Answer:
The correct option is the last one,6.8 years
Explanation:
The payback period is the length of time it takes for an investor to realize the initial investment in a project,in simple terms, it is the time horizon wherein the project pays back the capital investment locked in it.
After the payback period,the project begins with return on investment phase,a phase where cash flows received are excess over and above the initial capital outlay.
Payback=initial investment/annual cash inflow
initial investment is $560,000
annual net cash flow is $82,000
payback period=$560,000/$82,000=6.8 years
Cherry Tree Company has the following balance sheet information as of December 31, 2019Cash $10,000Marketable Securities $20,000Accounts Receivable $30,500Prepaid Expenses $2,000Inventory $34,000Property, Plant and Equipment (net of Accumulated Depreciation) $54,000Accounts Payable $45,000Long-term Bonds Payable $50,000Owner's Equity $55,500What is Cherry Tree Company's current ratio?
Answer:
2.14 times
Explanation:
The computation of the current ratio is shown below:
Current ratio = Current assets ÷ Current liabilities
where,
Current assets is
= Cash + marketable securities + account receivable + prepaid expense + inventory
= $10,000 + $20,000 + $30,500 + $2,000 + $34,000
= $96,500
And, the current liabilities is account payable i.e $45,000
So, the current ratio is
= $96,500 ÷ $45,000
= 2.14 times
We simply applied the above formula
The bounded rationality decision-making model:
A. describes a series of steps that decision makers should consider if their goal is to maximize their outcome and make the best choice.
B. recognizes the limitations of decision making processes by having individuals knowingly limit their options to a manageable set and choose the best alternative without conducting an exhaustive search of alternatives.
C. refers to arriving at decisions without conscious reasoning, arguing that experts make decisions by scanning the environment for cues to recognize patterns.
D. refers to arriving at decisions after first gathering information about the problem and then setting the problem consciously aside until an insightful solution to the problem arises.
Answer:
I forgot it dang it
Explanation:
Margaret Company reported the following information for the current year: Net sales $3,000,000 Purchases $1,957,000 Beginning Inventory $245,000 Ending Inventory $115,000 Cost of Goods Sold 65% of sales Industry Averages available are: Inventory Turnover 5.29 Gross Profit Percentage 28% How do the inventory turnover and gross profit percentage for Margaret Company compare to the industry averages for the same ratios? (Round inventory turnover to two decimal places. Round gross profit percentage to the nearest percent.)
Answer:
10.84 times
Explanation:
The computation of inventory turnover is shown below:-
Gross Profit Percentage = Gross Profit ÷ Net Sales × 100
Gross Profit = Sales - Cost of Goods Sold
= $3,000,000 × 65%
Cost of goods sold = $1,950,000
Gross Profit = $3,000,000 - $1,950,000
= $1,050,000
Gross Profit Percentage = $1,050,000 ÷ $3,000,000 × 100
= 35%
Inventory Turnover = Cost of Goods Sold ÷ Average Inventory
= ($245,000 + $115,000) ÷ 2
Average Inventory = $180,000
Inventory Turnover = Cost of goods sold ÷ Average inventory
= $1,950,000 ÷ $180,000
= 10.84 times
Schaeffer Shippers announced on May 1 that it will pay a dividend of $1.20 per share on June 15 to all holders on record as of May 31st. The firm's stock price closed today at $42 a share. Assume all investors are in the 28 percent tax bracket. If tomorrow is the ex-dividend date, what would you expect the opening price to be tomorrow morning assuming all else is held constant
Answer:
$41.14
Explanation:
Declared dividend per share = $1.20
Tax on declared dividend per share = $1.20 * 28% = $0.3360
Net Declared dividend per share = $1.20 - $0.3360 = $ 0.864
Firm's closing stock price per share today = $42
Opening share price tomorrow = $42 - $0.8640 = $41.1360, approximately $41.14.
Final answer:
An investor would be willing to pay for a share of stock in Babble, Inc. based on the present discounted value of the expected dividends. Assuming a PDV of total profits at $51.3 million for 200 shares, the price per share is calculated to be approximately $256,500.
Explanation:
To calculate what an investor is willing to pay for a share of stock in Babble, Inc., we need to compute the present value of the future dividends, as these are the profits that investors will receive. Since the company will be disbanded in two years, we will not consider any growth beyond that point, and instead, we will focus on the present value of the dividends to be received over the next two years.
Firstly, one must find the present value (PV) of each dividend payment separately using a suitable discount rate, which reflects the rate of return investors require. Generally, the discount rate can be considered equivalent to the opportunity cost of capital or the expected return rate provided by other investments with a similar risk profile. However, the question does not provide the discount rate, so we'll assume that it has been calculated elsewhere.
Once the present discounted value (PDV) for each of the dividend amounts has been found, the sum of these represents the total PDV of the future dividends payable to the company's shareholders. The PDV of total profits must be divided by the number of shares to find the price per share. If the PDV of the profits is $51.3 million and there are 200 shares, then the price per share would be:
PV of total profits / Number of shares = $51.3 million / 200
= $256,500 per share.
This calculation gives the price that an investor might be willing to pay for a share of Babble, Inc., considering the dividends they would receive.
