Answer:
One thing to clear ab initio is that equilibrium quantity and price are achieved when the demand and supply curves intersect at a point. Therefore, at equilibrium, the demand and supply in quantity are equal.
a) If a technological improvement reduces the cost of product, the equilibrium price will reduce and equilibrium quantity will be equal to the quantity demanded and supplied.
b) If there is a reduction in the number of sellers, the equilibrium price will increase and the equilibrium quantity will be equal to the quantity demanded and supplied.
c) If there is a tax levied on the sellers of apps, the equilibrium price will increase and the equilibrium quantity will be equal to the quantity demanded and supplied.
Explanation:
a) The market is in equilibrium when the supply and demand curves intersect, meaning that the quantity demanded and quantity supplied are equal. The price and quantity at which this intersection occurs are called the equilibrium price and equilibrium quantity respectively. In economics, when quantity supplied equals quantity demanded, an equilibrium situation is achieved, and it is represented by this equation: Qs = Qd; where Qs is quantity supplied and Qd is quantity demanded.
b) Equilibrium price reduces when there is a cost reduction and more supplies are pushed to the market to meet demand.
c) When suppliers leave the market, it means that the market price and demand are no longer attractive and beyond their individual influence. This leads to a reduction in quantity supplied overall.
d) Sales tax increases the price of goods and services, and equilibrium will be achieved when there consumers demand the product with increased price and sellers are willing to produce and sell at such a price.
Hanschu Inc. issues an $800,000, 10%, 10-year mortgage note on December 31, 2019, to obtain financing for a new building. The terms provide for annual installment payments of $130,196. Prepare the entry to record the mortgage loan on December 31, 2019, and the first installment payment on December 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
Answer:
For mortgage loan:
Dr cash $800,000
Cr mortgage payable $800,000
Repayment of $130,196
Dr interest expense $80,000
Dr mortgage payable $50,196
Cr cash $130,196
Explanation:
The repayment of $130,196 comprises of both principal repayment and interest payment.
Interest payment=mortgage amount*rate of interest
mortgage amount is $800,000
rate of interest is 10%
interest payment=$800,000*10%=$80,000
Principal repayment=$130,196-$80,000=$50,196
Suppose the following transactions occur during the current year:
1. Rajiv orders 40 cases of beer from a Dutch distributor at a price of $40 per case.
2. A U.S. company sells 200 transistors to a Spanish company at $15.00 per transistor.
3. Yakov, a U.S. citizen, pays $1,100 for a computer he orders from Dellosoft (a U.S. company).
Complete the following table by indicating how the combined effects of these transactions will be reflected in the U.S. national accounts for the current year.
Amount
Consumption
Investment
Government Purchases
Imports
Exports
Net Exports
Gross Domestic Product (GDP)
Answer:
Consumption - $2,700
Investment - $0
Government Purchases - $0
Imports - $1,600
Exports - $3,00
Net Exports - $1,400
Gross Domestic Product (GDP) - $4,100
Explanation:
1. Consumption.
Consumption is the amount of goods and services consumed in the economy in a given period by citizens themselves. Things such as beer and laptops fall under here.
The consumption for the above economy are the computer purchased as well as the beer.
Adding them up would be,
= 1,100 + (40* 40)
= 1,100 + 1,600
= $2,700
Consumption is $2,700
Investment refers to the amount of money that private citizens spend on either investments or on Capital projects such as buildings. There are none here so the answer is $0.
Government Purchases are straightforwardly the transactions that involved the Government paying for goods and services. There are no such transactions here either so the answer is $0.
Imports are goods and services purchased from a foreign company by a consumer in the local Economy. From the above scenario there is a purchase from a Dutch Distributor. This is an import.
Imports are therefore,
= $40 * 40 cases of beer.
= $1,600.
Exports are goods and services that are bought by a foreign company from the local Economy. From the above there is an Export of 200 transistors to Spain.
That means that the exports in the Economy total,
= 200 * $15
= $3,000
The Net Exports are calculated by Subtracting Imports from Exports.
= 3,000 - 1,600
= $1,400
The Gross Domestic Product is a very important Economic measure that calculates the amount of goods and services produced in an Economy within a given period which is usually a year. The goods must be finished goods as intermediate goods would results in an overestimation due to Double Counting.
