Answer:
278 Shares
Explanation:
According to the scenario, computation of the given data are as follow:-
We can calculate the no. of shares to be bought by using following formula:-
Unlevered cost of capital = 10% = 0.10
Value of Enterprise = Additional Free Cash Flow ÷ Unlevered Cost of Capital
= $40 million ÷ 0.10 = $4 million
Market Value of Shares = Value of Enterprise + Excess Cash
= $400 million + $50 million = $450 million
Per Share Market Value = Market Value of Shares ÷ Share Outstanding
= $450 million ÷ $10 million shares = $45 per share
Per Share Special Dividend = Excess Cash ÷ Share Outstanding
= $50 million ÷ $10 million shares = $5 per share
Dividend Per Share = Own Shares × Per Share Special Dividend
= 2500 shares × $5 per share = $12,500
No. of Shares to Be Bought = Dividend Per Share ÷ Per Share Market Value
= $12,500 ÷ $45 per share
= 277.78 or 278
During 2012, Walker Corporation acquired 500 shares of Wychek stock at $30 per share. Walker Corporation accounted for the stock as available-for-sale securities. All declines in market value are considered to be temporary. The market price per share of Wychek’s stock as of December 31, 2012 and 2013, is $22.50 and $37.50, respectively. Given this information, the correct adjusting entry by walker at December 31, 2013, would include a credit to
A.Market Adjustment – Available-for-Sale Securities of $3,750
B.Unrealized Increase in Value of Available-for-Sale Securities – Equity of $7,500
C.Market Adjustment – Available-for-Sale Securities of $7,500
D.Unrealized Increase in Value of Available-for-Sale Securities – Equity of $3,750
Answer: B.Unrealized Increase in Value of Available-for-Sale Securities Equity of $7,500
Explanation:
Walker acquired the 500 shares at a price of $30 in 2012. At the end of 2012 however, the shares were worth $22.50.
At the end of 2013, it is stated that the shares are now worth $37.50 meaning they increased in value.
The value of the increase is therefore the difference between the most recent previous price and the new price,
= 500 shares * ( 37.50 - 22.50)
= $7,500
Available for Sale Securities Account should therefore see an increase of $7,500 because of the increase in price from the end of 2012 to the end of 2013.
It is worthy of note that at the end of 2012, the account decreased by the difference between the purchase price of $30 and the end of 2012 price of $22.50. This is why at the end of 2013, the price used as the previous price was $22.50.
Pharoah Company compiled the following financial information as of December 31, 2022:
Service revenue $1171000
Common stock 233000
Equipment 319000
Salaries and wages expense 390000
Rent expense 97500
Depreciation expense 487500
Cash 276000
Dividends 83000
Supplies 39000
Accounts payable 155000
Accounts receivable 110000
Retained earnings, 1/1/22 567000
Pharoah's total assets at December 31, 2022 are: _________.
Answer: $913000
Explanation:
The net income must be calculated first. This will be:
Net income = Service revenue – (Salaries + Rent + Depreciation)
= 1171000 - (390000+97500+487500)
= 1171000 - 975000
= $196000
Now, the retained earnings has to be calculated. This will be:
Retained earnings (31/12/2022) = Beginning + Net income – Dividends
= 567000+196000-83000
= $680000
Now, the tockholders’ equity will be:
Stockholders’ equity= Common stock+Retained earnings(31/12/2022)
= $233000+$680000
= $913000
Pearle Corporation makes automotive engines. For the most recent month, budgeted production was 3,300 engines. The standard power cost is $9.20 per machine-hour. The company's standards indicate that each engine requires 2.1 machine-hours. Actual production was 3,400 engines. Actual machine-hours were 7,160 machine-hours. Actual power cost totaled $61,815.
Required:
a) Determine the rate and efficiency variances for the variable overhead item power cost and indicate whether those variances are unfavorable or favorable. (Input all amounts as positive values.)
Answer:
Rate variance = $4057 Favorable
Efficiency variance = $184 unfavorable
Explanation:
Rate variance $
7,160 hours should have cost (7,160 × $9.20) 65872
bur did cost (actual cost) 61,815
Rate variance 4057 Favorable
Efficiency variance
3400 units should have taken (3,400 × 2.1 hours) 7140
but did take 7,160
Efiicienct=y varince (hours) 20 unfavorable
standard hour ×$9.20
Efficiency variance $184 unfavorable
Rate variance = $4057 Favorable
Efficiency variance = $184 unfavorable
What are the four basic operating principles of the information processing cycle?
information, storage, input, processing
gathering, input, output, processing
input, gathering, software, output
input, processing, output, storage
Answer:
the answer is D
Explanation:
input, processing , output, and storage
The four basic operating principles of the information processing cycle are - Input, processing, output, and storage. Therefore, (D) is the correct option.
What is Information processing?Information processing is a method of capturing information in using it in the desired manner. In present times, this term is generally used for computer-based operations.
The information processing cycle is a method to process the obtained information. Input, processing, output, and storage are the four major principles of the information processing cycle. Therefore, (D) is the correct option.
