Answer:
The answer is "$ 3,005,010.27".
Explanation:
Let those cash flows be in millions of dollars
[tex]NPV = -20+(\fatc{2.5}{1.12}+\frac{2.5}{1.12^2}+...+\frac{2.5}{1.12^{10}} +\frac{5}{1.12^9}+\frac{5}{1.12^{10}}+...+\frac{5}{1.12^{20}} - \frac{K}{1.12^5}+\frac{K}{1.12^{10}}+ \frac{K}{1.12^{15}})[/tex]
[tex]\ max \ value \ of \ K \ so, \ NPV = 0\\\\ \Rightarrow -20+(\frac{2.5}{1.12}+\frac{2.5}{1.12^2}+...+\frac{2.5}{1.12^{10}} +\frac{5}{1.12^9}+\frac{5}{1.12^{10}}+...+\frac{5}{1.12^{20}}) - (\frac{K}{1.12^5}+\frac{K}{1.12^{10}}+ \frac{K}{1.12^{15}}) = 0[/tex]
[tex]\Rightarrow -20+\frac{2.5}{0.12}\times(1-\frac{1}{1.12^{10}})+ \frac{1}{1.12^{10}}\times \frac{5}{0.12}\times (1-\frac{1}{1.12^{10}})- 1.072096*K = 0 \\\\\Rightarrow 3.221661 = 1.072096*K \\\\\Rightarrow K = 3.00501 \\[/tex]
The value of k = "$ 3,005,010.27".
Doyle Company issued $390,000 of 10-year, 8 percent bonds on January 1, Year 2. The bonds were issued at face value. Interest is payable in cash on December 31 of each year. Doyle immediately invested the proceeds from the bond issue in land. The land was leased for an annual $52,500 of cash revenue, which was collected on December 31 of each year, beginning December 31, Year 2.
Required:
1. Prepare the income statement, balance sheet, and statement of cash flows for Year 2 and Year 3. (Amounts to be deducted and net loss amount should be indicated with minus sign.)
Answer:
issued $390,000 of 10 year 8% bonds at face value
journal entry
Dr Cash 390,000
Cr Bonds payable 390,000
purchased land that it rents
journal entry
Dr Land 390,000
Cr Cash 390,000
journal entry to record interest payments
Dr Interest expense 31,200
Cr Cash 31,200
journal entry to record collection of lease
Dr Cash 52,500
Cr lease revenue 52,500
Doyle Company
Income statement for years 2 and 3 (they are the same for both)
Total revenue $52,500
- Expenses ($31,200)
Net income $20,400
Doyle Company
Balance Sheet
December 31, Year 2
Assets:
Cash $20,400
Land $390,000
total = $410,400
Liabilities and Equity:
Bonds payable $390,000
Retained earnings $20,400
total = $410,400
Doyle Company
Balance Sheet
December 31, Year 3
Assets:
Cash $40,800
Land $390,000
total = $430,800
Liabilities and Equity:
Bonds payable $390,000
Retained earnings $40,800
total = $430,800
A young couple has made a deposit of the first month's rent (equal to $1,000) on a 6-month apartment lease. The deposit is refundable at the end of six months if they stay until the end of the lease. The next day they find a different apartment that they like just as well, but its monthly rent is only $900. And they would again have to put a deposit of $900 refundable at the end of 6 months. They plan to be in the apartment only 6 months. Should they switch to the new apartment?
Answer:
It would be wiser for the couple to stay in the old apartment and save $1400
Explanation:
If they stay until the end of the lease, total money that will be paid out is $1000 x 6 = $6000,
If they leave, they'll have to forgo $1000.
If they move to their new apartment, they'll pay $900 x 6 = $5400
total expenditure if they move to the new place at the end of the six months period will be, the $1000 that will not be refunded back to them on the old apartment, plus this new $5600 for six month's rent in this new apartment, and that will be a total of $6400.
It would be wiser for the couple to stay in the old apartment and save $1400
Sue's Soup Products uses a process costing system with two processing departments: the Mixing and Cooking Department and the Canning Department. Work in process inventories are reduced to zero each month. In March, the Mixing and Cooking Department incurred manufacturing costs of $113,400 to mix 54,000 gallons of soup. The Canning Department incurred manufacturing costs of $9,500. A total of 190,000 cans of soup were transferred to the finished goods warehouse during the month.
Required:
1. The unit cost per can of soup transferred to the finished goods warehouse during March was ___________.
Answer:
$0.65
Explanation:
The unit cost per can of soup transferred to finished goods warehouse during March is the total manufacturing costs incurred by both Mixing and Cooking department and Canning Department divided by the total number of cans of soup transferred.
