You have ​$. You put ​% of your money in a stock with an expected return of ​%, ​$ in a stock with an expected return of ​%, and the rest in a stock with an expected return of ​%. What is the expected return of your​ portfolio?

Answers

Answer 1

Answer: 16.26%

Explanation:

The expected return is the weighted average of the returns of the constituent stocks in the portfolio.

Weights.

Stock A = 20%

Stock B

= 30,000/70,000

= 0.4286

Stock C

= 70,000 - 30,000 - (20% * 70,000)

= 70,000 - 30,000 - 14,000

= $26,000

= 26,000/70,000

= 0.3714

Expected return = ( 0.2 * 12%) + ( 0.4286* 15%) + ( 0.3714 * 20%)

= 0.024 + 0.06429‬ + 0.07428‬

= 0.16257‬

= 16.26%


Related Questions

Sunny Day Manufacturing Company is considering investing in a one-year project that requires an initial investment of $450,000. To do so, it will have to issue new common stock and will incur a flotation cost of 2.00%. At the end of the year, the project is expected to produce a cash inflow of $550,000. The rate of return that Sunny Day expects to earn on its project (net of its flotation costs) is:____________

White Lion Homebuilders has a current stock price of $22.35 per share, and is expected to pay a per-share dividend of $2.03 at the end of next year. The company's earnings' and dividends' growth rate are expected to grow at the
constant rate of 8.70% into the foreseeable future. If White Lion expects to incur flotation costs of 5.00% of the value of its newly-raised equity funds, then the flotation-adjusted (net) cost of its new common stock (rounded to two decimal places) should be:_________

Sunny Day Manufacturing Company Co.'s addition to earnings for this year is expected to be $420,000. Its target capital structure consists of 50% debt, 5% preferred, and 45% equity. Determine Sunny Day Manufacturing Company's retained earnings breakpoint: ___________

a. $840,000
b. $980,000
c. $933,333
d. $886,666

Answers

Answer:

A lot to read and check but I will get back to you soon

The term economies of scale refers to the fact that as the:
o physical size of the product gets larger, the costs of production become lower
O quantity of product produced in a given period increases, the cost of manufacturing each unit increases
o quantity of product produced in a given period increases, the cost of manufacturing each unit remains constant
quantity of product produced in a given period increases, the cost of manufacturing each unit decreases
Need!​

Answers

Answer:

quantity of product produced in a given period increases, the cost of manufacturing each unit decreases

Explanation:

Economies of scale happens when the average total cost (variable + fixed production costs per unit) decreases as total output increases. This generally takes place because fixed costs are the same for a small number of units produced or a large number of units produced, so the average fixed cost per unit tend to decrease as more units are produced (at least up to certain point). Variable production costs per unit can also decrease as total output increases since materials might be purchased in larger quantities resulting in higher discounts or labor productivity increases.

On January 1, 2017, Boston Enterprises issues bonds that have a $1,850,000 par value, mature in 20 years, and pay 7% interest semiannually on June 30 and December 31. The bonds are sold at par. 1. How much interest will Boston pay (in cash) to the bondholders every six months

Answers

Answer:

Interest per six months =$64,750 .

Explanation:

Bonds are instruments used by companies, governments and other entries to borrow from the public.

They represent a contractual agreement where  the borrower commits to pay a percentage of the principal amount borrowed plus the principal amount to the lender or investor.

The proportion of the amount borrowed which is paid as interest is called coupon. The interest payment is computed as the the coupon rate in percentage multiplied by the amount borrowed.

Interest payment = Coupon rate (%) × Nominal Value

 Annual interest payment    = 7%  × 1,850,000 =$129,500

Semi-annual interest payment = Annual interest payment/2

Semi-annual interest payment =129,500 /2 =64,750 .

Interest per six months =$64,750 .

Note we had to divide by 2 because they are two six months in a year.

Juice Drinks has beginning inventory of $10,000, purchases in the amount of $150,000, and ending inventory of $8,000. Juice Drinks cost of goods sold is $ ____________.

