A European call option for a stock has an exercise price of $70, and expires one year from today. Suppose that the stock price has an equal probability of being valued at $60, $70, $75, $83, and $89 dollars per share, one year from now. What is the current present value of the option, given an effective annual rate of 10%
Answers
Answer:
Find attached complete question with multiple choices:
The correct option is E,$6.7
Explanation:
The current present value of the option given an effective annual rate of 10% is the sum of payoffs from different stock prices discounted to present value as below:
Payoff is potential gain from buying the share in a year's time at the exercise price of $70
Stock price option price payoff
$60 $70 $0
$70 $70 $0
$75 $70 $5
$83 $70 $13
$89 $70 $19
Total payoffs=$0+$0+$5+$13+$19=$37
Average payoff(there are 5 different possible prices)=$37/5=$7.4
Present value of average payoff=$7.4/(1+10%)^1=$ 6.73
Related Questions
Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current year, Mystic Lake reacquired 60,000 shares of its common stock at $42 per share. On September 22, Mystic Lake sold 45,000 of the reacquired shares at $51 per share. The remaining 15,000 shares were sold at $40 per share on November 23.
Required:
A. Journalize the transactions of July 9, September 22, and November 23. Refer to the Chart of Accounts for exact wording of account titles.
B. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?
C. For what reasons might Mystic Lake have purchased the treasury stock?
Answers
Answer:
A. Journalize the transactions
July 9, purchase of 60,000 treasury stocks
Dr Treasury stocks 2,520,000
Cr Cash 2,520,000
September 22, 45,000 treasury stocks sold
Dr Cash 2,295,000
Cr Treasury stocks 1,890,000
Cr Additional paid in capital 405,000
November 23
Dr Cash 600,000
Dr Additional paid in capital 30,000
Cr Treasury stocks 630,000
B. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?
Additional paid in capital = $405,000 - $30,000 = $375,000
December 31 balance:
Additional paid in capital $375,000
C. For what reasons might Mystic Lake have purchased the treasury stock?
management believed that the stock was underpricedthey have excess cash and no immediate projects to invest init is a way to increase the price of stocks since lower equity with the same profits means that each remaining stock will earn more returnsThe integration of flower farming in Kenya into global economy creates additional pressure for the ecosystem and the environment in Kenya. The major concern is due to the following.
A. More pollution in Naivasha lake
B. Less water resources for locals
C. extensive use to water flowers
D. All of these
Answers
Answer: D. All of these
Explanation:
Lake Naivasha has seen a huge rise in pollution due to the integration of the Kenya flower farming industry. This is due to the chemicals and fertilizers used to farm the flowers. Indeed in the year, Researchers estimate that due to a torrential rainfall that hit the area, millions of fish and aquatic life died when fertilizers and chemicals were washed into the lake.
The use of water from the lake for flower farming has also reduced the amount of water available to locals. This as well as the massive increase in the population of area as people come from far and wide to work for the flower farms have also increased the usage of the lake thereby reducing what is left for the locals.
Used in farming are water flowers and their overuse have led to their numbers dropping as well.
Adjustment for Unearned Revenue
On June 1, 20Y2, Herbal Co. received $41,250 for the rent of land for 12 months.
Journalize the adjusting entry required for unearned rent on December 31, 20Y2.
Set up an Unearned Fees T-account. Recall that the unearned revenue account is decreased (debited) for the amount of the revenue that has been earned, and the related revenue account is increased (credited). The balance before adjustment will be the normal balance for the unearned liability account. The number given for the end of the year is to be the new balance after adjusting out the revenue earned. What amount is this difference between the pre-adjustment balance and the post-adjustment balance?
Answers
Answer:
oshe mush have been out of her head
Explanation:
0she lost her dog in the microwave
Crazy Mountain Outfitters Co., an outfitter store for fishing treks, prepared the following unadjusted trial balance at the end of its first year of operations:
Crazy Mountain Outfitters Co. Unadjusted Trial Balance April 30, 20Y5
Debit Balances Credit Balances
Cash 11,400
Accounts Receivable 72,600
Supplies 7,200
Equipment 112,000
Accounts Payable 12,200
Unearned Fees 19,200
Common Stock 20,000
Retained Earnings 117,800
Dividends 10,000
Fees Earned 305,800
Wages Expense 157,800
Rent Expense 55,000
Utilities Expense 42,000
Miscellaneous Expense 7,000
475,000 475,000
For preparing the adjusting entries, the following data were assembled:
a. Supplies on hand on April 30 were $1,380.
b. Fees earned but unbilled on April 30 were $3,900.
c. Depreciation of equipment was estimated to be $3,000 for the year.
d. Unpaid wages accrued on April 30 were $2,475.
e. The balance in unearned fees represented the April 1 receipt in advance for services to be provided. Only $14,140 of the services was provided between April 1 and April 30.