The formula for the GDP calculation is,
= C + G + I + X - M
Where,
C is Consumption
G is Government Spending
I is Investment and
X - M is Net Imports
GDP = 2,700 + 0 + 0 + 1,400
GDP = $4,100
5. Suppose that you are the governor of Istanbul and trying to decide whether you should support the third Bosporus Bridge construction project. The project is estimated to take 5 years to complete. The project will require $50 million in construction materials per year and $20 million in labor costs per year. In addition, the project will disrupt transportation within the city for the duration of the construction. The transportation disruption lengthens transport times for 1 million workers by 20 hours a year. The project, when finished, will ease transportation within the city. Each of the 1 million workers will have their transport time reduced by 60 hours a year as compared to the pre-construction transport time for 10 years. Assume that all workers are paid $10 per hour (in other words, one hour of a worker lost/gained is worth $10), the discount rate is 5% and the benefits of the project is accrued between years 6 and 15. (a) (10 points) Show the yearly benefits and costs of this project on a table. (b) (10 points) Calculate the present value of the net benefits of this project.
Answer:
Explanation:
Part a)
Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Benefits $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000
Costs
Construction materials $50,000,000 $50,000,000 $50,000,000 $50,000,000 $50,000,000
Labor costs $20,000,000 $20,000,000 $20,000,000 $20,000,000 $20,000,000
Transport disruption cost $200,000,000 $200,000,000 $200,000,000 $200,000,000 $200,000,000
Net benefit -$270,000,000 -$270,000,000 -$270,000,000 -$270,000,000 -$270,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000
Part b)
Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Benefits $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000
Costs
Construction materials $50,000,000 $50,000,000 $50,000,000 $50,000,000 $50,000,000
Labor costs $20,000,000 $20,000,000 $20,000,000 $20,000,000 $20,000,000
Transport disruption cost $200,000,000 $200,000,000 $200,000,000 $200,000,000 $200,000,000
Net benefit -$270,000,000 -$270,000,000 -$270,000,000 -$270,000,000 -$270,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000
P V F at 5% $0.9524 $0.9070 $0.8638 $0.8227 $0.7835 $0.7462 $0.7107 $0.6769 $0.6447 $0.6140 $0.5848 $0.5570 $0.5305 $0.5052 $0.4811
P V of net benefit -$257,148,000 -$244,890,000 -$233,226,000 -$222,129,000 -$211,545,000 $447,720,000 $426,420,000 $406,140,000 $386,820,000 $368,400,000 $350,880,000 $334,200,000 $318,300,000 $303,120,000 $288,660,000
Present value of net benefit = sum of P V of net benefit = $2,461,722,000
cheers i hope this helped !!
The CEO of Lexington decides to impose a transfer price since the two divisions cannot agree. She chooses the highest feasible price. Her reasoning is that selling for a high price is better for Lexington's profit. Is the CEO's reasoning sound? Explain why or why not.
Answer: Not Sound as Company does not benefit as a Whole.
Explanation:
This question alludes to the presence of Divisions in a company tasked with producing different segments of a good.
One Division makes a segment of the good and transfers it for a price to the other division so that they may be able to show Revenue on their books.
The reasoning of the CEO of Lexington is flawed because if she chooses the highest feasible Transfer Fee for the goods it will be good for the Division doing the Transferring because they make more revenue.
However, it will increase the cost of those being transferred to by the same amount that it increase the revenue of the Division transferred from.
As a result, the increase in Cost and the Increase in Revenue in the two divisions will cancel each other out meaning that the company did not benefit.
The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. Use this information to answer the question that follow. Assets Cash and short-term investments $38,612 Accounts receivable (net) 27,852 Inventory 27,691 Property, plant, and equipment 265,063 Total assets $359,218 Liabilities and Stockholders' Equity Current liabilities $67,177 Long-term liabilities 88,562 Stockholders' equity—Common 203,479 Total liabilities and stockholders' equity $359,218 Income Statement Net Sales $88,992 Cost of goods sold (35,597) Gross margin 53,395 Operating expenses (27,302) Interest expense (4,450) Net income $21,643 Number of shares of common stock outstanding 6,044 Market price of common stock $35 Total dividends paid $8,900 Cash provided by operations $38,612 Using the data provided for Diane Company, what is the return on total assets? a.8.5% b.9.5% c.7.3% d.7.0%
Answer:
The Return on total assets is 7.3%. The right answer is c
Explanation:
In order to calculate the the return on total assets we would have to calculate the following formula:
Return on total assets = Earnings before interest and taxes / Average total assets
Earnings before interest and taxes=Net income + Interest expense
Net income=$21,643
Interest expense=$4,450
Average total assets =$359,218
Return on total assets= ($21,643 + $4,450) / $359,218
Return on total assets=0.0726=7.3%
The Return on total assets is 7.3%
A buyer submitted an offer with a deposit on a property on June 1. The offer included the condition that it must be accepted within 48 hours. The sellers were out of town, however, and could not be contacted until June 6. At that point, the sellers eagerly signed and returned the purchase agreement; but now the buyer says he does not want the property any longer and is demanding the return of his deposit. A court would rule that:
Answer:
a. the deposit should be returned to the buyer
Explanation:
Based on the information that has been provided it can be said that the court would most likely rule that the deposit should be returned to the buyer . This is because is the contract includes a deadline and it passes, the offer is automatically terminated. Therefore, since this is the case in this situation the sellers' acceptance after the deadline would not be considered valid, and the buyer's deposit needs to be returned.