Answers

Answer:

$152,000

Explanation:

Given the data as shown below;

Opening inventory = $10,000

Purchases = $150,000

Ending inventory = $8,000

Therefore,

Juice drinks cost of goods sold = Opening inventory + Purchases - Ending inventory

= $10,000 + $150,000 - $8,000

= $152,000

A stock currently sells for $34 a share but is expected to increase in value over the next six months to at least $36 a share. Assume there are 6-month options available on this stock with an exercise price of $35. Which of these options should have the most value today?a. American and European calls equallyb. European callc. European putd. American pute. American call

Answers

Answer:  American call

Explanation:

The price of the underlying stock is going to increase to at least $36 which is more than the exercise price on the option of $35. The option that would have more value therefore is a Call option because call options make profit when the exercise price is less than the market price.

The more valuable call option between the European and American call options is the American call option. This is because with an American call option, the holder is free to call in the option at any point in time up to the exercise date while a European option has to wait till the exercise date.

The American Call option is therefore the option with the most value today.  

If annual demand is 50,000 units, the ordering cost is $25 per order, and the holding cost is $5 per unit per year, which of the following is the optimal order quantity in order to minimize the total annual inventory cost?
A. 707
B. 909
C. 634
D. 500
E. 141

Answers

Answer:

22

3 25

6 15

a. Determine which variable is the dependent variable.

b. Compute the least squares estimated line.

c. Compute the coefficient of determination. How would you interpret this value22

3 25

6 15

a. Determine which variable is the dependent variable.

b. Compute the least squares estimated line.

c. Compute the coefficient of determination. How would you interpret this value

A one-month summary of manufacturing costs for Rapid Routers Company follows.

Direct materials $40,000
Direct labour 20,000
Material handling costs 1,500
Product inspection and rework 2,000
Materials purchasing and inspection 500
Routine maintenance and equipment servicing 1,200
Repair of equipment 300

Required:
Classify each cost as value-added or non-value-added

Answers

Answer:

        Cost                                                                 Classification

Direct materials                                                       Value added

Direct labor                                                              Value added

Material handling costs                                           Non-value added

Product inspection and rework                              Non-value added

Materials purchasing and inspection                     Value added

Routine maintenance and equipment                    Non-value added

servicing

Repair of equipment                                                Non-value added

ZZZ-Best, Inc. recently issued $65 par value preferred stock that pays an annual dividend of $17. If the stock is currently selling for $76, what is the expected return of this preferred stock?

Answers

Answer:

r = 0.22368 or 22.368% rounded off to 22.37%

Explanation:

The expected or required rate of return on a preferred stock is the return provided by the stock in terms of dividend as a proportion of the current market price. The expected return on a preferred stock can be calculated as follows,

r = Dividend / current market price

r = 17 / 76

r = 0.22368 or 22.368% rounded off to 22.37%

Jessie and Paul have worked in the same office at DEF Insurance LLC for 6 years. Jessie has always taken extra care to follow the office norms and ensure that everyone has a happy and harmonious working experience. Paul has been very driven during his years at DEF Insurance, and though he started as an insurance agent, he has since been promoted to the agency manager and proudly displays all of his awards on the wall of his new office. According to Learned Needs Theory, Jessie most likely has a high: Group of answer choices

Answers

Answer:

Need for affiliation

Explanation:

from the learned needs theory, Jessie most likely has a high need for affiliation.

This describes her need to feel a sense of involvement and belonging within her work environment.

By following office norms and trying to ensure everyone is happy, she is expressing her need for open and good relationships at work. People like Jessie are usually friendly, outgoing and cooperative

Supply Chain Integration Supply chain integration is a major contributing factor to organizational success. The goal of supply chain integration is alignment within the supply chain. As a business leader, how can you achieve greater supply chain integration with suppliers and customers

Answers

Answer:

True.

Explanation:

The integration of the supply chain comes from the use of the total quality management tool that will make the supply chain effective as a whole, generating significant improvements at each stage of the chain, with the help of technologies that streamline operations. Integrating the supply chain means organizing the steps so that there is a reduction in costs, time, waste and continuous optimization of the processes as a whole, making the product reach the final consumer correctly meeting their expectations and needs.