Required:
1. Journalize the adjusting entries necessary on April 30. 2016.
2. Determine the revenues, expenses, and net income of Crazy Mountain Outfitters before the adjusting entries.
3. Determine the revenues, expense, and net income of Crazy Mountain Outfitters G after the adjusting entries.
4. Determine the effect of the adjusting entries on Retained Earnings.
Answers
Answer:
Required 1.
a.
Supplies Inventory $1,380 (debit)
Income Statement $1,380 (credit)
b.
Cash $3,900 (debit)
Un-earned Fees $3,900 (credit)
c.
Depreciation $3,000 (debit)
Accumulated Depreciation $3,000 (credit)
d.
Wages Expenses $2,475 (debit)
Wages Accrued $2,475 (credit)
e.
Unearned Fees $14,140 (debit)
Fees Earned $14,140 (credit)
Required 2.
Fees Earned 305,800
Less Expenses :
Wages Expense (157,800)
Rent Expense (55,000 )
Utilities Expense (42,000 )
Miscellaneous Expense (7,000)
Net Income / (loss) 44,000
Required 3.
Fees Earned (305,800 + 14,140) 319,940
Less Expenses :
Wages Expense (157,800 + 2,475) (160,275)
Rent Expense (55,000 )
Utilities Expense (42,000 )
Miscellaneous Expense (7,000)
Depreciation (3,000)
Net Income / (loss) 52,665
Required 4.
Effect = Increase by $8,665
Explanation:
Required 3.
Make the following Adjustments :
Increase the Fees EarnedIncrease the Wages ExpenseInclude the Depreciation Expense in Net Income calculation.Required 4
Adjust the Retained Earnings with items affecting the Income Statement.
Retained Earnings $117,800
Less Depreciation Expense ($3,000)
Less Wages Accrued ($2,475)
Add Fees Earned $14,140
Adjusted Retained Earnings $126,465
Conclusion :
Effect = Increase
Amount = $126,465 - $117,800 = $8,665
Martha, the chief designer of StyleSmartz, is considered a role model by her design team members for her role as an effective leader. Martha is considered an effective leader by the team due to her tendency to _____a. motivate employees by satisfying their basic necessities or low-level needsb. adopt a zero-tolerance stand on erring and unproductive employeesc. discourage employees from letting their emotions affect their workd. engage in management openness by encouraging members to voice their opinion
Answers
Answer:
engage in management openness by encouraging members to voice their opinion.
Explanation:
An important characteristic of management is approachability and openness of the manager to ideas of employees. This gives the manager an idea of the actual state of the workplace facilitating effective resolution of issues as they arise.
When employees know they can freely express themselves without being reprimanded, they better express themselves about challenges encountered.
Also opportunities and methods of doing things better is communicated to the manager
Torche Corporation Balance Sheet As of March 11, 2020 (amounts in thousands) Cash 14,700 Accounts Payable 2,400 Accounts Receivable 4,800 Debt 3,700 Inventory 3,800 Other Liabilities 5,000 Property Plant & Equipment 15,800 Total Liabilities 11,100 Other Assets 900 Paid-In Capital 6,000 Retained Earnings 22,900 Total Equity 28,900 Total Assets 40,000 Total Liabilities & Equity 40,000 Use T-accounts to record the transactions below, which occur on March 12, 2020, close the T-accounts, and construct a balance sheet to answer the question. 1. Receive payment of $12,000 owed by a customer 2. Buy $15,000 worth of manufacturing supplies on credit 3. Purchase equipment for $44,000 in cash What is the final amount in Total Liabilities & Equity?
Answers
Answer:
Final amount in Total Liabilities & Equity = $40,015,000
Explanation:
A T-account refers to an informal term that is used to describe a set of financial records that are based on the principle of double-entry bookkeeping. The term T- account is used to indicate how bookkeeping entries appear.
Balance sheet is a statement of financial position used to report assets, liabilities and shareholders' equity of a company.
Note: See the attached excel for the T-accounts prepared and the balance sheet constructed. Just scroll down on the excel file to see everything.
Perpetual Inventory Using FIFO Beginning inventory, purchases, and sales data for DVD players are as follows: November 1 Inventory 120 units at $39 10 Sale 90 units 15 Purchase 140 units at $40 20 Sale 110 units 24 Sale 45 units 30 Purchase 160 units at $43 The business maintains a perpetual inventory system, costing by the first-in, first-out method. a. Determine the cost of goods sold for each sale and the inventory balance after each sale, presenting the data in the form illustrated in Exhibit 3. Under FIFO, if units are in inventory at two different costs, enter the units with the LOWER unit cost first in the Cost of Goods Sold Unit Cost column and in the Inventory Unit Cost column. Cost of Goods Sold Schedule First-in, First-out Method DVD Players Date Quantity Purchased Purchases Unit Cost Purchases Total Cost Quantity Sold Cost of Goods Sold Unit Cost Cost of Goods Sold Total Cost Inventory Quantity Inventory Unit Cost Inventory Total Cost Nov. 1 Nov. 10 Nov. 15 Nov. 20 Nov. 24 Nov. 30 Nov. 30 Balances b. Based upon the preceding data, would you expect the inventory to be higher or lower using the last-in, first-out method?
