The yield to maturity on a coupon bond is the rate an investor earns if she holds the bond to the maturity date, assuming she can reinvest all coupons at the yield to maturity. This takes into account both interest payments and any capital gain or loss.
Explanation:The yield to maturity on a coupon bond is (C) the rate an investor earns if she holds the bond to the maturity date, assuming she can reinvest all coupons at the yield to maturity. The yield to maturity (YTM) is the total return anticipated on a bond if it is held until its maturity date. It is comparable to the internal rate of return of a bond.
YTM takes into account both the interest payments received periodically, which can be assumed to be reinvested at the same rate, and any capital gain or loss. For example, if a bond with a face value of $1000 is purchased at a discount for $900 and gives a coupon payment of $100 yearly before maturing in 3 years, the YTM will factor in both the yearly coupon payments and the $100 gain upon maturity.
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The yield to maturity on a coupon bond is the C. rate an investor earns if they hold the bond to the maturity date and reinvest all coupons at the yield to maturity.
Explanation:The yield to maturity on a coupon bond is the rate an investor earns if they hold the bond to the maturity date and reinvest all coupons at the yield to maturity. This is option (C) from the given choices. The yield to maturity takes into account the bond's current price, coupon rate, and time to maturity, and reflects the total return an investor can expect to receive.
YTM considers interest payments received periodically, which can be assumed to be reinvested at the same rate, and any capital gain or loss. For example, if a bond with a face value of $1000 is purchased at a discount for $900 and gives a coupon payment of $100 yearly before maturing in 3 years, the YTM will factor in both the yearly coupon payments and the $100 gain upon maturity.
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Nachman Industries just paid a dividend of D 0 = $1.32. Analysts expect the company's dividend to grow by 30% this year, by 10% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The required return on this low-risk stock is 9.00%. What is the best estimate of the stock's current market value?
a. $41.59
b. $42.65
c. $43.75
d. $44.87
e. $45.99
Answer:
option D
Explanation:
End of PV Calculation PV of Dividend
Year (Div x PVIF9%,n)
1 $1.32(1.30) = $1.716 x 0.9174 $1.574
2 $1.716(1.10) = $1.8876 x 0.8417 $ 1.588
$3.162
Value of stock at the end of year 2 = $1.9820/0.04 = $49.55
P V of $38.275 at the end of year 2 = $49.55(PVIF 9%,2) = $41.71
∴ V = $3.162 + $41.71 = $44.87
Hence, the correct answer is option D
(Last Word) From 2006-2010, the federal government paid $600 million in retirement benefits to deceased federal employees, with the checks being illegally cashed by relatives. This example illustrates
A. the benefits-received principle.
B. logrolling.
C. bureaucratic inefficiency.
D. the problem of limited and bundled choices.
Answer:
c. bureaucreatic inefficiency
Explanation:
When establishing the bureaucracy, it is essential to understand that it is based on issues such as the division of labor, the hierarchy of authority, rules and norms, professional commitment, rationality, impersonality as regards the application of procedures and rules or written records. In a negative connotation, bureaucracy is understood as inefficient administration by paperwork and formalities, and the excessive influence of civil servants in public affairs.
Luther is a successful logistical services firm that currently has $5 billion in cash. Luther has decided to use this cash to repurchase shares from its investors, and has already announced the stock repurchase plan. Currently Luther is an all equity firm with 1.25 billion shares outstanding. Luther's shares are currently trading at $20 per share.With perfect capital markets, what is the market value of Luther's equity after the share repurchase?A) $15 billionB) $10 billionC) $25 billionD) $20 billion
Answer:
Total market value of equity = 1.25 billion x $20 = 25 billion
Value of shares repurchased = $5 billion
Total market value after share repurchase
= $25 billion - $5 billion
= $20 billion
The correct answer is D
Explanation:
In this question, we need to calculate the total market value of equity. Then, we will deduct the value of shares repurchased from the total market value of equity. This gives the market value of equity after repurchase.