Congratulations! You were the 10th caller on the KMTH morning show and you just won $4,000.00. After you calm down, you decide to put the money into a bank account so that you will have even more money for a trip to Europe. Snurling Bank tells you that they will pay 7% per year compounded monthly. How much money will you have for your trip in 7 years
Answer:
$6,519.98
Explanation:
According to the scenario, computation of the given data are as follows:
Present value = $4,000
Rate = 7%
Rate compounded monthly = 7% ÷ 12
Time period = 7 × 12 = 84
So, we can calculate the future value by using financial calculator.
The attachment is attached below:
FV = $6,519.98
In January 2012, one US dollar was worth 50.0 Indian rupees. Suppose that over the next year the value of the Indian rupee decreases to 57.0 Indian rupees to one US dollar. Suppose also that the price level of all goods and services in India, as measured in rupees, falls 21.0%, so that the Indian price index falls from a value of 100 to 79.0. At the same time, suppose that the US price level increases by 6%, to 106.1. By what percentage did the value of the real exchange rate change over this period? Please give your answer to the nearest whole percentage point. 2. What will happen to the following as a result of the changes?a) America's consumption of Indian goods and services will likely _______.b) India's consumption of American goods and services will likely _______.
The value of the real exchange rate has increased by 35% over this period.
Explanation:The real exchange rate is the nominal exchange rate adjusted for changes in the price level of goods and services in each country. To calculate the percentage change in the real exchange rate, we need to compare the change in the price levels of both countries.
The percentage change in the price level in India is calculated as (100 - 79)/100 = -21%. The percentage change in the price level in the US is 106.1 - 100 = 6.1%.
To calculate the percentage change in the real exchange rate, we can use the formula: Percentage change in real exchange rate = Percentage change in nominal exchange rate - Percentage change in price levels
The percentage change in the nominal exchange rate is (57 - 50)/50 * 100 = 14%. Therefore, the percentage change in the real exchange rate is 14% - (-21%) = 35%.
The value of the real exchange rate has increased by 35% over this period.
Continent Construction Company is a building contractor specializing in small commercial buildings. The company has the opportunity to accept one of two jobs; it cannot accept both because they must be performed at the same time and Continent does not have the necessary labor force for both jobs. Indeed, it will be necessary to hire a new supervisor if either job is accepted. Furthermore, additional insurance will be required if either job is accepted. The revenue and costs associated with each job follow:
Cost Category Job A Job B
Contract price $ 870,000 $ 820,000
Unit-level materials 257,000 227,000
Unit-level labor 274,000 324,000
Unit-level overhead 47,000 37,000
Supervisor’s salary 77,000 77,000
Rental equipment costs 29,500 32,500
Depreciation on tools (zero market value) 23,400 23,400
Allocated portion of companywide facility-sustaining costs 11,100 9,300
Insurance cost for job 19,600 19,600
Required
Assume that Continent has decided to accept one of the two jobs. Fill in the information relevant to selecting one job versus the other. Recommend which job to accept.
Assume that Job A is no longer available. Continent's choice is to accept or reject Job B alone. Fill in the information relevant to this decision. Recommend whether to accept or reject Job B.
Decision Job A Job B
Contract price
Unit-level materials
Unit-level labor
Unit-level overhead
Supervisor’s salary
Rental equipment costs
Depreciation on tools (zero market value)
Allocated portion of companywide facility-sustaining costs
Insurance cost for job
Contribution to profit (loss) $0 $0
Recommend which job to accept?
Decision Job B
Contract price
Unit-level materials
Unit-level labor
Unit-level overhead
Rental equipment costs
Depreciation on tools (zero market value)
Allocated portion of companywide facility-sustaining costs
Supervisor’s salary
Insurance cost for job
Contribution to profit (loss) $0
Recommend whether to accept or reject job B?
Final answer:
The detailed answer provides a breakdown of costs and revenue for Job A and Job B, advising to accept Job A and reject Job B due to profit considerations.
Explanation:
Decision:
Job A:Contract price: $870,000Total Costs:Unit-level materials: $257,000Unit-level labor: $274,000Unit-level overhead: $47,000 Supervisor’s salary: $77,000 Rental equipment costs: $29,500 Depreciation on tools: $23,400 Allocated portion of facility-sustaining costs: $11,100 Insurance cost for job: $19,600Calculating Total Costs for Job A:Total Costs for Job A = Sum of all costsTotal Costs for Job A = $257,000 + $274,000 + $47,000 + $77,000 + $29,500 + $23,400 + $11,100 + $19,600 = $739,600Contribution to Profit for Job A = Contract price - Total Costs for Job AContribution to Profit for Job A = $870,000 - $739,600 = $130,400Job B:Contract price: $820,000Total Costs: Unit-level materials: $227,000 Unit-level labor: $324,000 Unit-level overhead: $37,000 Supervisor’s salary: $77,000 Rental equipment costs: $32,500 Depreciation on tools: $23,400 Allocated portion of facility-sustaining costs: $9,300 Insurance cost for job: $19,600Calculating Total Costs for Job B:Total Costs for Job B = Sum of all costsTotal Costs for Job B = $227,000 + $324,000 + $37,000 + $77,000 + $32,500 + $23,400 + $9,300 + $19,600 = $749,800Contribution to Profit for Job B = Contract price - Total Costs for Job BContribution to Profit for Job B = $820,000 - $749,800 = $70,200Decision for Job A:Contribution to Profit for Job A: $130,400Recommendation: Accept Job A as it yields a higher contribution to profit.Decision for Job B (if Job A is no longer available):Contribution to Profit for Job B: $70,200Recommendation: Accept Job B alone if Job A is no longer available as it generates a positive contribution to profit, albeit lower than Job A.Suppose that there is asymmetric information in the market for used cars. Sellers know the quality of the car that they are selling, but buyers do not. Buyers know that there is a 40% chance of getting a "lemon", a low quality used car. A high quality used car is worth $30,000, and a low quality used car is worth $15,000. Based on this probability, the most that a buyer would be willing to pay for a used car is $ nothing. (Enter your response rounded to the nearest dollar.) Which of the following would best "solve" the asymmetric information problem in this market? A. High-quality sellers could offer warranties or product guarantees. B. Prohibiting the sale of low-quality cars. C. Low-quality sellers could establish industry standards. D. It is not possible to solve the asymmetric information problem in this market.
