Answer:
10.88%
Explanation:
According to the given situation, the computation of the company's cost of equity is shown below:-
Stock price = (Current dividend × (1 + Growth rate)) ÷ (Cost of equity - Growth rate)
$54 = ($2.70 × (1 + 0.056)) ÷ (Cost of equity - 0.056)
Cost of equity = $2.8512 ÷ $54 + 0.056
= 10.88%
Therefore for computing the cost of equity we simply applied the above formula.
Assume you have a margin account with a 50% initial margin. You purchase 100 shares of stock at $80 per share. The price increases to $100 per share. What is the net value of your investment (margin) now
Answer:
Net value of the investment (margin) is $6,000
Explanation:
The initial margin = (100 shares * $80) * 50%
The initial margin = $4,000
Increase in the Margin value = 100 shares* ($100-$80)
Increase in the Margin value = 100 shares * $20
Increase in the Margin value =$2,000
Net value of the investment (margin) = $4,000 + $2,000
Net value of the investment (margin) = $6,000
Bonita Industries is planning to sell 1000 boxes of ceramic tile, with production estimated at 470 boxes during May. Each box of tile requires 44 pounds of clay mix and a 0.50 hour of direct labor. Clay mix costs $0.40 per pound and employees of the company are paid $11 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Bonita has 3900 pounds of clay mix in beginning inventory and wants to have 3700 pounds in ending inventory. What is the total amount to be budgeted for direct labor for the month
Answer: $2,585
Explanation:
Total budgeted amount for direct labor;
Production is estimated at 470 boxes.
Each box requires 0.5 hours of direct labor
Employees are paid $11 per hour.
= 470 * 0.5 * 11
= $2,585
Annual demand for a product is 13,000 units; weekly demand is 250 units with a standard deviation of 40 units. The cost of placing an order is $100, and the time from ordering to receipt is four weeks. The annual inventory carrying cost is $0.65 per unit.a. To provide a 98 percent service probability, what must the reorder point be?b. Suppose the production manager is told to reduce the safety stock of this item by 100 units. If this is done, what will the new service probability be?
Answer:
a. Reorder point is 1,164 units to provide a 98 percent service probability.
b. the new service probability will be 79% if production manager reduces the safety stock by 100 units.
Explanation:
a. To provide a 98 percent service probability, what must the reorder point be?
This can be calculated as follows:
Step 1: Calculation of optimal order quantity
The optimal order quantity also known as economic order quantity (EOQ) using the following formula:
[tex]EOQ = \sqrt{\frac{2 *D*O}{C} }[/tex] ........................................... (1)
Where,
EOQ = Optimal order quantity = ?
D = Annual demands = 13,000
O = Ordering cost = $100
C = Carrying cost of annual inventory = $0.65 per unit
Substituting the values into equation (1), we have:
[tex]EOQ = \sqrt{\frac{2*13,000*100}{0.65} }[/tex]
[tex]EOQ = \sqrt{\frac{2,600,000}{0.65} }[/tex]
[tex]EOQ = \sqrt{4,000,000}[/tex]
EOQ = 2,000 units
Step 2: Calculation of standard deviation during the lead time
This can be calculated using the following formula:
[tex]SL = \sqrt{L*(S)^{2} }[/tex] ................................................. (2)
Where;
SL = Standard deviation during the lead time = ?
L = Lead time = 4
S = Standard deviation = 40
Substituting the values into equation (2), we have:
[tex]SL = \sqrt{4 *(40)^{2} }[/tex]
[tex]SL = \sqrt{4*1,600}[/tex]
[tex]SL =\sqrt{6.400}[/tex]
SL = 80
Also, z = 2.05 from the standard normal distribution
Step 3: Calculation of reorder point
Total calculate reorder point, we use the following formula:
R = (d * L) + (z * SL) ............................................ (3)
Where;
R = Reorder point = ?
d = Weekly demand = 250
L = Lead time = 4
z = 2.05
SL = Standard deviation during the lead time = 80
Substituting the values into equation (3), we have:
R = (250 * 4) + (2.05 * 80)
R = 1,000 + 164
R = 1,164 units
Therefore, reorder point is 1,164 units to provide a 98 percent service probability.
b. Suppose the production manager is told to reduce the safety stock of this item by 100 units. If this is done, what will the new service probability be?
