The total penalty for Samantha Corporation's failure to file on time will be the greater of the late filing penalty or the minimum penalty, which is $2,175. The failure to file on time penalty is based on the number of months that the tax return is late and the number of shareholders that the corporation has.
For Samantha Corporation, the penalty for failure to file on time will be calculated as follows:
1. Late filing penalty: The penalty for filing the tax return after the due date is $195 per shareholder per month, up to a maximum of 12 months. Therefore, for Samantha Corporation with 5 shareholders, the late filing penalty will be $975 per month (5 x $195) for up to 12 months.
2. Minimum penalty: If the tax return is filed more than 60 days after the due date, the penalty will be the lesser of $435 per shareholder or the tax due with the return. In this case, since Samantha Corporation has 5 shareholders, the minimum penalty will be $2,175 (5 x $435).
Therefore, the total penalty for Samantha Corporation's failure to file on time will be the greater of the late filing penalty or the minimum penalty, which is $2,175. This penalty is in addition to any interest and late payment penalties that may be assessed on the tax due with the return.
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Suppose that you have just purchased a share of stock for $40. The most recent dividend was $2 and dividends are expected to grow at a rate of 7% indefinitely. What must your required return be on the stock
The required return on the stock is 12%. This means that an investor would expect to earn a return of at least 12% on their investment in order to justify paying $40 for a share of stock that pays $2 in dividends and is expected to grow at a rate of 7% indefinitely.
This model takes into account the current stock price, the expected dividends, and the required return.
First, the expected dividend for the next year. Since the most recent dividend was $2, we can assume that the next dividend will also be $2.
However, since dividends are expected to grow at a rate of 7%, we can calculate the dividend for the following year by multiplying the current dividend by 1.07. So, the expected dividend for year two would be $2 x 1.07 = $2.14.
Next, we the present value of these future dividends.
To do this, we divide the expected dividend for year one by the required return minus the dividend growth rate. In this case, the required return is unknown, so we'll call it "r." The formula would be:
Present value of future dividends = expected dividend / (r - dividend growth rate)
$40 = $2 / (r - 0.07)
$40r - $2.80 = $2
$40r = $4.80
r = 12%
So, the required return on the stock is 12%
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An employee carrying documents detailing his employer's trade secrets is assaulted and robbed of the documents on his way to a meeting. Which Commercial Crime insuring agreement would cover the loss
The Commercial Crime insuring agreement that would cover the loss in this scenario is the Employee Theft insuring agreement.
The Employee Theft insuring agreement provides coverage for losses caused by dishonest acts committed by an employee, including theft of property. In this case, the employee was carrying documents detailing trade secrets and was robbed of them, which would be considered a theft of property.
It's important to note that the Employee Theft insuring agreement typically requires that the theft be committed by an employee with the intent to cause a loss, and the loss must be discovered within a certain time period.
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If a Super Meal costs $1.00 more than a Regular Meal, economic analysis would argue that a customer should buy the Super Meal if:
If the additional benefits provided by the Super Meal (such as larger portion sizes or additional menu items) are worth more than the extra $1.00 cost.
If a Super Meal costs $1.00 more than a Regular Meal, economic analysis would argue that a customer should buy the Super Meal If the additional benefits provided by the Super Meal (such as larger portion sizes or additional menu items) are worth more than the extra $1.00 cost.
This decision should be based on the customer's individual preferences and budget constraints. Additionally, if the Super Meal offers a better value in terms of cost per unit (such as cost per ounce or cost per calorie), it may also be a more economically efficient choice.
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Suppose a project plan had three distinct paths through the network. The first path consisted of activities A (3 days), B (4 days), and C (2 days). The second path consisted of activities D (4 days), E (5 days), and F (5 days). The third path consisted of activities G (2 days), H (3 days) and I (10 days). Which is the critical path
Path 3 is the critical path as it is the longest path, taking 15 days to complete. Any delays in the activities on this path will delay the entire project.
The critical path is the longest path through the network, which is determined by adding up the durations of all the activities on each path.
In this case, the durations of the three paths are as follows:
Path 1: 3 days + 4 days + 2 days = 9 days
Path 2: 4 days + 5 days + 5 days = 14 days
Path 3: 2 days + 3 days + 10 days = 15 days
Therefore, Path 3 is the critical path as it is the longest path, taking 15 days to complete. Any delays in the activities on this path will delay the entire project.
