Answer:
$
Sales revenue 600
Selling and administrative expenses (250)
Restructuring charges (20)
Profit before tax 330
Tax @ 40% 132
Income from continuing operations 198
The correct answer is A
Explanation:
Income from continuing operation is the excess of sales revenue over selling and administrative expenses, restructuring charges and tax.
Tax is 40% of profit before tax.
Western Electronics (WE) is reviewing the following data relating to a new equipment proposal: Net initial investment outlay $ 50,000 After-tax cash inflow from disposal of the asset after 5 years $ 10,000 Present value of an annuity of $1 at 12% for 5 years 3.605 Present value of $1 at 12% in 5 years 0.567 WE expects the net after-tax savings in cash outflows from the investment to be equal in each of the 5 years. What is the minimum amount of after-tax annual savings (including depreciation effects) needed to make the investment yield a 12% return (rounded to the nearest whole dollar)?
Answer:
The answer is $12,297.
Explanation:
Denote x is the minimum amount of after-tax annual savings (including depreciation effects) needed to make the investment yield a 12% return.
As required in the question, at $X annual after-tax saving, the net present value of the project discounted at the required return 12% will be equal to 0. So, we have:
- Net initial investment + Present value of cash inflow from asset disposal in 5-year + Present value of 5 after-tax annual savings = 0 <=> -50,000 + 10,000 x 0.567 + X x 3.605 = 0 <=> 3.605X = 44,330 <=> X = $12,297 (rounded to the nearest whole dollar).
Thus, the answer is $12,297.
In a recent news release Bloomberg.com reported that the existing home sales declined in December of 2012 (the released article: "Existing Home Sales Decline as U.S. Supply Dwindles", January 22, 2013). As is obvious from the title of the article, the author blamed the reduction in the level of sales on a reduction in the supply of existing homes (existing homes are homes that had already been owned, i.e. not new construction). Which of the following explanations might justify this blame?
Homeowners expect housing prices to increase in the future
Homeowners expect housing prices to decrease in the future
Homebuyers expect housing prices to decrease in the future
Homebuyers expect housing prices to remain constant.
Answer:
The correct answer is Option (A) Homeowners expect housing prices to increase in the future
Explanation:
Existing home sales decline was attributed to reduction in the supply of existing homes. The owners of existing homes would not sell their property only if they believe that home prices will increase in the future. Therefore, they can sell the property at a higher price later.
Had homeowners believed that home prices will decline in the future, the owners would have put-up existing houses for sale so that they get a better price now than wait to see the price decline.
On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bonds mature at the end of four years. Olive uses the effective-interest amortization method. The partially completed amortization schedule below pertains to the bonds: Date Cash Interest Amortization Balance January 1, Year 1 $ 48,813 End of Year 1 $ 3,600 $ 3,417 $ 183 48,630 End of Year 2 ? ? ? 48,434 End of Year 3 ? ? 210 ? End of Year 4 ? 3,376 ? 48,000
Answer:
See the explanation
Explanation:
Date Cash Interest Exp. Amortization Balance
----------------------------------------------------------------------------------------
Jan. 1, Year 1 48,813
End of Year 1 3,600 3,417 183 48,630
End of Year 2 3,600 3,404 196 48,434
End of Year 3 3,600 3,390 210 48,224
End of Year 4 3,600 3,376 224 48,000
----------------------------------------------------------------------------------------
Calculations:
Cash = 3,600 (Fixed amount)
Interest Exp. = 3,417 / 48,813 = 7%
End oy year 2:
Cash 3,600
Interest Expense 48,630 * 7% = 3,404
Amortization 3,600 - 3,404 = 196
End oy year 3:
Cash 3,600
Interest Expense 48,434 * 7% = 3,390
Balance 48,434 - 210 = 48,224
End oy year 4:
Cash 3,600
Amortization 3,600 - 3,376 = 224
Hope this helps!
Aguilar Company is a priceminus−taker and uses target pricing. Refer to the following information: Production volume 601 comma 000601,000 units per year Market price $ 30$30 per unit Desired operating income 1616% of total assets Total assets $ 13 comma 700 comma 000$13,700,000 Variable cost per unit $ 19$19 per unit Fixed cost per year $ 5 comma 400 comma 000$5,400,000 per year With the current cost structure, Aguilar cannot achieve its profit goals. It will have to reduce either the fixed costs or the variable costs. Assuming that fixed costs cannot be reduced, what are the target variable costs per unit per year? Assume all units produced are sold. (Round your answer to the nearest cent.)
