Answer:
Option 1
Explanation:
The computation is shown below:
For option 1
Dividend received in 6 month is
= $0.25 × 2
= $0.50
Now
Profit from the sale of stock is
= sale price - purchase price
= $24 - $20 i
= $4
So,
Net proceed received from stock is
= dividend + profit from the sale
= $0.50 + $4
= $4.50
Now
Holding period return for 6 months is
= (Net proceed received ÷ purchase price) ×100
= ($4.50 ÷ $20) × 100
= 22.5 %
So,
Annualized holding period return is
= 22.5% × 2
= 45%
For Option 2
Dividend received in 1 year is
= $0.50 × 4
= $2
Profit from sale of stock is
= $30 - $27
= $3
Net proceeds from stock is
= $2 + $3
= $5
So,
Annualized holding period return is
= ($5 ÷ $27) × 100
= 18.52%.
As we can see that option 1 contains higher return so it would be selected
If inputs increase by 15% and outputs increase by 15%, what is the percentage change in productivity?
Answer:
0%
Explanation:
If input increase by 15% and output increase by 15% then the equation for productivity will be
Input = 100% + 15% = 115%
Output = 100% + 15% = 115%
[tex]productivety =\frac{Outpu t }{Inpu t}[/tex]
[tex]productivety=\frac{1.15}{1.15}[/tex]
[tex]productivty = 1[/tex]
Percentage change = 1-1
Percentage change = 0%
If both Output and input is increased by the same amount the results will be the same
Which of the following items will not appear in the operating section of patnode's 2005 indirect method cash flow statement?
A. Deduct: increase in accounts receivable $3,000.
B. Add: decrease in accounts payable $1,000.
C. Add: increase in taxes payable $2,400.
D. Add: decrease inventories $6,000.
Answer:
B. Add: decrease in accounts payable $1,000.
Explanation:
Operating Cash Flow (OCF) can be described as the cash that comes from the normal operating activities a company during a particular period.
The operating cash flow section starts with net income and other items that appear under it include change in current assets and current liabilities.
The following are 4 rules that employed to determine the nature of an adjustment to a current asset or current liability under the operating cash flow section of the cash flow statement:
Rule 1: When a current asset increases, you deduct.
Rule 2: But when a current asset reduces, you add.
Rule 3: When a current a liability increases, you add.
Rule 4: But when a current liability reduces, you deduct.
The 4 rules are now applied to this question as follows:
A. Deduct: increase in accounts receivable $3,000.
Account receivable is a current asset and there is an increase in it. Based on Rule 1, we deduct. Therefore, what is done is correct and will appear in the operating section of the cash flow.
B. Add: decrease in accounts payable $1,000.
Accounts payable is a current liability and there is a decrease in it. Based on Rule 4, we should deduct. Therefore, what is done is wrong and will not appear in the operating section of the cash flow.
C. Add: increase in taxes payable $2,400.
Taxes payable is a current liability and there is an increase in it. Based on Rule 3 above, we add. Therefore, what is done for this is correct and will appear in the operating section of the cash flow.
D. Add: decrease inventories $6,000.
Inventory is a current asset and there is a decrease in it. Based on Rule 2 above, we add. Therefore, what is done is correct and will appear in the operating section of the cash flow.
Conclusion
Based on the analysis above, only option B is wrong and will not appear in the the operating section of the cash flow. Therefore, the answer is B. Add: decrease in accounts payable $1,000.
Wyly Inc. produces and sells a single product. The selling price of the product is $215.00 per unit and its variable cost is $66.65 per unit. The fixed expense is $405,099 per month. The break-even in monthly dollar sales is closest to:______.
a. $1,306,771.
b. $901,672.
c. $587,100.
d. $405,099.
Answer:
c. $587,100.