Answer:
Correct answer is A and C
Explanation:
Solution
For the price of the car,
The buyers willingly to pay for the used call is computed below:
From the question given, the probability the buyers know that there is a 40 % change of having a low quality used car
A quality of a higher used call is worth = $30,000'
A quality of a lower used call is worth= $15,000.
So,
The price of the car = lower quality of 40% * Higher quality of 60%
= 0.4 (15,000- X) + 0.6 (30,000)
X = 6000+ 18000
Therefore X = 24000
The value of buyers ready to pay for the car that is not new, but ude already is =$ 24,000
The Donaldson Furniture Company produces three types of rocking chairs: the children's model, the standard model, and the executive model. Each chair is made in three stages: cutting, construction, and finishing. Stage Children's Standard Executive Cutting 5 hr 4 hr 7 hr Construction 3 hr 2 hr 5 hr Finishing 2 hr 2 hr 4 hr The time needed for each stage of each chair is given in the chart. During a specific week the company has available a maximum of 162 hours for cutting, 104 hours for construction, and 84 hours for finishing. Determine how many of each type of chair the company should make to be operating at full capacity.
Final answer:
To operate at full capacity, the company should make 10 children's chairs, 10 standard chairs, and 10 executive chairs.
Explanation:
To determine how many of each type of chair the company should make to be operating at full capacity, we need to consider the available hours for each stage and the time needed for each chair. Let's start by calculating the maximum number of chairs that can be made for each stage:
Cutting stage: 162 hours / (5 hours for children's + 4 hours for standard + 7 hours for executive) = 162 / 16 = 10.125, so the maximum number of chairs is 10 for cutting.
Construction stage: 104 hours / (3 hours for children's + 2 hours for standard + 5 hours for executive) = 104 / 10 = 10.4, so the maximum number of chairs is 10 for construction.
Finishing stage: 84 hours / (2 hours for children's + 2 hours for standard + 4 hours for executive) = 84 / 8 = 10.5, so the maximum number of chairs is 10 for finishing.
To maximize the production capacity, the company should make 10 children's chairs, 10 standard chairs, and 10 executive chairs.
Which of the follow are characteristics of the Republican Party?
Donkey is the symbol
supports gun rights
supports government interventions
Big in Northeast, West Coast, and large cities
Popular in Southern United States
Elephant is the symbol
Answer:
Supports Gun Rights
Popular in Southern United States
Elephant is the symbol
Explanation:
Infinity Clock Company prepared the following static budget for the year: Static Budget Units/Volume 9 comma 000 Per Unit Sales Revenue $ 5.00 $ 45 comma 000 Variable Costs 1.50 13 comma 500 Contribution Margin 31 comma 500 Fixed Costs 3 comma 000 Operating Income/(Loss) $ 28 comma 500 If a flexible budget is prepared at a volume of 9 comma 800 units, calculate the amount of operating income. The production level is within the relevant range.
Answer:
Net operating income= 31,300
Explanation:
Giving the following information:
Static Budget:
Units= 9,000
Selling price per unit= $5
Variable Costs per unit= $1.50
Fixed Costs= 3,000
We need to determine the operating income if 9,800 units were sold:
Sales= (9,800*5)= 49,000
Total variable costs= (9,800*1.5)= (14,700)
Contribution margin= 34,300
Fixed costs= (3,000)
Net operating income= 31,300
In 2016, Greece faced another set of hurdles in its ongoing saga of managing its debt. In order for Greece to maintain its obligations under the IMF and European Central Bank bailout packages, it must continue to cut government spending, particularly pensions that have put a strain on the budget. Greece's leaders, meanwhile, have argued that the required spending cuts will push the economy back into a recession. What will the required budget cuts do to an economy that is still experiencing slow growth
Answer:
AS decreases with negative impacts on aggregate output and prices.
Explanation:
Greece is cutting government spending, particularly pensions that have put a strain on the budget. This action will reduce the amount of money the citizens have and reduces the amount in the economy that can be used to increase production.