Suppose that Dunkin Donuts reduces the price of its regular coffee from $2 to $1 per cup, and as a result, the quantity sold per day increased from 10 to 40. Over this price range, the price elasticity of demand for Dunkin Donuts’ regular coffee is:

Answers

Answer:

PED = -6

Explanation:

The PED or price elasticity of demand for a product measures the responsiveness of a product's demand to the changes in the price of the product. The PED is calculated as follows,

PED = % change in Quantity demanded / % change in price

PED = [(40 - 10) / 10]  /  [(1 - 2) / 2]

PED = -6

A PED of -6 represents that quantity demanded is highly price elastic and a negative sign means that it is a normal good.

Myers, Inc.
Income Statement
For the Year Ended December 31, 2020
Sales revenue $400,000
Cost of goods sold 180,000
Gross profit 220,000
Expenses (including $10,000 interest and $20,000 income taxes) 80,000
Net income $ 140,000
Additional information:________.
1. Common stock outstanding January 1, 2020, was 16,000 shares, and 24,000 shares were outstanding at December 31, 2020.
2. The market price of Myers stock was $9.59 in 2020.
3. Cash dividends of $19,600 were paid, $3,000 of which were to preferred stockholders.
Compute the following measures for 2020. (Round Earnings per share to 2 decimal places, e.g. 1.65, and all other answers to 1 decimal place, e.g. 6.8 or 6.8%.)
(a) Earnings per share $
(b) Price-earnings ratio times
(c) Payout ratio %
(d) Times interest earned times

Answers

Answer:

a. $6.85

b. 1.4 times

c. 11.9%

d. 17 times

Explanation:

a)  Weighted Average number of common shares outstanding = (Number of common shares outstanding in the beginning + Number of common shares outstanding in the end)/2

= (16,000 +24,000) /2

= 20,000 shares

Earnings per share = (Net income – Preferred stock dividend)/Weighted Average number of common shares outstanding

= (140,000 - 3,000) / 20,000

= 137,000/20,000

= $6.85

b) Price earnings ratio = Market price of 1 common share/Earnings per share

= 9.59 / 6.85

= 1.4 times

c)  Payout ratio = Cash dividends on common stock/Net income

= 16,600 / 140,000

= 0.11857

= 11.9%

d)  Times interest earned = (Net income + Interest expense + Tax expense) / Interest expense

= (140,000 + 10,000 + 20,000)/10,000

= 170,000 / 10,000

= 17 times

If a firm is producing so that the point chosen along the production possibility frontier is socially preferred, then that firm is said to have reached its:________

a. allocative efficiency
b. productive efficiency
c. utility-maximizing efficiency
d. minimum price efficiency


Answers

Answer:

b

Explanation:

Productive efficiency means that production is been carried out with no waste.  

Production possibility frontier is a curve that shows the various combinations of goods that can be produced in an economy when all resources are fully utilised.

On the ppf, all resources are fully utilised, so there is productive efficiency.

Calculate the cost of goods manufactured using the following information: Direct materials used $ 298,800 Direct labor used 132,300 Factory overhead costs 264,300 General and administrative expenses 85,800 Selling expenses 49,100 Work in Process inventory, January 1 118,800 Work in Process inventory, December 31 126,200 Finished goods inventory, January 1 232,400 Finished goods inventory, December 31 239,000

Answers

Answer:

$687,100

Explanation:

Cost of Goods Manufactured = Raw Materials Used + Direct Labor + Factory Overhead +Beginning Work in Process - Ending Work in ProcessCost of Goods Manufactured = $298,500 + $132,000 + $264,000 + $118,500 - $125,900 =$687,100

HOPE IT HELPS MARK IT BRAINLIEST!!!!!!

As the assistant to the CFO of Johnstone Inc., you must estimate its cost of common equity. You have been provided with the following data: D 0 = $0.80; P 0 = $22.50; and g = 8.00% (constant). Based on the DCF approach, what is the cost of common from reinvested earnings?

Answers

Answer:

The cost of common equity from reinvested earnings is 11.84%

Explanation:

The constant growth model of DDM or DCF approach is used to calculate the price of a stock today whose dividends are expected to grow at a constant rate forever. The model values the stock based on the present value of the expected future dividends form the stock.

