Answer:
12.17%
Explanation:
The computation of total percentage return is shown below:
(Dividend per share + Capital gain per share ) ÷ Initial investment OR Purchase per share)
Where
Capital gain per share = (Sale price per share - Purchase price per share)
= ($47.82 - $43.64 + $1.13) ÷ $43.64)) × 100
= $5.31 ÷ $43.64 × 100
= 0.121677 × 100
= 12.17%
Therefore for computing the total percentage return we simply applied the above formula.
Accounts Payable: $19,207
Accounts Receivable: 81,336
Cash: 98,324
Discount on Bonds Payable: 7,000
Sales Tax Payable: 3,512
Inventory: 95,816
Treasury Stock: 30,000
Stock Investments: 3,700
FICA Tax Payable: 3,200
Bonds Payable: 100,000
Accumulated Depreciation: 2,000
Note: Payable, due in two years 1,709 Equipment 54,128 Common Stock 100,000 Retained Earnings 102,808 Unearned Service Revenue 30,500 Supplies 10,512 Salaries and Wages Payable 17,880 Use the information above to answer the following question. What is the amount of Total Liabilities to be reported on the December 31, 2019?
Answer:
total liabilities = $169,008
Explanation:
total liabilities:
Accounts Payable: $19,207Discount on Bonds Payable: ($7,000) ⇒ contra liability accountSales Tax Payable: 3,512FICA Tax Payable: 3,200 Bonds Payable: 100,000Note Payable, due in two years 1,709Unearned Service Revenue 30,500 ⇒ must be reported as a liabilitySalaries and Wages Payable 17,880to determine the total liabilities we just have to add both current and long term liabilities, and subtract any contra liability accounts = $176,008 - $7,000 = $169,008
Following are forecasts of sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of December 31, 2017 for Stellar Stores, Inc. Horizon Period (in millions) Reported 2017 2018 2019 2020 2021 Terminal Period Sales $37,006 $44,777 $54,180 $65,558 $79,325 $80,912 NOPAT 1,292 1,563 1,891 2,288 2,768 2,824 NOA 10,007 102 14,643 17,718 21,439 21,868 Assuming a terminal period growth rate of 2%, a discount rate (WACC) of 8%, common shares outstanding of 814.3 million, and net nonoperating obligations (NNO) of $1,676 million, estimate the value of a share of Stellar common stock using the discounted cash flow (DCF) model as of December 31, 2017.
The estimated value of a share of Stellar common stock using the discounted cash flow (DCF) model, as of December 31, 2017, is approximately $48,103.72 million, given a 2% terminal growth rate and an 8% weighted average cost of capital.
The value of Stellar common stock can be estimated using the discounted cash flow (DCF) model. The formula for the DCF valuation is:
[tex]\[ \text{Stock Value} = \frac{\text{NOPAT}_{\text{Terminal}} \times (1 + g)}{\text{WACC} - g} + \frac{\text{NOA}_{\text{Terminal}} + \text{NNO}}{\text{Shares Outstanding}} \][/tex]
Where:
- [tex]\(\text{NOPAT}_{\text{Terminal}}\)[/tex] is the terminal period NOPAT.
- g is the terminal period growth rate.
- WACC is the weighted average cost of capital.
- [tex]\(\text{NOA}_{\text{Terminal}}\)[/tex] is the terminal period net operating assets.
- NNO is the net nonoperating obligations.
- Shares Outstanding is the common shares outstanding.
Given the provided data:
- [tex]\(\text{NOPAT}_{\text{Terminal}} = 2,824\)[/tex] million.
- g = 2% (terminal period growth rate).
- WACC = 8%.
- [tex]\(\text{NOA}_{\text{Terminal}} = 21,868\)[/tex] million.
- NNO = 1,676 million.
- Shares Outstanding = 814.3 million.
Plug these values into the formula:
[tex]\[ \text{Stock Value} = \frac{2,824 \times (1 + 0.02)}{0.08 - 0.02} + \frac{21,868 + 1,676}{814.3} \]\[ \text{Stock Value} \approx \frac{2,824 \times 1.02}{0.06} + \frac{23,544}{814.3} \]\[ \text{Stock Value} \approx \frac{2,884.48}{0.06} + 28.92 \]\[ \text{Stock Value} \approx 48,074.8 + 28.92 \]\[ \text{Stock Value} \approx 48,103.72 \][/tex]
Therefore, the estimated value of a share of Stellar common stock using the DCF model as of December 31, 2017, is approximately $48,103.72 million.
Final answer:
Estimating the value of Stellar common stock using a DCF model requires calculating the present value of projected NOPAT for specific years and terminal period, adjusting for net nonoperating obligations, and dividing by the number of shares. However, calculation cannot occur without the actual forecasted NOPAT and terminal value data.
Explanation:
To estimate the value of a share of Stellar common stock using the discounted cash flow (DCF) model, we need to calculate the present value of the projected NOPAT (net operating profit after tax) for the years 2018-2021 and the terminal period, discounting them back to their present values as of December 31, 2017, using the weighted average cost of capital (WACC) of 8%. Then we have to calculate the present value of the terminal value which considers the perpetual growth rate of 2%. After obtaining the total present value of future cash flows, we must adjust for net nonoperating obligations (NNO) and divide by the number of common shares outstanding to find the per-share value.
