Answer:
$2,000
Explanation:
Use the format
Jansen Company’s
Bank reconciliation as of May 31, 2013.
Balance as per Bank Statement
Add Outstanding Checks
Less Unpresented Checks
Balance as per Cash Book
A mining company is evaluating when to open a gold mine. The mine has 100,000 ounces of gold left that can be mined and mining operations will produce 10,000 ounces per year. The price of gold from the mine will be guaranteed for the remaining life of the mine through the gold futures contracts. If the mine is opened today, each ounce of gold will generate an after-tax cash flow (= total or net cash flow) of $1,300 per ounce. If the company waits one year, there is a 70 percent probability that the contract price will generate an after-tax cash flow of $1,550 per ounce and a 30 percent probability that the after-tax cash flow will be $1,200 per ounce. The required return on the gold mine is 15 percent and it will cost $30,000,000 to open the mine regardless of whether the mine is open today or in one year. Compute the value of the option to wait today.
Answer:
The value of the option to wait today = $2,500,000
Explanation:
a) Data and Calculations:
Quantity of gold left in the mine = 100,000 ounces
Quantity of gold to be produced yearly = 10,000 ounces
Estimated life of mine = 10 years (100,000/10,000)
After-tax cash flow if mine is opened today = $1,300 per ounce
After-tax cash flow if mine is opened a year later:
Expected value = ($1,550 * 70%) + ($1,200 * 30%) = $1,325 per ounce
Comparison of the values of opening options:
Mine opened Mine opened
today a year later
After-tax cash flow per ounce $1,300 $1,325
Quantity of gold in the mine 100,000 100,000
Total after-tax cash flows $130,000,000 $132,500,000
Cost of opening mine 30,000,000 30,000,000
Required return (15%) 4,500,000 4,500,000
Actual returns from mine $100,000,000 $102,500,000
Therefore, the value of option to wait:
Returns from mine opened next year = $102,500,000
Returns from mine opened today = 100,000,000
Value of the option to wait today = $2,500,000
Assume that a $1,000,000 par value, semiannual coupon US Treasury note with four years to maturity has a coupon rate of 3%. The yield to maturity (YTM) of the bond is 11.00%. Using this information and ignoring the other costs involved, calculate the value of the Treasury note: $746,617.36 $634,624.76 $470,368.94 $895,940.83
Answer:
Asset Price= $746,617.36
Explanation:
Giving the following information:
Face value= $1,000,000
Coupon= 0.03/2= 0.015*1,000,000= $15,000
Number of periods= 2*4= 8 semesters
YTM= 0.11/2= 0.055
To calculate the price of the asset, we need to use the following formula:
Asset Price= cupon*{[1 - (1+i)^-n] / i} + [face value/(1+i)^n]
Asset Price= 15,000*{[1 - (1.055^-8) / 0.055} + [1,000,000 / (1.055^8)]
Asset Price= 95,018.49 + 651,598.87
Asset Price= $746,617.36
Senff Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: Activity Cost Pools Activity Rate Setting up batches $ 89.00 per batch Processing customer orders $ 79.41 per customer order Assembling products $ 14.11 per assembly hour Data concerning two products appear below: Product V91Z Product V21I Number of batches 70 13 Number of customer orders 21 10 Number of assembly hours 493 698 How much overhead cost would be assigned to Product V91Z using the activity-based costing system? (Round your intermediate calculations to 2 decimal places.)