ISS = Initial safety stock = z * SL = 2.05 * 80 = 164
If the safety stock is reduced by 100 units, we have:
NSS = New safety stock = ISS - 100 = 164 - 100 = 64
The new z (nz) can be obtained as follows:
NSS = nz * SL ................................................. (4)
Where;
NSS = 64
nz = new z = ?
SL = Standard deviation during the lead time = 80
Substituting the values into equation (4) and solve for nz, we have:
64 = nz * 80
nz = 64 / 80
nz = 0.80
For the new z, nz = 0.80, from Standard Normal distribution, the new service probability is 79%.
Therefore, the new service probability will be 79% if production manager reduces the safety stock by 100 units.
Bon Nebo Co. sold 25,000 annual subscriptions of Bjorn 20XX for $85 during December 2014. These new subscribers will receive monthly issues, beginning in January 2015. In addition, the business had taxable income of $840,000 during the first calendar quarter of 2015. The federal tax rate is 40%. A quarterly tax payment will be made on April 12, 2015.
Prepare the Current Liabilities section of the balance sheet for Bon Nebo Co. on March 31, 2015.
Answer:
Current Liabilities
Federal Income Taxes Payable $336,000
Advances on Magazine Subscriptions $1,593,750
Total Current Liabilities $1,929,750
Explanation:
Federal Income Taxes Payable
This is a current Liability as it falls under a period of a year. As March ends the first quarter, the quarterly tax is;
= 840,000 x 40%
= $336,000
Advances on Magazine Subscriptions
They are to deliver monthly subscriptions for 12 months to the tune of 25,000 copies which they have already been paid for. Under the Accrual system they cannot recognize this as revenue until they have fulfilled their obligation to deliver the magazines and until then, they are current Liabilities. As of end of March, they have fulfilled their obligations for 3 months leaving 9 in the year.
= 25,000 x $85 x 9/12
=$1,593,750
What is another name for progress monitoring? a. Curriculum-based measurement c. Curriculum-based learning b. Assessment d. None of these
Answer:
Curriculum based measurement
Answer:
a. Curriculum-based measurement
It's correct
Required information [The following information applies to the questions displayed below.] Simon Company’s year-end balance sheets follow.
At December 31 2017 2016 2015
Assets Cash $ 31,800 $ 35,625 $ 37,800
Accounts receivable, net 89,500 62,500 50,200
Merchandise inventory 112,500 82,500 54,000
Prepaid expenses 10,700 9,375 5,000
Plant assets, net 278,500 255,000 230,500
Total assets $ 523,000 $ 445,000 $ 377,500
Liabilities and Equity
Accounts payable $ 129,900 $ 75,250 $ 51,250
Long-term notes payable secured by
mortgages on plant assets 98,500 101,500 83,500
Common stock, $10 par value 163,500 163,500 163,500
Retained earnings 131,100 104,750 79,250
Total liabilities and equity $ 523,000 $ 445,000 $ 377,500
The company’s income statements for the years ended December 31, 2017 and 2016, follow.
For Year Ended December 31 2017 2016
Sales $ 673,500 $ 532,000
Cost of goods sold $ 411,225 $ 345,500
Other operating expenses 209,550 134,980
Interest expense 12,100 13,300
Income taxes 9,525 8,845
Total costs and expenses 642,400 502,625
Net income $ 31,100 $ 29,375
Earnings per share $ 1.90 $ 1.80
Calculate the company’s long term risk and capital structure positions at the end of 2015 and 2014 by computing the following ratios.
(1) Debt and equity ratios.
(2) Debt to equity ratios.
Answer:
(1) Debt and equity ratios. (I guess the years should be 2017 and 2016)
debt ratio = liabilities / assets
equity ratio = stockholder's equity / assets
debt ratio 2016 = $155,750 / $411,250 = 37.87%
debt ratio 2017 = $202,575 / $484,000 = 41.85%
equity ratio 2016 = $255,500 / $411,250 = 62.13%
equity ratio 2017 = $281,425 / $484,000 = 58.15%
(2) Debt to equity ratios. (2017 and 2016)
debt to equity ratio = liabilities / stockholders' equity
debt to equity ratio 2016 = $155,750 / $255,500 = 60.96%
debt to equity ratio 2017 = $202,575 / $281,425 = 71.98%
Explanation:
average liabilities 2017 = ($129,900 + $75,250 + $98,500 + $101,500) / 2 = $202,575
average liabilities 2016 = ($75,250 + $51,250 + $101,500 + $83,500) / 2 = $155,750
average assets 2017 = ($523,000 + $445,000) / 2 = $484,000
average assets 2016 = ($445,000 + $377,500) / 2 = $411,250
average stockholders' equity 2017 = $484,000 - $202,575 = $281,425
average stockholders' equity 2016 = $411,250 - $155,750 = $255,500
NoGrowth Corporation currently pays a dividend of per quarter, and it will continue to pay this dividend forever. What is the price per share of NoGrowth stock if the firm's equity cost of capital is ?