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Gerald Wilkins owns a home worth $330,000, a car worth $19,750, various investments worth $650,000 and other personal assets worth $34,000. He still owes $160,000 on his mortgage and $5,700 on a car loan. What is his net taxable estate
Gerald Wilkins owns home worth $330,000, a car worth $19,750, some investments worth $650,000 and the personal assets worth is $34,000. He still owes $160,000 on mortgage and $5,700 car loan. Then, the net taxable estate is $868,050.
To calculate Gerald Wilkins' net taxable estate, we need to first calculate the value of his total assets and then subtract his debts and any allowable deductions.
Value of Total Assets;
Home = $330,000
Car = $19,750
Investments = $650,000
Other Personal Assets = $34,000
Total Assets = $330,000 + $19,750 + $650,000 + $34,000
= $1,033,750
Debts;
Mortgage = $160,000
Car Loan = $5,700
Total Debts = $160,000 + $5,700 = $165,700
Net Taxable Estate'
Net Taxable Estate = Total Assets - Total Debts - Allowable Deductions
Assuming there are no additional deductions, we can calculate the net taxable estate as;
Net Taxable Estate = $1,033,750 - $165,700
= $868,050
Therefore, net taxable estate is $868,050.
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A lump-sum deposit of $8,000 left in a bank for 12 years at 9%, compounded annually, will result in an ending balance of: (Select the closest answer.)
The closest answer to the ending balance after 12 years is $21,334.97.
Given a lump-sum deposit of $8,000 left in a bank for 12 years at an interest rate of 9% compounded annually, you can calculate the ending balance using the formula for compound interest, which is:
A = P(1 + r/n)^(nt)
In this formula, A is the ending balance, P is the principal amount ($8,000), r is the annual interest rate (0.09), n is the number of times the interest is compounded per year (1), and t is the number of years (12).
Plugging the values into the formula, you get:
A = 8000(1 + 0.09/1)^(1*12)
A = 8000(1.09)^12
A ≈ 21,334.97
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Complete question: A lump sum deposit of $8,000 left in the bank for 12 years at 9% compounded annually will result in an ending balance of (select the closest answer)
$11,600.
$16,640.
$21,334.
$52,938.
Managers of what type of decentralized units have authority and responsibility for revenues, costs, and assets invested in the unit
Managers of profit centers have authority and responsibility for revenues, costs, and assets invested in the unit. A profit center is a type of decentralized unit within an organization that is responsible for generating revenue and managing its own costs and investments.
The main advantage of the profit center model is that it allows for greater flexibility and responsiveness to market conditions. By giving managers control over their own resources, they are able to adapt quickly to changes in demand or supply, and make decisions that optimize profitability. This can lead to greater innovation, better customer service, and increased efficiency. This means that the manager of a profit center has significant autonomy and decision-making power within their unit. They are held accountable for the financial performance of their unit, including both revenue generation and cost control.
However, it is important to note that the profit center model also has its challenges. For example, it can be difficult to coordinate activities and achieve economies of scale across multiple profit centers. Additionally, there may be a risk of sub-optimization, where individual units prioritize their own interests over those of the organization as a whole. Overall, the profit center model is a popular approach to decentralization in many organizations. It provides managers with autonomy and accountability, while also allowing for greater agility and responsiveness to market conditions.
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Why would three partners who own a small graphic design business fit into what Erik Olin Wright calls contradictory class locations
Erik Olin Wright's contradictory class locations refer to situations where individuals occupy positions in the class structure that embody conflicting class interests or have a mix of both exploitative and non-exploitative relations with others. In the case of the three partners in a small graphic design business, they may find themselves in contradictory class locations due to the following reasons:
1. As owners of the business, they may be considered capitalists who benefit from the profit generated by their employees' labor. This places them in a higher class position, as they have control over the means of production.
2. However, as partners in a small business, they likely participate in the day-to-day operations of the company, working alongside their employees. This means they also share some characteristics with the working class, as they engage in the direct production of goods and services.
3. Additionally, if the partners have varying levels of ownership or decision-making power within the business, they may occupy different positions within the class structure, leading to contradictory class locations among the partners themselves.
