Answer: c. greater because interest rate changes have a greater impact on distant cash flows than near-term cash flows.
Explanation:
Interest rate changes have a greater impact on distant cashflows because those cashflows will be exposed to the interest rates for longer. This means that they will be subjected to more discounting than a cashflow that is due in one year which would be subject to only a single year of discounting.
For instance, assume the required rate of return for two investments is 10%. One investment yields $10,000 in 20 years and another yields $10,000 in 2 years .
The present value of both are:
= 10,000 / (1 + 10%)²⁰ = 10,000 / ( 1 + 10%)²
= $1,486.43 = $8,264.46
Notice the difference. The longer term investment was more exposed to interest rate effects.
A firm is currently unlevered with 1,000,000 shares each price at $50. The firm is debating of changing its capital structure by taking $20 million in debt that matures in 4 years and repurchasing shares. It will pay down this debt by $5 million every year. If the tax rate is 21% and cost of debt is 7.5%, what is the firm value of the restructured firm
Answer:
its would be 50,000 dont really know
Compute a three-period moving average forecast given demand for shopping carts for the last five periods. (Round all your answers to two decimal points.) Period Demand 1 58 2 54 3 60 4 53 5 63
Answer:
Computation of a Three-Period Moving Average Forecast
Period Demand 3-period moving average
1 58
2 54
3 60 57.33
4 53 55.67
5 63 58.67
Explanation:
a) Data and Calculations:
Period Demand 3-period moving average
1 58
2 54
3 60 57.33 (58 + 54 + 60)/3
4 53 55.67 (54 + 60 + 53)/3
5 63 58.67 (60 + 53 + 63)/3
b) The three-period moving average is computed by summing the demand for periods 1, 2, and 3 and dividing it by 3. The result becomes the moving average for period 3. This process is repeated by eliminating the first one and adding the next number until the end.
Global Tek plans on increasing its annual dividend by 15 percent a year for the next four years and then decreasing the growth rate to 2.5 percent per year. The company just paid its annual dividend in the amount of $.20 per share. What is the current value of one share of this stock if the required rate of return is 17.4 percent
Answer:
2.02
Explanation:
year 1 dividend = 0.2 x 1.15 = 0.23
year 2 dividend = 0.2 x (1.15^2)= 0.26
year 3 dividend = 0.2 x (1.15^3) = 0.30
year 4 dividend = 0.2 x (1.15^4) = 0.35
divdend value in the second stage
0.35 x 1.025 / (0.174 - 0.025) = 2.41
Determine the present value of the cash flows
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
year 1 dividend = 0.2 x 1.15 = 0.23
year 2 dividend = 0.2 x (1.15^2)= 0.26
year 3 dividend = 0.2 x (1.15^3) = 0.30
year 4 dividend = 0.2 x (1.15^4) = 0.35 + 2.41
i = 17.4
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
The petty cash fund had an initial imprest balance of $110. It currently has $21 and petty cash tickets totaling $73 for office supplies. The entry to replenish the fund would contain:_______
a) a debit to Petty Cash for $89
b) a debit to Cash Short & Over for $16.
c) a credit to Petty Cash for $89
d) a credit to Cash Short & Over for $16
Answer:
B. Debit to cash short and over $16
Explanation:
The total entry to replenish the cash would be:
office supplies. 73
cash short and over 16
Cash. 89
The entry to replenish the fund would contain is Debit to cash short and over $16. Thus, option B is correct.
What is petty cash?Petty cash is a minuscule portion of discretion funds in the form of cash that is used for expenses when it would be inconvenient and costly to make a distribution by cheque due to the hassle and costs of drafting, signing, and then cashing the cheque.
Petty cash seems to be a small sum of money held on the corporate premises to cover minor monetary demands. Office supplies, cards, flowers, and other items are examples of these contributions. Petty cash is kept in a petty cash drawer or box close to where it is required.
The total entry to replenish the cash would be:
Office supplies 73
cash short and over 16
To Cash 89
Therefore, it can be concluded that the replenishment entry would be Debit to cash short and above $16. As a result, option B is correct.