Audio City, Inc., is developing its annual financial statements at December 31. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized below: Current Year Previous Year Balance Sheet at December 31 Cash $ 70,100 $ 73,800 Accounts Receivable 16,600 22,000 Inventory 24,400 22,000 Equipment 231,000 154,000 Accumulated Depreciation—Equipment (66,000 ) (49,000 ) Total Assets $ 276,100 $ 222,800 Accounts Payable $ 8,400 $ 19,800 Salaries and Wages Payable 2,100 1,000 Note Payable (long-term) 62,000 79,000 Common Stock 108,000 74,000 Retained Earnings 95,600 49,000 Total Liabilities and Stockholders’ Equity $ 276,100 $ 222,800 Income Statement Sales Revenue $ 212,000 Cost of Goods Sold 94,000 Other Expenses 66,000 Net Income $ 52,000 Additional Data: Bought equipment for cash, $77,000. Paid $17,000 on the long-term note payable. Issued new shares of stock for $34,000 cash. Dividends of $5,400 were paid in cash. Other expenses included depreciation, $17,000; salaries and wages, $22,000; taxes, $27,000. Accounts Payable includes only inventory purchases made on credit. Because a liability relating to taxes does not exist, assume that they were fully paid in cash. Required: 1. Prepare the statement of cash flows for the current year ended December 31 using the indirect method. (Amounts to be deducted should be indicated by a minus sign.)
Answer:
Closing Cash and Cash equivalents balance is $70,100 as per the statement of cash flows presented below in indirect format. the closing figure matches the balance sheet sheet figure of cash and cash equivalents for the current year.
For year reference, solution in excel format is also attached
Explanation:
Statement of Cash Flows for year ended 31 December 20x1
Net Profit before tax (Net Income + Tax) $79,000
Adjustment of Non Cash Expenses:
Depreciation $17,000
Increase in Salaries & Wages Payable $1,100
Working Capital Changes:
Increase in Inventory $(2,400)
Decrease in Accounts Receivables $5,400
Decrease in Accounts Payable $(11,400)
Cash generated from Operations $88,700
Tax Paid $(27,000)
Net cash from operating activities $61,700
Cash Flows from Investing Activities:
Purchase of equipment $(77,000)
Net cash from investing activities $(77,000)
Cash Flows from Financing Activities:
Proceeds from issue of shares $34,000
Payment of long term loans $(17,000)
Dividends paid $(5,400)
Net cash from Financing Activities $11,600
Net decrease in cash and cash equivalents $(3,700)
Opening cash and cash equivalents $73,800
Closing Cash and Cash Equivalents $70,100
For a nonmonetary exchange of plant assets, accounting recognition should not be given to
a. a loss when the exchange has no commercial substance.
b. a gain when the exchange has commercial substance.
c. part of a gain when the exchange has no commercial substance and cash is paid (cash paid/received is less than 25% of the fair value of the exchange).
d. part of a gain when the exchange has no commercial substance and cash is received (cash paid or received is less than 25% of the fair value of the exchange).
Answer: The correct answer is "c. part of a gain when the exchange has no commercial substance and cash is paid (cash paid/received is less than 25% of the fair value of the exchange).".
Explanation: For a nonmonetary exchange of plant assets, accounting recognition should not be given to part of a gain when the exchange has no commercial substance and cash is paid (cash paid/received is less than 25% of the fair value of the exchange).
In nonmonetary exchanges of plant assets in accounting, recognition should not be given to part of a gain when the exchange lacks commercial substance and cash is received, as long as the cash paid or received is less than 25% of the fair value of the exchange.
Explanation:In the context of accounting, a nonmonetary exchange of plant assets pertains to a transaction where an entity swaps assets that are not cash, for something else. The key rule is that accounting recognition should not be given to part of a gain when the exchange has no commercial substance and cash is received, if the cash paid or received is less than 25% of the fair value of the exchange, as per the US GAAP regulations. Hence, answer (d) is the most appropriate.
The recognition of a loss or gain when the exchange has commercial substance doesn't generally result in a defiance with US GAAP rules on recognition. A nonmonetary exchange that has commercial substance will generally lead to recognition of a loss or gain due the fact that the future cash flows change as a result of the transaction.
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In preparing for the upcoming holiday season, Fresh Toy Company (FTC) designed a new doll called The Dougie that teaches children how to dance. The fixed cost to produce the doll is $100,000. The variable cost, which includes material, labor, and shipping costs, is $34 per doll. During the holiday selling season, FTC will sell the dolls for $42 each. If FTC over produces the dolls, the excess dolls will be sold in January through a distributor who has agreed to pay FTC $10 per doll. Demand for new toys during the holiday selling season is uncertain. The normal probability distribution with an average of 60,000 dolls and a standard deviation of 15,000 is assumed to be a good description of the demand. FTC has tentatively decided to produce 60,000 units (the same as average demand), but it wants to conduct an analysis regarding this production quantity before finalizing the decision.
