Answer: 11.31%
Explanation:
From the question, we are informed that the price of a stock at the end of each of the past three years has been $14, $12, and $11 with $11 being the latest price and that the stock pays an annual dividend of $1 per share.
The average annual capital gain for the past two years will be:
= (-$2/$14) + ($-1/$12)/2
= 11.31%
Jason has a loan that requires a single payment of $6,000 at the end of 3 years. The loan's interest rate is 10%, compounded semiannually. How much did Jason borrow? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)
Answer:
Jason borrowed $4,4,77.29
Explanation:
In order to calculate this, let we will use the formula for the future value on an invested amount, semiannually, yielding interest at a certain interest rate. This is done as follows:
[tex]FV\ =\ PV(1+\frac{r}{n} )^{(n\times t)}[/tex]
where:
FV = future value = $6,000 (loan repayment)
PV = present value = amount borrowed = ??
r = interest rate = 10% = 10/100 = 0.1
n = number of compounding periods per year = 2
t = time = 3 years
[tex]6,000\ =\ PV(1+\frac{0.1}{2} )^{(2\times 3)}\\6,000\ =\ PV(1+ 0.05)^{6}\\6,000\ =\ PV(1.05)^{6}\\6,000\ =\ PV (1.340096)\\diving\ both\ sides\ by\ 1.340096\\PV = \frac{6,000}{1.340096} \\PV = \$4,477.29[/tex]
Therefore, Jason borrowed $4,4,77.29
Assuming that the standard fixed overhead rate is based on full capacity, the cost of available but unused productive capacity is indicated by the a.fixed factory overhead volume variance b.direct labor rate variance c.variable factory overhead controllable variance d.direct labor time variance
Answer: a.fixed factory overhead volume variance.
Explanation:
Fixed overhead costs are the costs that are incurred by an organization that doesn't change even when the lre is a change in the volume of production activity. The fixed overhead costs are vital in order for the effective operation of the company.
When the standard fixed overhead rate is based on full capacity, the cost of available but unused productive capacity is indicated by the a.fixed factory overhead volume variance.
Variance is the data analysis tool that helps in measuring the gap between the actual and budgeted or the standard data. The standards are set based on past records and performances. There are various types of variances such as cost variance, efficiency variance, rate variance, volume variance, and many more.
The cost of available but unused productivity capacity is indicated by fixed factory overhead volume variance.
When the standard fixed overhead rate or can be said as the fixed overhead cost is constant and remains at full capacity irrespective of the changes in the volume of production activity.
In this case, the cost of productive capacity can be determined by using the fixed factory overhead volume variance. This is because it determines the difference between the fixed cost based upon the budgets and the production capacity.
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Haruto Kawa, a Japanese citizen who works for Shin-Ro Corp. in Japan, has been asked to head the company's sales office in the United States. Upon taking the assignment, Haruto will be a(n) _____ manager.
Answer:
The correct answer will be "Expatriate".
Explanation:
An expatriate seems to be a migrant worker through his or her occupation, a specialist, or maybe even a skilled worker. Expatriate managers could've been characterized because of those who aren’t residents including its country during which individuals work, and were employed because of everyone's specialized operational skills but rather because of about there willingness to employ organization knowledge.Busch Company has these obligations at December 31. For each obligation, indicate whether it should be classified as a current liability, noncurrent liability, or both.
(a) A note payable for $100,000 due in 2 years.
Current liabilityNoncurrent liabilityBoth
(b) A 10-year mortgage payable of $200,000 payable in ten $20,000 annual payments.
BothCurrent liabilityNoncurrent liability
(c) Interest payable of $15,000 on the mortgage.
Noncurrent liabilityBothCurrent liability
(d) Accounts payable of $60,000.
Current liabilityNoncurrent liabilityBoth
Answer:
(a) A note payable for $100,000 due in 2 years. - Noncurrent liability
Non-current liabilities are obligations of payments by the company that extend for over a year. This note payable is due in 2 years and so is a Non-current liability.