Answer: $18.88
Explanation:
The dividends are being paid quaterly so in other to use those dividends, the cost of capital will have to be converted to a quaterly rate as well.
[tex]( 1 + r )^{4} = 1.124[/tex]
r = [tex]\sqrt[4]{1.124} - 1[/tex]
r = 2.966%
Using the Dividend discount model, the price per share is;
= Next Dividend / ( cost of capital - growth rate)
= 0.56 / 0.02966
= $18.88
Note; there is no growth rate as the company will pay that dividend forever.
If a firm's projects differ in risk, then one way of handling this problem is to evaluate each project with the appropriate risk-adjusted discount rate.
A. True
B. False
Answer:
True
Explanation:
the discount rate used for a project should reflect the risk of the project so as to make accurate predictions. if the discount rate used for a project is the same as that of the firm and the risks of the project differs, the predictions made with this project would be inaccurate. the risk adjusted discount rate has to be calculated.
Problem 9-18 Comprehensive Variance Analysis [LO9-4, LO9-5, LO9-6]
Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The plant has been experiencing problems as shown by its June contribution format income statement below:
Flexible Budget Actual
Sales (3,000 pools) $ 179,000 $ 179,000
Variable expenses:
Variable cost of goods sold* 33,390 44,540
Variable selling expenses
11,000
11,000
Total variable expenses
44,390
55,540
Contribution margin
134,610
123,460
Fixed expenses:
Manufacturing overhead 50,000 50,000
Selling and administrative 75,000 75,000
Total fixed expenses
125,000
125,000
Net operating income (loss) $ 9,610 $
(1,540
)
*Contains direct materials, direct labor, and variable manufacturing overhead.
Janet Dunn, who has just been appointed general manager of the Westwood Plant, has been given instructions to "get things under control." Upon reviewing the plant’s income statement, Ms. Dunn has concluded that the major problem lies in the variable cost of goods sold. She has been provided with the following standard cost per swimming pool:
Standard Quantity or Hours Standard Price
or Rate Standard Cost
Direct materials 3.6 pounds $
2.00
per pound $ 7.20
Direct labor 0.5 hours $
6.60
per hour 3.30
Variable manufacturing overhead 0.3 hours* $
2.10
per hour
0.63
Total standard cost per unit $ 11.13
*Based on machine-hours.
During June the plant produced 3,000 pools and incurred the following costs:
Purchased 15,800 pounds of materials at a cost of $2.45 per pound.
Used 10,600 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.)
Worked 2,100 direct labor-hours at a cost of $6.30 per hour.
Incurred variable manufacturing overhead cost totaling $3,000 for the month. A total of 1,200 machine-hours was recorded.
It is the company’s policy to close all variances to cost of goods sold on a monthly basis.
Required:
1. Compute the following variances for June:
a. Materials price and quantity variances.
b. Labor rate and efficiency variances.
c. Variable overhead rate and efficiency variances.
2. Summarize the variances that you computed in (1) above by showing the net overall favorable or unfavorable variance for the month.
Answer:
1 a. Materials price and quantity variances.
Material price variance = (Actual price - Standard price) * Actual Quantity purchased
= ($2.45 - $2) * 15,800
= $0.45 * 15,800
= $7110 (Unfavorable)
Materials Quantity variance = (Actual Quantity used - Standard Quantity allowed) * Standard price
(10600 - 3000 * 3.6) * $2
= (10,600 - 10,800) * $2
= 200 * $2
= 400 (Favorable)
b. Labor rate and efficiency variances.
