Answer:
$8,000 gain
Explanation:
the carrying value of the bonds at the time of the redemption:
10 coupon payments were made, so amortization of bond premium = ($40,000 / 20) x 11 = $22,000
carrying value = $1,040,000 - $22,000 = $1,018,000
redemption price = $1,000,000 x 1.01 = $1,010,000
Fox's gain = carrying value - redemption price = $1,018,000 - $1,010,000 = $8,000
Since the carrying value was higher than the redemption value, Fox must report a gain.
synovec co. is growing quickly. dividends are expected to grow at a rate of 30 percent for the next three years, with the growth rate falling off to a constant 5 percent thereafter. If the required return is 11 percent, and the company just paid a dividend 2.8, what is the current share price?
Answer:
P0 = $90.3328 rounded off to $90.33
Explanation:
The two stage growth model of DDM can be used to calculate the price of the share today. The DDM values a stock based on the present value of the expected future dividends from the stock. The price of this stock under this model can be calculated as follows,
P0 = D0 * (1+g1) / (1+r) + D0 * (1+g1)^2 / (1+r)^2 + D0 * (1+g1)^3 / (1+r)^3
+ [ (D0 * (1+g1)^3 * (1+g2) / (r - g2)) / (1+r)^3 ]
Where,
g1 is the initial growth rate which is 30% g2 is the constant growth rate which is 5% r is the required rate of return
P0 = 2.8 * (1+0.3) / (1+0.11) + 2.8 * (1+0.3)^2 / (1+0.11)^2 +
2.8 * (1+0.3)^3 / (1+0.11)^3 +
[ (2.8 * (1+0.3)^3 * (1+0.05) / (0.11 - 0.05)) / (1+0.11)^3 ]
P0 = $90.3328 rounded off to $90.33
P0 = $13.33
27. Presently, Stock A pays a dividend of $1.00 a share, and you expect the dividend to grow rapidly for the next four years at 20 percent. Thus the dividend payments will be
The question is incomplete. The complete question is,
Presently, Stock A pays a dividend of $1.00 a share, and you expect the dividend to grow rapidly for the next four years at 20 percent. Thus the dividend payments will be
Year Dividend
1 $1.20
2 1.44
3 1.73
4 2.07
After this initial period of super growth, the rate of increase in the dividend should decline to 8 percent. If you want to earn 12 percent on investments in common stock, what is the maximum you should pay for this stock?
Answer:
The maximum that should be paid for the stock today is $40.29
Explanation:
We will use the two stage dividend growth model of DDM to calculate the price of the stock today. The DDM values the stock based on the present value of the expected future dividends from the stock. The formula for price under the two stage model is,
P0 = D1 / (1+r) + D2 / (1+r)^2 + ... + Dn / (1+r)^n + [Dn * (1+g2) / (r - g2)] / (1+r)^n
P0 = 1.2 / (1+0.12) + 1.44 / (1+0.12)^2 + 1.73 / (1+0.12)^3 + 2.07 * (1+0.12)^4 +
[2.07 * (1+0.08) / (0.12 - 0.08)] / (1+0.12)^4
P0 = $40.2853 rounded off to $40.29
Investors require a return of 13 percent on the stock for the first three years, a return of 11 percent for the next three years, and then a return of 9 percent thereafter. What is the current share price for the stock
Complete Question:
BenchMark, Inc., just paid a dividend of $3.45 on its stock. The growth rate in dividends is expected to be a constant 5 percent per year indefinitely. Investors require a return of 13 percent on the stock for the first three years, a return of 11 percent for the next three years, and then a return of 9 percent thereafter. What is the current share price for the stock.
Answer:
BenchMark, Inc.
The current share price for the stock is:
$43.13
Explanation:
a) Data and Calculations:
Dividend per share = $3.45
Growth rate = 5%
Investors' required rate of return = 13%
Stock value = Dividend per share / (Required Rate of Return – Dividend Growth Rate)
= $3.45/(0.13 - 0.05)
= $43.13
b) We can calculate BenchMark's current share price, by dividing the dividend per share by the investors' required rate of return after subtracting the growth rate from the required rate of return.
