Praveen Co. manufactures and markets a number of rope products. Management is considering the future of Product XT, a special rope for hang gliding, that has not been as profitable as planned. Since Product XT is manufactured and marketed independently of the other products, its total costs can be precisely measured. Next year’s plans call for a $350 selling price per 100 yards of XT rope. Its fixed costs for the year are expected to be $315,000, up to a maximum capacity of 550,000 yards of rope. Forecasted variable costs are $245 per 100 yards of XT rope.
Required:
1. Estimate Product XT's break-even point in terms of (a) sales units and (b) sales dollars.
2. Prepare a CVP chart for Product XT. Use 7,000 units (700,000 yards/100 maximum number of sales units on the horizontal axis of the graph, and $1,400,000 as the maximum dollar amount on the vertical axis.
3. Prepare a contribution margin income statement showing sales, variable costs, and fixed costs for Product XT at the break-even point.

Answer:

No.It should not be Accepted.

Explanation:

Weighted Average Cost of Capital (WACC) is the minimum return that is expected from a project. It shows the risk of the entity. If a project gives a return below the WACC, it is regarded as very risk and must not be accepted.

Answer:

Portfolio beta = 1.3156

Explanation:

The portfolio beta is a function of the weighted average of the individual stocks betas' that form up the portfolio. To calculate the portfolio beta, we use the following formula,

Portfolio beta = wA * Beta of A + wB * Beta of B + ... + wN * Beta of N

Where,

Portfolio beta = 0.34 * 1.03  +  0.18 * 1.09  +  0.36 * 1.49  +  0.12 * 1.94

Portfolio beta = 1.3156

Answer:

OPERATING INCOME $91,250

NET INCOME $57,390

Explanation:

a. Calculation for operating income for the period.

Net sales $730,000

Less: Cost of goods sold ($401,500)

Gross profit $328,500

Less Selling, general, and administrative expenses ($160,600)

Less: Research and development expenses ($76,650)

OPERATING INCOME $91,250

b. calculation for the net income for the period.

Net sales $730,000

Less: Cost of goods sold ($401,500)

Gross profit $328,500

Less Selling, general, and administrative expenses ($160,600)

Less: Research and development expenses ($76,650)

OPERATING INCOME $91,250

Less: Interest expense ($17,500)

Less: Tax expense ($16,360)

NET INCOME $57,390

Therefore the OPERATING INCOME will be $91,250 while the NET INCOME will be $57,390

Answer: 1155

Explanation:

The solution guess thus to calculate the units in Ending Inventory:

Units of product on hand: 800 units

Add: Units in transit 180

Add: Units on consignment 200

Less: Damaged units 25

The number of units that Emma should include in her company’s period-end inventory will be:

= (800+180+200) - 25

= 1180 - 25

= 1155

Answer:

a. Identification as direct, indirect, or semi-indirect organizational patterns:

Direct organizational pattern

b. Putting sentences in order for a paragraph using an indirect organizational pattern:

Due to projected second quarter revenue shortfalls, the CEO has decided to take precautionary measures to protect the long-term viability of the company.

A mandatory staff furlough will be instituted July 1–6 of this year.

After considering cost-saving proposals, such as eliminating the internal Parts Shipping division and tertiary quality control measures, the executive team determined that staff furloughs would have the least impact on company morale.

Explanation:

Organizational paragraph patterns refer to how paragraphs are organized in order to deliver intended messages.  The direct organizational pattern delivers the bad news first before giving reasons, and then closes on a positive note.  The indirect pattern starts with a buffer, the reasons, then delivers the bad news, before finally closing on a positive note.  The semi-indirect pattern is a mixture of the two.

Answer:

ABC Co. and XYZ Co.

a. Rico owns $23,750 worth of XYZ’s stock. What rate of return is he expecting?

Expected Rate of Return = 12.32%

b. Suppose Rico invests in ABC Co and uses homemade leverage. Calculate his total cash flow and rate of return.

