Answer:
a. 5.63%
b. 5.72%
Explanation:
to calculate YTM of zero coupon bonds:
YTM = [(face value / market value)¹/ⁿ] - 1
YTM₁ = [(1,000 / 974.85)¹/ⁿ] - 1 = 2.58%YTM₂ = [(1,000 / 882.39)¹/ⁿ] - 1 = 6.46%YTM₃ = [(1,000 / 847.70)¹/ⁿ] - 1 = 5.66%a. A 5.6% coupon $1,000 par bond pays an annual coupon and will mature in 3 years. What should the yield to maturity on the bond be?
the bond's current market price:
$1,000 / 1.0566³ = $847.75$56/1.0258 + 56/1.0646² + 56/1.0566³ = $54.59 + $49.41 + $47.47 = $151.47current market price = $999.22YTM = [C + (FV - PV)/n] / [(FV + PV)/2] = [56 + (1,000 - 999.22)/3] / [(1,000 + 999.22)/2] = (56 + 0.26) / 999.61 = 5.63%
b. If at the end of the first year the yield curve flattens out at 6.5%, what will be the 1-year holding-period return on the coupon bond?
the bond's current market price:
$1,000 / 1.065³ = $827.85$56/1.0258 + 56/1.065² + 56/1.065³ = $54.59 + $49.37 + $46.36 = $150.32current market price = $978.17you invest $978.17 in purchasing the bond and you receive a coupon of $56, holding period return = $56 / $978.17 = 5.72%
g A decrease in the price of a good would a. increase the supply of the good. b. increase the quantity demanded of the good. c. give producers an incentive to produce more to keep profits from falling. d. shift the supply curve for the good to the left.
Answer:
. b. increase the quantity demanded of the good
Explanation:
An decrease in the price of the good increases the demand for the good according to the law of demand.
The law of demand states that the higher the price, the lower the quantity demanded and the lower the price, the higher the quantity demanded.
An increase in price would increase supply.
A change in price leads to a movement along either the demand or supply curve.
Other factors other than the change in price leads to a movement of these curves.
I hope my answer helps you
Answer:
A decrease in the price of a good would increase the supply of the good.
A decrease in the price of a good would NOT increase the quantity demanded of the good.
A decrease in the price of a good would NOT give producers an incentive to produce more to keep profits from falling.
Consider the market for mobile applications, smartphones, and conventional phones. For each pair, identify whether they are complements or substitutes:
Pairs of Goods and Services Complements Substitutes
Mobile applications and smartphones
Mobile applications and conventional phones
Smartphones and conventional phones
Answer:
Mobile Applications and Smart Phones are Complements
Smart Phones and Conventional Phones are Substitutes
Mobile Applications and Conventional Phones are substitutes.
Explanation:
Complement goods are goods that can be used or consumed together. E.g. car and gas. A car would not work without gas. A rise in price of a good leads to a fall in demand of the complement good.
Subsituite goods rival one another in consumption. They can be used in place of another good.
A rise in price of a good leads to a rise in demand of the other good.
I hope my answer helps you
Which of the following is a disadvantage of growth by means of external growth strategies? Group of answer choices Diversification of business risk Economies of scale Getting access to proprietary products or services Reducing competition Loss of organizational flexibility
Answer:
- Loss of organizational flexibility
- Diversification of business
Explanation:
Remember, External growth strategies unlike the Internal growth strategies involves using external assistance to grow the organization, such as merging or acquiring other companies, franchising or forming joint ventures.
In such a case, organisational flexibility could be lost since the organization becomes more complex as a result of bringing in more people into the organization. Also, another disadvantage is that with a restructured management team, the business may experience unexpected diversification into other products as in the case of joint ventures.
The poverty rate would be substantially lower if the market value of in-kind transfers were added to family income. The largest in-kind transfer is Medicaid, the government health program for the poor. Suppose the program costs $10,000 per recipient family. True or False: If the government gave each recipient family a $10,000 check instead of enrolling them in the Medicaid program, most of these families likely would spend that amount of money on health insurance. True False True or False: This result suggests that we should value in-kind transfers at the price the government pays for them in determining the poverty rate. True False Because the benefit of Medicaid to its recipients is likely than its cost, it to give the poor cash transfers instead.
Answer: False; False; True.
Explanation:
a. False.
If the government gave every recipient family a $10,000 check rather than enrolling them in the Medicaid program, majority of the families would not spend the money on health insurance. The money will rather be spent on foods that the customer hasn't reached a satiation point in e.g foods, housing etc.
b. False.
We should determine poverty rate by valuing the in-kind transfers at the price which the family would have paid for the same amount of the good not taking into consideration of how the family spend the cash transfer.
c. True.
The poor would be better off in situations where they receive cash transfer rather than in-kind transfer. They could spend the cash on things apart from medical care. The poor value other things more than the health insurance and would be better off with the cash.
Composing powerful paragraphs is essential when striving for dear communication. Familiarize yourself with basic paragraph elements, various paragraph patterns, and strategies for building coherence. Use the following paragraphs to answer the questions that follow
Paragraph A: Last week, three of our Xdite executives closed a lucrative merger deal with Editionplus. The merger will add more than 500 accounts to our business and will increase our profits by 39 percent in less than a year. Additionally, the executives met with several Editionplus product designers and agreed on three new computer prototypes that we will produce during the next five years. This means we will expand our business to both Los Angeles and Las Vegas.
