Answer: coming stocks
Explanation: just took test
Common stocks are an example of an asset class. Hence, option C is correct.
What is Common stocks?The most accessible form of a company's shares, known as common stock, is what you would most usually come across when trading equities on an exchange. These shares normally have voting privileges but are paid out last in the order of preference if a corporation goes bankrupt.
Common stocks are securities that indicate a person's ownership in a particular firm and their right to share in the venture's profits. Such a stock option grants people the right to vote for the company's board of directors and also gives them the ability to influence business policy.
The primary distinction between preferred and common stock is that common stock grants stockholders voting rights, whilst preferred stock does not.
Thus, option C is correct.
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Walnut has forecast sales for the next three months as follows: July 4,900 units, August 6,900 units, September 8,000 units. Walnut's policy is to have an ending inventory of 50% of the next month's sales needs on hand. July 1 inventory is projected to be 2,200 units. Selling and administrative costs are budgeted to be $20,000 per month plus $9 per unit sold. What are budgeted selling and administrative expenses for July
Answer:
the budgeted selling and administrative expenses for July is $64,100
Explanation:
The computation of the budgeted selling and administrative expenses for July is shown below:
= Budgeted selling & admin cost + (per unit sold × July units)
= $20,000 + ($9 × 4,900 units)
= $20,000 + $44,100
= $64,100
hence, the budgeted selling and administrative expenses for July is $64,100
We simply applied the above formula
The aggregate supply curve Multiple Choice is explained by the interest rate, real-balances, and foreign purchases effects. gets steeper as the economy moves from the top of the curve to the bottom of the curve. shows the various amounts of real output that businesses will produce at each price level. is downsloping because real purchasing power increases as the price level falls.
Answer:
. shows the various amounts of real output that businesses will produce at each price level
Explanation:
Aggregate supply can be regarded as " domestic final supply" in domain of economics, it is the overall supply of services/ goods that is been produced at a particular overall price within an economy at a given period. It should be noted that aggregate supply shows the various amounts of real output that businesses will produce at each price level
Find the final amount in the following retirement account, in which the rate of return on the account and the regular contribution change over time. $322 per month invested at 4%, compounded monthly, for 5 years; then 440$ per month invested at 5%, compounded monthly, for 5 years.
Answer:
Total value of the investment= $57,320.73
Explanation:
First, we need to calculate the future value of the first part of the investment. We will calculate the future value for the monthly deposit for five years and then the lump sum for another five years.
FV= {A*[(1+i)^n-1]}/i
A= monthly deposit
i= 0.04/12= 0.003333
n= 5*12= 60 months
FV= {322*[(1.003333^60) - 1]} / 0.003333
FV= $21,348.05
For the lump sum:
FV= PV*(1+i)^n
n= 12*5= 60
i= 0.05/12= 0.004167
FV= 21,348.05*(1.004167^60)
FV= $27,397.75
Now, the future value of the second part of the investment:
n= 60
i= 0.0041667
A= 440
FV= {440*[(1.004167^60) - 1]} / 0.004167
FV= $29,922.98
Total value of the investment= 27,397.75 + 29,922.98
Total value of the investment= $57,320.73
Skysong, Inc. sells office equipment on July 31, 2022, for $17,400 cash. The office equipment originally cost $72,400 and as of January 1, 2022, had accumulated depreciation of $42,300. Depreciation for the first 7 months of 2022 is $5,250. Prepare the journal entries to (a) update depreciation to July 31, 2022, and (b) record the sale of the equipment.
Answer:
(a) update depreciation to July 31, 2022
Debit : Depreciation expense $5,250
Credit : Accumulated depreciation $5,250
(b) record the sale of the equipment.
Debit : Accumulated depreciation $47,550
Debit : Cash $17,400
Debit : Profit and Loss $7,450
Credit : Cost $72,400
Explanation:
Accumulated Depreciation is the total depreciation charged on the asset during its tie in use in the business Accumulated depreciation is $47,550 ($42,300 + $5,250 ).