Answer:
$14,853.84
Explanation:
Calculation to determine How much overhead cost would be assigned to Product V91Z using the activity-based costing system
Overhead cost assigned to Product V91Z
Assembly product $6,956.23
($14.11*493)
Processing customer order $1,667.61
($79.41*21)
Setting up batches $6,230
($89*70)
Total $14,853.84
Therefore How much overhead cost would be assigned to Product V91Z using the activity-based costing system will be $14,853.84
Luzadis Company makes furniture using the latest automated technology. The company uses a job-order costing system and applies manufacturing overhead cost to products on the basis of machine-hours. The predetermined overhead rate was based on a cost formula that estimates $1,152,000 of total manufacturing overhead for an estimated activity level of 72,000 machine-hours.During the year, a large quantity of furniture on the market resulted in cutting back production and a buildup of furniture in the company's warehouse. The company's cost records revealed the following actual cost and operating data for the year:,Machine-hours 67,000Manufacturing overhead cost $551,000 Inventories at year-end: Raw materials $13,000 Work in process (includes overhead applied of $37,520) $139,300 Finished goods (includes overhead applied of $101,840) $378,100 Cost of goods sold (includes overhead applied of $396, 640) $1,472,600Required: 1. Compute the underapplied or overapplied overhead. 2. Assume that the company closes any underapplied or overapplied overhead to Cost of Goods Sold. Prepare the appropriate journal entry. 3. Assume that the company allocates any underapplied or over appliedoverhead proportionally to Work in Process, Finished Goods, and Cost of Goods Sold. Prepare the appropriate journal entry. 4. How much higher or lower will net operating income be if the underapplied or overapplied overhead is allocated to Work in Process, Finished Goods, and Cost of Goods Sold rather than being closed to Cost of Goods Sold?
Answer:
Answer:
1. Overhead over applied= $521,000
2. Factory Overhead Dr. $ 521,000
Cost Of Goods Sold Cr. $ 521,000
3. Work in Process, (ratio) $521,000 * 7%= 36,470
Finished Goods, $521,000 * 19%= 98,990
Cost of Goods Sold $521,000 * 74%= 385,540
Total $521,000 100%
4. Difference between the two CGS= $ 136,060
Explanation:
Predetermined Overhead Costs $1,152,000
Estimated activity level of 72,000 machine-hours
Overhead rate= $ 1152,000/ 72,000= $ 16 per hour
Manufacturing overhead cost $551,000
Actual hours = 67,000
Overhead applied to WIP = 67,000 * 16= $ 1072,000
Overhead over applied= $ 1072,000 - $551000= $521,000
Part 2:
Factory Overhead Dr. $ 521,000
Cost Of Goods Sold Cr. $ 521,000
The Cost of Goods Sold is credited and Factory overhead is debited.
Part 3:
Suppose the overhead is applied in the following ratio
Work in Process, (ratio) $37,520 7% (37520/536,00*100%)
Finished Goods, $101,840 19% (101840/536,00*100%)
Cost of Goods Sold $396, 640 74% (396,640/536,00*100%)
Total $536,000 100%
The overhead over applied would be allocated in the following way applying the same ratio as determined above.
Work in Process, (ratio) $521,000 * 7%= 36,470
Finished Goods, $521,000 * 19%= 98,990
Cost of Goods Sold $521,000 * 74%= 385,540
Total $521,000 100%
Part 4:
Cost of Goods Sold ( overhead applied of $396, 640) $1,472,600
Less Overhead overapplied $ 521,000
CGS = $ 951,000
Cost of Goods Sold (overhead applied to WIP & FG) $1,472,600
Less Overapplied Overhead $ 385,540
CGS= $ 1087,060
Difference between the two CGS = $ 1087,060- $ 951,000= $ 136,060
a disgruntled customer will tell how many people about their experience
Answer:
A disgruntled customer will tell 9 - 15 people about their experience.
Explanation:
According to a study carried out by the White House Office of Consumer Affairs, a dissatisfied consumer tells 9-15 people about their experience. However, with the advent of social media and the internet, this number can sky-rocket into thousands and possibly millions depending on how viral the complaint becomes.
This is the more reason why organizations should endeavor to provide good customer service so that their brand will not be dragged into the mud by disgruntled customers.
What are out-of-order rooms? How do they differ from out-of-inventory rooms
Bramble Company has the following equivalent units of production for July: materials 30200 and conversion costs 23500. Production cost data are:
Materials Conversion
Work in process, July 1 $6400 $2600
Costs added in July 54000 35000
The unit production costs for July are:
Materials Conversion Costs
a. $1.79 $1.60
b. $1.79 $1.49
c. $2.00 $1.49
d. $2.00 $1.60
Answer:
d. $2.00 $1.60
Explanation:
The unit production costs for July are calculated as
Total Cost Calculation
Materials = $6400 + $54000 = $60,400
Conversion Costs = $2600 + $35000 = $37,600
Cost per equivalent unit
Materials = $60,400 ÷ 30,200 units =$2.00
Conversion Costs = $37,600 ÷ 23500 units =$1.60
1. Which one of the items below is NOT a reason why CASH does not equal PROFIT?
A. Credit Sales
B. Credit Purchases
C. Cash Sales
D. Prepayments
Answer:
I have no more ad!!!!
