Answer:
Queensland division has ROI of 35.7%
New South Wales division has ROI of 38.88%
The divisional manager at New South Sales division has a higher ROI and seems to doing better job
Explanation:
The return on investment stated in terms of margin and turnover=net operating income/sales*sales/average operating assets
For Queensland division return on investment is computed thus:
net operating income is $232,050
sales is $2,275,000
average operating assets is $650,000
return on investment=$232,050/$2,275,000*$2,275,000/$650,000=35.70%
For New South Wales division return on investment is computed thus:
net operating income is $200,232
sales is $2,781,000
average operating assets is $515,000
return on investment=$200,232/$2,781,000*$2,781,000/$515,000=38.88%
Benaflek Co. purchased some equipment 3 years ago. The company's required rate of return is 12%, and the net present value of the project was $(1,800). Annual cost savings were: $20,000 for year 1; $16,000 for year 2; and $12,000 for year 3. The amount of the initial investment wasYear Present Value PV of an Annuity of 1 at 12% of 1 at 12%1 .893 .893 2 .797 1.6903 .712 2.402A. $40,232.B. $37,356.C. $40,956.D. $36,632.
Answer:
The correct option is C,$40,956
Explanation:
NPV=present value annual cost savings-initial investment
NPV is -$1800
present value of annual savings=$20,000/(1+12%)^1+$16,000/(1+12%)^2+$12,000/(1+12%)^3=$39,153.61
-$1800= $39,153.61 -initial investment
initial investment=$ 39,153.61+$1800=$40953.61
The correct option is the option C,$40,956 which is closest to $40953.61 ,the difference arose from rounding errors when the discount factors were rounded to to three decimal places instead of using the exact figures
Concord is a book publisher that reissues old titles. The company offers these books with either a standard machine-glued hard cover or a deluxe, hand-embossed, hand-stitched, leather cover. Concord currently allocates overhead to the books based on direct labor hours. A recent activity analysis conducted by the controller revealed the following information. Standard Edition Deluxe Edition Units produced 479,000 10,000 Direct labor hours 526,900 32,000 Printing press hours 91,010 1,900 Sales orders 4,790 10,000.
Calculate the following for each product: (Round answers to 2 decimal places, e.g. 15.25.)
Answer:
(1). For the Standard Edition, it is = 526,900/479,000 = 1.1 DLH/unit.
For the Deluxe Edition, it is ,= 32,000/10,000 = 3.2 DHL/unit.
(2). For the Standard Edition, it is = 91,010/479,000 = 0.19 PPH/unit.
For the Deluxe edition= 1,900/10,000 = 0.19 PPH/unit.
(3). For the Standard Edition, it is = 4,790/479000 = 0.01 order per unit.
For the Deluxe edition = 10000/10000= 1 order per unit.
Explanation:
We are given the following parameters or data or infomation which is going to help us in solving this problem;
(A) for the Units produced;
=> Standard Edition = 479,000
=>Deluxe Edition = 10,000.
(B). For the Direct labor hours
=>Standard Edition = 526,900.
=>Deluxe Edition = 32,000.
(C). For the Printing press hours;
=> Standard edition= 91,010.
=> Deluxe edition= 1,900.
(D). For the Sales orders;
=> Standard edition= 4,790.
=> Deluxe edition = 10,000.
Hence;
DIRECT LABOR HOUR OER UNIT:
(1). For the Standard Edition, it is = 526,900/479,000 = 1.1 DLH/unit.
For the Deluxe Edition, it is ,= 32,000/10,000 = 3.2 DHL/unit.
PRINTING PRESS PER HOUR;
(2). For the Standard Edition, it is = 91,010/479,000 = 0.19 PPH/unit.
For the Deluxe edition= 1,900/10,000 = 0.19 PPH/unit.
SALES ORDER PER UNIT
(3). For the Standard Edition, it is = 4,790/479000 = 0.01 order per unit.
For the Deluxe edition = 10000/10000= 1 order per unit.
You work in the human resource department at the headquarters of a multinational corporation based in the US. Your company is about to send a number of managers overseas as expatriates to France and Mexico.
Requried:
You need to create an executive summary evaluating, comparing, and contrasting the possible issues expats may encounter in these two countries.
Answer:
EXECUTIVE SUMMARY:
Explanation:
1.There are many factors to consider that the company must bear in mind when sending these managers as expatriates.
In the following executive summary we will analyze what challenges must be faced according to the country where they will be sent.
In the case of France, the work environment is highly formal and follows a hierarchical structure already defined, so they must adapt to their role as manager and comply with the imposed requirements, which in turn is important.
As for the social and cultural sphere, it is important to comply with the punctuality and formality protocols required in each of the events or meetings to be held, in addition to feeling respect and admiration for them.