Answers
Answer:
a) UNDER FIFO
November 1 Inventory 120 units at $39
November 10 Sale 90 units
COGS = 90 X $39 = $3,510remaining inventory = 30 x $39 = $1,170November 15 Purchase 140 units at $40
November 20 Sale 110 units
COGS = (30 x $39) + (80 x $40) = $1,170 + $3,200 = $4,370remaining inventory = 60 x $40 = $2,400November 24 Sale 45 units
COGS = 45 x $40 = $1,800remaining inventory = 15 x $40 = $600November 30 Purchase 160 units at $43
remaining inventory = $600 + (160 x $43) = $7,480b. UNDER LIFO
November 1 Inventory 120 units at $39
November 10 Sale 90 units
COGS = 90 X $39 = $3,510remaining inventory = 30 x $39 = $1,170November 15 Purchase 140 units at $40
November 20 Sale 110 units
COGS = 110 x $40 = $4,400 remaining inventory = (30 x $40) + (30 x $39) = $2,370November 24 Sale 45 units
COGS = (30 x $40) + (15 x $39) = $1,785remaining inventory = 15 x $39 = $585November 30 Purchase 160 units at $43
remaining inventory = $585 + (160 x $43) = $7,465Under LIFO, the ending inventory is lower than under FIFO.
"First in first out" or FIFO is a method of inventory evaluation by which the process of goods buying and selling are assumed as having same chronological order.
FIFOAs per the question, if units are in inventory at two different costs, than the Cost of Goods Sold (COGS), and Inventory will be different, as per the given information:
⇒November 1, Inventory 120 units at $39
November 10, Sale 90 units
Cost of Goods Sold = 90 X $39 = $3,510
Remaining inventory = (120-90) x $39 = $1,170
⇒ November 15, Purchase 140 units at $40
November 20, Sale 110 units
Cost of Goods Sold = (30 x $39) + (80 x $40) = $1,170 + $3,200 = $4,370
Remaining inventory = 60 x $40 = $2,400
⇒ November 24, Sale 45 units
COGS = 45 x $40 = $1,800
Remaining inventory = 15 x $40 = $600
⇒November 30, Purchase 160 units at $43
Remaining inventory = $600 + (160 x $43) = $7,480
B. Under Last in, First Out (LIFO)
⇒November 1, Inventory 120 units at $39
November 10, Sale 90 units
COGS = 90 × $39 = $3,510
Remaining inventory = 30 x $39 = $1,170
⇒November 15, Purchase 140 units at $40
November 20, Sale 110 units
COGS = 110 x $40 = $4,400
Remaining inventory = (30 x $40) + (30 x $39) = $2,370
⇒November 24, Sale 45 units
COGS = (30 x $40) + (15 x $39) = $1,785
Remaining inventory = 15 x $39 = $585
⇒November 30, Purchase 160 units at $43
Remaining inventory = $585 + (160 x $43) = $7,465
Hence, the results shows that the Inventory is LOWER when used Last-in, First out Method.
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Heidee Corp. and Leaudy Corp. have identical assets, sales, interest rates paid on their debt, tax rates, and EBIT. However, Heidee uses more debt than Leaudy. Which of the following statements is CORRECT?
A) Heidee would have the higher net income as shown on the income statement.
B) Without more information, we cannot tell if Heidee or Leaudy would have a higher or lower net income.
C) Heidee would have the lower equity multiplier for use in the Du Pont equation.
D) Heidee would have to pay more in income taxes.
E) Heidee would have the lower net income as shown on the income statement.
Answers
Answer:
E) Heidee would have the lower net income as shown on the income statement.
Explanation:
Heidee and Leaudy have the same Earning Before Interest and Taxes (EBIT).
They both also have the same interest rate paid on debt.
So if Heidee uses more of their debt than Leaudy it means they will incur more interest payment on debt.
This will result in less income for the company.
On the other hand Leaudy uses less debt so their interest expense is low and income is higher.
Heidee would have the lower net income as shown on the income statement.
Henrie’s Drapery Service is investigating the purchase of a new machine for cleaning and blocking drapes. The machine would cost $102,990, including freight and installation. Henrie’s estimated the new machine would increase the company’s cash inflows, net of expenses, by $30,000 per year. The machine would have a five-year useful life and no salvage value.