A senior MIS design class project team has developed the following schedule of activities for their project, using their best estimate of completion times. Both written and oral reports are required. Draw the project network. Find the Critical Path.
Activity Time Immediate PredecessorA. Find client 4 ---B. Write prospectus 2 A C. Obtain approval from client 3 B and professorD. Complete programming 12 CE. Do industry background research 10 ---
F. Write final paper 6 D, EG. Write oral report 5 D, E
Answer:
see below for the network
ABCDF is the critical path
Explanation:
The critical path is the longest path from start to finish. Here, it is ...
A-B-C-D-F . . . critical path
The total time required is 4+2+3+12+6 = 27 time units. In order to accomplish the project in that time, the team must be capable of executing task E in parallel with some parts of A, B, C, and D; and it must be capable of executing task G in parallel with task F.
A newly issued bond pays its coupons once annually. Its coupon rate is 5.7%, its maturity is 20 years, and its yield to maturity is 8.5%. a. Find the holding-period return for a 1-year investment period if the bond is selling at a yield to maturity of 7.5% by the end of the year. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Answer:
16.56%
Explanation:
Intial Price, P0=753.03
when n=20, pmt=57 ,fv=1,000 ,i=8.5
Next year price = P1= $820.74
when n=19, pmt= 57, fv =1,000, i= 7.5
HPR=$57+(820.74-75303) / $753.03
HPR= 0.165611 = 16.56%
The holding period return is 16.56%
In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period. You and your new spouse each bring home $1400 each month after taxes and other payroll deductions. By living frugally, you intend to live on just one paycheck and save the other in a mutual fund yielding 7.83% compounded monthly. How long will it take to have enough for a 20% down payment on a $165,000 condo in the city? (Round your answer to two decimal places.)
Answer:
1.93618 or 1.94 years
Explanation:
Monthly household income = 1400(Since you are using just one spouse's income as savings)
Down payment Needed = 20% of $165,000 = $33,000
Interest rate = 7.83% compounded monthly.
This can be easily solved using a financial calculator by inputting following variables
N = this is what we have to calculate.
Interest rate = 7.83%/12 = 0.6525% -----> since it is compounded monthly.
Present Value = 0
PMT = -1400(This is what you intend to invest). Ensure that you put a negative sign here. Because "Cash out flow is treated as negative and cash inflow as positive)
Future Value = 33,000(The required down payment on the house)
When you solve for N, you get the answer as 23.23415 months. To get it in years, divide it by 12.
23.23415/12 = 1.93618 or 1.94 years
Alternatively, you can use the formula =NPER (0.6525%,-1400,0,33000,0) in Excel to obtain the number of months as 23.23415. 0.6525% is the monthly interest rate, -1400 is the payment per period, 0 is the Present Value, 33000 is the required down payment, and the last zero is telling excel to calculate everything at the end of the period
The key difference between an agency shop agreement and an open shop agreement is that in an agency shop:_____________
a) workers must agree not to join a union in order to keep their jobs while in an open shop workers are free to join a union if they wish, but they are not required to do so.
b) the union is restricted to a limited number of employees who perform specific types of jobs, but in an open shop membership in the union is available to all workers.
c) workers must join the union within a stipulated time period (usually 30, 60, or 90 days) in order to keep their jobs, but in an open shop the workers are not required to join the union.
d) workers who do not join the union must pay a fee or regular dues, while in an open shop workers who choose not to join the union do not have to pay any union fees or dues.
Answer:
A
Explanation:
The key difference between an agency shop agreement and an open shop agreement is that in an agency shop workers must agree not to join a union in order to keep their jobs while in an open shop workers are free to join a union if they wish, but they are not required to do so. Thus, option (a) is correct.
What is agreement?An agreement is a written agreement between two or more persons to do something. To make a legally binding commitment, two or more parties must agree on the parameters of the agreement. The terms and conditions are always included in the signed agreement.
The fundamental distinction between the agent shop arrangement and the flow shop agreement is that the employees are in the shop agreement but are not union members. In the agency shop agreement, the order to join a union was the focal point, and the shop staff were members of the union.
As a result, the significance of the agreement are the aforementioned. Therefore, option (a) is correct.