Create a what-if spreadsheet model using formulas that relate the values of production quantity, demand, sales, revenue from sales, amount of surplus, revenue from sales of surplus, total cost, and net profit. What is the profit when demand is equal to its average (60,000 units)?
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.
Final answer:
To calculate total revenue, multiply the price per unit by the quantity sold. To calculate marginal revenue, subtract the total revenue of the previous level from the total revenue of the current level. The profit maximizing quantity is where marginal revenue equals marginal cost.
Explanation:
To calculate total revenue, multiply the price per unit by the quantity sold. In this case, the price of one dog coat is $72. To calculate marginal revenue, subtract the total revenue of the previous level from the total revenue of the current level. Total cost is the sum of fixed costs and variable costs. Marginal cost is the change in total cost divided by the change in quantity. The profit maximizing quantity is where marginal revenue equals marginal cost.
Quantity | Total Revenue | Marginal Revenue | Total Cost | Marginal Cost
1 | $72 | $72 | $164 | $100
2 | $144 | $72 | $248 | $84
3 | $216 | $72 | $362 | $114
4 | $288 | $72 | $546 | $184
5 | $360 | $72 | $816 | $270
On one diagram, plot the total revenue curve starting at zero quantity and increasing with each unit sold. Plot the total cost curve starting at the fixed cost and increasing with the variable cost for each unit sold. On another diagram, plot the marginal revenue curve as a horizontal line since the price is constant. Plot the marginal cost curve starting at the first unit and increasing with each additional unit. The profit maximizing quantity is where marginal revenue equals marginal cost, which is at a quantity of 4 units.
On January 1, 2017, Garzon purchased 6% bonds issued by PBS Utilities at a cost of $40,000, which is their par value. The bonds pay interest semiannually on July 1 and January 1. For 2017, prepare entries to record Garzon's July 1 receipt of interest and its December 31 year-end interest accrual. (Do not round your intermediate calculations.)
Answer:
July 1st: Debit Cash=$1,200 Credit Interest Received=$1,200
December 31st: Debit Interest Receivable=$1,200, Credit Interest Earned= $1,200
Explanation:
July 1st Receipt of Interest
Step 1: Calculate Interest Receivable for the entire Year
=($40,000×6%)= 40,000×0.06= $2,400
=$2,400
Step 2: Calculate Interest Receivable for the first 6 months (Semi-annual Payment)
January 1st to July 1st is 6 Months, we therefore divide the annual interest receivable into 2
$2,400÷2=$1,200
Step 3: Entries for the July 1 Receipt of Interest
Debit Cash = $1,200
Credit Interest Received=$1,200
Step 4: Calculate the Interest Accrual for the Decembe 31st
Between July 1st and December 31st is equally 6 months, therefore, the remaining $1,200 is for the second half of the year.
Step 5: Entries for December 31st Interest Accrual
Debit Interest Receivable = $1,200
Credit Interest Earned= $1,200
One of the most talented managers to ever work at ABC Inc. is Amy Holmes. Combining graciousness intelligence and creativity. Amy has been successful in attracting and building a highly committed and, division of employees. When interviews by the national news media for insight into her success, one of the, topics that became a primary focus was the challenge of. Communicating effectively.Amy believes that successful managers solicit and respond to upward communication. Information that can be expected with upward communication includes all of the following EXCEPT which one? a. Procedures and practices b. Suggestions for improvement c. Financial and accounting information d. Performance reports e. All of these are included.
Answer:
The correct answer is letter "A": Procedures and practices.
Explanation:
Upward communication is a sharing-information method widely spread in nowadays organizations. It consists of obtaining feedback from employees from the lowest hierarchy to the top executive. This information flows in each level through a responsible for that matter so that the representative takes the pieces of information to the next level of the hierarchy. Suggestions for improvement, performance reports, financial and accounting information are shared under this format.
Procedures and practices are given into a firm from executives to employees which aims in the opposite direction than the upward communication technique.
According to the modern view of the Phillips curve, expansionary macroeconomic policy that leads to inflation will reduce unemployment
a. only if people underestimate the inflationary side effects of the policy.
b. only if people overestimate the inflationary side effects of the policy.
c. if people accurately anticipate the inflationary side effects of the policy.
d. only if monetary policy provides the macroeconomic stimulus.
Answer:
a. only if people underestimate the inflationary side effects of the policy.
