Shoe Barn Inc. is a privately owned firm with few investors. Investors forecast their earnings per share (EPS) to reach $2 this coming year. The average price-to-earnings (P/E) ratio for similar companies in the S&P 500 is 12. What will the estimated intrinsic value of the Shoe Barn Inc.'s stock?

Answers

Answer 1

Answer:

$24

Explanation:

Calculation to determine What will the estimated intrinsic value of the Shoe Barn Inc.'s stock

Using this formula

Estimated intrinsic value = Earnings * P/E Ratio for the industry

Where,

EPS = $2

Industry P/E = 12

Let plug in the formula

Estimated intrinsic value= $2 * 12

Estimated intrinsic value= $24

Therefore the estimated intrinsic value of the Shoe Barn Inc.'s stock is $24


Related Questions

Ramanond Technologies is an independent business that facilitates foreign exchange trades. In the context of institutions that make foreign exchange happen, Ramanond Technologies is categorized under:

Answers

Answer:

Fiscal investors.

Explanation:

Trade can be defined as a process which typically involves the buying and selling of goods and services between a producer and the customers (consumers) at a specific period of time.

Basically, trade can be categorized into two (2) main groups and these are;

I. Import: this involves bringing in goods from a foreign country to sell in a different (domestic) country.

II. Export: it involves the sales of goods produced in a domestic country to a foreign country.

Globalization can be defined as the strategic process which involves the integration of various markets across the world to form a large global marketplace. Basically, globalization makes it possible for various organizations to produce goods and services that is used by consumers across the world.

Under globalization, a fiscal investor refers to an independent business that facilitates or enhances foreign exchange trades between two or more countries.

This ultimately implies that, fiscal investors are institutions or business firms that make it possible for foreign exchange to take place with respect to the buying and selling of goods and services between countries.

The common stock of Alpha Manufacturers has a beta of 1.14 and an actual expected return of 15.26 percent. The risk-free rate of return is 4.3 percent and the market rate of return is 12.01 percent. Which one of the following statements is true given this information? To be correctly priced according to CAPM, the stock should have an expected return of 21.95 percent.
a. The actual expected return will graph below the Security Market Line.
b. The stock has less systematic risk than the overall market.
c. The stock is overpriced.
d. The actual expected stock return indicates the stock is currently underpriced.

Answers

Answer: d. The actual expected stock return indicates the stock is currently underpriced.

Explanation:

According to CAPM, the expected return is:

= Risk free rate + beta * (market return - risk free rate)

= 4.3% + 1.14 * (12.01% - 4.3%)

= 13.09%

The actual expected return is greater than the CAPM expected return.

This stock is underpriced because it is bringing in a higher return than CAPM predicted based on the market.

Which of the following statements about inflation is​ true? A. Inflation is not a problem because it is just another way for the government to collect revenuelong dash an alternative to the income tax or the sales tax. B. Inflation is a tax on spending money. C. Inflation is a tax on holding money. D. Inflation occurs when real GDP grows more rapidly than the quantity of money.

Answers

Answer:

C

Explanation:

Inflation is a persistent rise in the general price levels

Inflation occurs when quantity of money grows faster than real GDP

Types of inflation

1. demand pull inflation – this occurs when demand exceeds supply. When demand exceeds supply, prices rise

2. cost push inflation – this occurs when the cost of production increases. This leads to a reduction in supply. Higher prices are the resultant effect  

Shoe leather cost is when people try to spend money immediately so they would not be holding money for a long time. This is because money loses its value in an inflation.

Because inflation causes money to lose its value, it can be viewed as a form of tax on holding money This is because, tax reduces the amount of money a person has. Also, does inflation reduce the value of money a person has

the common sources of secondary data in tourism research are

Answers

Explanation:

Secondary data sources, such as industry statistics, surveys/censuses, and big data indicators, cover a wide array of topics that can be leveraged in tourism research..

pls Mark brainliest if it was helpfull

Cost accumulation is the determination of the dollar amounts of direct materials, direct labor and overhead costs, and cost measurement is the recognition and recording of costs. True False

Answers

Answer:

true......................