Cash flow from ABC Co. = 11.16% of $23,750 = $2,650.50

Cash outflow from homemade leverage = 10% of $11,875 = $1,187.50

Total cash flows = $1,463 ($2,650.50 - $1,187.50)

Rate of return = $1,463/$11,875 x 100 = 12.32%

c. What is the cost of equity for ABC and XYZ?

Cost of Equity for ABC Co. = Expected Return on Equity

= $53,000/$475,000 x 100

= 11.16%

Cost of Equity for XYZ Co. = Expected Return on Equity

= $29,250/$237,500 x 100

= 12.32%

d. What is the WACC for ABC and XYZ?

WACC for ABC = Cost of Equity = 11.16%

WACC for XYZ = Weighted Cost of Equity + Weighted Cost of Debt

= 11.16% x 50% + 10% x 50%

= 0.0558 + 0.05

= 0.1058

= 10.58%

Explanation:

ABC:

Equity = $475,000

Expected EBIT = $53,000

Returns on Equity = $53,000/$475,000 x 100 = 11.16%

XYZ:

Equity = $237,500

Debt = $237,500

Interest on Debt = 10% = $23,750

EBIT = $53,000

Return for Equity = $29,250 ($53,000 - 23,750)

Return on Equity = $29,250/$237,500 x 100 = 12.32%

RICO is assumed to leverage debt for his shares in ABC Co. to the tune of 50% just as the debt leverage in XYZ Co.

ABC's and XYZ's costs of equity are equal to the expected returns on the equities expressed percentages of the equities.

ABC's and XYZ's WACC or Weighted Average Costs of Capital are the weighted cost of equity plus the weighted cost of debt respectively.

Answer: C. $2.40

Explanation:

Earnings Per Share (EPS) refers to how much of the net income is due to the shareholders and is calculated by dividing the net income by the number of shareholders.

The retention ratio refers to how much of the net income will be held back by the company and not declared as dividends.

The dividends will therefore be the percentage of the EPS that is not held back.

= 8 * ( 1 - 0.7)

= $2.40

Answer:

The answer is $18.29

Explanation:

We have many formulas to arriving at the stock price but here we use Gordon growth model.

Formula for getting stock price is:

D1/r - g

Where:

D1 - is the next year dividend or expected dividend to be paid next.

r is the rate of return

g is the growth rate

$0.75/0.105 - 0.064

$0.75/0.041

$18.29.

Therefore, the stock's current price is $18.29

Answer:

Opportunity cost.

Explanation:

Opportunity cost is an economics term that is used to describe the value or determinant to best forgone alternative in certain situations. In as much as every business model or dealings can never be measured in monetary terms because merit can also be determined through satisfaction gained and actual time spent on the job.

It is sometimes seen to fall in as individual perspective, this is seen as such because it is always different for every person in as much as our personality and different in likes and lifestyle affects it when it boils down to persons.

Economists also tag opportunity cost to be fundamental costs and are generally used for gaining a better understanding of a project.

Answer:

risk premium increases by more of the low - beta stock

A risk averse investor is an investor that avoids risk. if risk aversion increases, it means that the investor is more wary of risky investment.

Beta measures the volatility of a portfolio. the higher the volatility, the more risky the portfolio is.

risk premium measures the rate of return in excess of the risk free rate.

According to CAPM :

risk free rate + (beta x stock risk premium)

Beta is a multiplier of stock risk premium, so the higher the beta, the more there would be an increase in the stock risk premium

If a risk averse investor invests in a high beta stock, he would want extra or higher compensation for holding such a volatile stock. this extra compensation would be in the form of a higher risk premium.

Explanation:

Answer: advertising

Explanation:

Advertising is used in marketing to reach out to a larger number and of people and also for people to know more about the product and invariably, convince them to buy the product and hence increase the sales of the product.

Google generates revenue by offering online advertisement opportunities next to search results or on specific web pages.

Answer:

It shows what similar homes in the area have recently sold for.

Explanation:

Answer:

The statement "It shows the same types of homes in the area that are presently sold" is considered to be the best description for the comparative market analysis.