To know more about, Information processing, visit the link below:
https://brainly.com/question/27178394
#SPJ2
You have been engaged to review the financial statements of Flounder Corporation. In the course of your examination, you conclude that the bookkeeper hired during the current year is not doing a good job. You notice a number of irregularities as follows.
1. Year-end wages payable of $3,410 were not recorded because the bookkeeper thought that "they were immaterial."
2. Accrued vacation pay for the year of $30,000 was not recorded because the bookkeeper "never heard that you had to do it."
3. Insurance for a 12-month period purchased on November 1 of this year was charged to insurance expense in the amount of $2,868 because "the amount of the check is about the same every year."
4. Reported sales revenue for the year is $1,928,140. This includes all sales taxes collected for the year. The sales tax rate is 6%. Because the sales tax is forwarded to the state’s Department of Revenue, the Sales Tax Expense account is debited. The bookkeeper thought that "the sales tax is a selling expense." At the end of the current year, the balance in the Sales Tax Expense account is $94,140.
Prepare the necessary correcting entries, assuming that Headland uses a calendar-year basis.
Answer:
Flounder Corporation
Journal Correcting Entries:
1. Debit Wages & Salaries Account $3,410
Credit Wages & Salaries Payable $3,410
To accrue unpaid wages.
2. Debit Wages $ Salaries Account $30,000
Credit Wages & Salaries Payable $30,000
To record vacation pay for the year.
3. Debit Insurance Prepaid $2,390
Credit Insurance Account $2,390
To account for Insurance Prepaid
4. Debit Sales Tax Expense $109,140
Credit Sales Tax Payable $109,140
To record 6% sales tax on $1,819,000
5. Debit Sales Tax Payable $94,140
Credit Sales Tax Expense $94,140
To record sales tax paid.
Explanation:
1. In accordance with the accrual concept and the matching principle of the US Generally Accepted Accounting Principles, all wages payable must be accrued. This ensures that expenses are matched to the period's revenue.
2. As in 1, all accrued vacation pay must be recorded.
3. Prepaid insurance must be accrued so that only the period's expense is recognized against the period's income.
4. The Sales Tax is calculated as follows:
Sales Revenue, including sales taxes divided by 106% to give the sales revenue figure. Then 6% is applied on sales revenue figure to get the Sales Taxes for the year.
Sales Revenue = $1,928,140/106% = $1,819,000
Sales Taxes = 6% of $1,819,000 = $109,140
Answer:
Explanation:
Journal Entry
Date Particulars Dr. Amt. Cr. Amt.
1 Salaries & Wages Expenses 3,410.00
Salaries & Wages Payable 3,410.00
2 Salaries & Wages Expenses 30,000.00
Salaries & Wages Payable 30,000.00
3 Prepaid Insurance 2,390.00 $2,868X 10/12
Insurance Expense 2,390.00 $2,868 X 10/12
4-1 Sales Revenue 723,052.5.00 $1,928,140X 6/106
Sales Tax Payable 723,052.5 .00 $1,928,140 X 6/106
4-2 Sales Tax Payable $94,140
Sales Tax Expense $94,140
Suppose that a monopoly firm finds that its MR is $68 for the first unit sold each day, $67 for the second unit sold each day, $66 for the third unit sold each day, and so on. Further suppose that the first worker hired produces 5 units per day, the second 4 units per day, the third 3 units per day, and so on.
Required:
a. What is the firm’s MRP for each of the first five workers?
b. Suppose that the monopolist is subjected to rate regulation and the regulator stipulates that it must charge exactly $58 per unit for all units sold. At that price, what is the firm’s MRP for each of the first five workers?
c. If the daily wage paid to workers is $242 per day, how many workers will the unregulated monopoly demand?
d. If the daily wage paid to workers falls to $113 per day, how many workers will the unregulated monopoly demand?
e. Comparing your answers to parts c and d, does regulating a monopoly’s output price always increase its demand for resources?
Answer:
a. What is the firm's MRP for each of the first five workers?
Worker 1 = $325Worker 2 = $242Worker 3 = $171Worker 4 = $109Worker 5 = $53The marginal revenue product = units produced x units price
b. Suppose that the monopolist is subjected to rate regulation and the regulator stipulates that it must charge exactly $58 per unit for all units sold. At that price, what is the firm's MRP for each of the first five workers?
Worker 1 = $290Worker 2 = $232Worker 3 = $174Worker 4 = $116Worker 5 = $58c. If the daily wage paid to workers is $242 per day, how many workers will the unregulated monopoly demand?
2 workers only, since their MRP ≥ $242 per dayd. If the daily wage paid to workers falls to $113 per day, how many workers will the unregulated monopoly demand?
3 workers only, since their MRP ≥ $113 per daye. Comparing your answers to parts c and d, does regulating a monopoly's output price always increase its demand for resources?
No it doesn't, since regulation always affects markets. Markets need regulation, but that doesn't mean that the effects of regulation are always positive for everyone involved. In this case, regulation is probably good for customers, but bad for the workers employed and the business itself.Explanation:
unit sold MR worker
1 $67 1
2 $66 1
3 $65 1
4 $64 1
5 $63 1
6 $62 2
7 $61 2
8 $60 2
9 $59 2
10 $58 3
11 $57 3
12 $56 3
13 $55 4
14 $54 4
15 $53 5
basic similarity and different between BAUM, UNIDO, DEPSA project life cycle
Answer:
BAUM, UNIDO, and DEPSA all refer to types of project development cycles.