You purchased two WXO 30 call option contracts at a quoted price of $.35. What is your net gain or loss on this investment if the price of WXO is $33.70 on the option expiration date

Answers

Answer: $670

Explanation:

Since the quoted price of $.35, the cost to purchase two WXO 30 call option will be: = $0.35 × 2 = $0.70

Then, the price of RADM 30 call option contract will be calculated as;

= $33.7 - $30

= $3.70

The net gain on one RADM 30 call option will then be:

= $3.70 - $0.35

= $3.35.

Therefore, the net gain on 2 RADM30 call options will be:

= $3.35 × 2

= $6.70

Since there are 100 shares in a option contract, the gain will be:

= $6.70 × 100

= $670

Explain how each of these terms is reflected in some way during the period of the American Revolution.

Answers

Answer:

The American Revolution was a revolution in the second half of the 18th century, during which the 13 original colonies that today form an area along the American east coast seceded from Britain and established the United States of America as a federal republic.

The American Revolution brought about a number of major intellectual and social changes in young American society, particularly the interest in a Republican government. The American patriots were strongly influenced by the ideas of the Enlightenment; they were against autocracy and did not see the French form of government as a viable solution. In some colonies there were heated debates over the role of democracy in the organization of the state. The change of public opinion towards a republican government and a gradually expanding democracy brought about great changes in the structure of society and laid the foundation for the central ideas by which the United States is still governed.

Carstow uses the periodic inventory method. (In the periodic method it is assumed that all sales occur the last day of the accounting period - or after all purchases during the period.) Carstow had the following inventory transactions in May, of the current year. On May 1, Carstow had 250 units in inventory that cost $8 each. On May 14, Carstow purchased 800 units at $10 each. On May 20, Carstow purchased 60 units at $13 each. On May 24, Carstow purchased 110 units at $14 each. Carstow sold 840 units on May 28th for $28 each. Do a computation for items 1-6 in the left column. Then, match the computations to the description. There may be extra choices in the right column that will not be used. Round the weighted average cost per unit to the nearest penny for those computations. (Final answer should be rounded to the nearest dollar.)
1. Sales revenue
2. Total cost of goods available for sale during the period
3. Cost of goods sold under FIFO
4. Cost of goods sold under LIFO
5. Cost of ending inventory under LIFO
6. Cost of goods sold under weighted average
A. $3,300
B. $3,838
C. $4,420
D. $7,900
E. $8,484
F. $9,020
G. $12,320
H. $23,520

Answers

Answer:

Carstow Inc.

1. Sales revenue  = H. $23,520

2. Total cost of goods available for sale during the period = G. $12,320

3. Cost of goods sold under FIFO = D. $7,900

4. Cost of goods sold under LIFO = F. $9,020

5. Cost of ending inventory under LIFO = A. $3,300

6. Cost of goods sold under weighted average = E. $8,484

Explanation:

a) Data and Calculations:

Date     Description               Units   Unit Cost    Total

May 1    Beginning inventory  250      $8             $2,000

May 14  Purchase                    800    $10                8,000

May 20 Purchase                      60    $13                   780

May 24 Purchase                      110   $14                 1,540

May 28 Total units/costs      1,220                     $12,320

May 28 Sales                           840            $28

May 28 Ending inventory       380

Sales revenue = $23,520 (840 * $28)

FIFO:

Cost of goods sold = $7,900 (250 * $8 + 590 * $10)

Ending inventory = $4,420 ($12,320 - $7,900)

LIFO:

Ending inventory = $3,300 ($250 * $8 + 130 * $10)

Cost of goods sold = $9,020 (12,320 - $3,300)

Weighted average costs:

Cost of goods available for sale = $12,320

Total units available for sale = 1,220

Unit cost of goods = $10.10 ($12,320/1,220)

Cost of goods sold = $8,484 (840 * $10.10)

Activity A B C D E F G H Time 5 3 7 6 7 3 10 8 a. Identify the critical path. b. How much time will be needed to complete this project

Answers

Answer:

Critical path = A-D-F-H

Duration = 22

Explanation:

Given:

Activity A B C D E F G H

Time 5 3 7 6 7 3 10 8

The objective is to identify the critical path and to find the time needed to complete this project

Solution:

The possible paths are as follows,

A-C-H = 5+7+8 =20

A-D-F-H = 5+6+3+8 =22

A-D-G = 5+6+10 = 21

B-E-G = 3+7+10 = 20

B-E-F-H = 3+7+3+8 = 21

a)

Critical is the path with the longest duration

Critical path =A-D-F-H

The duration is 22

b)

The duration to complete the project is as follows,

Duration = Length of critical path = 22

The concept of market efficiency underpins almost all financial theory and decision models. When financial markets are efficient, the price of a security—such as a share of a particular corporation’s common stock—should be____the present value estimate of the firm’s expected cash flows discounted by its appropriate rate of return (also called the intrinsic value of the stock).
Almost all financial theory and decision models assume that the financial markets are efficient. The informational efficiency of financial markets determines the ability of investors to "beat" the market and earn excess (or abnormal) becomes available. Financial theorists have identified three levels of informational efficiency that reflect what information is incorporated in stock prices.
Consider the following statement, and identify the form of capital market efficiency under the efficient market hypothesis based on this statement.
Current market prices reflect all relevant publicly available information.
This statement is consistent with:_____.
A. Strong-form efficiency.
B. Weak-form efficiency.
C. Semistrong form efficiency.
Consider that there is a semistrong-form of efficiency in the markets.
A pharmaceutical company announces that it has received Federal Drug Administration approval for a new allergy drug that completely prevents hay fever The consensus analyst forecast for the company's earnings per share (EPS) is $4.50, but insiders know that, with this new drug, earnings will increase and drive the EPS to $5.00. What will happen when the company releases its next earnings report?
A. There will be some volatility in the stock price when the earnings report is released: it is difficult to determine the impact on the stock price.
B. The stock price will not change, because the market already incorporated that information in the stock price when the announcement was made.
C. The stock price will increase and settle at a new equilibrium level.

Answers

Answer:

sry I don't know the answer

sry

Compute a three-period moving average forecast given demand for shopping carts for the last five periods. (Round all your answers to two decimal points.) Period Demand 1 58 2 54 3 60 4 53 5 63

Answers

Answer:

Computation of a Three-Period Moving Average Forecast

Period  Demand   3-period moving average

1                58

2               54

3               60          57.33

4               53          55.67

5              63           58.67

Explanation:

a) Data and Calculations:

Period  Demand   3-period moving average

1                58

2               54

3               60          57.33 (58 + 54 + 60)/3

4               53          55.67 (54 + 60 + 53)/3

5              63           58.67 (60 + 53 + 63)/3

b) The three-period moving average is computed by summing the demand for periods 1, 2, and 3 and dividing it by 3.  The result becomes the moving average for period 3.  This process is repeated by eliminating the first one and adding the next number until the end.

Development cost $ 1,250,000 Estimated development time 9 months Pilot testing $ 200,000 Ramp-up cost $ 400,000 Marketing and support cost $ 150,000 per year Sales and production volume 60,000 per year Unit production cost $ 100 Unit price $ 205 Interest rate 8% Tuff Wheels also has provided the project plan shown below. As can be seen in the project plan, the company thinks that the product life will be three years until a new product must be created.

Required:
What is the net present value (discounted at 8%) of this project?

Answers

Answer:

Tuff Wheels

The net present value of the project is:

= $13,617,154

Explanation:

a) Data and Calculations:

Development cost $ 1,250,000

Estimated development time 9 months

Pilot testing $ 200,000

Ramp-up cost $ 400,000

Total Project cost in Year 0 = $1,850,000 ($ 1,250,000 + $200,000 + $400,000)

Marketing and support cost $ 150,000 per year

Sales and production volume 60,000 per year

Unit production cost $ 100

Unit price $ 205

Contribution per unit = $105 ($205 - $100)

Total contribution margin = $6,300,000 ($105 * 60,000)

Marketing and support cost  $ 150,000

Interest rate 8%                         148,000

Net income (cash flow)      $6,002,000

Discount rate = 8%

Annual net cash inflow = $6,002,000

Annuity factor = 2.577

Total cash inflow = $15,467,154 ($6,002,000 * 2.577)

Total project cost      1,850,000

Net present value  $13,617,154

If ABC’s sales are $1,000,000, while accounts receivable is $100,000, inventory is $45,000, and fixed assets are $132,000, what is ABC’s fixed asset turnover?