Explanation:

A comparative market analysis is a tool that is used by the real estate agent in order to remove the value of the particular property via evaluation of the same types of homes that could be presently sold in a similar area.

For finding the best description regarding the comparative market analysis, we need to determine the following information:

Therefore we can conclude that the first statement is correct

Learn more about the comparative market analysis here: brainly.com/question/16715737

Answer:

1) the $71,000 is considered a sunk cost because it cannot be recovered.

option A yields $32,000 - $24,000 = $8,000 (this is more profitable)

option B yields $5,000

2) the $104,000 is also considered a sunk cost because it cannot be recovered

option A results in $105,500 - $15,500 = $90,000 in costs

option B costs $85,500 (this option is less costly)

Answer: The donor may incur a gift tax liability. Also, the cost basis will be $50 per share to the recipient of the gift.

Explanation:

From the question, we are informed that a customer owns 200 shares of ABC, that were bought 2 years ago at $50 per share and that the current market value of ABC stock is $60 per share.

If the customer gifts the stock to his son, the result is the donor may incur a gift tax liability. Also, the cost basis will be $50 per share to the recipient of the gift.

Answer:

Please refer to the below for explanations

Explanation:

a) Premises and operations liability . This type of liability loss exposures arises from ownership and general maintenance of the premises where the firm is carrying out it's business. It is also the possibility that a firm will be held liable because of bodily injury or property damage caused by an accident which occurred in the firm's premises.

• Products liability. Sometimes products that have been manufactured and sold by the firm could result into liability loss exposure if the products causes injury to the buyers or consumers after purchase.

• Completed operations liability. This type of liability loss exposure occurs due to faulty work done in another place other than the premises( where the firm usually carry out its business activities) after the work or operation has been performed. It arises out of the entity's completed work including defective parts or materials.

• Contractual liability. The liability loss exposure arises when there are assumption of legal liability in a contract, whether written or oral hence contact must be properly understood by the parties involved.

• Contingent liability. Sometimes, work done by independent contractors could cause liability loss exposures if they are not properly executed. It exist when the insured is held liable for the actions or failure of the others.

b) • Premises and operations liability

Example is when an employee suffers bodily injury through an accident in the premises where the firm is situated in carrying out its business operation.

• Products liability

Example is when a child or children got injured while playing with a defective toys manufactured by Kid smart, which specializes in manufacturing children toys.

• Competed operations liability

Example is when County janitor service contracted local bars and taverns to clean their restrooms daily.

• Contractual liability

Example is when Party A to a contract agreement reads different meaning to the contract signed with party B, hence suffer losses.

• Contingent liability

Example is when a potential loss could possibly occur in the future due to the occurrence of certain events.

Answer:

The answer is 3.5

Explanation:

Inventory turnover ratio is:

Cost of goods sold / Total or average inventory

Cost of goods sold is $322,000

Total Inventory in this question comprises work-in- process, finished goods and even raw materials.

So total inventory equals:

Production materials on hand $42,500 Work-in-process inventory $37,000

Finished goods on hand $12,500

Total inventory. $92,000

Therefore, inventory turnover ratio is

$322,000 / $92,000

= 3.5

Answer: False

Explanation:

The aim of the business is to ideally make a profit. As a result, Additional business should only be accepted if the incremental cost of doing so is less than the incremental revenue accrued from doing so.

If incremental revenue equals incremental cost, there is no point in engaging in the additional business as it brings no extra value to the business.  

Answer:

CROIX COMPANY

Sales Budget Report

For the Quarter Ended June 30, 2017

                                  Second Quarter                         Year to Date

Product Line  Budget     Actual   Difference    Budget    Actual    Difference

The Edge     381,000  391,000  10,000         695,000   691,800    3,200  U

Explanation:

Croix's sales budget gives a forecast of the sales figure over the future period in order to help Croix plan its production or purchase of the newest guitar, The Edge so that customers' demand can be met and profit objectives of the company is achieved.