Required:
a. Compute the machine's internal rate of return to the nearest whole percent.
b. Compute the machine's net present value. Use a discount rate of 16%. (Any cash outflows should be indicated by a minus sign. Round discount factor(s) to 3 decimal places.)
c. Suppose that the new machine would increase the company's annual cash inflows, net of expenses, by only $41,000 per year. Under these conditions, compute the internal rate of return to the nearest whole percent.
Answers
Answer:
A. 14%
B. NPV = $-4,761.19
C. 28%
Explanation:
The internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.
IRR can be calculated using a financial calculator:
Cash flow in year 0 = $-102,990
Cash flow each year from year one to five = $30,000
IRR = 14%
The net present value is the present value of after tax cash flows from an investment less the amount invested.
Npv can be calculated using a financial calculator:
Cash flow in year 0 = $-102,990
Cash flow each year from year one to five = $30,000
I = 16%
NPV = $-4,761.19
IRR if cash flow is $41,000
Cash flow in year 0 = $-102,990
Cash flow each year from year one to five = $41,000
IRR = 28%
To find the NPV 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
To find the IRR 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 IRR button and then press the compute button.
I hope my answer helps you
Below are the account balances for Cowboy Law Firm at the end of December. Accounts Balances Cash $ 4,600 Salaries expense 1,800 Accounts payable 2,600 Retained earnings 4,100 Utilities expense 1,000 Supplies 13,000 Service revenue 8,500 Common stock 5,200 Required: Use only the appropriate accounts to prepare an income statement.
Answers
Answer:
Cowboy Law Firm
Income statement for the period ended December
Amount in $
Service revenue 8,500
Utilities (1,000)
Salaries expense (1,300)
Net income/(loss) 6,200
Explanation:
An income statement is a part of the financial statements that shows how profitable the activities of an entity was for a given period of time. It is usually stated as the income statement for a period end.
The elements of the income statement include the revenue otherwise called sales, expenses including cost of goods sold, operating expenses etc and the profit or loss as well as the other comprehensive income/loss.
You are a project manager leading an IT development project. Halfway through your project, you realize that you need to hire an additional worker in order to complete the project on time. How will you convince your project sponsors to authorize the hire? How will you on-board your new worker?
Answers
Answer:
The project manager can convince the project sponsors with the following reasons which are,
(1) Telling the sponsors the additional benefits that the team will have once a member enters the team.
(2)Informing the sponsors about the work not completed due to lesser number of workers.
(3)Informing the sponsors the additional benefits that the team will have once a member enters the team.
For on boarding a new worker the project manager does the following which includes:
(1)it is very necessary to share the agendas and charters of the previous meetings of the project to help individuals to familiarize with the project scope and goals.
(2)Having a one one meeting a with the individual and discussing with him/her about the project and solve his/her issues.
(3) Doing a formal introduction of the new member to both the project team and stakeholders of the project.
Explanation:
Solution:
In the half way of the project, the project manager can convince the project sponsors in the following ways shown below:
Informing the sponsors about the work not completed due to lesser number of workersInforming the sponsors about the delays taking place due to shortage of members in the teamTelling the sponsors the additional benefits that the team will have once a member enters the teamConvincing the sponsors by discussing and talking with him/her the various drawbacks of not having the required numbers of members in the team.For getting a new member on board for the project, it is very important to share the agendas and charters and minutes of the previous meetings of the project to enable individuals to familiarize with the project scope and goals.
Secondly, a one one meeting and discussion with the individual must be organized to brief him/her about the project and solve his/her issues.
Finally the new member must be introduced to both the project team and stakeholders of the project.
g The sticky-wage theory of the short-run aggregate supply curve says that when the price level rises more than expected, a. production is more profitable and employment rises. b. production is more profitable and employment falls. c. production is less profitable and employment rises. d. production is less profitable and employment falls.
Answers
Answer:
A. Production is more profitable and employment rises
Explanation:
Wages are sticky if market prices or wages don’t adjust quickly to changes in the economy. When prices are sticky, the Short Run Aggregate Supply curve slopes upward. It slopes upward because at least one price is fixed. The curve shows that a higher price level leads to more output
Therefore when the price level rises more than expected, production is more profitable and employment rises.
Required information
An internal control system consists of the policies and procedures managers use to protect assets, ensure reliable accounting, promote efficient operations, and uphold company policies. It can prevent avoidable losses and help managers both plan operations and monitor company and human performance. Principles of good internal control include establishing responsibilities, maintaining adequate records, insuring assets and bonding employees, separating recordkeeping from custody of assets, dividing responsibilities for related transactions, applying technological controls, and performing regular independent reviews. Sarbanes-Oxley Act requires each of the following:
A. An effective internal control.
B. Light penalties for violators.
C. Auditors must evaluate internal controls.
D. Auditor's work overseen by Public Accounting Board.
Answers
Answer:
Options A and D.