The formula for price today under this model is,

P0 = D0 * (1+g) / (r - g)

Where,

P0 is price todayD0 is the dividend todayr is the cost of equityg is the growth rate in dividends

Plugging in the available values for all the variables, we can calculate the r or cost of common equity to be,

22.5 = 0.8 * (1+0.08) / (r - 0.08)

22.5 * (r - 0.08) = 0.864

22.5r - 1.8 = 0.864

22.5r = 0.864 + 1.8

r = 2.664 / 22.5

r = 0.1184 or 11.84%

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?

Answers

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.

Teams with both difficult goals and specific incentives to attain them achieve the _____ performance levels.

Answers

Answer:

Highest

Explanation:

teams with highest performance are are social groups that work to achieve a common objective or goals that can be either short term or long term. These kind of teams achieve peak performance by By having both difficult goals and specific incentives to attain these goals. Such teams must have a common objective that can be turned into performance goals that can be measured.

Bark Inc. and Happy Toys Ltd. Bark Inc. and Happy Toys Ltd. are considering a merger and are worried that their two organizational cultures will clash. They perform a detailed diagnosis by collecting and analyzing data about the employees of the two companies. They identify several overlapping values, which they feel can be combined into a cohesive new culture. This process is known as:

Answers

Complete Question:

Bark Inc. and Happy Toys Ltd. Bark Inc. and Happy Toys Ltd. are considering a merger and are worried that their two organizational cultures will clash. They perform a detailed diagnosis by collecting and analyzing data about the employees of the two companies. They identify several overlapping values, which they feel can be combined into a cohesive new culture. This process is known as:

Group of answer choices.

A. a merger strategy.

B. a bicultural audit.

C. assimilation.

D. deculturation.

Answer:

B. a bicultural audit.

Explanation:

Bark Inc. and Happy Toys Ltd. Bark Inc. and Happy Toys Ltd. are considering a merger and are worried that their two organizational cultures will clash. They perform a detailed diagnosis by collecting and analyzing data about the employees of the two companies. They identify several overlapping values, which they feel can be combined into a cohesive new culture. This process is known as a bicultural audit.

A bicultural audit can be defined as the process of analyzing and measuring the cultural relations between two companies prior to a merger, as well as identifying the extent to which there might be cultural clashes among its employees.

Generally, bicultural audit process start with the identification of cultural differences between the merging companies. In order to create a cohesive new culture between the merging companies, a good action plan and effective strategy should be developed.

If the IRS intends to close a Taxpayer Assistance Center, they must notify the public at least _____ days in advance of the closure date.

Answers

Answer: 90 days

Explanation:

The Internal Revenue Service is typically known as the revenue service of the federal government as it is in charge of tax collection and enforcing tax laws.

If the IRS intends to close a Taxpayer Assistance Center, they must notify the public at least 90 days in advance of the closure date.

White says, “We live in a world where success is defined by income.” Do you agree with this statement? Discuss examples in your life that support or negate this idea.

Answers

Answer:

yes i agree coz nowadays even in my family, the outsiders give more respect and praise my big brother as he earns big income

The decision that could be made regarding the statement that "In the modern world, income has turned equivalent to success" would be:

Yes.

The reason to agree with this statement is due to the increased importance that the modern world has provided to money.For example, a person is considered successful only when he earns a handsome amount while a person with a lower or average income but greater satisfaction level is considered unsuccessful. However, there is also a saying that "money can't buy happiness" which suggests that people can be sad even after having money and vice versa.Thus, it depends on the individual's perception and the way they equate success with happiness or material possessions.

Learn more about "Income" here:

brainly.com/question/14732695

An e-business can redefine its market by removing traditional marketplace intermediaries or by creating new ways to add value to business transactions.
a. True
b. False

Answers

Answer: True

Explanation:

An e-business is a kind of business whereby information is passed across on the internet. Since we live in a digital world, organizations now engage their customers online.

An e-business can redefine its market by removing traditional marketplace intermediaries or by creating new ways to add value to business transactions.

For the coming year, Belton Company estimates fixed costs of $60,000, the unit variable cost of $25, and the unit selling price of $50.

a. Determine the break-even point in units of sales.

b. Determine the unit sales required to realize operating income of $100,000.

c. Determine the probable operating income if sales total $400,000.