In Celia's company, employees enroll each year for the set of benefits that makes the most sense for their individual needs. This is referred to as a(n) _______ plan. affordable benefit government-mandated customized benefit collective bargaining cafeteria-style
Answer: Customized benefit
Explanation:
With a Customized Benefit plan, the company is able to pick which benefits to wants to offer it's employees. This enables them to even allow employees choose the set of benefits that makes the most sense for their individual needs thereby creating a personal flexible plan like in Celia's company.
The benefit of this is that your plan will not be full of products that are irrelevant to your health thereby giving the person more value for their money.
Pensacola Inc. exchanged old equipment for new equipment in two exchange transactions. Each transaction has commercial substance. Old Equipment Cash Book Value Fair Value Received Equipment A $ 74,100 $ 81,600 $ 11,100 Equipment B $ 61,900 $ 55,600 $ 10,000 For Equipment B, Pensacola would record a gain/(loss) of:
Answer:
Loss of 6300
Explanation:
Give the following :
Equipment - -- B/Val - - F/Value - - cash Received Equipment A - - 74,100 - - 81,600 - - 11,100 Equipment B - - 61,900 - - 55,600 - - 10,000
Book value of equipment B = 61,900
Loss / gain :
(Fair value - book value ) = (55,600 - 61,900)
Loss / gain = - 6,300
Loss = (6300)
When screening employees for employment to guard sensitive assets,the screener should look for employment data from the following areas:________
a) Former employers
b) State and local police
c) Schools
d) Television producers
Answer:
When screening employees for employment to guard sensitive assets,the screener should look for employment data from the following areas:________
a) Former employers
Explanation:
Former employers remain the best source of employment data when screening employees for employment. It is believed that past performances always influence future performances. As a result, former employers of any worker should be in position to provide sensitive information about the new employee. However, there is the need to adhere to data privacy by ensuring that the employee consents to the enquiry into his or her past.
If assets are $365,000 and equity is $120,000, then liabilities are: __________
a. $120,000
b. $245.000
c. $365,000
d. $485,000.
e. $610,000.
Answer:
b. $245.000
Explanation:
The computation of the liabilities is shown below:
As we know that
The accounting equation comprise of
total assets = total liabilities + total equity
where,
total assets = $365,000
Total equity = $120,000
So, the total liabilities is
= total assets - total equity
= $365,000 - $120,000
= $245,000
Hence, the total liabilities is b. $245.000
Papenfuss Family Inn is a bed and breakfast establishment in a converted 100-year-old mansion. The Inn's guests appreciate its gourmet breakfasts and individually decorated rooms. The Inn's overhead budget for the most recent month appears below: Activity level 80 guests Variable overhead costs: Supplies $ 144.00 Laundry 600.00 Fixed overhead costs: Utilities 444.00 Salaries and wages 5,120.00 Depreciation 2,900.00 Total overhead cost $ 9,208.00 The Inn's variable overhead costs are driven by the number of guests. What would be the total budgeted overhead cost for a month if the activity level is 70 guests
Answer: $9,115
Explanation:
Total budgeted overhead cost =Variable Costs + Overhead costs
The variable costs listed are for an activity level of 80 guests but 70 guests will be coming.
The variable costs will be;
Supplies
= (144 / 80) * 70
= $126
Laundry
= ( 600/80 ) * 70
= $525
The rest are fixed costs so will stay the same regardless of activity level.
Total budgeted overhead cost = 126 + 525 + 444 + 5,120 + 2,900
= $9,115
Pepci co. is issuing a $1,000 par value bond that pays 7 percent annual coupon and mature in 15 years. Investors are expected to pay $925 for the bond. The company is in a 40 percent tax bracket. What will be the firm’s after tax cost of debt?
Answer:
1,678660
Explanation:
You wish to retire after 20 years; at which time you want to have accumulated enough money to receive an annuity of $60,000 a year for 25 years of retirement. During the period before retirement you can earn 4 percent annually, while after retirement you can earn 3 percent on your money. What annual contribution to the retirement fund will allow you to receive the 60,000 annually?