2. Regarding Mexico, the work environment is very healthy, and expatriates are highly respected and appreciated, although they must meet all the labor requirements and additional demands regarding extra work.
In the current year, Norris, an individual, has $59,000 of ordinary income, a net short-term Capital loss (NSTCL) of $9,100 and a net long-term capital gain (NLTCG) of $3,700. From his capital gains and losses, Norris reports:
A. an offset against ordinary income of $9,800
B. an offset against ordinary income of $3,000 and a NSTCL carryforward of $6,900
C. an offset against ordinary income of $3,000 and a NSTCL carryforward of $3,900
D. an offset against ordinary income of $3,000 and a NSTCL carryforward of $6,800
E. an offset against ordinary income of $2,900 and a NSTCL carryforward of $6,900
Answer: an offset against ordinary income of $3,000 and a NSTCL carryforward of $2,400
Explanation:
Feom the question, we are told that in the current year, Norris, an individual, has $59,000 of ordinary income, a net short-term Capital loss (NSTCL) of $9,100 and a net long-term capital gain (NLTCG) of $3,700.
From his capital gains and losses, Norris reports an an offset against ordinary income of $3,000 and the a net short-term Capital loss (NSTCL) balance carryforward will be the difference between the net short-term Capital loss (NSTCL) of $9,100 and a net long-term capital gain (NLTCG) of $3,700 and the offset against ordinary income. This will be:
= ($9100 - $3700) - $3000
= $5400 - $3000
= $2400
A 5% coupon, 18-year annual bond has a yield to maturity of 6.2%. Assuming the par value is $1,000 and the YTM does not change over the next year, what will the price of the bond be today
Answer:
Price of Bond=$871.997
Explanation:
The price of a bond is the present value (PV) of the future cash inflows expected from the bond discounted using the yield to maturity.
Price of Bond = PV of interest payment + PV of redemption value
PV of interest payment
interest payment = 5%× 1,000 = $50
PV = A × (1- 1+r)^(-n)/r
r- 6.2%, n- 18, A- 50
PV = 50 × (1 -1.062^(-18))/0.062=533.341
PV of redemption
PV = FV × (1+r)^(-n)
PV = 1,000 × 1.062^(-18)= 338.655
Price of the stock = 533.3419 + 338.655
Price of Bond=$871.997
Choose appropriate term from the list below for each of the following descriptions.
a. Executive Order 9066
b. English-Only Movement
c.Chinese Exclusion Act
d. Bilingual Education Act
e. Proposition 227 and 58
f. Meyer vs. Nebraska
g. Farrington vs. Tokushige
h. Lau vs. Nichols
i. Native American Languages Act
j. Bill of Rights for Deaf and Hard of Hearing Children
This federal legal act, signed in 1968 by President Lyndon B. Johnson. introduced a new type of education for students whose home language was not English. It was originally written for Spanish-speaking students, but
overtime it was changed to include all students who speak a language other than English. It signified the birth of the bilingual education movement but was replaced in 2001 by the No Child Left Behind legislation emphasizing
English Language Learning.
This was a law signed in 1942 by President Franklin D. Roosevelt authorizing the internment of tens of thousands of American citizens of Japanese ancestry and resident aliens from Japan, leading to the loss of language and
culture among tens of thousands of Japanese-Americans.
This was a 1927 case in which the Supreme Court of the United States unanimously stmck down the Territory of Hawaii's law which made the teaching of foreign languages illegal for schools. The Supreme Court argued that the
Hawaii law violated the due process clause of the Fifth Amendment.
This 1990 legislation passed by the US Congress declared it •the official policy of the United States government to preserve, protect, and promote the rights and freedom of Native Americans to use, practice, and develop Native
languages."
This was a 1923 case in which the Supreme Court of the United States struck down the 1919 Nebraska law restricting foreign-language education, specifically education in German.
This form of political activism advocates for the use of one language in the official United States government operations and a legal policy proclaiming an official national language. It also advocates against bilingual education.
This legislation, only passed by a handful of states so far. recognizes the not always deaf-friendly educational settings and proposes that every deaf child must have full access to all information, specialized personnel, school
programs, social activities, and extra-curricular activities and a right to acquire both English and American Sign Language (a natural visual language).
This 1882 federal law signed by President Chester A. Arthur was the first immigration law that allowed an absolute moratorium banning an entire ethnic group from entering the United States.
This was a 1974 Supreme Court ease which extended bilingual education to Chinese-speaking children in San Francisco, California, first, and, subsequently, everywhere in the United States, arguing that the lack of appropriate bilingual programs was a violation of the Civil Rights Act of 1964.