Paragraph B: Employee reaction has been mixed about our recent plans to expand to Las Vegas and Los Angeles. Many Xcite employees are concerned that the Los Angeles site will not have the same relaxed corporate environment as the current site. However, this is not the case: The relaxed corporate environment at the San Francisco site will be replicated in Los Angeles. The culture we have developed works for the company and our employees, and we don't plan to change it. Human resources executives are already interviewing San Francisco employees so they can capture and replicate the culture with ease.
Answer: 1. A, C
2. "Everyone in senior-level positions has worked his or her way up the corporate ladder and has contributed greatly to the company's success. This team has increased our profits by 6 percent, expanded office space, hired additional IT support, and strengthened our IT infrastructure. These are just a few of this leadership team's many accomplishments."
Explanation:
1. The Direct Approach is also known as a Deductive Approach. This is because when using the Direct Approach, the writer or speaker begins with the main point of the article and then gives supporting evidence and explanations as they go further along.
Paragraph A uses the Direct approach because the writer began by talking about the main point of the sealing of the deal with Editionplus. It then speaks on how it will increase their profits and how they even met with some of their product designers.
Paragraph C also uses the Direct Approach as it speaks to the effectiveness of the leadership first and then gives evidence of why they are effective by stating that they worked hard for it and that they have increased profits, office space and strengthened infrastructure.
2. Supporting sentences are made with the purpose of supporting the main point. They expound on the point and give it meaning by showing evidence of the original point.
Option C would be the correct answer because it gave evidence of the main point in Paragraph C. The Main Point noted how the leadership in San Francisco has been phenomenal for the past decade. Option C then speaks on how they have done so by stating that they had worked their way up and contributed to the success of the company by having increased profits by 6 percent, expanded office space, hired additional IT support, and strengthened IT infrastructure.
I have attached the full question to this answer.
1. If you and your BSG team decided to explore the possibility of diversification beyond the athletic shoe market, what factors would you consider to be positive factors in selecting a diversification target and why; i.e. what positive elements would you be looking for in making your decision? 2. What factors would discourage you from pursuing a diversification strategy with another firm and why?
Answer: provided in the explanation section
Explanation:
The process of diversification has to do with connecting to new business opportunity with the existing business. This business startegy helps the company to enter a new area of the market in which it is not currently working. The risk associated with it can or may not provide extraordinary benefits.
In these cases, there are positive factors that encourage diversification-
Other companies will handle the losses in the current company.
Unpleasant surprises can be offset by market diversification.
The resources used under these can be used in sports shoe styling in game simulation companies such as background designers, creative team and so on.
The customer base would be more like that, thereby reducing the attempt of the company to shape a whole new customer base.
If the gaming business starts to decline at any time, all its resources can be used in this new business.
There are always, however, factors which prevent such diversifications.
This can restrict business growth opportunities in the gaming sector as new companies can get investment that is needed to be more competitive.
More new skilled employees, equipment and resources will be needed as the production requires a whole new set of know-how and equipment.
A poorly managed diversification will cause existing businesses to suffer.
As this is a broad horizontal diversification, they can not respond with the same speed to market changes.
Cheers I hope this helps !!!
10. Define transfer pricing. Describe at least two methods of defending transfer prices if they are challenged by tax authorities. How are transfer prices used in managing multinational tax exposures
Answer:
Explanation:
(A) What is Transfer Pricing?
This is an accounting practice that sets prices for goods and services bought and sold between related entities.
(B) Two methods of defending transfer prices if they are challenged by tax authorities:
1. Treating the related or commonly controlled entities as if they are 2 independent entities.
2. Claiming that services rendered between the 2 related entities could not be priced.
(C) How are transfer prices used in managing multinational tax exposures?
- Transfer Prices help reduce import and export duties. They are used to manage multinational tax exposures by exporting or shipping the goods at a low transfer price, to subsidiaries or related entities in countries with high tariff rates.
- It reduces income taxes and corporate taxes in high tax countries, by overpricing goods that are sold/transferred to subsidiaries in countries with low tax rate.
Strait Co. manufactures office furniture. During the most productive month of the year, 3,300 desks were manufactured at a total cost of $82,000. In the month of lowest production, the company made 1,130 desks at a cost of $59,000. Using the high-low method of cost estimation, total fixed costs are
Answer:
Using the high-low method of cost estimation, total fixed costs are $47,020
Explanation:
Cost at highest level of activity = $82,000.00
Cost at Lowest level of activity = $59,000.00
Highest level of activity = 3,300
Lowest Level of activity = 1,130
Variable cost per unit = $(82,000 - 59,000) ÷ (3,300 -1,130)
Variable cost per unit = $23,000 ÷ 2,170
Variable cost per unit = $10.60
Fixed Costs = $82,000 - (3,300 × 10.60)
Fixed Costs = $47,020
The Eastern District of Adelson Inc. is organized as a cost center. The budget for the Eastern District of Adelson Inc. for the month ended December 31 is as follows:
Sales salaries $819,840
System administration salaries 448,152.00
Customer service salaries 152,600.00
Billing salaries 98,760.00
Maintenance 271,104.00
Depreciation of plant and equipment 92,232.00
Insurance and property taxes 41,280.00
Total $1,923,968.00
During December, the costs incurred in the Eastern District were as follows:
Sales salaries $818,880.00
System administration salaries 447,720.00
Customer service salaries 183,120.00
Billing salaries 98,100.00
Maintenance 273,000.00
Depreciation of plant and equipment 92,232.00
Insurance and property taxes 41,400.00
Total $1,954,452.00
Required:
Prepare a budget performance report for the manager of the Eastern District of Adelson for the month of December.