Answer:
Target variable costs/ unit /year = $17.37
Explanation:
We reverse work this to get to target variable costs,
First lets summarize the data,
Production = 601,000 units
Price = $30
Variable cost = $19
Fixed Costs= $5,400,000
Desired operating income @ 16% = (0.16*13,700,000) = $2,192,000
We reverse work this as,
Sales (601,000*30) 18,030,000
Less Variable costs(GP - Sales) 10,438,000
Gross Profit (FC + Profit) 7,592,000
Less Fixed Costs 5,400,000
Profit 2,192,000
Variable costs/ unit /year = 10,438,000 / 601,000 = $17.37/unit
Hope that helps.
Assume that the reserve requirement is 20 percent. First National Bank has vault cash and deposits with the Fed of $80 million, loans and securities of $320 million, and demand deposits of $400 million. First National: a. could extend a maximum of $10 million of additional loans. b. could extend a maximum of $20 million of additional loans. c. is not in a position to extend additional loans. d. could extend a maximum of $40 million of additional loans.
Answer:
The answer is (c) First National Bank is not in a position to extend additional loans.
Explanation:
Please find the below for detailed explanation and calculations:
The First National Bank current reserve ratio is calculated as : Vault cash and deposits of the Bank with the Fed/ Total demand deposits of the Bank = $80 million / $400 million = 20%.
As the First National Bank' reserve ratio is now equal to the Fed's Reserve Requirement, First National Bank can not further extend its loan portfolio's balance, otherwise, its reserve ratio will fall below Fed's requirement which is not acceptable.
So, the answer is (c).
Suppose Hoosiers, a specialty clothing store, rents space at a local mall for one year, paying $22,800 ($1,900/month) in advance on October 1.1.Record the payment of rent in advance on October 1.2.Record the adjusting entry for rent used till December 31.3. Calculate the year-end adjusted balances of prepaid rent and rent expense (assuming the balance of Prepaid Rent at the beginning of the year is $0).
Answer:
1.
Debit Credit
Prepaid Rent $22,800
Cash $22,800
2.
Debit Credit
Rent expense(22,800*3/12) $5,700
Prepaid Rent $5,700
3.
Prepaid rent=22,800-5,700=$17,100
Rent expense=$5,700
Explanation:
1.
On October 1, , the following journal entry will be recorded in respect of the advance rent paid by the Hoosiers for one year of rent space at local mall:
Debit Credit
Prepaid Rent $22,800
Cash $22,800
2.
The year end given in this question is December 31 and the prepaid rent is paid for one year and since the rent is paid on October 1, therefore, only expense in respect of 3 months i.e. from October to the December will be recognised in this year in respect of rent expense. Remaining expense of nine months will be recognised in the next year.
The following adjusting Journal entry will be recorded in respect of rent expense in accounts on December 31.
Debit Credit
Rent expense(22,800*3/12) $5,700
Prepaid Rent $5,700
3. The year end adjusting balance of prepaid rent and rent expense will be calculated as
Prepaid rent=22,800-5,700=$17,100
Rent expense=$5,700
Journal entry refers to the primary record of transactions and events of a specific period. The journal entries for the question are given in the attachment.
What is journal entry?Journal entry refers to the primary record of transactions and event of an entity in chronological order during a specific period. Journal entry supports the preparation of subsidiary books.
Prepaid expense refers to the expenses paid in advance for a period. They appear in the balance sheet as assets of the entity.
Prepaid rent of Suppose Hoosiers is $22,800 in the month of October. In the month of December, the expense of 3 months will be recognized as the expense for the period.
Therefore rent expense will be:
[tex]\rm Rent\:expense = Rent\:per\:month \times 3\: months\\\\\rm Rent\:expense = \$1,900 \times 3\: months\\\\\rm Rent\:expense = \$5,700[/tex]
The prepaid rent will be the rent paid for next year for the period between January to September:
[tex]\rm Prepaid\:rent = \$1,900 \times 9\:months\\\\\rm Prepaid\:rent = \$17,100[/tex]
Prepaid rent of $17,100 will appear in the asset side of the balance sheet.
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Xion Co. budgets a selling price of $80 per unit, variable costs of $35 per unit, and total fixed costs of $270,000. During June, the company produced and sold 10,800 units and incurred actual variable costs of $351,000 and actual fixed costs of $285,000. Actual sales for June were $885,000. Prepare a flexible budget report showing variances between budgeted and actual results. List variable and fixed expenses separately. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance) XION CO. Flexible Budget Report For Month Ended June 30 Flexible Budget Actual Results Variances Fav./Unf.