Explanation:
Just like it is given in the question above, the concept of internal control system has to do with the regulations and policies that are being set by each companies/firms or agencies or bodies or business organization in order to increase their productivity and efficiency.
The Sarbanes-Oxley Act was enacted on the 30th day of the month of July in the year 2002 by the 107th United States of America congress and its main work or purpose is to make sure sure that there is reliability and transparency in financial and accounting institutions and also to protect investors.
When a breech is perceived, group of people will be appointed to conduct "An effective internal control" and also for the "Auditor's work overseen by Public Accounting Board."
Answer:
A. An effective internal control
C. Auditors must evaluate internal controls
Explanation:
SOX requires managers and auditors whose stock is publicly traded to have an effective internal control system, auditors must evaluate internal controls, violators may receive harsh penalties (not light penalties), and auditors’ work is overseen by Public Company Accounting Oversight Board (PCAOB) (not by the Public Accounting Board).
Imperial Jewelers manufactures and sells a gold bracelet for $408.00. The company’s accounting system says that the unit product cost for this bracelet is $268.00 as shown below:
Direct materials $147
Direct labor 85
Manufacturing overhead 36
Unit product cost $268
The members of a wedding party have approached Imperial Jewelers about buying 30 of these gold bracelets for the discounted price of $368.00 each. The members of the wedding party would like special filigree applied to the bracelets that would require Imperial Jewelers to buy a special tool for $452 and that would increase the direct materials cost per bracelet by $9. The special tool would have no other use once the special order is completed.
To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $15.00 of the overhead is variable with respect to the number of bracelets produced. The company also believes that accepting this order would have no effect on its ability to produce and sell jewelry to other customers. Furthermore, the company could fulfill the wedding party’s order using its existing manufacturing capacity.
Required:
a. What is the financial advantage (disadvantage) of accepting the special order from the wedding party?
b Should the company accept the special order?
Answers
Answer:
2352, Yes
Explanation:
a) Incremental Cost = Direct Material cost + Direct labour cost + Filgree + Manufacturing overhead cost
= 147 + 85 + 9 + 15 = 256
Total additional Cost = 256 x 21 = 5376
Incremental Revenue = 368
Total additional Revenue = 368 x 21 = 7728
Incremental net operating income = Total additional revenue - total additional cost
= 7728 - 5376 = 2352
b) As Incremental net operating income is positive, company is earning from the special order. Yes, it should accept it
The relevant costs for a decision to accept the special order are :
1. Incremental Revenue from the special order
2. incremental variable cost
3. The cost of the special tool
Unit variable cost = 147+ 85 + 9 + 15 = $256
The balance of manufacturing overhead would be incurred either way. Therefore, they are not relevant for the decision
Sales revenue from special order $
(21× $368) 7728
The Variable cost of special order $
(21× $256) (5376 )
Financial advantage 2358
The company should accept the special order, as it will increase its profit by $2352
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17. A global strategy for a company would include a. Products tailored to local tastes and needs, with local sourcing. b. A standardized product available without any local responsiveness. c. Patents and copyrights that are designed to promote maximum innovation. d. All of the above.
Answers
Answer: b. A standardized product available without any local responsiveness.
Explanation:
A global strategy refers to when a company aims to expand across the globe. One of the strategies is known as Standardisation.
This is a policy where the company that hopes to expand decides that it wants to make a standard product that is the same the world over. By not making it available without local responsiveness ( differentiating it by adding local features to it), the company signals that they want their product to be the same around the world.
It is very useful to some companies such as Apple which has the iPhone around the world with no local customisation and Dominoes Pizza which aims to have their pizza taste the same the world over.
Which of the following is NOT a pitfall an organization should avoid in strategic planning? Involving all managers rather than delegating planning to a "planner" Failing to communicate the plan to employees Failing to create a collaborative climate supportive of change Top managers not actively supporting the strategic-planning process Doing strategic planning only to satisfy accreditation or regulatory requirements
Answers
Answer:
Involving all managers rather than delegating planning to a "planner"
Explanation:
Strategic planning is a process of establishing the direction of a business. It assesses where the business is and where it is going. And the action plan needed to get to it's goal.
Delegating planning to a planner rather than involving all managers is an identified pitfall in strategic planning.
This is why Involving all managers rather than delegating planning to a "planner" is the correct answer since we are required to identify a non pitfall by the question.
Suppose you want to invest $10,000. You have two options: Option #1: Invest in municipal bonds with an expected return of 8.00%, or Option #2: Invest in the corporate bonds of Jefferson & Alexander Inc. which are offering an expected return of 10.00% Assume that your decision is based solely on your tax situation. If everything else is the same for both bonds, at what tax rate would you be indifferent between these two bond investments?
Answers
Answer: 20%
Explanation:
Municipal Bonds are generally not taxed so if you invest in the Municipal bond, the tax rate does not affect you.