Answer:
Eastern District: Adelson Inc.
Budget Performance Report
For the Year Ended December 31, XX
Actual Static Variance
results budget
Sales salaries $818,880 $819,840 -$960
System adm. salaries $447,720 $448,152 -$432
Customer service salaries $183,120 $152,600 $30,520
Billing salaries $98,100 $98,760 -$660
Maintenance $273,000 $271,104 $1,896
Depreciation of P & E $92,232 $92,232 $0
Insurance and prop. taxes $41,400 $41,280 $120
Total $1,954,452 $1,923,968 $30,484
Explanation:
A budget performance report shows how the actual costs and/or revenues perform according to the planned budget. A negative sign on the variance column shows a favorable variance (lower costs or higher revenues), while a positive sign shows an unfavorable variance (higher costs or lower revenues).
Alphonse Company manufactures staplers. The budgeted sales price is $ 12 per stapler, the variable costs are $ 3 per stapler, and budgeted fixed costs are $ 12 comma 000. What is the budgeted operating income for 4 comma 500 staplers?
Answer:
Operating income $28,500
Explanation:
The budgeted income is the difference between the budgeted sales revenue and budgeted costs
$
Budgeted revenue ( 12× 500) 54,000
Variable cost (3× 4500) (1,500)
Contribution 52500
Budgeted fixed cost (12,000)
operating income 28,500
Operating income $28,500
Determine whether each of the following goods is a private good, a public good, a common resource, or a club good.
1. A free weight station in a fitness room that is open to the public
2. A large, beautiful fountain in a town square
3. A new drum set for you to play in your friend's band
Answer:
1. A free weight station in a fitness room that is open to the public (common resource)
2. A large, beautiful fountain in a town square (public goods)
3. A new drum set for you to play in your friend's band (private good)
Explanation:
Before we look into the different types of goods, let us define the terms associated with goods:
Rival: A good is said to be rival, if its consumption by one consumer prevents simultaneous consumption by another consumer.
Excludable: An excludable good is one for which access is not provided by the owner or seller, to a consumer who has not paid for it or who has not met certain requirements for its use.
Now let us define the different types of goods:
a. Private goods: these goods are excludable and rival. This means that the owners can prevent certain individuals from using them and their use prevents simultaneous use by other consumers. These goods are usually limited in quantity. in our example, A new drum set for you to play in your friend's band meets these requirements. other examples include food, clothes et.
b. public good: these goods are non-excludable and non-rival. These goods can be used simultaneously by many individuals and restrictions to use are virtually absent on them. A large, beautiful fountain in a town square meets these criteria. other examples include air, street lights etc.
c. common resource: These products are non-excludable (restriction to use is absent) and rival (use by an individual can prevent simultaneous use by others). if an individual is using A free weight station in a fitness room that is open to the public, other individuals will have to wait for their turn, even if they do not pay for it.
d. club good: these goods or services are excludable (paid for before use) but non rival (multiple consumers can use them simultaneously). Examples include cable television, internet services, cinemas etc.
Given the series of demand data below Period: 1 2 3 4 5 6 7 8 9 10 Demand: 42 35 58 42 27 49 40 41 27 41 a. Calculate the forecasts for periods 7 through 11 using moving average models with n = 2, n = 4, and n = 6. (Round your intermediate calculations and final answers to 1 decimal place.)
Answer:
Kindly check Explanation
Explanation:
Given :
Period: 1 2 3 4 5 6 7 8 9 10
Demand: 42 35 58 42 27 49 40 41 27 41
Using n = 2
Week - - - - - - - - - - n = 2
7 - - - - - - ( 27 + 49)/2 = 38
8 - - - - - - (49 + 40)/2 = 44.5
9 - - - - - - -(40 + 41)/2 = 40.5
10 - - - - - - (41 + 27)/2 =34
11 - - - - - - - (27 + 41)/2 34
Using n = 4
Week - - - - - - - - - - n = 4
7 - - - - - - (58 + 42 + 27 + 49)/4 = 44
8 - - - - - - (42 + 27 + 49 + 40)/4 = 39.5
9 - - - - - - -(27 + 49 + 40 + 41)/4 = 39.3
10 - - - - - - (49 + 40 + 41 + 27)/4 =39. 3
11 - - - - - - - (40 + 41 + 27 + 41)/2 = 37.3
Using n = 6
Week - - - - - - - - - - n = 6
7 - - - - - - (42 + 35 + 58 + 42 + 27 + 49)/6= 42.2
8 - - - - - - (35 + 58 + 42 + 27 + 49 + 40)/6 = 41.8
9 - - - - - - -(58 + 42 + 27 + 49 + 40 + 41)/6= 42.8
10 - - - - - - (42 + 27 + 49 + 40 + 41 + 27)/6 =39.7
11 - - - - - - - (27 + 49 + 40 + 41 + 27 + 41)/6 = 37.5
The moving average model is the measurement tool that determines the cumulative average of certain period based upon the records and data of previous periods.