Learn more about petty cash here:
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The Dow Theory describes stock prices as moving in trends analogous to the movement of water. Which of the following statements is nottrue?
A. Major trends resemble tides.
B. Intermediate trends resemble waves.
C. Short-run movements are like ripples.
D. Waves are the most important.
E. None of the above (that is, all are true statements)
Answer:
D.Waves are the most important I think sorry if I'm wrong
Explanation:
Hope this helped! :)
The Abner Corporation, a retail seller of television sets, wants to determine how many television sets it must sell to earn a profit of $10,000 per month. The price of each television set is $300, and the average variable cost is $100. What is the required sales volume if the Abner Corporation’s monthly fixed costs are $5,000 per month?
Answer: 75
Explanation:
The required sales volume if the Abner Corporation’s monthly fixed costs are $5,000 per month will be:
Required sales = (Fixed cost + target profit) / (Selling price - AVC)
= (5,000 + 10,000) / (300 - 100)
= 15,000 / 200
= 75
Therefore, the required sales volume is 75.
The table below pertains to a small agricultural economy where the typical consumer's basket
consists of 10 pounds of apples and 20 pounds of oranges. If 2017 is the base year, then the CPI
for 2018 was?
Year
Price of Apples
Price of Oranges
2017
$2.0 per pound (Apples)
$2.00 per pound (Oranges)
2018
$1.5 per pound (Apples)
$3.00 per pound (Oranges)
A) 125.0
B) 100.0
C) 95.0
D) 110.0
Answer:
125
Explanation:
Given the table:
Year
Price of Apples
Price of Oranges
2017
$2.0 per pound (Apples)
$2.00 per pound (Oranges)
2018
$1.5 per pound (Apples)
$3.00 per pound (Oranges
Consumer price index is obtained using the formular :
CPI = (Cost of market basket In current period / Cost of market basket in base period) * 100
Current period (2018):
Cost of 10 pounds of apple and 20 pounds of oranges :
($1.5 * 10) + ($3 * 20) = $15 + $60 = $75
Base year (2017)
Cost of 10 pounds of apple and 20 pounds of oranges :
($2 * 10) + ($2 * 20) = $20 + $40 = $60
Hence,
CPI = ($75 / $60) * 100
CPI = 1.25 * 100
CPI = 125
The Fed threw a lot of money at the financial crisis in 2008 to unfreeze credit markets and encourage economic activity. As part of its effort to keep the interest rate low, the Fed purchased government bonds worth $300 billion between March and September 2009. By October, the Fed held $770 billion in government securities, nearly double its pre-crisis total. Before the crisis, the Fed held mainly government securities, which it used to control the quantity of money in the economy. Now government securities make up just 35% of the Fed's balance sheet.
Explain how the Fed uses its government securities to control the nominal interest rate
When the Fed purchases government securities, bank reserves ______ and bank deposits ______.
A. increase; increase
B. decrease; increase
C. decrease; decrease
D. increase; decrease
Answer:
D. increase; decrease
Explanation:
$2200; increased; 300
The business intelligence environment includes all of the following except: A. BI Infrastructure B. Business Analytics C. Data from the business enviroment D. Cloud-based Storage
Answer: D. Cloud-based storage
Explanation:
Business Intelligence Environments consists of the various means and technologies that is used to collect, analyze, present and disseminate information relating to the business from both internal and external sources.
There are six components to Business Intelligence Environments which are:
BI InfrastructureBusiness AnalyticsData from the Business environment Managerial users and methodsDelivery platform - MIS, DSS, ESSUsers InterfaceThe only option that is not listed is Cloud-based storage so it is not part of the BI Environment.
A structure that organizes worldwide operations primarily based on function and secondarily on product is called: a global area division. a global functional division. a multinational matrix structure. a global product division.
Answer:
a global functional division.