Answers

Answer:

Fixed asset turnover= 7.58

Explanation:

Giving the following information:

Sales revenue= $1,000,000

Fixed assets= $132,000

To calculate the fixed asset turnover, we need to use the following formula:

Fixed asset turnover= sales revenue / fixed assests

Fixed asset turnover= 1,000,000 / 132,000

Fixed asset turnover= 7.58

Jack and Jill both love hot coffee. Jack likes to keep his coffee hot during the day while Jill doesn't mind drinking room temperature coffee. Jack is willing to spend more money on a thermos than Jill is willing to spend. This example illustrates the following major limitation of employing the Economic Value Creation framework because:________

a. accounting data focus mainly on tangible assets, which are no longer the most important.
b. accounting data are historical and thus backward-looking.
c. determining the value of a good service through the perspective of a consumers is not a simple task because consumers have different spending habits
d. overall macroeconomic factors such as the unemployment rate, and interest and exchange rates all have a direct bearing on stock prices

Answers

Answer:

C

Explanation:

LUVFINANCE, Inc. is estimating its WACC. The firm could sell, at par, $100 preferred stock that pays a 10 percent annual dividend and incurs 4.72% flotation costs. What is the cost of new preferred stock financing?

Answers

Answer:

The answer is "10.49%".

Explanation:

Preference inventory values are incurred as described below:

Using formula:

[tex]= \frac{Annual \ \ dividend}{ Price \times (1 - flotation\ cost) ]}[/tex]

[tex]= \frac{\$ 10}{[ \$ 100 \times (1 - 0.0472) ]}\\\\= \frac{\$ 10}{ \$ 100 \times (0.9528) }\\\\= \frac{\$ 10}{ \$ 95.28}\\\\=0.10495\\\\=10.49\%[/tex]

Evaluating your data involves examining it in terms of reliability, relevance, expertise, adaptability, and biases.

a. True
b. False

Answers

Answer:

a. True

Explanation:

In the case when the data is evaluated so it consist of detail examination with respect how much data is reliable that means how the data gives the actual results, how much it is relevant to the current decision, the data needs expertise in order to make some decisions, the data needs adaptability as per the changes done and the biases also

Therefore the given statement is true

Based on this model, households earn income when firms __________ purchase goods and services ___________in markets for factors of production. Suppose Caroline earns $625 per week working as jewelry appraiser for Classy's Jewelry Store. She uses $10 to get her car washed at Spotless Car Wash. Spotless Car Wash pays Antonio $275 per week to wash cars. Antonio uses $150 to purchase a necklace from Classy's Jewelry Store.
Identify whether each of the following events in this scenario occurs in the market for factors of production or the market for goods and services.
Event Market for Factors of Production Market for Goods and Services
Caroline spends $10 to get her car washed.
Antonio spends $150 to purchase a necklace from Classy's Jewelry Store.
Antonio earns $275 per week working for Spotless Car Wash.
Which of the elements of this scenario represent a flow from a household to a firm? This could be a flow of dollars, inputs, or outputs.
i. The car wash Caroline receives
ii. The $275 per week
iii. Antonio earns working for Spotless Car wash
The $150 Antonio spends to purchase a necklace from Classy's Jewelry Store
The actual economy is more complicated than the one illustrated in the previous circular-flow diagram of a simple economy
True / False

Answers

Answer and Explanation:

Market for Factors of Production:

Antonio earns $275 per week working for Spotless Car Wash.

Market for Goods and Services:

Caroline spends $10 to get her car washed.

Antonio spends $150 to purchase a necklace from Classy's Jewelry Store.

Which of the elements of this scenario represent a flow from a household to a firm?

The $150 Antonio spends to purchase a necklace from Classy's Jewelry Store

The actual economy is more complicated than the one illustrated in the previous circular-flow diagram of a simple economy - false

The circular flow of income represents the flow of economic exchanges between economic agents in the economy. If a household provides the labor factor of production, it is paid and uses the same money to purchase from the same firms that produce goods and services. This is a cycle and actually doesn't get more complex than this in real life, only involves alot more firms or economic agents.