Explanation:
One of the items that is below which is not a reason why cash does not equal profit is credit sales. The correct option is a.
What is credit sales?Credit sales refer to a sale in which the amount owed will be paid at a later date. In other words, credit sales are purchases made by customers who do not render payment in full, in cash, at the time of purchase.
There are three main types of sales transactions: cash sales, credit sales, and advance payment sales. The difference between these sales transactions simply lies in the timing of when cash is received. 1. Cash sales: Cash is collected when the sale is made and the goods or services are delivered to the customer. 2. Credit sales: Customers are given a period of time after the sale is made to pay the seller.
3. Advance payment sales: Customers pay the seller in advance before the sale is made.
Learn more about credit sales, here:
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Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and web-site construction is estimated to be $150,000. Variable processing costs are estimated to be $7 per book. The publisher plans to sell single-user access to the book for $49. Through a series of web-based experiments, Eastman has created a predictive model that estimates demand as a function of price. The predictive model is demand
Question Completion:
What profit can be anticipated with a demand of 3,400 copies?
With a demand of 3,400 copies, what is the access price per copy that the publisher must charge to break even?
Answer:
Eastman Publishing Company
a) A loss of $7,200 can be anticipated with a demand of 3,400.
b) The access price per copy with a demand of 3,400 copies should be $51.
Explanation:
a) Data and Calculations:
Fixed cost = $150,000
Variable costs per book = $7
Selling price of single-user access per book = $49
Demand = 3,400 copies
Profit based on a demand of 3,400 copies:
Income Statement:
Sales Revenue ($49 *3,400) $166,600
Variable costs ($7 * 3,400) 23,400
Contribution margin $142,800
Fixed cost 150,000
Net loss $7,200
To break-even, the total sales revenue should be equal to the total costs. Therefore, the access price should be:
Total costs:
Fixed cost $150,000
Variable 23,400
Total costs $173,400
Sales unit 3,400
Access price = $51.00 ($173,400/3,400)
Sole Purpose Shoe Company is owned and operated by Sarah Charles. The company manufactures casual shoes, with manufacturing facilities in your state. Sarah began the business this year, and while she has a great deal of experience in manufacturing popular and comfortable shoes, she needs some help in evaluating her results for the year, and asks for your help.
Sarah’s first questions for you have to do with the general ideas and terminology used to evaluate variances.
1. Why might Sarah want to use standard costs to compare with her actual costs?
a. Management can evaluate the differences between standard costs and actual costs to focus on correcting the cost variances.
b. Standard costs give management a cost structure for products that is applicable for the entire life of the business.
c. Standard costs allow management to motivate employees by comparing their performance to what it would be under perfect conditions.
2. What are some possible drawbacks to using standard costs that Sarah might consider? Check all that apply.
a. Since standards are impossible to attain, they are a distraction from the work at hand.
b. Since standards never change, they do not reflect reality.
c. Standards limit operating improvements because employees may be discouraged from improving beyond the standards.
d. Employees may focus only on efficiency improvement and their own operations rather than considering the larger objectives of the organization.
e. Standards may become "stale" in a dynamic manufacturing environment.
Answer:
1. The reason Sarah might want to use standard costs to compare with her actual costs is:
a. Management can evaluate the differences between standard costs and actual costs to focus on correcting the cost variances.
2. Drawbacks of using Standard Costs are:
c. Standards limit operating improvements because employees may be discouraged from improving beyond the standards.
d. Employees may focus only on efficiency improvement and their own operations rather than considering the larger objectives of the organization.
e. Standards may become "stale" in a dynamic manufacturing environment.