These laws have regulated the availability of bilingual programs in one of the largest states in the United States for the past 20 years,
Answer: Please refer to Explanation
Explanation:
a. Executive Order 9066
This was a law signed in 1942 by President Franklin D. Roosevelt authorizing the internment of tens of thousands of American citizens of Japanese ancestry and resident aliens from Japan, leading to the loss of language and culture among tens of thousands of Japanese-Americans.
b. English-Only Movement.
This form of political activism advocates for the use of one language in the official United States government operations and a legal policy proclaiming an official national language. It also advocates against bilingual education.
c.Chinese Exclusion Act.
This 1882 federal law signed by President Chester A. Arthur was the first immigration law that allowed an absolute moratorium banning an entire ethnic group from entering the United States.
d. Bilingual Education Act.
This federal legal act, signed in 1968 by President Lyndon B. Johnson. introduced a new type of education for students whose home language was not English. It was originally written for Spanish-speaking students, but
overtime it was changed to include all students who speak a language other than English. It signified the birth of the bilingual education movement but was replaced in 2001 by the No Child Left Behind legislation emphasizing
English Language Learning.
e. Proposition 227 and 58.
These laws have regulated the availability of bilingual programs in one of the largest states in the United States for the past 20 years. State in question is California.
f. Meyer vs. Nebraska.
This was a 1923 case in which the Supreme Court of the United States struck down the 1919 Nebraska law restricting foreign-language education, specifically education in German.
g. Farrington vs. Tokushige.
This was a 1927 case in which the Supreme Court of the United States unanimously struck down the Territory of Hawaii's law which made the teaching of foreign languages illegal for schools. The Supreme Court argued that the Hawaii law violated the due process clause of the Fifth Amendment.
h. Lau vs. Nichols
This was a 1974 Supreme Court ease which extended bilingual education to Chinese-speaking children in San Francisco, California, first, and, subsequently, everywhere in the United States, arguing that the lack of appropriate bilingual programs was a violation of the Civil Rights Act of 1964.
i. Native American Languages Act.
This 1990 legislation passed by the US Congress declared it •the official policy of the United States government to preserve, protect, and promote the rights and freedom of Native Americans to use, practice, and develop Native languages."
j. Bill of Rights for Deaf and Hard of Hearing Children.
This legislation, only passed by a handful of states so far. recognizes the not always deaf-friendly educational settings and proposes that every deaf child must have full access to all information, specialized personnel, school programs, social activities, and extra-curricular activities and a right to acquire both English and American Sign Language (a natural visual language).
A cash flow series is increasing geometrically at the rate of 7% per year. The initial payment at EOY 1 is $4 comma 000, with increasing annual payments ending at EOY 20. The interest rate is 14% compounded annually for the first seven years and 5% compounded annually for the remaining 13 years. Find the present amount that is equivalent to this cash flow.
Answer:
$ 83,921.45
Explanation:
The present value of the cash flows can determined by discounting to today's terms all of the cash flows involved.
The cash flows for the first years were discounted using a 14% discount rate while the remaining years were discounted at 5% as shown in the attached.
Describe the six-step process of conducting an ethics audit in detail.
Answer: 1. Requesting Financial Documents.
2. Preparing an Audit Plan.
3. Scheduling an Open Meeting.
4. Conducting Onsite Fieldwork.
5. Drafting a Report.
6. Setting Up a Closing Meeting.
Explanation:
1. Requesting Financial Documents
the organisation should be notified about an upcoming audit, with the auditor requesting for documents listed on his audit checklist. This documents usually include copies of previous audit report carried out, bank statements, reciepts and ledgers.
2. Preparing an Audit Plan
the auditor uses the information contained in the documents provided for him to plan or map out how the audit would be conducted.
3. Scheduling an Open Meeting
the auditor is invited to a meeting with the admintrative staffs, and senior management to present his scope of the audit. This helps determine the time interval for the audit.
4. Conducting Onsite Fieldwork
the auditor uses information gotten from the open meeting to finalize or conclude his audit plans. After which a field work is conducted.
5. Drafting a Report
the auditor prepares a report show full details of his findings of the audit conducted.
6. Setting Up a Closing Meeting
the clos meeting helps the auditor get a feedback from the managemen, whinch indicates the managements approval or disapproval with problems presented in the audit report.
Assume that on October 1st Lee Corporation purchases all of the assets of Kay Corporation for $510,000. All of the identifiable assets of Kay Corporation have a fair market value of $420,000, including the patent, which has a fair market value of $36,000. Also, a covenant not to compete for 3 years costing $72,000 is included in the purchase agreement.