Jansen Company reports the following for its ski department for the year 2019. All of its costs are direct, except as noted. Sales $ 605,000 Cost of goods sold 425,000 Salaries 115,000 ($25,200 is indirect) Utilities 14,500 ($5,800 is indirect) Depreciation 48,600 ($17,500 is indirect) Office expenses 28,200 (all indirect) 1. Prepare a departmental income statement for 2019. 2.

Answers

Answer:

Please find the attached file for the complete solution:

Explanation:

what is another name for advertising?

Answers

Answer:

commercial,  message,  pitch

Explanation:

yes

When Get the Glare Out needed some information about the potential market for its product, the marketing team looked to the Internet to find industry trends and at the market for eyewear products, which uses the same technology that is used in its self-darkening windshield. The type of information the marketing team was using is referred to as Multiple Choice surveys. focus groups. primary data. secondary data.

Answers

Answer:

secondary data.

Explanation:

Market research can be defined as a strategic technique which typically involves the process of identifying, acquiring and analyzing informations about a business. It involves the use of product test, surveys, questionnaire, focus groups, interviews, etc.

Secondary market research can be defined as a method designed to determine the demographics of a particular target market.

A secondary data can be defined as any form of data that has been obtained or collected earlier by someone else through primary sources for their own purpose and made readily available for other researchers to use. Thus, a secondary data is a type of data that has been previously obtained or collected.

In this scenario, the type of information the marketing team was using is referred to as secondary data because it looked to the Internet to find industry trends and at the market for eyewear products, which uses the same technology that is used in manufacturing its self-darkening windshield.

In conclusion, a secondary data is typically reliant or based on the primary source of information and as such it isn't a first hand experience.

A company just starting business made the following four inventory purchases in June:
June 1 150 units $ 390
June 10 200 units 585
June 15 200 units 630
June 28 150 units 510 $
2,115
A physical count of merchandise inventory on June 30 reveals that there are 250 units on hand. Using the FIFO inventory method, the amount allocated to cost of goods sold for June is:________
a. $683.
b. $825.
c. $1,290.
d. $1,432.

Answers

Answer:

c. $1,290

Explanation:

FIFO assumes that the units to arrive first are the first to be sold. This means that the cost of sales is based earlier prices.

Step 1 : Units Sold

Units Sold =Units available for sale - Units in Inventory

                 = 700 - 250

                 = 450

Step 2 : Cost of Sales

Cost of Sales = $390 + $585 + 100/200 x $630

                      = $390 + $585 + $315

                      = $1,290

Using the FIFO inventory method, the amount allocated to cost of goods sold for June is $1,290

Falcon Co. produces a single product. Its normal selling price is $30 per unit. The variable costs are $16 per unit. Fixed costs are $22,700 for a normal production run of 5,000 units per month. Falcon received a request for a special order that would not interfere with normal sales. The order was for 1,440 units with a special price of $19 per unit. Falcon has the capacity to handle the special order, and for this order, a variable selling cost of $2 per unit would be eliminated. If the order is accepted, what would be the impact on net income?
a. increase of $5,360.
b. decrease of $3,216.
c. increase of $4,288.
d. increase of $6,968.

Answers

Answer:

See below

Explanation:

Since we were given that the variable costs are $16 and for special order, $2 per unit will be eliminated.

Revised variable cost = $16 - $2 = $14 per unit

Normal selling price = $30 per unit

We can then calculate the profit per unit by considering the special price per unit and revised variable cost per unit

Profit per unit = Special price per unit - revised variable cost per unit

= $19 - $14

= $5 per unit

Also for 1,440 units, the special order is placed, hence would increase the net income by:

= Special order units × Profits

= 1,440 × $5

= $7,200

If the order is accepted, the net income is increased by $7,200

Ahngram Corp. has 1,000 defective units of a product that cost $3.70 per unit in direct costs and $7.20 per unit in indirect cost when produced last year. The units can be sold as scrap for $4.70 per unit or reworked at an additional cost of $3.30 and sold at full price of $14.10. The incremental net income (loss) from the choice of reworking the units would be:

Answers

Answer:

Reowrk:

Effect on income= $10,800 increase

Explanation:

Giving the following information:

Number of units= 1,000

Sell as-is:

Selling price= $4.7

Rework:

Incremental cost= $3.3

Selling price= $14.1

We need to calculate the effect on the income of both options:

Sell as-is:

Effect on income= 4.7*1,000= $47,000 increase

Rework:

Effect on income= 1,000*(14.1 - 3.3)

Effect on income= $10,800 increase

An analysis of the income statement revealed that interest expense was $100000. Waterway Company's times interest earned was

Answers

Answer: 8.3

Explanation:

The times interest earned is used to estimate the ability of a company to pay its debt payments using income from operations.