Labor rate variance = (Actual rate - standard rate) * Actual hours
= (6.30 - 6.6) * 2,100
= 0.3 * 2,100
= 630 (Favorable)
Labor Efficiency variance = (Actual hours - standard hours allowed) * Standard rate
= (2100 - 3000 * 0.5) * 6.6
= (2,100 - 1,500) * 6.6
= 600 * 6.6
= 3960 (Unfavorable)
c. Variable overhead rate and efficiency variances
Variable overhead rate variance = (Actual rate - Standard rate * Actual machine hours)
= 3000 - (2.10 * 1200)
= 3,000 - 2,520
= 480 Unfavorable
Variable overhead Efficiency variance = (Actual hours - standard hours allowed)* Standard rate
= (1200 - 3000 * 0.3) * 2.10
= (1200 - 900) * 2.10
= 300 * 2.10
= 630 (Unfavorable)
2. Variances Amount
Material price variance 7,110 U
Material quantity variance 400 F
Labor rate variance 630 F
Labor efficiency variance 3,960 U
Variable overhead rate variance 480 U
Variable overhead efficiency variance 630 U
Net variance 11,150 U
The net variance of all the variance of the month is 11,150 (Unfavorable)
________ are a means for consumers to share text, images, audio and video information with each other and with companies, and vice versa. Group of answer choices Social media Microsites Interstitials Pay-per-click ads Mobile ads
Answer:
Social Media.
Explanation:
Social media are increasingly being used by people and companies around the world. Through it it is possible to share information, photos, videos, social interactions, etc.
For companies, these platforms are more than just an interaction tool, they can act as a marketing channel that will strengthen the relationship with the consumer, in addition to attracting new customers, strengthening the brand image, engaging consumers, creating shopping desires, providing data on consumer trends, etc.
Social Media are a means for consumers to share text, images, audio and video information with each other.
The following information should be considered:
Social media are increasingly being used by people and companies around the world. Through it is possible to share information, photos, videos, social interactions, etc.Learn more: brainly.com/question/17429689
Geese Company utilizes the LIFO retail inventory method. Its cost-to-retail percentage is 60% based on beginning inventory and 64% based on current-period purchases. The company determined that beginning inventory at retail was $200,000 and that during the current period a new layer was added with retail value of $50,000. The cost of ending inventory should be
Answer:
$152,000
Explanation:
Calculation for the cost of the ending inventory
First step is to calculate the cost-to-retail percentage of the beginning inventory amount
Using this formula
Beginning Inventory =Cost-to-retail percentage*Beginning inventory at retail
Let plug in the formula
Beginning Inventory =60%*$200,000
Beginning Inventory =$120,000
Second step is to calculate current-period purchases percentage of the new layer amount
Using this formula
Current period purchases= Purchases percentage* New layer
Let plug in the formula
Current period purchases=64%*50,000
Current period purchases=$32,000
The last step is to find the cost of the ending inventory using this formula
Ending inventory cost=Beginning Inventory+Current period purchases
Let plug in the formula
Ending inventory cost=$120,000+$32,000
Ending inventory cost=$152,000
Therefore the cost of the ending inventory will be $152,000
Finding operating and free cash flows Consider the following balance sheets and selected data from the income statement of Keith Corporation.
Keith Corporation Balance Sheets December 31
Assets 2015 2014
Cash $ 1,500 $ 1,000
Marketable securities 1,800 1,200
Accounts receivable 2,000 1,800
Inventories 2,900 2,800
Total current assets $ 8,200 $ 6,800
Gross fixed assets $ 29,500 $ 28,100
Less: Accumulated depreciation 14,700 13,100
Net fixed assets $ 14,800 $ 15,000
Total assets $ 23,000 $ 21,800
Liabilities and stockholders' equity
Accounts payable $ 1,600 $ 1,500
Notes payable 2,800 2,200
Accruals 200 300
Total current liabilities $ 4,600 $ 4,000
Long-term debt 5,000 5,000
Total liabilities $ 9,600 $ 9,000
Common stock $ 10,000 $ 10,000
Retained earnings 3,400 2,800
Total stockholders' equity $ 13,400 $ 12,800
Total liabilities and stockholders' equity $ 23,000 $ 21,800
Keith Corporation Income Statement Data (2015)
Depreciation expense $1,600
Earnings before interest and taxes (EBIT) 2,700
Interest expense 367
Net profits after taxes 1,400
Tax rate | 40%
Required
a. Calculate the firm's net operating profit after taxes (NOPAT) for the year ended December 31, 2015
b. Calculate the firm?s operating cash flow (OCF) for the year ended December 31, 2015
c. Calculate the firm?s free cash flow (FCF) for the year ended December 31, 2015
d. Interpret, compare, and contrast your cash flow estimates in parts b and c.