Based upon the previous records the forecasts for the future periods can be predicted and determined.
The moving average model is used to forecast the future values using the estimating trend cycles of the past time values.
The forecasts for periods 7 through 11 is shown in the tables attached below, while taking three different values of n.
The "n" is the time value based upon which the data of previous records are taken.
To know more about moving average model, refer to the link:
https://brainly.com/question/19863583
1. Below are some of the components for Prufrock Corp. income statement for the year ending December 31t, 2016. Use the values to fill in the income statement and calculate the net income. All values are given in millions of dollars and there may be more lines provided than needed.
Sales $70,000
Tax Rate = 34%
Depreciation = $16,000
Interest Paid = $450
Cost of Goods Sold $35,000
Income Statement
Earnings Before Interest and taxes (EBIT)
Taxable Income (EBT)
Net Income
2. Prufrock Corp. has 4,000 million shares outstanding. If they do not reinvest any of their earnings what will be the dividend per share paid out this year?
3. Assume that the dividend from Part B will be paid out one year from today. After the initial dividend from part B is paid, the dividend is expected to grow at a rate of 4% per year. Investors require a 10% return on their investment, what is the current share price?
Answer and Explanation:
1. The computation of Earnings Before Interest and taxes, Taxable income and Net income is shown below:-
Earnings Before Interest = Revenue from sales - Cost of goods sold - Depreciation
= $70,000 - $35,000 - $16,000
= $19,000
Taxable Income = Earnings Before Interest - Interest paid
= $19,000 - $450
= $18,550
Net Income = Taxable Income - Taxes
= $18,550 - ($18,550 × 34%)
= $18,550 - $6,307
= $12,243
2. The computation of dividend per share is shown below:-
Dividend per share = Net income ÷ Number of shares outstanding
= $12,243 ÷ 4,000 million
= $3.06
3. The computation of current share price is shown below:-
Current share price = Current dividend ÷ (Expected return - Growth rate)
= $3.06 ÷ (10% - 4%)
= $3.06 ÷ 6%
= $51
Therefore we have applied the above formula.
uppose McKnight Corp.'s breakeven point is revenues of $ 1 comma 100 comma 000. Fixed costs are $ 660 comma 000. Requirements 1. Compute the contribution margin percentage. 2. Compute the selling price if variable costs are $16 per unit. 3. Suppose 65 comma 000 units are sold. Compute the margin of safety in units and dollars. 4. What does this tell you about the risk of McKnight making a loss? What are the most likely reasons for this risk to increase?
Answer:
1. Compute the contribution margin percentage.
40%2. Compute the selling price if variable costs are $16 per unit.
$26.673. Suppose 65 comma 000 units are sold. Compute the margin of safety in units and dollars.
margin of safety in $ = $633,550margin of safety in % = 36.55%4. What does this tell you about the risk of McKnight making a loss? What are the most likely reasons for this risk to increase?
Since the contribution margin is relatively high, this means that the production costs are relatively low (compared to selling price). The associated risks may come from high leverage, e.g. machinery purchased on credit that results in high interest expense. For the most part, having a high contribution margin is generally very good, just ask Apple.Explanation:
break even point is $ = $1,100,000 (= break even point units x selling price)
fixed costs = $660,000
contribution margin % = (total sales - total variable costs) / total sales
total variable costs = $1,100,000 - $660,000 = $440,000
contribution margin % = ($1,100,000 - $660,000) / $1,100,000 = 40%
variable costs = $16 per unit
0.4 = (x - $16) / x
0.4x = x - $16
$16 = 0.6x
x = $26.67
65,000 x $26.67 = $1,733,550
margin of safety in $ = $1,733,550 - $1,100,000 = $633,550
margin of safety in % = $633,550 / $1,733,550 = 36.55%
The balance sheet for Campbell Corporation follows:________.
Current assets $238,000
Long-term assets (net) 756,000
Total assets $994,000
Current liabilities $156,000
Long-term liabilities 444,000
Total liabilities 600,000
Common stock and retained earnings 394,000
Total liabilities and stockholders’ equity $994,000
Required Compute the following. (Round ""Ratios"" to 1 decimal place.)
a. Working Capital?
b. Current Ratio?
c. Debt to assets Ratio?
d. Debt to equity Ratio?
Answer:
a.
$82,000
b.
1.53
c.
0.6
d.
1.52
Explanation:
a.
Working capital is the net of current assets and current liabilities.
Working Capital = Current Asset - Current Liabilities
Placing values in the formula
Working Capital = $238,000 - $156,000
Working Capital = $82,000
b.
Current ratio is the ratio of current asset and liabilities.
Current Ratio = Current Assets / Current Liabilities
Placing values in the formula
Current Ratio = $238,000 / $156,000
Current Ratio = 1.53
c.
Debt to asset ratio is the ratio of debt to total assets of the company.
Debt to assets Ratio = Total Liabilities / Total Assets
Placing values in the formula
Debt to assets Ratio = $600,000 / $994,000
Debt to assets Ratio = 0.60
d.
Debt to equity ratio is the ratio of debt to equity of the company.
Debt to equity Ratio = Total Liabilities / equity
Placing values in the formula
Debt to equity Ratio = $600,000 / $394,000
Debt to equity Ratio = 1.52
Category killers compete primarily on the basis of a. low prices and enormous product availability. b. enormous product selection and sales expertise. c. convenient locations and customer services. d. rock-bottom prices and moderate selections. e. one-stop shopping and product availability.