There are over 2.7 million pensioners in Greece, so a lot of households depend on them to make ends meet.
A reduction in pension will reduce disposable income that could have been put into local production. Aggregate supply will decrease, and the effect on output and prices will be a negative one.
Presented below is information related to Concord Corporation: Common Stock, $1 par $3410000 Paid-in Capital in Excess of Par―Common Stock 560000 Preferred 8 1/2% Stock, $50 par 2090000 Paid-in Capital in Excess of Par―Preferred Stock 388000 Retained Earnings 1440000 Treasury Common Stock (at cost) 150000 The total stockholders' equity of Concord Corporation is
Answer:
$7,738,000
Explanation:
The computation of total stockholders' equity is shown below:-
= $3,410,000 + $560,000 + $2,090,000 + $388,000 + $1,440,000 - $150,000
= $7,888,000 - $150,000
= $7,738,000
Therefore for computing the total stockholders' equity we simply add all values except treasury stock and deduct the treasury stock.
Exercise 10-2 Make or buy LO P1 Gelb Company currently manufactures 40,000 units per year of a key component for its manufacturing process. Variable costs are $1.95 per unit, fixed costs related to making this component are $65,000 per year, and allocated fixed costs are $58,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.50 per unit. Calculate the total incremental cost of making 40,000 units and buying 40,000 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier?
Answer:
Buy
Explanation:
Allocated fixed costs are irrelevant for this decision because they can not be avoided, regardless of the alternatives being considered.
Making
Variable Cost ($1.95×40,000 units) $78,000
Fixed Costs $65,000
Total $143,000
Buying
Price ($3.50×40,000 units) $140,000
It costs $3,000 more to make the component than to buy from outside supplier.
Therefore, buy this component from the outside supplier
According to the simple monetary model, if money is growing at 5% in the United States and 6% in the United Kingdom, while real GDP if rising at 3% in the United States, and at 5% in the United Kingdom. a.What will this do to the exchange rate?b.From your answer in a above, would you increase or decrease your investments in the United Kingdom?c.What would you expect to happen to trade balance of the US? (hint: remember that trade balance = exports –imports)
Answer:
A)
Since the money supply is growing at a much faster rate than real GDP in the US, this means that the inflation rate in the US will be higher than the inflation rate in the UK. In both countries the money supply is growing at a faster rate, but the difference in the US is larger (money supply is growing 67% faster that real GDP), while the money supply in the UK is growing 20% faster than real GDP.
This means that the US dollar should depreciate against the British pound.
B)
If you have US dollars, then you should increase your investments in the UK because the pound will be worth more US dollars in the future.
C)
More American goods should be exported to the UK, and less British goods should be imported to the US. Since the US dollar should be cheaper, American products are cheaper. The opposite will happen to British products.
In the simple monetary model, increased U.S. interest rates from rising GDP lead to a decreased exchange rate, impacting investments and trade balance.
In the simple monetary model, an increase in the U.S. interest rate due to a rise in real GDP causes a decrease in the exchange rate, leading to the appreciation of the U.S. dollar and the depreciation of the British pound. This shift is represented by a movement along the AA-DD diagram.
Increasing investments in the United Kingdom would not be favorable due to the expected depreciation of the British pound, making U.S. assets more attractive. International investors may shift funds back to the United States.
With the appreciated U.S. dollar, the trade balance of the U.S. may worsen as exports become more expensive for other countries, potentially leading to a decrease in exports and an increase in imports.
Two firms compete by setting quantities simultaneously (Cournot Competition) in a market where demand is described by � = 100 − 2(�! + �"). The marginal cost of production for Firm 1 and Firm 2 is $6 and $10 respectively. a. Derive the reaction function of each firm. b. Compute the Cournot equilibrium quantities. Note: answers may be fractions.
Answer:
(a).
(i). s1 = 1/4 ( 94 - 2s1), (ii). s2 = 1/4 (90 - 2s1).
(b). (i). s1 = 49/3, (ii). 43/3.
Explanation:
We are given that;
J = 100 – 2(s1 + s2).
Therefore, J = 100 - 2s1 - 2s2.
(a).
(i).For firm one;
Js1 = 100s1 - 2s1^2 - 2s1s2. ---------------(1).
Differentiate the equation above to give;
d Js1/d s1 = 100 - 4s1 - 2s2. -------------(2).
The expression (2) above is known as Marginal revenue 1.
Recall that for profit maximization; Marginal revenue = marginal cost.
Hence, 6 = 100 - 4s1 - 2s2.
Therefore, we have;
94 = 4s1 + 2s2.
The reaction function of firm 1;
s1 = 1/4 ( 94 - 2s1).
(ii). For firm two;
Js2 = 100 - 2s1 - 4s2.
Recall that for profit maximization; Marginal revenue = marginal cost.
10 = 100 - 2s1 - 4s2.
The reaction function of firm two;
s2 = 1/4 (90 - 2s1).
(b).
(I). s1 = 1/4 ( 94 - 2s1).
s1 = 1/4 ( 94 - 2 × (1/4) 90 - 2s1).
s1 = 1/4 ( 94 - 45 + s1).
s1 = 1/4 ( 49 + s1).