Answer:
$35,085.63
Explanation:
we must first calculate the amount of money that you need to receive $60,000 in annual distributions during 25 years. We must use the present value of an annuity formula:
PV = annuity payment x annuity factor
annuity payment = $60,000
annuity factor (3%, 25 periods) = 17.413
PV = $60,000 x 17.413 = $1,044,780
this means that you will need to save $1,044,780 in the remaining 20 years. The annual contribution can be calculated using the future value of an annuity formula:
FV = annuity payment x annuity factor
Fv = $1,044,780
annuity factor (4%, 20 periods) = 29.778
annuity payment = FV / annuity factor = $1,044,780 / 29.778 = $35,085.63
Bramble Corp. can sell all the units it can produce of either Plain or Fancy but not both. Plain has a unit contribution margin of $58 and takes two machine hours to make and Fancy has a unit contribution margin of $57 and takes three machine hours to make. There are 2400 machine hours available to manufacture a product. What should Bramble do?
Answer:
plain makes a profit of $10
Explanation:
The computation is shown below:
Particulars Plain fancy
Unit contribution margin $58 $57
Machine hours 2 3
Contribution margin
per machine hour $29 $19
($58 ÷ 2) ($57 ÷3)
As we can see that the plain makes a profit of $10 that comes from
= $29 - $19
= $10
Before deciding on a pricing strategy, Wallmart consults with a strategy team to understand what discounts the Doormart is offering. The model that BEST fits this industry is:
Answer:
oligopoly
Explanation:
The model that best fits this industry would be an oligopoly. This is a market or industry which is dominated by a small group of very large companies/sellers. In this model, the few companies involved are in direct competition with one another and focus solely on outpricing one another in order to gain a competitive edge. Which is what Wallmart is trying to accomplish by understanding the discounts being offered by Doormart.
Tacit collusion is more likely to be a concern with horizontal alliances. vertical alliances. international alliances of any kind compared with domestic alliances. U.S. alliances with companies in less- developed countries.
Answer:
horizontal alliances
Explanation:
A horizontal alliance is a term that describes a form of arrangements or partnership between businesses that conduct as competitors in the exact area.
In other words, competitors work in unison to enhance their strategy in the market.
On the other hand, Tacit Collusion occurs when firms avoid actions that are likely to require or demand a response from another firm often a competitor. For example, when a firm avoids the opportunity to price cut an opposition due to the fact that, the opposition may retaliate
Hence, Tacit collusion is more likely to be a concern with HORIZONTAL ALLIANCE
Next to each item, indicate whether it would most likely be reported on the balance sheet (B), the income statement (1), or the statement of stockholders' equity (SE) Choose
a. Cash (year end balance)
b. Advertising expense
c. Common stock
d. Printing fees earned B, T
e. Dividends
f. Accounts payable
g. Inventory>
h. Equipment
Answer:
a. balance sheet (B)
b. income statement (1)
c. statement of stockholders' equity (SE)
d. income statement (1)
e. statement of stockholders' equity (SE)
f. balance sheet (B
g.balance sheet (B
h.balance sheet (B
Explanation:
The Balance Sheet consists of balances in the Asset , Liabilities and Equity Accounts and it uses the equation Assets = Equity + Liability.It shows the result as at the end of the Financial Period.
The Income statement comprises of Revenues or Incomes and Expenses. The profit or loss resulting from operation during the financial period is the the end goal of this financial statement.
The statement of stockholders' equity (SE) shows the interest of the owners of the company and any distributions out of profit that has been made to them during the year.
Rawls would agree with the idea that inequalities can be justified if they are based on home-country values. redistribute wealth and property benefit those in the highest position. are used to the advantage of everyone. benefit those in the worst position.
Answer:
benefit those in the worst position.
Explanation:
Rawls theory is based on the concept that no inequalities shall prevail in the country. Although some inequalities are unavoidable.