Both departments incurred $122,900 in manufacturing costs i.e($113,400+$9,500) while the total number of gallons of soup transferred to finished goods warehouse was 190,000 cans
Unit cost per can of soup=$122,900/190,000=$0.65
A company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the company's unadjusted trial balance reported the following selected amounts: All sales are made on credit. Based on past experience, the company estimates 0.6% of credit sales to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense
The complete question is:
A company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the company's unadjusted trial balance reported the following selected amounts:
Accounts receivable $349,000 debit
Allowance for uncollectible accounts 660 debit
Net Sales 794,000 credit
All sales are made on credit. Based on past experience, the company estimates that 0.6% of net credit sales are uncollectible. What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared?
Answer:
A debit of $4,764 to Bad Debt Expense
Explanation:
When a company uses the percentage of sales approach to determine its bad debt expense, it uses an estimated percentage of net sales made to calculate it's debt expense.
In this case there was a net sales of $794,000.
Based on experience about 0.6% of sales are usually uncollectible
Estimated debt expense= Percentage loss * Net sales
Estimated debt expense= 0.006 * 794,000
Estimated debt expense= $4,764
The adjusting entry at year end will involve a debit of $4,764 to Bad Debt Expense
Kelly Realty loaned money and received the following notes during 2018:Note Date Principal Amount Interest Rate Term(1) Oct. 1 $28,000 6% 1 year(2) Jun. 30 22,000 10% 9 months(3) Sep. 19 14,000 14% 90 daysRequired:1. Determine the maturity date and maturity value of each note.2. Journalize the entries to establish each note Receivable and to record collection of principle and interest at maturity.Include a single adjusting entry on December 31, 2018, the fiscal year-end, to record accrued interest revenue on any applicable note.Explanations are not required.(Round to the nearest dollar)
Answer:
Kelly Realty
1. Determination of Maturity Date and Value for each note:
Note Principal Interest Rate Maturity Date Maturity Value
1. $28,000 6% Sept. 30 2019 $29,680
2. $22,000 10% March 31, 2019 $23,650
3. $14,000 14% Dec. 18, 2018 $14,490
b) Journal Entries to record receivables:
October 1:
Debit 6% Notes Receivable $28,000
Credit Cash Account $28,000
June 30:
Debit 10% Notes Receivable $22,000
Credit Cash Account $22,000
Sept 19:
Debit 14% Notes Receivable $14,000
Credit Cash Account $14,000
c) Journal Entries to record collection of principal and interest at maturity:
Sept. 30, 2019:
Debit Cash Account $29,680
Credit Interest on Note $1,680
Credit Notes Receivable $28,000
March 31:
Debit Cash Account $23,650
Credit Interest on Note $1,650
Credit Notes Receivable $22,000
Dec. 18, 2018:
Debit Cash Account $14,490
Credit Interest on Note $490
Credit Notes Receivable $14,000
d) Adjusting Entry:
Dec. 31, 2018:
Debit Interest on Notes Receivable $2,150
Credit Interest on Notes $2,150
Explanation:
a) Note Date Principal Amount Interest Rate Term
(1) Oct. 1 $28,000 6% 1 year
(2) Jun. 30 22,000 10% 9 months
(3) Sep. 19 14,000 14% 90 days
b) Interest on the notes:
Total For 2018
1. 6% of $28,000 = $1,680 $1,680 x 4/12 = $560
2. 10% of $22,000 x 9/12 = $1,650 $1,650 x 6/9 = $1,100
3. 14% of $14,000 x 90/360 = $490 $490 x 90/90 = $490
Total $3,820 $2,150
c) Interests on notes receivable are prorated accordingly.
On October 15, 2020, the board of directors of Ensor Materials Corporation approved a stock option plan for key executives. On January 1, 2021, 32 million stock options were granted, exercisable for 32 million shares of Ensor's $1 par common stock. The options are exercisable between January 1, 2024, and December 31, 2026, at 80% of the quoted market price on January 1, 2021, which was $30. The fair value of the 32 million options, estimated by an appropriate option pricing model, is $6 per option. Ensor chooses the option to recognize forfeitures only when they occur.
Ten percent (2.6 million) of the options were forfeited when an executive resigned in 2022. All other options were exercised on July 12, 2025, when the stock’s price jumped unexpectedly to $25 per share.Required:1. When is Ensor’s stock option measurement date?2. Determine the compensation expense for the stock option plan in 2021. (Ignore taxes.)3. Prepare the journal entries to reflect the effect of forfeiture of the stock options on Ensor’s financial statements for 2022 and 2023.5. Prepare the journal entry to account for the exercise of the options in 2025.