Explanation:
The modern Phillips curve suggests that as inflation increases, unemployment reduces and vice versa dependent on two factors; the level of inflation and the excess of growth rate of wages over the expected inflation. The larger the excess, the greater the effect of the expansionary monetary policy. Thus, if it is underestimated, then the unemployment will greatly reduce.
As part of your plan you want to build momentum by generating short-term wins. What is not a characteristic of a short-term win?
Answer:
The correct answer is letter "B": Visible to senior leadership, but not lower levels of the organization.
Explanation:
Short-term wins are organizational improvement plans that can be implemented in short periods. For the short-win to be successful it must be clear, available to all levels within the organization, and change effort should be pointed out as the key to achieving the objective.
How has the pattern of trade changed in the United States since 1960?
A. Exports and imports have grown at the same rate, and the United States has remained a net exporter.
B. Imports have grown faster than exports, and the United States has become a net importer.
C. Exports have grown faster than imports, and the United States has become a net importer.
D. Imports have grown faster than exports, and the United States has remained a net exporter.
E. Exports have grown faster than imports, and the United States has remained a net exporter.
Answer:
The correct answer is letter "B": Imports have grown faster than exports, and the United States has become a net importer.
Explanation:
International trade is not just a major engine of the U.S. economy, but for the global economy. The total trade share in terms of the global Gross Domestic Product was 25% in 1960 and it has raised to 56% in 2017. Though, imports have surpassed the level of exports, making America be a net importer. Main imports are in the form of raw materials for the production of different goods mainly vehicles, and clothing.
You have just been assigned as project manager for a large telecommunications project. This one year project is about halfway done. The project team consists of five sellers and 20 of your company's employees. You want to understand who is responsible for doing what on the project. Where would you find such information?
A. Responsibility assignment matrix
B. Resource histogram
C. Bar chart
D. Project organization chart
Answer: (A) Responsibility assignment matrix
Explanation:
Responsibility assignment matrix is plays an important role for completing the project as it describe about the business process and the participation for completing the various types of given task.
The main objective of the responsibility assignment matrix is that it assign the role for each participant for completing the given project. It is also known as the responsibility accountability matrix or the RACI matrix.According to the given question, the project manager assign a project related to the telecommunication and by using the responsibility assignment matrix we can easily find out the role of the each participant in the given project.
Therefore, Option (A) is correct.
IE 4-3....Suppose that a Demand shift (a change in income) moves this economy to Point F with Employment of 110 million people. The Circular Flow will be producing a Real GDP of ____________ billion with an equilibrium at Point U in the PPF. This is a ______________ situation..
Answer:
$3840
Depression (Major Recession)
Explanation:
In the problem above, if there is a shift in demand as a result of a change in income which moves the economy to point F. There will be a production of a Real GDP of approximately $3840 billion. Due to the change in the equilibrium position, the economic system will be a major recession which is also known as depression. This occurs because there is loss of customer confidence.
A company purchased factory equipment on April 1, 2017 for $168000. It is estimated that the equipment will have a $22000 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2017 is a. $16800. b. $12600. c. $10950. d. $14600.
Answer:
c.10950
Explanation:
The depreciation expense in a particular year is charged from the date on which the asset is purchased by the entity. In this case, the factory equipment is purchased on April 1, 2017, so the depreciation expense for the year ended December 31, 2017 will be charged from April 1, 2017 to December 31, 2017 i.e. 9 months.
The Depreciation expense is calculated using the following formula:
(Cost of factory equipment-salvage value/useful life)*9/12
Depreciation expense=(168000-22000/10)*9/12=$10,950
Answer is c.$10950
A firm is considering a new project that will generate cash revenue of $1,300,000 and cash expenses of $700,000 per year for five years. The equipment necessary for the project will cost $300,000 and will be depreciated straight line over four years. What is the expected free cash flow in the second year of the project if the firm's marginal tax rate is 35%?