Learn more about on agreement, here:
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The IS curve represents Select one: a. the single level of output where financial markets are in equilibrium. b. the combinations of output and the interest rate where the money market is in equilibrium. c. the single level of output where the goods market is in equilibrium. d. the combinations of output and the interest rate where the goods market is in equilibrium.
Answer:
D. the combinations of output and the interest rate where the goods market is in equilibrium.
Explanation:
The IS curve means investment-savings curve.
The IS curve is the combinations of output and the interest rate where the goods market is in equilibrium.
It is a curve which shows the different combinations of income (Y) and the real interest rate (r) such that the market for goods and services is in equilibrium.
This means that, every point on the IS curve is an income/real interest rate pair (Y,r) such that the demand for goods is equal to the supply of goods(Qs=Qd) or equivalently, the desired national saving is equal to desired investment.
Answer:
d. the combinations of output and the interest rate where the goods market is in equilibrium.
Explanation:
British economist John Hicks was the first to introduce the IS-LM model in 1937, where IS stands for Investment-Savings and LM stands for Liquidity preference-Money supply. It is a Keynesian macroeconomic model that gives the relationship between the market for economic goods (Investment-Savings) and the money market (Liquidity preference-Money supply). The IS-LM model is a graphical representation of Keynesian economic theory.
The IS curve represents the combinations of output and the interest rate where the goods market is in equilibrium. When there's an increase in government spending, the IS curve would shift to the right on the graph.
Also, when there's an increase in the interest rate, it causes investment spending to decrease as the IS curve shifts to the left with respect to economy.
You have $1,000 to invest over an investment horizon of three years. The bond market offers various options. You can buy (i) a sequence of three one-year bonds; (ii) a three-year bond; or (iii) a two-year bond followed by a one-year bond. The current yield curve tells you that the one-year, two-year, and three-year yields to maturity are 3.5 percent, 4.0 percent, and 4.5 percent respectively. You expect that one-year interest rates will be 4 percent next year and 5 percent the year after that. Assuming annual compounding, compute the return on each of the three investments.
a. Expected return for (i)
b. Expected return for (ii)
c. Expected return for (iii)
Answer:
a) 13.02%
b) 14.12%
c) 13.57%
Explanation:
Given:
Yield to maturity for:
One year = 3.5%
Two year = 4.0%
Three year = 4.5%
Required:
Compute the return on investments
One year interest rate = 4%
Next year (2nd year) interest rate = 5%
a) For sequence of three one-year bonds:
1000 x (1+3.5%)(1+4%)(1+5%)
=1000 x 1.13022
= $1,130.25
Return =(1130.22/1000)-1 = 0.13022 = 13.02%
b) For a three-year bond; or
1000 x (1+4.5%)³
=1000 x 1.141166125
= $1,141.166
Return = (1,141.166/1000)-1 = 14.12%
c) For two-year bond followed by a one-year bond.
1000 x (1+4.0%)² (1+5%)
= 1000 x 1.13568
=$1,135.68
Return =(1135.68/1000)-1 = 13.568%
Graphical Designs is offering 20-20 preferred stock. The stock will pay an annual dividend of $20 with the first dividend payment occurring 20 years from today. The required return on this stock is 5.10 percent. What is the price of the stock today?
Answer:
$ 152.35
Explanation:
The stock price today can be computed by first determining the future value of the dividend in perpetuity ,then discounting that to present value.
Value in perpetuity=dividend/required return
dividend is $20
required return is 5.10%
value in perpetuity=$20/5.10%=$392.16
The price of the stock today is the present value of the value in perpetuity
PV=FV*(1+r)^-n
FV is $392.16
r is the required return of 5.10%
n is the number of years involved,which is 19,it is 19 because counting from today till the next next years would be first day of the next twenty years
price=$392*(1+5.10%)^-19=$ 152.35
Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next nine years, because the firm needs to plow back its earnings to fuel growth. The company will pay a dividend of $18 per share exactly 10 years from today and will increase the dividend by 6 percent per year thereafter. If the required return on this stock is 13 percent, what is the current share price
Answer:
The current share price $85.60
Explanation:
Share Price is the present value of all the future dividends associated with that share.
Use following formula to calculate the value of share at year 9.
Price of share at year 9 = Dividend / ( Required rate of return - growth rate )
Price of share at year 9 = $18 / ( 13% - 6% )
Price of share at year 9 = $257.14
The Current Price of the bond can be calculated by discounting the Price of share at year 9.