Answer:
FLEXIBLE BUDGET REPORT
Flexible budget Actual Variance
Activity level (units) 10,800 10,800 No variance
$ $
Sales 864,000 885,000 21,000(F)
Less: Variable cost:
Total variable cost 378,000 351,000 27,000(F)
Less: Fixed cost:
Total fixed cost 270,000 285,000 15,000(U)
Profit 216,000 249,000 33,000(U)
Explanation:
In this report, the budgeted total variable cost is obtained by multiplying the variable cost per unit by the quantity of goods produced and sold.
The total fixed cost remains constant regardless of the quantity produced and sold.
Variance is the difference between the flexible budget and actual results.
Final answer:
To prepare the flexible budget report, we need to calculate the budgeted and actual amounts for variable expenses and fixed expenses. The flexible budget report for Xion Co. for the month of June would show an unfavorable variance of $27,000 for variable expenses and a favorable variance of $15,000 for fixed expenses.
Explanation:
To prepare the flexible budget report, we need to calculate the budgeted and actual amounts for variable expenses and fixed expenses.
Variable Expenses
The budgeted variable expense per unit is $35. Therefore, the budgeted variable expenses for 10,800 units would be $35 per unit multiplied by 10,800 units, which equals $378,000. The actual variable expenses incurred for 10,800 units are given as $351,000.
The variance for variable expenses can be calculated by subtracting the actual variable expenses from the budgeted variable expenses:
Variance = Budgeted variable expenses - Actual variable expenses
= $378,000 - $351,000
= $27,000 (Unfavorable variance)
Fixed Expenses
The budgeted fixed expenses are given as $270,000, and the actual fixed expenses incurred are $285,000.
The variance for fixed expenses can be calculated by subtracting the actual fixed expenses from the budgeted fixed expenses:
Variance = Budgeted fixed expenses - Actual fixed expenses
= $270,000 - $285,000
= $-15,000 (Favorable variance)
Therefore, the flexible budget report for Xion Co. for the month of June would show an unfavorable variance of $27,000 for variable expenses and a favorable variance of $15,000 for fixed expenses.
Mace Auto Parts Company sells to retail auto supply stores on credit terms of "net 60". Annual credit sales are $300 million (spread evenly throughout the year) and its accounts average 28 days overdue. The firm's variable cost ratio is 0.75 (i.e., variable costs are 75 percent of sales). When converting from annual to daily data or vice versa, assume there are 365 days per year. Determine Mace's average collection period.
A. 88 days
B. 44 days
C. 74 days
D. 60 days
Answer:
Mace's average collection period is 88 days
Explanation:
Credit terms is "Net 60" which means the customer will naturally pay within 60 days. Further it is given that account average 28 days overdue. This means it takes 28 more days to collect the amount of receivables. Therefore the average collection period comes to
60 + 28 = 88 days.
Which of the following is not a true statement?
a. Incremental analysis might also be referred to as differential analysis.
b. Incremental analysis is the same as CVP analysis.
c. Incremental analysis is useful in making decisions.
d. Incremental analysis focuses on decisions that involve a choice among alternative courses of action.
Answer:
Incremental analysis is not the same as CVP analysis
The correct answer is B
Explanation:
CVP analysis is also known as break-even analysis. It measures an established relationship among cost, volume and profit.
Incremental analysis refers to differential analysis used in decision-making for making choices among alternative courses of action.
Incremental analysis and CVP analysis are separate concepts in accounting. The former is a decision-making tool used to compare costs and revenues of different alternatives, while the latter examines the impact of different levels of sales and production volume on profit.
Explanation:The statement that is not true among the options provided is b. Incremental analysis is the same as CVP analysis. Incremental analysis, sometimes referred to as differential analysis, and CVP (Cost-Volume-Profit) Analysis are two distinct concepts in accounting.
Incremental analysis is a decision-making tool in which the relevant costs and revenues of one alternative are compared to those of another. This method is useful in making decisions and focuses on decisions that involve a choice among alternative courses of action.
On the other hand, CVP analysis is a method of cost accounting. It looks at the effect on company profit (cost, volume, and profit) of different levels of sales and production volume.
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Wade Company is operating at 75% of its manufacturing capacity of 140,000 product units per year. A customer has offered to buy an additional 20,000 units at $32 each and sell them outside the country so as not to compete with Wade. The following data are available: Costs at 750% capacity: Per Unit $12.00 $1.260,000 Total Direct materials Direct labor 945.000 9.00 1.575,000 $36,00 $3.780,000 Overhead (fixed and variable) Totals 15.00 In producing 20,000 additional units, fixed overhead costs would remain at their current level but incremental variable overhead costs of $6 per unit would be incurred. What is the effect on income if Wade accepts this order? Income will decrease by $4 per unit. Income will increase by $4 per unit. Income will increase by $5 per unit. Income will decrease by $5 per unit. Income will increase by $11 per unit.