Required:
a. If lee Corporation purchases the patent for $36,000, how much amortization expense may Lee Corporation deduct in the current year?
b. Assume that Lee Corporation purchases all of the assets of Kay Corporation for $510,000. All of the identifiable assets of Kay Corporation have a fair market value of $420,000, including the patent, which has a fair market value of $36,000. Also, a covenant not to compete for 3 years costing $72,000 is included in the purchase agreement. How much amortization expense may Lee Corporation deduct in the current year?
Answer and Explanation:
According to the scenario, computation of the given data are as follow:-
a) Assume Remaining life = 10 years
Corporation purchases the patent = $36,000
Current Amortization Value (October to December)
= (Purchase Value of Patent ÷ Remaining Life) × number of months ÷ total number of months in a year
= ($36,000 ÷ 10) × 3 months ÷ 12 months
= $3,600 × 3 months ÷ 12 months
= $900
Lee Corporation deducted $900 amortization expenses in the current year.
b).Goodwill
= Assets Purchasing Value of Kay Corporation - Assets Purchasing Fair Market Value of Kay Corporation
= $510,000 - $420,000
= $90,000
Assume amortization period is = 15 years as it is for trade or business
Current Amortization Value (October to December)
= (Goodwill + Fair Market Value of Patent + Costing of 3 Years ÷ Amortization Period) × number of months ÷ total number of months in a year
= ($90,000 + $36,000 + $72,000 ÷ 15) × 3 months ÷ 12 months
= $13,200 × 3 months ÷ 12 months
= $3,300
Lee Corporation deducted $3,300 amortization expenses in the current year.
RKO Company sold bonds with a face value of $890,000 for $955,501. The bonds have a coupon rate of 7 percent, mature in 10 years, and pay interest annually every December 31. All of the bonds were sold on January 1 of this year. Record the sale of the bonds on January 1 and the payment of interest on December 31 of this year, without the use of a premium account. RKO uses the effective-interest amortization method. Assume an annual market rate of interest of 6 percent.
Answer:
June 1
Dr cash $955,501
Cr Discount on bond payable $65,501
Cr Bond payable $890,000
June 30
Dr Interest expense $26,700
Dr Discount on bonds 4,450
Cr Cash $31,150
Explanation:
RKO Company Journal entry
June 1
Dr cash $955,501
Cr Discount on bond payable $65,501
($955,501-$890,000)
Cr Bond payable $890,000
June 30
Dr Interest expense $26,700
($890,000×6%×1/2)
Dr Discount on bonds 4,450
Cr Cash $31,150
($890,000×7%×1/2)
During the planning process, if there is a gap between future desired sales and projected sales, corporate management will need to develop or acquire new businesses to fill it. Identify and describe the three strategies that can be used to fill the strategic gap.
Answer:
They are:
1) Intensive growth
2) Integrative growth
3) Diversification growth
Explanation:
1. Intensive growth:
This involves identifying further growth opportunities that are available within existing businesses. It identifies new customer groups for growth within current businesses, develop additional distribution channels or selling in new markets such as those in other countries. If this is insufficient the company may look into Integrative growth.
2. Integrative growth:
The second involves involves backward, forward, or horizontal integration. Horizontal integration involves buying smaller competitors.
Backward integration reaches into value chain to get suppliers. Forward involves buying distribution channels in the value chain closest to the customer. Integrative growth identifies opportunities to acquire businesses that are in relation to current businesses.
3. Diversification:
Diversification growth is to identify opportunities so as to add attractive unrelated businesses
In which step of the planning process to managers identify the priorities and trade-offs among goals and plans
Answer:
Selection of goals and plans
Explanation:
When engaging in a project, the different stages involved can be broadly categorized into four. These include; the selection of goals and plans, the monitoring of these goals and plans, the implementation and evaluation of them.
The selection of the goals and plans is the first stage of the project planning. At this stage, goals as well as problems to be solved are identified. Trade-offs measure the quality of the project, while factoring in time and cost. Having an idea of the final quality would help in making changes possible along the course of the project.
This stage is then followed by the build up stage where goals are monitored and means to achieve them are initiated. The implementation and evaluation of these goals then follow.
Karen White is saving to buy a house in five years. She plans to put 20 percent down at that time, and she believes that she will need $29,000 for the down payment. If Karen can invest in a fund that pays 9.40 percent annual interest, compounded quarterly, how much will she have to invest today to have enough money for the down payment
Answer:
$ 7,196.59
Explanation:
To determine the the amount that should be invested today, we will workout a sum that will be invested today at 9.40% that would amount to 29,000 five(5 ) years time.