The Sale has resulted in a loss of $7,450 ($72,400 - $17400 - $47,550)
Jerryworld, Inc., is looking at setting up a new manufacturing plant in Dallas to produce footballs. The company bought some land six years ago for $5.2 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent these facilities from a competitor instead. If the land were sold today, the company would net $4.6 million. The company wants to build its new manufacturing plant on this land; the plant will cost $10.4 million to build, and the site requires $840,000 worth of grading before it is suitable for construction. What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project
Answer:
the proper cash flow amount to use as the initial investment in fixed assets is $15,840,000
Explanation:
The computation of the proper cash flow amount to use as the initial investment in fixed assets is shown below:
= (Net amount + cost of the plant + grading cost)
= ($4.6 million + $10.4 million + $0.84 million )
= $15,840,000
Hence, the proper cash flow amount to use as the initial investment in fixed assets is $15,840,000
Plymouth Company owns equipment with a cost of $600,000 and accumulated depreciation of $375,000 that can be sold for $300,000, less a 4% sales commission. Alternatively, Plymouth Company can lease the equipment for four years for a total of $320,000, at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incurred by Plymouth Company on the equipment would total $40,000 over the four-year lease.
A. Prepare a differential analysis on August 7 as to whether Plymouth Company should lease (Alternative 1) or sell (Alternative 2) the equipment.
B. Should Plymouth Company lease (Alternative 1) or sell (Alternative 2) the equipment?
Answer:
A. We have:
Profit from Lease Equipment (Alternative 1) = $280,000
Profit from Sell Equipment (Alternative 2) = $288,000
Differential Effects = Net gain from selling = $8,000
B. Since the net gain from selling is $8,000, Plymouth Company should sell (Alternative 2) the equipment.
Explanation:
A. Prepare a differential analysis on August 7 as to whether Plymouth Company should lease (Alternative 1) or sell (Alternative 2) the equipment.
Note: See the attached excel file for the differential analysis.
In the attached excel file, the following calculation is made:
Cost of Sell Equipment (Alternative 2) = Sales commission = Revenue * Sales commission percentage = $300,000 * 4% = $12,000
From attached excel file, we have:
Profit from Lease Equipment (Alternative 1) = $280,000
Profit from Sell Equipment (Alternative 2) = $288,000
Differential Effects = Net gain from selling = $8,000
B. Should Plymouth Company lease (Alternative 1) or sell (Alternative 2) the equipment?
Since the net gain from selling is $8,000, Plymouth Company should sell (Alternative 2) the equipment.
The financial staff of Cairn Communications has identified the following information for the first year of the roll-out of its new proposed service: Projected sales $24 million Operating costs (not including depreciation) $9 million Depreciation $5 million Interest expense $4 million The company faces a 25% tax rate. What is the project's operating cash flow for the first year (t = 1)? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as $1,200,000. Round your answer to the nearest dollar.
Answer: $12,500,000
Explanation:
Sales = $24,000,000
Less: Operating cost = $9,000,000
Less,l: Depreciation = $5,000,000
Earning before interest and tax = $10,000,000
Less: Tax at 25% EBIT = $2,500,000
Net income before interest = $7,500,000
Add: Depreciation = $5,000,000
Operating cashflow = $12,500,000
Graymont Industries purchases Solvate, a chemical compound used in several of its products, from ChemMaster. ChemMaster has just increased the list price of Solvate to $6.10 per gallon. However, because Graymont purchases a high volume of Solvate, ChemMaster grants the company a 14 percent discount off the list price. Charges for shipping Solvate from ChemMaster to Graymont's factory are $130 for a shipment of twenty-five 49-gallon drums. Special storage requirements cost $0.59 per gallon.
Calculate Graymont's standard price for a gallon of Solvate. (Round answer to 2 decimal places, e.g. 3.51)
Answer:
the standard price for a gallon of Solvate is $5,942 per gallon
Explanation:
The computation of the standard price for a gallon of Solvate is shown below:
List Price $6.1 per gallon
Less: Discount at 14% 0.854 per gallon
Charges (130 ÷ (25 × 49) 0.106 per gallon
Special Storage $0.59 per gallon
Total Cost $5.942 per gallon
Hence, the standard price for a gallon of Solvate is $5,942 per gallon
Suppose that Nevada Co., a US-based MNC, makes regular, monthly purchases of materials from a German supplier named Spicurity. These regular payments are typically in the amount of 300,000 euros. Last month the exchange rate was $1.93 per euro. Nevada Co. only has cash reserves in dollars, while Spicurity only has cash reserves in euros. Suppose both companies use the same bank.