Answer:
Income will increase by $5 per unit
Explanation:
The income effect in case of the order accepted is presented below:
As we know that
Additional sales per unit $32
Direct material per unit $12
Direct labor per unit $9
And, the incremental variable overhead cost is $6 per unit
Since the fixed cost is the same so it does not affect the effect on income
So, the income effect would be
= $32 - $12 - $9 - $6
= $5 per unit
Since the answer comes in positive which means there is an increase in income
The effect on income when accepting an additional order is that the profit above variable cost will be $4800 with a 4% price change and a new quantity of 960 units.
Your current profit above variable cost is $4800.
Your price will change by 4 percent.
Your new quantity is 960 units.
If you raise the price, the profit above variable cost will remain at $4800.
Lloyd is chronically-ill and received tax-qualified long-term care insurance benefits in 2018 amounting to $8,000 to cover a 30-day nursing home stay. What amount, if any, must he include in income if actual nursing home costs for the 30 days amounted to $7,500 and the applicable per dier limitation was $360?
A) $0
B) $500
C) $7,500
D) $8,000
Answer:
A) $0
Explanation:
as per IRC section 101g, if the payment exceeds the greater of per actual cost then the excess payment amount will be taxable.
total tax free payment = 360*30
= $10,800
Therefore, The taxable amount is $0
Lloyd will include A) $0 of insurance benefits in his income.
Data and Calculations:
Tax-qualified long-term care insurance benefits received = $8,000
Number of nursing home stay days = 30 days
Actual nursing home costs for the 30 days = $7,500
Applicable per day limitation = $360
The total per day limitation = $10,800 ($360 x 30)
Since Lloyd is chronically ill, the $8,000 insurance benefits he received his life insurance contract is treated under § 101(g) as an amount received by reason of death and excluded from his gross income.
Thus, Lloyd will include A) $0 of insurance benefits in his income.
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Contemporary project communications typically include both push methods such as blogs, and pull methods such as e-mail(A) True(B) False
Answer:
False.
Explanation:
This question is false because strategies are inversely exemplified in the communication of contemporary projects in this case. It would be correct to state that a blog is a pull method and an email is a push method.
The Push strategy refers to the way companies seek to push a product to a customer, that is, to look for ways to encourage consumers to buy a product, which is more about sending promotional emails.
The Pull strategy refers to the search of organizations to establish a relationship between the brand and the consumer, pulling the customer towards the product, which is more conducive to creating blogs, which generates diverse content that generate engagement and provides greater interaction. and creating customer relationship with the brand.
Which subtype of ADHD is characterized by lethargic, daydreamy behavior?
Answer:
predominantly inattentive
Explanation:
ADHD is a disorder of neurobiological origin, in which there is a deficit in the functional structure of certain brain areas or centers related to the regulation of different attention processes.
The child with ADHD has difficulties in selecting the relevant focus of attention, (he does not know what he has to attend to) is slow in motor tasks and cognitive tasks, is easily distracted, and all this can lead to school age at learning difficulties, as well as having an impact on the emotional and personal areas of the child, (low self-esteem, anxiety, behavioral problems ...)
A government's Statement of Revenues, Expenditures, and Changes in Fund Balances reported proceeds of bonds in the amount of $500,000. It also reported expenditures for bond principal in the amount of $1,000,000. The last interest payment was on the last day of the fiscal year. The reconciliation from the governmental funds changes in fund balances to the governmental activities change in Net Position would reflect a(an):_________.
Answer Choices:
A)Increase of $500,000
B)Decrease of $500,000
C)Increase of $1,500,000
D)Decrease of $1,500,000
Answer:
A)Increase of $500,000
Which of the following statements is most accurate? Select one: a. In process costing, estimating the degree of completion of units is usually more accurate for conversion costs than for direct materials. b. The FIFO method includes the cost of the beginning Work in Process inventory account in calculating cost per equivalent units. c. The FIFO method computes equivalent units based only on production activity in the current period, ignoring the percentage of completion in beginning Work in Process inventory. d. The FIFO method of calculating equivalent units of production merges the work and the costs of the beginning inventory with the work and the costs done during the current period. e. It is not possible for there to be a significant difference between the cost of completed units between the weighted average and the FIFO methods.
Answer: The correct answer is "c. The FIFO method computes equivalent units based only on production activity in the current period, ignoring the percentage of completion in beginning Work in Process inventory.".
Explanation: Process Costing is a special accounting method to identify and accumulate direct costs and prorate indirect costs of the same manufacturing process.