(b) A 10-year mortgage payable of $200,000 payable in ten $20,000 annual payments. - Noncurrent liability
This obligation also extends for over a year thereby satisfying the definition of a Non-current liability
(c) Interest payable of $15,000 on the mortgage. - Current liability
Current Liabilities being the opposite of Non-current liabilities are obligations that are due within a year. The $15,000 interest payment is the amount due for the year and so is a Current Liability.
(d) Accounts payable of $60,000. - Current liability
Accounts Payable are payable within the year and as such are current liabilities.
hi , what is third-party companies??? thank
Answer:
A 'third party', is any entity that a company does business with. This may include suppliers, vendors, contract manufacturers, business partners and affiliates, brokers, distributors, resellers, and agents.
Kathy fields wants to buy a condominium selling for $95,000. The bank is requiring 20% down and is charging 9.5% interest for a 25 year loan. determine the amount required down payment and the amount of the monthly payment for the principal and interest.
Answer:
The down payment is 19000 and monthly payment is 664.009
Explanation:
The purchase price of condominium = $95000
Down payment = 20%
Interest charged = 9.5 %
Time period = 25 years
Down payment amount = 95000 × 20% = 19000
Remaining loan amount = $76000
Below is the calculation of monthly payment:
[tex]\text{Present vlaue of annuity} =\frac{A(1-(1+r)^{-n})}{r} \\A = monthy \ installment \\76000 = \frac{A(1-(1+ 0.095/12)^{-25\times 12})}{ 0.095/12} \\A(0.906112) = 601.667 \\A = 664.009[/tex]
Cole Co. began constructing a building for its own use in January 2016. During 2016, Cole incurred interest of $50,000 on specific construction debt, and $20,000 on other borrowings. Interest computed on the weighted-average amount of accumulated expenditures for the building during 2016 was $40,000. What amount of interest should Cole capitalize?
Answer:
$40,000
Explanation:
The accounting procedure involved in the above is that one picks the lower between the actual interest incurred and the interest computed on the weighted average amount of accumulated expenditures for PPE.
The actual interest incurred on specific construction debt and other borrowings
= $50,000 + $20,000
= $70,000
Since the interest computed on the weighted average amount of accumulated expenditure for the building is $40,000 , the lower between the actual interest incurred and interest on weighted average amount of accumulated expenditure is $40,000, hence will be the capitalized amount.
If interest rates rise, which of the following U.S. Government debt instruments would show the greatest percentage drop in value?
a. treasury bills.
b. treasury notes.
c. treasury bonds.
d. savings bonds.
Answer: treasury bonds
Explanation:
The treasury bonds are typically debt securities for the government that have a long maturity period e.g ten years ane above.
If interest rates rise, the U.S. Government debt instruments that would show the greatest percentage drop in value is the treasury bonds because of its longer maturity period.
Since the 1980s and 1990s, segmentation in global financial markets has been reduced. As a result of this, the correlation among securities markets has increased, thereby reducing, but not eliminating, the benefits of international portfolio diversification. True or Worse
Answer: True
Explanation:
With the on-going drive towards Globalization, companies took advantage to raise more capital by listing across various stock exchanges in the world. The result of this became that the securities market became more correlated.
This had the advantage of granting many companies enough capital that they became Multinational companies but it had the disadvantage of reducing the benefits of international portfolio diversification because the companies would be able to influence the movement of stock across the nations that they are listed in. Where before you could trade in Japan if there were losses in the NYSE, with a company being on both and suffering, both exchanges would feel it.
Compute the companywide break-even point in dollar sales. 2. Compute the break-even point in dollar sales for the East region. 3. Compute the break-even point in dollar sales for the West region. 4. Prepare a new segmented income statement based on the break-even dollar sales that you computed in requirements 2 and 3. Use the same format as shown above. What is Crossfire’s net operating income (loss) in your new segmented income statement? 5. Do you think that Crossfire should allocate its common fixed expenses to the East and West regions when computing the break-even points for each region?