Answers

Answer:

1. Break even point in units = 2,400 units

2. Sales required = 6,400 units

3. Operating income = $140,000

Explanation:

Given:

Fixed costs = $60,000

Variable cost =$25 per unit

Selling price = $50 per unit

Computation:

1. Break-even point in units of sales.

Contribution per unit = sales - VC

Contribution per unit = $50 - $25

Contribution per unit = $25

Break even point in units = Fixed costs / Contribution per unit

Break even point in units = $60,000 / $25

Break even point in units = 2400 units

2. Unit sales required to realize operating income = $100,000

Sales required = (Fixed costs + Operating income) / Contribution per unit

Sales required = ($60,000 + $100,000) / $25

Sales required = 6400 units

3. Operating income if sales total = $400,000

Contribution margin = [$25/ $50]100 = 50%

Operating income = Contribution margin - Fixed costs

Operating income = ($400,000 × 50%) - $60,000

Operating income = $140,000

The expected before-tax IRR on a potential real estate investment is 14 percent. The expected after-tax IRR is 10.5 percent. What is the effective tax rate on this investment?

Answers

Answer:

25%

Explanation:

The expected before-tax IRR on a potential real estate investment is 14%

The expected after-tax IRR is 10.15%

Therefore, the effective tax rate on this investment can be calculated as follows

Effective tax rate= 1-(after-tax IRR/before-tax IRR)

Effective tax rate= 1-(10.15/14)

= 1-0.75

= 0.25×100

= 25%

Hence the effective tax rate is 25%

Brodrick Company expects to produce 21,200 units for the year ending December 31. A flexible budget for 21,200 units of production reflects sales of $508,800; variable costs of $63,600; and fixed costs of $142,000. Assume that actual sales for the year are $587,200 (26,300 units), actual variable costs for the year are $113,900, and actual fixed costs for the year are $137,000. Prepare a flexible budget performance report for the year.

Answers

Answer:

                Flexible budget performance report  for the year

                           Flexible budget  Actual     Variance   Fav/Unf

Sales                        631,200         587,200    44,000   UNF

Variable cost           (78,900)         (113,900)    35,000    F

Contribution            416,000         368,000   48,000   UNF

margin

Fixed cost               (142,000)        (137,000)    5000       UNF

Net operating          274,000        231,000    43,000    UNF

income

Working:

a. At flexible budget, selling price per unit = $508,800 / 21,200 = $24 per unit . Total sales =26,300 *24 = $631,200  

b. Variable cost per unit = $63,600 / 21,200 = $3 per unit . Total cost = 3 * 26,300 = 78,900

Nautical has two classes of stock authorized: $10 par preferred, and $1 par value common. As of the beginning of 2015, 125 shares of preferred stock and 2,700 shares of common stock have been issued. The following transactions affect stockholders� equity during 2015:
March 1 Issue 2,700 additional shares of common stock for $13 per share.
April 1 Issue 175 additional shares of preferred stock for $37 per share.
June 1
Declare a cash dividend on both common and preferred stock of $0.40 per share to all stockholders of record on June 15.
June 30 Pay the cash dividends declared on June 1.
August 1 Repurchase 175 shares of common treasury stock for $10 per share.
October 1 Reissue 125 shares of treasury stock purchased on August 1 for $12 per share.
Nautical has the following beginning balances in its stockholders� equity accounts on January 1, 2015: Preferred Stock, $1,250; Common Stock, $2,700; Paid-in Capital, $19,200; and Retained Earnings, $11,200. Net income for the year ended December 31, 2015, is $7,500.
Required:
1. Record each of these transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
2. Select whether each of these transactions would increase (+), decrease (?), on total assets, total liabilities, and total stockholders� equity by completing the following table. (If none of the categories apply for a particular item, leave the cell blank.)
Transaction Total Assets Total Liabilities Total Stockholders Equity
Issue common stock
Issue preferred stock
Declare cash divedens
Pay cash divedens
Repurchase treasury stock
Reissue treasury stock

Answers

Answer:

Nautical

1. Journal Entries:

March 1:

Debit Cash Account $35,100

Credit Common Stock $35,100

To record the issue of 2,700 shares of common stock for $13 per share.

April 1:

Debit Cash Account $6,475

Credit Preferred STock $6,475

To record the issue of 175 shares of preferred stock for $37 per share.