Answer:  the firm will have a temporary competitive advantage

Explanation: The firm in question would have a temporary competitive advantage. Competitive advantage describes something that places a company or business or a person above the competition such as value, rarity, difficult/costly-to-imitate amongst others. However, where a substitute is already in existence for such service, then the firm would have a temporary competitive advantage.

Answer:

A.Current ratio

2017 191%

2016 248%

2015 289%

B.Acid Test Ratio

2017 101%

2016 139%

2015 183%

Explanation:

A.Computation of the current ratio for the year ended 2017, 2016, and 2015.

Using this formula

Current Ratio =Current Assets / Current Liabilities

2017 2016 2015

Cash $26,403 $29,364 $29,991

Accounts receivable, net

73,552 52,436 40,392

Merchandise inventory 96,214 70,676 43,017

Prepaid expenses 8,255 7,944 3,467

a.Current asset

204,424 160,420 116,867

b.Current Liabilities

Accounts payable $107,101 $64,564 $40,392

Let plug in the formula

(a) / (b) Current Ratio 191% 248% 289%

Therefore the Current ratio are:

2017 191%

2016 248%

2015 289%

B.Computation for acid-test ratio for the year ended 2017, 2016, and 2015.

Using this formula

Acid Test Ratio=Current Assets / Current Liabilities

2017 2016 2015

Cash $26,403 $29,364 $29,991

Accounts receivable, net

73,552 52,436 40,392

Prepaid expenses 8,255 7,944 3,467

a. Current asset

108,210 89,744 73,850

b. Current liabilities

Accounts payable $107,101 $64,564 $40,392

Let plug in the formula

(a) / (b)Acid Test Ratio 101% 139% 183%

Therefore the Acid Test Ratio are:

2017 101%

2016 139%

2015 183%

Answer:

Total cash collection= $257,500

Explanation:

Giving the following information:

Sales:

March= $250,000

April= $280,000

Speedster Bicycles, Inc., collects 25% of its sales on account in the month of the sale and 75% in the month following the sale.

Cash collection April:

Sales on account from April= 280,000*0.25= 70,000

Sales on account from March= 250,000*0.75= 187,500

Total cash collection= $257,500

Complete Question:

A cash equivalent is:

Group of answer choices

a) Generally is within 12 months of its maturity date.

b) Another name for cash.

c) An investment readily convertible to a known amount of cash.

d) Is not considered highly liquid.

e) Close to its maturity date but its market value may still be affected by interest rate

changes

Answer:

c) An investment readily convertible to a known amount of cash.

Explanation:

In Financial accounting, cash equivalents can be defined as any short term and highly liquid investments which can be easily converted or transformed to a known and standard amounts of cash and as such are subjective to little or no risk of changes in value.

This ultimately implies that, a cash equivalent is an investment readily convertible to a known amount of cash.

Under the statements of cash flow, cash equivalents can be classified broadly into three (3) categories and these are;

1. Operating activities.

2. Financing activities.

3. Investing activities.

Answer:

money

Explanation:

Answer:

                                    Script, Inc.

                   Territory and Company Income Statements

                         For the Month of September

                           Florida$   Alabama$  Company Total$

Sales

Pens                       18000      12000       30000

Pencils                    9000      21000        30000

Total sales [A]        27000    33000       60000

Variable cost

Pens                       7200        4,800        12000

                            [18000*.4]  [12000*.4]

[12000 Variable cost / 30000 = 0.40 per pen ]

Pencils                    3600        8400        12000

                             [9000*.4]   [21000*.4]

[12000 Variable cost /30000 = 0.4 per pencil]

Total var. cost [B]    10800       13200       24000

Contribution A-B    16200      19800       36000

D. fixed expenses     2000       3000        5000

Territory margin   14200       16800      31000

Common fixed expenses

Pen               9000

Pencil            7000

Home office  1000

Total              17,000                                    (17000)

Net income                                                   14000

Answer: Was actively used by President Roosevelt in the early 20th century.

Explanation:

The Sherman Act of 1890 was a law passed by Congress to target monopolies in the United States. At the time, Trusts had been in existence. Trusts were in effect monopolies because they worked by getting the largest stockholders to transfer their stock to a single trust and get profits from all companies in the trust. This Trust would then in effect control the industry as a monopoly.