A) $416,250
B) $374,625
C) $341,250
D) $499,500
Answer:
A) $416,250
Explanation:
The computation of the free cash flow is shown below:
= (Cash revenues generated - cash expenses - depreciation expense) × (1 - tax rate) + depreciation expense
= ($1,300,000 - $700,000 - $75,000) × (1 - 0.35) + $75,000
= $525,000 × 0.65 + $75,000
= $416250
Simply we added the depreciation expense in the Earning after tax amount
The (Cash revenues generated - cash expenses - depreciation expense) × (1 - tax rate) is also known as Earning after tax
You are the manager of BlackSpot Computers, which competes directly with Condensed Computers to sell high-powered computers to businesses. From the two businesses’ perspectives, the two products are indistinguishable. The large investment required to build production facilities prohibits other firms from entering this market, and existing output firms operate under the assumption that the rival will hold constant. The inverse market demand for computes is P=5,900 – Q, and both firms produce at a marginal cost of $800 per computer. Currently, BlackSpot earns revenues of $4.25 million and profits (net of investment, R&D, and other fixed costs) of $890,000. The engineering department at BlackSpot has been steadily working on developing an assembly method that would dramatically reduce the marginal cost of producing these high powered computers and has fond a process that allows it to manufacture each computer at a marginal cost of $500. How will this technological advance impact your production and pricing plans? How will it impact Blackspot’s bottom line?
Answer and Explanation:
In order to know how this affects the production we will first find out the quantities produce before and after the technological advance.
Profit maximizing, MR = MC (Marginal revenue = Marginal Cost)
TR = P x Q
TR= (5900 - Q) x Q = 5900Q - Q^2
MR = 5900 - 2Q (Taking derivative)
Now, MR = MC
5900 - 2Q = 800
Q = 2550
After Technological advancement,
MR = MC
5900 - 2Q = 500
Q = 2700
After technological advancement, Backspot Computers are able to produce more quantities. An increase of 150 units. The technological advancement has helped them.
Holt Company purchased a computer for $8,000 on January 1, 2019. Straight-line depreciation is used, based on a 5-year life and a $1,000 salvage value. In 2021, the estimates are revised. Holt now feels the computer will be used until December 31, 2022, when it can be sold for $500?
Answer:
$2,350
Explanation:
On January 1, 2019
Cost of computer = $8,000
Useful life = 5 years
Salvage value = $1,000
Annual Depreciation = (8000 - 1000)/5
= 7000/5
= $1,400
In 2021 estimates are revised i.e after 2 years of use
Carrying value = 8000 - (2 × 1400)
= 8000 - 2800
= $5,200
Remaining Useful life after revised estimate = 2 years
Revised salvage value = 500
Annual depreciation = (5200 - 500)/2
= 4700/2
= $2,350
First-degree price discrimination:
a. None of the answers are correct.
b. results in the firm extracting all surplus from consumers.
c. occurs when a firm charges each consumer the maximum price he or she would be willing to pay for each unit of the good purchased.
d. occurs when a firm charges each consumer the maximum price he or she would be willing to pay for each unit of the good purchased and results in the firm extracting all surplus from consumers.
Answer:
C ) occurs when a firm charges each consumer the maximum price he or she would be willing to pay for each unit of the good purchased and results in the firm extracting all surplus from consumers.
Explanation:
First-degree price discrimination is known as the perfect price discrimination because firm charges maximum price for each unit of good purchased by the customer. So the firm ables to extract all cosumer surplus.
Buffalo in the United States almost became extinct while cattle, an animal that provides similar products, never has been close to extinction. The difference is due to
Question 1 options:
the greater marginal value of a buffalo relative to a steer, leading to the overharvesting of buffalo.
the greater marginal value of a head of cattle relative to buffalo, leading to over-hunting of buffalo.
the use of private property rights on cattle and common property rights on buffalo.
cattle existing in Europe also while buffalo were specific to North America.
Answer:
The greater marginal value of a buffalo relative to a steer, leading to the over harvesting of buffalo.
Explanation:
Marginal value looks at the increased amount of value that can be achieved by providing an additional source of output. So as the marginal value of Buffalo relative to a steer increases, people tends to over harvest it leading to its extinction.
Section 16(b) of the 1934 Securities Exchange Act _____
(A) requires that foreign nationals buying U.S.corporate stock register with the Securities Exchange Commission (SEC).
(B) regulates proxy statements.
(C) provides for recapture by the corporation of all profits realized by an insider from the purchase or sale of corporate stock within a 6 month period.
(D) allows foreign nationals to seek an SEC exemption from securities registration requirements.
Answer:
Section 16(b) of the 1934 Securities Exchange Act provides for recapture by the corporation of all profits realized by an insider from the purchase or sale of corporate stock within a 6 month period.
Explanation:
This section of the 1934 Securities Exchange Act was put in place to uphold fairness and equity in the financial markets. Without its provision, insiders could advantage of privileged information and exploit it for personal gain.