Answer:
1. The Ensor's stock measurement date is January 01, 2021
2. Compensation expense for the stock option is $50 million
3. Please see journal entry in the explanation below.
Explanation:
1. It was clearly indicated in the question that on January 1, 2021 , 32 million stock options were granted hence measurement date is ; 1st of January, 2021
2. The fair value per stock option is $6
Therefore, total compensation expenses = $6 × 25 million
= $150 million
Since the options are exerciseable between 01/01/2024 and 01/01/2026
The period for vesting will be 3 years from 01/01/2021 - 31/12/2023
Therefore, the compensation expense for the stock option in year 2021 = Total compensation expense/ Vesting period
= $150 million /3
= $50 million
3. Since 2.6 million(10%) were forfeited, 90% represent the remaining unforfeited. I. e (100%-10%)=90%
In 2022, which is the second year of the vesting period, compensation expense would be;
Compensation expense of 2022 = (Total compensation expense * 90% * the order of the period / Number of period - Compensation expense of
2021
= $150 million *90% *2/3 - $50 million
=$40 million.
In 2023,
Dr Cr
Compensation expense. $40 million
Paid in capital stock options. $40 million
In 2010, many high-income countries will be focused on the short-term economic horizon due to aggressive and often controversial steps governments took to jump-start these economies out of severe recession. Considering the economic challenges that result from these policies, which of the following actions would be most advisable?
A. extricate themselves from the recession and the policies adopted in fighting that recessionB. to continue to temporarily disregard the foundations for future long-term growthC. find niches that they are well-suited to fill in the global networks of economic productionD. build upon or copy technologies and industries developed by other technology leaders
Answer:
A. extricate themselves from the recession and the policies adopted in fighting that recession
Explanation:
The United States, Western Europe, and Japan had great financial crisis and deep recession, and suffered from the after-effects of the recession. These effects included increased unemployment rates which could linger for several years. These countries had to focus on the short term rather than the long term. Some of the economies took aggressive and controversial steps by running very big deficit budget as part of expansionary fiscal policy. The countries adopted combination of lower government spending and higher taxes.
The action most advisable would be to
extricate themselves from the recession and the policies adopted in fighting that recession
help me out please i don’t get it
Logan Corp.'s trial balance of income statement accounts for the year ended December 31, 2012 included the following: Sales revenue Cost of goods sold Administrative expenses Loss on disposal of equipment Sales commission expense Interest revenue Freight-out Loss due to earthquake damage Bad debt expense Totals Debit Credit $280,000 $100,000 50.000 18,000 16.000 10,000 6,000 24,000 6,000 $220,000 Other information: Logan's income tax rate is 30%. Finished goods inventory: January 1, 2012 $160,000 December 31, 2012 140,000 On Logan's multiple-step income statement for 2012, Extraordinary loss is
Answer:
Logan Corp
Extraordinary Loss is $24,000.
This includes Loss on Disposal of Equipment totalling $18,000 and Freight-out Loss due to earthquake damage totalling $6,000.
Explanation:
Extraordinary Loss is the business loss resulting from some transactions that are considered to be highly unusual , occur only rarely, and do not result from normal operating activities.
An example of an extraordinary loss is the damage caused by an earthquake and other natural disasters, where their occurrences are uncommon..
But extraordinary loss is no longer stated separately according to US GAAP.
According to Benjamin Lang what is the hardest thing about being an entrepreneur
Answer:
Benjamin Lang was just 14 years when he decided to become his own business and hence become an entrepreneur. And he soon realized that the biggest challenge in front of him was to win the trust of the clients. And that requires a complete sacrifice plus the best level of skills to tackle the real world and project requirements. It's not that easy to win the trust of the clients. You need to work quite hard to show through your performances that you can fulfill any of the client's requirements, and only then you will be able to ensure that clients trust you, and you end up being a successful entrepreneur.
Explanation:
Benjamin Lang was only 14 when he decided to start his own business and thus became an entrepreneur.
Who is Benjamin Lang?Ben Lang is an 18-year-old online businessman whose journey began at the age of 14 when he started his eBay business.
Ben Lang soon realized that the biggest challenge before him was gaining customer trust.
And that requires total sacrifice and the best level of skills to deal with the real world and the needs of the project. It is not so easy to gain the trust of clients.
An entrepreneur needs to work hard to show by your actions and meet any client's needs and only then can ensure that clients trust you, and you end up being a successful entrepreneur.
Thus, these are lessons learned by Benjamin Lang in the stages of becoming a successful entrepreneur.
To learn more about Benjamin Lang, refer:
https://brainly.com/question/14966315
On June 15, a US firm is planning to import Mexican caviar worth Pesos 2 million due on July 15 (one month later). The firm decides to hedge its payables position by using September peso futures. The spot rate on June 15 is US$ 0.0630 / peso and the September futures price on June 15 is at $0.0665 per peso. One month late on July 15, the spot rate is $0.0570 / peso while the September futures price is $0.0615 / peso. Assume contract size is 2 million pesos.