A. The BAUM project lifecycle refers to the World Banks' project development cycle as described by Warren Baum.
The BAUM project life cycle features 6 stages namely:
identification of opportunity preparation for the project appraisal of the project negotiations related to the project implementation and supervision of the project and ex-post evaluationB. UNIDO - The UNIDO model features three major stages which are also broken down into various steps.
Pre-investment phase
This phase is further divided into:
A study of the opportunity presented. This has to do with identifying ideas to be invested in. Pre-feasibility study. This stage involves the formulation, and selection of project alternatives) Feasibility study. When the project is selected, then it is tested to economic feasibility. Submission of report on the evaluation
2. Investment phase
This stage is further broken down into:
Project design stage: At this stage, the criteria for success, and key deliverables are spelt out. Construction stage (For engineering or building projects) Pre-production marketing stage Training of staff Kick-off stage3. Operational phase
This is also broken down into:
Replacement of equipment due to wear and tear or upgrade to better technologies
Development, invasion or liquidation states.
C. DEPSA stands for "Development Project Studies Authority".
This variant of the Project Lifecycle also consists of three major stages. They are:
Pre-investment phase Investment and Operation
The DEPSA stage is very similar to the UNIDO project life cycle. Both are defined according to an Investment Cycle paradigm and that's the reason why you have pre-investment, investment and operations phase for both methodologies.
Whilst the UNIDO model is more 'universal' in that it speaks to a wide range of businesses including engineering projects, DEPSA seems a little skewed towards engineering projects.
This is evident in the terminologies used in the investment phases. With DEPSA you would notice terms like 'detailed engineering design'
'construction', and 'erection'. The UNIDO the investment phase contains engineering terms but also speaks to 'marketing' and 'training'
While the BAUM project lifecycle contains all the basic stages in the DEPSA and UNIDO life cycles, it holds a universal outlook and seems applicable to both business and engineering projects.
Cheers!
The basic similarities and differences between the BAUM, UNIDO, DEPSA project life cycles are shown below:
The basic similarities between them all is that:
They are all project development cyclesThe basic differences between them is that:
They develop their respective programs in different phases.With this in mind, we know that a project development cycle has to do with the ways in which potential opportunities are identified and the various steps which a project manager has to take in order to take advantage of the project and make it a reality.
Read more about project life cycle here:
https://brainly.com/question/25231696
Baldwin has a new design for their product Bill next round that can reduce their material cost of producing units from $8.14 to $7.32. Baldwin passes on half of all cost savings by cutting the current price to customers. For simplicity:
- Use current labor costs of $4.17
- Assume all period costs as reported on Baldwin's Income Statement (Annual Rpt Pg 2) will remain the same.
Determine how many units (000) of product Bill would need to be sold next round to break even on the product.
Answer:
Hie, the information you have provided is incomplete.
However important information is explained as follows :
To calculate Break - even Point use the formula;
Break even Point (units) = Total Budgeted Fixed Costs / Contribution per unit
Break even Point is the level of operation at which a firm neither makes a profit nor a loss.
Contribution is Calculated as :
Sales : No information xxxx
Less Variable Costs ( Materials + Labor) $11,49
Contribution per unit xxxx
A machine purchased three years ago for $303,000 has a current book value using straight-line depreciation of $184,000; its operating expenses are $36,000 per year. A replacement machine would cost $239,000, have a useful life of nine years, and would require $12,000 per year in operating expenses. It has an expected salvage value of $76,000 after nine years. The current disposal value of the old machine is $88,000; if it is kept 9 more years, its residual value would be $15,000.Calculate the total costs in keeping the old machine and purchase a new machine.
Answer: Cost of keeping old machine is $469,000
Cost of Purchasing New Machine is $271,000
Explanation:
Keeping the old machine.
When calculating the cost of keeping the machine you use the disposal value.
Cost = (Disposal Value - Residual Value) + Total Operating Costs for remaining lifetime
Cost = ( 88,000 - 15,000) + ( 36,000 * 11 years)
Cost = 73,000 + 396,000
Cost = $469,000
Cost of keeping old machine is $469,000.
Cost of New machine
Cost = (Disposal Value - Residual Value) + Total Operating Costs for remaining lifetime
Cost = (239,000 - 76,000) + (12,000 * 9)
Cost = 163,000 + 108,000
Cost = $271,000
Cost if New machine purchased,
= $271,000
On January 1, 2016, VKI Corporation awarded restricted stock units (RSUs) representing 11 million of its $1 par common shares to key personnel, subject to forfeiture if employment is terminated within three years. After the recipients of the RSUs satisfy the vesting requirement, the company will distribute the shares. On the grant date, the shares had a market price of $7.20 per share.
Required:
1. Determine the total compensation cost pertaining to the RSUs. (Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).)
2. to 6. Prepare the appropriate journal entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).)
Answer:
1.$79,200,000
2.No entry is made on the grant date
3 - 5
Dr Compensation expense 264
Cr Paid-in capital—restricted stock 264
6.