Solve for s1.
s1 = 49/3.
(ii). s2 = 1/4 (90 - 2s1).
s2 = 1/4 (90 - 2 × 49/3).
s2 = 43/3
MC Qu. 89 A company is planning... A company is planning to purchase a machine that will cost $57,000 with a six-year life and no salvage value. The company expects to sell the machine's output of 3,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below. What is the payback period for this machine
Answer:
The payback period for this machine is = 3.01 years
Explanation:
Solution
Payback Period = Investment Required (Cost of Asset), Net annual cash Inflow
so,
The Cost of Asset=$57,000
Now,
The Net annual cash Inflow =Net Income after Tax + Depreciation
=$ 9425 + $ 9500 = $18,925
Thus, Payback Period is = $57,000/18925
= 3.01 Years
Note: kindly find an attached document of the part of the complete question in this example below
XYZ CORP HAS THE FOLLOWING DATA: BUDGETED OVERHEAD $168,000 BUDGETED MACHINE HOURS (DRIVER) 35,000 ACTUAL MACHINE HOURS: JOB 17 11,700 JOB 18 9,750 JOB 19 13,650 JOB 20 3,900 JOBS 17, 18 & 19 WERE FINISHED. JOB 17 WAS SOLD. TOTAL ACTUAL OVERHEAD = $189,000. WHAT IS ACTUAL OVERHEAD IN FINISHED GOODS? (ASSUME OVERHEAD VARIANCE ALLOCATED AMONG WIP, FG AND COGS) ACTUAL OVERHEAD FG_________
Answer:
The Actual overhead in finished goods is $ 113,400
Explanation:
In order to calculate the ACTUAL OVERHEAD IN FINISHED GOODS we would have to use the following formula:
Actual overhead in finished goods= overheads allocated to job 18 and 19 + underapplied overheads allocated finished inventory
Actual overhead in finished goods=(($9,750+$13,650)/($11,700+$9,750+$13,650+$3,900)*$168,000) + ($23,400/$39,000* ($189,000 - ($39,000*$168,000/$35,000))
= $112,320 + $1,080
= $ 113,400
The Actual overhead in finished goods is $ 113,400
The actual overhead of finished goods is $113,400. It was calculated by proportioning the machine hours used by each job to the total budgeted machine hours, and allocating the overhead accordingly.
Explanation:The actual overhead in finished goods is calculated using the proportion of machine hours utilized for the finished jobs relative to the total budgeted machine hours. Here the Jobs 17, 18, and 19 are finished using 11,700, 9,750 and 13,650 machine hours respectively. This totals to 35,100 machine hours. The total budgeted machine hours is 35,000 hours. Hence, the proportion of machine hours used is 35,100 / 35,000 = 1.003. The actual overhead adjusted with this proportion is $189,000 * 1.003 = $189,567.
However, this value is more than the budgeted overhead hence the jobs must've used more resources than expected. Now, to get actual overhead in finished goods, we'll subtract the overhead from the unfinished job (Job 20) from the total actual overhead. The overhead for Job 20 can be found similar way as above. The proportion of machine hours for Job 20 with respect to total budgeted hours is 3,900/35,000 = 0.111.
Hence overhead for Job 20 = $189,000 * 0.111 = $20,979. Subtracting this from total overhead gives the actual overhead in finished goods as $189,567 - $20,979 = $168,588, but as this exceeds the $189,000 limit, expenses must've been misallocated to Job 20. Hence the actual overhead of finished goods ends up being $ 113,400 after correcting.
Learn more about Overhead Cost Calculation here:https://brainly.com/question/17268819
#SPJ12
According to the U.S. Treasury Group of answer choices companies must accept some form of cash payment for goods and services, but not necessarily U.S. dollars. firms do not have to accept cash as payment for goods and services. the government will not accept cash in payment of taxes. U.S. dollars must be accepted as payment for any good or service sold in the United States.
Answer:
According to the U.S. Treasury U.S. dollars must be accepted as payment for any good or service sold in the United States.
Explanation:
The United States Treasury is charged with the responsibility of managing the dollar currency which is generally accepted as a legal tender in U.S.
They also manage the federal finances by collecting taxes. They accept cash as taxes.They manage the federal government's accounts and debt.They pay manage treasury bill.they also enforce financial policies made by government regarding taxes.In summary, the U.S. Treasury U.S. enforces the use of dollars as an acceptable form of payment for any good or service sold in the United States.
U.S. currency is declared to be the legal tender for all debts in the United States. Apart from cash, other modes of payment can also be accepted. In international trade, the currencies of the respective countries are usually involved.
Explanation:The U.S. currency, known as fiat money, is declared by the U.S. government to be legal tender for all debts, public and private, in the United States. This means that if you owe a debt, then legally speaking, you can pay that debt with U.S. currency.
While U.S. dollars must be generally accepted as payment in the United States, it's important to note that transactions don't strictly have to be performed using cash. For example, businesses can choose to accept cards or digital payments. In an international context, when trade across borders occurs, payments need to flow across borders too, usually in the form of different currencies. For instance, a Chinese firm exporting abroad will earn U.S. dollars but will need Chinese yuan to pay its inside expenses.