Answer:
a. NOPAT = EBIT * (1-t)
NOPAT = $2,700 * (1-0.40)
NOPAT = $1,620
b. OCF = NOPAT + Depreciation
OCF = $1,620 + $1,600
OCF = $3,220
c. FCF = Net fixed asset investment - Net current asset investment
FCF = $3,320 - $1,400 - $1,400
FCF = $420
Note:
Net fixed asset investment = Change in net fixed assets + depreciation
= ($14,800- $ 15,000) + $1,600
= $1,400
Net current asset investment = Change in current assets - Change in accounts payable and accurals
= ($8,200 - $6,800) - {($1,600 + $200) - ($1,500 - $300)}
= $1,400
d. FCF is meaningful as it shows that OCF is able to cover Operating expenses as well as Investment in Fixed and Current Assets
Which of the following is a difference between global consistency and local adaptation? a. Unlike global consistency, local adaptation simplifies decisions. b. Unlike global consistency, a company following a policy of local adaptation modifies its standard operating procedures to adapt to differences in foreign customers, governments, and regulatory agencies. c. Unlike global consistency, a company following a policy of local adaptation follows the same rules and regulations across all its offices in different countries. d. Unlike global consistency, local adaptation is typically preferred by overseas managers who are charged with making the local business successful in other countries.
Answer:
b. Unlike global consistency, a company following a policy of local adaptation modifies its standard operating procedures to adapt to differences in foreign customers, governments, and regulatory agencies.
Explanation:
When a company wants to operate in different locations globally they can adopt 2 methods of operation.
The global consistency approach aims to maintain a uniform operational procedure across all countries where a company does business.
Local adaptation is when the company modifies it's standard operating procedures to fit local preferences, government policy, regulations, and politics.
Local adaptation tends to be more complex be side each location has its way of operating so there is no uniformity across global locations.
Vaughn Manufacturing is constructing a building. Construction began in 2020 and the building was completed 12/31/20. Vaughn made payments to the construction company of $3114000 on 7/1, $6456000 on 9/1, and $5950000 on 12/31. Weighted-average accumulated expenditures were
Answer:
$3,709,000
Explanation:
7/1 Time weighted amount = $3,114,000 * 6/12 = $1,557,000
9/1 Time weighted amount = $6,456,000 * 4/12 = $2,152,000
12/31 Time weighted amount = $5,950,000 * 0/12 = $0
Weighted-average accumulated expenditures = 7/1 Time weighted amount + 9/1 Time weighted amount + 12/31 Time weighted amount
Weighted-average accumulated expenditures = $1,557,000 + $2,152,000 + 0
Weighted-average accumulated expenditures = $3,709,000
IP Company pays for purchases of materials in full in the month following the purchase. During the previous month, IP had purchases of $25,000. During the current month, IP had purchases of $30,000. The amount that I will pay during the current month for purchases is:________
Answer:
The correct answer is "$25,000".
Explanation:
The given values are:
IP purchase during the previous month
= $25,000
IP purchases during the current month
= $30,000
As the sum is charged in the corresponding sales month, IP must compensate for the transaction made mostly during the reporting period throughout the previous quarter.
Therefore the quantity IP will be paying for purchasing mostly during the reporting period seems to be $25,000.
Which of the following reasons would cause a company to reject an offer to accept business at a special price?
a. The additional sales will increase differential income.
b. The additional sales will not increase fixed expenses
c. The additional sales will increase fixed expenses
d. The additional sale will not conflict with regular sales.
Answer:
The additional sale will not conflict with regular sales.
Explanation:
Accept business at a special price if the additional sales conflict regular sales. That is, special price must maintain the status quo or improve it.
Duval inc budgets direct materials at $1/liter and requires 4 liters per unit of finished product. April’s activities show usage of 832 liters to complete 196 units at a cost of $798.72. Calculate the direct materials price and quantity variances and indicate favorable or unfavorable results.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Duval inc budgets direct materials at $1/liter and requires 4 liters per unit of the finished product.
April’s activities show usage of 832 liters to complete 196 units at a cost of $798.72.
To calculate the direct material price and quantity variance, we need to use the following formulas:
Direct material price variance= (standard price - actual price)*actual quantity
Actual price= 798.72/832= $0.96
Direct material price variance= (1 - 0.96)*832
Direct material price variance= $33.28 favorable
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Standard quantity= 4*196= 784
Direct material quantity variance= (784 - 832)*1
Direct material quantity variance= $48 unfavorable
. Define a primary and secondary market for securities and discuss how they differ. Discuss how the primary market is dependent on the secondary market. (
Explanation:
Primary market for securities is one that provides access to buy new new issues of stocks and bonds of a company. A good example of primary market is an Initial Public Offering (IPO), organized by a company that wants to sell it's shares for the first time to investors.