Famous Productions performs London shows. The average show sells 900 tickets at $ 65 per ticket. There are 115 shows per year. No additional shows can be held as the theater is also used by other production companies. The average show has a cast of 55, each earning a net average of $ 330 per show. The cast is paid after each show. The other variable cost is a program-printing cost of $ 9 per guest. Annual fixed costs total $ 580 comma 500.
Compute revenue and variable costs for each show.
Final answer:
Revenue per show for Famous Productions is $58,500, and the variable costs per show are $26,250, which includes $18,150 for the cast and $8,100 for printing programs.
Explanation:
To compute the revenue and variable costs for each show for Famous Productions, we first calculate their revenue by multiplying the average tickets sold per show by the price per ticket. So, revenue per show would be 900 tickets × $65 = $58,500. Next, we calculate the variable costs which include the payment to the cast and the program-printing costs. Payment to the cast is 55 cast members × $330 each = $18,150, and program-printing costs are $9 × 900 guests = $8,100. Adding these together gives us the total variable costs per show: $18,150 for the cast plus $8,100 for programs, which equals $26,250.
On August 1, 2016, ACE Corp. purchased parts from SUPPLY Corp. In payment for the $54,000 purchase, ACE issued a 1-year installment note to be paid in equal monthly payments at the end of each month. The payments include interest at the rate of 12%.
1. What entry will ACE make to record the August 1, 2016 purchase of the parts?
2. What entry will ACE make to record the 1st installment payment on August 31, 2016? 3. How much interest expense will ACE report in its income statement for the year ended 12/31/2016?
Answer:
a- Parts - (asset) Dr $54000
Note payable Cr $54000
b- Note payable Dr $4500
Cash/Bank Cr 4500
c- Interest expense for the year end= $2700
Explanation:
The entry to record the purchase of parts from SUPPLY Corp will result in, an increase in asset and liability because ACE Corp isn't settling the purchase via a cash/bank payment rather it's issuing a 1-year installment note. Therefore the entry is as follows:
Parts - (asset) Dr $54000
Note payable Cr $54000
Now the payments on the 1-year note are installment based which means the $54000 note payments would have to be split between twelve months (i.e one year). The monthly payment would be $4500 against note payable.
The entry to record first installment payment on august is as follows:
Note payable Dr $4500
Cash/Bank Cr 4500
Moreover, along with payment of $4500 ACE Corp is also liable to pay interest on the payments made. Therefore, interest shall be calculated on monthly payment of $4500 at the rate of 12% as follows:
Interest on payment = $4500×12%
Interest on monthly payment = $540
The interest expense to be reported by ACE in its income statement for the year ended 12/31/2016 is of Five months (i.e from Aug till Dec), see as follows:
Interest expense for the year end= $540×5
Interest expense for the year end= $2700
A company uses cash basis accounting. Their income statement for the year shows sales of $600,000 and net operating income of $200,000. Because similar companies report on an accrual basis, the business appraiser adjusts the statements to the accrual basis for comparison. He has accounts receivable of $120,000 and accounts payable of $40,000. Based on this information, the adjusted statements show sales of:
Answer:
$720,000
Explanation:
Data provided in the question:
Sales reported for the year = $600,000
Net operating income = $200,000
Accounts receivable = $120,000
Accounts payable = $40,000
Now,
The adjusted statements show sales of
= Sales reported for the year + Accounts receivable
or
= $600,000 + $200,000
or
= $720,000
hence,
The adjusted statements show sales of $720,000
Bell is a product of the Baldwin company which is primarily in the Nano segment, but is also sold in another segment. Baldwin starts to create their sales forecast by assuming all policies (R&D, Marketing, and Production) for all competitors are equal this year over last. For this question assume that all 700 of units of Bell are sold in the Nano segment. If the competitive environment remains unchanged what will be the Bell product’s demand next year (in 000’s)?
Answer:
The bell product's demand will be 700 units multiplied by the annual percentage of population growth Demand = 700 * (1 + population growth in %).
Explanation:
Making the forecast where the competitors will do the same and no other change in the market is expected, the changes in demands could occur because the population grows and changes in technology. Since the forecast is only for the next year, changes in technology are not included (usually affects the long-term).
In 1993, the government increased the tax on gasoline producers from 14.1 cents per gallon to 18.4 cents per gallon. Our model of supply and demand predicts that:_____a. the demand for gasoline decreased. b. the supply for gasoline increased. c. the demand for gasoline increased. d. the supply for gasoline decreased. e. both the supply and demand for gasoline decreased.