Complete Question:
Crossfire Company segments its business into two regions - East and West. The company prepared a contribution format segmented income statement as shown below:
Total Company East West
Sales $900,000 $600,000 $300,000
Variable Expenses 675,000 480,000 195,000
Contribution margin 225,000 120,000 105,000
Traceable Fixed Expenses 141,000 50,000 91,000
Segment Margin $84,000 $70,000 $14,000
Common Fixed Expenses 59,000
Net Operating Income $25,000
Instructions: (As given).
Answer:
Crossfire Company1. Computation of the companywide break-even point in dollar sales:
Break-even point in dollar sales
= Sales = Total costs
Sales = $816,000
Total costs = Variable costs + Traceable fixed costs
= $675,000 + $141,000
= $816,000
2. Computation of the break-even point in dollar sales for the East region:
Break-even point in dollar sales
= Sales = Total costs
= $530,000
Total costs = $530,000 ($480,000 + 50,000)
3. Computation of the break-even point in dollar sales for the West region:
Break-even point in dollar sales
= Sales = Total costs
= $286,000
Total costs = $286,000 ($195,000 + 91,000)
4. A new segmented income statement based on the break-even dollar sales that are computed in requirements 2 and 3:
Total Company East West
Sales $816,000 $530,000 $286,000
Variable Expenses 675,000 480,000 195,000
Contribution margin 141,000 50,000 105,000
Traceable Fixed Expenses 141,000 50,000 91,000
Segment Margin $0 $0 $0
Common Fixed Expenses 59,000
Net Operating Income/(loss) ($59,000)
Crossfire's net operating income (loss) in the new segmented income statement is: $59,000
5. I think that Crossfire should allocate the common fixed expenses to the East and West regions when computing the break-even points for each region.
This ensures that Crossfire does not run into net operating loss, company-wide. The segmented sales revenues for the regions can be used to allocate the common fixed expenses. Other suitable bases are traceable fixed expense, number of sales and administrative staff, or activity cost pools, using activity-based costing technique.
Explanation:
a) Break-even point in sales dollars is the sales point at which Crossfire's sales revenue will be equal to the total costs. At this point, Crossfire will not make any profit or incur any loss.
The major components of a time series are all of the following EXCEPT: trend. cycles. random variations. seasonality. inflation.
Answer: Inflation
Explanation:
Time series data are refer to those taken over a period of years with a minimum of four years being satisfactory. The data shown will have variations that fall under four major components being;
Trend - Data that moves in a predictable fashion and so can be used to predict future behavior.Cycles - The variation here follows the business cycle or its own. Random Variables - Cannot be predicted. Seasonal - These follow a chronological pattern.Only Inflation does not fall here.
eally Great Corporation manufactures industrial−sized landscaping trailers and uses budgeted machine−hours to allocate variable manufacturing overhead. The following information pertains to the company's manufacturing overhead data: Budgeted output units 51,000 units Budgeted machine−hours 10,200 hours Budgeted variable manufacturing overhead costs for 51,000 units $387,600 Actual output units produced 35,750 units Actual machine−hours used 14,300 hours Actual variable manufacturing overhead costs $328,900 What is the budgeted variable overhead cost rate per output unit?
Answer:
$7.60 per unit of output
Explanation:
Budgeted output units 51,000 units
Budgeted machine−hours 10,200 hours
Budgeted variable manufacturing overhead costs for 51,000 units $387,600
budgeted variable overhead cost per unit of output = $387,600 / 51,000 units = $7.60 per unit of output
In this case, the applied variable overhead rate = 35,750 units x $7.60 = $271,700, which would have been under-applied since the actual variable overhead costs were much higher, $328,900.
Mangum Co. is a large company that segments its business into cost and profit centers. The Cost center for the manufacture of Product M2T incurred the following costs in October:
Direct Labor: $25/unit
Direct Materials: $80/unit
Variable Overhead: $15/unit
Traceable Fixed Costs: $62,000
Common Fixed Costs: $100,000
Sales were 2,000 units in October. Each unit sells for $210. The M2T Department is being evaluated on overall profitability. In September, the department margin was $100,000. By how much did the department margin increase or decrease in October?
a. $100,000 decrease
b. $118,000 increase
c. $18,000 increase
d. $82,000 decrease
Answer: c. $18,000 increase
Explanation:
Department margin was $100,000 in September.