The statement "The FIFO method computes equivalent units based only on production activity in the current period, ignoring the percentage of completion in beginning Work in Process inventory." is the most accurate.
The most accurate statement regarding process costing and FIFO is that the FIFO method only considers the production activity and costs of the current period, excluding the completion level of beginning inventory.
Explanation:The most accurate statement among the options provided, focused on process costing, is c. The FIFO method computes equivalent units based only on production activity in the current period, ignoring the percentage of completion in beginning Work in Process inventory. This method allows for the separation of costs between what was already in process at the beginning of the period and the costs incurred during the current period.
Under FIFO, the beginning work in process costs are maintained separately, and the costs added during the period to the new production are then used to calculate the cost per equivalent unit. This approach is different from the weighted average method, which blends the costs of beginning inventory with the costs of production during the period.
It's necessary to recognize that accounting for costs using FIFO can result in significant differences when compared with the weighted average method, specifically when there is a change in the costs of production or when the degree of completion of beginning inventory is significantly different from the new production.
On January 1, Bramble Corp. had 61,200 shares of no-par common stock issued and outstanding. The stock has a stated value of $4 per share. During the year, the following transactions occurred.
Apr. 1 Issued 10,350 additional shares of common stock for $13 per share.
June 15 Declared a cash dividend of $1.70 per share to stockholders of record on June 30.
July 10 Paid the $1.70 cash dividend.
Dec. 1 Issued 4,600 additional shares of common stock for $11 per share.
Dec. 15 Declared a cash dividend on outstanding shares of $2.00 per share to stockholders of record on December 31.
(a) Prepare the entries, if any, on each of the three dates that involved dividends. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 1,225.)
Answer
The answer and procedures of the exercise are attached in the following archives.
Step-by-step explanation:
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
On June 15, the company declared a cash dividend of $1.70 per share to stockholders of record on June 30. On December 15, the company declared a cash dividend of $2.00 per share to stockholders of record on December 31.
Explanation:On June 15, the company declared a cash dividend of $1.70 per share to stockholders of record on June 30. The journal entry for this transaction would be:
Date: June 15
Account Titles:
Retained EarningsDividends PayableDebit:
Retained Earnings - $103,920 (61,200 shares x $1.70 per share)Credit:
Dividends Payable - $103,920 (61,200 shares x $1.70 per share)Similarly, on December 15, the company declared a cash dividend of $2.00 per share to stockholders of record on December 31. The journal entry for this transaction would be:
Date: December 15
Account Titles:
Retained EarningsDividends PayableDebit:
Retained Earnings - $122,400 (61,200 shares x $2.00 per share)Credit:
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If you invest $2,000 today for three years at 5% interest paid annually, you will earn a total of $______ in interest. Assume you re-invest all interest.
A. 205.00
B. 300.00
C. 315.25
D. 500.00
Answer:
Option (C) is correct.
Explanation:
Given that,
Amount invested today = $2,000
Interest paid annually(r) = 5%
Time period(n) = 3 years
[tex]Future\ value=Present\ value\times(1+r)^{n}[/tex]
[tex]Future\ value=2,000\times(1+0.05)^{3}[/tex]
[tex]Future\ value=2,000\times(1.05)^{3}[/tex]
= $2,315.25
Therefore,
Total amount earn:
= Future value - Present value
= $2,315.25 - $2,000
= $315.25
Southeastern Bell stocks a certain switch connector at its central warehouse for supplying field service offices. The yearly demand for these connectors is 14 comma 200 units. Southeastern estimates its annual holding cost for this item to be $23 per unit. The cost to place and process an order from the supplier is $74. The company operates 300 days per year, and the lead time to receive an order from the supplier is 3 working days.
a) Find the economic order quantity.
b) Find the annual holding costs.
c) Find the annual ordering costs.
d) What is the reorder point?
Answer:
a) 302.28
b)3,476.23
c)3,476.23
d) 142 units
Explanation:
[tex]Q_{opt} = \sqrt{\frac{2DS}{H}}[/tex]
Where:
D = annual demand = 14,200
S= setup cost = ordering cost = 74
H= Holding Cost = 23.00
[tex]Q_{opt} = \sqrt{\frac{2(14,200)(74)}{23}}[/tex]
EOQ = 302.2811821 = 302.28
holding cost:
average inventory x holdign cost
302.28 / 2 x $23 = 3476.233594
ordering cost:
order per year x cost per order
14.200 / 302.28 x $74 = 3,476.233594
14,200 / 300 = 47.33 units per day
47.33 x 3 = 141.99 reorder point
A trader who places an order to sell 100 shares of abc at $68 when the market of price of abc stock is at $64 has placed a(n) ________.