It is calculated by the formula:

= Earnings before interest and tax / Interest expense

Earnings before interest and tax:

= Earnings before tax + Interest expense

= 730,000 + 100,000

= $830,000

Times interest earned:

= 830,000 / 100,000

= 8.3

1. A time study analyst timed an assembly operation for 30 cycles, and then computed the average time per cycle, which was 18.75 minutes. The analyst assigned a performance rating of .96, and decided that an appropriate allowance was 15%. Assume the allowance factor is based on the workday. Determine the following: observed time (OT), the normal time (NT), and the standard time (ST)

Answers

Answer:

1. observed time = 18.75 minutes.

2. Normal time = 18 minutes

3. Standard time = 21.17 minutes

Explanation:

1. The observed time will be equal to the average time per cycle, which was given in the question as 18.75 min. Therefore, observed time = 18.75 minutes.

2. The normal time will be:

= Average Time x Performance Rating

= 18.75 x 0.96

= 18 minutes

3. The standard time will be:

= Normal time × 1/(1 - 15%)

= Normal time × 1/(1 - 0.15)

= 18 × 1/0.85

= 18 × 1.176

= 21.17 minutes

Swifty Corporation purchased a truck at the beginning of 2020 for $109600. The truck is estimated to have a salvage value of $4100 and a useful life of 123000 miles. It was driven 18000 miles in 2020 and 26000 miles in 2021. What is the depreciation expense for 2020?
a. $37752
b. $22308
c. $16639
d. $15444

Answers

Answer:

Annual depreciation= $15,444

Explanation:

Giving the following information:

Purchase price= $109,600

Salvage value= $4,100

Useful life= 123,000

Miles driven 2020= 18,000

To calculate the depreciation expense, we will use the units-of-production method:

Annual depreciation= [(original cost - salvage value)/useful life of production in miles]*miles drive

Annual depreciation= [(109,600 - 4,100)/123,000]*18,000

Annual depreciation= 0.858*18,000

Annual depreciation= $15,444

Eric receives a portion of his income from his holdings of interest-bearing U.S. government bonds. The bonds offer a real interest rate of 4.5% per year. The nominal interest rate on the bonds adjusts automatically to account for the inflation rate. The government taxes nominal interest income at a rate of 10%. The following table shows two scenarios: A low-inflation scenario and a high- inflation scenario. Given the real interest rate of 4.5% per year, find the nominal interest rate on Eric's bonds, the after-tax nominal interest rate, and the after-tax real interest rate under each inflation scenario. Inflation Rate Real Interest Nominal Interest After-Tax After-Tax (Percent) Rate Rate Nominal Interest Rate Real Interest (Percent) (Percent) (Percent) (Percent)2.0 4.5 7.0 4.5Compared with higher inflation rates, a lower inflation rate will_________ nominal interest income. This tends to_________ the after-tax real interest rate when the government taxes saving, thereby________ the quantity of investment in the economy and________ the economy's long-run growth rate.

Answers

Solution :

Given :

The bonds offer a [tex]\text{real interest rate}[/tex] of 4.5% per year

Tax rate = 10% = 0.10

Inflation rate = 2

[tex]\text{Nominal interest rate}[/tex] = [tex]\text{real interest rate}[/tex] + [tex]\text{inflation rate}[/tex]

[tex]\text{Nominal interest rate}[/tex] = 2 + 4.5

                                   = 6.5

[tex]\text{After tax nominal rate}[/tex] = [tex]\text{Nominal interest rate}[/tex] [tex]$\times (1-\text{tax rate})$[/tex]

[tex]\text{After tax nominal interest rate}[/tex] = [tex]$6.5 \times (1-0.10)$[/tex]

                                                  [tex]$=6.5 \times 0.90$[/tex]