Explanation:
The computation of the break even sales in dollars is shown below:
Break Even Sales = Fixed Cost ÷ Contribution Margin Ratio
where,
Fixed cost is $405,099
And, the contribution margin ratio is
= (sales price - variable cost) ÷ sales price
= ($215 - $66.65) ÷ $215
= 69%
Now placing these above formulae to the given formula
= $405,099 ÷ 0.69
= $587,100
Hene, the correct option is c. $587,100
Question 2 options: Use the following total product schedule as a resource to answer questions a, b, and c. Assume that the quantities of other resources the firm employs remain constant. Total Product Schedule Number of Workers Total Product 0 0 1 15 2 28 3 38 4 43 5 46 Instructions: Enter all values as whole numbers (no decimal places). a) If the firm's product sells for a constant $2 per unit, what is the marginal revenue product of the second worker
Answer:
The marginal revenue product (MRP) = $26 (13 x $2).
Explanation:
a) Data and Calculations:
Total Product Schedule
Number of Total Marginal Selling Total Marginal
Workers Product Product Price Revenue Revenue
0 0 0 $2 $0 $0
1 15 15 $2 $30 $30
2 28 13 $2 $56 $26
3 38 10 $2 $76 $20
4 43 5 $2 $86 $10
5 46 3 $2 $92 $6
b) The marginal revenue product is calculated by multiplying the marginal physical product (MPP) of the second worker by the marginal revenue (MR) $2 selling price.
If the residual value of a leased asset is guaranteed by a third party:________.
A. it is treated by the lessee as no residual value.
B. the third party is also liable for any lease payments not paid by the lessee.
C. the net investment to be recovered by the lessor is reduced.
D. it is treated by the lessee as an additional payment and by the lessor as realized at the end of the lease term.
Answer:
A. it is treated by the lessee as no residual value.
Explanation:
If the expected residual value is in assurance or unguaranteed, that's the economic and accounting product of the lesses
Furthermore, the guaranteed residual value also affects the computation of the minimum lease payment and the capitalised amount for an asset i.e. leased, lease obligation for the lessee
The promised residual value is an extra lease payment that can be paid in real estate or in cash, or both
Although the unguaranteed residual value, on the other hand, stays the same because no residual value will be impacted with respect to the estimation of the total lease payment and the capitalised amount for an asset, i.e. rented, lease contract.
A project that will last for 10 years is expected to have equal annual cash flows of $103,900. If the required return is 8.4 percent, what maximum initial investment would make the project acceptable
Answer:
Maximum amount will be present value of future cash flow is $684,772.10
Explanation:
Present Value of annual cash flow = Annual Cash flows * Present value of annuity of 1
Present Value of annual cash flow = $103,900 * 6.590684
Present Value of annual cash flow = $684,772.0676
Present Value of annual cash flow = $684,772.10
Workings
Present value of annuity of 1 = (1-(1+i)^-n)/i
i = 8.40%, n = 10 years
Present value of annuity of 1 = (1-(1+0.084)^-10)/0.084
Present value of annuity of 1 = 6.590684306
Golden Enterprises started the year with the following: Assets $125.000: Liabilities $42,500: Common Stock $73,000, Retained Earnings $11,000 During the year, the company earned revenue of $6,700, all of which was received in cash, and incurred expenses of $3,850, all of which were unpaid as of the end of the year. In addition, the cominy paid dividends of $2700 to owners. Assume no other activities occurred during the year The amount of Golden's retained earnings at the end of the year is:_________
Answer:
$11,150
Explanation:
The amount of Golden's retained earnings at the end of the year is calculated below
Ending retained earnings = Beginning retained earnings + Net income - Dividends
= $11,000 + ($6,700 - $3,850) - $2,700
= $11,150
The profit-maximizing output level is 4 units. 4.5 units. 2.5 units. 3 units. b. The profit-maximizing price is $14.30. $25. $40. $32.50. c. The firm has an economic profit of -$30.00. $0. $30.00. $45.50. $18.75. d. If the firm was forced to charge a price that resulted in allocative efficiency, this price would be $20. $14.30. $32.50. $25. e. If the firm was forced to charge a price that resulted in productive efficiency, the output level would be 4 units 2.5 units 0 units 4.5 units
Please see full Question attached Answer and Explanation:
A. Answer A : profit is maximised at output level 2.5 units where marginal revenue(MR) equal to marginal cost(MC)
B. Answer A: Profit is maximised at price $40 where the demand curve matches marginal revenue and marginal cost .
C. Answer C : Economic profit is equal to zero .
D. Answer D. Allocative efficiency is achieved where demand is equal to marginal cost. Level of output at this point is equal price at $25
E. Answer C. Efficient level of output is achieved where average total cost is lowest. From the diagram average total cost is lowest at output level 4.5 units.
Cox Corporation was organized on January 1, 2003, at which date it issued 100,000 shares of $10 par common stock at $15 per share. During the period January 1, 2003, through December 31, 2005, Cox reported net income of $450,000 and paid cash dividends of $230,000. On January 10, 2005, Cox purchased 8,000 shares of its common stock at $4 per share. On December 31, 2005, Cox sold 6,000 treasury shares at $12 per share. What is Cox's total stockholders' equity at December 31, 2005?
Answer: $1,760,000
Explanation:
Total Shareholder Equity = Common share + Net Income - Dividends - Treasury stock
Common share
= 100,000 * 15
= $1,500,000
Net Treasury Stock
= Treasury stock bought - Treasury stock sold
= (8,000 * 4) - (6,000 * 12)
= 32,000 - 72,000
= -40,000
Total Shareholder Equity = Common share + Net Income - Dividends - Treasury stock
= 1,500,000 + 450,000 - 230,000 - (40,000)
= 1,500,000 + 220,000 + 40,000
= $1,760,000
In a planned economy, prices of commodities are controlled by _________.
The correct answer is C. The government
Explanation:
The key feature of a planned economy is the strong influence and control of government in the economy. Indeed, in a planned economy it is the government the entity that decides on trade and production, this includes the prices of goods and the types of products that should be manufactured. Moreover, this does not occur in market economies because in these customers, produces and the law of supply/demand determine factors of the economy. According to this, in a planned economy prices are controlled by government.
Suppose you have been hired as a financial consultant to Defense Electronics, Inc. (DEI), a large, publicly traded firm that is the market share leader in radar detection systems (RDSs). The company is looking at setting up a manufacturing plant overseas to produce a new line of RDSs. This will be a five-year project. The company bought some land three years ago for $7.2 million in anticipation of using it as a toxic dump site for waste chemicals, but it built a piping system to safely discard the chemicals instead. If the land were sold today, the net proceeds would be $7.68 million after taxes. In five years, the land will be worth $7.98 million after taxes. The company wants to build its new manufacturing plant on this land; the plant will cost $13.32 million to build. The following market data on DEI’s securities are current:
Answer:
Initial Cash Flow at Time 0 = -(Appraised Value of Land + Cost of Building Plant and Equipment + Net Working Capital)
Substituting values in the above formula, we get,
Initial Cash Flow at Time 0 = -(6,000,000 + 32,600,000 + 1,475,000) = -$40,075,000 (answer for Part a)
_____
Part b)
Step 1: Calculate Weights of Different Sources of Finance
Market Value of Debt = Number of Bonds*Par Value*Current Selling Price Percentage = 245,000*1,000*105% = $257,250,000
Market Value of Common Stock = Number of Shares*Current Selling Price = 9,500,000*73.10 = $694,450,000
Market Value of Preferred Stock = Number of Shares*Current Selling Price = 465,000*83 = $38,595,000
Total Market Value of Firm = Market Value of Debt + Market Value of Common Stock + Market Value of Preferred Stock = 257,250,000 + 694,450,000 + 38,595,000 = $990,295,000
Now, we can calculate weights as follows:
Weight of Debt = Market Value of Debt/Total Market Value of Firm = 257,250,000/990,295,000
Weight of Equity = Market Value of Equity/Total Market Value of Firm = 694,450,000/990,295,000
Weight of Preferred Stock = Market Value of Preferred Stock/Total Market Value of Firm = 38,595,000/990,295,000
_____
Step 2: Calculate After-Tax Cost of Debt
The after-tax cost of debt can be calculated with the use of Rate function/formula of EXCEL/Financial Calculator. The function/formula for Rate is Rate(Nper,PMT,-PV,FV) where Nper = Period, PMT = Payment (here, Coupon Payment), PV = Present Value (here, Current Selling Price) and FV = Future Value (here, Face Value of Bonds).