To combat this, the Sherman Act enabled the Federal Government to go against Trusts and dissolve them. This was good news to President Theodore Roosevelt who ruled from 1901 to 1909. Roosevelt hated the anti-competitive tactics of the rich that ripped off the poor. He believed that this would bring about a revolution and he also hated them as the big corporations thought themselves above the law in his assessment.

Using the Sherman Act, he went against them with so much vigor that he earned the nickname, The Trust Buster. He started with a Trust controlled by J.P. Morgan called Northern Securities Company which was dissolved by the Supreme Court after the Attorney General under Roosevelt brought a suit against them.

Answer:

B. Decrease $19,000

Explanation:

The computation of the amount affect the operating income is shown below

But before that first we need to find the new operating income

Total operating income for Cat Food  $280,000

Less: Fixed costs for Dog Food           ($52000)

Add: rented per year                             $26000

New net operating income                  $254000

Now decrease in net operating income is

= operating income - new operating income

= $273,000 - $254,000

= $19,000

Answer: $640,000

Explanation:

The total Stockholders Equity for a company is calculated by;

= Common Stock + Paid-in-capital in excess of Par + Retained Earnings - Treasury Stock

Treasury Stock reduces stockholder equity as the company bought the shares back from the stockholders.

= 375,000 + 90,000 + 190,000 - 15,000

= $640,000

Answer: can protect United States jobs in the protected industry but will also lead to reductions in U.S. output and income

Explanation:

Imports are the goods that are purchased and brought from another country into one's home country. Restricting imports is a way by which the government helps to protect the industries at home.

It should also be noted that restricting imports will lead to reductions in the United States output and income as other people in other countries might stop purchasing ones products as well and this will affect the income of the United States.

Answer:

C.  can protect United States jobs in the protected industry but will also lead to reductions in U.S. output and income.

Explanation:

Import restriction is a measure taken by some countries that want trade protectionism. They do this to limit importation of goods and services from foreign countries. To achieve this they may impose tariffs, quotas, develop policies, or give subsidies to the local producers, all in a bid to limit importation. In the United States, while restricting imports can protect jobs in the protected industries, it would also result to trade wars with other nations.

This is a situation where other countries reciprocate the import restriction. This would eventually result in a reduced Gross domestic product for the country and limited choices for the consumers who will want to settle with cheaper goods. A case is the situation between Japan and the United States

Answer:

a. 110,000 units

b. 128,500 units

Explanation:

a. Compute the anticipated break even sales in unit

Break even point in unit = Total fixed cost / Contribution margin

Total fixed cost = $14,300,000

Contribution margin per unit = Unit selling price - Unit variable cost

= $380 - $250

= $130

Break even point in units = $14,300,000 / $130

= 110,000 units

b. Compute sales (units) required to realize income from operations of $2,405,000

Break even point + expected profits = (total fixed costs + expected profits) / Contribution margin

° total fixed cost + expected profits

= $14,300,000 + $2,405,000

= $16,705,000

°contribution margin per unit

= $380 - $250

= $130

Break even point + expected profits in unit

= $16,705,000 / $130

= 128,500 units

Answer: A. a downward-sloping labor demand curve.

Explanation:

If the marginal product of labor is diminishing then that means that for every extra worker hired, less products are made than the last worker. As a result of this, companies will not want to pay high wages to workers because they would be bringing in less revenue when hired.

This will cause a downward-sloping labor demand curve that shows that as more workers are hired, the company would like to pay less wages because each new worker is only producing less than the last worker.

Answer:

TRUE

Explanation:

Current Access Control rosters should be authenticated, authorized and accounted for by the manager or their designated representative.

Bio-metrics, Electronic locks, and Smart cards are sensitive data-derivation technologies and since they are applied in a number of sectors - e.g. Telecommunications, Retail, Defense, Healthcare, Hospitality, and Information Technology - current access to devices and software applications should be authenticated by the manager or a designated representative of the manager.