In those circumstances, when Rawls shall agree to such inequalities, and in-fact, further states that it shall benefit all the people. But for this he states that those in the worst position shall be benefited first and with maximum.
This shall create an equality as these people facing inequality will not be criticised further for any purpose, if they are paid off well in the first instance only.
The top four most economically globalized countries according to KOF Swiss Economic Instituteâs 2007 rankings include:___________.
Answer:
The top four most economically globalized countries according to KOF Swiss Economic Instituteâs 2017 rankings include:___________.
Netherlands, Ireland, Belgium, and Austria.
Explanation:
The KOF Swiss Economic Institute's ranking of the most economically globalized countries is a ranking of the countries with businesses that have global influence and presence. The Institute which an index called the KOF Globalisation Index to measure the economic, social and political dimensions of globalisation and rank countries according to their performances.
You're prepared to make monthly payments of $390, beginning at the end of this month, into an account that pays 7 percent interest compounded monthly. How many payments will you have made when your account balance reaches $23,087?
Answer:
$ 11,111,000
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A cost center is a unit of a business that incurs costs but does not directly generate revenues. Which of the following would definitely not be considered a cost center?A. Accounting department.B. Purchasing department.C. Research departmentD. Advertising department.E. All of these could be considered cost centers.
Answer:
E. All of these could be considered cost centers.
Explanation:
A cost center is a unit of a business that incurs costs but does not directly generate revenues. Generally, cost center in an organization is typically saddled with the responsibility of controlling and allocation of costs but not the generation of revenues like a profit center such as sales department.
Hence, the following departments would definitely be considered a cost center;
A. Accounting department.
B. Purchasing department.
C. Research department
D. Advertising department.
The following are all examples of abnormal items disclosed by the company, except: (4 points) A) Goodwill Impairment Charges B) Royalty Expense C) Intangible Asset Impairment Charges D) Restructuring Charges
Answer:
Correct Answer:
B) Royalty Expense
Explanation:
A royalty is a payment made by one party, franchisee to another that owns a particular asset, franchisor for the right to ongoing use of that asset. The expenses incurred in executing this payment is called royalty expenses.
The shareholders' equity of Green Corporation includes $332,000 of $1 par common stock and $520,000 par of 7% cumulative preferred stock. The board of directors of Green declared cash dividends of $62,000 in 2021 after paying $32,000 cash dividends in each of 2020 and 2019. What is the amount of dividends common shareholders will receive in 2021
Answer:
$16,800
Explanation:
The computation of the amount of dividends common shareholders will receive in 2021 is shown below:-
Dividends per year for preferred stock = Par value × Cumulative preferred stock
= $520,000 × 7%
= $36,400
So, dividends in arrears for preferred stock for years is
For 2017 = Dividends per year for preferred stock - Cash dividend
= $36,400 - $32,000
= $4,400
For 2018 = For 2017 + (Dividends per year for preferred stock - Cash dividend)
= $4,400 + ($36,400 - $32,000)
= $8,800
Total dividends to be paid to preferred stockholders = For 2018 + Dividends per year for preferred stock
= $8,800 + $36,400
= $45,200
Finally
Dividends for common stockholders = Declared Cash Dividend - Total dividends to be paid to preferred stockholders
= $62,000 - $45,200
= $16,800
List some forms of political risk other than a takeover of a subsidiary by the host government, and briefly elaborate on how each factor can affect the risk to the MNC.Identify common financial factors for an MNC to consider when assessing country risk. Briefly elaborate on how each factor can affect the risk to the MNC.
Answer with Explanation:
The political risk are the risk that the investors and corporation bears who are affected by the political decisions of government. The adverse impact of political decision making is reduction in earnings, abandoning of operations, government interventions, etc.
