
Explanation:
Real value = Nominal value / Inflation
Beni's house has gone up in value from 100,000 to 200,000 dollars in the previous ten years. The cost of living has quadrupled (raised fourfold). The home is now less expensive because, if it had appreciated at the same pace as all other products and services, it would have been four times more expensive ($400,000), but rather it is $200,000.
what is the meaning of Neccesity
Answer:h
Explanation:
the fact of being required or indispensable.
"the necessity of providing parental guidance should be apparent"
the process of deciding what should be done, how and when it should be done and who should do it is known as
Answer:
Planning.
Explanation:
Management involves the control, planning and organization of the affairs of a business firm.
Basically, the management of an organization is saddled with the responsibility of planning, organizing, controlling and staffing within the organization.
The four (4) main management activities are;
I. Organizing
II. Controlling
III. Motivating.
IV. Planning.
Planning can be defined as the process of developing organizational objectives and translating them into action plans or courses of action.
This ultimately implies that, planning is a strategic technique used by organizations to make an aggregate plan for its manufacturing (production) process typically ahead of time, in order to have an idea of the level of goods that are to be produced and what resources are required so as to reduce the total cost of production to its barest minimum.
This ultimately implies that, planning is a strategic process which typically involves deciding what should be done, how and when it should be done and who should do it.
Hilda owes a significant amount of debt to a doctor's office, and they hired a collection agency to take up those claims. The collection agency calls frequently, sometimes as late as 1 a.m. or 2 a.m. on weekdays. In this case, the collection agency ____________________.
Answer: c. is violating the Fair Debt Collection Practices Act.
Explanation:
A person being in debt does not mean that they will lose their rights. They are still citizens and certain rights will be protected and these are shown in the Fair Debt Collection Practices Act.
One of the requirements of this Act is that debt collectors do not call between the hours 9pm and 8am as these hours are unreasonable to disturb people at. In calling Hilda at 1 am or 2 am therefore, this collection agency is in violation of the Act and can be sanctioned.
Determine if the research is deductive or inductive: - If because of analysis of data collected, one infers that the problem of turnover can be minimized by three important factors: (i) flexible work hours; (ii) recognition of superior performance of workers through suitable merit pay raises; and (iii) enriching certain types of jobs. If a manager observes that people residing at distances beyond 50 miles from the workplace remain absent more frequently than those he knows to reside close by, and infers thereby that distance is a factor in absenteeism. Fares spent some time reviewing the literature on child behavior and focused particularly on theoretical explanations for gender differences he might expect to find in his upcoming study of children.
Answer:
1. Deductive
2. Inductive
3. Deductive
Explanation:
Deductive research is a form of reasoning that stems from existing theories that can be tested. Data is collected to test a theory and the results are analyzed. The first and third scenarios are deductive research works because there are existing theories or data that can be worked on. In the first instance, data on issues of turnover already exist. In the third scenario, there were theories to explain gender differences.
Inductive research proposes a theory after observation. This is applicable in the second instance where the manager proposes the theory that relates distance to absenteeism after close observation.
On June 15, Oakley Inc. sells inventory on account to Sunglass Hut (SH) for $4,500, terms 4/10, n/30. On June 20, SH returns to Oakley inventory that SH had purchased for $1,000. On June 24, SH completely fulfills its obligation to Oakley by making a cash payment. What is the amount of cash paid by SH to Oakley
Answer: $3360
Explanation:
Based on the information given in the question, the amount of cash paid by SH to Oakley will be calculated as thus:
SH will be entitled to a discount of 4% since the payment was made within the discount period, therefore, the discount that is applicable will be:
= $4500 - $1000
= $3,500
Therefore, the amount of cash payment that is made by SH to Oakley will be:
= $3,500 - (4% × $3,500)
= $3500 - (0.04 × $3500)
= $3500 - $140
= $3360
Therefore, the amount of cash paid by SH to Oakley is $3360.
Belltone Company made the following expenditures related to its 10-year-old manufacturing facility: 1. The heating system was replaced at a cost of $210,000. The cost of the old system was not known. The company accounts for improvements as reductions of accumulated depreciation. 2. A new wing was added at a cost of $790,000. The new wing substantially increases the productive capacity of the plant. 3. Annual building maintenance was performed at a cost of $16,500. 4. All of the equipment on the assembly line in the plant was rearranged at a cost of $44,000. The re-arrangement clearly increases the productive capacity of the plant.Required: Prepare journal entries to record each of the above expenditures.
Answer:
S/N Journal Entries Debit Credit
1 Accumulated depreciation-Building $210,000
Cash $210,000
2 Building $790,000
Cash $790,000
3 Maintenance expense $16,500
Cash $16,500
4 Equipment $44,000
Cash $44,000
Travis and Andrea were divorced in 2017. Their only marital property consisted of a personal residence (fair market value of $400,000, cost of $200,000), and publicly traded stocks (fair market value of $800,000, cost basis of $500,000). Under the terms of the divorce agreement, Andrea received the personal residence and Travis received the stocks. In addition, Andrea was to receive $50,000 for eight years. I. If the $50,000 annual payments are to be made to Andrea or her estate (if she dies before the end of the eight years), the payments will qualify as alimony. II. Andrea has a taxable gain from an exchange of her one-half interest in the stocks for Travis' one-half interest in the house and cash. III. If Travis sells the stocks for $900,000, he must recognize a $400,000 gain. a.I, II, and III are true. b.Only III is true. c.Only I and II are true. d.Only I and III are true.
Answer: B. b.Only III is true.
Explanation:
It should be noted that in order to qualify as an alimony, then the cash payments have to stop when the payer dies.
It should be noted that the $50,000 annual payments that are to be made to Andrea or her estate if she dies before the end of the eight years doesn't qualify as alimony.
Therefore, the correct option will be that If Travis sells the stocks for $900,000, he must recognize a $400,000 gain.
Therefore, only III is correct.
Prior to June 30, a company has never had any treasury stock transactions. A company repurchased 100 shares of its $1 par common stock on June 30 for $40 per share. On July 20, it reissued 50 of these shares at $46 per share. On August 1, it reissued 20 of the shares at $38 per share. What is the journal entry necessary to record the repurchase of stock on June 30?A. Debit Common Stock $2,300; credit Cash $2,300.
B. Debit Common Stock $20; debit Treasury Stock $2,290; credit Cash $2,300.
C. Debit Common Stock $2,300; credit Treasury Stock $2,000; credit Paid-In Capital, Treasury Stock $300.
D. Debit Cash $2,300; credit Paid-in Capital, Treasury Stock $300; credit Treasury Stock $2,000.
E. Debit Cash $2,300; credit Treasury Stock $2,300.
Answer:
When shares are repurchased, they are recorded at the cost price in the books which means that they will be recorded at:
= 100 * 40
= $4,000
Cash will then be credited because assets are credited when they reduce.
Treasury stock will be debited to show that Equity is reducing.
Date Account Title Debit Credit
June, 30 Treasury Stock $4,000
Cash $4,000