Here, Nper = 23*2 = 46, PMT = 1,000*6%*1/2 = $30, PV = 1,000*105% = $1,050 and FV = $1,000
Using these values in the above function/formula for Rate, we get,
Pre-Tax Cost of Debt = Rate(46,30,-1050,1000)*2 = 5.61%
After-Tax Cost of Debt = Pre-Tax Cost of Debt*(1-Tax Rate) = 5.61%*(1-22%) = 4.38%
______
Step 3: Calculate Cost of Preferred Stock
The cost of preferred stock is determined as below:
Cost of Preferred Stock = Annual Dividend/Current Stock Price*100 = (3.8%*100)/83*100 = 4.58%
______
Step 4: Calculate Cost of Equity
The cost of equity is arrived as below:
Cost of Equity = Risk Free Rate + Beta*(Market Risk Premium) = 2.9% + 1.2*(6%) = 10.10%
Calculate Discount Rate
The value of discount rate is calculated as follows:
Discount Rate = (Weight of Debt*After-Tax Cost of Debt + Weight of Preferred Stock*Cost of Preferred Stock + Weight of Equity*Cost of Equity) + Appropriate Risk Adjustment Factor
Substituting values in the above formula, we get,
Discount Rate = (257,250,000/990,295,000*4.38% + 38,595,000/990,295,000*4.58% + 694, 450,000/990,295,000*10.10%) + 1.5% = 9.90% (answer for Part b)
The after-tax salvage value of the plant is arrived as below:
Annual Depreciation = Cost of Plant and Equipment/Useful Life = 32,600,000/8 = $4,075,000
Book Value of Plant and Equipment After 5 Years = Cost of Plant and Equipment - Annual Depreciation*5 = 32,600,000 - 4,075,000*5 = $12,225,000
Loss on Sale of Plant and Equipment = Book Value of Plant and Equipment After 5 Years - Salvage Value = 12,225,000 - 5,200,000 = $7,025,000
After-Tax Salvage Value = Salvage Value + Loss on Sale of Plant and Equipment*Tax Rate = 5,200,000 + 7,025,000*22% = $6,745,500 (answer for Part c)
The annual operating cash flow (OCF) is determined as follows:
Sales Value (19,550*11,070) 216,418,500
Less Variable Costs (19,550*9,700) 189,635,000
Fixed Costs 7,500,000
Depreciation 4,075,000
EBT 15,208,500
Less Taxes 3,345,870
EAT 11,862,630
Add Depreciation 4,075,000
Operating Cash Flow $15,937,630
Answer for Part d) is $15,937,630.