FV = PV ×(1+r/)^n/m
r = 9.40/4= 2.35 per quarter
29,000= PV × (1.0235)^(5×12)
29,000 =PV × 4.029682413
= 29,000/4.029682413
PV = 7,196.59
The amount that should be invested today to have enough money
$ 7,196.59
Kendall borrowed $782,000 on a construction loan at 10% interest on January 1, 2021. This loan was outstanding throughout the construction period. The company had $4,660,000 in 7% bonds payable outstanding in 2021 and 2022. Interest (using the weighted-average method) capitalized for 2021 was:
Missing information:
Payments made during 2021:
January 1, $200,000September 30, $300,000December 31, $300,000Answer:
$20,435.50
Explanation:
the weighted average method for calculating interest expense calculates weighted interest rates based on the interest expense of more than one outstanding debt:
$782,000 x 10% = $78,200$4,660,000 x 7% = $326,200total interest expense = $404,400weighted interest rate = $404,400 / ($782,000 + $4,660,000) = 7.4311%
average accumulated expenditure:
January 1: $200,000 x 12/12 = $200,000
September 30: $300,000 x 3/12 = $75,000
December 31: $300,000 x 0/12 = $0
total = $275,000
interest expense = $275,000 x 7.4311% = $20,435.50
SuperGroup has expressed the intention to begin selling in other countries, including China, while still protecting its Superdry brand. This will mean determining the appropriate pricing strategies for each country, training and supporting an international sales force, and creating advertising campaigns. These activities all occur in what segment of the value chain?
Answer:
Marketing and sales segment.
Explanation:
A values chain consists of actions that a firm functioning in a public industry that performs in order to deliver a valuable product to the market. The idea value chain is based on the process view of a manufacturing organization as a system of subsystems that transforms and processes money, labor, and materials, etc. The marketing and sales is considered to be a primary function and include the creation of salesforce, advertising campaigns, and giving values to its customers, clients and partners.The new car you just purchased cost $25,499. You have saved $3,240 for the down payment (made at the time of purchase) and will finance the rest through a fully amortized installment loan from the car dealer. This loan has an interest rate of 5.25% compounded monthly and required an equal monthly payment for the next 72 months. Which of the following best represents the payment on interest (145)and principal (P45) associated with the 45th monthly payment?
1(45) = $1.02, P(45) = $360.05
1(45) = $0.03, P(45) = $361.04
I(45) = $274.89, P(45) = $86.17
|(45) = $41.54, P(45) = $319.52
Answer:
The correct option is |(45) = $41.54, P(45) = $319.52
Explanation:
Loan amount = Price - Down payment = $25499 - $3240 = $22259
Monthly interest rate = i = 5.25%÷ 12 = 0.004375
Number of installments = n =72
Monthly installment=$22,259 × (A/P,0.004375,72)
Calculating the interest factor;
[tex]\small (A/P,i,n)=\frac{i}{1-\frac{1}{(1+i)^{n}}}[/tex]
[tex]\small (A/P,0.004375,72)[/tex] = [tex]\frac{0.004375}{1-\frac{1}{(1+0.004375)^{72}}}[/tex] = 0.0162212
So,
Monthly installment=$22259 × 0.0162212= $361.0677
Now let us calculate the balance after 44th payment
B(44)= [$22,259 × (F/P,0.004375,44)] - [$361.0677 × (F/A,0.004375,44) ]
Calculating the interest factor;
(F/P,0.004375,44) = [tex](1+0.004375)^{44}[/tex] = 1.2117676
[tex]\small (F/A,i,n)[/tex] = [tex]\frac{(1+i)^{n}-1}{i}[/tex]
[tex]\small (F/A,0.004375,44)[/tex] = [tex]\frac{(1+0.004375)^{44}-1}{0.004375}[/tex] = 48.4040257
So,
B(44)= [$22,259 × 1.2117676] - [$361.0677 × 48.4040257] = $9495.6532
So, interest for 45th payment = I(45) = Balance due × Monthly interest rate
=9495.6532 ×0.004375
= $41.54
Principal associated with 45th payment=Monthly installment-Interest payment
=$361.0667 - $41.5435
= $319.5232
≅$319.52
Henry Ford invented mass production. In doing so, he perfected the assembly line concept in which each worker does only one job or a handful of jobs and is given little other responsibility. This worked well for 70 years; however, it became apparent in the 1990s that an increasing number of U.S. companies could not produce a high-quality product by sticking to the assembly line model. What has changed?
The correct answer to this open question is the following.
Although there are no options provided or another reference, we can say that what has changed from that old conception to produce goods is the customization of products and attention to detail to differentiate the product from the competition and the more efficient production line with the use of robots and modern technology. That is what is making the difference today, in a competitive market full of companies that try to capture the loyalty of the consumer.
No more production line in the old way. Today, companies are asking consumers what they want and how they want it and are making every single effort possible to provide the exact product.
