Pitchfork, Inc. is preparing its 2020 financial statements. The company's accountant calculated Income from Continuing Operations to be $1,700,000, but upon further review is not certain this number is accurate. Pitchfork has a corporate income tax rate of 30%. Additionally, the company reports only one year of financial data on the face of the financial statements. All amounts listed are pretax unless otherwise noted. After reviewing the following information, determine the appropriate adjustments, if any, to Income from Continuing Operations. Once you have determined the CORRECT Income from Continuing Operations, complete the remainder of the Income Statement for reporting EPS.

1. On January 1, 2017, Pitchfork purchased a machine for $180,000 with a salvage value of $20,000 and useful life of eight years which was depreciated using the straight-line method. During 2020, Pitchfork decided to change to double-declining-balance method. The $1,700,000 Income from Continuing Operations had already been calculated using the straight-line depreciation method.

Determine the correct ADJUSTMENT to Income from Continuing Operations (ICO) for Depreciation Expense in 2020.

Adjustment for Depreciation Expense (2020):___________

Continuing with the information presented in #1 above, Pitchfork has ICO of $1,700,000 and a corporate tax rate of 30%. Determine if ICO should be adjusted based on the following information:

2. Pitchfork had an unrealized loss from foreign currency translation adjustments of $120,000 (pretax) that was included in calculating the $1,700,000 income from continuing operations.

Adjustment to I.C.O. for Translation Loss from Foreign Currency: __________

Continuing with the information presented in #1 above, Pitchfork Inc has Income from Continuing Operations (ICO) of $1,700,000 and a corporate tax rate of 30%. Determine if ICO should be adjusted based on the following information:

3. During 2020, Pitchfork closed one of its stores for a pre-tax loss of $150,000. This store closure did not qualify as a component of the entity, nor did it create a strategic shift in the operations of the entity. Therefore, it should not be treated as Discontinued Operations. The $150,000 restructuring charges were excluded in determining the $1,700,000 income from continuing operations.

To correct I.C.O., the Adjustment for Restructuring Charges would be $ _________

Continuing with the information presented in #1 above, Pitchfork has Income from Continuing Operations (ICO) of $1,700,000 and a corporate tax rate of 30%. Determine if ICO should be adjusted based on the following information:

4. On April 1, 2019 Pitchfork paid $24,000 for two years rent on office space and at the time debited Rent Expense. No adjusting or correcting entries were made for this transaction in 2019 or 2020.

a. To correct I.C.O for 2020, the correct Rent Expense (after tax) would be: $ _________


b. Determine the amount of the Prior Period Adjustment to be reported on the Retained Earnings Statement to correct the Beginning Balance at Jan 1, 2020: ______

5. Pitchfork sold investments during the year that resulted in a pre-tax loss of $18,000. The company also had unrealized gains on Available for Sale securities of $20,000 (pre-tax). Both of these transactions were excluded in determining the $1,700,000 Income from Continuing Operations calculation.

To correct I.C.O. for 2020, the adjustment for gains/losses on investments would be: $_________

6. Using the adjustments you made in items 1-5 above, determine the CORRECTED Income From Continuing Operations _________

7. Referring to the information presented above in questions 1-6, determine Pitchfork's Comprehensive Income as of year-end: $_________

Answer:

d. achieve organizational goals.

Explanation:

Sterile Feral, Inc. being a non-profit organization that catches wild or stray cats, and then neuters, vaccinates, and releases them back into the wild.

If Sterile Feral Inc. then turns to marketing, this simply means that they're more interested in achieving organizational goals of saving endangered cats.

Also, as a non-profit organization, Sterile Feral Inc. isn't operating solely to make money or profits, it is rather literally trying to impact positively the cat world.