Explanation:
Standard costs encourage the pursuit of management goals. They are the costs that should be under a particular type of circumstances. They are usually compared with actual costs to determine their differences or variances. Their use helps management to focus on how to improve overall performance.
Portsmouth Company makes upholstered furniture. Its only variable cost is direct materials. The demand for the company's products far exceeds its manufacturing capacity. The bottleneck (or constraint) in the production process is upholstery labor-hours. Information concerning three of Portsmouth's products appears below: Recliner Sofa Love Seat Selling price per unit $ 1,270 $ 1,750 $ 1,190 Variable cost per unit $ 850 $ 1,200 $ 850 Upholstery labor-hours per unit 7 hours 10 hours 4 hoursRequired:
1. Portsmouth is considering paying its upholstery laborers additional compensation to work overtime. Assuming that this extra time would be used to produce sofas, up to how much of an overtime premium per hour should the company be willing to pay to keep the upholstery shop open after normal working hours?
2. A small nearby upholstering company has offered to upholster furniture for Portsmouth at a price of $44 per hour. The management of Portsmouth is confident that this upholstering company’s work is high quality and their craftsmen can work as quickly as Portsmouth’s own craftsmen on the simpler upholstering jobs such as the Love Seat. How much additional contribution margin per hour can Portsmouth earn if it provides the raw materials to the nearby company and then hires it to upholster the Love Seats?
3. Should Portsmouth hire the nearby upholstering company?
Answer:
1. $55 per hour
2. $41 per hour
3.Yes
Explanation:
1. Calculation to determine how much of an overtime premium per hour should the company be willing to pay.
Selling price per unit $ 1,750
Less Variable cost per unit ($1,200)
Contribution margin per unit (a) $ 550
Upholstery shop time required to produce one unit (b) 10 hours
Contribution margin per unit of the constrained resource (a) ÷ (b) $55 per hour
($550/10 hours)
Therefore the Maximum overtime premium per hour will be $55 per hour
2. Calculation to determine How much additional contribution margin per hour can Portsmouth earn
First step is to calculate the Contribution margin per unit of the constrained resource
Selling price per unit $ 1,190
Less Variable cost per unit ($850)
Contribution margin per unit (a) $ 340
Upholstery shop time required to produce one unit (b) 4hours
Contribution margin per unit of the constrained resource (a) ÷ (b) $85 per hour
($340/4 hours )
Now let calculate The additional contribution margin per hour earned by hiring the nearby company
Additional contribution margin per hour earned= $85 – $44
Additional contribution margin per hour earned= $41 per hour
Therefore The additional contribution margin per hour earned by hiring the nearby company will be $41 per hour
3. Yes . Portsmouth should hire the nearby upholstering company reason been that Portsmouth will earn an additional contribution margin of $41 per hour by hiring the nearby company
High owns 60% of Low. In 2019, Low sold inventory (cost $70,000) to High for $100,000. 40% of this inventory was not sold to third parties by High until 2020. In 2020, Low sold inventory (cost $72,000) to High for $120,000. Of this inventory, $50,000 was not sold to third parties by High until 2021. In 2020, Low reports $70,000 of net income. What is the noncontrolling interest in 2020 income of Low. $24,800 $31,200 $37,200 $46,800
Answer: $24800
Explanation:
To calculate the noncontrolling interest in 2020 income of Low goes thus:
Profit reported by Low in 2020 = $70000
Add: Profit in opening stock that isn't sold to third party = ($100,000 × 40%) × 30% = $12,000
Less Profit in Opening stock that's not sold to third party = $50000 ×40% =$20000
The Total Profit will be:
= $70000 + $12000 - $20000
= $62000
Then, the noncontrolling interest in 2020 income of Low will be:
= $62000 × 40%
= $62000 × 0.4
= $24800
When we grow in relationship with ______________, we grow in relationship with God.
Answer:
Explanation:
knowledge? Sorry if this dosent help! <3
Ring Me Up Inc. has net income of $143,100 for the year ended December 31, 2019. At the beginning of the year, 36,000 shares of common stock were outstanding. On May 1, an additional 18,000 shares were issued. On December 1, the company purchased 4,300 shares of its own common stock and held them as treasury stock until the end of the year. No other changes in common shares outstanding occurred during the year. During the year, Ring Me Up paid the annual dividend on the 9,000 shares of 4.65%, $100 par value preferred stock that were outstanding the entire year.