Answer:
A. Low prices and enormous product availability.
Explanation:
This is a chain of retail stores or a retail outlet that sells different kinds of goods or products that in a way that seems cheap and affordable to consumers. They also look and facilitate quick form of buying and selling. Their main goal stands primarily on cheap, fast enormous sales of the product.
They possibly can create a compelling shopping experience. In a bid to do that, they need to compress instant gratification, unique assortments and a reasonable showroom experience that aids social lifestyles.
For each of the following cases determine the ending balance in the inventory account. (Hint: First, determine the total cost of inventory available for sale. Next, subtract the cost of the inventory sold to arrive at the ending balance.) a. Jill’s Dress Shop had a beginning balance in its inventory account of $40,000. During the accounting period, Jill’s purchased $75,000 of inventory, returned $5,000 of inventory, and obtained $750 of purchases discounts. Jill’s incurred $1,000 of transportation-in cost and $600 of transportation-out cost. Salaries of sales personnel amounted to $31,000. Administrative expenses amounted to $35,600. Cost of goods sold amounted to $82,300. b. Ken’s Bait Shop had a beginning balance in its inventory account of $8,000. During the accounting period, Ken’s purchased $36,900 of inventory, obtained $1,200 of purchases allowances, and received $360 of purchases discounts. Sales discounts amounted to $640. Ken’s incurred $900 of transportation-in cost and $260 of transportation-out cost. Selling and administrative cost amounted to $12,300. Cost of goods sold amounted to $33,900.
Answer:
Jill's Dress Shop:
Ending Inventory 27,950
Ken's Bait Shop:
Ending Inventory 10,340
Explanation:
Jill's Dress Shop:
Beginning 40,000
Purchases 75,000
Returned (5,000)
Discounts (750)
Freight-In 1,000
Cost of Goods Sold (82,300)
Ending Inventory 27,950
Ken's Bait Shop
Beginning 8,000
Purchases 36,900
Allowances (1,200)
Discounts (360)
Freight-In 900
Cost of Goods Sold (33,900)
Ending Inventory 10,340
The freight-out and sales discount have an impact in net sales and selling expenses they do not constitute part of the inventory as are relatedto the sale of the goods rather than acquisition.
Answer:
Determination of Ending Inventory:a) Beginning Inventory = $40,000
Purchases = $75,000
Purchases Return = ($5,000)
Purchases Discounts = ($750)
Freight-in = $1,000
Cost of Goods Available$110,250
less cost of goods sold ($82,300)
Ending Inventory $27,950
b) Beginning Inventory = $8,000
Purchases = $36,900
Purchases Return = ($1,200)
Purchases Discounts = ($360)
Freight-in = $900
Cost of Goods Available $44,240
less cost of goods sold ($33,900)
Ending Inventory $10,340
Explanation:
a) Ending inventory represents the value of goods available for sale and held by a company at the end of an accounting period. It is calculated as follows: Beginning Inventory + Net Purchases - Cost of Goods Sold (or COGS) = Ending Inventory. The value of goods available for sale at the end of the accounting period is important in reporting the financial status of any trading or producing company.
b) The cost of goods available for sale includes the beginning inventory, the net purchases of inventory, and the freight-in during the period.
Victor Rumsfeld Inc.'s dividend policy is under review by its board. Its projected capital budget is $2,000,000, its target capital structure is 60% debt and 40% equity, and its forecasted net income is $300,000. If the company follows a residual dividend policy, what total dividends, if any, will it pay out? Select the correct answer.
Answer:
The multiple choices are
a. $240,000
b. $228,000
c. $216,600
d.$205,770
e. $0
The correct option is E,$0
Explanation:
The funding required from equity is 40% of the projected capital budget of $2000,000 which is expected to be from the profit attributable to stockholders since new issue of shares is not contemplated.
In other words, dividends payable to shareholders is the net income less their counter funding of the project which is computed below:
residual dividends=net income-(equity%*capital outlay)
residual dividends=$300,000-(40%*$2000,000)
=$300,000-$800,000=$0
In essence the $300,000 is not even enough as funds expected from equity less alone paying excess as dividend
Orange Corporation acquired new office furniture on August 15, 2018, for $130,000. Orange does not elect immediate expensing under § 179. Orange claims any available additional first-year depreciation. If required, round your answer to the nearest dollar.
a. Determine Orange's cost recovery for 2018
The office furniture is classified as a seven-year class of property for MACRS. If bonus depreciation is elected, Orange's deduction is
b. Determine Orange's cost recovery for 2018 if Orange decided to only use $52,000 of bonus depreciation and normal MACRS on the balance of the acquisition cost.
Answer:
Explanation:
a) The asset is purchased in 2018.
In 2018, bonus depreciation % has been increased from 50% to 100%. If bonus depreciation is elected Orange Corporation can deduct 100% of Purchase cost of $130,000.
The office furniture is classified as seven year class of property for MACRs. If bonus depreciation is elected Orange's deduction is $130,000
= $130,000
b) if Orange decides to use only $52,000 of bonus depreciation, it can claim depreciation (MACRS) on balance amount of acquisition cost.