Current Price = Price of share at year 9 x ( 1 + r )^-n
Current Price = $257.14 x ( 1 + 13% )^-9
Current Price = $85.60
The company produced 5,600 units during the month.A total of 14,700 pounds of material were purchased at a cost of $41,160.There was no beginning inventory of materials on hand to start the month; at the end of the month, 2,940 pounds of material remained in the warehouse.During March, 3,000 direct labor-hours were worked at a rate of $19.50 per hour.Variable manufacturing overhead costs during March totaled $6,950. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for March is:
Answer:
-$3,500 Unfavorable
Explanation:
For computation of materials quantity variance for March firstly we need to find out the standard quantity and actual quantity which is shown below:-
Standard quantity = Production units × Standard quantity of direct material
= 5,600 × 2.0
= 11,200
and
Actual quantity = Total pounds of material - Ending pounds of material
= 14,700 - 2,940
= 11,760
Now, we will put these value by using the formula of material quantity variance for march which is shown below:
Materials quantity variance for March = (Standard quantity - Actual quantity) × Standard price
= (11,200 - 11,760) × $6.25
= -$560 × $6.25
= -$3,500 Unfavorable
The unfavorable variance is the variance at which the actual cost is more than the standard cost and the same is to be considered
Which one of the following describes the total overhead variance?
A. The difference between what was actually incurred and the flexible budget amount.
B. The difference between what was actually incurred and overhead applied.
C. The difference between the overhead applied and the flexible budget amount.
D. The difference between what was actually incurred and the total production budget
Answer:
B. The difference between what was actually incurred and overhead applied.
Explanation:
This could be simply as the difference of what was actually incurred and overhead that was been applied or it could be the difference between the amount that would be absorbed into the cost/unit of the actual units of a certain commodity been produced, and the actual cost of the fixed overheads.
This could be seen in a certain number of labor hours taken to manufacture a an amount of product, as it may differ significantly from the standard or budgeted number of hours of the work been done.
Assume a firm is a monopoly and enjoys $10 million profits per year. The firm lobbies to have a moratorium passed by Congress on new firms in its market for the next 25 years. If there is no discount rate, how much would the firm be willing to pay to deter entry? A. $250 million. B. $100 million. C. $250 billion. D. $25 million.
Answer: A. $250 million
Explanation:
The firm is a Monopoly and is lobbying Congress to remain that way. As a monopoly it makes $10 million a year and wants to remain a monopoly for the next 25 years.
Assuming there is no discount rate which means that the value of money stays the same over the 25 years, if they succeed in Congress, they have a chance to make a total profit of,
= 10 million * 25 years
= $250 million
If the maximum amount the firm can make if the lobbying is successful is $250 million, this is the maximum they will pay to lobby for a deterrence to entry. If they pay any amount more than $250 million, they will be making a loss and therefore it would make no sense to spend that amount of the lobbying.
Journalize the transactions. If no entry is required, select "No Entry Required" and leave the amount boxes blank. For a compound transaction, if an amount box does not require an entry, leave it blank. Jan. 8. Split the common stock 2 for 1 and reduced the par from $80 to $40 per share. After the split, there were 150,000 common shares outstanding. Jan. 8 Apr. 30. Declared semiannual dividends of $0.75 on 18,000 shares of preferred stock and $0.28 on the common stock payable on July 1. Apr. 30 July 1. Paid the cash dividends. July 1 Oct. 31. Declared semiannual dividends of $0.75 on the preferred stock and $0.14 on the common stock (before the stock dividend). In addition, a 5% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $52. Cash dividends Stock dividends Dec. 31. Paid the cash dividends and issued the certificates for the common stock dividend. Payment Issuance
Answer:
Journal Entries:
Jan 8: Stock split
Jan 8:
Debit Dividends: Preferred $13,500
Debit Dividends: Common Stock $42,000
Credit Dividends Payable $55,500
To record semiannual dividends declared.
July 1:
Debit Dividends Payable $55,500
Credit Cash Account $55,500
To record payment of cash dividends.
Oct. 31:
Debit Dividends: Preferred $13,500
Debit Dividends: Common Stock $21,000
Credit Dividends Payable $34,500
To record semiannual dividends declared.
Oct, 31:
Debit Dividends: Common Stock $300,000
Credit Dividends Payable $300,000
To record 5% stock dividend on common stock.
Dec. 31:
Debit Dividends Payable $34,500
Credit Cash Account $34,500
To record cash dividends paid.
Dec. 31:
Debit Dividends Payable $300,000
Credit Common Stock $300,000
To record the issue of certificates for the common stock dividend.
Explanation:
a) Stock split is a decision to increase the number of outstanding shares and reduce the market price of shares by the same ratio. It makes the shares attractive to most investors. The transaction does not have any financial effect, since the number of shares are increased and the share price is reduced by the same amount.
b) Stock dividend is payment to stockholders in the form of stock and not cash. It involves the issue of additional share certificate to outstanding stockholders as a compensation. The dividend is not usually subject to tax at the time of issue until the shares are sold.