June 1:

Debit Dividends $2,280

Credit Dividends Payable $2,280

To record dividends of $0.40 per share to all stockholders of record.

June 30:

Debit Dividends Payable $2,280

Credit Cash Account $2,280

To record the payment of cash dividends.

August 1:

Debit Treasury Stock $1,750

Credit Cash Account $1,750

To record the repurchase of 175 shares of common stock for $10 per share.

October 1:

Debit Cash Account $1,500

Credit Treasury Stock Account $1,500

To record the reissue of 125 shares of treasury stock for $12 per share.

2. Selection of  whether each of these transactions would increase (+), decrease (?), on total assets, total liabilities, and total stockholders' equity:

                                        Transaction   Assets   Liabilities    Stockholders

                                            Total          Total          Total              Equity

Issue common stock         $35,100       +$35,100                    +$35,000

Issue preferred stock         $6,475        +$6,475                       +$6,475

Declare cash dividends      $2,280                        +$2,280      ?$2,280      

Pay cash dividends             $2,280       ?$2,280   ?$2,280

Repurchase treasury stock  $1,750       ?$1,750                        ?$1,750

Reissue treasury stock       $1,500       +$1,500                        +$1,500

Explanation:

a) Data and Calculations:

Authorized share capital:

$10 par preferred

$1 par value common

Issued, beginning of 2015:

Preferred = 125 shares

Common = 2,700 shares

b) The issue of 2,700 additional shares of common stock for $13 per share totalled $35,100.  This amount is credited to the Common Stock and the receipt of cash debited to the Cash Account.  The same is applicable with respect to the 175 additional shares issued at $37 per share.

c) When a cash dividend is declared, the stockholders of record on the record date of June 15 are noted, since they are the only ones that will participate in the dividends.  The accounting records are debit to the dividend account and a credit to the Dividends Payable account, establishing the liability.  The payment for the declared dividend is recorded with a debit to the Dividends Payable account to close the liability and a credit to the Cash Account.

d) Treasury stock is a stock of common stock repurchased by the company.  The issue and reissue of treasury stock are treated in the treasury stock account if the costing method is used, otherwise, the par-value method would be operational.

What is another name for progress monitoring? a. Curriculum-based measurement c. Curriculum-based learning b. Assessment d. None of these

Answers

Answer:

Curriculum based measurement

Answer:

a.  Curriculum-based measurement

It's correct

On January 1, 2017, Hi and Lois Company purchased 12% bonds having a maturity value of $300,000, for $322,744.44. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2017, and mature January 1, 2022, with interest receivable January 1 of each year. Hi and Lois Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category.a. Prepare the journal entry at the date of the bond purchase.
b. Prepare a bond amortization schedule.
c. Prepare the journal entry to record the interest revenue and the amortization at December 31, 2017
d. Prepare the journal entry to record the interest revenue and the amortization at December 31, 2018

Answers

Answer:

a. January 1, 2017, bonds are purchased at a premium

Dr Investment in bonds 300,000

Dr Premium on bonds receivable 22,744.44    

    Cr Cash 322,744.44    

b.

Date      Cash          Interest    Amortization       Bond          Carrying

             received    revenue   of premium         premium    value

1/1/18     $36,000    $32,274.44   $3,725.56   $19,018.88    $280,981.12

1/1/19     $36,000    $31,904.89   $4,095.11     $14,923.77    $285,076.23

1/1/20    $36,000    $31,492.38   $4,507.62    $10,416.15    $289,583.85

1/1/21     $36,000    $31,041.61     $4,958.39   $5,457.76     $294,542.24

1/1/22    $36,000    $30,542.24  $5,457.76    $0                 $300,000

amortization of bond premium = ($322,744.44 x 10%) - $36,000 = -$3,725.56

amortization of bond premium = ($319,018.88 x 10%) - $36,000 = -$4,095.11

amortization of bond premium = ($314,923.77 x 10%) - $36,000 = -$4,507.62

amortization of bond premium = ($310,416.15 x 10%) - $36,000 = -$4,958.39

amortization of bond premium = $10,416.15 - $4,958.39 = -$5,457.76

c.

December 31, 2017

Dr Interest receivable 36,000

    Cr Interest revenue 32,274.44

    Cr Premium on bonds receivable 3,725.56

d.