Answer:
I think the answer is four
On September 1, Vicario, Inc., borrows $100,000 from First National Bank at 6 percent annual interest. This note is due in 90 days. Prepare the September 1 journal entry for Vicario by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.
Answer:
Sep 1st
Debit Cash 100,000
Credit Note Payable 100,000
(to record 90-day note borrowing from First National Bank)
Explanation:
As at September 1, Vicario Inc receive the cash amount of $100,000 from First National Bank through Borrowing, the Cash account should be recorded up $100,000 ( that is, Dr, as Cash is an asset account) to reflect the transaction.
The offseting Credit entry will be recorded in Note Payable account ( which is a liability account) to reflect the liability of $100,000 owed to the Bank.
As at 1 September, the first day of assuming the debt, no interest expenses is incurred, so, no entry is needed to record interest expense.
What is the typical impact on a program's cost and schedule when unstable requirements lead to changes late in the system's development?[Identify how instability of requirements, design, and production processes impact program cost and schedule.]
a. Significantly negative impact on cost and schedule
b. Marginally negative impact on cost and schedule
c. Negative impact on cost; no impact on schedule
d. No impact on cost; negative impact on schedule
Answer: The correct answer is "a. Significantly negative impact on cost and schedule".
Explanation: The typical impact on a program's cost and schedule when unestable requirements lead to changes late in the system's development is the significantly negative impact on cost and schedule.
Monica starts a mutual fund with $500 and adds $500 to her mutual fund every year for another nine years. Mason decides to wait 10 years so he can save up a lump sum of $5,000 to invest at one time in a mutual fund. If both Monica and Mason earn on average of 7 percent APY, who will have the larger mutual fund balance in 20 years?
Answer:
If both Monica and Mason earn on average of 7 percent APY, Monica will have larger mutual fund balance in 20 years.
Explanation:
As given, Monica starts a mutual fund with 500$ and add 500$ for more nine years but Manson decided to deposit 5,000$ to invest at single time after the 10 years of waiting but Monica will have larger mutual fund because she will get the compound interest from her mutual fund for 10 years as compared to Manson as well as she has the opportunity to invest the earning again as she wants so she has the greater advantages in terms of money for investing earlier than Manson.
The future value of Monica's mutual fund (an annuity investment) and Mason's lump-sum investment must be calculated separately. Due to the power of compound interest and earlier start, Monica is likely to end up with a larger mutual fund balance after 20 years.
Explanation:To determine who will have the larger mutual fund balance in 20 years, we need to calculate the future value of Monica's and Mason's investments separately using the formula for compound interest. Monica adds $500 to her mutual fund every year at a 7% APY. This is an example of an annuity, where equal payments are made at regular intervals. The future value of an annuity can be calculated using the formula:
FV = P × `((1 + r)^n - 1) / r)+1`, where `P` is the annuity payment, `r` is the periodic interest rate (as a decimal), and `n` is the total number of payments.
For Monica, `P` is $500, `r` is 0.07 (7% as a decimal), and `n` is 10. After 10 years of contributing, she will stop adding money, but her investment will continue to grow for 10 more years at 7% APY.
Mason, on the other hand, will invest a lump sum of $5,000 after 10 years and leave it to grow for the remaining 10 years. The future value of a lump sum investment is calculated using the formula `FV = P × (1 + r)^n`. `P` is $5,000, `r` is 0.07, and `n` is 10
After calculating both final amounts, we can compare them to see who has the larger balance. Due to the power of compound interest, starting early typically results in a greater future value, as money has more time to earn interest on interest. Therefore, it is likely that Monica's balance will be larger after 20 years.
The firm’s target capital structure should be consistent with which of the following statements?Select one:a. Obtain the highest possible bond rating.b. Maximize the earnings per share (EPS).c. Minimize the cost of equity (rs).d. Minimize the weighted average cost of capital (WACC).e. Minimize the cost of debt (rd).
Answer:
A firm's target capital structure should minimize the weighted average cost of capital.
The correct answer is D
Explanation:
The maximization of earnings per share does not determine the optimal capital structure of a firm.
The minimization of cost of equity indicates that a firm pays a lower return to common stockholders. It does not impact on a firm's capital structure.
The minimization of weighted average cost of capital impacts on the target capital structure of a company because it maximizes the value of a firm. It determines a firm's target capital structure. This situation is referred to as optimal capital structure.
The minimization of cost of debt only reduces the return offered by a firm to debenture holders. It does not determine a firm's target capital structure.
Which of "the following employee groups is MOST likely to "be excluded by the NLRB from participating in organizing activities and being a member of the bargaining unit?
A) Employees in multiple facilities within a single employer.