Required:
Calculate basic earnings per share of common stock for the year ended December 31, 2019.
Answer:
$2.13
Explanation:
Computation what the basic earnings per share of common stock for the year ended December 31, 2019 be
Using this formula
Basic earnings per share = Net income - preferred dividends / Weighted average no of shares outstanding
Let plug in the formula
Basic earnings per share = $143,100 - (9,000*4.65%*100) / (36,000*12/12)+(18,000*8/12) - (4,300*1/12)
Basic earnings per share = $143,100 - 41,850 / 36,000+12,000 - 358
Basic earnings per share = 101,250 / 47,642
Basic earnings per share =$2.13
Therefore the basic earnings per share of common stock for the year ended December 31, 2019 be $2.13
Ataxia Fitness Center is considering an investment in some additional weight training equipment. The equipment has an estimated useful life of 10 years with no salvage value at the end of the 10 years. Ataxia's internal rate of return on this equipment is 8%. Ataxia's discount rate is also 8%. The payback period on this equipment is closest to (Ignore income taxes.):
Answer:
6.71 years
Explanation:
we need to determine the PVIFA for 8% and 10 periods:
PVIFA = [1 - 1/(1 + i)n ] / i
PVIFA = [1 - 1/(1 + 0.08)¹⁰ ] / 0.08 = 0.5368 / 0.08 = 6.71
Ataxia's payback period should be 6.71 years or less in order for this project to be feasible and accepted.
Lo-crete produces quick setting concrete mix. Production of 200,000 tons was started in April, 190,000 tons were completed. Material costs were $3,152,000 for the month while conversion costs were $591,000. There was no beginning work-in-process; the ending work-in-process was 70% complete. What is the cost of the product that was completed and transferred to finished goods
Answer:
$3,564,400
Explanation:
Equivalent units of Production
Materials = 190,000 + 10,000 = 200,000
Conversion cost = 190,000 + 10,000 x 70% = 197,000
Cost per equivalent units
Materials = $3,152,000 / 200,000 =$15.76
Conversion Cost = $591,000 / 197,000 =$3.00
Total cost per unit = $18.76
Therefore,
the cost of the product that was completed and transferred to finished goods is $3,564,400 ( 190,000 x $18.76)
Consider the following limit order book for a share of stock. The last trade in the stock occurred at a price of $130. Limit Buy Orders Limit Sell OrdersPriceShares PriceShares$129.75400 $129.80150129.70700 129.85150129.65400 129.90300129.60200 129.95150128.65500 a. If a market buy order for 150 shares comes in, at what price will it be filled
Answer:
a. If a market buy order for 150 shares comes in, it will be filled at
= $128.65500 per share ($19,298.25 in total).
Explanation:
a) Data and Calculations:
Limit Buy Orders Limit Sell Orders
Price Shares $129.75400 $129.80150
Price Shares 129.70700 129.85150
Price Shares 129.65400 129.90300
Price Shares 129.60200 129.95150
Price Shares 128.65500 130.00000
The total purchase price for 150 shares = $19,298.25 ($128.65500 * 150)
b) An investor's Limit Buy Orders give the limit above which the shares cannot be exchanged for cash. But below and at the limit amount, the shares can be bought in exchange for cash. The investor's Limit Sell Orders give the limit below which the shares should not be sold in exchange for cash. In other words, the shares can be sold at a price above the limit.
Uptown Bank provides lockbox services. They estimate that you can reduce your average mail time by 2.2 days and your combined clearing and processing time by .75 days by implementing their system. Your firm receives 65 checks a day with an average value of $298 each. The current T-Bill rate is .01 percent per day. Assume a 365-day year. The bank will charge your firm $.15 per check. What is the annual net savings from installing this system?