Answer:

(a) Thailand polishing price per unit is $2.03

(b) India shine price per unit is $1.88

(c) Sacramento glow price per unit is $15

Explanation:

(a) Thailand polishing:

Thailand polishing has submitted a quote of 3000 baht

$1 = 10 bhat

1 bhat = $ 0.1

Thailand polishing submitted bid = 3000 × $0.1 =$300

Import tax = 35%

Total cost = 1.35 × 300 = $405

Cost per unit = 405 ÷ 200 = $2.03

(b) India shine:

India shine has submitted a bid of 3000 rupees

$1 = 8 rupees

1 Rupee = $0.125

India shine submitted bid = 3000 × 0.125 = $375

Price per unit = 375 ÷ 200 = $1.88

(c) Sacramento Glow submitted bid = $3,000

price per unit = $3,000 ÷ 200

= $15

Answer:

a. predetermined overhead rate for each activity

initial concept formation  = $3,310 per Project Change

design  = $3 per Square feet

construction oversight  = $1,130 per Month

b. Classification

unit-level activities :

design

batch level activities :

initial concept formation

Product level activities :

design

Facility level activities :

initial concept formation

construction oversight

Explanation:

This question requires application of Activity Based Costing (ABC) method of allocating overheads.

For each overhead a rate is determined as follows :

initial concept formation

Predetermined overhead rate = Overhead Cost / Number of Project Changes

                                                  = $52,960/ 16

                                                  = $3,310 per Project Change

design

Predetermined overhead rate = Overhead Cost / Square feet

                                                  = $420,000/ 140,000

                                                  = $3 per Square feet

construction oversight

Predetermined overhead rate = Overhead Cost / Number of Months

                                                  = $118,650/ 105

                                                  = $1,130 per Month

Classification

The way the activity is to be absorbed in costing determine its classification

Answer:

Project X maximizes shareholder value (highest NPV) and has a MIRR of 14.27%.

Explanation:

year       cash flow project X          cash flow project Y

0                   -1,000                             -1,000

1                        100                               1,000

2                      320                                   110

3                      400                                   55

4                      700                                   45

WACC = 13%

Using an excel spreadsheet I calculated the projects' NPV, IRR and MIRR

                                                        NPV         IRR     MIRR

project X                                        $45.65      15%    14.27%

project Y                                        $36.82      16%    14.03%  

The modified internal rate of return (MIRR) considers that the project's cash inflows are invested at the company's WACC and the initial investment is financed at a certain debt rate (in this case the same WACC).

Answer:

5.25%

Explanation:

To calculate the inflation for the year 3, we will have to calculate the yield on 1 Year treasury bond.

The yield is calculated using the following formula:

Nominal Yield on Bond = Real risk free rate + Inflation for the year

Here

Inflation for Year One is 3.75%

Real Risk-Free Rate is 3.5%

Nominal yield on bond is Y for year 1

By putting values, we have:

Y = 3.5% + 3.75% = 7.25%

For 3 years treasury bond,

Nominal Yield on Treasury Bond  for 3 years = Yield on year 1 + Inflation

Y3 = 7.25% + 1.5% = 8.75 %

Now if we deduct the real risk free rate from the  3 year yield on the treasury bond, then the resultant rate would be the inflation rate for the year 3.

Inflation Rate for Year 3 = Y3 - Real Risk-Free Rate

Inflation Rate for Year 3 = 8.75% - 3.5%

Inflation Rate for Year 3 = 5.25%

Answer:

Contribution margin ratio= 0.4375

Contribution margin= $7

Explanation:

Giving the following information:

Zeke Company sells 26,900 units at $16 per unit. Variable costs are $9 per unit, and fixed costs are $38,100.

To calculate the contribution margin per unit, we need to use the following formula:

Contribution margin= selling price - unitary variable cost

Contribution margin= 16 - 9= $7

Now, we can calculate the contribution margin ratio:

Contribution margin ratio= contribution margin/ selling price

Contribution margin ratio= 7/16

Contribution margin ratio= 0.4375

Answer:

The total amount of overhead cost allocated to Product X would be closest to $ 392,480

Explanation:

Activities (and Activity Measures)          Estimated Overhead Cost

Machine related (machine-hours)               $256,520

Batch setup (setups)                                    $261,360

General factory (direct labour-hours)         $178,560

                                                       Expected Activity

Activities                   Product X      Product Y         Total

Machine related          4,300             6,300            10,600

Batch setup                 8,600             1,300              9,900

General factory           3,300             6,300             9,600

The total amount of overhead cost allocated to Product X would be closest to:

Machine related = (4,300 × $256,520) ÷ 10,600 = $104,060

Batch setup = (8,600 × $261,360) ÷ 9,900 = $227,040

General factory = (3,300 × $178,560) ÷ 9,600 = $61,380

Total = $104,060 + $227,040 + $61,380 = $ 392,480

Answer and Explanation:

The journal entry is shown below;

Bond payable $1,000,000

Loss on retirement of bond $20,000

           To Discount on bond $10,000

           To Cash $1,010,000

(Being the loss on retirement of bond is recorded)

For recording this we debited the bond payable and loss as it decrease the current liabilities and it increased the losses at the same time it decreased the discount and decreased the cash so the respective accounts are credited

Answer:

1) 2.6 times

Explanation:

The Inventory turnover ratio measures the activity of liquidity of a company`s Inventory.