Here are some of the political risks that has adverse impact on the operations of Multinational Corporations:
Blocked funds will result in loosing potential investments in other countries due to shortage of fund created by the blockage in movement of funds from one country to other. This blockage is as a result of regulations passed to restrict the use of money generated in a country.Changing tax laws will result in the decrease in earnings for the shareholders and retained earnings for the corporationsPublic revolt against the firm which was to abandon the use of fair treatment like in the case of PIA-Pakistan International Airlines. The company is struggling to lower its losses by rewarding the right person and firing employees who are working as per set standards. The employees has revolted against the firm which has severe impact on the share value in the stock market. The revolt continued for the whole month.Changing Interest rates would result in increase in interest cost to MNC which is also because of government interventions.Attitude of the host government towards MNC is political risk if the host government is willing to tighten controls which includes environmental related regulations, worker's right act, etc. This would increase the cost to the multinational corporations.Corruption and rule of Law effect the most to the corporations because the fraudulent activities can not be stopped if there is no rule of law. It also depends on how long does a legal case takes to be resolved.The Financial factors includes inflation rate, Exchange rate, GDP growth rate, interest rates, electricity cost, corporation taxes, labor costs, industry specific policies, etc. These factors can result in acceptance or rejections of projects in the country because these are the main financial factors that has tendency to alter the decision of the investors and corporations.
Corporation Taxes and interest rates are discussed above.All the cost related items which includes electricity costs, inflation rates, labor costs, etc are very important element as they are almost more than 50% of total cost of the project. Hence these are the financial factors that has immense importance when assessing country risks and considering potential investment opportunities.Exchange rate are another important element that helps in assessing the country risk of the company. If the investment was profitable but the currency deflated against the MNC's home country then it was not a good decision. The exchange rate fluctuations will also be an important financial factor while making business decisions.GDP growth rate is also one of the significant factor to consider because significant investment value grows if the Gross Domestic Production is growing with great pace and vice versa.lectronically filed tax returns: a. May not be transmitted from a taxpayer's home computer. b. Constitute less than 50 percent of the returns filed with the IRS. c. Offer faster refunds than paper returns. d. Have error rates similar to paper returns.
Answer: c. Offer faster refunds than paper returns.
Explanation:
The IRS has stated that people who submit their tax returns electronically or use the Direct debit facility will see their refunds faster than those using paper returns.
This has been most recently blamed on the current pandemic which has forced the IRS to reduce its staff in adherence with Corona virus prevention tips. As a result, the available staff cannot process the paper returns as fast.
It is therefore better to use the electronic or the Direct debit facilities if one wants their returns processed fast and their refunds released earlier.
The communication tools a company uses to pursue its advertising and marketing objectives is often referred to as the company’s ________.
Answer:
Promotional mix.
Explanation:
In a person's day to day involvement in business, their are key patterns and methods that are used as target strategies to promote his/her business, Therefore this mix model is explained as the collection of tools you use that explicitly in enhancing of business, products, or services. The keys that are used most times use are personal selling, direct marketing, and sales promotions, also personal approach and also advertising play vital roles too. This model design directly shows its target audience values, features of the products or services you offer. This helps differentiate you from your competition and drive sales.
A company’s book value increases when a company retains its net income.
a) true
b) false
The answer to your question is true.
Crich Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 21,980 hours and the total estimated manufacturing overhead was $540,708. At the end of the year, actual direct labor-hours for the year were 21,950 hours and the actual manufacturing overhead for the year was $540,708. Overhead at the end of the year was: (Round your intermediate calculations to 2 decimal places.)
Answer:
$738 Under applied
Explanation:
Calculation for Overhead at the end of the year
First step is to calculate for the POR using this formula
POR=Total estimated manufacturing overhead/Estimated direct labor-hours
Let plug in the formula
POR=$540,708/21,980 hours
POR=$24.6/DLH
Second step is to Calculate for the applied Overhead using this formula
Applied overhead =Actual direct labor-hours ×POR
Let plug in the formula
Applied overhead =21,950 hours×$24.6/DLH
Applied overhead=$539,970
The last step is to for the Overhead at the end of the year
Using this formula
Ending Overhead =Actual manufacturing overhead -Applied overhead
Let plug in the formula
Ending overhead =$540,708-$539,970
Ending overhead=$738 Under applied
Therefore the Overhead at the end of the year will be $738 Under applied due to the debit balance.