In summary, the three partners who own a small graphic design business can fit into Erik Olin Wright's contradictory class locations due to their dual roles as both owners and workers, as well as potential differences in ownership and decision-making power among them. This unique position within the economic system highlights the complex nature of class relations in contemporary society.
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Marshall Corporation had $220,000 in invested assets, sales of $242,000, income from operations of $66,000, and a desired minimum rate of return of 3%. The rate of return on investment for Marshall is
The rate of return on investment for Marshall Corporation is: 30%. The correct option is B.
To determine the rate of return, we will need to use the following information:
1. Invested assets: $220,000
2. Sales: $242,000
3. Income from operations: $66,000
4. Desired minimum rate of return: 3%
To calculate the rate of return on investment, we will use the following formula:
Rate of return on investment = (Income from operations / Invested assets) x 100%
Rate of return on investment = ($66,000 / $220,000) x 100%
Rate of return on investment = (0.3) x 100%
Rate of return on investment = 30%
Therefore, Marshall Corporation has a rate of return on investment of 30%, which is higher than their desired minimum rate of return of 3%.
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Complete question:
Marshall Corporation had $220,000 in invested assets, sales of $242,000, income from operations of $66,000, and a desired minimum rate of return of 3%. The rate of return on investment for Marshall is
a. 9.1%
b. 30%
c. 3.0%
d. 27.3%
Determining which products should be produced when the plant is operating at full capacity is referred to as a(n):
Determining which products should be produced when the plant is operating at full capacity is referred to as a(n) "capacity utilization decision" or "production planning decision."
This involves selecting the most profitable combination of products to produce, considering the available resources and the demand for the products. Determining which products should be produced when the plant is operating at full capacity is referred to as production planning. Production planning involves analyzing demand, available resources, and production capabilities to determine the most efficient and effective use of resources to produce products at full capacity. This includes determining which products should be prioritized based on demand, production costs, and profitability, and ensuring that the production process is optimized to produce the desired products at full capacity.
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Finn Company projects cost of goods sold to be $250,000 in October and $400,000 in November. Finn maintains an ending inventory equal to 10% of the next month's projected cost of goods sold. Calculate Finn's desired ending inventory for October.
Finn's desired ending inventory for October is $40,000.
To calculate Finn Company's desired ending inventory for October, we need to consider the projected cost of goods sold for November and the 10% requirement for ending inventory.
Finn Company projects the cost of goods sold to be $400,000 in November.
To find the desired ending inventory for October, we need to calculate 10% of this projected amount.
Ending inventory for October = 10% of November's projected cost of goods sold
Ending inventory for October = 10% x $400,000
Ending inventory for October = 0.1 x $400,000
Ending inventory for October = $40,000
So, Finn's desired ending inventory for October is $40,000. This amount ensures that the company maintains a stock level equal to 10% of the next month's projected cost of goods sold, which is important for meeting customer demand and managing inventory effectively.
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Which of the following metrics would give you the best idea of how much your company is spending on benefits? Benefit costs by employee group Benefits as a percent of payroll Paid time-off utilization Retirement plan participation rate
Of the three metrics provided, the benefit costs by employee group would give you the best idea of how much your company is spending on benefits. This is because it provides a breakdown of the costs associated with each employee group, allowing you to see how much is being spent on benefits for each group. The correct option is a.
Benefits as a percent of payroll can also be a useful metric, as it gives you an idea of how much of your company's payroll is being spent on benefits. However, it doesn't provide a breakdown of costs by employee group, so it may not be as useful if you have different benefit plans for different groups. Paid time-off utilization and retirement plan participation rate are both important metrics, but they don't provide information about the overall cost of benefits.
Paid time-off utilization can give you an idea of how much time employees are taking off, while retirement plan participation rate can give you an idea of how many employees are participating in the plan. However, neither of these metrics provides information about the actual cost of benefits. The correct option is a.
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Which advertising agency department is responsible for deciding on the target market for the advertising
The department responsible for deciding on the target market for advertising is the account planning department. So the right answer is account planning department.
The account planning department is responsible for analyzing consumer behavior and market research to create advertising strategies that effectively reach the target audience. This involves understanding the target market's characteristics, such as their demographics, psychographics, behaviors, and attitudes, to create messages that will resonate with them. The department then works with other departments, such as creative and media, to develop and execute the advertising campaign.