Inventory turnover = Cost of goods sold / Inventory

                               =  $66,000 / $25,000

                               =  2.64 times

Answer: A. Par

Explanation:

While US Government bonds are usually sold at auction which means a price different from Par, Federal Agency bonds operate much like Corporate Bonds in their selling procedure. They engage a group of Underwriters called a Selling group which can be made up of large banks and brokers.

These underwriters will then handle everything that have to do with the sale and sell it to the public. Like a Corporate listing, they get a commission from this.

Because of this direct sale by the Underwriter to the public, the Public is most likely to get the offering at Par.

Answer:

At December 31, Black should record interest revenue of: $545

Explanation:

Black Company receives a 10% interest bearing note from Reese Company to settle an $21,800 account receivable.

The amount of the interest per year = 10% x $21,800 = $2,180

At December 31, following 3 months, the interest accrual = $2,180/12 x 3 = $545

Journal entries to record the interest accrual:

Debit Interest receivable $545

Credit Interest revenue $545

Answer:

c. borrowing directly from the public.

Explanation:

If the Apple corporation sells a bond it is borrowing directly from the public.  That is because corporate bonds are exactly that, they are bonds issued by a corporation in which the individual buying them is basically loaning money to the corporation which they will receive back the full amount that they loaned out as soon as the bond matures. Therefore by buying a corporate bond you are directly loaning that corporation money to finance their operations.

If Apple Corporation sells a bond, it is borrowing indirectly from the public. Therefore, the correct option is b.

A bond is a debt instrument issued by a corporation or government entity to raise funds. When Apple sells a bond, it is essentially borrowing money from investors or the public. In return, Apple promises to repay the principal amount of the bond along with periodic interest payments. Bonds do not involve selling shares of ownership in the company, as in the case of issuing stocks. Instead, bonds represent a form of debt financing for the issuer.

Thus, the ideal selection is option b.

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Answer:

a) Gross Profit is $31,160,000      

b) Cost of goods sold is $9,840,000      

c) Operating profits is $15,990,000    

d) Operating Expenses is $15,170,000    

e) Earnings available to common stockholders is $2,870,000    

f) Total assets is $21,581,947.37      

g)Total common stock equity is $11,958,333.33  

h) Accounts Receivable is $7,222,739.73

Explanation:

McDougal​ Printing, Inc.

Year Ended December​ 31, 2019

Sales = $ 41,000,000

Gross profit margin = 76​%

Operating profit margin = 39​%

Net profit margin = 7​%

Return on total assets = 13.3​%

Return on common equity = 24​%

Total asset turnover = 1.9

Average collection period = 64.3 days

Calculation of the dollar values of various income statement and balance sheet accounts    

a) Gross Profit = Sales × Gross Profit margin

= $41,000,000 × 76%

= $31,160,000      

b) Cost of goods sold = Sales - Gross profit

= $41,000,000 - $31,160,000

= $9,840,000      

c) Operating profits = Sales × Operating profit margin

= $41,000,000 × 39% = $15,990,000    

d) Operating Expenses = Gross profit - Operating profit

= $31,160,000 - $15,990,000

= $15,170,000    

e) Earnings available to common stockholders = Sales × Net profit margin

= $41,000,000 × 7%

= $2,870,000    

f) Total assets = Sales ÷ Total asset turnover ratio

= $41,000,000 ÷ 1.9

= $21,581,947.37      

g)Total common stock equity = Earnings available to common stockholders ÷ Return on common equity %

= $2,870,000 ÷ 24%

= $11,958,333.33  

h) Accounts Receivable = (Sales ÷ 365 days) × Average collection period

= ($41,000,000 ÷ 365 days) × 64.3 days

= $7,222,739.73

Answer:

For 13,200, the Operating Leverage is 3.46.