True or False? Modern companies deal with many different suppliers in order to avoid problems that can arise when one supplier is unable to provide needed parts or materials.
Answer:
True
Explanation:
The statement modern companies deal with many different suppliers in order to avoid problems that can arise when one supplier is unable to provide needed parts or materials is true because businesses try to maintain different suppliers for a specific good to be able to react quickly and have the material available if one of the suppliers have a problem to provide itl. For example, on key materials some companies decide to buy most of the material to the supplier that offers the best value in terms of price and quality but they decide to buy a small percentage from another supplier to guarantee that they will always have the material available in case the main supplier is not able to provide the good and they can cover the immediate need with the other one.
The Stone Harbor Fund is a closed-end investment company with a portfolio currently worth $430 million. It has liabilities of $8 million and 10 million shares outstanding. If the fund sells for $40 a share, what is its premium or discount as a percent of NAV
Answer:
5.21%
Explanation:
The Stone Harbor Fund
NAV= Investment in portfolio - liabilities/ Numbers of share outstanding
(430-8)/10
=422/10
=$42.2
Discount will be : $42.2 -40 shares
=$2.2
Hence:
$2.2/$42.2
=5.21%
Therefore the premium or discount as a percent of NAV will be 5.21%
El Niño wind patterns affected the weather across the United States during the winter of 1997–1998. Suppose the demand for home heating oil in Connecticut is given by Q = 20 – 2 Phho + 0.5 Png – TEMP, where Q is the quantity of home heating oil demanded, Phho is the price of home heating oil per unit, Png is the price of natural gas per unit, and TEMP is the absolute difference between the average winter temperature over the past 10 years and the current average winter temperature. If the current price of home heating oil is $1.20, the current price of natural gas is $2.00, and the average winter temperature this year is 40 degrees compared to 28 degrees over the past 10 years, the price elasticity of demand for home heating oil is:
Answer:
The price elasticity of demand for home heating oil is-0.36
Explanation:
In order to calculate the price elasticity of demand for home heating oil we would have to use the following formula:
Elasticity of demand = (dQ/dPhho)*(P/Q)
According to the given data we have the following:
demand for home heating oil in Connecticut=Q = 20 – 2 Phho + 0.5 Png – TEMP
current price of home heating oil=$1.20
current price of natural gas =$2.0
Therefore, if Q = 20 – 2 Phho + 0.5 Png – TEMP, then:
Q=20 – 2*1.2 + .5*2 – 12
Q=6.6
Therefore, price elasticity of demand = (-2)*(1.2/6.6)
price elasticity of demand =-0.36
The price elasticity of demand for home heating oil is-0.36
Which of the following selections use business appropriate language? A. GR8 news. The hag in marketing got fired. B. We are going to take action in response to recent market fluctuations. C. Hi, yeah, why don’t you start the PD stuff we talked about. D. Janice, please implement the performance measure we discussed last week.
Answer:
B. We are going to take action in response to recent market fluctuations.
D. Janice, please implement the performance measure we discussed last week.
Explanation:
The two statements above use appropriate business language because the language used is formal (although not too formal which can also be negative in a business context because it could reduce clarity), and also because the words used are part of the common business jargon.
The other two statements are inappropriate. A) is inappropriate because it uses profanity, and C) is inappropriate because the language used is too informal.
Dickinson Company has $11,820,000 million in assets. Currently, half of these assets are financed with long-term debt at 9.1 percent and a half with the common stock having a par value of $8. Ms. Smith, Vice President of Finance, wishes to analyze two refinancing plans, one with more debt (D) and one with more equity (E). The company earns a return on assets before interest and taxes of 9.1 percent. The tax rate is 40 percent. Tax-loss carryover provisions apply, so negative tax amounts are permissible.
How would each of these plans affect earnings per share? Consider the current plan and the two new plans. (Round your answers to 2 decimal places.)