Required:
1. What is the gain or loss from the futures hedge?
Answer:
The firm incur a loss of $ 9,000 due to future contract
Explanation:
Let's compute the gain of loss from the future hedge as follows
As the US firm is importing the goods it will have to pay for the value in US dollars
Contract Size = 2,000,000 peso
Spot rate on 15 July = $ 0.0570/ peso
September future price on July 15 = $ 0.0615/ peso
Difference in Spot and Future rate = ( September future price on July 15 - Spot rate on 15 July )
= ( 0.0615 - 0.0570 )
= $ 0.045/ peso
This means that the firm will have to pay additional $ 0.045/ peso for the future contract which is a loss for the US firm
Total Loss = Difference in Spot and Future rate * Contract size
Total loss = 0.045 * 2,000,000
Total loss = $ 9,000
The firm incur a loss of $ 9,000 due to future contract.
Hair Zone manufactures a brand of hair styling gel. It is considering adding a modified version of the product-a foam that provides stronger hold. Hair Zone's variable costs and prices to wholesalers are: Current hair gel New foam product Unit selling price 2.00 2.25 Unit variable costs 85 1.25 Hair Zone expects to sell 1 million units of the new styling foam in the first year after introduction, but it expects that 60% of those sales will come from buyers who normally purchase Hair Zone's styling gel. Hair Zone estimates that it would sell 1.5 million units of the gel if it did not introduce the foam. If the fixed cost of launching the new foam will be $100,000 d the first year, should Hair Zone add the new product to its line? Why or why not?
Answer:
Should Hair Zone add the new product to its line? Why or why not?
Yes they should, since it would increase their total net income by $210,000.Explanation:
Current hair gel New foam product
Unit selling price $2.00 $2.25
Unit variable costs $0.85 $1.25
expected sales for new foam product 1,000,000 units, but 600,000 units would replace sales from current hair gel
expected sales for current hair gel if new foam is introduced 900,000 units (1,500,000 if no new product is introduced)
Alternative 1 Alternative 2 Differential
no new foam new foam income
total sales revenue $3,000,000 $4,050,000 $1,050,000
total variable costs ($1,275,000) ($2,015,000) ($740,000)
additional fixed costs $0 ($100,000) ($100,000)
total $1,725,000 $1,935,000 $210,000
Evaluate the statement "Accounting is all about numbers.". Using the definition of accounting to
justify your answer. (10 marks, maximum 250 words)
Answer:
To say "Accounting is all about numbers." is incorrect since Non- Financial or Non Qualitative information must be communicated on economic entities as well.
Explanation:
Accounting is the measurement, processing and communication of financial and non-financial information about economic entities such as business and corporations.
To say "Accounting is all about numbers." is incorrect since Non- Financial or Non Qualitative information must be communicated on economic entities as well .These Non - Financial information included the Corporate Activities which has impacts on Community (People) and the Environment (Planet).
Complementary and substitute goods
Which of the following events (in the marketplace or within the company itself) will decrease the market price of Marvelous Manufacturing's common stock? Future dividend growth for Marvelous is forecast to increase from 6% to 9%. Marvelous has increased its estimate of next year's dividend from $1.60 to $1.75. The market's expectation of future inflation decreases from 7% to 5% The beta on Marvelous’ common stock decreases from 1.4 to 1.2. The risk-free rate of return required of investors increases from 8% to 10%.
Answer:
The beta on Marvelous’ common stock decreases from 1.4 to 1.2
Explanation:
According to the scenario, computation of the given data are as follow:-
As we know that
Expected Return = Market Risk Premium × Beta + Risk Free Rate
If the Beta is decreased, this means that expected return is decreased too, and if the expected return decreases the market value is decreases too.
According to the analysis, The Beta on marvelous’ common stock decreases from 1.4 to 1.2 is correct option.
You have been made treasurer for a day at AIMCO, Inc. AEVICO develops technology for video conferencing. A manager of the satellite division has asked you to authorize a capital expenditure in the amount of $10,000. The manager states that this expenditure is necessary to continue a long-running project designed to use satellites to allow video conferencing anywhere on the planet. The manager admits that the satellite concept has been surpassed by recent technological advances in telephony, but he feels that AEVICO should continue the project because $2.5 million has already been spent over the past 15 years on this project. .Although the project has little chance to be viable, the manager be Keves it would be a shame to waste the money and time already spent. Use marginal cost-benefit analysis to make your decision regarding whether you should authorize the $10,000 expenditure to continue the project.
Which of the following statements correctly describes your decision? (Select the best answer below.)
a) You should not authorize the $10,000 expenditure to continue the project because it is surpassed by new telephony technology. Though the marginal cost-benefit analysis treats the $2.5 million as a cost that is irrelevant to the current decision making, continuing the project would be foolish even if the $10,000 expenditure generates a positive net present value.
b) You should not authorize the $10,000 expenditure to continue the project even if the project will generate a positive net present value. The marginal cost-benefit analysis treats the $2.5 million as a cost that is extremely unlikely to be recovered and the $10,000 expenditure will also become a cost unlikely to be recovered.
c) You should authorize the $10,000 expenditure to continue the project because the marginal cost-benefit analysis treats the $2.5 million as part of the project's initial capital outlay that can be recovered only if the project is implemented
Answer: D. You should authorize the $10,000 expenditure to continue the project if the project will generate a positive net present value. The marginal cost-benefit analysis treats the $2.5 million as a cost that is irrelevant to the current decision making.