Explanation:
In a global functional structure, the MNC activities are to be organized among the particular functions that are related to the production, finance, marketing etc. Here the developments are establishment that would have the responsibility worldwide for the particular function
So as per the given situation, the above should be the answer
The Adept Co. is analyzing a proposed project. The company expects to sell 3,500 units, give or take 10 percent. The expected variable cost per unit is $7 and the expected fixed costs are $12,500. Cost estimates are considered accurate within a plus or minus 5 percent range. The depreciation expense is $6,000. The sale price is estimated at $15 a unit, give or take 2 percent. The company bases their sensitivity analysis on the expected case scenario. What is the sales revenue under the optimistic case scenario?
a. $54,880.
b. $50,000.
c. $58,905.
d. $53,120.
e. $54,000.
Answer:
c. $58,905.
Explanation:
The computation of the sales revenue is shown below:
optimistic scenario revenue = optimistic unit sold × optimistic price
where,
optimistic unit sold = 3500 × 110%
= $3,850
optimistic price = 15 × 102%
= 15.3
So, the Optimistic revenue is
= 3850 × 15.3
= $58,905
Hence, the option c is correct
A stock will pay no dividends for the next 5 years. Then it will pay a dividend of $9.51 growing at 1.75%. The discount rate is 9.14%. What should be the current stock price
Answer:
PV= $84.56
Explanation:
Giving the following information:
A stock will pay no dividends for the next 5 years. Then it will pay a dividend of $9.51 growing at 1.75%. The discount rate is 9.14%.
First, we need to calculate the value of the stock in five years:
PV5 = D1 / (i - g)
PV5= (9.51*1.0175) / (0.0914 - 0.0175)
PV5=$130.94
Now, the value today of the stock:
PV= FV / (1 + i)^n
PV= 130.94 / (1.0914^5)
PV= $84.56
Later, the teaching assistant in Yvette’s economics course gives her some advice. "Based on past experience," the teaching assistant says, "working on 30 problems raises a student’s exam score by about the same amount as reading the textbook for 1 hour." For simplicity, assume students always cover the same number of pages during each hour they spend reading. Given this information, in order to use her 4 hours of study time to get the best exam score possible, how many hours should she have spent working on problems, and how many should she have spent reading?
Answer:
Yvette
To get the best exam score possible, Yvette should spend 2 hours working on problems and 2 hours reading.
Explanation:
a) Data and Calculations:
Total study time = 4 hours
Number of problems solved = 30
Hours reading textbook = 1 hour
Score obtained from problem solving = 50%
Score obtained from reading textbook = 50%
Therefore, number of hours to spend working on problems = 2 (4 * 50%)
Number of hours to spend reading - 2 (4 * 50%)
Umatilla Bank and Trust is considering giving Kingbird, Inc. a loan. Before doing so, it decides that further discussions with Kingbird, Inc.’s accountant may be desirable. One area of particular concern is the Inventory account, which has a year-end balance of $253,450. Discussions with the accountant reveal the following.
1. Kingbird, Inc. sold goods costing $51,940 to Hemlock Company FOB shipping point on December 28. The goods are not expected to reach Hemlock until January 12. The goods were not included in the physical inventory because they were not in the warehouse.
2.The physical count of the inventory did not include goods costing $88,290 that were shipped to Kingbird, Inc. FOB destination on December 27 and were still in transit at year-end.
3. Kingbird, Inc. received goods costing $25,690 on January 2. The goods were shipped FOB shipping point on December 26 by Yanice Co. The goods were not included in the physical count.
4. Kingbird, Inc. sold goods costing $53,020 to Ehler of Canada FOB destination on December 30. The goods were received in Canada on January 8. They were not included in Kingbird, Inc. physical inventory.
5. Kingbird, Inc. received goods costing $46,060 on January 2 that were shipped FOB destination on December 29. The shipment was a rush order that was supposed to arrive December 31. This purchase was included in the ending inventory of $253,450.
Answer:
$286,100
Explanation:
Calculation to determine the correct inventory amount on December 31.
Using this formula
Correct Inventory amount=Ending Inventory+ Goods received shipping points + Goods shipped FOB destination-Goods received FOB destination
Let plug in the formula
Correct Inventory amount=$253,450+$25,690+$53,020-$46,060
Correct Inventory amount=$286,100
Therefore the correct inventory amount on December 31 is $286,100
Beyer Company is considering the purchase of an asset for $370,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year. Year 1 Year 2 Year 3 Year 4 Year 5 Total Net cash flows $ 86,000 $ 49,000 $ 70,000 $ 300,000 $ 12,000 $ 517,000 Compute the payback period for this investment. (Cumulative net cash outflows must be entered with a minus sign. Round your Payback Period answer to 2 decimal place.)