December 31, 2017

Dr Interest receivable 36,000

    Cr Interest revenue 31,904.89

    Cr Premium on bonds receivable 4,095.11

Jensen Corporation uses the percentageofsales method to estimate uncollectibles. Net credit sales for the current year amount to and management estimates ​% will be uncollectible. The Allowance for Doubtful Accounts prior to adjustment has a debit balance of . After all adjusting entries are​ made, the balance in Allowance for Uncollectible Accounts will​ be:

Answers

Answer:

$42,300 credit balance

Explanation:

The question is incomplete:

Jensen Corporation uses the percentage-of-sales method to estimate uncollectibles. Net credit sales for the current year amount to $2,010,000 and management estimates ​3% will be uncollectible. The Allowance for Doubtful Accounts prior to adjustment has a debit balance of $18,000. After all adjusting entries are​ made, the balance in Allowance for Uncollectible Accounts will​ be:

uncollectible accounts = $2,010,000 x 3% = $60,300 credit

the adjusting entry at the end of the year:

December 31, 202x, bad debt expense:

Dr Bad debt 60,300

    Cr Allowance for uncollectible accounts 60,300

the ending balance of the Allowance for uncollectible accounts account = $60,300 - $18,000 (debit balance) = $42,300

Masters Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $450,000 is estimated to result in $184,000 in annual pretax cost savings. The press falls in the MACRS five-year class, and it will have a salvage value at the end of the project of $74,000. The press also requires an initial investment in spare parts inventory of $33,000, along with an additional $3,750 in inventory for each succeeding year of the project. The shop’s tax rate is 23 percent and its discount rate is 10 percent. (MACRS schedule)

Required:
Calculate the NPV of this project.

Answers

Answer:

Masters Machine Shop

PV of Salvage value = $74,000 x 0.683 =               $50,542

Present value of total savings                                $449,126

less Present value of investments                          494,888

Net Present Value                                                      $4,780

Explanation:

a) Data                      Amount              Present Value

Cash Outflow         $450,000             $450,000

Initial spare parts        33,000                  33,000

Annual Inventory          3,750                    11,888

PV of investments                               $494,888

     

Project lifespan = 4 years

Discount rate = 10%

Annual pretax cost savings = $184,000

Tax rate                 23%              42,320

After Tax savings                    $141,680

PV of Annuity of Tax savings = $141,680 x 3.170 = $449,126

Salvage value = $74,000        

PV of Salvage value = $74,000 x 0.683 =               $50,542

Present value of total savings                                $449,126

less Present value of investments                          494,888

Net Present Value                                                      $4,780

b) Master Machine Shop's Net Present Value (NPV) is the difference between the cash inflows (savings) and the cash outflows (investments) for this four-year project

A newly issued 20-year maturity, zero-coupon bond is issued with a yield to maturity of 8% and face value $1,000. Find the imputed interest income in: (a) the first year; (b) the second year; and (c) the last year of the bond’s life.

Answers

Answer:

First Year $ 17.17

Second Year $ 18.53

Last Year $ 74.08

Explanation:

Computation to Find the imputed interest income in: (a) the first year; (b) the second year; and (c) the last year of the bond’s life

Imputed Interest

First step

Using this formula

Imputed interest=(Present Value /1+Yield to maturity)^Numberd of years

Year Years Remaining to Maturity Constant Yield Value ( 1 / 1.08)^n

0 20 (1/1.08)^20= $ 214.54

1 19 (1/1.08)^19=$ 231.71

2 18 (1/1.08)^18=$ 250.24

19 1 (1/1.08)^1=$ 925.92

20 0 (1/1.08)^0=$ 1,000

Second step is to find the Imputed interest for the first year, second year; and the last year of the bond’s life

Year Years Remaining to Maturity Constant Yield Value ( 1 / 1.08)^n =Imputed Interest

0 20 $ 214.54

1 19 $ 231.71 $17.17

($231.71-$214.54)= $17.17

2 18 $ 250.24 $18.53

($250.24-$231.71)=$18.53

19 1 $ 925.92

20 0 $ 1,000 $74.08

($1,000-$925.92) =$74.08

Therefore the imputed interest will be:

First Year $ 17.17

Second Year $ 18.53

Last Year $ 74.08

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