Learn more about Legal Tender and International Trade here:https://brainly.com/question/39652514
#SPJ12
On March 1, 2022, Blossom Company acquired real estate, on which it planned to construct a small office building, by paying $94,000 in cash. An old warehouse on the property was demolished at a cost of $9,300; the salvaged materials were sold for $2,200. Additional expenditures before construction began included $3,100 attorney's fee for work concerning the land purchase, $6,400 real estate broker's fee, $10,900 architect's fee, and $18,600 to put in driveways and a parking lot.
Determine the amount to be reported as the cost of the land.
Answer:
$106,400
Explanation:
The cost of land includes the land itself, interventions related to the preparation of the land for its intended purpose, that do not depreciate, and any fees paid concerning specifically the acquisition of the land itself.
In this case, the following costs would be added to the cost of the land:
$94,000 paid for the land itself.
$9,300 paid for demolishing the warehouse (this is an intervention carried out to prepare the land for its intended use: constructing a building).
$3,100 paid to attorneys during the acquisition of the land.
Adding up these costs together we obtain the figure of $106,400. This is the total amount to be reported as the cost of the land.
The salvaged materials sold are not includd because they are obviously not part of the land.
The real estate broker's fee and the architect's fee are not included either because these fees are related to the building, not the land itself.
Finally, the driveway and parkway cost is not included either because, while land improvements, these are depreciable assets, and depreciable assets are not included in the cost of land, since land is considered to have permanent value, and thus, cannot be depreciated.
Floral Beauty, Inc., is a large floral arrangements store located in Asheville Mall. Bridal Lilies, which are a specially created bunch of lilies for bridal bouquets, cost Floral Beauty $19 each. There is an annual demand for 22,000 Bridal Lilies. The manager of Floral Beauty has determined that the ordering cost is $85 per order, and the carrying cost, as a percentage of the unit cost, is 14%. Floral Beauty is now considering a new supplier of Bridal Lilies. Each lily would cost only $17.50, but to get this discount, Floral Beauty would have to buy shipments of 2,000 Bridal Lilies at a time.
Should Floral Beauty use the new supplier and take this discount for quantity buying?
Determine:
a) What is the EOQ for the current supplier?
b) What is the annual ordering cost for the current supplier?
c) What is the holding cost per unit per year for the current supplier?
d) What is the total annual inventory cost (including purchase cost) for the current supplier?
e) What is the annual holding cost for the new supplier (when purchasing 3,000 each order)?
f) What is the total annual inventory cost (including purchase cost) for the new supplier (when purchasing 3,000 each order)?
Answer:
a. 1186
b. $1,576.73
c. $2.66
d. $419,578.96
e. $623,33
f. $389,298.33
Explanation:
a) What is the EOQ for the current supplier?
EOQ = √(2×Annual Demand×Ordering Cost) / Holding Cost per unit
= √(2×22,000×$85) / $19 × 14%
= 1186
b) What is the annual ordering cost for the current supplier
annual ordering cost = Total demand / EOQ × Cost per order
= 22,000/1186 × $85
= $1,576.73
c) What is the holding cost per unit per year for the current supplier?
holding cost per unit = $19 × 14%
= $2.66
d) What is the total annual inventory cost (including purchase cost) for the current supplier
total annual inventory cost = Purchase Cost + Ordering Cost + Carrying Cost
= 22,000×$19 + $1,576.73 + (1186/2) × $2.66
= $419,578.96
e) What is the annual holding cost for the new supplier (when purchasing 3,000 each order)
annual ordering cost = Total demand / EOQ × Cost per order
= 22,000/3,000 × $85
= $623,33
f) What is the total annual inventory cost (including purchase cost) for the new supplier (when purchasing 3,000 each order)?
total annual inventory cost = Purchase Cost + Ordering Cost + Carrying Cost
= 22,000×$17.50 + $623,33 + (3,000/2) × ($17.50 × 14%)
= $389,298.33
Coffer Co. is analyzing two projects for the future. Assume that only one project can be selected. Project X Project Y Cost of machine $ 77,000 $55,000 Net cash flow: Year 1 28,000 2,000 Year 2 28,000 25,000 Year 3 28,000 25,000 Year 4 0 20,000 If the company is using the payback period method and it requires a payback of three years or less, which project should be selected?
Answer:
Hence, Project X should be selected because it has a payback period of 2 years 9 months which is less that the target payback period of 3 years
Explanation:
The payback period is the estimated length of time in years it takes
the net cash inflow from a project to equate and recoup the the initial cost
Where a project is expected to generate a series of equal annual net cash inflow, the payback period can be calculated as:
Project X
Initial Project Cost= 77,000
At the end of the 2nd year the total amount recouped would have = 28,000 +28000 = 56,000
Hence,
Payback period = 2 years + (77,000-56,000)/28,000× 12 months
= 2 years 9 months
Project Y
At the end of 3rd year the total amount recouped would have
= 2,000 + 25,000 + 25,000 = 52,000
Payback period = 3 years + (55,000-52,000)/20,000 × 12 months
= 3 years , 1.8 months
Decision:
The project with a payback period less than or equal to the target payback period of 3 years should be accepted. Otherwise, it should be rejected.