Given the provided data:
- \(\text{NOPAT}_{\text{Terminal}} = 2,824\) million.
- g = 2% (terminal period growth rate).
- WACC = 8%.
- \(\text{NOA}_{\text{Terminal}} = 21,868\) million.
- NNO = 1,676 million.
- Shares Outstanding = 814.3 million.
Plug these values into the formula:
\[ \text{Stock Value} = (2,824 * (1 + 0.02))/(0.08 - 0.02) + (21,868 + 1,676)/(814.3) \]\[ \text{Stock Value} \approx (2,824 * 1.02)/(0.06) + (23,544)/(814.3) \]\[ \text{Stock Value} \approx (2,884.48)/(0.06) + 28.92 \]\[ \text{Stock Value} \approx 48,074.8 + 28.92 \]\[ \text{Stock Value} \approx 48,103.72 \]
Therefore, the estimated value of a share of Stellar common stock using the DCF model as of December 31, 2017, is approximately $48,103.72 million.
Avery Company has two divisions, Polk and Bishop. Polk produces an item that Bishop could use in its production. Bishop currently is purchasing 22,000 units from an outside supplier for $14 per unit. Polk is currently operating at less than its full capacity of 580,000 units and has variable costs of $7 per unit. The full cost to manufacture the unit is $13. Polk currently sells 450,000 units at a selling price of $17 per unit.A. What will be the effect on Avery Company’s operating profit if the transfer is made internally?
B. What is the minimum transfer price from Polk’s perspective?C. What is the maximum transfer price from Bishop’s perspective?
Answer :
a) Impact on profit increased by $154,000
b) Minimum transfer price = $7
c) Maximum transfer price from Bishop's perspective= $14
Explanation :
As per the data given in the question,
a) Effect on operating profit :
Purchase price from outside = $14 per unit
Variable cost of production internally = $7
Profit per unit = $7
Total number of units = 22,000
Total increment in operating profit is
= 22,000 units × $7
= $154,000
In this case the fixed cost is to ignored
b) Minimum transfer price :
Since, Polk has excess capacity so there will be no increment in fixed cost and Polk would recover its variable cost which is $7
Hence, Minimum transfer price = $7
c) Maximum transfer price from perspective of Bishop :
If price i.e internal is more than $14, there would be a loss For Bishop so it would be purchase from outside due to which the whole company will lose the incremental operating profit of $154,000
Hence, Maximum transfer price = $14
Banderas corporation is considering the purchase of a machine that would cost $330,000 and would last for 9 years, the machine would have a salvage value of $79,000.By reducing labor and other operatin costs, the machine would provide annual cost savings of $59,000. The company requires a minimum pretax return of 12% on allinvestment project. The net value of the proposed project is closest to:___________.
Answer:
NPV = $ 12,854.93
Explanation:
Net Present Value (NPV) : This is one of the techniques available to evaluate the feasibility of an investment project. The NPV of a project is the difference between the present value of the cash inflows and the cash outflows of the project.
Net Present Value of the proposed project
Present Value (PV) of annual cash inflow = A× (1- (1+r)^(-n) )/r
A- annual cash inflow - 59,000, r-12%, n- 9
PV of cash inflow = 59,000× ((1- (1.012)^(-9))/0.12
= 314366.7377
PV of Scrap value = F× (1+r)^(-n)
F- scrap value - 79,000
= 79,000 × (1.12)^(-9)
= 28,488.19
NPV = 314,366.7377 + 28,488.19 - 330,000 =
NPV = $ 12,854.93
Gehring Services is a company organized around a strong management which values experience, knowledge, and structure. The company has a detailed framework of rules, procedures, and guidelines in place to help employees respond to problems in an orderly manner. Mails, memos, and notifications are used to communicate between managers, employees, and the management. Despite such provisions to help in structuring and executing work, the company incurs losses for delays and quality issues. One of their key clients had asked for two similar projects to be delivered by the teams headed by Briony and Benedict. While Benedict's team completed the project successfully on time, Briony's team had to implement numerous last-minute changes to meet client specifications, and she ended up delivering the project over a week late. Which of the following, if true, would explain this delay in Briony's submission? Briony had a good track record with clients who trusted her to do a good job. Briony and Benedict had teams comprising equal members and were allocated company resources in equitable manner. Briony's team was comprised of members who generated a lot of positive synergy while working together. The company stipulated that all communication be in the upward or downward mode only to ensure clarity and control. The management allowed Briony's team an extension to complete the project.
Answer:
the company stipulated that all communication be in the upward or downward mode only to ensure clarity and control.
Explanation:
even though Briony's team consist of members who gives a lot of positive synergy while working together is not a concrete reason forthe delay in team's submission and also, even if Briony and Benedict had teams comprised of equal members and were allocated company resources in equitable manner is still not a reasonablle explantion for delay in Briony's project submission. even if the companylayed a ground rule that all communication be in the upward or downward mode is a reasonable fact or explaination to the delay in Briony's project submission due to the the fact that Gehring servichas a plicy of strict adherance to formal vertical structure for all communications, it has become inefficient. Lateral communication occurring with management's knowledge and support can be beneficial in such a situation. The reason that Briony had a good track record with clients who trusted her to do a good job is not a concrete or valid reason/explantion to the delay in her project submission. The reason the management permit Briony's team an extension to complete the project is a consequence of the delay.