For 11,200, the Operating Leverage is 2.94.

Explanation:

The first step is to calculate the Contribution Margin per unit:

Operating Leverage = (# of units * Contribution margin per unit) / Net Operating income

Here,

Number of Units are 12,200 Units

Net Operating income $67,100

Operating Leverage is 3.2

By putting values, we have:

3.2 = (12,200 Units * Contribution margin per unit) / $67,100

(3.2 * $67,100) / 12,200 Units = Contribution margin per unit

Contribution margin per unit = $17.6 per unit

For 13,200 units:

By putting value of units and keeping other variables constant, we have:

Operating Leverage = (13,200 units x $17.60 per unit) / $67,100

Operating Leverage = 3.46

For 11,200 units:

By putting value of units and keeping other variables constant, we have:

Operating Leverage = (11,200 units * $17.60 per unit) / $67,100

Operating Leverage = 2.94

Answer:

1. The entry for the expenses of employee benefits and for payroll taxes would be as follows:

                                                Debit            Credit

Salaries Expense                   $62,000

FICA Taxes payable                                        $4,743

Health insurance payable                              $3,000

Life Insurance payable                                      $330

Retirement Benefits payable                         $6,200

Salaries payable                                             $47,727

                                                                     Debit            Credit

Payroll tax expense                                      $6,063            

FICA Taxes payable                                                           $4,743

State unemployment taxes payable                                 $1,188

Federal unemployment taxes payable                               $132

2. Ricardo's total expense for 2018 related to payroll was $68,063

Explanation:

1. According to the given the entry for the expenses of employee benefits and for payroll taxes would be as follows:

                                                  Debit            Credit

Salaries Expense                   $62,000

FICA Taxes payable                                        $4,743

Health insurance payable                              $3,000

Life Insurance payable                                      $330

Retirement Benefits payable                         $6,200

Salaries payable                                             $47,727

FICA Taxes payable=$62,000*7.65%=$4,743

Retirement Benefits payable=$62,000*10%=$6,200

                                                                     Debit            Credit

Payroll tax expense                                      $6,063            

FICA Taxes payable                                                           $4,743

State unemployment taxes payable                                 $1,188

Federal unemployment taxes payable                               $132

FICA Taxes payable=$62,000*7.65%=$4,743

State unemployment taxes payable=$22,000*5.4%=$1,188

Federal unemployment taxes payable=$22,000*0.6%=$132

2. In order to calculate Ricardo's total expense for 2018 related to payroll we would have to make the following calculation:

Total expenses related to payroll=Salaries expense+payroll tax expense

Total expenses related to payroll=$62,000+$6,063

Total expenses related to payroll=$68,063

Ricardo's total expense for 2018 related to payroll was $68,063

Answer:

b. Producer.

Explanation:

Organizational buying deals with the process of purchasing products and services after duly identifying, evaluating and choosing which company to buy from.

Organizational buying is mainly classified into four categories, these are;

1. Producer.

2. Intermediary or Retailers.

3. Wholesaler.

4. Institution.

In this scenario, Dell Computer buys computer chips from Intel for the purpose of making computers to be sold to consumers and other organizations. Dell is an example of a producer organizational buyer because it bought computer chips, so it can be used to manufacture a computer.

Hence, the producers usually buy raw materials, components or other parts, from other manufacturers to use in producing goods for their consumers or end users.

Answer:

 Predetermined overhead rate = $ 9.75 per direct labor hours

 Overhead applied = $897,000

Explanation:

Given:

Budgeted Overhead cost = $975,000

Actual Overhead cost = $950,000

Budgeted Machine hours = 50,000

Actual Machine hours = 45,000

Budgeted Direct labor hours = 100,000

Actual Direct labor hours = 92,000

Computation:

(a) Predetermined overhead rate.

Predetermined overhead rate = budgeted overhead cost / budgeted direct labor hours

 Predetermined overhead rate = $975,000 / 100,000

 Predetermined overhead rate = $ 9.75 per direct labor hours

(b) Amount of overhead applied for the year.