                                                 = 5.85

After tax real interest rate = [tex]\text{after tax nominal rate}[/tex] - [tex]\text{inflation rate}[/tex]

                                           = 5.85 - 2.0

                                            = 3.85

[tex]\text{Inflation rate}[/tex] = 7.0

[tex]\text{Real interest rate = 4.5}[/tex]

[tex]\text{Nominal interest rate}[/tex] = [tex]\text{real interest rate}[/tex] + [tex]\text{inflation rate}[/tex]

                                   = 7 + 4.5

                                  = 11.5

[tex]\text{After tax nominal interest rate}[/tex] = [tex]\text{Nominal interest rate}[/tex] [tex]$\times (1-\text{tax rate })$[/tex]

                                                  [tex]$=11.5 \times (1 - 0.10)$[/tex]

                                                  [tex]$=11.5 \times 0.90$[/tex]

                                                = 10.35

[tex]\text{After tax nominal interest rate}[/tex] = 11.5 x (1 - 0.10)

                                          = 11.5 x 0.90

                                         = 10.35

[tex]\text{After tax nominal interest rate}[/tex] = [tex]\text{after tax nominal rate}[/tex] - [tex]\text{inflation rate}[/tex]

                                           = 10.35 - 7.0

                                          = 3.35

Putting all the value in table :

[tex]\text{Inflation rate}[/tex]    Real interest  Nominal interest  After tax nominal  After tax  

                                  rate                rate               interest rate       interest rate

2.0                             4.5                  6.5                        5.85                   3.85

7.0                              4.5                11.5                         10.35                3.35

Comparing with the [tex]\text{higher inflation rate}[/tex], a [tex]\text{lower inflation rate}[/tex] will increase the after after tax real interest rate when the government taxes nominal interest income. This tends to encourage saving, thereby increase the quantity of investment in the economy and the increase the economy's long-run growth rate.

A firm's year-end price on its common stock is $55. The firm has a profit margin of 6 percent, total assets of $75 million, a total asset turnover ratio of 0.9, no preferred stock, and 2.5 million shares of common stock outstanding. Calculate the PE ratio for the firm.

Answers

Answer:

34

Explanation:

Price/Earning ratio (PE) = Price per Share ÷ Earnings per share

where,

Earnings per share = Net Income ÷ Number of Common Stock Outstanding

                                = (0.9 x $75 million x 0.06) ÷ 2.5 million shares

                                = 1.62

therefore,

Price/Earning ratio (PE) =  $55 ÷ $1.62 = 33.95 or 34

Annenbaum Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 2,200 units. The costs and percentage completion of these units in beginning inventory were: Cost Percent Complete Materials costs $ 7,500 65% Conversion costs $ 8,600 45% A total of 10,100 units were started and 7,700 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: Cost Materials costs $ 127,300 Conversion costs $ 208,800 The ending inventory was 50% complete with respect to materials and 35% complete with respect to conversion costs. What are the equivalent units for conversion costs for the month in the first processing department

Answers

Answer:

$23.35

Explanation:

Units completed and transferred out = 7,700

WIP, Ending = 2,200 + 10,100 - 7,700 = 4,600. Conversion = 4,600*35% = 1,610

Equivalent unit of production = Units completed and transferred out + Conversion

Equivalent unit of production = 7,700 + 1,610

Equivalent unit of production = 9,310

Cost per equivalent unit = $8,600 + $208,800 / 9,310 units

Cost per equivalent unit = $217,400 / 9,310 units

Cost per equivalent unit = $23.351235231

Cost per equivalent unit = $23.35

The cost components of a heater include $38 for the compressor, $14 for the sheet molded compound frame, and $70 per unit for assembly. The factory machines and tools cost is $53,000. The company expects to produce 1,400 heaters in the coming year. What cost function best represents these costs

Answers

Answer: y = 122x + 53,000

Explanation:

The cost function takes the form, y = mx + c

Y = total cost

m would be the variable cost because it is the increase in x

x = total number of units to be produced

c = fixed cost because this is the y intercept and represents an amount that will not change regardless of the change in x

Variable cost = compressor + compound frame + assembly

= 38 + 14 + 70

= $122

Fixed cost = $53,000

Cost function is:

y = 122x + 53,000

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