The accounting break-even quantity is calculated as follows:
Accounting Break-Even Quantity = (Fixed Cost + Depreciation)/(Selling Price - Variable Cost)
Substituting values in the above formula, we get,
Accounting Break-Even Quantity = (7,500,000 + 4,075,000)/(11,070 - 9,700) = 8,449 units (answer for Part e)
IRR
IRR is the minimum rate of return acceptable from a project. It can be calculated with the use of IRR function/formula of EXCEL/Financial Calculator. The basic formula for calculating IRR is given below:
NPV = 0 = Cash Flow Year 0 + Cash Flow Year 1/(1+IRR)^1 + Cash Flow Year 2/(1+IRR)^2 + Cash Flow Year 3/(1+IRR)^3 + Cash Flow Year 4/(1+IRR)^4 + Cash Flow Year 5/(1+IRR)^5
IRR is calculated with the use of EXCEL as below:
Year Cash Flow 0 -40075000 15937630 15937630 15937630 15937630 30558130 33.16% 4 6 4 IRR 10
where
IRR = RR(B2:B7) = 33.16%
NPV
The NPV can be calculated with the use of following formula:
NPV = Cash Flow Year 0 + Cash Flow Year 1/(1+Discount Rate)^1 + Cash Flow Year 2/(1+Discount Rate)^2 + Cash Flow Year 3/(1+Discount Rate)^3 + Cash Flow Year 4/(1+Discount Rate)^4 + Cash Flow Year 5/(1+Discount Rate)^5
Substituting values in the above formula, we get,
NPV = -40,075,000 + 15,937,630/(1+9.90%)^1 + 15,937,630/(1+9.90%)^2 + 15,937,630/(1+9.90%)^3 + 15,937,630/(1+9.90%)^4 + (15,937,630 + 6,745,500 + 1,475,000 + 6,400,000)/(1+9.90%)^5 = $29,619,521.66
Price leadership is legal in the United States, whereas price-fixing is not. This is because price leadership is not an agreement, whereas price-fixing is. a registered arrangement subject to oversight, whereas price-fixing is not. an agreement, whereas price-fixing is not. not a registered arrangement subject to oversight, whereas price-fixing is.
Answer:
This is because price leadership is not an agreement, whereas price-fixing is.
Explanation:
Price fixing is a type of collusion (and yes, collusion is illegal). Price fixing is an illegal business practice where competing firms agree upon increasing, decreasing or maintaining the price of certain goods or services. In the US, competing firms must establish their prices by themselves without consulting or agreeing with their competition.
The role of the government in establishing how private business can operate includes all of the following except:a)providing legal frameworkb)PROVIDING RAW MATERIAL TO BUSINESSc)protecting the environmentd)protecting consumers
Answer: providing raw material to business
Explanation:
It should be noted that the government of every economy plays a major role regarding the operations of businesses. The role of the government in establishing how private business can operate include providing legal framework, protecting the environment and also protecting th consumers.
It is not the role of the government to provide raw materials for industries.
As a comparable, an expired listing can be a useful indicator of a listing period that was too short. a listing price that was too high for the market. a seller who was flexible. a property that was not as good as its competitors.
Answer: a listing price that was too high for the market.
Explanation:
An expired listing occurs when the house for sale was not sold in the time period that was allowed by the contract between the house owner and the sales agent.
If this was to happen then it could be because prospective buyers deemed the house to be worth less than it was being offered for and so did not buy it. Both the seller and the agent can learn from this as it very much could be an indicator that the listing price was too high for the market.
A commercial bank will loan you $20,000 for four years to buy a car. The loan must be repaid in 48 equal monthly payments. The annual interest rate on the loan is 6.00 percent of the unpaid balance. How large are the monthly payments?
Answer:
Monthly payment = $469.701
Explanation:
Loan Amortization: A loan repayment method structured such that a series of equal periodic installments will be paid for certain number of periods to offset both the loan principal amount and the accrued interest.