Answer:
3.55 years
Explanation:
The payback period is the length of time it takes for Beyer Company to recoup the initial investment of $370,000.
In other words, the number of years for the net cash flows of the project to equate the initial investment amount of $370,000 as shown in the attached excel file for Beyer company's payback computation
A company wants to have $20,000 at the end of a ten-year period by investing a single sum now. How much needs to be invested in order to have the desired sum in ten years, if the money can be invested at 12%? (Ignore income taxes.) Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided.
Answer:
$6,439.56
Explanation:
The computation is shown below:
As we know that
Future value = Present Value × Future Value Interest Factor
where,
Future value interest factor = ( 1 + r )^10
= ( 1.12 )^10
= 3.1058
Now
Present value of the future sum is
= $20,000 ÷ 3.1058
= $6,439.56
What is the similarity between high-technology firms and service-based firms that makes them risky as restructuring candidates
Answer:
Thet are both human-resource dependent.
Explanation:
Human resources refers to the group of people who make up a firm's workforce or personnel and are considered a valuable asset in terms of skills and talents.
Restructuring is the phrase used in corporate management to describe the process of rearranging a firm's legal, ownership, operational, or other structures in order to make it more lucrative or better organized for its current needs.
Because the firm's personnel are human, they have the capacity to resist any restructuring they believe will negatively affect them. This makes high-tech and service-based firms which are human-resource dependent to be particularly risky restructuring candidates.
Llewelyn Company purchased 1,000 shares of its own $10 par value common stock when the market price of the stock was $36 per share. What journal entries would be used to record the purchase of treasury stock?
Answer: Increase the treasury stock account and decrease the cash account by $36,000.
Explanation:
The journal entries that would be used to record the purchase of treasury stock will be to increase the treasury stock account and decrease the cash account by $36,000.
Note that the $36000 was calculated as:
= 1,000 shares × $36 per share
= $36,000
You want to buy a car and a local bank will lend you $18,500. The loan will be fully amortized over 5 years, and the nominal interest rate would be 4.65%, with interest paid monthly. What is the monthly loan payment
Answer:
$346.16
Explanation:
The monthly loan payment can be calculated using a Financial calculator as follows :
PV = $18,500
N = 5 x 12 = 60
I/YR = 4.65%
P/YR = 12
FV = $0
PMT = ??
The monthly loan payment (PMT) is calculated as $346.16
Chik Chik Company showed the following balances at the end of its first year: Cash $ 3,000 Prepaid insurance 4,700 Accounts receivable 3,500 Accounts payable 2,800 Notes payable 4,200 Common stock 1,400 Dividends 700 Revenues 22,000 Expenses 17,500 What did Chik Chik Company show as total credits on its trial balance
Answer: $30,400
Explanation:
Accounts with credit balances are revenue, liabilities and stock or equity.
The credit balances above are:
Accounts payable, Notes payable, common stock, revenues,= 2,800 + 4,200 + 1,400 + 22,000
= $30,400
The lifetime of a particular brand of A batteries follows a normal distribution. The mean lifetime of particular brand of A batteries is 1000 hours, with a standard deviation of 100 hours.
1. What percentage of batteries last more than 1100 hours?
a. 2.5%.
b. 5%.
c. 16%.
d. 32%.
2. What is the probability that a randomly selected battery lasts more than 875 hours?
a. 0.3749.
b. 0.8944.
c. 0.8716.
d. 0.1056.
3. What is the probability that a randomly selected battery lasts between 1150 and 1250 hours?
a. 0.2417.
b. 0.4332.
c. 0.9915.
d. 0.3085.
Answer:
1. d. 32%
2. a. 0.3749
3. c. 0.9915
Explanation:
Percentage of battery is calculated by;
mean - sample / standard deviation
1100 hours - 875 / 100 = 225 / 875 = 0.3749
z-score calculated based on the probability of battery is 0.6549
[ 1250 - 1150 ] / 1250 = 0.9915
On September 15, Jerome, Inc., paid $8,900 to make a long-term investment in available-for-sale securities by purchasing notes of Topper, Inc.