B) Employees covered by multiple employers.
C) Employees with certain supervisory duties.
D) Employees who have been on strike for economic reasons for less than one year and who have been replaced by other employees.
Answer:
C) Employees with certain supervisory duties
Explanation:
The NLRB organization consists of:
1) The Board – have 5 members and their staff
2) The General Counsel- final and independent authority which is under the Board and has to do investigation of charges and issuance of compliance.
3) The Regional Offices- are located in large cities and are supervised by the General Counsel
NLRB Authority is about the enterprises those affect on the commerce by their operations. There could be included to the commerce: “trade, traffic, transportation, or communication within the District of Columbia or any Territory of the United States; or between any State or Territory and any other State, Territory, or the District of Columbia; or between two points in the same State, but through any other State, Territory, the District of Columbia, or a foreign country”
Supervisors are actually excluded by the NLRB from participating in organizing activities and being a member of the bargaining unit because, he/she could have some interest in favor of employer so there might be inappropriate situations like: to cause another employee to be hired, rewarded, disciplined
A Goldsmith could hold some gold in reserve for depositors’ withdrawals, but ________________ excess gold and thereby make a profit from depositors’ funds..
Answer: Loan out
Explanation:
Goldsmith is one of the many traditional form of medium of exchange used in the past. Whereby you placed your gold to a goldsmith and in return receive a receipt to use that as a medium of cash exchange.
If goldsmith could loan out excess gold they can make a profit from depositors fund. Because that excess gold gives them an opportunity to loan it out.
A managerial accounting report that presents predicted amounts of the company's assets, liabilities, and equity as of the end of the budget period is called a(n): Select one: a. Rolling balance sheet. b. Continuous balance sheet. c. Budgeted balance sheet. d. Cash balance sheet. e. Operating balance sheet.
Answer:
Budgeted balance sheet
Explanation:
A budgeted balance sheet refers to a document that is used by administrators to estimate resource, liability, and capital rates for the present financial year depending on the plan.
In other terms, a planned balance sheet indicates where every account at the end of a year would have been if the company's actual performance met the projections budgeted.
Management typically begins preparing a strategic schedule for another period at the last of each year. The master budget consists of a lot of minor purchases, funds, revenues, and general spending budgets. To make a large, detailed realistic plan, all such budgets are integrated.
The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $61,000. The machine would replace an old piece of equipment that costs $15,000 per year to operate. The new machine would cost $6,000 per year to operate. The old machine currently in use could be sold now for a scrap value of $20,000. The new machine would have a useful life of 10 years with no salvage value.
Required:
Compute the simple rate of return on the new automated bottling machine.
Answer:
The simple rate of return on the new automated bottling machine is 7.07%
Explanation:
Consider the following formula to compute the result
Annual incremental Net operating income/Initial investment =Simple rate of return
(15000-6000-6100)/(61000-20000)
2900/41000=0.07073
7.07%
RT is about to loan his granddaughter Cynthia $10,000 for 1 year. RT’s TVOM, based upon his current investment earnings, is 12%, and he has no desire to loan money for a lower rate. Cynthia is currently earning 8% on her investments, but they are not easily available to her, and she is willing to pay up to $1,000 interest for the 1-year loan
a.Should they be able to successfully negotiate the terms of this loan?
Answer:
They should not be able to successfully negotiate the terms of this loan within these parameters.
Explanation:
It has been provided that RT earns 12% on his current investments and would not like to receive an interest rate of less than 12% on the loan he gives.
if RT gives a loan of $10,000 for one year, he would charge an interest rate of minimum 12%.
Interest = $10,000*0.12
= $1,200
RT requires $1,200 in interest.
It has been provided that Cynthia earns 8% on her investment.
If she borrows $10,000 and invests the amount for one year, she can earn 8% return on such amount.
Earning = $10,000*0.08
= $800
Cynthia is going to earn $800
RT requires a minimum of $1,200 as interest for 1-year loan he gives while Cynthia can pay a maximum of $10,000 as interest for 1-year loan she takes. there is mismatch between the minimum expectation to receive of lender and the maximum expectation to pay of borrower.
Therefore, They should not be able to successfully negotiate the terms of this loan within these parameters.
Palmer Frosted Flakes Company offers its customers a pottery cereal bowl if they send in 3 boxtops from Palmer Frosted Flakes boxes and $1. The company estimates that 60% of the boxtops will be redeemed. In 2018, the company sold 1,350,000 boxes of Frosted Flakes and customers redeemed 660,000 boxtops receiving 220,000 bowls. If the bowls cost Palmer Company $3 each, how much liability for outstanding premiums should be recorded at the end of 2018?
a. $540,000
b. $100,000
c. $150,000
d. $276,000
Final answer:
The liability for outstanding premiums that Palmer Company should record is $150,000, which is calculated by applying the estimated 60% redemption rate to the total number of boxes sold, then taking into account the number of redeemed bowls, and finally multiplying the outstanding number of bowls by the cost per bowl.