Explanation:
The options you presented were not all the options listed. The option I have listed as the answer is the correct option.
Under the Marginal Cost - Benefit analysis, only the Additional costs and inflows are considered. The original cost is considered a Sunk Cost and therefore irrelevant.
When making a decision therefore, the company or person should ask if the new investment will bring about a positive NPV. If it is not anticipated to, then there is no need to invest more into it.
The accompanying table shows a small community's demand for monthly subscriptions to a streaming movie service. Assume that only two firms (Nextflix and Flixbuster) sell in this market, that each firm offers the same quality of service and movie selection, and that each firm's marginal cost is constant and equal to 0 (zero) due to excess capacity.
Price/Month (P) Number of Customers (Q) Total Revenue/Month (TR)
$10 0 $0
$9 100 $900
$8 200 $1,600
$7 300 $2,100
$6 400 $2,400
$5 500 $2,500
$4 600 $2,400
$3 700 $2,100
$2 800 $1,600
$1 900 $900
$0 1,000 $0
If the two firms operating in this market agreed to each supply one-half of the quantity a monopolist would supply, the contract would specify that:
a) Nextflix supplies zero subscriptions and Flixbuster supplies 500 subscriptions.
b) Nextflix supplies 250 subscriptions and Flixbuster supplies 250 subscriptions.
c) Flixbuster supplies 400 subscriptions and Nextflix supplies 100 subscriptions.
d) Nextflix supplies 400 subscriptions and Flixbuster supplies 100 subscriptions.
e) Flixbuster supplies 500 subscriptions and Nextflix supplies zero subscriptions.
Answer:
The correct answer is (b) Nextflix supplies 250 subscriptions and Flixbuster supplies 250 subscriptions.
Explanation:
Solution
Now,
A monopolist would supply where the total revenue is Maximum
So, quantity produced = 500 where each will produce 500/2
=250 units
Therefore from the given question stated as, If the two firms operating in this market agreed to each supply one-half of the quantity a monopolist would supply, the contract would specify that: Nextflix supplies 250 subscriptions and Flixbuster supplies 250 subscriptions.
In December 2016, Custom Mfg. established its predetermined overhead rate for jobs produced during 2017 by using the following cost predictions: overhead costs, $1,740,000, and direct materials costs, $600,000. At year-end 2017, the company’s records show that actual overhead costs for the year are $1,497,400. Actual direct material cost had been assigned to jobs as follows.
Jobs completed and sold $380,000
Jobs in finished goods inventory 74,000
Jobs in work in process inventory 59,000
Total actual direct materials cost $513,000
1. Determine the pre-determined overhead rate for 2017.
2. Enter the overhead costs incurred and the amounts applied during the year using the pre-determined overhead rate and determine whether overhead is overapplied or underapplied.
3. Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold.
Answer:
1. The pre-determined overhead rate is 290% of direct material cost
2. The overhead is underapplied for $9,700
3. The adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold would be the following:
31 Dec Debit Credit
Cost of goods sold $9,700
Factory overhead $9,700
Explanation:
1. In order to calculate the pre-determined overhead rate for 2017 we have to calculate the following formula:
pre-determined overhead rate=Estimated overhead costs/Estimated direct material costs
pre-determined overhead rate=$1,740,000/$600,000
pre-determined overhead rate=290%
The pre-determined overhead rate is 290% of direct material cost
2. overhead underapplied= $1,497,400-(290%*$513,000)
overhead underapplied=$1,497,400-$1,487,700
overhead underapplied=$9,700
The overhead is underapplied for $9,700
3. The adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold would be the following:
To record allocation of underapplied overhead to cost of goods sold
31 Dec Debit Credit
Cost of goods sold $9,700
Factory overhead $9,700
Exercise 6A-5 Least-Squares Regression [LO6-11][The following information applies to the questions displayed below.] George Caloz & Frères, located in Grenchen, Switzerland, makes luxury custom watches in small lots. One of the company’s products, a platinum diving watch, goes through an etching process. The company has recorded etching costs as follows over the last six weeks: WeekUnitsTotal Etching Cost1 4 $18 2 3 17 3 8 25 4 6 20 5 7 24 6 2 16 30 $120 For planning purposes, management would like to know the variable etching cost per unit and the total fixed etching cost per week.Exercise 6A-5 Part 33. If the company processes five units next week, what would be the expected total etching cost?