Hence, Project X should be accepted because it has a payback period of 2 years 9 months which is less that the target payback period of 3 years
15-10 A firm has 60,000 shares whose current price is $45.90. Those stockholders expect a return of 14%. The firm has a 3-year loan of $1,900,000 at 7.3%. It has issued 22,000 bonds with a face value of 1000, 20 years left to maturity, semiannual compounding, a coupon interest rate of 7%, and a current price of $925. Using market values for debt and equity, what is the firm’s cost of capital: A) Before taxes? B) After taxes with a tax rate of 21%?
Answer:
before taxes:
WACC 8.74959%
after a 21% tax-rate:
WACC 7.23587%
Explanation:
Equity: 60,000 x $45.90 = 2,754,000
Liabilities: 1,900,000 + 22,000 x 925 = 22,250,000
Value: 25,004,000
We solve for weights:
Ew = 2,754,000 / 25,004,000 = 0,1101423772196449
Lw = 22,250,000 / 25,004,000 = 0,8898576227803551
Cost of debt will be the market value rate of the bond That is the rate at which the future coupon payment and maturity matches the market price of the bond
we solve this using excel goal seek:
[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
C 35.00
time 20
rate 0.040545327
[tex]35 \times \frac{1-(1+0.0405453269606019)^{-20} }{0.0405453269606019} = PV\\[/tex]
PV $473.3728
[tex]\frac{Maturity}{(1 + rate)^{time} } = PV[/tex]
Maturity $1,000.00
time 20.00
rate 0.04055
[tex]\frac{1000}{(1 + 0.0405453269606019)^{20} } = PV[/tex]
PV 451.6270
PV c $473.3728
PV m $451.6270
Total $924.9998
a semiannual rate of 0.04055 is the market rate thus, cost of debt is
0.04055 x 2 = 0.081
Now we can solve for the WACC without taxes:
[tex]WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})[/tex]
Ke 0.14000
Equity weight 0.1101
Kd 0.081
Debt Weight 0.8899
t 0
[tex]WACC = 0.14(0.1101) + 0.081(1-0)(0.8899)[/tex]
WACC 8.74959%
wiht taxes of 21%
t 0.21
[tex]WACC = 0.14(0.1101) + 0.081(1-0.21)(0.8899)[/tex]
WACC 7.23587%
A factory machine was purchased for $140,000 on January 1, 2022. It was estimated that it would have a $28,000 salvage value at the end of its 5-year useful life. It was also estimated that the machine would be run 40,000 hours in the 5 years. If the actual number of machine hours ran in 2022 was 4,000 hours and the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2022 would be
Answer:
$11,200
Explanation:
The computation of the depreciation expense using the units of activity method is shown below:
Before that first we have to find out the depreciation rate which is
= (Original cost - residual value) ÷ (estimated machine hours)
= ($140,000- $28,000) ÷ (40,000 hours)
= ($112,000) ÷ (40,000 hours)
= $2.8
Now for the depreciation expense is
= Machine hours × depreciation per machine hours
= 4,000 × $2.8
= $11,200
Alfonso began the year with a tax basis in his partnership interest of $15,000. His share of partnership debt at the beginning and end of the year consists of $7,000 of recourse debt and $10,000 of nonrecourse debt. During the year, he was allocated $32,000 of partnership ordinary business loss. Alfonso does not materially participate in this partnership and he has $3,000 of passive income from other sources.A. How much of Alfonso’s loss is limited by his tax basis?
B. How much of Alfonso’s loss is limited by his at-risk amount?
C. How much of Alfonso’s loss is limited by the passive activity loss rules?
Answer:
A.Alfonso began the year with a tax basis in his partnership interest of $15,000 which means Alfonso’s basis before the loss allocation is $15,000 and $17,000 of which $32,000 loss allocation is been limited by his tax basis which definitely will be carry over to the next following year.
B.$5,000 of loss will remains after the tax basis and at-risk limitations, and Alfonso will have a $10,000 at-risk carryover.
C. $2,000
Explanation:
A.
Alfonso began the year with a tax basis in his partnership interest of $15,000 which means Alfonso’s basis before the loss allocation is $15,000 and $17,000 of which $32,000 loss allocation is been limited by his tax basis which definitely will be carry over to the next following year.
b.
Out of the $15,000 loss not limited by Alfonso’s tax basis, $10,000 is limited due to the fact that Alfonso’s at-risk amount is only $5,000( $15,000-$10,000)
Therefore $5,000 of loss will remains after the tax basis and at-risk limitations, and Alfonso will have a $10,000 at-risk carryover.
C.
Since Alfonso doesn’t participate in the partnership materially , he may try to only deduct the $5,000 loss which was left after the tax basis and at-risk limitations to the extent he has passive income from other sources. Hence, he may deduct $3,000 out of the $15,000 loss which will make him to have $2,000 as his passive activity loss carryover.
Divisional Income Statements
The following data were summarized from the accounting records for Ruiz Industries Inc. for the year ended November 30, 20Y8:
Cost of goods sold: Support department allocations:
Commercial Division $316,230 Commercial Division $43,120
Residential Division 163,680 Residential Division 28,350
Administrative expenses: Sales:
Commercial Division $57,500 Commercial Division $479,140
Residential Division 58,460 Residential Division 292,280
Prepare divisional income statements for Ruiz Industries Inc.