Cost Recovery for 2018:
Bonus depreciation = $52,000
MACRS Depreciation [($130,000 - $52,000) * 14.29%]= $11,146.20
Hence, Cost Recovery for 2018 = Bonus depreciation + MACRS Depreciation
= $52,000 + $11,146.20
= $63,146 (rounded off to nearest dollar)
The following information applies to Pro-Weave manufactures stadium blankets by passing the products through a weaving department and a sewing department. The following information is available regarding its June inventories:
Beginning Inventory Ending Inventory
Raw materials inventory $ 120,000 $ 185,000
Work in process inventory-Weaving 300,000 330,000
Work in process inventory-Sewing 570,000 700,000
Finished goods inventory Inventory 1,266,000 1,206.000
The following additional information describes the company's manufacturing activities for June:
Raw materials purchases (on credit) Factory wages cost (paid in cash) Other factory overhead cost (other Accounts credited) Materials used 500,000 3,060,000 156, 000 Direct-Weaving Direct-Sewing Indirect $ 240, 000 75,000 120,000 Labor used Direct-Weaving Direct-Sewing Indirect $1,200, 000 360,000 1,500,000 Overhead rates as a percent of direct labor Weavinqg Sewing 80% 150% Sales (on credit) $4,000,000
1. Compute the (a) cost of products transferred from weaving to sewing, (b) cost of products transferred from sewing to finished goods and (c) cost of goods sold
2. Prepare journal entries dated June 30 to record (a) goods transferred from weaving to sewing, (b) goods transferred from sewing to finished goods, and (c) sale of finished goods
Complete this question by entering your answers in the tabs below
Required 1
Required 2
Compute the (a) cost of products transferred from weaving to sewing, (b) cost of products transferred from sewing to finished goods, and (c) cost of goods sold
(a) Sewing
(b) Finished Goods
(c) Cost of goods sold
Find the given attachments
The company has just hired a new marketing manager who insists that unit sales can be dramatically increased by dropping the selling price from $8 to $7. The marketing manager would like to use the following projections in the budget:
Data Year 2 Quarter Year 3 Quarter
1 2 3 4 1 2
Budgeted unit sales 45,000 70,000 105,000 70,000 90,000 100,000
Selling price per unit $7 per unit
a. What are the total expected cash collections for the year under this revised budget?
b. What is the total required the production for the year under this revised budget?
c. What is the total cost of raw materials to be purchased for the year under this revised budget?
d. What are the total expected cash disbursements for raw materials for the year under this revised budget?
e. After seeing this revised budget, the production manager cautioned that due to the current production constraint, a complex milling machine, the plant can produce no more than 80,000 units in any one quarter. Is this a potential problem?
Answer:
a. What are the total expected cash collections for the year under this revised budget?
65 + 236.25 + 78.75 + 367.5 + 122.5 + 551.25 + 183.75 + 367.5 = 1,972.5 x $1,000 = $1,972,500
b. What is the total required production for the year under this revised budget?
52.5 + 80.5 + 94.5 + 76 = 303.5 x 1,000 = 303,500 units
c. What is the total cost of raw materials to be purchased for the year under this revised budget?
237 + 367.5 + 507.5 + 360 = 1,472 x 1,000 = 1,472,000 pounds x $0.80 = $1,177,600
d. What are the total expected cash disbursements for raw materials for the year under this revised budget?
195.26 + 252.24 + 361.2 + 330.4 = 1,139.1 x $1,000 = $1,139,100
e. After seeing this revised budget, the production manager cautioned that due to the current production constraint, a complex milling machine, the plant can produce no more than 80,000 units in any one quarter. Is this a potential problem?
No, since total budgeted sales for the year are 303,500 units, which divided by 4 quarters = 75,875 units per quarter. All you need to do is increase quarter 1 production by 15,000 units, and that would satisfy quarters 2 and 3 needs.
Explanation:
Year 2 Quarter Year 3 Quarter
1 2 3 4 1 2
unit sales 45 70 105 70 90 100
(in thousands)
total sales 315 490 735 490 630 700
(in thousands)
cash collected 65 78.75 122.5 183.75 122.5 157.5
(in thousands) 236.25 367.5 551.25 367.5 472.5 525
75% of sales are collected during this quarter and 25% are collected the next quarter
beginning $65,000
ending finished inventory 30% of budgeted sales for next quarter
Year 2 Quarter Year 3 Quarter
1 2 3 4 1 2
beginning 13.5 21 31.5 21 27 30
ending 21 31.5 21 27 30 ?
quarter sales 45 70 105 70 90 100
production 52.5 80.5 94.5 76 93 ?
cost of raw materials = $0.80, 5 pounds per unit produced
beginning inventory of raw materials = 23,000 pounds
desired ending inventory of raw materials = 10% of next quarter's needs
Year 2 Quarter Year 3 Quarter
1 2 3 4 1 2
beginning 23 35 52.5 35 45 50
ending 35 52.5 35 45 50 ?
quarter needs 225 350 525 350 450 500
raw materials 237 367.5 507.5 360 455 ?
60% of raw materials cost paid during the quarter, 405 paid the next quarter
beginning accounts payable 81.5
Year 2 Quarter Year 3 Quarter
1 2 3 4 1 2
past q $ 81.5 75.84 117.6 162.4 112 114
next q $ 75.84 117.6 162.4 112 114 ?
quarter needs 189.6 294 406 280 360 ?
payments 195.26 252.24 361.2 330.4 358 ?