Answer:
George Caloz & Freres
The High - Low method can be used to solve:
The Highest Units and cost = 8 at $25
The Lowest Units and cost = 2 at $16
The difference = 6 units at $9
a) Variable cost = $9/6 = $1.5 per unit
b) Fixed cost at Highest unit produced, is then:
8 x $1.5 + Fixed cost = $25
Fixed cost = $25 = $12 (8 x $1.5) = $13
Check:
At lowest units of production, fixed cost:
Fixed cost = $16 - $3(2x $1.5) = $13
c) If the company processes 5 units next week, the expected total etching costs will be $20.50 (5x $1.5 + $13)
Explanation:
a) Arrangement of the cost data:
Week Units Total Etching Cost
1 4 $18
2 3 $17
3 8 $25
4 6 $20
5 7 $24
6 2 $16
30 $120
b) The High - Low can be used to work out the variable and fixed elements of cost. This method extracts the differences in units and cost to determine the variable cost per unit and the fixed cost.
11) A company knows that they will sell 80,000 cases of #2 Pencils at a steady rate over the course of the next year. It costs them $12 a year to warehouse each case, based on the average number of cases in the warehouse, and it costs them $100 each time a delivery is made to their warehouse. How many orders should they place each year in order to minimize their total inventory costs? Assume that the orders are all of equal size. Round your answer to the nearest whole number
Answer:
139 units
Explanation:
In order to compute the number of orders place each year so that it can minimize the total inventory cost we need to use the economic order quantity formula i.e shown below:
The computation of the economic order quantity is shown below:
[tex]= \sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}}[/tex]
where,
Annual demand = 80,000 cases
Ordering cost = $12
And, the carrying cost = $100
Now placing these values to the above formula
So, the economic order quantity is
[tex]= \sqrt{\frac{2\times \text{80,000}\times \text{\$12}}{\text{\$100}}}[/tex]
= 139 units
Prahm Corp. wants to raise $5.3 million via a rights offering. The company currently has 590,000 shares of common stock outstanding that sell for $54 per share. Its underwriter has set a subscription price of $27 per share and will charge the company a spread of 6 percent. If you currently own 7,000 shares of stock in the company and decide not to participate in the rights offering, how much money can you get by selling your rights
Answer:
Proceeds from sale of rights will be $49407.62
Explanation:
Proceeds from the sale of rights
=> Net Proceeds per share = Subscription price per share x (1 – Spread)
= $27 × (1 – 0.06)
= $25.38 per share
=> New shares offered = money raised/net proceeds per share
= 5300000/25.38 = 208826 Shares
=> Number of rights needed = current shares/New share offered
= 590000/208826 = 2.82532
=> The Ex-rights stock price will be
Ex-rights stock price = ((Number of rights needed × selling price per share) + Subscription price) + (Number of rights needed + 1)
= ((2.82532 × 54) + $27 per share) / (2.82532 + 1) = $46.94177 per share
So, the value of a right = Selling price per share - Ex-rights stock price
= $54 - $46.94177
= $7.05823 per share
Therefore, proceeds from selling the rights will be
= Number of shares × value of a right
= 7000 × 7.05823
= $49407.62
Proceeds from sale of rights will be $49407.62
Kameron Gibson’s bank statement showed a balance of $954.35. Kameron’s checkbook had a balance of $259.60. Check No. 104 for $116.90 and check No. 105 for $19.15 were outstanding. A $721.40 deposit was not on the statement. He has his payroll check electronically deposited to his checking account—the payroll check was for $1,320.30. There was also a $17.50 teller fee and an $22.70 service charge.
Required:
1. Prepare Kameron Gibson’s bank reconciliation. (Input all amounts as positive values. Round your answers to 2 decimal places.)
Answer:
Cash book Reconciled balance: $1,539.7
Kameron's bank balance Reconciled balance: $1,539.7
Explanation:
Kameron Gibson’s bank reconciliation
Kameron's checkbook balance: $259.60
Add Direct deposit: $1,320.30
Balance $1,579.9
Less: Teller fee: $17.50
Service charges: $22.70
Total deduct: $40.2
Reconciled balance: $1,539.7
Kameron's bank balance: $954.35
Add Deposit in transit: $721.40
Balance $1,675.75
Less :Outstanding checks (total)
($116.90+$19.15) $136.05
Reconciled balance: $1,539.7
One of the most fundamental issues in business law involves the question of when a company can be held liable for the acts of an individual person, whether this involves a contractual obligation or a personal injury (meaning a tort).
A) Choose one of the scenarios below and explain whether or not you think the business is liable for the acts under the principles of agency law.
1. A real estate agent hires a handful of local kids to do the landscaping of homes that he is trying to sell. In addition to the general payment, he reimburses them for the cost of gasoline for lawn mowers and other equipment. While mowing a lawn, one of the kids loses control of a lawn mower and it mows down a neighbors very expensive collection of lawn gnomes.