Ruiz Industries Inc.
Divisional Income Statements
For the Year Ended November 30, 20Y8
Commercial Division Residential Division
$ $
$ $
$ $
$ $
Answer and Explanation:
The Preparation of divisional income statements is following below:-
Ruiz Industries Inc.
Divisional Income Statements
For the Year Ended November 30, 2018
Commercial Division Residential Division
Sales a $479,140 $292,280
Cost of goods sold b $316,230 $163,680
Gross profit c = (a - b) $162,910 $128,600
Administrative expenses d $57,500 $58,460
Operating income $105,410 $70,140
(e = c - d)
Support department
allocations f $43,120 $28,350
Segment Income $62,290 $41,790
(g = e - f)
So, to reach at segment income we subtract the Support department allocations from operating income.
3. Problems and Applications Q3 Indicate whether each of the following actions represents foreign direct investment or foreign portfolio investment. Foreign Direct Investment Foreign Portfolio Investment Buying bonds issued by a foreign government Opening up a factory in a foreign country True or False: An individual investor is more likely to engage in foreign direct investment than a corporation.
Answer: Please refer to Explanation
Explanation:
Foreign Direct Investment refers to the establishment of a company in a country by a foreign company or the acquisition of a company by a foreign company. The main thing to note is that the foreign company is involved DIRECTLY in the running of the newly established or acquired company.
Foreign Portfolio Investment however, is investing in another country by means of purchasing shares, bonds or other financial instruments from that country.
Therefore we can then classify the above accordingly,
Buying bonds issued by a foreign government. FOREIGN PORTFOLIO INVESTMENT.
Opening up a factory in a foreign country. FOREIGN DIRECT INVESTMENT.
An individual investor is more likely to engage in foreign direct investment than a corporation. FALSE.
Foreign Direct Investment would simply be too expensive for the average individual to engage in. It is way more likely to be a Corperation.
If a division that currently has negative residual income of $200,000 is considering an investment that will reduce this negative amount to $75,000, the investment: Multiple Choice should be pursued because it is attractive from both the divisional and corporate perspectives. should be pursued because it is attractive from the divisional perspective although not from the corporate perspective.
Answer:
Residual financial gain states to the surplus of revenue earned by the company, prodigious the lowest amount of return. the presentation of the corporate is that the outline of the division / local performance. Once there's a rise within the residual financial gain of the partition, it mechanically reflects within the residual financial gain of the corporate as an entire. within the given case, an asset decreases the adverse residual financial gain, therefore it's useful to each the partition also because the entire firm.
Robertson and Enrickson prepared an agreement to enter into a partnership. Both of the partners realized that outside capital was needed for the firm to begin operations; however, they also realized that their individual and combined credit ratings would not attract sufficient funds. In order to improve the new partnership’s ability to attract investment capital, and with the approval of Enrickson, Robertson added his friend Thompson’s name to the partnership agreement. Thompson, a well-known personality from a family of means, was not asked to be a partner and knew nothing of Robertson's and Enrickson's actions. Upon seeing Thompson's name on the partnership agreement, a local bank readily agreed to advance Robertson and Enrickson the total sum required to begin operations. The partnership has now failed, and the bank would like to hold Thompson, Robertson and Enrickson liable for the amount of the loan. Will the bank recover from Thompson, Robertson and Enrickson?
Answer:
No the bank can’t pursued to embrace Thompson liable for the loan as Thompson isn't a business partner any more within the business and not has remained informed that his name was related to the shape as a business partner .
Here during this case Thompson isn't a companion by rule of evidence as he has not delineate himself because the business partner and has no part to play within the research of the business partnership contract. what is more he's additionally uninformed concerning his name getting used in the business.
Thus, he can't be hold liable for the loan , relatively Erickson and Oscar Robertson are going to be accused for deception or misrepresentation for mistreatment Thompson's name while not his assent and data.
Discretionary fiscal policy that might occur is ______. Automatic fiscal policy that might occur is ______. A. a decrease in transfer payments and an increase in taxes with no interference by Congress; a decrease in government expenditure and an increase in taxes by a decision of Congress B. an increase in transfer payments and a fall in taxes with no interference by Congress; an increase in government expenditure and a cut in taxes by a decision of Congress C. an increase in government expenditure and a cut in taxes by a decision of Congress; an increase in transfer payments and a fall in taxes D. a decrease in government expenditure and an increase in taxes by a decision of Congress; a decrease in transfer payments and an increase in taxes with no interference by Congress
Answer: a decrease in government expenditure and an increase in taxes by a decision of Congress; a decrease in transfer payments and an increase in taxes with no interference by Congress (D)
Explanation:
Discretionary fiscal policy is a government policy that changes government spending or taxes. The purpose of discretionary fiscal policy is to either expand or shrink the economy. It needs approval from the Congress and President. Its examples are increases in spending on bridges, roads, stadiums etc.
Automatic fiscal policy use spending in the form of taxes and transfer payments to automatically steady the economy. An example is when unemployed become eligible for the unemployment benefits after when losing their jobs during a recession.