Overhead applied = Actual hours × Predetermined overhead rate

Overhead applied   = 92000 × $9.75

 Overhead applied = $897,000

Answer:

The present value the expected costs of the new security and data management system is $-75,062.5

Explanation:

Kindly check attached picture for explanation

Answer:

1. The total cost for Job M1 is $592,000

2. Cost per unit is $370

3. Journal

Finished goods inventory 592,000  

Work in process inventory                    592,000

4.  Ending balance in Work-in-Process Control account is $448,920

Explanation:

                                A                              B                          C

1)   Rowan Company, May 2016           Job M1              Job M2

2)  Direct materials                             $ 75,000             $ 56,000

3)  Direct manufacturing labour          275,000                209,000

Direct manufacturing labour is paid at the rate of $25 per hour

Manufacturing overhead costs are allocated at a budgeted rate of $22 per direct manufacturing labour-hour

1. Direct labor rate = $25 per hour

Direct labor hours used on Job M1 = Direct manufacturing labor ÷ Direct labor rate

= 275,000 ÷ 25

= $ 11,000

Manufacturing overhead applied to Job M1 = Direct labor hours used on Job M1 x 22

= $11,000 x 22

= $242,000

Job cost sheet (Job M1)

Direct material  = $75,000

Direct labor = $275,000

Overhead applied  = $242,000

Total cost = $592,000

2.  Cost per unit = Total cost ÷ Number of units

= 592,000 ÷ 1,600

= $370

3. Journal

Finished goods inventory 592,000  

Work in process inventory                    592,000

4.  Direct labor hours used on Job M2 = Direct manufacturing labor/Direct labor rate

= 209,000 ÷ 25

= $8,360

Manufacturing overhead applied to Job M2 = Direct labor hours used on Job M2 x 22

= $8,360 x 22

= $183,920

Job cost sheet (Job M2)

Direct material  = $56,000

Direct labor  = $209,000

Overhead applied  = $183,920

Total cost  = $448,920

Ending balance in work in process control account = $448,920

Answer:

1. Overhead cost per unit for Model 145 is $515.59, and overhead cost per unit for Model 212 is $265.12.

2.Total cost per unit for Model 145 is $765.59, and total cost per unit for Model 212 is $445.12.

3. Profit per unit for Model 145 is $54.41, while profit per unit for Model 212 is $34.88.

Explanation:

1. Using ABC, compute the overhead cost per unit for each product line. (Round your final answers to 2 decimals places.)

Note: See the attached excel file for the computation.

2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $250 for Model 145 and $180 for Model 212. (Round your final answers to 2 decimals places.)

Total cost per unit for each model = Overhead cost per unit + direct labor and direct materials costs per unit.

Therefore, we have:

Total cost per unit for Model 145 =  $515.59 + $250 = $765.59

Total cost per unit for Model 212 = $265.12 + $180 = $445.12

3. Assume if the market price for Model 145 is $820 and the market price for Model 212 is $480, determine the profit or loss per unit for each model. (Round your final answers to 2 decimals places.)

Profit or loss per unit for each model = Market price per unit - Total cost per unit.

Therefore, we have:

Profit or loss per unit for Model 145 = $820 - $765.59 = $54.41 profit

Profit or loss per unit for Model 212 = $480 - 445.12 = $34.88 profit

Answer:

a. The IRR for the option B will be 9.988%.

b. The company would accept option A and reject the option B

Explanation:

a. To calculate  the IRR for option B we first need to determine the service life of the option A.

If R = 12.28%

Net annual benefits = 650-245=$405

Then,  1450= 405*(1-1/1.1228^n)/.1228

1/1.1228^n =1 - 1450*.1228/405 = .5603

1.1228^n = 1.7846

n = log(1.7846)/log(1.1228) = 5 years

Therefore, For option B

Let, IRR = R

Net annual benefit = 445-147 = $298

1130 = 298*(1-1/(1+R)^5)/R

At R = 9%

PV of cash inflows = $1159.12

At R = 10%

PV of cash inflows = $1129.65

As per the method of interpolation,

R = 9% + ((1159.12 - 1130)/( 1159.12-1129.65))*(10%-9%)

R = 9.988%

Thus, IRR for the option B will be 9.988%.

b.  According to the given data to selection the any option, the value of IRR must be greater than or equal to the MARR. in this case, option A has the IRR of 12.28% that is greater than the MARR of 11%. But, it is not the case with option B whose IRR is only 9.988% and it is less than the MARR of 11%.

Thus, option A will be accepted and option B will be rejected.