What does the Fair Labor Standards Act require?
Answer:
The Fair Labor Standards Act's (FLSA) basic requirements are:
Payment of the minimum wage;
Overtime pay for time worked over 40 hours in a workweek;
Restrictions on the employment of children; and.
Recordkeeping.
Explanation:
The Fair Labor Standards Act (FLSA) establishes basic wage, overtime pay, bookkeeping, and youth employment standards that apply to employees in the private sector as well as those employed by federal, state, and local governments.
What is the main objective of the Fair Work Act?The Fair Work Act's purpose is to establish a national workplace relations system that establishes minimum standards and conditions for employees and serves as the legal framework for employer-employee relations in the majority of Australian workplaces.
The 1938 law established a minimum wage, overtime pay, equal pay, record keeping, and child labor regulations. workers in interstate commerce or producers of interstate commerce goods Employees from the state, local government, and federal government previous case holding that employees were not covered.
Learn more about the Fair Work Act here:
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Find the account balance at the end of the second period for $3,000.00 invested at 9% compounded quarterly.
Answer:
A = $3136.51875
Explanation:
Given that :
The principal = $3,000.00
Rate = 9%
Time = 6 months
Since the amount is compounded quarterly;
r = 9/4 = 2.25 %
t = 6 months = 2 quarter
Using the formula:
A = P(1+r/100)^t
A = 3000.00(1+ 2.25/100)^2
A = 3000.00( 1+ 0.0225)^2
A = 3000.00 (1.0225)^2
A = 3000.00 (1.04550625)
A = $3136.51875
A dealer buys 10,000 shares of ABC common at $20 for its inventory. One week later the stock is quoted at $22 - $23, and a customer sells 100 shares to the dealer at a net price of $21. Under the FINRA 5% Policy, a fair and reasonable mark-down is based upon which price?
Answer:
$22
Explanation:
According to the FINRA 5% Policy the mark-down if the customer sell must always be calculated from the inside bid price which is here $22 and if the customer is a buyer then the mark-up must be calculated using the inside ask price which is here $23. As the customer here is seller, hence the inside bid price $22 was appropriate here according to the FINRA 5% policy.
FINRA 5% policy says that the broker can not charge commissions, or markups or markdowns which is more than 5% on standard trades.
So the commission of $2 ($23-$21) is not allowed under this rule hence the appropriate price for the stock must be $22 not $21.
Saul Company purchased a tractor at a cost of $180,000. The tractor has an estimated salvage value of $20,000 and an estimated life of 8 years, or 12,000 hours of operation. The tractor was purchased on January 1, 2019 and was used 2,400 hours in 2019 and 2,200 hours in 2020. What amount will Saul Company report as depreciation expense over the 8-year life of the equipment using straight-line depreciation
Answer:
Annual depreciation= $20,000
Explanation:
Giving the following information:
cost= $180,000.
The tractor has an estimated salvage value of $20,000 and an estimated life of 8 years
Under the straight-line depreciation method, the depreciation expense remains constant during the useful life. We need to use the following formula:
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (180,000 - 20,000)/8
Annual depreciation= $20,000
Prepare a double spaced memo to the company president, John Smith (who has an engineering background but no financial or accounting training) recommending the best choice in the following scenario:
Smith Construction Inc. has just purchased several major pieces of road building equipment. Because the purchase price is so large, the supplier is giving Smith the option of choosing among three payment plans:
Option 1 - $600,000 immediately in cash;
Option 2 - $200,000 down payment now and $65,000 per year for each of the next 12 years beginning at the end of the current year;
Option 3 - $90,000 at the end of each of the next 14 years.
Please assume that the cost of capital for Smith Construction is 12%.
Answer:
The best option is the third option because it has the lowest present value
Explanation:
The best choice of the options can be found by calculating the present value of the options.
Present value can be calculated using a financial calculator.
The present value of the first option would be $600,000
Present value of the second option
Cash flow in year 0 = $200,000
Cash flow each year from year 1 to 12 = $65,000
I = 12%
Present value = $602,634.33
Present value of the third option
Cash flow each year from year 0 to 13 = $90,000
I = 12%
Present value = $596,535.14
To find the PV using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
I hope my answer helps you
Heavy Metal Corporation is expected to generate the following free cash flows over the next five years.