The tax rate therefore that will make you indifferent between the 2 options is the one that will take the Corporate bond returns of Jefferson to 8% so that both bonds may give you the same return after tax.
Assuming that tax rate is 'x' then,
8 = 10 (1 - x)
8 = 10 - 10x
10x = 10 - 8
10x = 2
x = 20%
At a tax rate of 20%, the Corporate bonds give an 8% return.
Q.No. 1 Assume yourself as a Marketing Specialist of a Company and Determine the New Product Development Process by manufacturing a New Product for your company. Max Marks 10
Max : 200words
Answers
Answer:
New products suffer through five development stages throughout the product lifecycle.
Explanation:
Manufacturing a new product isn't easy for any company. There is always uncertainty whether that product will run successfully as per customer needs.
Stage 1: Idea
Every product development starts with an idea you need to get an idea about the market and about the customer needs. you need to find out what market requires the most. As soon as you got the idea you can jump to the next step.
Stage 2: Research
In this step, the company conducts market surveys about the product idea. The company has to provide samples to market to check their product is working perfectly or whether it requires some changes and how customers are responding. The company has to collect reviews from customers.
Stage 3: Marketing
Once the company got the customer reviews and they are positive then its time to tell the world about the product but the company has to analyze the 4 Ps that are price, place, promotion, and product. The company has to consider these Ps in marketing stage.
Stage 4: Business Analysis
This is a very important step where a company finds out about the factors about the product such as the product's profitability. Whether the product is profitable enough to carry on marketing activities.
Step 5 Commercilisation
After performing every stage properly its time to launch the product. In this stage, the company produces the product in large quantity and supplies it to market to cover all the cost it took to launch and make the company more profitable
Which of the following represents an increase in living standards over the past century? Check all that apply. Increased human activities have magnified the pollution of air and water. The purchasing power of a dollar has declined over time due to inflation. Medical breakthroughs enable people to enjoy better healthcare nowadays.
Answers
Answer:
Medical breakthroughs enable people to enjoy better healthcare nowadays.
Explanation:
An increase in living standard means that the lives of people are better off.
Advances in medicine have made it possible to find cure to various diseases. This improves standard of living.
Increased pollution of air and water and decline of dollar value have negative effects on living standard.
Pollution affects human health negatively and can cause diseases which negatively affect standard of living. Also, pollution can cause floods and other environmental disasters. Floods can displace people from their homes and this affects standard of living negatively.
Decrease in dollar value has made items more expensive.
I hope my answer helps you
Workers in the nation of Argenia prefer managers that forcefully tell employees what to do and how to do it. Conversely, employees in the U.S. prefer to participate in decision making in the workplace. This __________ difference between Argenian workers and U.S. workers represents a management challenge for firms trading in the global market.
Answers
Answer: sociocultural
Explanation:
The options for the question are:
a. geopolitical
b. economic
c. sociocultural
d. regulatory
Sociocultural is used to describe differences between groups of people which relate to the social class and the culture in which they live. The sociocultural environment of a business are the values and the customs that guide the practices of the business.
From the question, employees in Argenia prefer managers who forcefully tell employees what to do and how to do it while the employees in the United States like to participate in the decision making in the workplace. This shows that there are sociocultural differences between the two nations.
You are an international shrimp trader. A food producer in the Czech Republic offers to pay you 2.3 million Czech koruna today in exchange for a year's supply of frozen shrimp. Your Thai supplier will provide you with the same supply for 2.8 million Thai baht today. If the current competitive market exchange rates are 25.49 koruna per dollar and 39.31 baht per dollar, what is the value of this deal?
Answers
Answer:
$19,002.77
Explanation:
The computation of the value of deal is shown below:
The value of the deal = Sales revenue - purchase cost
where,
Sales revenue is
= 2,300,000 ÷ 25.49 koruna per dollar
= $90,231.46
And, the purchase cost is
= 2,800,000 ÷ 39.31 baht per dollar
= $71,228.69
So, the value of the deal is
= $90,231.46 - $71,228.69
= $19,002.77
hence, the value of the deal is $19,002.77
Dividends Per Share Windborn Company has 25,000 shares of cumulative preferred 3% stock, $50 par and 50,000 shares of $15 par common stock. The following amounts were distributed as dividends:
Y1 $75,000
Y2 15,000
Y3 112,500
Determine the dividends per share for preferred and common stock for each year. The stock outstanding when a corporation has issued only one class of stock.common stock for each year.