Answer: $1473.067
Explanation:
First, we calculate the total time that's saved by the firm when it installs the lockbox services. This will be:
= 2.2 days + 0.75 days
= 2.95 days
Then, the gross amount that the firm will save will be:
= 65 × 2.95 × 298 × 0.01%
= $5.7142 per day
Since the bank charges the firm $0.15 per check and the firm receives 65 checks per day, the total cost to the firm will then be:
= 65 × $0.15
= $9.75 per day
The net loss will then be calculated as:
= $9.75 - $5.7142
= $4.0358 per day
Then, to get that for annual, we multiply the above value by 365. This will be:
= $4.0358 × 365
= $1473.067 per annum.
You manage an equity fund with an expected risk premium of 10% and an expected standard deviation of 15%. The rate on Treasury bills (risk-free rate) is 5%. Your client chooses to invest $60,000 of her portfolio in your equity fund and $40,000 in a T-bill money market fund. The expected return and standard deviation of your client's overall portfolio is:__________ a. 11.0% and 9.0% b. 10.0% and 8.4% c. 15.0% and 9.0% d. 5.0% and 15.0%
Answer:
Portfolio Mean return = 11%
Portfolio Stdev = 0.09 or 9%
Option a is the correct answer
Explanation:
The mean return of a portfolio consisting of two securities can be calculated by multiplying the weight of each security in the portfolio by the mean return of that security and adding the products for each security. The formula for two asset or security portfolio return (mean) can be written as follows,
Portfolio Mean = wA * rA + wB * rB
Where,
w represents the weight of each security r represents the mean return of each security
The return on the equity fund = risk free rate + risk premium
The return on the equity fund = 5% + 10% = 15%
Portfolio Mean return = 60% * 15% + 40% * 5%
Portfolio Mean return = 11%
The standard deviation is a measure of the total risk. The standard deviation of a portfolio consisting of two securities, one of which is a risk free security and has zero standard deviation, can be calculated as follows,
Portfolio Stdev = Weight of risky security * Standard deviation of risky security
Portfolio Stdev = 0.6 * 0.15
Portfolio Stdev = 0.09 or 9%
Management at the Flagstaff Company currently sells its products for $250 per unit and is contemplating a 40% increase in the selling price for the next year. Variable costs are currently 30% of sales revenue and are not expected to change in dollar amount on a per unit basis next year (the company will still pay the same variable cost per unit). Fixed expenses are $120,000 per year. If fixed costs were to decrease 10% during the current year and the new selling price goes into effect, how many units will need to be sold to breakeven
Answer:
393 units will need to be sold to breakeven
Explanation:
Break even point is the point where a Company makes neither makes a profit nor a loss.
Step 1 : Calculate new variables
New Sales = $250 x 1.40 = $350
Variable Costs = $250 x 30 % = $75
New Fixed Costs = $120,000 x 90 % = $108,000
Step 2 : Break even (units)
Break even (units) = Fixed Costs ÷ Contribution per unit
= $108,000 ÷ ($350 - $75)
= 393 units
Thus, 393 units will need to be sold to breakeven
The Fabricating Department started the current month with a beginning Work in Process inventory of $11,600. During the month, it was assigned the following costs: direct materials, $77,600; direct labor, $25,600; and factory overhead, 80% of direct labor cost. Also, inventory with a cost of $117,000 was transferred out of the department to the next phase in the process. The ending balance of the Work in Process Inventory account for the Fabricating Department is:
Answer: $18,280
Explanation:
Ending inventory for fabricating department = Beginning Work in Process + Direct materials + Direct labor + Factory overhead - Inventory transferred out of department
= 11,600 + 77,600 + 25,600 + (80% * 25,600) - 117,000
= 11,600 + 77,600 + 25,600 + 20,480 - 117,000
= $18,280
In 2020, Bertha Jarow had a $28,000 loss from the sale of a personal residence. She also purchased from an individual inventor for $7,000 (and resold in two months for $18,000) a patent on a rubber bonding process. The patent had not yet been reduced to practice. Bertha purchased the patent as an investment. In addition, she had the following capital gains and losses from stock transactions:
Long-term capital loss ($6,000)
Long-term capital loss carryover from 2019 (12,000)
Short-term capital gain 21,000
Short-term capital loss (7,000)
A. Bertha has a net long-term capital loss of $___. Bertha has a net short-term capital gain of $ 14000. As a result, Bertha has an overall net short-term capital gain of $___.