October Margin = Sales - Variable Costs - Traceable Fixed Costs
= (2,000 *( 210 - 25 - 80 - 15) ) - 62,000
= (2,000 * 90) - 62,000
= $118,000
= October Margin - September Margin
= 118,000 - 100,000
= $18,000 increase
One Step, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 27 years to maturity that is quoted at 105 percent of face value. The issue makes semiannual payments and has a coupon rate of 4 percent.
Requried:
a. What is the company's pretax cost of debt?
b. If the tax rate is 23 percent, what is the aftertax cost of debt?
Answer:
Before tax cost of debt=3.72%
After-tax cost of debt =2.87 %
Explanation:
The yield to maturity to Maturity van be worked out using the formula below:
YM =( C + F-P/n) ÷ ( 1/2× (F+P))
C- annual coupon,
F- face value ,
P- current price,
n- number of years to maturity
YM - Yield to maturity
DATA
C- 4%× 100 = 4, P- 105, F- 100
AYM = 4 + (100-105)/27 ÷ 1/2× (100+105)
=0.0372 × 100= 3.72%
Yield to maturity =3.72%
Before tax cost of debt = Yield to maturity
Before tax cost of debt=3.72%
After tax cost of debt =Before tax cost of debt × (1-T)
Before tax cost of debt = 3.72%
Tax rate = 23%
After-tax cost of debt = 3.72%× (1-0.23) =2.87 %
After-tax cost of debt =2.87 %
When a financial calculator or spreadsheet program finds a bond's yield to maturity, it uses a trial-and-error process
a. true
b. false
Answer:
zh
Explanation:
When a financial calculator or spreadsheet program finds a bond's yield to maturity, it uses a trial-and-error process. This statement was the truth. Thus, option (a) is correct.
What is error?
The term errors refer to the mistake in the data or the sentence. The sentence was the read are the changes in the correction. The errors are the founding is the process was the called are the proofreading. The errors are the founding to the correct of the spelling, grammar, and the capitalization was the errors.
In the finance calculator estimate, according to trial and error. The bond's yield to maturity was calculated using a simple spreadsheet. A bond's maturity yield is the interest amount that makes the present value of the pledged loan repayments equal to the grant's market price today.
As a result, the statement was the truth. Therefore, option (a) is correct.
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Conner Manufacturing has two major divisions. Management wants to compare their relative performance. Information related to the two divisions is as follows:
Division 1:
Sales: $200,000
Expenses: $150,000
Asset investment: $950,000
Division 2:
Sales: $45,000
Expenses: $35,000
Asset investment: $200,000
Based on ROI, which division is more profitable?
a. Division 1
b. Both divisions have the same ROI ratio
c. Division 2
Answer:
The correct answer is:
Division 1 (a.)
Explanation:
Return on investment (ROI) is a financial ratio used to calculate the benefit earned on an investment cost.
Mathematically, it is represented as:
[tex]ROI = \frac{Net\ Income}{original\ cost\ of\ investment} \times 100[/tex]
where:
Net income = Sales - expenses
Original cost of investment = asset invested
Now let us calculate the ROI for each division:
Division 1 :
Net income = Sales - Expenses = 200,000 - 150,000 = $50,000
Asset investment = $950,000
[tex]ROI = \frac{50,000}{950,000} \times 100\ \\\\ROI = 5.26\%[/tex]
Division 2:
Net income = 45,000 - 35,000 = $10,000
Asset investment = $200,000
[tex]ROI = \frac{10,000}{200,000} \times 100\\\\= ROI = 0.05\ \times\ 100\ = 5\%[/tex]
Therefore, based on the ROI for both divisions, Division 1 has a greater ROI (5.26%) than Division 2 (5%) hence, Division 1 is more profitable.
Calculate gross profit ratio and cost of goods sold Refer to the consolidated statements of earnings in the Campbell Soup Company annual report in the appendix.