The monthly equal installment is calculated as follows:
Monthly equal installment= Loan amount/Monthly annuity factor
Loan amount = 20,000
Monthly annuity factor =
=( 1-(1+r)^(-n))/r
r- Monthly interest rate (r)
= 6/12= 0.5%
n- Number of months ( n) = 20 × 4 = 48
Annuity factor
= ( 1- (1.005)^(-48)/0.005= 42.5803
Monthly installment= 20,000 /42.5803 = $469.701
Monthly installment = $469.701
Monthly payment = $469.701
On April 12, Hong Company agrees to accept a 60-day, 8%, $5,700 note from Indigo Company to extend the due date on an overdue account. What is the journal entry that Indigo Company would make, when it records payment of the note on the maturity date
Answer:
Interest = Principal Amount × Rate × Number of days / 365
Interest = $5,700 * 10% * 60/365
Interest = $96.70
Cash to be paid = Principal Amount + Interest
Cash to be paid = $5,700 + $96.70
Cash to be paid = $5796.70
On the date of maturity, journal entry to make the payment of note payable is given below
Date Account Title & Explanation Debit Credit
Note Payable $5,700
Interest Expense $96.70
Cash $5796.70
Mia has an outside basis of $50,000 in the Brimstone Partnership, including her share of liabilities of $25,000. In a liquidating distribution, she receives cash of $10,000 and inventory worth $8,000 (inside basis to Brimstone of $20,000). What is Mia's recognized gain or loss on the liquidation and basis in the property received
Answer:
No gain or loss, Cash basis $10,000, Inventory $15,000
Explanation:
Calculation for Mia’s recognized gain or loss
First step is to calculate for Mia outside adjusted basis
Using this formula
Outside adjusted basis=Outside basis - Liabilities
Let plug in the formula
Outside adjusted basis=$50,000 - $25,000
Outside adjusted basis= $25,000
Second step is to calculate for Mia Gain or loss
Using this formula
Gain/Loss=Outside adjusted basis- Cash received - Inside basis
Let plug in the formula
Gain/Loss =$25,000 -$10,000 -$20,000
Gain/Loss = ($5,000)
Since Mia had ($5,000) this means Mia has no gain or loss
Last step is to calculate for Mia Inventory
Using this formula
Inventory = Cash + Gain/Loss
Let plug in the formula
Inventory =$10,000 + $5,000
Inventory = $15,000
Therefore Mai has NO gain or loss, Cash basis amount of $10,000 and Inventory amount of $15,000
tahir owns and operates a gym. In 2020, he purchased and placed the following new assets into service for his business: March 17, a $1,700 sound system; July 4, a $500 desk; September 2, a $2,000 computer. He did not opt out of bonus depreciation. What is the total 2020 depreciation for the desk
Answer:
$500
Explanation:
Since the Cost of the desk is $500
Also Tahir did not pt out for the bonus depreciation so in this case the 100% cost to be claimed as the bonus depreciation for the year 2020 with respect to the qualifying assets that are purchased in the year 2020
Hence, the total depreciation for the desk in the year is $500 and the same is to be considered
A bond issue with a face amount of $400,000 bears interest at the rate of 8%. The current market rate of interest is 9%. These bonds will sell at a price that is:
The question is incomplete. The complete question is,
A bond issue with a face amount of $400,000 bears interest at the rate of 8%. The current market rate of interest is 9%. These bonds will sell at a price that is:
More than $400,000.
Equal to $400,000.
Less than $400,000.
The answer cannot be determined from the information provided.
Answer:
The bond sells at a price less than $400000
Explanation:
The coupon rate of bonds is the interest rate at which the bond will pay the interest. When the coupon rate of a bond is less than the market interest rate or the Yield to Maturity (YTM), the bond sells at a discount in the market. On the other hand, if the coupon rate of bond is greater than the market interest rate, the bond sells at a premium.
As the coupon rate of the given bond is 8% which is less than the market interest rate of 9%, the bond sells at a discount. Thus, the price at which the bond sells is less than $400000.
As a preferred stockholder, you are entitled to numerous preferences and privileges over common stockholders. If you are a preferred stockholder of a company that has fallen on economic hardship and is likely to go bankrupt, which preference or privilege of preferred stock is going to be most useful to you
Answer:
asset distribution preference
Explanation:
In such a situation the preference or privilege that would be best for you is known as asset distribution preference or liquidation preference. This is a clause that dictates that the payout in case of a corporate liquidation (such as when they are about to go bankrupt) must first go to the preferred stockholders in order for them to get their money back first. Therefore, since you are a preferred stockholder this would be the biggest privilege for you, allowing you to recover your money quickly and move on to something else.