While Secondary market, are places to sell securities to a secondary (second) buyer from the current security owner who bought from the primary market.
The primary market is dependent on the secondary market since it is the demand from the secondary market that determines the asset valuation of the primary market.
An investor owns 5,000 shares, which is 1% of a corporation's outstanding stock before a stock repurchase. The investor did not sell any of his stock during the 25,000 share repurchase. Which one of the following statements is correct?
A. The investor still owns 1% of the corporation.
B. The stock's price is likely to drop by 5%.
C. The investor owns more than 1% of the corporation.
D. The investor now has 5,250 shares.
Answer:
C. The investor owns more than 1% of the corporation.
Explanation:
data provided in the question
Number of shares own = 5,000 shares
Outstanding stock percentage = 1%
Repurchased shares = 25,000
Based on the above information, the following statement is correct
i.e the investor owns more than 1% of the corporation as the A option, B and D options are incorrect and the option C is most appropriate option
24. Emotional labor is higher in jobs requiring: 1 point A. limited hours of routine work. B. working in irregular shifts. C. working in isolation. D. frequent interaction with clients. E. skilled knowledge such as accounting.
Answer:
The correct answer is:
frequent interaction with clients. (D.)
Explanation:
Emotional labour refers to the suppression or the management of one's emotions that are felt but not expressed while at a job. Essentially, emotional labour requires workers to:
Hide emotions they do feel
show emotions they do not feel
create an appropriate emotion for the situation.
These can be achieved through surface acting and deep acting.
Customer service and retail jobs require a lot of emotional labour. For instance, if the customer service agent is angry, it is not ethical in his/her job description to show such anger to the clients, hence he/she has to force a smile just to give a satisfactory service to the client. some determinants of emotional labour include:
1. societal, organizational or occupational norms
2. emotional expressiveness
3. supervisory regulation of display rules
Company FM2 must pay 100,000 in 4 years. In order to fully immunize from changes in interest rate, the company invests in a 3 year zero coupon bond that matures for 45,000 and a 5 year zero coupon bond that matures for X. The actuary for Company FM2 determined that their portfolio fully immunized their ability to meet their obligations at the current interest rate i. Calculate i.
Answer:
5. 11.1%
Explanation:
the options for this question are missing:
5%7.8%10%10.5%11.1%I prepared the following equation:
$100,000 = $45,000(1 + i)³ + x(1 + i)⁵
There is something that we must remember about zero coupon bonds, and that is that they are sold in thousands. This equation is complex, but there is an easier way to solve it. We can plug in the options to determine which % will result in a possible answer.
The answer is 11.1%, since the other options resulted in numbers which are not even close to a thousand.
$100,000 = $45,000(1.111)³ + x(1.111)⁵
$100,000 = $61,709.88 + 1.2763x
$38,290.12 = 1.2763x
x = $38,290.12 / 1.2763 = $30,000
Emira wants to buy a classic drawing from an art centre in Kuala Lumpur. She managed to secure a painting by a renowned Malaysian artist that costs her RM99,800. Currently, she only has RM12,650 in her savings account and she intends to use 70% of her saving to fund the purchase. If she borrows the remaining amount from Bank Atlantis that levies 4.77% of interest rates, determine the total interest payment that she will pay if the agreement takes 10 years of settlement.
Answer:
RM23,617.80
Explanation:
cost of the painting RM99,800
she has RM12,650 on her bank account and she will use 70% = RM8,855 as down payment. She will borrow the rest = RM99,800 - RM8,855 = RM90,945
interest charged on the loan 4.77% / 12 = 0.3975%
120 monthly periods (10 years)
using the present value formula to determine the monthly payment:
PV = monthly payment x annuity factor
monthly payment = PV / annuity factor
PV = 90,945
annuity factor (120 periods, 0.3975%) = 95.26168
monthly payment = 90,945 / 95.26168 = 954.69
total payments = 120 x 954.69 = RM114,562.80
interests paid = RM114,562.80 - RM90,945 = RM23,617.80
Southland Corporation has a present capital structure consisting of common stock (10 million shares) and debt ($150 million, 8% coupon rate). The company needs to raise $60 million and is undecided between two financing plans. Plan A: Equity financing. Under this plan, an additional common stock will be sold at $15 per share. Plan B: Debt financing. Under this plan, the firm will issue 10% coupon bonds. At what level of operating income (EBIT) will the firm be indifferent between the two plans? Assume a 40% marginal tax rate.