Complete the necessary journal entry.
Answer and Explanation:
The journal entry is shown below:
Long term investment - AFS $8,900
To Cash $8,900
(Being cash paid is recorded)
here long term investment is debited as it increased the assets and credited the cash as it decreased the assets
Answer:
Date Account Title Debit Credit
Sept. 15 Investment in Available For Sale $8,900
Security
Cash $8,900
Cash will be credited to recognize that it reduced on account of it being used to pay for the investment. The investment will be treated as an asset so it will be debited to recognize that it is an increase.
An FI purchases at par value a $100,000 Treasury bond paying 10 percent interest with a 7.5 year duration. If interest rates rise by 4 percent, calculate the bond's new value. Recall that Treasury bonds pay interest semiannually. Use the modified duration valuation equation.
Answer:
The bond's new value is $70,000
Explanation:
First calculate the percentage change in the value of the bond
Duration = Percentage change in price / Percentage change in yield
Percentage change in price = Duration x Percentage change in yield
where
Duration = 7.5 years
Percentage change in yield = 4%
Percentage change in price = ?
Placing value sin the formula
Percentage change in price = 7.5 x 4%
Percentage change in price = 0.30
Percentage change in price = 30%
As we know that the value of the bond and the yield rate are inversely proportional to each other, If the yield rate increases the value of the bond decreases due to the discounting factor used in the valuation o the bond.
Hence, the value of the bond is calculated as follow
Value of the bond = Par value of the bond x ( 1 - per centage of change in the price of the bond
Value of the bond = $100,000 x ( 1 - 30% )
Value of the bond = $100,000 x 0.70
Value of the bond = $70,000
Refer to Exhibit 26-5. Assume the firm is a factor price taker and that the price of a unit of labor is constant at $1,200. The firm should hire __________ of labor.
Answer: 3 units of labor
Explanation:
The marginal revenue product will be:
- 1 labor unit
Marginal product = 500
Marginal revenue product = 500 × 5 = 2500
- 2 labor unit
Marginal product = 400
Marginal revenue product = 400 × 5 = 2000
- 3 labor unit
Marginal product = 250
Marginal revenue product = 250 × 5 = 1250
- 4 labor unit
Marginal product = 200
Marginal revenue product = 200 × 5 = 1000
- 5 labor unit
Marginal product = 200
Marginal revenue product = 200 × 5 = 1000
Therefore, till the third unit of labor, we can infer that the marginal revenue product is more than the marginal revenue cost. The 4th and 5th unit of labor will become costly to hire more labor.
In 2019, Teller Company sold 3,000 units at $600 each. Variable expenses were $420 per unit, and fixed expenses were $270,000. The same selling price, variable expenses, and fixed expenses are expected for 2020. What is Teller’s break-even point in units for 2020? g
Answer:
Break-even point in units= 1,500
Explanation:
Giving the following information:
Selling price= $600
Unitary variable cost= $420
Fixed cost= $270,000
To calculate the break-even point in units, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 270,000 / (600 - 420)
Break-even point in units= 1,500
True or False: The shape of the production function reflects the law of increasing marginal returns. True False
Answer: False
Explanation:
The statement that "The shape of the production function reflects the law of increasing marginal returns" is false. Rather, the shape of the production function simply reflects the law of diminishing marginal returns.
The slope of the production function is used in the measurement of the change in output for every unit of labor input that's added.
On December 31, there were 53 units remaining in ending inventory. These 53 units consisted of 9 from January, 10 from February, 14 from May, 8 from September, and 12 from November. Using the specific identification method, what is the cost of the ending inventory
Answer:
Cost of the ending inventory = $7,108
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question as follows:
A company had the following purchases during the current year:
January 17 Units at $112
February 37 Units at $123
May 32 Units at $135
September 29 Units at $143
November 27 Units at $153
On December 31, there were 53 units remaining in ending inventory. These 53 units consisted of 9 from January, 10 from February, 14 from May, 8 from September, and 12 from November. Using the specific identification method, what is the cost of the ending inventory?