Answer:
In 1993, the government increased the tax on gasoline producers from 14.1 cents per gallon to 18.4 cents per gallon. Our model of supply and demand predicts that
both the supply and demand for gasoline decreased.
Explanation:
The reason why both supply and demand will be decreased is a result in the increase of tax which will have direct effect on the price i.e the price will increase as result of tax increment and this will affect the rate at which the gasoline will be demanded for, hence; affects the supply rate as little quantity will be made available for sales.
Your client has been given a trust fund valued at $1.07 million. He cannot access the money until he turns 65 years old, which is in 30 years. At that time, he can withdrawal $28,500 per month. If the trust fund is invested at a 5.0 percent rate, how many months will it last your client once he starts to withdraw the money?
Answer:
285 Months
Explanation:
n = 30 years × 12 = 360
percent rate = 5.0 % divided by 12 = 0.417.
Now recalling the statement of time value for money,
We have future value = present value × ( 1 + rate) ∧ n
future value = 1, 070,000 × ( 1 + 0.417 ) ∧ 360
future value = 3.33065667 E 60
At age 65, the value 3.33065667 E 60 will be the present monthly withdrawal at $28,500.
present value of ordinary annuity, = annuity ( 1 - (1 + r) ∧ -n ÷ r
= 3.33065667 E 60 = 28500 (1 - ( 1 + 0.417) ∧ - n ÷ 0.417
= 3.33065667 E 60 ÷ 28500 = (1 - ( 1 + 0.417) ∧ - n ÷ 0.417
1.168651462 E 56 = (1 - ( 1 + 0.417) ∧ - n ÷ 0.417
we now introduce logs to determine the value of n
Solving further, we discovered that n= 285.
Therefore, the number of months it will last one he start to withdraw the money is 285 month
Final answer:
To find out how many months a trust fund will last with monthly withdrawals, calculate the future value of the trust fund and divide it by the withdrawal amount. It requires understanding annuity distributions and applying formulas for both future value and annuity present value in financial mathematics.
Explanation:
The student's question pertains to determining the duration of monthly withdrawals from a trust fund invested at a 5.0 percent rate until the fund is depleted. To solve this question, we must employ the concept of annuity distributions in financial mathematics. The trust fund grows for 30 years and then the client starts withdrawing money monthly. This situation calls for a calculation where both future value and present value of annuities must be considered.
First, we calculate the future value of the trust fund after 30 years. After that, we use the present value of an annuity formula to determine how many months the withdrawals of $28,500 will last. However, a crucial detail that is missing from the question is whether the trust fund continues to earn interest at the same rate after the client begins to withdraw money. Assuming it does not, the calculation would be more straightforward - simply dividing the total future value of the trust fund by the monthly withdrawal amount.
Assuming the trust fund does not earn interest after withdrawals begin, the calculation is:
Future Value of the trust fund: FV = P \\times (1 + r)^n
Future Value of $1.07 million invested for 30 years at 5% annual interest rate: FV = 1,070,000 \\times (1 + 0.05)^30
Calculate the total amount available for withdrawal.
Divide this total by the monthly withdrawal amount of $28,500 to determine the number of months the fund will last.
Without the precise calculations, we cannot provide an exact number of months. Nevertheless, these steps outline the process the student should follow to determine the duration of the trust fund's payouts.
Ethan's Eggroll House, a calendar year corporation, purchased a new computer and printer in January for $1,500. In February, the business purchased a new oven for $1,200. No other assets were purchased during the year. How much depreciation will be taken on these items in the current year if the taxpayer does NOT elect to use Section 179 and does NOT use bonus depreciation?A. $300 computer; $171 ovenB. $525 computer; $300 ovenC. $375 computer; $300 ovenD. $300 computer; $240 ovenE. $525 computer; $420 ovenF. $214 computer; $171 oven
The depreciation for the computer and printer is $300 per year and for the oven is $171 per year. This calculation is based on the Straight-Line Depreciation Method. The correct answer is (A) $300 computer; $171 oven.
Explanation:To answer this question, we need to understand that the IRS sets a different rate for different types of tangible business property that can be depreciated over time. The computer and printer are typically classified as 'Information Systems' which have a depreciable life of 5 years. The oven is classified as 'Restaurant Equipment' which has a depreciable life of 7 years.