Answer:
Current Plan Plan D Plan E
Earnings per share (EPS) 0.44 0.34 0.04
Explanation:
I-Current Plan :
Total assets $11,820,000 million
Total debt 50% $11,820,000
= $5,910,000 million
Total equity
= $5,910,000 million
Number of shares
5910000/8= 738750 million
Current Plan:
Return on asset before interest and tax is 9.1%
= 11820000*9.1%
=$1075620 million
Less Interest paid to debt holders 9.1%
=5910000*9.1%
= ($537810) million
Less Tax 40%
=(1075620-537810)*40%
= ($215124)million
Available Net Income to equity shareholder
$322686 million
EPS=322686/738750
= 0.44
II-Plan D
Total assets= $11,820,000 million
Total debt= (50% ×11,820,000)+2955000
= $8865000 million
Total equity
5910000 - (369375*8)
=5910000-2955000
= $2955000 million
Number of shares =
=2955000/8
=369375 million
Plan D :
Return on asset before interest in which tax is given as 9.1%
= 11820000*9.1%
=$1075620 million
Less Interest paid to debt holders 9.1% =5910000*9.1%
= ($537810) million
Less Interest paid to debt holders 11.1%
=295500*11.1%
= ($328005) million
Less Tax40%
=(1075620-537810-328005)*40%
($83922)million
Net Income available to equity shareholder $125883 million
EPS=
=125883/369375= 0.34
III Plan E :
Total assets= $11,820,000 million
Total debt
= 5910000-2955000
=$2955000 million
Total equity
= 5910000 + (369375*8)
=5910000+2955000
= $8865000 million
Number of shares =8865000/8
=1108125 million
Plan E :
Return on asset before interest and tax is given as 9.1%
= 11820000*9.1%
=$1075620 million
Less Interest paid to debt holders 9.1% =2955000*9.1%= ($268905) million
Less Tax 40%
=(1075620-268905)*40% ($322686)million
Net Income available to equity shareholder $484029 million
EPS
=484029/1108125= 0.04
Current Plan Plan D Plan E
Earnings per share (EPS) 0.44 0.34 0.04
You are considering purchasing stock in Canyon Echo. You feel the company will increase its dividend at 3.6 percent indefinitely. The company just paid a dividend of $3.71 and you feel that the required return on the stock is 12 percent. What is the price per share of the company's stock?
Answer:
$45.76
Explanation:
Next dividend = Dividend just paid * (1 + Dividend growth rate) = $3.71 * (1 + 0.036) = $3.84356
Using the formula for the dividend discount model, we can calculate he price per share of the company's stock as follows:
Stock price = Next dividend / (Required return - Dividend growth rate) = $3.84356 / (0.12 - 0.036) = $45.76
Therefore, the price per share of the company's stock is $45.76.
Selected transactions completed by Canyon Ferry Boating Corporation during the current fiscal year are as follows. Journalize the transactions. If no entry is required, select "No Entry Required" and leave the amount boxes blank. If an amount box does not require an entry, leave it blank. Jan. 8. Split the common stock 2 for 1 and reduced the par from $100 to $50 per share. After the split, there were 300,000 common shares outstanding. Jan. 8 Apr. 30. Declared semiannual dividends of $0.60 per share on 16,000 shares of preferred stock and $0.22 per share on the common stock payable on July 1. Apr. 30 July 1. Paid the cash dividends. July 1 Oct. 31. Declared semiannual dividends of $0.60 per share on the preferred stock and $0.11 per share on the common stock (before the stock dividend). In addition, a 5% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $56. Oct. 31 Oct. 31 Dec. 31. Paid the cash dividends and issued the certificates for the common stock dividend. Dec. 31 Dec. 31
Answer:
Canyon Ferry Boating Corporation
Journal Entries:
Debit Credit
Jan. 8: Stock Split
Jan. 8: Dividends: Preferred $9,600
Dividends: Common Stock $66,000
Dividends Payable $75,600
To record semiannual dividends declared.
July 1: Dividends Payable $75,600
Cash Account $75,600
To record the payment of the cash dividends.
Oct. 31: Dividends: Preferred $9,600
Dividends: Common Stock $33,000
Dividends Payable $42,600
To record semiannual dividends declared.
Oct. 31: Dividends: Common Stock $750,000
Dividends Payable $750,000
To record 5% dividend declared on the common stock.
Dec. 31: Dividends Payable $42,600
Cash Account $42,600
To record the payment of the cash dividends.
Dec. 31: Dividends Payable $750,000
Common Stock $750,000
To record the issue of certificates for the common stock dividend.
Explanation:
a) A decision by a company's board of directors to increase the number of outstanding shares through the issue of more shares to current shareholders is called a stock split. The purpose is to lower the market price of stock to a comfortable range for most investors, thereby increasing the liquidity of the shares. For example, in a 2-for-1 stock split, an additional share is given for each share held by a shareholder. The decision usually lowers the stock price and increases the number of shares by the same ratio, it does not necessitate for accounting records.
b) A stock dividend is payment to shareholders in the form of additional shares in the company, rather than as cash. There is no taxation on stock dividends until the shares granted are sold by their owners.