In order to conduct this transaction last month, Nevada Co.
Required:
a. $_____ to pay for the materials. Thus, the bank handling the transaction reduced Nevada’s account by this amount, denominated in
b. __________( euros OR dollars). The bank then converted this amount to c. ___________ d. ________________( euros OR dollars). and credited it to Spicurity’s account.
Answer:
In order to conduct this transaction last month, Nevada Co.
Required:
a. $_579,000____ to pay for the materials. Thus, the bank handling the transaction reduced Nevada’s account by this amount, denominated in
b. __dollars___( euros OR dollars). The bank then converted this amount to c. ___euros________ from d. ______dollars_____( euros OR dollars). and credited it to Spicurity’s account.
Explanation:
a) Data and Calculations:
Importer = Nevada Co., a US-based MNC
Exporter = Spicurity, a German supplier
Amount of regular payments = 300,000 euros
Exchange rate = $1.93 per euro
Amount in dollars = $579,000 (300,000 euros * $1.93)
b) To convert to dollars from euro, when the exchange rate is $1.93 per euro, we multiply the euro-based amount by the exchange rate. To convert the dollars to the euro, we divide by the exchange rate. To multiply or divide depends on which currency has a higher value (e.g. euro vs dollars).
Decision Case F:2-1 Your friend, Dean McChesney, requested that you advise him on the effects that certain transactions will have on his business, A-Plus Travel Planners. Time is short, so you cannot journalize the transactions. Instead, you must analyze the transactions without a journal. McChesney will continue the business only if he can expect to earn a monthly net income of $6,000. The business completed the following transactions during June:
A. McChesney deposited $10,000 cash in a business bank account to start the compan The company issued common stock to McChesney.
B. Paid $300 cash for office supplies.
C. Incurred advertising expense on account, $700.
D. Paid the following cash expenses: administrative assistant's salary, $1,400: office tent, $1,000.
E. Earned service revenue on account, $8,800.
F. Collected cash from customers on account, $1,200.
Answer:
A-Plus Travel Planners
Analysis of transactions:
A. Cash $10,000 (Increase Assets) Common Stock $10,000 (Increase Equity)
B. Office Supplies $300 (Decrease Profit) Cash $300 (Decrease Assets)
C. Advertising expense $700 (Decrease Profit) Cash $700 (Decrease Assets)
D. Salary expense $1,400 (Decrease Profit) Rent Expense $1,000 (Decrease Profit) Cash $2,400 (Decrease Assets)
E. Accounts Receivable $8,800 (Increase Assets) Service Revenue $8,800 (Increase Profit)
F. Cash $1,200 (Increase Assets) Accounts Receivable $1,200 (Decrease Assets)
Explanation:
a) Data and Calculations:
Expected net income = $6,000
Service Revenue $8,800
Expenses:
Office Supplies $300
Advertising 700
Admin. Salary 1,400
Rent 1,000 $3,400
Net income $5,400
Expected profit 6,000
Required improvement $600
b) To achieve profit target of $6,000 under the current revenue profile, A-Plus Travel Planners must decrease expenses by at least $600. Alternatively, it can increase its revenue by the same amount, while maintaining its costs at current level.
A retired auto mechanic hopes to open a customizing shop for installing heated or ventilated seats. Two locations are being considered, one in the center of the city and one on the outskirts. The central city location would involve fixed monthly costs of $6,500 and labor, materials, and transportation costs of $20 per car. The outside location would have fixed monthly costs of $3,900 and labor, materials, and transportation costs of $30 per car. Dealer price at either location will be $80 per car. a. Which location will yield the greatest profit if monthly demand is (1) 150 cars
Answer:
Outskrits
Explanation:
The Cost of labor and materials is quite a bit less than if in the middle of town, in the big picture that 10 dollar difference in transportation is nothing in the long run. The only problem is as your not a big pass-by kinda place you might not get as many customers from it as you might like. Saving money is a key but a good product is the door to fortune.
Mission Corp. borrowed $50,000 cash on April 1, 2019, and signed a one-year 12%, interest-bearing note payable. The interest and principal are both due on March 31, 2020. Assume that the appropriate adjusting entry was made on December 31, 2019 and that no adjusting entries have been made during 2020. How much interest expense should Mission Corp. record on March 31, 2020?