From the following list of steps in the accounting cycle, identify what two steps are missing: Transactions are analyzed and recorded in the journal. An unadjusted trial balance is prepared. Adjustment data are assembled and analyzed. An optional end-of-period spreadsheet is prepared. Adjusting entries are journalized and posted to the ledger. An adjusted trial balance is prepared. Closing entries are journalized and posted to the ledger. A post-closing trial balance is prepared. Select the steps in the accounting cycle in their proper order in order and include the two missing steps.
Answer:
The Accounting Cycle refers to the process of recording and analyzing the transactions of a business into it's books so that proper financial statements may be recorded and used.
It happens in 10 steps which are;
1. Transactions are analyzed and recorded in the journal.
2. Transactions are posted to the ledger. ( Missing)
3. An unadjusted trial balance is prepared.
4. Adjustment data are assembled and analyzed.
5. An optional end-of-period spreadsheet (work sheet) is prepared.
6. Adjusting entries are journalized and posted to the ledger.
7. An adjusted trial balance is prepared.
8. Financial statements are prepared. (Missing)
9. Closing entries are journalized and posted to the ledger.
10. A post-closing trial balance is prepared.
Step 2
After posting transactions to their journals, the transactions go to the General ledger.
Step 8.
Using the details from the adjusted trial balance, the Financial Statements can then be prepared with the correct figures.
In January 2012, an investor purchased 400 shares of Engulf & Devour, a rapidly growing high-tech conglomerate. From 2012 through 2016, the stock turned in the following dividend and share price performance:
Year Share Price Beginning of Year Dividends Paid during Year Share Price End of Year
2012 $39.26 $0.75 $49.02
2013 $49.02 $0.99 $63.45
2014 $63.45 $0.96 $61.06
2015 $61.06 $1.65 $44.23
2016 $44.23 $2.05 $111.07
Required:
On the basis of this information, find the annual holding period returns for 2012 through 2016.
Answer:
The annual holding period returns for 2012 through 2016 is 199.21%
Explanation:
In order to Calcualte the Holding Period Return for 2012 through 2016
we would have to use and calculate the following formula :
HPR = [(P1-P0) +D] / P0
P0 = Beginning value of stock = $39.26
P1 = The closing value of stock = $111.07
D = Dividends received during the year =($0.75 + $0.99 + $0.96 + $1.65 + $2.05) = $6.40
Substituting all the values in the formula , we will get Holding period return
HPR = [($111.07 - $39.26) + $6.40] / $39.26
= $78.21/ $39.26
= 1.9921
= 199.21%
Therefore, the annual holding period returns for 2012 through 2016 is 199.21%
Trade-Off Theory. Smoke and Mirrors currently has EBIT of $25,000 and is all-equity- financed. EBIT is expected to stay at this level indefinitely. The firm pays corporate taxes equal to 35% of taxable income. The discount rate for the firm’s projects is 10%.(LO3)
a. What is the market value of the firm?
b. Now assume the firm issues $50,000 of debt paying interest of 6% per year, using the proceeds to retire equity. The debt is expected to be permanent. What will happen to the total value of the firm (debt plus equity)?
c. Recompute your answer to (b) under the following assumptions: The debt issue raises the probability of bankruptcy. The firm has a 30% chance of going bankrupt after 3 years. If it does go bankrupt, it will incur bankruptcy costs of $200,000. The discount rate is 10%. Should the firm issue the debt?
Answer:
a. What is the market value of the firm?
$162,500b. Now assume the firm issues $50,000 of debt paying interest of 6% per year, using the proceeds to retire equity. The debt is expected to be permanent. What will happen to the total value of the firm (debt plus equity)?
$200,123c. Recompute your answer to (b) under the following assumptions: The debt issue raises the probability of bankruptcy. The firm has a 30% chance of going bankrupt after 3 years. If it does go bankrupt, it will incur bankruptcy costs of $200,000. The discount rate is 10%. Should the firm issue the debt?
The firm should not issue the debt because the risk of bankruptcy eliminates any possible gains obtained from issuing debt. It actually decreases the value of equity.Explanation:
the firm's current value = [EBIT x (1 - tax rate)] / WACC = [$25,000 x 0.65] / 10% = $162,500
firm's new WACC = ($112,500/$162,500 x 10%) + ($50,000/$162,500 x 6% x 0.65) = 6.92% + 1.2% = 8.12%
the firm's new value = [$25,000 x 0.65] / 8.12% = $200,123
expected cost of bankruptcy = (30% x $200,000) / 1.1³ = $45,079
firm's total value is still $200,123, but the stockholders' equity has been reduced from ($200,123 - $50,000 = $150,123) to $150,123 - $45,079 = $105,044
the gain from issuing debt will be eliminated due to the risk of bankruptcy, before equity had risen from $112,500 to $150,123, but now it decreases to $105,044.
The market value of the firm will be $162500.
Based on the information given, the market value will be calculated thus:
= [EBIT × (1 - Tax rate(] / WACC
= [25000 × (1 - 0.35)] / 10%
= [25000 × 0.65] / 0.10 = $162500
Since the firm's new WACC is 8.12%, then the new value of the firm will be:
= (25000 × 0.65) / 8.12%
= 200,123
Therefore, the total value of the firm is $200,123.
In conclusion, the firm should not issue the debt due to the fact that the risk of bankruptcy will eliminate the gains gotten from the issuance.