Required:
a. Calculate the gross profit ratio for each of the past three years.
b. Assume that Campbell's net sales for the first four months of 2015 totaled 527 billion. Calculate an estimated cost of goods sold and gross profit for the four months.
Answer:
gross profit ratio = (total revenue - cost of goods sold) / total revenue
I looked for the missing information:
year total sales cost of goods sold
2012 $7,175 $4,365
2013 $8,052 $5,140
2014 $8,268 $5,370
a)
gross profit ratio:
2012 = ($7,175 - $4,365) / $7,175 = 39.16%
2013 = ($8,052 - $5,140) / $8,052 = 36.16%
2014 = ($8,268 - $5,370) / $8,268 = 35.05%
b)
since the gross profit margin ratio is decreasing every year, we can assume that it will keep decreasing in 2015. Using linear regression, the slope is -0.02055. So the estimated gross profit margin ratio for 2015 = 34.33%
estimated cogs (first four months of 2015) = $527 billion x (1 - 34.33%) = $346.08 billion
estimated gross profit (first four months of 2015) = $527 billion x 34.33% = $180.92 billion
Identifying costs of inflation
Kyoko owns and operates a store in a country experiencing a high rate of inflation. In order to prevent the value of money in her cash register from falling too quickly, Kyoko sends an employee to the bank four times per day to make deposits in an interest-bearing account that protects the store's revenues from the effects of inflation. This is an example of the_______of inflation.
Answer:
Shoe-leather Costs.
Explanation:
In this scenario, Kyoko owns and operates a store in a country experiencing a high rate of inflation. In order to prevent the value of money in her cash register from falling too quickly, Kyoko sends an employee to the bank four times per day to make deposits in an interest-bearing account that protects the store's revenues from the effects of inflation. This is an example of the shoe-leather costs of inflation.
Inflation can be defined as the persistent rise in the price of goods and services in an economy. Generally, inflation usually causes the value of money to fall and as a result, it imposes more cost on an economy.
A Shoe-leather costs can be defined as the costs associated with time, energy and effort people expend to mitigate the effect of high inflation on the depreciative purchasing power of money by frequently visiting the bank in order to minimize inflation tax they pay on holding cash.
Figuratively speaking, in order to protect the value of money or assets, some people wear out the sole of their shoes by going to financial institutions more frequently to make deposits.
Hence, Kyoko is practicing a shoe-leather cost of inflation so as to protect the store's revenues from the effects of inflation.
Uchdorf Company invested $9,000,000 in a new product line. The life cycle of the product is projected to be 7 years with the following net income stream: $360,000, $360,000, $600,000, $1,080,000, $1,200,000, $2,520,000, and $1,444,000.
Required:
Calculate the ARR.
Answer:
Accounting rate of return = 24.10%
Explanation:
The accounting rate of return is the average annual income expressed as a percentage of the average investment.
The simple rate of return can be calculated using the two formula below:
Accounting rate of return
= Annual operating income/Average investment × 100
Average investment = (Initial cost + scrap value)/2
Average profit = Total profit over investment period / Number of years
Total profit = 360,000 + 360,000 + 600,000 +1,080,000, + 1,200,000 + 2,520,000 + 1,444,000 = 7,564,000.00
Average annual profit = 7,564,000/7 = 1,080,571.43
Average Investment = 9,000,000/2= 4500000
Accounting rate of return = 1,080,571.43 /4,500,000 × 100 = 24.10%
Accounting rate of return = 24.10%
Which one of these is the best description of a comparative market analysis? It shows what similar homes in the area have recently sold for It shows the list prices of similar homes in the area It’s a guide to the minimum acceptable offer It discloses issues with the home that are known to the seller
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:
It does not show the list prices of the same types of homes in the area.It does not guide for a minimum acceptable offer.Also, it does not disclose the issues for the income that are aware to the seller.Therefore we can conclude that the first statement is correct
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A firm is expected to have net earnings of $1,480,000 three years from now. There are 500,000 shares of stock outstanding. The firm's current P/E ratio is 18 and it is expected to remain at that level. What is the firm's expected stock price for year 3
Answer:
Stock price = $53.28
Explanation:
DATA
Earnings = $1,480,000
Shares outstanding = 500,000
P/E ratio = 18
Stock price = ?