In conclusion, the account planning department is responsible for identifying and analyzing the target market to create effective advertising campaigns. It is a critical department in the advertising agency, as it ensures that the advertising message resonates with the intended audience.
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Answer the question based on the payoff matrix for a duopoly in which the numbers indicate the profit in millions of dollars for each firm. If the two firms collude to maximize joint profits, the total profits for the two firms will be
Based on the payoff matrix for a duopoly, If the two firms collude to maximize joint profits, the total profits for the two firms will be $525 million.
D is the correct answer.
If both the firms choose the high price strategy, Firm 1 will earn $325 million and Firm 2 will earn $200 million resulting in the total profit of $525 million for the two firms. This is the highest possible profit they can achieve by cooperating with each other.
A duopoly is defined as two dominant firms that produce the same or comparable goods and services in a market or industry. The main factors that make up a duopoly are the interactions and effects that the firms have on one another.
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The complete question is:
Firm A: High price A = $250A = $325; High price B = $250B = $200
Firm B: Low price A = $200A = $175; Low price B = $325B = $175
Answer the question based on the payoff matrix for a duopoly in which the numbers indicate the profit in millions of dollars for each firm. If the two firms collude to maximize joint profits, the total profits for the two firms will be:
A. $350 million
B. $400 million
C. $500 million
D. $525 million
Fran purchased an annuity that provides $6,600 quarterly payments for the next 10 years. The annuity was purchased at a cost of $99,000. How much of the first quarterly payment will Fran include in her gross income
Fran will include $1,650 of the first quarterly payment in her gross income.
To determine how much of the first quarterly payment Fran will include in her gross income, we first need to calculate the taxable portion of each payment. This is done using the exclusion ratio, which is the original investment divided by the expected return.
In this case, the original investment is $99,000 and the expected return is $26,400 per year (or $6,600 per quarter). Therefore, the exclusion ratio is 99,000 / 26,400 = 3.75.
To calculate the taxable portion of the first quarterly payment, we multiply the payment amount ($6,600) by the exclusion ratio (3.75) and round to the nearest dollar. This gives us:
$6,600 x 3.75 = $24,750
Round to nearest dollar: $24,750 = $24,750
So Fran will include $1,650 ($24,750 / 15) of the first quarterly payment in her gross income.
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Multiple Choice 1-15 Standard Deduction (LO 1.7) Arthur is 65 years old and single. He supports his father, who is 90 years old, blind, and has no income. What is Arthur's standard deduction? a.$13,850 b.$12,200 c.$15,500 d.$20,000 e.$18,350
Arthur's standard deduction is $12,200. Therefore, the correct answer is B.
Arthur is considered single, so he gets the standard deduction for single taxpayers. However, he also supports his father, who meets the criteria to be considered a dependent for tax purposes. Since his father is over 65 and blind, an additional amount can be added to Arthur's standard deduction.
For tax year 2021, the standard deduction for a single taxpayer is $12,550.
However, Arthur can add an additional $1,650 (over 65) + $1,650 (blind) = $3,300 to his standard deduction, bringing it to a total of $12,550 + $3,300 = $15,850.
But Arthur's father has no income, which means he cannot provide more than half of his own support. Therefore, he qualifies as Arthur's dependent. This means Arthur must subtract his father's exemption amount from his standard deduction.
For tax year 2021, the exemption amount is $4,300. So Arthur's final standard deduction is $15,850 - $4,300 = $12,200.
Therefore, the correct answer is B: $12,200.
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sanders, incorporated, paid a $3 dividend per share last year and is expected to continue to pay out 70% of its earnings as dividends for the foreseeable future. if the firm is expected to generate a 14% return on equity in the future, and if you require a 16% return on the stock, the value of the stock is __________.
If the firm is expected to generate a 14% return on equity in the future, and if you require a 16% return on the stock, the value of the stock is 18.75.
First, let's calculate the expected dividend per share for the current year. We know that Sanders, Incorporated paid a $3 dividend per share last year and is expected to continue paying out 70% of its earnings as dividends.