Year 1 2 3 4 5
FCF($million) 52.1 68.6 78.3 74.4 81.1
After then, the free cash flows are expected to grow at the industry average of 4% per year. Using the discounted free cash flow model and a weighted average cost of capital of 14%:
A. Estimate the enterprise value of Heavy Metal.
B. If Heavy Metal has no excess cash, debt of $304 million, and 41 million shares outstanding, estimate its share price.
Answer:
Enterprise value of Heavy Metal= $1,080.766
Share price = $18.945 per unit
Explanation:
The value of a firm is the present value of the free cash flow discounted at the weighted average cost of capital
Year PV
1 52.1 × 1.14^(-1) = 45.70175439
2 68.6 × 1.14^(-2) = 52.40073869
3 78.6 × 1.14^(-3) = 53.05276117
4 74.4× 1.14^(-4) = 44.05077264
5 81.1 × 1.14^(-5) = 42.12079868
Year and beyond
81.1 × 1.04/(0.14-0.04) = 843.44
Total value = 45.70+ 52.40+53.052 + 44.050 +42.120+ 843.44 = 1080.766826
Enterprise value of Heavy Metal= $1,080.766
Share price = Total value - Debt value / number of shares
= (1,080.766 - 304 )/ 41 million units= $18.945 per unit
Share price = $18.945 per unit
Balance Sheet
Assets:
Cash and marketable $600,000
securities
Accounts receivable 900,000
Inventories 1,500,000
Prepaid expenses 75,000
Total current assets $3,075,000
Fixed assets 8,000,000
Less: accum. depr. (2,075,000)
Net fixed assets $5,925,000
Total assets $9,000,000
Liabilities:
Accounts payable $800,000
Notes payable 700,000
Accrued taxes 50,000
Total current liabilities $1,550,000
Long-term debt 2,500,000
Owner's equity (1 million 4,950,000
shares of common stock outstanding)
Total liabilities and $9,000,000
owner's equity
Net sales (all credit) $10,000,000
Less: Cost of goods sold (3,000,000)
Selling and (2,000,000)
administrative expense
Depreciation expense (250,000)
Interest expense (200,000)
Earnings before taxes 4,550,000
Income taxes (1,820,000)
Net income $2,730,000
a. Calculate the current ratio
b. Calculate the average collection period.
c. Calculate the debt ratio.
d. Calculate the total asset turnover ratio.
e. Calculate the operating profit margin
f. Calculate the inventory turnover ratio
Answer:
a. current ratio = 1.98
b. average collection period = 32.85 days
c. debt ratio = 35,56%
d. total asset turnover ratio = 1.11 times
e. operating profit margin = 47,50%
f. inventory turnover ratio = 2 times
Explanation:
a. current ratio
Current ratio = Current Assets / Current Liabilities
= 3,075,000 / 1,550,000
= 1.98
b. average collection period.
Average collection period = Accounts Receivable / (Sales / 365)
= 900,000 / (10,000,000 / 365)
= 32.85 days
c. debt ratio.
Debt ratio = Interest bearing debt / Total Assets × 100
= (700,000+2,500,000)/ 9,000,000 × 100
= 35,56%
d. total asset turnover ratio.
Total asset turnover ratio = Sales / Total Assets
= 10,000,000 / 9,000,000
= 1.11 times
e. operating profit margin
Operating profit margin = Operating Profit / Sales × 100
= (4,550,000+200,000) / 10,000,000 × 100
= 47,50%
f. inventory turnover ratio
Inventory turnover ratio = Cost of Sales / Inventory
= 3,000,000 / 1,500,000
= 2 times
Suppose you have $200,000 in a bank term account. You earn 5% interest per
annum from this account.
You anticipate that the inflation rate will be 4% during the year. However, the
actual inflation rate for the year is 6%.
Calculate the impact of inflation on the bank term deposit you have and
examine the effects of inflation in your city of residence with attention to food
and accommodation expenses.
Answer:
Kindly check explanation
Explanation:
Account balance or principal = $200,000
Interest rate per annum = 5% = 0.05
Actual inflation rate for the year = 6% = 0.06
Period = 1 year
Amount at the end of one year:
Principal × ( period + interest rate)
$200,000 × ( 1 + 0.05)
$200,000 × (1.05) = $210,000
With anticipated inflation rate of 4% :
$200,000 × ( 1 + 0.04)
$200,000 × (1.04) = $208,000
Purchasing power = $208,000
At this rate of inflation, $208,000 will buy us what $200,000 can buy today.
Excess amount = $210,000 - $208,000 = $2000
$2000 will be earned if the principal is placed in bank.
With actual inflation rate of 6% :
$200,000 × ( 1 + 0.06)
$200,000 × (1.06) = $212,000
Purchasing power = $212,000
With inflation rate of 6%, $200,000 today will be equivalent to $212,000 after one year and as such will be required to purchase the same items $200,000 can today.
Deficit amount = $210,000 - $212,000 = $(2000) deficit
A prospective MBA student earns $55,000 per year in her current job and expects that amount to increase by 7% per year. She is considering leaving her job to attend business school for two years at a cost of $40,000 per year. She has been told that her starting salary after business school is likely to be $100,000 and that amount will increase by 10% per year. Consider a time horizon of 10 years, use a discount rate of 13%, and ignore all considerations not explicitly mentioned here.