A 7-year bond of a firm in severe financial distress has a coupon rate of 12% and sells for $960. The firm is currently renegotiating the debt, and it appears that the lenders will allow the firm to reduce coupon payments on the bond to one-half the originally contracted amount. The firm can handle these lower payments. What are the stated and expected yields to maturity of the bonds? The bond makes its coupon payments annually. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Answer:
State Yield 12.9%
Expected Yield 8.8%
Explanation:
Yield to maturity is the annual rate of return that an investor receives if a bond bond is held until the maturity. It is the long term yield which is expressed in annual term.
Use Following Formula to calculate YTM
P = C×(1 + r) -1 + C×(1 + r) -2 + . . . + C×(1 + r) -Y + B×(1 + r) -Y
As per given data
Face value = B = $1,000
Coupon payment = C = $1,000 x 12% = $120
Selling price = P = $960
Number of periods = Y = 7 years
Stated Yield
$960 = $120 × (1 + r) -1 + $120 × (1 + r) -2 + $120 × (1 + r) -3 + $120 × (1 + r) -4 + $120 × (1 + r) -5 + $120 × (1 + r) -6 + $120 × (1 + r) -7 + $1,000 × (1 + r) -7
$950,39 = [ $120 ( × (1 + r) -28 ] + [ $1,000 × (1 + r) -7]
r = 12.9%
Expected Yield
Revised Coupon Rate = 12% / 1.5 = 8%
Coupon Payment = $1,000 x 8% = $80
P = C×(1 + r) -1 + C×(1 + r) -2 + . . . + C×(1 + r) -Y + B×(1 + r) -Y
$960 = $80 × (1 + r) -1 + $80 × (1 + r) -2 + $80 × (1 + r) -3 + $80 × (1 + r) -4 + $80 × (1 + r)-5 + $80 × (1 + r) -6 + $80 × (1 + r) -7 + $1,000 × (1 + r) -7
$950,39 = [ $80 ( × (1 + r) -28 ] + [ $1,000 × (1 + r) -7]
r = 8.79%
The risk-free rate is 6% and the expected rate of return on the market portfolio is 13%. a. Calculate the required rate of return on a security with a beta of 1.25. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Required return 22.25 % b. If the security is expected to return 16%, is it overpriced or underpriced
Answer:
a. 14.75%
b. Under priced
Explanation:
The computation for the required rate of return is shown below:
a. Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)
= 6% + 1.25 × (13% - 6%)
= 6% + 1.25 × 7%
= 6% + 8.75%
= 14.75%
b. As the required rate of return comes 14.75% and the required return is 16% so it is under priced as expected return is more than the required return
The required rate of return on a security with a beta of 1.25 is 14.75%. If the security is expected to return 16%, it is considered underpriced.
Explanation:To calculate the required rate of return on a security with a beta of 1.25, we can use the Capital Asset Pricing Model (CAPM) formula:
Required return = Risk-free rate + Beta × (Expected market return - Risk-free rate)
Given that the risk-free rate is 6% and the expected rate of return on the market portfolio is 13%, we can substitute the values into the formula:
Required return = 6% + 1.25 × (13% - 6%)
Required return = 6% + 1.25 × 7%
Required return = 6% + 8.75%
Required return = 14.75%
Therefore, the required rate of return on a security with a beta of 1.25 is 14.75%.
To determine if the security is overpriced or underpriced, we compare the expected rate of return of 16% to the required rate of return of 14.75%. If the expected rate of return is higher than the required rate of return, the security is considered underpriced. If the expected rate of return is lower than the required rate of return, the security is considered overpriced.
In this case, the expected rate of return of 16% is higher than the required rate of return of 14.75%, so the security is considered underpriced.
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The United States has a large trade deficit. It has a trade deficit with each of its major trading partners, but the deficit is much larger with some countries (e.g., China) than with others. Suppose the United States eliminates its overall trade deficit (with the world as a whole). Do you expect the United States to have a zero trade balance with every one of its trading partners?
Answer:
Many policymakers as well as trade analysts, do not assume that trading deficits harm the country, and caution against attempting to "protect" the trading partnership with specific countries which are crucial for the domestic industries.
Others, nevertheless, think that persistent budget deficits due to trade problems are always a concern, and there is already is considerable debate about how much of the trade deficit is triggered by foreign governments, as well as what strategies should be implemented to minimise it, if any at all.
As of December 31, 2021, Bennacer Corporation reported the following: Cash dividends payable $ 35,000 Treasury stock 750,000 Paid-in capital—share repurchase 35,000 Common stock and other paid-in capital accounts 5,500,000 Retained earnings 4,500,000 During 2022, half of the treasury stock was resold for $270,000; net income was $750,000; cash dividends declared were $1,650,000; and stock dividends declared were $650,000. The 2022 sale of half of the treasury stock would:
Answer:
The correct option in the attached full question is that the sale of half of treasury stock would reduce retained earnings by $70,000
Explanation:
The sale of half of treasury for $270,000 meant that the stock were sold for less than their worth of $375,000($750,000*1/2).