2. In a hurry to get his apartment complex painted, a homeowner hires three people he meets at the local home improvement store to do the work. Since they’re not professional painters, he provides all of the equipment and paint needed to do the work. While at the apartment complex, one of them breaks into an apartment, assaults the resident and steals a wallet.
3. An entrepreneur decides to open up his own car-for-hire business, and creates an app allowing anyone to connect with people who need a ride. The passengers pay the entrepreneur, who in turn pays a percentage to the driver. Other than the app, the entrepreneur has no other involvement between the driver and the passenger. One night, a driver who is intoxicated picks up a passenger and then gets into an accident, and the passenger is severely injured.
Answer:
Explanation below.
Explanation:
When considering the first illustration it will be discovered that the company involved can be held responsible for the act performed or carried out by the kids.
This is because, the people that were employed to do the work are kids and inexperienced. Under the agency law, the kids in this aspect are not punishable because they are still considered to be under the tutelage of older people.
The company will be held responsible for all the act the kids performed. The company can also be charged for child abuse.
Scenario 1 :
The business is liable for the acts under the principles of agency law :
When considering the first scenario states that it will be discovered that the company involved can be held responsible for the actions performed or carried out by the kids. This is because the people that were employed to do the work are kids and inexperienced. Under the agency law, the kids in this aspect are not punishable because they are still considered to be under the tutelage of older people. The company will be held responsible for all the actions the kids perform. The company can also be charged for child abuse.Know more :
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Wayne and May, who are both in their early 40s, have been happily married for nearly 20 years. While they have been saving some money for their eventual retirement, they know they are well short of what they need. Given their age, what percent of their income should they devote to retirement savings in order to make sure that they reach their retirement income goal?
a) 15% - 25%.
b) 10% - 15%.
c) More than 50%.
d) 25% - 40%.
Answer:
d) 25% - 40%
Explanation:
The level of stable income expected after retirement is based on couple's pattern of consumption and lifestyle. Looking at the U.S. statistics over the past few years, it was found that the average savings rate in the U.S. was around 9-10 percent, indicating that about 90 percent of earned income is spent on consumption.Therefore the couple should be prepared to save about 25 per cent and 40 per cent and meet the target of retirement. In this case, it is presumed that both interest rate and inflation rates do not exist to make the analysis easy.
For instance, if the couple earned a total of $1,00,000 a year and saved say about 40% per year which is $40,000 a year then total couple savings stood at about 80 percent of about $80,000 a year. So the overall savings rate in their retirement life would be 80 per cent, which will serve as a huge corpus.
This should be noted that at this point in time, as after retirement, the couple should cut down on expenses apart from the usual course of expenses which are medical bills and other services that need to be used and come at a cost. It is also very important to save about 25 percent to 40 percent per year to enjoy leisure activities such as travel after retirement.
In April, one of the processing departments at Terada Corporation had beginning work in process inventory of $29,000 and ending work in process inventory of $35,000. During the month, $252,000 of costs were added to production and the cost of units transferred out from the department was $246,000. In the department's cost reconciliation report for April, the total cost to be accounted for under the weighted-average method would be:
Answer:
$281,000
Explanation:
According to the scenario, computation of the given data are as follow:-
Total Cost Under the Weighted Average Method = Cost of Unit Transferred Out from the Department + Ending Work in Process Inventory
= $246,000 + $35,000
= $281,000
According to the analysis, In April the total cost to be accounted under the weighted-average method is $281,000.
(a) Consider the production of apple juice. If the supply of apple juice increased, did the marginal cost of
production of apple juice increase or decrease?
(b) Suppose that Sprite and Pepsi are substitutes in production. If the supply of Pepsi increased, did the
price of Sprite increase or decrease?
(c) Suppose that milk and beef are complements in production. If the supply of milk increased, did the
price of beef increase or decrease?
(d) Consider the market for orange juice. If the supply of orange juice stayed constant and the equilibrium
quantity exchanged of orange juice increased, did the demand for orange juice increase or decrease?
(e) Consider the market for grape juice. If the demand for grape juice stayed constant and the equilibrium
price of grape juice increased, did the supply of grape juice increase or decrease?
(f) Consider the market for Kool-Aid. If the demand for Kool-Aid increased and the supply for Kool-Aid
increased, did the equilibrium quantity exchanged increase or decrease?
Answer (a)
An increase in supply of apple juice means there's a decrease in the marginal cost of production.
Explanation: the marginal cost of production is the cost added by producing one additional unit of a product or service. Increasing supply spreads out the fixed cost of production, lowering the marginal cost of producing the next apple juice.
Answer (b)
B. An increase in the supply of Pepsi means there is an increase in price of sprite.
Explanation: increase in supply of Pepsi means there's a reduction in demand of sprite, which can be as a result of a price increase causing customers to shift towards the substitute.