Assume all cash flows occur at the start of each year (i.e., immediate, one year from now, two years from now,..., nine years from now). Also assume that the choice can be implemented immediately so that for the MBA alternative the current year is the first year of business school.
What is the net present value of the more attractive alternative?
Please round your answer to the nearest dollar.
Answer:
The net present value of the more attractive alternative is the MBA alternative which is = $ 495,894
Explanation:
Solution
Recall that:
An MBA student earns = $55,000 per year on her present job
The expected amount increase = 7%
She considers leaving her job to attend business school at cost of =$40,000
Starting salary after business school= $ 100,00
Per year increment of amount = 10%
Number of years = 10
Discount rate = 13%
Now,
The present Net value of the present Job alternative = $ 435,568.05
or 435,568
Thus,
The present Net value of the MBA alternative = $ 495,893.60
or $495,894
So,
The present Net value of the MBA alternative is more than that of the current job alternative.
Hence, the net present value of the more attractive alternative = MBA alternative = $ 495,894
Note: Kindly find an attached copy of the of the solution to the given question below.
Summary operating data for Custom Wire & Tubing Company during the year ended April 30, 2019, are as follows: cost of merchandise sold, $6,100,000; administrative expenses, $740,000; interest expense, $25,000; rent revenue, $60,000; sales, $9,332,500; and selling expenses, $1,250,000. Prepare a single-step income statement. Refer to the lists of Labels, Accounts, and Amount Descriptions provided for the exact wording of the answer choices for text entries.
Answer and Explanation:
The preparation of the single step income statement is presented below:
Custom Wire & Tubing Company
Income Statement
Particulars Amount($)
Sales 9,332,500
less: cost of goods sold (6,100,000)
Gross profit 3,232,500
Add: rent revenues 60,000
less: expenses:
Administrative expenses (740,000)
Selling expenses (1,250,000)
Interest expenses (25,000)
Net Income 1,277,500
We simply added the revenues and deducted all expenses so that the net income could arrive
If your company’s product is mobile phones, do you think it would make better strategic sense to employ a multidomestic strategy, a transnational strategy, or a global strategy? Multiple Choice A transnational strategy would be appropriate since the same strategic theme could be employed, but country-to-country customization is necessary to accommodate consumer preferences in mobile phone features. A global strategy makes best strategic sense since country-to-country customization to fit local market conditions is necessary. A global strategy would be appropriate since most mobile phones are constructed to work globally and buyer needs across the world are relatively universal. A multidomestic strategy is called for since mobile phone features must be tailored to the specific market conditions and buyer preferences in each country market. A transnational strategy would make better strategic sense since it would be difficult to employ essentially the same strategic theme in all country markets.
Answer:
The correct answer is the third option: A global strategy would be appropiate since most mobile phones are constructed to work globally and buyer needs across the world are relatively universal.
Explanation:
To begin with, in order to understand that using a global strategy is better and more suitable for the company first we need to understand that the company is working in the industry of mobile phones and therefore that is makes great sense to employ a global strategy that is focus on launching the products to the whole world or at least to the greater amount of countries that the company can because when it comes to mobile phones the needs of the consumers in every part tend to be the same and therefore it would no need much customization and the company will be able to release their product globally.
En el periódico lee que el PIB aumento debido a un incremento en las variables internas privadas. ¿A qué variables se refiere?
Answer:
precios de productos y servicios
Explanation:
El PIB de un país aumenta cuando el valor total de los productos y servicios que los productores nacionales venden a países extranjeros excede el valor total de los bienes y servicios extranjeros que compran los consumidores nacionales. Estos productos y servicios son las variables internas y pueden variar desde alimentos, facturas de servicios públicos e incluso el pago de una sesión de masaje.
Which of the following statements is true regarding the Unrealized Loss on Investments account
A) It is contra to the Allowance to Adjust Short Term Investments to Market Value
B) It is reported on the income statement when it pertains to short term investments
C) It is debited when securities are sold for less than their purchase price
D) It is not reported on the financial statements; only realized gains and losses are reported
Answer:
B) It is reported on the income statement when it pertains to short term investments
Explanation:
Unrealised loss is defined as a reduction in the value of an asset that is held by an investor rather than selling it and realising a loss.
Unrealised loss is also called paper loss. This loss is not realised until the asset is sold.
Unrealised losses are not usually recorded on the income statement unless they intend to be sold in a short time.
When a security is to be sold in the short run it is called a trading security. Trading securities are represented in the income statement as they can increase or reduce income