Therefore, the expected dividend per share for this year can be calculated as follows:
Expected dividend per share = Previous year dividend per share x Payout ratio
Expected dividend per share = $3 x 0.70
Expected dividend per share = $2.10
Next, let's calculate the expected growth rate of dividends. We know that the firm is expected to generate a 14% return on equity in the future. We can use this to estimate the growth rate of earnings and dividends using the sustainable growth rate formula:
Sustainable growth rate = Return on equity x (1 - Dividend payout ratio)
Sustainable growth rate = 0.14 x (1 - 0.70)
Sustainable growth rate = 0.042 or 4.2%
Now, we can use the DDM formula to calculate the intrinsic value of the stock:
Intrinsic value of stock = Expected dividend per share / (Required rate of return - Expected dividend growth rate)
Intrinsic value of stock = $2.10 / (0.16 - 0.042)
Intrinsic value of stock = $18.75
Therefore, the value of the stock is $18.75. If the current market price of the stock is lower than this value, it may be considered undervalued and a good investment opportunity. If the market price is higher, it may be considered overvalued and not a good investment opportunity.
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5) Suppose a company wants to raise $100 million. The subscription price is $45and the current stock price is $55. The firm currently has 5,000,000 shares outstanding How many shares have to be issued? How many rights will it take to purchase one share? What is the value of a right?
To raise $100 million, the company needs to issue new shares at the subscription price of $45. Therefore, the number of shares required to raise $100 million can be calculated by dividing the required amount by the subscription price, which is $100 million / $45 = 2,222,222.22.
Since the company currently has 5,000,000 shares outstanding, the total number of shares after the issuance would be 7,222,222.22.
To purchase one share, a shareholder will need to have one right. The number of rights required to purchase one share can be calculated by dividing the total number of shares after issuance by the number of rights issued. In this case, since the company wants to raise $100 million, it can issue (100,000,000 / 45) = 2,222,222.22 shares. Assuming that one right is required to purchase one share, the total number of rights issued would be 2,222,222.22.
The value of a right can be calculated by dividing the current market price of the stock by the total number of rights issued. In this case, since the current stock price is $55 and the total number of rights issued is 2,222,222.22, the value of a right is $55 / 2,222,222.22 = $0.025.
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Taunton issued 62,000 new shares of its common stock valued at $2.75 per share for all of the outstanding stock of Eubanks. Assume that Taunton acquired Eubanks on January 1, 2020. Immediately afterwards, what is the reported amount of the consolidated Common Stock
To calculate the reported amount of the consolidated Common Stock after Taunton acquired Eubanks on January 1, 2020, you will need to know the number of Taunton's outstanding shares and their value before the acquisition.
Unfortunately, that information is not provided in your question.
However, I can help you with the value of the 62,000 new shares issued by Taunton. To find this, you can multiply the number of new shares (62,000) by the value per share ($2.75):
62,000 shares × $2.75 per share = $170,500
This is the value of the new shares issued for the acquisition of Eubanks. To find the total consolidated Common Stock value, you would need to add this amount to the existing value of Taunton's Common Stock before the acquisition.
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A futures contract on a 30-day Eurodollar time deposit is currently selling at an IMM index of 95.75 percent. The IMM index on a 30-day Eurodollar time deposit for immediate delivery is 95.10 percent. What is the basis
The basis is 0.65%. This indicates that investors are willing to pay a premium for the futures contract, possibly because they believe that the interest rate on Eurodollar time deposits will increase in the future.
The basis is the difference between the price of a futures contract and the underlying asset's spot price. In this case, the underlying asset is a 30-day Eurodollar time deposit.
The IMM index on a 30-day Eurodollar time deposit for immediate delivery is 95.10 percent. This means that if an investor were to buy a Eurodollar time deposit for immediate delivery, they would earn a 30-day interest rate of 95.10 percent per year.
The futures contract on a 30-day Eurodollar time deposit is currently selling at an IMM index of 95.75 percent. This means that investors are willing to pay more for the futures contract than the underlying asset's spot price.
To calculate the basis, we subtract the spot price from the futures price:
Basis = Futures price - Spot price
Basis = 95.75% - 95.10%
Basis = 0.65%
Therefore, the basis is 0.65%. This indicates that investors are willing to pay a premium for the futures contract, possibly because they believe that the interest rate on Eurodollar time deposits will increase in the future.