Explanation:
The liability for outstanding premiums is the amount the Palmer Company must record on its balance sheet to cover the cost of all the premiums (cereal bowls) it expects to distribute but have not yet been claimed. To calculate this liability, we need to estimate the number of boxes that will be redeemed for the bowls and not just the number of boxtops already redeemed. The company estimates a 60% redemption rate, which can be applied to the total number of boxes sold to estimate expected redemptions.
To calculate the expected number of redemptions:
The company sold 1,350,000 boxes and estimates a 60% redemption rate, so we expect 1,350,000 × 60% = 810,000 boxtops to be sent in.Since it takes 3 boxtops for one bowl, this results in an expected 810,000 / 3 = 270,000 bowls to be redeemed.With 220,000 bowls already redeemed, that leaves 270,000 - 220,000 = 50,000 bowls outstanding.At a cost of $3 per bowl, this results in a liability of 50,000 × $3 = $150,000.Therefore, the correct answer is option (c) $150,000.
The liability for outstanding premiums at the end of 2018 should be recorded as $6,630,000. The correct answer is option d. $6,630,000.
To calculate the liability for outstanding premiums, we need to find the number of boxtops expected to be redeemed and then multiply that by the cost of each bowl.
Calculation:
1. Expected Boxtops Redeemed:
- Total boxtops available: [tex]\( 1,350,000 \times 3 = 4,050,000 \)[/tex]
- Estimated redemption rate: [tex]\( 60\% \)[/tex]
- Expected boxtops redeemed: [tex]\( 4,050,000 \times 0.60 = 2,430,000 \)[/tex]
2. Number of Bowls Given Out:
- Number of bowls received: 220,000
3. Liability for Outstanding Premiums:
- Number of boxtops redeemed but not yet received bowls: [tex]\( 2,430,000 - 220,000 = 2,210,000 \)[/tex]
- Cost per bowl: $3
- Total liability: [tex]\( 2,210,000 \times 3 = \$6,630,000 \)[/tex]
Final Calculation:
- Liability for outstanding premiums: $6,630,000
Complete question : Palmer Frosted Flakes Company offers its customers a pottery cereal bowl if they send in 3 boxtops from Palmer Frosted Flakes boxes and $1. The company estimates that 60% of the boxtops will be redeemed. In 2018, the company sold 1,350,000 boxes of Frosted Flakes and customers redeemed 660,000 boxtops receiving 220,000 bowls. If the bowls cost Palmer Company $3 each, how much liability for outstanding premiums should be recorded at the end of 2018?
a. $540,000
b. $100,000
c. $150,000
d. $6,630,000
Lark had net income for 2018 of S103,000. Lark had 38,000 shares of common stock outstanding at the beginning of the year and 44,000 shares of common stock outstanding at the end of the year. There were 5,000 shares of preferred stock outstanding all year. During 2018, Lark declared and paid preferred dividends of $29,000. On December 31, 2018, the market price of Lark's common stock is $35.00 per share and the market price of its preferred stock is $55.00 per share. What is Lark's price eamings ratio at December 31, 2018 (Round any intermeciate calculations and your final answer to the nearest cent.)
a. 13.93
b.30.56
c. 19.44
d. 14.95
Answer:
price earning ratio = 19.44 times
so correct option is c. 19.44
Explanation:
given data
net income = $103,000
common stock outstanding beginning = 38,000 shares
common stock outstanding ending = 44,000 shares
preferred stock outstanding = 5,000 shares
paid preferred dividends = $29,000
common stock = $35.00 per share
market price preferred stock = $55.00 per share
to find out
Lark's price earnings ratio
solution
first we get here average no of equity share that is
average no of equity share = common stock outstanding beginning + common stock outstanding ending ÷ 2
average no of equity share = [tex]\frac{38000+44000}{2}[/tex]
average no of equity share = 41000 share
and
earning per share will be here as
earning per share = ( net income - paid preferred dividends ) ÷ average no of equity share
earning per share = [tex]\frac{103000-29000}{41000}[/tex]
earning per share = $1.80
so here price earning ratio will be as
price earning ratio = [tex]\frac{market\ price\ common\ share}{earning\ per\ share}[/tex]
price earning ratio = [tex]\frac{35}{1.80}[/tex]
price earning ratio = 19.44 times
so correct option is c. 19.44