Answer:
The level of operating income (EBIT) where the firm will be indifferent between the two plans is $33 million.
Explanation:
Indifferent level of EBIT refers to the EBIT level where the he Earnings Per Share (EPS) two alternative financial plans are the same.
Indifferent level of EBIT can be calculated using the following formula:
[(EBIT - FB) * (1 - T)] / SA = [(EBIT - FB) * (1 - T)] / SB .................... (1)
Where:
EBIT = Indifference level of EBIT
FA = Fixed interest costs under plan B = Interest on existing debt = $150 * 8% = $12 million
FB = Fixed interest costs under plan A = Interest on existing debt + Interest on new debt = ($150 * 8%) + ($60 * 10%) = $18 million
T = Tax rate = 40%, or 0.40
SA = Number of equity shares outstanding under Plan B = Existing number of shares + New number of shares = 10 million + ($60 million / $15) = 10 million + 4 million = 14 million
SB = Number of equity shares outstanding under Plan A = Existing number of shares = 10 million
Substiuting the values into equation (1) and solve for EBIT, we have:
[(EBIT - 12) * (1 - 0.40)] / 14 = [(EBIT - 18) * (1 - 0.40)] / 10
[(EBIT - 12) * 0.60] / 14 = [(EBIT - 18) * 0.60] / 10
[EBIT0.60 - 7.20] / 14 = [(EBIT0.06 - 10.80] / 10
[EBIT0.60 - 7.20] * 10 = [(EBIT0.06 - 10.80] * 14
EBIT6 - 72 = EBIT8.40 - 151.20
-72 + 151.20 = EBIT8.40 - EBIT6
EBIT2.40 = 79.20
EBIT = 79.20 / 2.40
EBIT = $33 million
Therefore, the level of operating income (EBIT) where the firm will be indifferent between the two plans is $33 million.
Highly liquid assets: A. include all intangible assets. B. generally produce a high rate of return. C. increase the probability a firm will face financial distress. D. appear on the right side of a balance sheet. E. can be sold quickly at close to full value.
Answer:
E. can be sold quickly at close to full value.
Explanation:
Highly liquid assets are assets that can be sold quickly at close to full value. They are assets that can be easily converted to cash. Cash is the most liquid asset.
Aaron Corporation, which has only one product, has provided the following data concerning its most recent month of operations:
Selling price $90
Units in beginning inventory 0
Units produced 3,400
Units sold 3,000
Units in ending inventory 400
Variable costs per unit:
Direct materials $21
Direct labor $38
Variable manufacturing overhead $6
Variable selling and administrative expense $4
Fixed costs:
Fixed manufacturing overhead $54,400
Fixed selling and administrative expense $3,000
What is the unit product cost for the month under variable costing?
Answer:
$65 per unit
Explanation:
Calculation for the unit product cost for the month under variable costing for Aaron Corporation.
Variable costs per unit:
Direct materials $21
Direct labor $38
Variable manufacturing overhead $6
Variable costing unit product cost $ 65
Therefore the unit product cost for the month under variable costing will be $65 per unit.
Describe the main differences for revenue spending between ""for profit"" companies and ""not for profit"" companies. Describe how the main financial documents of Goodwill are similar to those companies that are ""for profit"". Describe how the main financial documents of Goodwill are difference to those companies that are ""for profit"".
Answer with Explanation:
Requirement 1:1. Profit Organization
The aim of profit organization is to maximize the wealth of shareholders by increasing its profits. The owners of the company get dividends and appreciation in the value as a return from the company.
2. Nonprofit Organization
The primary mission of Non-profit organization is to benefit the community by helping them and the earnings generation is not the primary goal of the company. ACCA is an entity that delivers quality education to its students and also earns profit on it but the profit margin kept is as low as possible to keep its operation running. Other examples are Rolex, NGO's, National Health Institutes, etc.
In other words, these institutes are for charitable purpose and their primary objective is not making profits.