Dr Paid-in capital—restricted stock 792
Cr Common stock 11
Cr Paid-in capital—excess of par (remainder) 781
Explanation:
1.Total compensation cost pertaining to the RSUs
Restricted stock units * Market price
11,000,000 *7.20
=$79,200,000
2.
January 1, 2016
No entry is made on the grant date
3 - 5
December 31, 2016, 2017 and 2018. (Note: The entry is the same for years 2016 - 2018.)
Dr Compensation expense 264
($792 million ÷ 3 years)
Cr Paid-in capital—restricted stock 264
6.
Dr Paid-in capital—restricted stock 792
Cr Common stock 11
(11 million shares x $1 par)
Cr Paid-in capital—excess of par (remainder) 781
Yvette is training for a triathlon, a timed race that combines swimming, biking, and running. Consider the following sentence: Because her pool sessions are helping her swim more quickly, Yvette plans to reduce by 1 hour per week the time she spends training on the bike and increase by 1 hour the time she spends in the swimming pool; however, her husband says that she should stop doing any biking and running and spend all 20 hours per week in the pool.
Which basic principle of individual choice does Yvette's plan illustrate that her husband's advice does not?
a. People usually exploit opportunities to make themselves better off.
b. Resources are scarce.
c. Many decisions are made on the margin.
d. All costs are opportunity costs.
Answer:
The correct answer is the option D: All costs are opportunity costs.
Explanation:
To begin with, the fact that Yvette is looking forward to reduce only one hour of her training on the bike in order to add one hour to her training on the pool and later her husband says that she should use all her hours for the training in the pool is showing a situation where her husband's advice does not illustrate a basic principle of individuals choices that is that all the costs are opportunity costs and therefore that if she decides to do that then she would be sacrifying the time for the other trainings and that would not benefit her. So that is why she must choose to sacrifice time in one training to do another and so on.
investing is best for
?
Most open market operations are ______ and are aimed at maintaining the economic status quo. During the______, however,______ targeted open market operations were used to encourage economic growth. These actions were dubbed "_______." The first round of this practice focused primarily on the________ market.
Answer:
routine; great recession; narrowly; quantitative easing; housing
Explanation:
An open market operation is sale and purchase of government securities to control the money supply and interest rates and to ensure regulation of the supply of money in the economy. Such money can be provided as loan to businesses and consumers.
Most open market operations are routine and are aimed at maintaining the economic status quo. During the great recession, however, narrowly targeted open market operations were used to encourage economic growth. These actions were dubbed "quantitative easing." The first round of this practice focused primarily on the housing market.
The following are Silver Corporation's unit costs of making and selling an item at a volume of 8,000 units per month (which represents the company's capacity):
Manufacturing:
Direct materials $4
Direct labor $5
Variable overhead $2
Fixed overhead $8
Selling and administrative:
Variable $1
Fixed $6
Present sales amount to 7,000 units per month. An order has been received from a customer in a foreign market for 1,000 units. The order would not affect regular sales. Total fixed costs, both manufacturing and selling and administrative, would not be affected by this order. The variable selling and administrative costs would have to be incurred for this special order as well as all other sales. Assume that direct labor is a variable cost. Assume the company has 50 units left over from last year which have small defects and which will have to be sold at a reduced price for scrap. The sale of these defective units will have no effect on the company's other sales. Which of the following costs is relevant in this decision?
a. $19 unit product cost
b. $11 variable manufacturing cost
c. $26 full cost
d. $1 variable selling and administrative cost
Answer:
$19 unit product cost - Not relevant
b. $11 variable manufacturing cost - Relevant
c. $26 full cost - Not relevant
d. $1 variable selling and administrative cost- Relevant
Explanation:
A relevant cost is an incremental cost future cash cost which is incurred as a direct consequence of a decision. Note that for any of the cost to be considered as relevant for the special order, such cost must satisfy all of the following criteria:
Future, cash flow and a rises a direct consequence.
So we shall apply these criteria to the question
a. $19 unit product cost : Not relevant because it includes an item of fixed cost of $2 which would incurred either way
$11 variable manufacturing cost: Relevant because it includes all the variable costs which would have to be incurred if the order is accepted
$26 full cost Not relevant because it includes items of fixed manufacturing and fixed selling costs of $14 i.e (8+6) which would incurred either way.
$1 variable selling and administrative cost : Relevant because it would be incurred if the special order is accepted
$19 unit product cost - Not relevant
b. $11 variable manufacturing cost - Relevant
c. $26 full cost - Not relevant
d. $1 variable selling and administrative cost- Relevant
A relevant cost is each future monetary expenditure that is incurred as a direct result of a choice. It should be emphasized that any expense taken into account for the particular order must meet all of the following criteria:
In conclusion, the growth, working capital, and a climb. As a result, we'll use these criteria to respond to the questions.The answers of the following are:
a. $19 unit product cost - Not relevant
b. $11 variable manufacturing cost - Relevant
c. $26 full cost - Not relevant
d. $1 variable selling and administrative cost- Relevant
a. $19 unit product cost: This is irrelevant since it contains a $2 set rate that would be incurred anyway.