Answer (c)
if the supply of milk increased, then there's a decrease in price of beef.
Explanation: since they are complement goods, an increase in supply of milk means that suppliers are supplying more milk due to an increasing demand of beef as a result of a reduction in the price of beef.
Answer (d)
If the supply of orange juice stayed constant and the equilibrium
quantity exchanged of orange juice increased, then the demand for orange juice increased.
Explanation: Equilibrium quantity is when there is no shortage or surplus of a product in the market. On a plot of demand and supply, the two will intersect at the equilibrium quantity. If the supply is held constant and the value of equilibrium quantity increases, then it means that the demand increased.
Answer (e)
If the demand for grape juice stayed constant and the equilibrium
price of grape juice increased, then the supply of grape juice decreased.
Answer (f)
If the demand for Kool-Aid increased and the supply for Kool-Aid
increased, then the equilibrium quantity exchange increases.
Explanation: since both demand and supply increased, then their point of intersection will increase since there'll be no surplus or lack.
Your business partner has proposed you to join him (her) in investing $100000 each in a new enterprise. assume that you have that amount of money available. in case of success your return is $40000 but in case of failure you lose $20000. your analysis shows P40=0.3 of success and P-20=0.7 of failure.
would you invest?what is your investment risk preference and analysis?
Answer:
I wouldn't invest.
Risk preference at least 50-50 chance of gain and loose
Explanation:
case of success the return i get is $40000
case of failure i lose $20000.
My analysis shows P40=0.3 of success
And P-20=0.7 of failure.
The probability of a loose is much bigger than the probability of a gain.
So I can't bear the loose of loosing 7 times if about 20000 and gaining 3 times of about 40000 it doesn't balance.
My loose accumulating to 140000
While my gain is 120000.
I can't invest
8. One of ADNOC's businesses has a net income to revenue ratio of 25%.
a) This ratio an expression of the
(1 mark)
b) Use the ratio above to calculate the product cost (2 Marks)
HUAWEI
Answer:
a) This ratio is an expression of the Net Income over the Revenue. It shows that for every revenue generated, there is a net income of 25%. Every dollar in revenue gives ADNOC a net income of $0.25.
b) Using the ratio above to calculate the product cost:
It is not possible to use net income to revenue ratio to calculate the product cost. The product cost is made of costs of materials, labor, and factory expenses. These costs are directly identifiable to the product.
Unless we assume here that product cost is equal to the total cost.
Using the above assumption, the product cost will be 75% (100 - 25)%. This means, for every dollar in revenue, the all-inclusive product cost will be equal to $0.75.
Explanation:
a) Net Income is the result obtained after deducting all expenses, including product cost and the cost of doing business. The net income is also called the profit margin ratio.
Net Income Ratio is calculated by dividing the net income by the net sales. Net sales is calculated by subtracting any returns or refunds from gross sales. Net income equals total revenues minus total expenses and is usually the last number reported on the income statement
b) In costing, the product cost can be derived in many ways. There are product costs based on marginal costing, absorption costing, and total costing. The most relevant is the cost based on marginal costing.
Journalize the following transactions of Trapper Jon’s Productions. Assume 360 days in a year.
June 23. Received a $48,000, 90-day, 8% note dated June 23 from Radon Express Co. on account.
Sept. 21. The note is dishonored by Radon Express Co.
Oct. 21. Received the amount due on the dishonored note plus interest for 30 days at 10% on the total amount charged to Radon Express Co. on September 21.
Answer:
Explanation:
To record note received
On June 23. Debit Credit
Notes Receivable $48,000
Accounts receivable for Radon ExpressCo $48,000
interest revenue = $48,000 x 8%x 90/360
To record dishonored note
On September 21st Debit Credit
Accounts receivable for Radon Co $48,960
Notes Receivable $48,000
Interest Revenue $960
Interest Revenue $48,960 x 10%x 30/360 = $408
Journal to record Cash Received
October 21 Debit Credit
Cash $49,368
Accounts Receivable for Radon Express Co $48,960
Interest $408
Arlene is single and has taxable income of $18,000. Her tax liability is currently $2,236. She has the opportunity to earn an additional $5,000 if she accepts and completes a special project at work. There are no additional expenses to offset the $5,000 income. Consequently, Arlene will have a tax liability of $2,986.
Required:
1. If she accepts the special project. Arlene has a marginal tax rate of __________.
Answer:
The answer is 15%
Explanation:
Solution
Recall that:
Arlene has a income (taxable) = $18,000
Current tax liability = $2,236
She has an opportunity to have a additional of =$5000
Consequently Arlene has a tax liability of =$2986
Now,
We find the marginal tax rate
Thus,
Marginal tax rate = Change in tax / change in taxable income
=(2986- 2236)/5000
= 750/5000
= 0.15 or 15%
Therefore, Arlene has a marginal tax rate of 15%