he firm's expected stock price for year 3 can be calculated by using Price earning ratio formula
Formula:
P/E ratio = Stock price / EPS
Stock price = P/E ratio x EPS
Stock price = 18 x $2.96(w)
Stock price = $53.28
Workings
EPS = Earning per share
EPS = Earning /Shares
EPS = $1,480,000 /500,000
EPS = $2.96
The accountant for Mandarin Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available:
Retained earnings balance at the beginning of the year $949,000
Net income for the year 295,000
Cash dividends declared for the year 55,000
Retained earnings balance at the end of the year 1,397,000
Cash dividends payable at the beginning of the year 12,600
Cash dividends payable at the end of the year 14,900
What is the amount of cash dividends paid that should be reported in the financing section of the statement of cash flows?
a. $55,000.
b. $57,300.
c. $82,500.
d. $2,300.
e. $52,700.
Answer: e. $52,700
Explanation:
Cash Dividend to be paid = Cash dividends payable at the beginning of the year + Cash dividends declared for the year - Cash dividends payable at the end of the year
= 12,600 + 55,000 - 14,900
= $52,700
Assume that the returns from an asset are normally distributed. The average annual return for this asset over a specific period was 13.6 percent and the standard deviation of those returns in this period was 43.86 percent. a. What is the approximate probability that your money will double in value in a single year? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What about triple in value? (Do not round intermediate calculations and enter your answer as a percent rounded to 6 decimal places, e.g., .161616.)
Answer: a. 2.44%
b. 0.001070%
Explanation:
Given: The returns from an asset are normally distributed with
[tex]\mu=\text{ 13.6 percent and }\sigma=\text{43.86 percent.}[/tex]
Let x be the percentage value of return.
a. Double in value in a single year i.e. 100% return.
z-value = [tex]\dfrac{x-\mu}{\sigma}[/tex]
[tex]=\dfrac{100-13.6}{43.86}=1.97[/tex]
Required probability = Right-tailed probability for Z = 1.97
= 0.0244 [By p-value calculator]
= 2.44%
b. Triple in value in a single year i.e. 200% return.
z-value = [tex]\dfrac{x-\mu}{\sigma}[/tex]
[tex]=\dfrac{200-13.6}{43.86}=4.25[/tex]
Required probability = Right-tailed probability for Z =4.25
= 0.0000107 [By p-value calculator]
= 0.001070%
Schwartzkopf Co. purchased for $2,088,000 property that included both land and a building to be used in operations. The seller's book value was $294,000 for the land and $986,000 for the building. By appraisal, the fair value was estimated to be $826,355 for the land and $2,023,145 for the building. At what amount should Schwartzkopf report the land and the building at the end of the year?
Answer:
Cost allocated to land=$605,520
Cost allocated to building=$1,482,480
Explanation:
Calculation for the amount that Schwartzkopf should report the land and the building at the end of the year
A. Calculation for Cost allocated to land
Using this formula
Cost allocated to land=Fair value of land/
Fair value of building and land×Cost
Let plug in the formula
Cost allocated to land=$826,355/($2,023,145+$826,355)×$2,088,000
Cost allocated to land=$826,355/$2,849,500×$2,088,000
Cost allocated to land=0.29×$2,088,000
Cost allocated to land=$605,520
Therefore the Cost allocated to land will be $605,520
B. Calculation for Cost allocated to building
Using this formula
Cost allocated to building=Fair value of land/
Fair value of building and land×Cost
Let plug in the formula
Cost allocated to building=$2,023,145/$2,023,145+$826,355)×$2,088,000
Cost allocated to building=$2,023,145/$2,849,500×$2,088,000
Cost allocated to building=0.71×$2,088,000
Cost allocated to building=$1,482,480
Therefore Cost allocated to building will be $1,482,480
Merry Maidens Cleaning generally charges $280 for a detailed cleaning of a normal-size home. However, to generate additional business, Merry Maidens is offering a new-customer discount of 10%. On May 1, Ms. E. Pearson has Merry Maidens clean her house and pays cash equal to the discounted price. Required: Record the revenue earned by Merry Maidens Cleaning on May 1.