$11 variable manufacturing cost: This is essential since it covers all of the various costs that must be paid if the order is approved. The full price is $26. It is irrelevant since it contains $14 in permanent manufactured and facilitator expenditures, i.e. (8+6), which would be incurred regardless of the outcome. $1 variable selling and administration cost: This is essential since it will be payable if the custom order is granted. The cost of a $19 unit product is negligible.
b. Variable manufacturing cost of $11 -
c. $26 full price - unimportant
d. $1 in variable selling and administrative costs- Relevant
To know more about the categories of the relevant and not relevant, refer to the link below:
https://brainly.com/question/13296648
c. Jessica Tate borrows $2,000 at a 10 percent add-on rate for two years. What is the finance charge?
Answer:
$400.
Explanation:
The simple interest is given by the formula below;
[tex]I = PRT[/tex]
Where;
I = Interest or Finance charge.
P = Principal
.
R = Rate.
T = Time (in years).
Given the following parameters;
I =?,
P = $2,000
R = 10% = 0.1
T = 2 years
Substituting into the formula, we have;
I = 2000 * 0.1 * 2
I = $400.
Hence, the finance charge is $400.
Portage Bay Enterprises has $ 1$1 million in excess cash, no debt, and is expected to have free cash flow of $ 10$10 million next year. Its FCF is then expected to grow at a rate of 5 %5% per year forever. If Portage Bay's equity cost of capital is 13 %13% and it has 66 million shares outstanding, what should be the price of Portage Bay stock?
Answer:
Value of a stock = $1.89
Explanation:
The value of a firm is the present value of the by the free cashflow discounted at the required rate of return
Value of the firm = FCF/(WACC- g)
FCF- free cash flow
WACC- Cost of capital = 13%
g- growth rate= 5%
= 10,000/(0.13-0.05)= 125,000,000
Value of a stock = Value of firm/No of shares
= $125,000,000/66,000,000 units
= $1.89
The quality assurance manager is assessing the capability of a process that puts pressurized grease in an aerosol can. The design specifications call for an average of 60 pounds per square inch of pressure in each can, with an upper specification limit of 65 psi and a lower specification limit of 55 psi. A sample is taken from production and it is found that the cans average 61 psi, with a standard deviation of 2 psi. Also, the process will stop if the process starts making cans that are more than three standard deviations above or below the average. What is the capability index of this production process?
Answer:
A sample is taken from production and it is found that the cans average 61 psi with a standard deviation of 2 psi.
Explanation:
After the checks of the QC manager, it is deduced that a sample is been taken from the production and it is also found that the kergs average 61 psi woth a standard deviation of 2 psi.
Hydraulic fittings are available in threaded, thread-forming, rivet and drive styles. They are available in different angled configurations and a wide variety of extension lengths to allow you to position the fitting for easy access with a grease gun on different types of equipment.
Another factor to consider is the type of grease fittings used in the facility. Most fittings have a ball check in the head of the fitting, which prevents dirt from getting to the bearing. The spherical contour of the fitting head provides a ball-and-socket joint between the fitting and the hydraulic coupler of the grease gun. The most common fitting is the hydraulic fitting, available in standard and metric sizes.
The Pet Company has recently discovered a type of rock which, when crushed, is extremely absorbent. It is expected that the firm will experience (beginning now) an unusually high growth rate (20%) during the period (3 years) when it has exclusive rights to the property where this rock can be found. However, beginning with the fourth year the firm's competition will have access to the material, and from that time on the firm will assume a normal growth rate of 8% annually. During the rapid growth period, the firm's dividend payout ratio will be relatively low (20%), to conserve funds for reinvestment. However, the decrease in growth will be accompanied by an increase in dividend payout to 50%. Last year's earnings were $2.00 per share (E0) and the firm's cost of equity is 10%. What should be the current price of the common stock?
Answer:
$70.26
Explanation:
Dividend payout ratio = Dividend per share / Earning per share
r = cost of equity = 10%, or 0.10
Discounting factor = 1 /(1 + r)^n
n = year
a. For during the rapid growth period
Dividend payout ratio = 20%, or 0.20
Growth rate = 20%, or 0.20
Earnings per share in year 1 = Last year's earnings per share * (1 + Growth rate) = $2 * (1 + 0.20) = $2.40 per share
Dividend per share in year 1 = Dividend payout ratio * Earning per share in year 1 = 0.20 * $2.40 = $0.48 per share
PV of year 1 dividend per share = $0.48 * (1/1.10^1) = $0.436363636363636
Earnings per share in year 2 = Earnings per share in year 1 * (1 + Growth rate) = $2.40 * (1 + 0.20) = $2.88 per share
Dividend per share in year 2 = Dividend payout ratio * Earning per share in year 2 = 0.20 * $2.88 = $0.5760 per share
PV of year 2 dividend per share = $0.5760 * (1/1.10^2) = $ 0.47603305785124
Earnings per share in year 3 = Earnings per share in year 2 * (1 + Growth rate) = $2.88 * (1 + 0.20) = $3.4560 per share
Dividend per share in year 3 = Dividend payout ratio * Earning per share in year 3 = 0.20 * $3.4560 = $0.6912 per share
PV of year 3 dividend per share = $0.6912 * (1/1.10^3) = $0.51930879038317
b. For during the slow growth period
Dividend payout ratio = 50%, or 0.50
Growth rate = 8%, or 0.08
Earnings per share in year 4 = Earnings per share in year 3 * (1 + Growth rate during slow growth) = $3.4560 * (1 + 0.08) = $3.73248
Dividend per share in year 4 = Dividend payout ratio * Earning per share in year 4 = 0.50 * $3.73248 = $1.86624 per share
Dividend per share in year 5 = Dividend per share in year 4 * (1 + Growth rate during slow growth) = $1.86624 * (1 + 0.08) = $2.0155392
Stock price in year 4 = Dividend per share in year 5 / (r - Growth rate during slow growth) = $2.0155392 / (0.10 - 0.08) = $100.77696
PV of stock price in year 4 = $100.77696 * (1/1.10^4) = 68.8320196707875
c. Calculation of the current price of the common stock
Current price of the common stock = PV of year 1 dividend per share + PV of year 2 dividend per share + PV of year 3 dividend per share + PV of stock price in year 4 = $0.436363636363636 + $0.47603305785124 + $0.51930879038317 + $68.8320196707875 = $70.26
Therefore, the current price of the common stock is $70.26.