Preferred Stock Common Stock
(dividend per share) (dividend per share)
Year 1 $ $
Year 2 $ $
Year 3 $ $
Answers
Answer:
Preferred Stock Common Stock
(dividend per share) (dividend per share)
Year 1 $1.50 $0.75
Year 2 $0.60 $0.00
Year 3 $2.40 $1.05
Explanation:
For Year 1:
Total dividend distributed = $75,000
Preferred shareholders' dividend = $50 * 25,000 * 3% = $37,500
Preferred shareholders' dividend per share = $37,500 / 25,000 = $1.50
Common stockholders' dividend = Total dividend distributed - Preferred shareholders' dividend = $75,000 - $37,500 = $37,500
Common stockholders' dividend per share = $37,500 / 50,000 = $0.75
For Year 2:
Total dividend distributed = $15,000
Dividend payable to preferred shareholders = $50 * 25,000 * 3% = $37,500
Dividend paid to preferred shareholders = $15,000
Preferred shareholders' dividend per share = $15,000 / 25,000 = $0.60
Preferred shareholders' dividend carried forward = Dividend payable to preferred shareholders - Total dividend distributed = $37,500 - $15,000 = $22,500
Common stockholders' dividend = $0
Common stockholders' dividend per share = $0
For Year 3:
Total dividend distributed = $112,500
Total dividend paid to preferred shareholders = $37,500 + Preferred shareholders' dividend carried down from Year 2 = $37,500 + $22,500 = $60,000
Preferred shareholders' dividend per share = $60,000 / 25,000 = $2.40
Common stockholders' dividend = Total dividend distributed - Total dividend paid to preferred shareholders = $112,500 - $60,000 = $52,500
Common stockholders' dividend per share = $52,500 / 50,000 = $1.05
(LaVilla) LaVilla is a village in the Italian Alps. Given its enormous popularity among
Swiss, German, Austrian, and Italian skiers, all of its beds are always booked in the winter
season and there are, on average, 1,200 skiers in the village. On average, skiers stay in
LaVilla for 10 days.
a. How many new skiers are arriving—on average—in LaVilla every day?
b. A study done by the largest hotel in the village has shown that skiers spend on average $50 per person on the first day and $30 per person on each additional day in local
restaurants. The study also forecasts that—due to increased hotel prices—the average
length of stay for the 2003/2004 season will be reduced to five days. What will be the
percentage change in revenues of local restaurants compared to last year (when skiers
still stayed for 10 days)? Assume that hotels continue to be fully booked!
Q2.6 (Highway) While driving home for the holidays, you can’t seem to get Little’s Law out of
Answers
Answer:
a) 120 skiers per day
b) 6.25% increase in revenue
Explanation:
a) If the average skier stays 10 days, the average turnover is 1/10 of the skiers per day, or 1200/10 = 120 skiers per day.
__
b) For a stay of n days, the average skier spends ...
50 +(n-1)30 = 20 +30n
and the average spending per day is ...
(20 +30n)/n = (20/n) +30
So, for a 10-day stay, the average skier spends in restaurants ...
20/10 +30 = 32 . . . . per day
And for a 5-day stay, the average skier will spend ...
20/5 +30 = 34 . . . . per day
The change in restaurant revenue is expected to be ...
(34 -32)/32 × 100% = 2/32 × 100% = 6.25%
Restaurant revenues will be 6.25% higher compared to last year.
The net income reported on the income statement for the current year was $261000. Depreciation was $39900. Account receivable and inventories decreased by $11800 and $34900, respectively. Prepaid expenses and accounts payable increased, respectively, by $1100 and $8300. How much cash was provided by operating activities?
Answers
Answer:
$ 354,800.00
Explanation:
The net cash amount provided by operating activities in the year is determined by adding depreciation to net income as well as the decrease in both accounts receivable and inventories.
There is also the need to to deduct increase in prepaid expenses and add the increase in accounts payable as done below:
net cash provided by operating activities=$261,000+$39,900+$11,800+$34,900-$1,100+$8,300=$354,800.00
Lucy's Music Emporium opened its doors on January 1, 2015, and it was granted permission to use the same depreciation calculations for shareholder reporting and income tax purposes. The company planned to depreciate its fixed assets over 20 years, but in December 2015 management realized that the assets would last for only 15 years. The firm's accountants plan to report the 2015 financial statements based on this new information. How would the new depreciation assumption affect the company's financial statements
Answers
Answer: d. The firm's cash position in 2015 and 2016 would increase.
Explanation:
The financila statements had been calculated with the view that fixed assets would be depreciated over a 20 year period. However, it was discovered that the assest should be depreciated over 15 years instead. This reduction in the period would have the effect for increasing the depreciation payment.
For example, say the asset cost $20,000 and was originally to be depreciated over 20 years using Straight Line Depreciation. This means that the depreciation per year would be,
= [tex]\frac{20,000}{20}[/tex]
= $1,000 a year.
If it was however discovered that it was supposed to be 15 years that figure would go to,
= [tex]\frac{20,000}{15}[/tex]
= $1,333.33 a year
Notice how depreciation increased. Lucy's Music emporium will therefore see their depreciation cost rise. Depreciation is subtracted from revenue as it is tax deductible. When Lucy's Emporium deduct this new depreciation, they will have less profit. They will be taxed on this less profit and so pay a lower tax. This will thus increase their cash holdings because Depreciation is a non cash expense and does not actually require a cash payment.