Answer:
The amount of interest expense that Mission Corp. should record on March 31, 2020 is $1,500.
Explanation:
This can be calculated as follows:
Monthly interest expense = (Amount borrowed * Interest rate) / Number of months in a year = ($50,000 * 12%) / 12 = $500
Remaining number of months = Number of months from January 1, 2020 to March 31, 2020 = 3
Interest expense to record on March 31, 2020 = Monthly interest expense * Remaining number of months = $500 * 3 = $1,500
Campbell Corporation uses the retail method to value its inventory. The following information is available for the year 2021: Cost Retail Merchandise inventory, January 1, 2021 $ 290,000 $ 290,000 Purchases 622,000 920,000 Freight-in 18,000 Net markups 30,000 Net markdowns 5,000 Net sales 900,000 Required: Determine the December 31, 2021, inventory by applying the conventional retail method using the information provided
Answer:
Estimated ending inventory at retail $335,000
Estimated ending inventory at cost $251,250
Explanation:
Calculation to determine the December 31, 2021, inventory by applying the conventional retail method using the information provided
COST RETAIL
Merchandise inventory, January 1, 2021
$290,000 $ 290,000
Purchases $622,000 $920,000
Freight-in 18,000 $0
Net markups$0 30,000
Total $930,000 $1,240,000
Less Net markdowns $0 $5,000
Goods available for sale $930,000 $1,235,000
($930,000-$0=$930,000)
($1,240,000-$5,000=$1,235,000)
Cost-to-retail percentage 75%
($930,000/$1,235,000)
Less Net sales $0 $900,000
Estimated ending inventory at retail $335,000
($1,235,000-$900,000)
Estimated ending inventory at cost $251,250
($335,000 x 75%)
Therefore the December 31, 2021, inventory by applying the conventional retail method using the information provided will be:
Estimated ending inventory at retail $335,000
Estimated ending inventory at cost $251,250
Swifty Company reports the following financial information before adjustments. Dr. Cr. Accounts Receivable $136,200 Allowance for Doubtful Accounts $3,670 Sales Revenue (all on credit) 813,600 Sales Returns and Allowances 54,790 Prepare the journal entry to record bad debt expense assuming Swifty Company estimates bad debts at (a) 4% of accounts receivable and (b) 4% of accounts receivable but Allowance for Doubtful Accounts had a $1,360 debit balance.
Answer:
(a) Debit Bad Debt Expense for $1,778; and Credit Allowance for Doubtful Accounts for $1,778.
(b) Debit Bad Debt Expense for $6,808; and Credit Allowance for Doubtful Accounts for $6,808.
Explanation:
(a) Company estimates bad debts at 4% of accounts receivable
Estimated bad debt = Accounts Receivable * 4% of accounts receivable = $136,200 * 4% = $5,448
Bad Debt Expense = Estimated bad debt - Allowance for Doubtful Accounts = $5,448 - $3,670 = 1,778
The journal entries will now look as follows:
Particulars Debit ($) Credit ($)
Bad Debt Expense 1,778
Allowance for Doubtful Accounts 1,778
(To record bad debt expense.)
(b) Company estimates bad debts at 4% of accounts receivable but Allowance for Doubtful Accounts had a $1,360 debit balance.
Bad debt expense = (Accounts Receivable * 4% of accounts receivable) + Allowance for Doubtful Accounts debit balance = ($136,200 * 4%) + $1,360 = $6,808
The journal entries will now look as follows:
Particulars Debit ($) Credit ($)
Bad Debt Expense 6,808
Allowance for Doubtful Accounts 6,808
(To record bad debt expense.)
Suppose that the global crude oil price has risen due to refinery breakdowns caused by middle-east politics and warfare. Crude oil is an input in the gasoline production. At the same time, the demand for driving and, therefore, the demand for gasoline has also risen in the United States. You can accurately predict that the domestic price of gasoline is:_______
Answer:
"Definitely increase" is the correct approach.
Explanation:
As fuel demand rises, consumption exceeds the amount, as manufacturers are unable to cope with either the surge in demand whenever the profit margin is still rising.We could perhaps state precisely that consumption overtakes the output of petrol or the curve of availability to that same right as well as would therefore be at that same greater degree.Thus the above is the correct answer.