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The risk that the interest rate that must be paid to refinance the short-term liabilities is greater than the interest rate earned on the long term assets is called
The risk described in the question is known as interest rate risk. This risk arises from the fact that a company's short-term liabilities may need to be refinanced at a time when interest rates are higher than the interest rate earned on the company's long-term assets.
This can lead to a reduction in the company's net interest income, which can negatively impact its financial performance. To mitigate this risk, companies may use interest rate derivatives, such as interest rate swaps or options, to hedge against adverse interest rate movements.
It is important for companies to carefully manage their interest rate risk to ensure that they are able to meet their financial obligations and maintain stable financial performance.
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Groupon offers discounts on products and services in specific cities. The concept of Groupon is that the discount for the product or service can be claimed only if a certain number of consumers (i.e., a group) purchase it. Groupon would BEST be described as a:
Groupon is an e-commerce platform that offers deals and discounts on various products and services to consumers. The concept of Groupon is based on group buying, where a specific number of customers need to buy a product or service to activate the discount.
Groupon provides local deals, allowing businesses to reach out to potential customers and boost their sales. Groupon operates as a marketplace, connecting businesses with customers, and facilitating transactions between them. Groupon generates revenue by taking a percentage of the sales generated through its platform. Groupon's model benefits both businesses and customers. For businesses, Groupon helps attract new customers and increase sales. For customers, Groupon provides an opportunity to try new products and services at discounted prices. In summary, Groupon can be described as an e-commerce platform that provides local deals to customers, based on group buying. It benefits both businesses and customers, and generates revenue by taking a percentage of the sales generated through its platform.
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Swifty Manufacturing is introducing a new product with a unit selling price of $11.00. The product required an investment of $540000, and the company requires a 10% ROI. Projected sales are 90000 units. Compute the target cost per unit.
The target cost per unit is the cost at which Swifty Manufacturing needs to produce each unit in order to achieve its desired 10% ROI. To calculate the target cost per unit, we need to subtract the desired ROI from the selling price and divide it by the projected sales volume.
Target cost per unit = (Unit selling price - Desired ROI) / Projected sales volume
In this case, the unit selling price is $11.00 and the desired ROI is 10%, which is equivalent to $1.10 per unit. Therefore, the target cost per unit can be calculated as:
Target cost per unit = ($11.00 - $1.10) / 90,000
Target cost per unit = $9.90 / 90,000
Target cost per unit = $0.11
This means that Swifty Manufacturing needs to produce each unit at a cost of $0.11 in order to achieve its desired ROI of 10% and sell the product at a unit selling price of $11.00.
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A TPS supports the monitoring, collecting, storage, and processing of ________ from the organization's basic business transactions.
Answer:
the answer is:
Explanation:
Data
hope this helps!
A firm should only undertake a project if its expected return is ______ that of a financial asset of comparable risk.
A firm should only undertake a project if its expected return is greater than or equal to that of a financial asset of comparable risk.
A financial asset is a tradable financial instrument that represents ownership of a financial claim or contractual right to receive money or another asset. Financial assets can take various forms, such as stocks, bonds, options, futures, currencies, and commodities. They are typically bought and sold in financial markets, such as stock exchanges and over-the-counter markets, and are used for various purposes, such as investment, speculation, hedging, and financing.
Financial assets are distinguished from real assets, which are tangible or intangible assets that have intrinsic value, such as real estate, machinery, and intellectual property. Unlike real assets, financial assets do not have inherent value but derive their value from the underlying assets or contracts they represent. For example, a stock represents ownership in a company, and its value reflects the company's profitability and growth prospects. A bond represents a loan to a borrower, and its value reflects the borrower's creditworthiness and the prevailing interest rates.
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What is the expected return for a portfolio with a risk premium of 2.65 percent if the risk-free return is 3.34 percent and the inflation rate is 1.20 percent
The expected return for a portfolio with a risk premium of 2.65%, a risk-free return of 3.34%, and an inflation rate of 1.20% is 4.72%.
To calculate the expected return for a portfolio with a risk premium of 2.65%, a risk-free return of 3.34%, and an inflation rate of 1.20%, follow these steps:
Determine the nominal return: Add the risk premium to the risk-free return.