During the most recent month, the following activity was recorded:_______.
a. Eleven thousand six hundred pounds of material were purchased at a cost of $2.90 per pound.
b. The company produced only 1,160 units, using 10,440 pounds of material. (The rest of the material purchased remained in raw materials inventory.)
c. 564 hours of direct labor time were recorded at a total labor cost of $6,768.
Answers
Answer:
7000
Explanation:
C.564 hours of direct labor tine were recorded at a total labor cost of $6,768
Arlington Company is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $4,000,000 on March 1, $3,300,000 on June 1, and $5,000,000 on December 31. Arlington Company borrowed $2,000,000 on January 1 on a 5- year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 3-year, $4,000,000 note payable and an 11%, 4-year, $7,500,000 note payable. 96. What are the weighted-average accumulated expenditures
Answers
Answer:
$5,258,333
Explanation:
Arlington Company weighted-average accumulated expenditures
March 1 Expenditure $3,333,333
($4,000,000 ×10/12)
Add June 1 Expenditure $1,925,000
($3,300,000 ×7/12)
Add Dec 31 Expenditure $0
($5,000,000 ×0/12)
Weighted-average accumulated expenditures $5,258,333
($3,333,333+$1,925,000)
Precious Metal Mining has $17 million in sales, its ROE is 13%, and its total assets turnover is 4x. Common equity on the firm’s balance sheet is 55% of its total assets. What is its net income? Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest cent. Do not round intermediate steps.
Answers
Answer:
net income = $303,875
Explanation:
total sales $17 million
return on equity (ROE) = 13% = net income / stockholders' equity
asset turnover = 4 = total sales / average total assets
common equity = 55% of assets
first we must determine average total assets:
average total assets = total sales / 4 = $17 million / 4 = $4.25 million
common equity = 55% x total assets = 55% x $4.25 million = $2,337,500
ROE = 13% = net income / $2,337,500
net income = 13% x $2,337,500 = $303,875
Prepare the adjusting journal entries for the following transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Supplies for office use were purchased during the year for $700, of which $200 remained on hand (unused) at year-end. Interest of $350 on a note receivable was earned at year-end, although collection of the interest is not due until the following year. At year-end, salaries and wages payable of $4,600 had not been recorded or paid. At year-end, one-half of a $3,000 advertising project had been completed for a client, but nothing had been billed or collected. Redeemed a gift card for $700 of services.
Answers
Answer:
Adjusting Journal Entries:
Debit Supplies Expense $500
Credit Supplies $500
To record supplies used during the year.
Debit Interests on Note Receivable $350
Credit Interest on Note $350
To record interest earned, but not received.
Debit Salaries & Wages Expense $4,600
Credit Salaries & Wages Payable $4,600
To record accrued salaries and wages.
Debit Account Receivable (Advertising Project) $1,500
Credit Service Revenue (Advertising Project) $1,500
To record one-half of advertising project completed.
Debit Cash Account $700
Credit Gift Card $700
To record redemption of a gift card of services.
Explanation:
Adjusting entries are made at the end of an accounting period to record accrued expenses and revenue, depreciation charge, deferred expenses and revenue. These adjustments bring the accounts to agree with the accrual concept which insists that transactions which do not impact cash flows must be recognized in the period they occur.
Cold Goose Metal Works owns 207,500 shares in the Fat Fox Smelting Corp.. If Fat Fox Smelters has 250,000 shares of common stock outstanding, can Cold Goose file a single income tax return that reports the incomes and expenses of both companies? No, because Cold Goose Metal Works’s ownership stake in Fat Fox Smelters is less than or equal to 49%, whereas 50% or more is required by the U.S. Tax Code. Yes, because Cold Goose Metal Works’s ownership stake in Fat Fox Smelters is greater than or equal to 60%, as required by the U.S. Tax Code. Yes, because Cold Goose Metal Works’s ownership stake in Fat Fox Smelters is greater than or equal to 80%, as required by the U.S. Tax Code.
Answers
Answer:
Cold Goose Metal Works and Fat Fox Smelting Corp.
Yes, because Cold Goose Metal Works’s ownership stake in Fat Fox Smelters is greater than or equal to 80%, as required by the U.S. Tax Code.
Explanation:
The total percentage of shares owned by Cold Goose Metal Works is 83% (207,500/250,000 x 100). This is more than 80% required.
The relevant section supporting the above is
"Section (2) 80-per cent voting and value test: The ownership of stock of any corporation meets the requirements of this paragraph if it—
(A)possesses at least 80 per cent of the total voting power of the stock of such corporation, and
(B)has a value equal to at least 80 per cent of the total value of the stock of such corporation."