Profit, time and performance are all basic classifications of project priorities.
a) true
b) false
Answer:
b) false
Explanation:
The basic classifications of project priorities are cost, time and performance. Profit is not included in the list, cost is included.
A project manager must decide how to manage the trade offs between cost, time and performance. E.g. if you want something well done and cheap, you cannot expect to have it done fast. If you want something done well and fast, it wouldn't be cheap.
The common stock of Flavorful Teas has an expected return of 14.31 percent. The return on the market is 9 percent and the risk-free rate of return is 3.1 percent. What is the beta of this stock
Answer:
1.9
Explanation:
The common stock of flavorful tea has an expected return of 14.31%
=14.31/100
= 0.1431
The return on the market is 9%
= 9/100
= 0.09
The risk free rate of return is 3.1%
= 3.1/100
= 0.031
Therefore, the beta can be calculated as follows
0.1413= 0.031 + beta(0.09-0.031)
0.1413= 0.031 + 0.09beta-0.031beta
0.1413=0.031 +0.059beta
0.1413-0.031= 0.059beta
0.1121= 0.059beta
beta= 0.1121/0.059
beta= 1.9
Hence the beta of this stock is 1.9
Which function of the management process requires a manager to establish goals and standards and to develop rules and procedures?
Answer:
The planning function of management includes establishing goals and standards, developing rules and procedures, and developing plans and forecasting
Explanation:
Planning is the function of management that involves setting objectives and determining a course of action for achieving those objectives.
a customer has invested 20000 in a variable annuity. in the first year nav increases to 21100 at what rate wsill 1100 gain be taxed
Answer: 0%
Explanation:
The $20,000 contribution to the variable annuity is not taxed and neither is the gain, at least not yet.
With the variable annuity, the gains/earnings will be tax-deferred and the customer will only have to pay taxes when they withdraw the contributions.
When this happens they will be charged at the normal income tax rate.
g A machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $50,000 cash. The amount that should be reported as a source of cash under cash flows from investing activities is: Group of answer choices
Answer: $50,000
Explanation:
From the question, we are informed that a machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $50,000 cash.
The amount that should be reported as a source of cash under cash flows from investing activities will be $50,000. It should be noted that only cash effects of transaction has to be added to the cash flow statement.
2. Many large department and specialty stores are changing their salespeople’s reward system from a salary to a commission-based system. What problems can commission-based systems cause? How can department managers avoid these problems?
Answer:
Some of the problems of a commission-based system can lead to are:
Aggressive sales tactics by sales personnel: People can be very driven when money is involved. When a company's compensation plan puts a heavyweight on commissions, salespeople, know that their depends on same resort all sort of manoeuvers in order meet their targets. Some times they push too much and this repels customers leading to negative brand equity which in turn stimulates the opposite effect that the compensation plan was installed to attain. Department managers in consultation with the HR department can work out a compensation system that is not so reliant on commissions so as to create a balance. It is also important to keep a feedback system in place that allows the company to monitor its brand equity.2. Budget/Compensation Disequilibrium
When a company relies on a sales system that is heavily dependent on a commission-based reward system, sometimes, they could find themselves in a spot where they have to pay out commissions even though the monies have not come in.
This could lead to cash flow problems.
One way out of this is to use policies to manage the amount of days goods can be held in credit by the debtor. That is, if usually, such a company had a credit policy of 60 days, they could shorten it to 45 or 30 days. It can also elect to put an interest rate on the credit. This will discourage customers from holding on to their payment for too long.