In order to recognize the loss of $105,000 on the sale ($375,000-$270,000) in the books of account,we first we need to reverse the excess amount posted to paid in capital-share repurchase account of $35,000 while the balance of the loss is debited to retained earnings.
The necessary entries are:
Dr Cash $270,000
Dr paid-in capital-share repurchase $35,000
Dr retained earnings($375,000-$270,000-$35,000) $70,000
Cr treasury stock $375,000
Dermody Snow Removal's cost formula for its vehicle operating cost is $3,000 per month plus $330 per snow-day. For the month of December, the company planned for activity of 24 snow-days, but the actual level of activity was 26 snow-days. The actual vehicle operating cost for the month was $11,190. The spending variance for vehicle operating cost in December would be closest to:
Answer:
390 F
Explanation:
Spending variance is defined as the difference between the actual expenses and planned expenses. It is favorable when the actual expenses is less than planned and vice versa.
Operating cost $3000
Maintenance per snow day - $330
Budgeted snow day - 24
Actual snow day - 26
Actual operating cost - $11,190
Variance
((330*26)+3000 =11580
Actual operating cost = 11,190
Variance = 11580-11190= 390 F
Answer: 390F
Explanation:
Given Data;
Vehicle operating cost = $11,190
Vehicle operating cost ( removal monthly) = $3,000
Actual days = 26
Snow per day = $330
Therefore:
Spending variance for vehicles operation = flexible budget - actual
= $ ( 330 * 26 + 3000 ) - $11,190
= $11,580 - $11,190
= 390F
The spending variance for vehicle operating cost would be closer to 390F in December.
On May 10, 2020, Crane Co. enters into a contract to deliver a product to Greig Inc. on June 15, 2020. Greig agrees to pay the full contract price of $1,840 on July 15, 2020. The cost of the goods is $1,170. Crane delivers the product to Greig on June 15, 2020, and receives payment on July 15, 2020. Prepare the journal entries for Crane related to this contract. Either party may terminate the contract without compensation until one of the parties performs.
Answer and Explanation:
The journal entries are shown below:
1. Accounts receivable a/c Dr $1,840
To Sales revenue a/c Cr $1,840
(Being the sales is recorded)
2. Cost of goods sold a/c Dr $1,170
To Inventory a/c Cr $1,170
(Being the cost of goods sold is recorded)
3. Cash a/c Dr $1,840
To Accounts receivable a/c Cr $1,840
(Being the payment received is recorded)
Only these three entries are recorded
Calculate the opportunity cost of capital (WACC) for a firm with the following capital structure: 53% in debt, 15% in preferred stock, and the remaining fraction in equity.The firms has a cost of debt of 7.12%, a cost of preferred stock equal to 10.9% and a 13.87% cost of common stock. The firm has a 29% tax rate. You answer should be entered as a %, for example 15.48%
Answer:
The WACC is 8.75%
Explanation:
The WACC or weighted average cost of capital is the cost of a firm's capital structure. The capital structure is made up of debt, preferred stock and common stock.
The formula for WACC is,
WACC = wD * rD * (1 - tax rate) + wP * rP + wE * rE
Where,
w represents the weight of each component in the capital structure or value of each component as a proportion of total assetsr represents the cost of each componentwe take after tax cost of debt. So we multiply cost of debt by (1 - tax rate)The weight of common equity = 1 - (0.53 + 0.15) = 0.32 or 32%
The WACC is:
WACC = 0.53 * 0.0712 * (1 - 0.29) + 0.15 * 0.109 + 0.32 * 0.1387
WACC = 0.0875 or 8.75%
On September 1, Taci Company lent $ 88,000 to L. Kahil on a 90-day, 4% note.
a. Journalize for Taci Company the lending of the money on September 1.
b. Journalize the collection of the principal and interest at maturity. Specify the date. Round interest to the nearest dollar.
Answer:
(a) Taci Company lent the money on September 1:
Debit Notes receivable $88,000
Credit Cash $88,000
(To recognize notes receivable)
(b) On December 1:
Debit Cash $88,880
Credit Notes receivable $88,000
Credit Interest receivable $880
(Collection of notes principal and interest at maturity)
Explanation:
Note receivable is a promissory note with a written promise made by the borrower to the lender (payee) to pay a certain, definite sum at a specified date.
Interest revenue on the notes is calculated as: Principal x Interest Rate x Time
In this case, the total interest revenue is $88,000 x 4%/12 x 3 months = $880.
Monthly interest revenue is therefore $880 / 3 months = $293.33.
Lance Chips granted restricted stock units (RSUs) representing 42 million of its $1 par common shares to executives, subject to forfeiture if employment is terminated within four years. After the recipients of the RSUs satisfy the vesting requirement, the company will distribute the shares. The common shares had a market price of $6 per share on the grant date. The total compensation cost pertaining to the restricted stock units is:
Answer:
Explanation:
Total compensation cost pertaining to the restricted stock units
= RUSs granted * market price per share
= 42 million * 6
= 252 million
A cell phone company offers two different plans. Plan A costs $96 per month for unlimited talk and text. Plan B costs $0.20 per minute plus $0.10 per text message sent. You need to purchase a plan for your 14-year-old sister. Your sister currently uses 1,800 minutes and sends 1,650 texts each month. (1) What is your sister’s total cost under each of the two plans? (2) Suppose your sister doubles her monthly usage to 3,600 minutes and sends 3,300 texts. What is your sister’s total cost under each of the two plans?