What is three ways eBay helps support small businesses? Full sentences please :)
Answer:
1. Gets you customers fast
2. There is a 95% chance you will make a profit
3. eBay is a big platform with multiple users
Performance management includes standards for measuring how well
individual performance supports the company's goals, practices for
measuring performance against those standards, and .
O A. procedures for giving feedback to employees
0 B. preparation for moving into managementjobs
O C. hands-on learning methods
0 D. presentations by a trainer
the answers A, procedures for give feedback to employees.
Performance management includes standards for measuring how well individual performance supports the company's goals, practices for measuring performance against those standards, and procedures for giving feedback to employees.
What is an employee?
A worker or manager who works for a business, group, or community is referred to as an employee. The organization's personnel consists of these people. There are various types of employees, but in general, any individual engaged by an employer to do a specific task in exchange for remuneration is considered an employee.
An employee benefit plan known as a pension is one that offers retirement income or postpones income until the end of covered employment or beyond. It may be developed or managed by an employer, an employee group (such as a union), or both.
The process of ensuring that a set of actions and outputs achieves the objectives of an organization effectively and efficiently is known as performance management. Performance management can be used to evaluate an employee, a department, a whole business, or the systems in place to handle certain tasks.
Therefore, Thus option (A) is correct
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You are on a TV game show and can choose one of the following. Which would you
take?
Presented below is information related to Pharoah Corporation for the current year. Beginning inventory $ 590,300 Purchases 1,472,500 Total goods available for sale $2,062,800 Sales revenue 2,455,000 Compute the ending inventory, assuming that (a) gross profit is 46% of sales, (b) gross profit is 60% of cost, (c) gross profit is 36% of sales, and (d) gross profit is 25% of cost.
Answer:
a. $948,888
b. $773,550
c. $1,237,680
d. $412,560
Explanation:
The Ending Inventory is calculated using the missing figure approach or the Gross Margin technique.
that is,
Ending Inventory = Cost of Goods Available for Sale - Cost of Sales
thus,
This can be clearly done by writing up a Trading Account as shown below for each scenario.
also remember,
Cost + Profit = Sales
so for those based on cost use this formula.
for example : gross profit is 60% of cost
will be : 100 % + 60 % = 160 %
Part a
Pharoah Corporation
Trading Account for the Year
Sales $2,062,800
Less Cost of Sales
Beginning Inventory $ 590,300
Add Purchases $1,472,500
Goods Available for Sale $2,062,800
Less Ending Inventory (Balancing amount) ($948,888) ($1,113,912)
Gross Profit $948,888
Part b
Pharoah Corporation
Trading Account for the Year
Sales $2,062,800
Less Cost of Sales
Beginning Inventory $ 590,300
Add Purchases $1,472,500
Goods Available for Sale $2,062,800
Less Ending Inventory (Balancing amount) ($773,550) ($1,289,250)
Gross Profit $773,550
Part c
Pharoah Corporation
Trading Account for the Year
Sales $2,062,800
Less Cost of Sales
Beginning Inventory $ 590,300
Add Purchases $1,472,500
Goods Available for Sale $2,062,800
Less Ending Inventory (Balancing amount) ($1,237,680) ($825,120)
Gross Profit $1,237,680
Part d
Pharoah Corporation
Trading Account for the Year
Sales $2,062,800
Less Cost of Sales
Beginning Inventory $ 590,300
Add Purchases $1,472,500
Goods Available for Sale $2,062,800
Less Ending Inventory (Balancing amount) ($948,888) ($1,113,912)
Gross Profit $948,888
Part a
Pharoah Corporation
Trading Account for the Year
Sales $2,062,800
Less Cost of Sales
Beginning Inventory $ 590,300
Add Purchases $1,472,500
Goods Available for Sale $2,062,800
Less Ending Inventory (Balancing amount) ($412,560) ($1,650,240)
Gross Profit $412,560
ando Company incurs a $10.00 per unit cost for Product A, which it currently manufactures and sells for $13.50 per unit. Instead of manufacturing and selling this product, the company can purchase it for $5.00 per unit and sell it for $11.90 per unit. If it does so, unit sales would remain unchanged and $5.00 of the $10.00 per unit costs of Product A would be eliminated. 1. Prepare Incremental cost analysis. Should the company continue to manufacture Product A or purchase it for resale
Answer and Explanation:
The preparation of the Incremental cost analysis is presented below:
Particulars Product A Purchase
Sales $13.50 $11.90
less: cost
Avoidable cost $5
Unavoidable cost $5 $5
Purchase cost $5
Net income $3.50 $1.90
Since the net income is higher in the manfufacture so the company should continue with manfuacture the product A
Laurel Enterprises expects earnings next year of $ per share and has a retention rate, which it plans to keep constant. Its equity cost of capital is , which is also its expected return on new investment. Its earnings are expected to grow forever at a rate of per year. If its next dividend is due in one year, what do you estimate the firm's current stock price to be?