B. Complete the letter to Bertha explaining the tax treatment of the sale of her personal residence. Assume Bertha's income from other sources puts her in the 28% bracket.
Answer and Explanation:
a. The net long term capital loss would be $7,000
And, the net short term capital gain would be $14,000 ($21,000 - $7,000)
So as a result the overall net short term capital gain is $7,000
b. Since there is a loss arise from the personal residence of $28,000 so the blank would be filled by the amount i.e. $28,000 and the rest of the things would be alright.
In 2013, Chirac Enterprises issued, at par, 75 $1,060, 8% bonds, each convertible into 200 shares of common stock. Chirac had revenues of $19,100 and expenses other than interest and taxes of $8,860 for 2014. (Assume that the tax rate is 40%.) Throughout 2014, 2,530 shares of common stock were outstanding; none of the bonds was converted or redeemed.(a) Compute diluted earnings per share for 2014. (Round answer to 2 decimal places, e.g. $2.55.)(b) Assume the same facts as those assumed for part (a), except that the 75 bonds were issued on September 1, 2014 (rather than in 2013), and none have been converted or redeemed. (Round answer to 2 decimal places, e.g. $2.55.)(c) Assume the same facts as assumed for part (a), except that 25 of the 75 bonds were actually converted on July 1, 2014. (Round answer to 2 decimal places, e.g. $2.55.)
Answer:
Chirac Enterprises
a) Diluted EPS = $0. 35
b) Diluted EPS = $0. 35
c) Diluted EPS = $0. 35
Explanation:
a) Data and Calculations:
Issued at par 75 $1,060, 8% bonds = $70,000 Bonds Premium $9,500
Each of the 75 bonds are convertible into 200 shares = 15,000 (75 * 200) shares
2014 Revenue $19,100
2014 expenses 8,860
Pre-tax income $10,240
Tax (40%) 4,096
Net income $6,144
Ordinary EPS = $2.43 per share ($6,144/2,530)
Common shares = 2,530
Convertible bonds shares = 15,000
Total shares = 17,530
Diluted EPS = $0. 35 ($6,144/17,530) per share
b) The basic assumption for computing diluted earnings per share is that Chirac's earnings are expressed per share (EPS) as if all convertible securities were exercised. This implies that whether the bonds had been converted or not, the number of the shares used for calculating diluted earnings per share will remain the same in these scenarios.
Dwayne Wade Company recently signed a lease for a new office building, for a lease period of 10 years. Under the lease agreement, a security deposit of $12,000 is made, with the deposit to be returned at the expiration of the lease, with interest compounded at 5% per year.
What amount will the company receive at the time the lease expires?
Answer:
The correct answer is "$19,546.74".
Explanation:
The given values are:
Amount,
= $12,000
Years,
= 10
Interest rate,
= 10%
Now,
The future value will be:
⇒ [tex]Future \ value=Amount\times (1+Rate)^{Years}[/tex]
On substituting the given values in the above formula, we get
⇒ [tex]=12000\times (1+5 \ percent)^{10}[/tex]
⇒ [tex]=12000\times (1+0.05)^{10}[/tex]
⇒ [tex]=12000\times (1.05)^{10}[/tex]
⇒ [tex]=19,546.74[/tex] ($)
In the extended Labor CAPM, the CAPM measure of systematic risk, beta, is replaced by an adjusted beta that also accounts for covariance with the portfolio of aggregate human capital. Despite the complications inherent in any extension of the CAPM with a labor component, labor is an important consideration in explaining the systematic risk of financial securities.
a. True
b. False
Answer:
Despite the complications inherent in any extension of the CAPM with a labor component, labor is an important consideration in explaining the systematic risk of financial securities.
b. False
Explanation:
Instead of being an important component of the systematic risk, labor is a component of the unsystematic risk of a financial security or investment. Therefore, the risk arising from the labor component is a type of unsystematic risk. Unsystematic risks are peculiar to a firm or an industry. They are internal to the business environment of a firm or an industry. Systematic risks are market-driven risks. These latter risks include market, interest rate, and purchasing power (inflation) risks.