Answer:
1.
Plan A - Total Cost per month = $96
Plan B - Total Cost per month = $525
2.
Plan A - Total Cost per month = $96
Plan B - Total Cost per month = $1050
Explanation:
The total cost under Plan A is fixed. Thus it will not change whatever the number of texts and talk are for the month.
The total cost for Plan B is variable and will vary with change in number of talk and texts for the month. The total cost can be calculated by multiplying the cost per talk with the number of minutes per months plus the cost per text by the number of texts per month.
Plan A - Total Cost per month = $96
Plan B - Total Cost per month = 0.2 * talk minutes per month + 0.1 * texts per month
1.
Plan A - Total Cost per month = $96
Plan B - Total Cost per month = 0.2 * 1800 + 0.1 * 1650 = $525
2.
Plan A - Total Cost per month = $96
Plan B - Total Cost per month = 0.2 * 3600 + 0.1 * 3300 = $1050
Rubium Micro Devices currently manufactures a subassembly for its main product. The costs per unit are as follows:Direct materials$ 53Direct labor40Variable overhead36Fixed overhead31Total costs$ 160Crayola Technologies Inc. has contacted Rubium with an offer to sell 7 comma 000 of the subassemblies for $ 145 each. Rubium will eliminate $ 85 comma 000 of fixed overhead if it accepts the proposal. Should Rubium make or buy the subassemblies? What is the difference between the two alternatives?
Answer and Explanation:
According to the scenario, computation of the given data are as follow:-
Total Unit Cost of Making Product = Direct Material + Direct Labor + Variable Overhead + Fixed Overhead
= $53 + $40 + $36 + $31
= $160
Total Unit Cost of Buying Product = Fixed Cost + Purchase Cost
= $31 + $145
= $176
Particular Make product($) Buy product($)
Direct material(7,000 × $53) 371,000 -
Direct labor(7,000 × $40) 280,000 -
Variable overhead(7,000 ×$36) 252,000 -
Fixed overhead(7,000 × $31) 217,000 132,000
(217,000 - 85,000)
Purchase cost 7,000 × $145 = 1,015,000
Total cost 1,120,000 1,147,000
Difference between two alternatives
= $1,147,000 - $1,120,000
= $27,000
According to the analysis, rubium make the product because buying product cost is more than making the product.
QS 18-12 Contribution margin income statement LO P2 Zhao Co. has fixed costs of $286,200. Its single product sells for $163 per unit, and variable costs are $110 per unit. The company expects sales of 10,000 units. Prepare a contribution margin income statement for the year ended December 31, 2017.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Total fixed costs of $286,200.
Its single product sells for $163 per unit.
Unitary variable cost= $110 per unit. The company expects sales of 10,000 units.
Contribution margin income statement:
Sales= (10,000*163)= 1,630,000
Variable costs= (10,000*110)= (1,100,000)
Contribution margin= 530,000
Fixed costs= (286,200)
Net operating income= 243,800
In a two good economy, only burritos and t-shirts are sold. In 2014, the base year, the price of a burrito was $7.50 and 200 burritos were sold. Meanwhile, in 2014, the price of a t-shirt was $5.00, and 1000 were sold. In 2015, the price of a burrito was $9.00 and 150 burritos were sold, and the price of a t-shirt was $6.00 and 900 t-shirts were sold. What was the GDP for 2014? Please include the dollar sign in your answer.
Answer:
The GDP for 2014 was $6500
Explanation:
GDP or Gross Domestic Product is the total value in monetary terms of all the finished goods and services produced in a country within a specific period of time. It is a measure of the valuation of the size of an economy and its growth rate. The GDP of an economy with only two goods can be calculated as follows,
GDP 2014 = 7.5 * 200 + 5 * 1000
GDP 2014 = $6500
Final answer:
The Gross Domestic Product (GDP) for 2014 in this two good economy is calculated by multiplying the price of burritos and t-shirts by the quantity sold. The total GDP for 2014 is $6500.
Explanation:
To calculate the Gross Domestic Product (GDP) for 2014 in a two good economy where only burritos and t-shirts are sold, we must multiply the quantity of each good sold by its price for that year. The GDP formula for a year is GDP = (Price of Good 1 * Quantity of Good 1) + (Price of Good 2 * Quantity of Good 2). In 2014, burritos and t-shirts were sold at $7.50 and $5.00 respectively. The number of burritos sold was 200, and the number of t-shirts was 1000.
Thus, the calculation for each good is as follows:
Burritos: $7.50 * 200 = $1500T-shirts: $5.00 * 1000 = $5000Adding these together yields the total GDP for 2014.
The GDP for 2014 is $1500 for burritos plus $5000 for t-shirts, totaling $6500.
Textbooks, transportation and room and board are all...
a. included in the price of attending a college or university.
b. additional costs for attending a college or university.
c. included in a school's tuition.
d. usually offered to students who stay on campus.
Answer:
b. additional costs for attending a college or university.
Explanation:
Textbooks, transportation and room and board are additional costs for attending a college or university.