When actual output exceeds potential, firms have an easy time keeping production in line with the high demand. Firms therefore lower their prices by more than the usual amount in an attempt to cover increased production costs. When actual output falls below potential, firms easily keep production in line with the high demand. Firms therefore raise their prices by more than the usual amount in an attempt to cover increased production costs. When actual output exceeds potential, firms struggle to keep production in line with the high demand. Firms therefore raise their prices by more than the usual amount in an attempt to cover increased production costs. When actual output exceeds potential, firms struggle to keep production in line with the high demand. Firms therefore lower their prices with decreased production costs.
A. True
B. False
Answer: When actual output exceeds potential
Firms raise their prices by more than the usual amount in an attempt to cover increased production costs.
Explanation: The price level rises because employers have to raise wage rates to entice more people into the labor market and employers have to pay more for other inputs that become more expensive to produce.
You are considering replacing your aging propane furnace for a natural gas model. The propane model originally cost $2,200, will last 6 more years, and will have no salvage value. The gas model costs $2,200 and offers a $400 trade-in on the old furnace. It lasts 13 years and can be salvaged for $500 at the end of year 13. Annual fuel costs are $800 for the propane furnace and $600 for the gas furnace. The real interest rate is 9% per year. Using cash-flow replacement and annual worth analysis, should the propane furnace be replaced with the gas model?
Answer:
The information is not complete (we do not know the useful life of the propane model), but the difference in costs between one project and the other is two large. The NPV of the savings for the gas model almost pays for the initial investment, plus the present value of the costs of using the gas model are much lower for future equivalent projects, we can assume that replacing the propane furnace with the gas model is a good investment.
We cannot determine exactly by how much the actual worth of the costs of the gas model are lower than the costs of the propane model, but there is no doubt that they are much lower. The only way that the propane model would have lower actual costs would that its useful life is much longer.
Explanation:
use propane model use gas model
initial investment $0 $1,800
operating costs $800 $600
useful life 6 years 13 years
present value of the costs for first product life cycle:
$3,559 (6 years) $6,129 (13 years)
Since the useful lives of the alternatives are not the same, we must find a common denominator for the useful life of the alternatives. Here we have a problem because we are not given the information.
But we can assume that the useful life of a propane furnace is also 13 years:
use propane model use gas model
initial investment $2,200 $2,200
operating costs $800 $600
useful life 13 years 13 years
residual value $0 $500
present value of total costs per life cycle:
$8,190 $6,529
Now we need to determine the NPV of the money saved by using gas propane = -$140 (-$1,800, 9%, $200 saved during 12 periods and $700 received at last period), so basically the gas model almost pays for itself with the money it saves.
GEICO, the number-two auto insurer with $18 billion in revenue last year, spent $0.9 billion on advertising that year and plans to continue spending the same percentage of sales on advertising next year. The average advertising-to-sales ratio for the insurance industry is 0.2 percent of sales. If GEICO projects $20 billion in sales next year, using the percentage-of-sales method of advertising budgeting, how much will the company budget for advertising if basing it on projected sales?
Answer:
The budget for advertising for the next year will be $1 billion.