Calculate the required rate of return for Mudd Enterprises assuming that investors expect a 5.0% rate of inflation in the future. The real risk-free rate is 1.5%, and the market risk premium is 5.0%. Mudd has a beta of 1.5, and its realized rate of return has averaged 13.5% over the past 5 years. Round your answer to two decimal places.
Answer:
r of Mudd = 14.00%
Explanation:
The required rate of return for Mudd Enterprises can be calculated using the CAPM equation. The equation is as follows,
r = rRF + Beta * rpM
Where,
rRF is the risk free raterpM is the market risk premiumWe know the beta for Mudd and we also know the market risk premium. We will need to calculate the risk free rate.
Risk free rate = Real risk free rate + expected inflation rate
Risk free rate = 1.5% + 5%
Risk free rate = 6.5%
r of Mudd = 6.5% + 1.5 * 5%
r of Mudd = 14.00%
Marketers competing on product attributes and image are said to be participating in:
Answer:
nonprice competition
Explanation:
Marketers battling on product characteristics and image is defined as Non-price competition.
What is Non-price competition?Non-price competition is a strategy that implies attracting customers and increasing sales by providing superior product quality, a unique selling proposition, a great location, and excellent service rather than lower prices. It helps brands stand out and win new consumers
It is a type of competitiveness wherein the two or more manufacturers exploit elements such as marketing, transportation, or customer support to raise demand for their products rather than price.
Therefore, it can be concluded that Non-price competition is characterized as manufacturers competing on product qualities and appearance.
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Apedwa Inc. recently purchased a new delivery truck. The new truck costs $25,000 and is expected to generate net after-tax operating cash flows, including depreciation, of $7,000 at the end of each year. The truck has a 5-year expected life. The expected abandonment values (salvage values after tax adjustments) at different points in time are given below. The firm's cost of capital is 10 percent. What is ithis project's optimal economic life?
Year Annual Operating Cash Flow Salvage Value
0 ($20,000) $20,000
1 7,000 16,000
2 7,000 14,000
3 7,000 12,000
4 7,000 8,000
5 7,000 0
Answer:
This project's optimal economic life is 3 years.
Explanation:
Note: See the attached excel file for the calculation of equivalent annual cost
In the attached excel file, the following is used:
Cost of Capital = 10%
From the attached excel file, the highest equivalent annual cost of $526 occurred in year 3. This implies that this project's optimal economic life is 3 years.
Multi-Level-Marketing is a quickly growing industry in the United States. Many men and women are deciding to work from home, selling various goods to their friends and family due to the convenience and possible salary that can be made. Multi-Level-Marketing consists of a hierarchy of workers and customers and is sometimes referred to as a pyramid scheme
Answer:
True
Explanation:
Multilevel marketing is a strategy that consists of creating a hierarchy of workers for product distribution, being very common companies of beauty products, essential oils, and other products that are easy to sell. The strategy works like this: the distributors buy the products of the companies to sell to the final customer, and thus they receive a percentage for the sale of the products. But there is a criticism about this strategy, which can be a pyramid scheme, when there is a greater intention of the company to recruit new distributors than to actually sell its products, because in a pyramid scheme the intention is always to profit to benefit those who are on the top. Generally, companies that operate in an illegal pyramid scheme have strong marketing aimed at recruiting people to purchase products for sale with promises of quick enrichment.
Which resources would be classified as a land factor of production?
A)
milk
B)
petroleum
C)
timber
D)
tractor
E)
workers
Timber and Petroleum can be classified as a land factor of production
Land is part of the four factors of production. The other three factors are Capital, Labour and Entrepreneur.
Let understand clearly that Land refers to anything that comes from the land and serves as resources used to produce goods and services.Capital is the factor that provides the money needed to run the business operation. The reward is Interest.Labour is the factor that helps the business run its day to day operation and this includes workers, staff etc. The reward for labor is Wages and salary.Entrepreneur is the factor that control and manage the other three factor of production. The reward for entrepreneur is Profit.
In conclusion, Petroleum and Timber are part of land and they serves as resources used to provide refined fuel, furniture and so on.
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