Answer: $49.26
Explanation:
Using the Gordon Growth model, the price of stock should be:
= Next divided / (Cost of equity - growth rate)
Next dividend = Earnings per share * (1 - Retention rate)
= 4.44 * ( 1 - 40%)
= $2.66
Price of stock:
= 2.66 / (9% - 3.6%)
= $49.26
Suppose that a worker in Radioland can produce either 5 radios or 1 television per year, and a worker in Teeveeland can produce either 1 radios or 5 televisions per year. Each nation has 100 workers. Also, suppose that each country completely specializes in producing the good in which it has a comparative advantage. If Radioland trades 50 radios to Teeveeland in exchange for 50 televisions each year, then each country's maximum consumption of new radios and televisions per year will be
Answer:
450 radios 50 televisions in radioland and 50 radios 450 televisions in Teeveeland.
Explanation:
In radioland 5 radios are equivalent to one television. Then 1 radio will be equivalent to 0.2 of television. The opportunity cost for each radio is 0.2. In teeveeland the cost of 1 radio is 5 televisions. Hence radioland has comparative advantage in producing radios and Teeveeland has comparative advantage is producing televisions.
The fictional global firm of Knickerbockers Socks established itself in the international trade industry ten years ago and has been an active participant with intra-industry trade in developed countries. Because of the way Knickerbockers operates, it can take advantage of economies of scale. What do economies of scale make possible for its sock customers
Answer: c. A large variety of sock styles and sizes at competitive prices.
Explanation:
Economies of scale refers to a scenario that arises with companies that operate on a certain scale that makes their cost per unit decrease as they produce more units of a good.
When this happens, such companies can offer more goods at cheaper prices because they have less costs to cover. Knickerboxers Socks has a economies of scale which allows it to produce a large variety of sock styles that it can sell at cheaper competitive prices.
Daniel, age 38, is single and has the following income and expenses in 2020:
Salary income $87,000
Net rent income 2,500
Dividend income 1,300
Payment of alimony (divorce finalized in March 2019) 26,000
Mortgage interest on residence 5,700
Property tax on residence 2,600
Contribution to traditional IRA (assume the amount is fully deductible) 2,400
Contribution to United Church 2,700
Loss on the sale of real estate (held for investment) 825
Medical expenses 4,600
State income tax 2,100
Federal income tax 7,100
Required:
What is Daniel's gross income and his AGI?
Answer:
A. $90,800
B. $87,575
Explanation:
Calculation to determine Daniel's gross income and his AGI
A. Calculation for the Gross income using this formula
Gross income=Salary income + Net rent income + Dividend income
Let plug in the formula
Gross income= $87,000 + 2,500 + 1,300
Gross income=$90,800
Therefore her Gross income is $90,800
B. Calculation to determine the AGI using this formula
AGI=Gross income - (Contribution to traditional IRA + Loss on sale of real estate)
Let plug in the formula
AGI= $90,800 - ($2,400 + $825)
AGI=$90,800-$3,225
AGI=$87,575
Therefore her AGI is $87,575
) Prestwich Company has budgeted production for next year as follows: First Quarter Second Quarter Third Quarter Fourth Quarter Production in units 60,000 80,000 90,000 70,000 Two pounds of material A are required for each unit produced. The company has a policy of maintaining a stock of material A on hand at the end of each quarter equal to 25% of the next quarter's production needs for material A. A total of 30,000 pounds of material A are on hand to start the year. The cost of material A is $3 per pound. Prestwich pays for 60% of the purchases in the month of purchase and 40% in the following month. a. What would be the budgeted purchases of material A in pounds for the second quarter
Answer:
165,000 pounds ($495,000)
Explanation:
To determine the budgeted purchases of material A in pounds for the second quarter, prepare a Materials Purchases Budget as follows :
Materials Purchases Budget
Pounds
Materials Required for Production (80,000 x 2) 160,000
Add Closing Materials Inventory (90,000 x 2 x 25%) 45,000
Total Materials 205,000
Less Opening Materials Inventory (80,000 x 2 x 25%) (40,000)
Material Purchases 165,000
Cost per unit $3
Budgeted Materials Cost $495,000
Bengal Co. provides the following unit sales forecast for the next three months: July August September Sales units 5,800 6,500 6,360 The company wants to end each month with ending finished goods inventory equal to 30% of the next month's sales. Finished goods inventory on June 30 is 1,740 units. The budgeted production units for July are:
Answer:
Production= 6,010
Explanation:
Giving the following information:
July August
Sales units 5,800 6,500
Finished goods inventory on June 30 is 1,740 units.