They aren't included as part of tuition costs.
They are the real costs of attending college.
These costs needs to be considered when choosing a college.
I hope my answer helps you
Answer:
addition costs for attending a college or university
Explanation:
thanks me later
Martinez Corp. has 7,900 shares of common stock outstanding. It declares a $5 per share cash dividend on November 1 to stockholders of record on December 1. The dividend is paid on December 31. Prepare the entries on the appropriate dates to record the declaration and payment of the cash dividend. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Answer:
Nov. 1
Dr Cash Dividend 39,500
Cr Dividends Payable 39,500
Dec. 31
Dr Dividends Payable 39,500
Cr Cash 39,500
Explanation:
Martinez Corp Journal entries
Nov. 1
Dr Cash Dividend 39,500
(7,900 shares of common stock ×5 per shares)
Cr Dividends Payable 39,500
Dec. 31
Dr Dividends Payable 39,500
Cr Cash 39,500
Geno's Body Shop had sales revenues and operating costs in 2020 of $740,000 and $570,000, respectively. In 2021, Geno plans to expand the services it provides to customers to include detailing services. Revenues are expected to increase by $103,000 and operating costs by $59,000 as a result of this expansion.
Required:
1. Assuming that there are no changes to the existing body shop business, operating profits would be expected to increase during 2021 by __________.
Answer:
$214,000
Explanation:
Total Revenues ($740,000 + $103,000) =$843,000
−Total Operating costs ($570,000 + $59,000)
=$629,000
= Total operating profit = $214,000
Therefore Assuming that there are no changes to the existing body shop business, operating profits would be expected to increase during 2021 by $214,000
Answer:
$97,100
Explanation:
Increase in revenue $103,000
Less: Increase in operating cost $59,000
Increase in operating profit $97,100
The master budget at Western Company last period called for sales of 235,000 units at $9.30 each. The costs were estimated to be $4.00 variable per unit and $270,000 fixed. During the period, actual production and actual sales were 240,000 units. The selling price was $9.40 per unit. Variable costs were $4.75 per unit. Actual fixed costs were $270,000. Prepare a flexible budget for Western.
Answer:
Please see the budget preparation below
Explanation:
Calculation:
Sales revenue = $2,232,000 (240,000 x $9.30)
Variable cost = $960,000(240,000 x $4)
WESTERN COMPANY
FLEXIBLE BUDGET
Sales revenue $2,232,000
Variable cost ($960,000)
Contribution margin $1,272,000
Fixed cost. ($270,000)
Operating profit. $1,002,000
If you were shopping for a new TV, would you prefer to buy one (a) under perfectly competitive market conditions, (b) from a regulated monopoly, (c) from an oligopoly or (d) under monopolistic competition market conditions? Explain your reasoning. What market structure would result in the lowest price? If you choose a market structure that doesn't offer the best price, why did you choose it? In your answer, also be sure to explain the characteristics of each of these four market structures. Do this to explain the market structure you chose, and the three you did not.
Answer:
One is buying a brand new T.V. then one can purchase the T.V. beneath the monopolistic market situation. this can be as a result of T.Vs are oversubscribed as differentiated product by diverse brands with diverse options in several brands of T.V. conjointly promotion and marketing also shows a vital part in T.V. market. though utterly viable variety of markets lead to lowest worth, however the market construction of noncompetitive kind are going to be chosen during this case as request for T'V is comparatively elastic and not utterly flexible as is that the circumstance in perfectly competitive markets and other people conform to pay higher costs for a lot of options and conditions.
It is not wise to shop for T.V. beneath monopoly because the worth are going to be terribly high and shopper additional will be low. Also, in oligopoly market arrangement the costs are going to be high and solely few companies will be marketing the merchandise with not a lot of selections accessible within the market.
Thus, the most effective sort of market arrangement to shop for T.V.is monopolistic competition.
You have taken a short position in a futures contract on corn at $3.74 per bushel. Over the next 5 days (Day 1 to Day 5) the contract settled at 3.68, 3.71, 3.67, 3.64, and 3.61. Before you can reverse your position in the futures market you are notified on Day 5 to complete delivery. What will you receive on delivery per bushel and what is the net amount per bushel you receive in total
Answer:
Explanation:
In finance, short selling (also known as shorting or going short) is the practice of selling assets, that have been borrowed from a third party with the intention of buying identical assets back at a later date to return to the lender.
So in the given scenario the investor would be at lose of
Selling price = 3.74 per bushel
Purchase price = 3.61 per bushel
therefore lose of $ 0.13 per bushel you need to pay off.
Judd Company uses standard costs for its manufacturing division. Standards specify 0.1 direct labor hours per unit of product. The allocation base for variable overhead costs is direct labor hours. At the beginning of the year, the static budget for variable overhead costs included the following data: Production volume 6 comma 100 units Budgeted variable overhead costs $ 15 comma 000 Budgeted direct labor hours 610 hours At the end of the year, actual data were as follows: Production volume 4 comma 000 units Actual variable overhead costs $ 15 comma 300 Actual direct labor hours 490 hours What is the variable overhead cost variance? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.)