To calculate annual depreciation, we use straight-line depreciation, wherein the value of an asset is reduced uniformly over its predetermined life. For the computer and printer, the annual depreciation would be $1500 / 5 years = $300. For the oven, the annual depreciation would be $1200 / 7 years = $171.43 (round up to $172).
Therefore, the correct answer would be $300 depreciation for the computer and printer and $171 for the oven, making the correct answer (A).
Learn more about Depreciation here:https://brainly.com/question/17827672
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In January, Prahbu purchased a new machine for use in an existing production line of his manufacturing business for $90,000. Assume that the machine is a unit of property and is not a material or supply. Prahbu pays $2,500 to install the machine, and after the machine is installed, he pays $1,300 to perform a critical test on the machine to ensure that it will operate in accordance with quality standards. On November 1, the critical test is complete, and Prahbu places the machine in service on the production line. On December 3, Prahbu pays another $3,300 to perform periodic quality control testing after the machine is placed in service.
How much will Prahbu be required to capitalize as the cost of the machine?
Final answer:
Prabhu will capitalize a total of $93,800 as the cost of his new machine, including the purchase cost, installation fee, and pre-service testing.
Explanation:
The cost that Prahbu will be required to capitalize as the cost of the machine includes the purchase price, installation costs, and costs for testing performed before placing the machine into service. Specifically, these costs are the purchase price of the machine ($90,000), the installation cost ($2,500), and the cost of the pre-service critical test ($1,300). However, the periodic quality control testing costs performed after the machine is placed in service ($3,300) are generally considered operational expenses and are not capitalized.
Therefore, the total cost Prahbu will capitalize for the machine is:
Purchase: $90,000
Installation: $2,500
Pre-service testing: $1,300
Total capitalized cost: $93,800
Final answer:
The capitalized cost of the machine is $93,800, which includes the purchase price, installation fees, and critical testing costs. Periodic testing costs after the machine's installation are not capitalized.
Explanation:
Prahbu needs to determine the cost of the machine for his manufacturing business. To calculate this, he needs to add the cost of the machine, the installation costs, and the costs of any additional services that are necessary to prepare the machine for its intended use. The initial purchase price of the machine is $90,000. The installation costs are an additional $2,500. The critical testing that is required to ensure the machine operates to quality standards was $1,300, which is considered a capital expenditure since it's necessary to bring the asset to a working condition. Therefore, these costs should be included in the capitalization of the machine's cost. The total capitalized cost is the sum of these amounts: $90,000 + $2,500 + $1,300, equalling $93,800.
However, the $3,300 paid for periodic quality control testing after the machine is in service is not capitalized as it is considered a periodic expense and not essential to bring the asset to a working condition. Thus, this amount should be treated as an expense in the period it was incurred.
Telicia, a single taxpayer, purchased a famous painting for $69,000. Several years later, she sold it for $99,000. Telicia's marginal tax rate is 35%. Telicia's gain on the sale of the painting will be taxed at a rate of
Answer:
28%
Explanation:
Please see attachment
Your uncle offers you a choice of $115,0 in 10 years or $52,000 today, if the money is discounted at 9%, which should you do ose? 2. If you invest $9,500 per period or the fotioning number of periods how much would you have? A. 10years at 10% B. 15years at 9%
Answer:
1) we would choose the second offer i.e. $52,000 today
2) For A) 10 years at 10%
Future value = $151,405.53
For B) 15 years at 9%
Future value = $278,928.70
Explanation:
1) Future value = $115,000
Time, n = 10 years
Discount rate, r = 9% = 0.09
Now,
Present value of the money provided after 10 years
= Future Value ÷ [ ( 1 + r )ⁿ ]
= $115,000 ÷ [ ( 1 + 0.09 )¹⁰ ]
= $48,577.24
Since,
The Present value of $115,000 is less than the money to offered today i.e $52,000
Hence, we would choose the second offer i.e. $52,000 today
2) Payment per period = $9,500
Future value = Yearly Payment × [ { ( 1 + r ) ⁿ - 1 } ÷ r ]
Thus,
For A) 10 years at 10%
Future value = $9,500 × [ { ( 1 + 0.1 )¹⁰ - 1 } ÷ 0.1 ]
= $151,405.53
For B) 15 years at 9%
Future value = $9,500 × [ { ( 1 + 0.09 )¹⁵ - 1 } ÷ 0.09 ]
= $278,928.70