To calculate the production for July, we need to use the following formula:
Production= sales + desired ending inventory - beginning inventory
Production= 5,800 + (6,500*0.3) - 1,740
Production= 6,010
Ron was vacationing in France, when his camera was stolen. As he walked into a camera store, Ron noticed that camera prices were in euros. If Ron was willing to pay $ for a new digital camera and the exchange rate is $ per euro, how much will Ron be paying in euros? Ron will be paying nothing euros for the camera. (Instructions: Enter your response by rounding two places after the decimal.)
Answer:
130.43 euros
Explanation:
Since Ron willing to Pay is $150
Now we have to convert $150 in euros
As we know that
exchange rate × willing to pay in euro = Willing to pay in Dollar
i.e.
willing to pay in euro = Willing to pay in Dollar ÷ Exchange rate
= 150 ÷ 1.15
= 130.43 euros
Hence, the ron be paying in euros is 130.43
The same would be relevant
Explain the significance of capital structure.
The Buck Store is considering a project that will require additional inventory of $216,000 and will increase accounts payable by $181,000. Accounts receivable are currently $525,000 and are expected to increase by 9 percent if this project is accepted. What is the project's initial cash flow for net working capital
Answer:
$607,250 outflow
Explanation:
Net Working Capital is the amount of money needed to maintain operations on a day to day basis.
Net Working Capital = Current Assets - Current Liabilities
where,
Current Assets are calculated as :
Inventory $216,000
Accounts Receivable ($525,000 x 1.09) $575,250
Total $788,250
and
Current Liabilities = $181,000
therefore,
Net Working Capital = $788,250 - $181,000 = $607,250
Conclusion
The project's initial cash flow for net working capital is $607,250 outflow.
You are attempting to value a call option with an exercise price of $100 and one year to expiration. The underlying stock pays no dividends, its current price is $100, and you believe it has a 50% chance of increasing to $130 and a 50% chance of decreasing to $70. The risk-free rate of interest is 10%. Calculate the call option's value using the two-state stock price model. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Answer:
$18.18
Explanation:
Calculation to determine the call option's value using the two-state stock price model
Based on the information given since the two possible stock prices are: S+ = $130 Increase and and S- = $70 decrease which means that If the exercise price is the amount of $100 the first step will be to determine the corresponding two possible call values.
First step is to determine the corresponding two possible call values.
Hence, the corresponding two possible call values are:
Cu = ($130-$100) and Cd = $0
Cu = $30 and Cd = $0
Second step is to Calculate the hedge ratio using this formula
Hedge ratio= (Cu - Cd)/(uS0 - dS0)
Hedge ratio= (30- 0)/(130 - 70)
Hedge ratio=30/60
Hedge ratio= 0.50
Third step is form the cost of the riskless portfolio and end-of-year value
Cost of the riskless portfolio = (S0 - 2C0)
Cost of the riskless portfolio = 100 - 2C0
End-of-year value =$70
Fourth step is to calculate the present value of $70 with a one-year interest rate of 10%:
Present value=$70/1.10
Present value= $63.64
Now let estimate the call option's value by first Setting the value of the hedged position to equal to the present value
Call option's value=$100 - 2C0 = $63.64
Hence,
C0=$100-$63.64/2
C0=$36.36/2
C0=$18.18
Therefore the call option's value using the two-state stock price model will be $18.18