Answer:
Variable overhead cost variance = $2,949.80
Explanation:
As per the data given in the question,
Actual overhead cost = $15,000
Actual hours = 490
Actual cost = $30.61 per hour
Standard overhead cost = $15,000
Standard hours = 610
Budgeted cost = $24.59 per hour
Variable overhead cost variance = Actual hours × (Actual cost per hour - Standard cost per hour)
= 490 × ( $30.61 - $24.59 )
= $2,949.80
Stock Y has a beta of 1.2 and an expected return of 11.1 percent. Stock Z has a beta of .80 and an expected return of 7.85 percent. If the risk-free rate is 2.4 percent and the market risk premium is 7.2 percent, the reward-to-risk ratios for stocks Y and Z are and percent, respectively. Since the SML reward-to-risk is percent, Stock Y is and Stock Z is (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer and Explanation:
As we know that
Reward to risk ratio = (Expected return of stock - Risk free rate of return) ÷ Beta of stock
For stock Y, it is
Reward to Risk ratio
= (11.1% - 2.4%) ÷ 1.2
= 7.25 %
For stock Z, it is
Reward to Risk ratio
= (7.85% - 2.4%) ÷ 0.80
= 6.8125%
And,
SML reward to Risk ratio should always market Risk premium i.e 7.20%
As we can see that
Stock Y has higher reward to Risk ratio i.e 7.25% than SML i.e 7.20% , so it is underpriced or undervalued.
And,
Stock Z has lower reward to Risk ratio i.e 6.8125% than SML i.e 7.20%, so it is overpriced or overvalued.
Stock Y is undervalued.
Stock Z is overvalued.
The computation is as follows:Reward to risk ratio = (Expected return of stock - Risk free rate of return) ÷ Beta of stock
For stock Y, it is
Reward to Risk ratio
= (11.1% - 2.4%) ÷ 1.2
= 7.25 %
For stock Z, it isReward to Risk ratio
= (7.85% - 2.4%) ÷ 0.80
= 6.8125%
Also,
SML reward to Risk ratio should always be equivalent to the market Risk premium i.e 7.20%
Stock Y has higher reward to Risk ratio i.e 7.25% compared to SML i.e 7.20% , because it is underpriced or undervalued. Stock Z has a lower reward to Risk ratio i.e 6.8125% compared to SML i.e 7.20%, because it is overpriced or overvalued.
Therefore we can conclude Stock Y is undervalued. and Stock Z is overvalued.
Learn more: brainly.com/question/8645356
Financial information is presented below: Operating Expenses$ 90,000 Sales Returns and Allowances18,000 Sales Discounts12,000 Sales Revenue320,000 Cost of Goods Sold174,000 The amount of net sales on the income statement would be
a.$290,000.
b.$302,000.
c.$308,000.
d.$320,000.
Answer:
a. $290,000
Explanation:
The relevant data provided in the question for computing the net sales is here below:-
Sales revenue = $320,000
Sales discounts = $12,000
Sales returns and allowances = $18,000
The computation of net sales on the income statement is shown below:-
The amount of net sales = Sales revenue - Sales discounts - Sales returns and allowances
= $320,000 - $12,000 - $18,000
= $320,000 - $30,000
= $290,000
Therefore for computing the amount of net sales we simply applied the above formula.
5. Common resources versus private goods Spring is here, and Ginny and her uncle would like to go fishing for the weekend in New Hampshire. Ginny could either go to the river in town where anyone can fish without a permit, or she could drive up to a stream located on her family's property in the countryside to fish. Assume that, no matter where people fish, all of the fish that are caught would be kept (that is, there is no "catch and release" policy). The fish in the river are considered and whereas the fish in the private stream are and . In other words, the fish in the river are an example of , and the fish in the private stream are an example of . Fishing in the river will likely lead to because of which of the following reasons? All fishermen will choose to fish in the river because of the limited access to the stream. Anyone can fish in the river, and one person's fishing activity decreases the ability of someone else to fish with success. Nobody will enjoy fishing because of the lack of private contributions to the maintenance of the river. All fishermen will choose to fish in the stream believing that there are more fish there. Grade It Now Save & Continue Continue without saving
Answer:
1. Fish in private stream (rival/Excludable). Fish in River (rival/non Excludable)
2. Fish in Private stream (private good). Fish in River (common resource)
3. Tragedy of commons
Explanation:
1. The fish in the private stream are Rival in consumption and Excludable while the fish in the river are Rival in consumption and Non- Excludable
2. The fish in the private stream is a private good, the fish in the river is a common resource.
A private good must be purchased to be consumed. Consumption by one person prevents another person from consuming it hence it is rival and Excludable. A common resource like the river benefits all individuals because it is not owned by any one individual. A common resource stands the risk of depletion and over consumption.
3. Fishing in the river will lead to tragedy of the commons because anyone can fish in the river, and one person's fishing activity decreases the ability of someone else to fish with success.
Your client has $ 99 comma 000 invested in stock A. She would like to build a two-stock portfolio by investing another $ 99 comma 000 in either stock B or C. She wants a portfolio with an expected return of at least 14.5 % and as low a risk as possible, but the standard deviation must be no more than 40%. What do you advise her to do, and what will be the portfolio expected return and standard deviation?