Key Difference Between Profit Organization and Non-profit Organization
A profit organization's primary objective is to maximize profits whereas the Non profit organizations work for delivering services and products that helps in uplifting the society from their donations.A profit organization is registered as a sole proprietorship or partnership or a corporation. Whereas Non profit organization is registered as a charity club, association of person, trust, corporations, etc.Usually major source of income of Non profit organization comes from donations, government and corporation grants, subscriptions, etc. Whereas the major source of profit organization is income generated from the sale of goods and services. Non profit organization - the major incomes are donation, grant, legacies, subscription, etc.Requirement 2:
Profit making organization have to publish all financial statements which includes income statement, balance sheet, cash flow statement, statement of changes in equity, etc whereas the non profit organization only publishes balance sheet and cash flow statement. If the Non profit organization is involved in selling of products and services then the organization will also have to prepare income statement.
The non profit organization doesn't pays andy dividends as it is a charity firm and all it does is, it spends it money for the welfare of the community. Whereas the profit organization have to retain a share of earned profits and then distributes the remainder to shareholders.
The profit making organization publishes changes in equity statement whereas the charitable firm is not required to publish such things because its primary objective is to spend on the welfare of the community.
If the economy is normal, Charleston Freight stock is expected to return 16.5 percent. If the economy falls into a recession, the stock's return is projected at a negative 11.6 percent. The probability of a normal economy is 70 percent while the probability of a recession is 30 percent. What is the variance of the returns on this stock
Answer:
Variance of the returns of this stock is 0.01658177
Explanation:
Mean return = 0.7 * 16.5% + 0.3*-11.6%
Mean return = 0.1155 - 0.0348
Mean return = 0.0807
Mean return = 8.07%
Variance of the return = 0.7 * (16.5%-8.07%)^2 + 0.3 * (-11.6%-8.07%)^2
Variance of the return = 0.7 * (8.43%)^2 + 0.3 * (-19.67%)^2
Variance of the return = 0.7 * (0.0843)^2 + 0.3 * (-0.1967)^2
Variance of the return = 0.0049745 + 0.011607267
Variance of the return = 0.01658177
Jerry, a partner with 30 percent capital and profits interest, received his Schedule K-1 from Plush Pillows, LP. At the beginning of the year, Jerry's tax basis in his partnership interest was $44,000. His current-year Schedule K-1 reported an ordinary loss of $9,000, long-term capital gain of $4,600, qualified dividends of $3,600, $2,100 of non-deductible expenses, a $26,000 cash contribution, and a reduction of $5,600 in his share of partnership debt. What is Jerry's adjusted basis in his partnership interest (outside basis) at the end of the year
Answer: $61,500
Explanation:
Jerry's adjusted basis in his partnership interest at the end of the year is determined by adding his cash contributions, long-term capital gain, and qualified dividends to the original tax basis.
There will also be deductions of the non-deductible expenses, ordinary loss and his share of the reduction in partnership debt.
Jerry's adjusted basis at the end of the year = ( 44,000 + 26,000 + 3,600 4,600) - ( 2,100 + 9,000 + 5,600)
= 78,200 - 16,700
= $61,500
Identify whether the following paragraph uses a direct, indirect, or semi-indirect organizational pattern.
Due to budgetary restraints, departmental charge cards will no longer be valid for purchasing supplies. Departments will now order all supplies through central purchasing in Accounting. The new procedure for ordering supplies will be effective March 1. Improved company intranet functionality will make this process easy and effective. The electronic Supply Request Form can be found on the intranet in the "Orders" folder. Supply requests submitted via the intranet will be processed within 24 hours.
Put the sentences in order for a paragraph using an indirect organizational pattern.
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.
Due to projected second quarter revenue short falls, 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.
Due to projected second quarter revenue short falls, the CEO has decided to take precautionary measures to protect the long-term viability of the company.
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.
A mandatory staff furlough will be instituted July 1–6 of this year.
Due to projected second quarter revenue short falls, 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.
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.
_________ can give every business access to an agile workforce that is not only better suited to solving some of the problems that organizations struggle with today but in many cases will do it for free.
Complete Question:
_________ can give every business access to an agile workforce that is not only better suited to solving some of the problems that organizations struggle with today but in many cases will do it for free.
Group of answer choices
a. Crowdsourcing
b. LinkedIn
c. Social recruiting
d. Brainstorming
Answer:
a. Crowdsourcing.
Explanation:
Crowdsourcing can be defined as a process of gathering information, ideas, micro-tasks, goods and services, finances, and votes into a project or organizational task from a large group of fast growing participants, either paid or unpaid mostly through the internet. These group of participants are saddled with the responsibility of creating value by contributing significantly to an organization typically over the internet.
Crowdsourcing can give every business access to an agile workforce that is not only better suited to solving some of the problems that organizations struggle with today but in many cases will do it for free.