Explanation of the answer is now provided as follows:
Specific identification method is an inventory method under which costs of goods sold and the closing/ending inventory are calculated using the particular cost of each inventory batch at the moment they were received.
Therefore, cost of the ending inventory is calculated as sum of the product of the number of closing units from each month and the cost per unit of purchases in that month.
Therefore, we have:
Cost of the ending inventory = (Number of closing units from January * Cost per unit of January Purchases) + (Number of closing units from February * Cost per unit of February Purchases) + (Number of closing units from May * Cost per unit of May Purchases) + (Number of closing units from September * Cost per unit of September Purchases) + (Number of closing units from November * Cost per unit of November Purchases) ………… (1)
Substituting the relevant values into equation (1), we have:
Cost of the ending inventory = (9 * $112) + (10 * $123) + (14 * $135) + (8 * $143) + (12 * $153) = $7,108
Suppose that on March 16, 2019, a marble statue handmade in Canada is priced at CAD 1,700. The approximate U.S. dollar price of the statue would be .
Answer: $1,443.81
Explanation:
The exchange rate is CAD 1 = US$0.8493
If a statue is priced at CAD 1,700, in American dollars it would be:
= Canadian dollar * Exchange rate
= 1,700 * 0.8493
= $1,443.81
a) Take a real time example of a company of your own choice working in Pakistan and then discuss the factors that lead to pressure for local responsiveness. Discuss it in detail. Draw diagram to show the effect.
Answer:
This responsiveness also promotes the local market orientation of a subsidiary and therefore the strength of its existing network with the businessmen and government authorities.
Explanation:
Usually, firms working within the global market confront two sorts of competitive pressure. They face pressure to scale back costs and pressure to react locally. These competing forces throw a corporation into conflict. It's going to also need a corporation to supply a consistent product on the international market to downstream the experience curve as soon as feasible. In response to local pressures, however, it's necessary for a firm to differentiate its product offering and marketing strategy from one country to a different in an effort to satisfy the various demands arising from domestic consumer preferences, business practices, channels of distribution, competitive conditions and public policies. Because it's going to entail substantial redundancy and a scarcity of product standards to adapt products to varied domestic needs, the result could also be a rise in prices.
While some organizations, like Company A, face a high to scale back cost and low for the reaction of locally, while others, like Company B, face low to scale back costs and high for local reaction, many companies are within the situation of Company C. It suggests and supports three layers of variables, including environmental, structural, and organizational responsiveness. The analysis of 168 MNE companies within the People's Republic of China shows that environmental complexity and therefore the uniqueness of business culture increase local reaction. Structural variables like the intensity of competition, heterogeneity of demand and localisation of components increase local reaction.
The 10% bonds payable of Kim Company had a net carrying amount (carrying value) of $2,850,000 on July 2, 2021. The bonds, which had a face value of $3,000,000, were issued at a discount to yield 12%. The amortization of the bond discount was recorded under the effective-interest method. Interest was paid on January 1 and July 1 of each year. On July 2, 2021, several years before their maturity, Kim retired the bonds at 101. The interest payment on July 1, 2021 was made as scheduled. What is the loss that Kim should record on the early retirement of the bonds on July 2, 2021
Answer:
-$159,000
Explanation:
Calculation to determine the loss that Kim should record on the early retirement of the bonds on July 2, 2021
First step is to calculate the CV of bonds
CV of bonds =$2,850,000 + [($2,850,000 × 12%/2) – ($3,000,000 × 10%/2)]
CV of bonds =$2,850,000 + [($2,850,000 × .06) – ($3,000,000 × .05)]
CV of bonds =$2,850,000 +($171,000-$150,000)
CV of bonds =$2,850,000 +$21,000
CV of bonds =$2,871,000
Now let determine the Loss
Loss=$2,871,000 – ($3,000,000 × 1.01)
Loss=$2,871,000 – $3,030,000
Loss= -$159,000
Therefore the loss that Kim should record on the early retirement of the bonds on July 2, 2021 is $159,000