Policies can also be used to manage the sales personnel date of payment for goods sold on credit. The policy can state that "commissions for cash sales will be paid as at when due. However, the commission on credit sales will be paid when the company recieves payment for same".
Cheers!
The manufacturing costs of Ackerman Industries for the first three months of the year follow:
Total Costs Units Produced
January $1,900,000 20,000 units
February 2,250,000 27,000
March 2,400,000 30,000
Using the high-low method, determine (a) the variable cost per unit and (b) the total fixed cost. Round all answers to the nearest whole dollar.
a. Variable cost per unit $
b. Total fixed cost $
Answer:
a. $50
b. $500,000
Explanation:
The computation of the fixed cost and the variable cost per unit by using high low method is shown below:
a. Variable cost per unit = (High total cost - low total cost) ÷ (High number of units produced - low number of units produced)
= ($2,400,000 - $1,900,000) ÷ (30,000 units - 20,000 units )
= $500,000 ÷ 10,000 units
= $50
b. Now the fixed cost equal to
= High total cost - (High number of units produced × Variable cost per unit)
= $2,400,000 - (30,000 units × $50)
= $2,400,000 - $1,500,000
= $900,000
Which of the following is true of taxes and subsidies? Group of answer choices Politicians like to levy taxes, but they are reluctant to subsidize activities. Both taxes and subsidies increase the incentive to work and use resources efficiently. If you tax something, you will get less of it; if you subsidize an activity, you will get more of it. If you tax something, you will get more of it; if you subsidize an activity, you will get less of it.
Answer: If you tax something, you will get less of it; if you subsidize an activity, you will get more of it
Explanation:
Taxes are the levy that governments impose on people or firms. Subsidies are financial aid to companies in order to boost production and reduce price.
It should be noted that if you tax something, you will get less of it; if you subsidize an activity, you will get more of it. For example of an income is taxed, the owner of the income will geta lesser amount as tax will be removed.
For each of the following, indicate whether the idea is most closely associated with the first industrial revolution, the second industrial revolution, neither, or both. Mechanization The possibility of traveling from coast to coast in the US in under a week Feedback loops
1. First Industrial Revolution The internet
2. Second Industrial Revolution The flying shuttle
3. Neither The steam engine
4. Both Railroads Telegraph A technological (as opposed to political) revolution
Answer:
The possibility of traveling from coast to coast in the US in under a week ⇒ SECOND INDUSTRIAL REVOLUTIONFeedback loops ⇒ BOTHThe internet ⇒ NEITHERThe flying shuttle ⇒ NEITHERThe steam engine ⇒ FIRST INDUSTRIAL REVOLUTIONRailroads ⇒ BOTHTelegraph ⇒ SECOND INDUSTRIAL REVOLUTION A technological (as opposed to political) revolution ⇒ SECOND INDUSTRIAL REVOLUTIONExplanation:
The first industrial revolution took place between 1760-1830 (roughly) and its main characteristics were the industrialization of production processes using stream power.
The second industrial revolution took place between 1870-1914 (beginning of WWI). Production processes were enhanced as well as the production of steel. Even though some systems were invented much earlier, during the second industrial revolution they became "popular" and were adopted in many places and became common things, e.g. railroad networks, telegraph and telephone, water systems, sewage, electricity, and even pencils.
Alistar Inc. recently issued $90 par value preferred stock that pays a 8.25% dividend rate per year. If the stock is currently selling for $85, what is the expected return of this preferred stock?
Answer:
8.74%
Explanation:
Calculation for the expected return of this preferred stock
First step is to find the Annual dividend using this formula
Annual dividend= Par value x Dividend rate
Let plug in the formula
Annual dividend=$90 par value×8.25% dividend rate
Annual dividend=7.425
Second step is to calculate for the expected return of the preferred stock
Using this formula
Expected return=Annual dividend/Current price
Let plug in the formula
Expected return=7.425/$85
Expected return=8.74%
Therefore the expected return of this preferred stock will be 8.74%