A flexible budget is based on a single predicted amount of sales or other activity measure.
a) true
b) false
Answer:
The answer is false
Explanation:
A flexible budget is a budget that changes with the level of volumes or revenue. It is not a single predicted amount of sales like fixed budget but a numerous budgets prepared for different levels of activities.
One of the advantages is that it is a goods metric to measure manager's
performance.
And one of the advantages is that it is complex to prepare.
The IRS: a. requires official tax forms be obtained at the local IRS office. b. provides information on how to choose a stock. c. has an app for mobile phones. d. links to the H
Answer:
c. has an app for mobile phones.
Explanation:
The IRS refers to the Internal Revenue service handled by the government agency based on the Unites States. It is responsible for the tax collection and the imposition of the taxation law.
To check the status of your tax the IRS allows the application in the mobile devices so that everyone could access it anywhere anytime.
Therefore the correct option is c.
At Bargain Electronics, it costs $29 per unit ($15 variable and $14 fixed) to make an MP3 player at full capacity that normally sells for $40. A foreign wholesaler offers to buy 3,200 units at $28 each. Bargain Electronics will incur special shipping costs of $2 per unit. Assuming that Bargain Electronics has excess operating capacity, indicate the net income (loss) Bargain Electronics would realize by accepting the special order. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Reject Accept Net Income Order Order Increase (Decrease)Revenues $ $ $Costs-Manufacturing ShippingNet income $ $ $The special order should be rejected accepted.
Answer:
Bargain Electronics would realize Net Income of $35,200 by accepting the special order.
Decision : The special order should be accepted.
Explanation:
Analysis of net income effect of accepting the special order
Sales ( 3,200 units × $28) $89,600
Less Expenses :
Variable ( 3,200 units × $15) ($48,000)
Shipping Costs ($2 × 3,200 units ) ($6,400)
Incremental Income / (loss) $35,200
Note that, the fixed costs are irrelevant for this decision. This is because they will remain the same whether or not the special order is accepted.
Last month when Holiday Creations, Inc., sold 42,000 units, total sales were $297,000, total variable expenses were $222,750, and fixed expenses were $36,900.Required:
1. What is the companyâs contribution margin (CM) ratio?
2. Estimate the change in the companyâs net operating income if it were to increase its total sales by $1,800.
Answer:
Results are below.
Explanation:
Giving the following information:
Sales in units= 42,000
Total sales= $297,000
Total variable expenses= $222,750
Total fixed expenses= $36,900
To calculate the contribution margin ratio, we need to use the following formula:
contribution margin ratio= (sales - total variable cost) / sales
contribution margin ratio= (297,000 - 222,750) / 297,000
contribution margin ratio= 0.25
Now, the effect on the income of an increase in sales:
Effect on income= contribution margin ratio*increase in sales
Effect on income= 0.25*1,800
Effect on income= $450 increase
Which of the following statements is true of radio-frequency identification (RFID) tags?
a. They can help identify genuine products from counterfeit knock-offs.
b. They are designed to learn more about customers' wants, needs, and behaviors.
c. They help firms gain competitive advantage by forecasting customer retention rates.
d. They help identify which customers should be the focus of targeted marketing initiatives.
Answer:
Correct Answer:
a. They can help identify genuine products from counterfeit knock-offs.
Explanation:
Radio-frequency identification (RFID) tags refers to a technology whereby digital data encoded in RFID tags are captured by a reader via radio waves. In general, RFID is similar to barcoding in that data from a tag or label are captured by a device that stores the data in a database.
Answer:
a. They can help identify genuine products from counterfeit knock-offs.
Explanation:
Radio-frequency identification: The term "radio-frequency identification" is also referred as RFID, and is described as a phenomenon that utilizes "electromagnetic fields" to track and identify different tags attached to various objects automatically. Therefore, a radio-frequency identification tag generally possesses a small "radio transponder" which is a radio transmitter and receiver. Lastly, when it is being triggered by any "electromagnetic interrogation pulse" from a closed RFID "reader device", then the tag tends to transmit some digital data i.e, inventory number to the reader.