Nominal Return = Risk Premium + Risk-Free Return
Nominal Return = 2.65% + 3.34%
Calculate the nominal return:
Nominal Return = 5.99%
Adjust for inflation to find the real return: Use the Fisher equation.
Real Return = [(1 + Nominal Return) / (1 + Inflation Rate)] - 1
Real Return = [(1 + 0.0599) / (1 + 0.0120)] - 1
Calculate the real return:
Real Return = 0.0472 or 4.72%
The expected return for a portfolio with a risk premium of 2.65%, a risk-free return of 3.34%, and an inflation rate of 1.20% is 4.72%.
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What is the promised yield on a corporate bond that is currently priced at $950 and will pay $1,050 in 1 year
The promised yield on the corporate bond is 10.53%.
To calculate the promised yield on a corporate bond, we can use the following formula:
Promised yield = (Face value - Price)/Price
where the Face value is the amount the bond will pay at maturity.
In this case, the face value of the bond is $1,050 and the current price is $950. Plugging these values into the formula, we get:
Promised yield = (1,050 - 950)/950 = 0.1053 or 10.53%
Therefore, the promised yield on the corporate bond is 10.53%.
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If fixed costs are $850,000 and variable costs are 61% of sales, what is the break-even point in sales dollars
To calculate the break-even point in sales dollars, we need to use the following formula:
Break-even point = Fixed costs / (1 - Variable cost percentage). The break-even point in sales dollars is $2,179,487.18.
Plugging in the given values, we get:
Break-even point = $850,000 / (1 - 0.61)
Simplifying the denominator, we get:
Break-even point = $850,000 / 0.39
Calculating the numerator, we get:
Break-even point = $2,179,487.18
In simple terms, the break-even point is the level of sales at which a business generates enough revenue to cover its fixed and variable costs. Fixed costs are expenses that do not change regardless of the level of production or sales, such as rent, salaries, and insurance. Variable costs, on the other hand, are expenses that vary based on the level of production or sales, such as raw materials and commissions.
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what is the approximate market value of a $1000 corporate bond that pays 7 percent interest when comparable bonds are paying 8 percent interest
The approximate market value for a $1,000 corporate bond that pays 7% interest when comparable bonds are paying 8% interest is $875. The market value of a bond is determined by discounting its future cash flows back to the present value.
To estimate the approximate market value for a $1,000 corporate bond that pays 7% interest when comparable bonds are paying 8% interest, we can use the concept of bond valuation.
In this case, the bond is paying $70 in annual interest (7% of $1,000 face value), while comparable bonds are paying $80 (8% of $1,000 face value).
Therefore, the bond is paying $10 less in interest than comparable bonds. To compensate for this lower return, the market value of the bond will be less than its face value.
We can estimate the market value of the bond by dividing the annual interest payment by the market interest rate and multiplying by the face value.
Market value = (Annual interest payment / Market interest rate) x Face value
Market value = ($70 / 0.08) x $1,000
Market value = $875
Therefore, the approximate market value for a $1,000 corporate bond that pays 7% interest when comparable bonds are paying 8% interest is $875.
In summary, the market value of a bond is determined by discounting its future cash flows back to the present value. The market value of a bond paying less interest than comparable bonds will be less than its face value.
The approximate market value for a $1,000 corporate bond that pays 7% interest when comparable bonds are paying 8% interest is $875.
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Complete Question:
What is the approximate market value for a $1,000 corporate bond that pays 7% interest when comparable bonds are paying 8% interest?
a. $800
b. $875
c. $70
d. $1,142
e. $1,000
A proposed capital budgeting project has initial cash outflows, followed by cash inflows, which are then followed by more cash outflows. We call these types of cash flows:
The type of cash flows that are characterized by initial cash outflows, followed by cash inflows, and then followed by more cash outflows are called non-conventional cash flows.
Non-conventional cash flows are more complex than conventional cash flows, which have a single initial cash outflow followed by a series of positive cash inflows. In non-conventional cash flows, there may be one or more cash outflows in addition to the initial investment, which can complicate the analysis and decision-making process. In order to evaluate a project with non-conventional cash flows, financial managers must use more advanced capital budgeting techniques, such as net present value (NPV) or internal rate of return (IRR).
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