Explanation:
Based on the information given in the question, the advertising to sales ratio for GEICO based on its last year data is,
Advertising to sales = Advertising / Sales Revenue
Advertising to sales = 0.9 / 18 = 0.05 or 5%
The advertising to sales ratio for GEICO is much higher than the industry average. If GEICO continues to maintain this ratio for the next year, the budget for advertising will be,
Advertising budget = 20 * 5% = $1 billion
If it uses the industry average ratio, the budget will be,
Advertising budget = 20 * 0.2% = $0.04 billion
As GEICO is expected to maintain its own advertising to sales ratio, the correct answer for advertising budget us $1 billion
Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement, which follows:
Sales $ 1,604,000
Variable expenses 663,400
Contribution margin 940,600
Fixed expenses 1,035,000
Net operating income (loss) $ (94,400)
In an effort to isolate the problem, the president has asked for an income statement segmented by division. Accordingly, the Accounting Department has developed the following information:
Division East Central West
Sales $ 394,000 $ 630,000 $ 580,000
Variable expenses as a percentage of sales 50 % 28 % 50 %
Traceable fixed expenses $ 278,000 $ 333,000 $ 210,000
Required:
1. Prepare a contribution format income statement segmented by divisions, as desired by the president.
Answer and Explanation:
The Preparation of contribution format income statement is shown below:-
Wingate Company
Contribution format income statement
Particulars Total East Central West
Sales $1,604,000 $394,000 $630,000 $580,000
Variable
Variable expenses as a
percentage of sales 50% 28% 50%
expenses $663,400 $197,000 $176,400 $290,000
Contribution
margin $940,600 $197,000 $453,600 $290,000
Traceable Fixed
expenses $821,000 $278,000 $333,000 $210,000
Segment
margin $119,600 ($81,000) $120,600 $80,000
Common Fixed
expenses $214,000
($1,035,000 - $821,000)
Net operating
income (loss) ($94,400)
The contribution margin income statement is the statement in which the net operating income or loss could be find out by deducting the variable cost and the fixed cost from the sales revenue
Answer:
The answer is "loss of $ 944,000".
Explanation:
Please find the attachment for the solution.
Strategic thinking is different from strategic planning in that ________.
A) strategic thinking relies more on hard data than strategic planning.
B) strategic thinking is regimented and confining, whereas strategic planning is more flexible.
C) strategic thinking includes all types of information sources while strategic planning does not.
D) strategic thinking can create an illusion of control, whereas strategic planning avoids this.
Answer:
C) strategic thinking includes all types of information sources while strategic planning does not.
Explanation:
The strategic thinking is the process in which the lower level of management involves which make the needs according to the company needs. In this, the managers focused on all types of information regarding the employee qualifications, skills, expertise etc and other matters of the company.
While on the other hand, the strategic planning is done by high level of management that involves the big decision of the company through which the company future could become better. Moreover it does not involves all types of information but involves only important matters i.e to be used for the long run
Johnson Corp. has two divisions, Division A and Division B. Division B has asked Division A to supply it with 5,000 units of part WD26 this year to use in one of its products. Division A has th capacity to produce 25,000 units of part WD26 per year. Division A expects to sell 21,000 units of part WD26 to outside customers this year at a price of $20.00 per unit. To fill the order from Division B, Division A would have to cut back its sales to outside customers. Division A's variable manufacturing cost (direct labor + direct material + variable overhead) for part WD26 is $12.00 per unit. The variable selling cost when selling to outside customers is $2.00 per unit. This variable selling cost would not have to be incurred on sales of the parts to Division B.
1. Calculate Division A's minimum acceptable transfer price.
2. Baker Inc. has approached Division B and has offered to sell 5,000 units of the part for $18 per unit. Division B can either purchase the part from Baker Inc. or transfer it from Division A. How much does the overall profit of Johnson Inc. increase or decrease, if Division B accepts Baker's offer and declines to transfer any units from Division A.
Answer:
1. $13.50
2. Decrease in Profit : $ 22,500
Explanation:
Minimum Transfer Price = Variable Costs - Internal Savings + Opportunity Cost
= $12.00 + $2.00 - $2.00 + 1,000/4,000 × ($20.00 - ($12.00 + $2.00))
= $12.00 + $1.50
= $13.50
Maximum Transfer Price can never be more than what the receiving division (Division B can purchase externally)
Maximum Transfer Price = $18.00
Division B will incur more costs when it accepts Baker's offer and declines to transfer any units from Division A. Hence decrease in Profit)
Decrease in Profit = 5,000 units × ($18.00 - $13.50)
= $ 22,500
Bryan Dobbs, Director of Marketing at Sarga Inc. has received multiple complaints about Davy Siegler over the past two months. Apparently, he spends his day surfing the net, passes all his own work on to subordinates, and disrupts those around him by dragging them over to view various videos, jokes, and timewaster findings online. Dobbs sets up a meeting with the intention of discovering what issues are causing Siegler's clear lack of motivation and poor production. During the meeting, Siegler is passive-aggressive and displays motivation and resentment issues. He recently received an "above average" performance appraisal but no pay increase.
This activity is important because it allows students to better understand cyberloafing’s relationship to job satisfaction, and then provides an opportunity for them to apply pertinent theory in order to resolve the scenario presented in the video.
1. Davy’s behavior on the job is related to all of the following, EXCEPT
A. counterproductive work behavior.
B. stress.
C. inequity.
D. organizational citizenship behavior.
Answer:
D. organizational citizenship behavior.
Explanation:
In this scenario exemplified in the question, it can be said that Davy has all work behaviors except the behavior of organizational citizenship.
This behavior can be described as one that is not mandatory as part of the functional requirements of a job position, but an employee who presents organizational citizenship helps the company to promote a culture favorable to the maintenance of ethics and the development and performance of the organization as one all.
Any informal action by the worker that benefits the organization is part of the behavior of organizational citizenship. Some of these dimensions of behavior are altruism, loyalty, conscience, self-development, obedience, etc.