Answer:
Portfolio Returns = 14% for Stock B
Portfolio Returns = 14% for Stock C
Portfolio Standard Deviation for Stock C = 34.9%
Portfolio Standard Deviation for Stock B = 32.8%
Here, we can see that, in both stocks expected return rate is same but the portfolio standard deviation for Stock B is lesser than Stock C. So, I advise her to invest in Stock B.
Explanation:
First of all, let be clear to you that, this question is incomplete and lacks data essential data. I have found similar question on the internet and I am going to share that data with you. Hope, the purpose of solving this question will be fulfilled.
Expected Return . Standard Deviation . Correlation with Stock A
Stock A = 15% 49% 1.00
Stock B = 13% 38% 0.12
Stock C = 13% 38% 0.28
Now, we have complete data. Let's solve this problem.
Condition: If my client invest in Stock B
then,
Expected Returns of stocks A & B will be as follows:
Expected Return of Stock A (R1) = 15%
Expected return of Stock B (R2) = 13%
and Standard Deviation of Stocks A & B will be as follows:
SD of Stock A (SD1) = 49%
SD of Stock B (SD2) = 38%
and weights depending on the amount of money invested on stocks A & B will be as follows:
Weight of Stock A (W1) = 50%
Weight of Stock B (W2) = 50%
Note: Weights are 50% each because, same amount of money is invested in two stocks i.e 99000 USD in Stock A and 99000 USD in Stock B.
So, for all of these data, our correlation with Stock A will be as follows:
Correlation of Stock B with Stock A = 0.12
Now, as we have all the data ready to be plugged into the formula. Let's write down the formula for portfolio return:
Portfolio Returns = W1xR1 + W2xR2 = (0.15x0.50) + (0.13x0.50) = 0.14 x 100 = 14%
Portfolio Returns = 14%
Now, it's time to calculate the Portfolio Standard Deviation:
Portfolio Standard Deviation = (W1² * SD1² + W2² * SD2² + 2*(W1)*(W2)*Correlation* SD1* SD2)^(1/2)
Portfolio Standard Deviation = [(50%² X 49%²) + (50%² X 38%²) + (2 X 50% X 50% X 0.12 X 49% X 38%)]^(1/2)
Portfolio Standard Deviation = 32.8%
Condition: If my client invest in Stock C
then,
Expected Returns of stocks A & C will be as follows:
Expected Return of Stock A (R1) = 15%
Expected return of Stock C (R3) = 13%
and Standard Deviation of Stocks A & C will be as follows:
Standard Deviation of A (SD1) = 49%
Standard Deviation of C (SD3) = 38%
and weights depending on the amount of money invested on stocks A & C will be as follows:
Weight of A (W1) = 50%
Weight of C (W3) = 50%
So, for all of these data, our correlation with Stock A will be as follows:
Correlation of Stock C with Stock A = 0.28
Now, as we have all the data ready to be plugged into the formula. Let's write down the formula for portfolio return:
Portfolio Returns = W1R1 + W3R3 = (0.15*0.50%) + (0.13*0.50) = 0.14 X 100 = 14%
Now, it's time to calculate the Portfolio Standard Deviation:
Portfolio Standard Deviation = (W1² * SD1² + W3² * SD3² + 2*(W1)*(W2)*Correlation* SD1* SD3)^(1/2)
Portfolio Standard Deviation= [(50%² X 49%²) + (50%² X 38%²) + (2 X 50% X 50%X 0.28 X 49% X 38%)]^(1/2)
Portfolio Standard Deviation = 34.9%
Here, we can see that, in both stocks expected return rate is same but the portfolio standard deviation for Stock B is lesser than Stock C. So, I advise her to invest in Stock B.
"Trey Jackson, CFO of Jackson Exploration, Inc. is deciding how to approach a particular oil well project. If the company drills today, the project would cost $925,000 today, and would provide estimated cash flows of $600,000 per year at the end of each of the next 4 years. However, if the company waits a year before drilling, the company would have more geological information regarding the well’s possibilities. The company estimates that if it waits 2 years, the project would cost $975,000 and would have a 65 percent chance of having net cash flows of $1,000,000 per year for 4 years, and a 35 percent chance of having net cash flows of only $300,000 per year for 4 years. Assume a discount rate of 17.5 percent. What should the company do
Answer:
the NPV of drilling in two more years is $74,430 higher in current dollars than drilling today
Explanation:
we can assume that these are 2 different projects:
project A:
initial outlay -$925,000
CF 1 $600,000
CF 2 $600,000
CF 3 $600,000
CF 4 $600,000
discount rate = 17.5%
NPV = -$925,000 + $600,000/1.175 + $600,000/1.175² + $600,000/1.175³ + $600,000/1.175⁴ = $704,859
project B (in two years):
initial outlay -$975,000
CF 1 = ($1,000,000 x 65%) + ($300,000 x 35%) = $755,000
CF 2 = $755,000
CF 3 = $755,000
CF 4 = $755,000
discount rate = 17.5%
NPV = -$975,000 + $755,000/1.175 + $755,000/1.175² + $755,000/1.175³ + $755,000/1.175⁴ = $1,075,906 in two years
now we need to discount the NPV ⇒ $1,075,906/1.175² = $779,289
the NPV of drilling in two more years is $74,430 higher in current dollars than drilling today = $779,289 - $704,859 = $74,430