Answer:
May 1
DR Cash $252
CR Service Revenue $252
(To record payment for services rendered)
Working
Cash = Net Service revenue
Net Service revenue = $280 * ( 1 - 10%)
= 280 * 90%
= $252
Break-Even Sales and Sales to Realize Income from OperationsFor the current year ended October 31, Friedman Company expects fixed costs of $14,300,000, a unit variable cost of $250, and a unit selling price of $380.a. Compute the anticipated break-even sales (units).unitsb. Compute the sales (units) required to realize income from operations of $2,405,000.units
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
measures that can be taken to increase equilibrium level of income.
Answer:
the government directly affects the level of equilibrium in come into specific ways government purchase of goods and services (G) increase aggregate demand and taxes and transfer separate the relation between income (d) and disposal income (YD) while the income available for consumption and savings with the households.
The Golden Company issues of %, 10year bonds at on March 31, 2019. The bonds pay interest on March 31 and September 30. Assume that the company uses the straightline method for amortization. The journal entry to record the issuance includes a
Answer:
Debit to Cash for $560,560
Explanation:
Based on the information given we were told that the Company issues the amount of $539,000 at 104 on March 31 2019 this means that the journal entry to record the issuance will includes a:
Debit to Cash for $560,560.
Calculated as :
Cash received = $539,000 × 104%
Cash received = $560,560
Cole Co. began constructing a building for its own use in January 20X3. During 20X3, Cole incurred interest of $50,000 on specific construction debt, and $20,000 on other borrowings. Interest computed on the weighted-average amount of accumulated expenditures for the building during 20X3 was $40,000. What amount of interest cost should Cole capitalize
Answer: $40,000
Explanation:
When capitalizing Interest for a PPE, accounting procedure is that one looks at the actual interests incurred vs the interest computed on the weighted-average amount of accumulated expenditures for the PPE and then pick the lower of the two for capitalization.
The actual interest incurred is;
= 50,000 + 20,000
= $70,000
The Interest computed on the weighted-average amount of accumulated expenditures for the building during 20X3 = $40,000. This is the lower one and so will be the amount capitalized.
The Matterhorn Corporation is trying to choose between the following two mutually exclusive design projects:
Year Cash Flow (I) Cash Flow (II)
0 –$87,000 –$55,000
1 36,900 11,700
2 47,000 34,500
3 27,000 28,500
Requirement 1:
(a) If the required return is 10 percent, what is the profitability index for each project? (Do not round intermediate calculations). Round your answers to 3 decimal places.
(b) If the required return is 10 percent and the company applies the profitability index decision rule, which project should the firm accept?
Requirement 2:
(a) If the required return is 10 percent, what is the NPV for each project? (Do not round intermediate calculations. Round your answers to 2 decimal places .
Answer:
PI for the first project = 1 + ($5,673.93 / 87,000) = 1.065
PI for the second project = 1 + ($5,561.23 / $55,000) = 1.101
b. the second project should be chosen because the PI is higher
NPV for 1 = $5,673.93
NPV for 2 = $5,561.23
Explanation:
profitability index = 1 + (NPV / Initial investment)
Net present value is the present value of after tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
for the first project
Cash flow in year 0 = –$87,000
Cash flow in year 1 = 36,900
Cash flow in year 2 = 47,000
Cash flow in year 3 = 27,000
I = 10%
NPV = $5,673.93
for the second project
Cash flow in year 0 = –$55,000
Cash flow in year 1 = 11,700
Cash flow in year 2 = 34,500
Cash flow in year 3 = 28,500
I = 10%
NPV = $5,561.23
PI for the first project = 1 + ($5,673.93 / 87,000) = 1.065
PI for the second project = 1 + ($5,561.23 / $55,000) = 1.101
b. the second project should be chosen because the PI is higher
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