These behaviors are capable of promoting the well-being of the employee and the entire organization.
With practical illustrations, discuss how managers can leverage organizational behavior components to maximize business success.
Answer:
b
Explanation:
The U.S. Treasury has Kleine Toymakers is introducing a new line of robotic toys, which it expects to grow their earnings at a much faster rate than normal over the next three years. After paying a dividend of $2.00 last year, it does not expect to pay a dividend for the next three years. After that Kleine plans to pay a dividend of $4.00 in year 4 and then increase the dividend at a rate of 10 percent in years 5 and 6. What is the present value of the dividends to be paid out over the next six years if the required rate of return is 15 percent
Answer:
The present value of the dividends to be paid out over the next six years if the required rate of return is 15 percent is $6.57
Explanation:
Solution:
Given that
The present value =∑ ⁿ t=1 cf/ (1 +r)t
where cf= cash flow
r =the required rate of return
t = the number of years
Now
The present value will be:
cf₁/(1+r)^1 + cf₂/(1 +)^2 + cf₃/(1+r)3 + cf₄/(1 +r)^4) + cf₅/(1 +r)^5 + cf₆/(1+r)^6
Hence,
cf₁, cf₂ cf₃ = 0 as the firm does not expect to pay dividend in the next three years
Note: Kindly find an attached document of the part of the solution to this given question
Prepare Journal Entries in a Purchases Journal Guardian Services Inc. had the following transactions during the month of April: Apr. 4. Purchased office supplies from Officemate Inc. on account, $415. Apr. 9. Purchased office equipment on account from Tek Village Inc., $2,460. Apr. 16. Purchased office supplies from Officemate Inc. on account, $185. Apr. 19. Purchased office supplies from Paper-to-Go Inc. on account, $195. Apr. 27. Paid invoice on April 4 purchase from Officemate Inc. a. Prepare a purchases journal to record the April purchase transactions for Guardian Services Inc. If an amount box does not require an entry, leave it blank. If no entry is required in "Other Accounts Dr." then select "No entry required".
Answer:
Apr. 4.
Office Supplies $415 (debit)
Accounts Payable - Officemate Inc. $415 (credit)
Apr. 9
Office Equipment $2,460 (debit)
Accounts Payable - Tek Village Inc. $2,460 (credit)
Apr. 16.
Office Supplies $185 (debit)
Accounts Payable - Officemate Inc. $185 (credit)
Apr. 19
Office Supplies $195 (debit)
Accounts Payable - Paper-to-Go Inc. $195 (credit)
Apr. 27
Accounts Payable - Officemate Inc. $415 (debit)
Cash $415 (credit)
Explanation:
Recognise a Liability - Accounts Payable for each purchase on Account.
De-recognise the liability when amount is settled.
If the price of a kayak increases, _______.
A. sellers offer more kayaks for sale
B. the supply of kayaks increases
C. sellers offer fewer kayaks for sale
D. the supply of kayaks decreases.
Answer:
A. sellers offer more kayaks for sale
Explanation:
According to the law of supply , the higher the price, the higher the quantity supplied and the lower the price, the lower the quantity supplied.
If the price of kayaks increases, all things being equal the quantity of kayaks supplied increases.
I hope my answer helps you
Answer:
A is the correct answer.
Explanation:
the law of supply states that when price gets higher or increases, then there would be a corresponding increase in the quantity supplied and when the price gets lower or decreases, so does the quantity supplied.
Following this law, If the price of kayaks increases, then the quantity of kayaks supplied would also increase.
In late December you​ decide, for tax​ purposes, to sell a losing position that you hold in​ Twitter, which is listed on the​ NYSE, so that you can capture the loss and use it to offset some capital​ gains, thus reducing your taxes for the current year.​ However, since you still believe that Twitter is a good​ long-term investment, you wish to buy back your position in February the following year. To get this done you call your Charles Schwab brokerage account manager and request that he immediately sell your 1 comma 200 shares of Twitter and then in early February buy them back. Charles Schwab charges a commission of ​$4.95 for online stock trades and for​ broker-assisted trades there is an additional ​$25 service​ charge, so the total commission is ​$29.95.
a. Suppose that your total transaction costs for selling the 1,400 shares of Twitter in December were $59.95. What was the bid/ask spread for Twitter at the time your trade was executed?
b. Given that Twitter is listed on the NYSE, do your total transaction costs for December seem reasonable? Explain why or why not.
c. When your February statement arrives in the mail, you see that your total transaction costs for buying the 1,400 shares of Twitter were $47.95. What was the bid/ask spread for Twitter at the time your trade was executed?
d. What are your total round-trip transaction costs for both selling and buying the shares, and what could you have done differently to reduce the total costs?
Answer:
a. The Bid/Ask spread is $0.03.
b. The statement is “False”.
c. The Bid/Ask spread at the time trade was executed is $0.02.
d. The Total Round-Trip Transaction Costs is $107.90 and the Bid/Ask spread is $0.09. It is important to have a lower commission charge. So the correct statement is “Statement C”.
Explanation:
Please check the file attached below to see the solution to given question