Markup on job cost 75%
Department
Milling Assembly
Machine-hours 60,000 3,000
Direct labor-hours 8,000 80,000
Total fixed manufact$ 390,000 $500,000
uring overhead cost
Variable manufacturing overhead per machine-hour $2.00
Variable manufacturing overhead per direct labor-hour $3.75
Cost summary for Job 407 Department
Milling Assembly
Machine-hours 90 4
Direct labor-hours 5 20
Direct materials $800 $370
Direct labor cost $70 $280
Enter a formula into each of the cells marked with a ? below
Step 1: Calculate the estimated total manufacturing overhead cost for each department
Step 2: Calculate the predetermined overhead rate in each department
Step 3: Calculate the amount of overhead applied from both departments to Job 407
Step 4: Calculate the total job cost for Job 407
Total cost of Job 407
Step 5: Calculate the selling price for Job 407
Answer:
Instructions are below.
Explanation:
Giving the following information:
Markup on job cost 75%
Milling Assembly
Machine-hours 60,000 3,000
Direct labor-hours 8,000 80,000
Total fixed manufacturing overhead cost $ 390,000 $500,000
Variable manufacturing overhead per machine-hour $2.00
Variable manufacturing overhead per direct labor-hour $3.75
Job 407:
Milling Assembly
Machine-hours 90 4
Direct labor-hours 5 20
Direct materials $800 $370
Direct labor cost $70 $280
1) We need to calculate the total overhead costs:
Milling= 390,000 + 2*60,000 + 3.75*8,000= $540,000
Assembly= 500,000 + 2*3,000 + 3.75*80,000= $806,000
2) Now, the predetermined overhead rate per department:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
For Milling we will use machine hours as allocation base:
Milling= 540,000/60,000= $9 per machine hour
For Assembly, we will use direct labor hours:
Assembly= 806,000/80,000= $10.075 per direct labor hour
3) We need to allocate overhead to Job 407
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Milling= 9*90= $810
Assembly= 10.075*20= $201.5
Total overhead= $1,011.5
4) Total cost= (800 + 370) + (70 + 280) + 1,011.5
Total cost= $2,531.5
5) Finally, the selling price:
Selling price= 2,531.5*1.75= $4,430.125
Suppose that banks are less able to raise funds and so lend less. Consequently, because people and households are less able to borrow, they spend less at any given price level than they would otherwise. The crisis is persistent so lending should remain depressed for some time.
Refer to Financial Crisis. In the long run, if the Fed does not respond, the change in price expectations created by the crisis shifts:
a) short-run aggregate supply right.
b) aggregate demand right.
c) aggregate demand left.
d) short-run aggregate supply left.
Answer:
The correct answe is: d) short-run aggregate supply left.
Explanation:
In this regard, one can observe an existing problem of banks that are less able to raise funds and therefore lend less. This cycle leads to less capital inflow, due to the reduced amount of assets in the budget.
Therefore the expected scenario is the behavior of the cumulative curve of the source in the short term moving to the left, due to the decrease in the growth of the investment pattern.
Another firm, called Robbem Power & Water, an established public utility company, has been paying dividends for the past 20 years. This year Robbem also announced that it will increase its dividends by 10%. Which class of investors is more likely to be pleased by Robbem’s dividend announcement?
a. Investors with low tax rates who depend on current dividernd income for Iiving expenses.
b. Investors with high tax rates who don't depend on current dividend income for living expenses
Answer:
sorry...too Difficult
Angelena files as a head of household. In 2018, she reported $52,300 of taxable income, including a $10,000 qualified dividend. What is her gross tax liability, rounded to the nearest whole dollar amount
Answer:
Her gross tax liability is $4,882
Explanation:
According to given data out of $52,300 , $10,000 is qualified dividend so remaining $42,300 will be taxed at normal rate.
Therefore, tax on ordinary income = $1,360 + ($42,300-$13,700)*12% =
tax on ordinary income =$4,792
In qualified dividend is taxed at 0% if income upto $51,700.
Hence excess $52,300-$51,700) will be taxed at 15%
Hence tax on dividend = $600*15% = $90
Hence total tax = $4,792+$90 = $4,882
Her gross tax liability is $4,882
A company has a process that results in 1,300 pounds of Product A that can be sold for $13.00 per pound. An alternative would be to process Product A further at a cost of $13,600 and then sell it for $23.00 per pound. What is the additional profit (loss) that would result from processing the product further?
Answer:
If the company process further the units, income will decrease by $600.
Explanation:
Giving the following information:
A company has a process that results in 1,300 pounds of Product A that can be sold for $13.00 per pound.
An alternative would be to process Product A further for $13,600 and then sell it for $23.00 per pound.
We need to determine the result of further processing the product.
Sell as-is:
Effect on income= 1,300*13= $16,900 increase
Continue processing:
Effect on income= 1,300*23 - 13,600= $16,300
It is more profitable to sell the units before further processing.