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Q.No. 1 Assume yourself as a Marketing Specialist of a Company and Determine the New Product Development Process by manufacturing a New Product for your company. Max Marks 10
Max : 200words
Answer:
New products suffer through five development stages throughout the product lifecycle.
Explanation:
Manufacturing a new product isn't easy for any company. There is always uncertainty whether that product will run successfully as per customer needs.
Stage 1: Idea
Every product development starts with an idea you need to get an idea about the market and about the customer needs. you need to find out what market requires the most. As soon as you got the idea you can jump to the next step.
Stage 2: Research
In this step, the company conducts market surveys about the product idea. The company has to provide samples to market to check their product is working perfectly or whether it requires some changes and how customers are responding. The company has to collect reviews from customers.
Stage 3: Marketing
Once the company got the customer reviews and they are positive then its time to tell the world about the product but the company has to analyze the 4 Ps that are price, place, promotion, and product. The company has to consider these Ps in marketing stage.
Stage 4: Business Analysis
This is a very important step where a company finds out about the factors about the product such as the product's profitability. Whether the product is profitable enough to carry on marketing activities.
Step 5 Commercilisation
After performing every stage properly its time to launch the product. In this stage, the company produces the product in large quantity and supplies it to market to cover all the cost it took to launch and make the company more profitable
At the end of the year, Ilberg Company provided the following actual information:
Overhead $423,600
Direct labor cost 532,000
Ilberg uses normal costing and applies overhead at the rate of 80% of direct labor cost. At the end of the year, Cost of Goods Sold (before adjusting for any overhead variance) was $1,890,000.
Required:
a. Dispose of the overhead variance by adjusting Cost of Goods Sold.
b. Calculate the overhead variance for the year.
Answer:
Adjusted cost of goods sold =$ 1,888,000
Overhead variance = 2,000 favorable
Explanation:
Overhead variance:
is the difference between the absorbed overhead and the actual overhead.
Absorbed overhead = OAR × direct labor cost
= 80% × 532,000 = $425,600
Over absorbed overhead = absorbed overhead - Actual overhead
= 425,600 - 423,600 = 2,000 over-absorbed
Overhead variance = 2,000 favorable
Adjusted cost of goods sold
= cost of goods sold - over absorbed overheads
= 1,890,000 - 2,000 =$ 1,888,000
Urban Bloom, Inc.'s books show an ending cash balance of $16,000 before preparing the bank reconciliation. Given the bank reconciliation shows outstanding checks of $4,200, deposits in transit of $3,200, NSF check of $220, and interest earned on the bank account of $130, the company's up-to-date ending cash balance equals:
Answer:
$15,910
Explanation:
Calculation for Urban Bloom, Inc.'s company's up-to-date ending cash balance
Using this formula
Up-to-date ending cash balance = Ending cash balance per books + Interest received from bank - NSF check
Hence:
=16,000+130-220
=15,910
Therefore the company's up-to-date ending cash balance equals: $15,910
Cinnamon Buns Co. (CBC) started 2018 with $52,600 of merchandise on hand. During 2018, $297,000 in merchandise was purchased on account with credit terms of 3/10 n/30. All discounts were taken. Purchases were all made f.o.b. shipping point. CBC paid freight charges of $9,400. Merchandise with an invoice amount of $2,100 was returned for credit. Cost of goods sold for the year was $309,000. CBC uses a perpetual inventory system. Assuming CBC uses the gross method to record purchases, ending inventory would be:
Answer:
$39,053
Explanation:
The computation of the ending inventory is shown below:
Beginning inventory $52,600
Add: Inventory purchased $297,000
Add: Freight in $9,400
Less: Merchandise returned -$2,100
Less: Discounts -$8,847 ($297,000 - $2,100) × 3%
Less: Cost of goods sold -$309,000
Ending inventory $39,053
Hence, the ending inventory using the gross method is $39,053
The statement of owner's equity shows a. only net income, beginning capital, and withdrawals b. only net income, beginning and ending capital c. only total assets, beginning and ending capital d. beginning and ending capital and all the changes in the owner's capital as a result of net income (loss), and withdrawals
Answer:
d. beginning and ending capital and all the changes in the owner's capital as a result of net income (loss), and withdrawals
Explanation:
The statement of owner's equity is a financial report that is prepared to indicate the changes in the owner's capital as a result of withdrawals, contributions, and net income or net loss. The structure of this report is beginning capital plus contributions plus net income less withdrawals which is equal to the ending capital. According to this, the answer is that the statement of owner's equity shows beginning and ending capital and all the changes in the owner's capital as a result of net income (loss), and withdrawals.
You just made the last monthly payment on a 30 year mortgage -- the house is yours! In your joyous moment, you calculate how much you made in payments over those 30 years, and it is $647,514! If your interest rate was an APR of 6%, and you made equal monthly payments, how much did you originally borrow for this house
Answer:
$112,807
Explanation:
To calculate the amount of money you borrowed, you have to use the formula to calculate the present value:
PV=FV/(1+r)^n
PV= pressent value
FV= future value= 647,514
r= rate= 6%
n= number of periods of time= 30
PV=647,514/(1+0.06)^30
PV=647,514/(1.06)^30
PV=647,514/5.74
PV=112,807
According to this, you originally borrowed $112,807 for this house.