Answer:

PMT = $1875.00

Explanation:

The annuity refers to a series of fixed payments made after an equal interval of time and for a definite time period. The formula for the present value of annuity is,

For ordinary annuity

PV of annuity = PMT * [(1 - (1+IN)^-n) / IN]

Plugging in the values for the available variables. We calculate the PMT to be,

14130.15 = PMT * [(1 - (1+0.08)^-12) / 0.08]

14130.15 = PMT * 7.536078017

14130.15 / 7.536078017   =   PMT

PMT = $1875.000493 rounded off to $1875.00

Answer:

$281,480

Explanation:

we need to find the future value of the annuity payments, we can use the future value of annuity formula (I couldn't find an annuity table for 7.5%):  

future value = annual payment x [(1 + r)ⁿ  - 1] / r

future value = $6,500 x [(1 + 0.075)²⁰ - 1] / 0.075 = $6,500 x 43.30468 = $281,480

The amount that Bob have in his retirement account in 20 years immediately after making his last deposit is $281,480.

Using this formula

Future value =Annual payment x [(1 + Interest rate)^Number of years  - 1] / Interest rate

Where:

Annual payment = $6,500

Interest rate = 7.5% or 0.075

Number of years= 20 years

Let plug in the formula

Future value = $6,500 x [(1 + 0.075)²⁰ - 1] / 0.075

Future value=$6,500 x [(1 .075)²⁰ - 1] / 0.075

Future value=$6,500 x [(4.24785) - 1] / 0.075

Future value=$6,500 x [3.24785]/ 0.075

Future value = $6,500 x 43.30467

Future value= $281,480

Inconclusion the amount that Bob have in his retirement account in 20 years immediately after making his last deposit is $281,480.

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Answer:

Socially responsible

Explanation:

A socially responsible company is one that seeks to identify as well as relieve the social needs in its business environment.

A major social problem or need around the world is the lack of clean drinking water and birthing services. Thus, by proffering solutions to this problem loyal customer of TOMS shoe company could notice that the company takes seriously its responsibility to the society.

Answer:

Contribution margin per unit = $11.90

Explanation:

Given:

Total unit sale = 1,000,000

Unit selling price of a bracket = $22.50

Direct material required = 4 pounds per unit  

Direct labor required = 0.15 hours per unit

Cost of material per pound = $1.75

Direct labor cost per hour = $9.00

Total variable selling cost = $2,250,000

Find:

Contribution margin per unit = ?

Computation:

Direct material per unit = 4 pounds per unit × $1.75

Direct material per unit = $7

Direct labor per unit = 0.15 hours per unit × $9.00

Direct labor per unit = $1.35

Variable selling cost per unit = Total variable selling cost / Total unit sale

Variable selling cost per unit = $2,250,000 / 1,000,000

Variable selling cost per unit = $2.25

Contribution margin per unit = Sales per unit - Variable cost per unit

Contribution margin per unit = Sales per unit - [Direct material per unit + Direct labor per unit + Variable selling cost per unit]

Contribution margin per unit = $22.50 - [$7 - $1.35 - $2.25]

Contribution margin per unit = $22.50 - [$10.6]

Contribution margin per unit = $11.90

Answer:

Journal Entry

Dr. Dividend                $7,000

Cr. Dividend Payable $7,000

Explanation:

Dividend are only paid to the outstanding share. Outstanding shares re those share is in held by the stockholders of the company at a specific time period.

Authorised share are those shares which a company can issue in the market legally.

Issued shares are those share which have been issued by the company.

Dividend Declared = Outstanding shares x dividend per share.

Dividend Declared = 14,000 shares x $0.5 = $7,000

Answer:

$31,320.00

Explanation:

The formula for accounting rate of return is the annual net cash flow divided by the initial investment.

If the initial investment was $522,000 and the accounting rate of return is computed to be 6% per year, hence the annual increase in cash flow accruing from the investment can be calculated by changing the subject of the formula.

ARR=annual increase in cash flow/initial investment

ARR is 6%

initial investment is $522,000

annual increase in cash flow?

6%=annual increase in cash flow/$522,000

annual increase in cash flow=6%*$522,000= $31,320.00  

Answer:required return of Nutshell, Inc. stock = 13.2%

Explanation:The Required return also called Hurdle rate is the  minimum return in percentage which  an investor should receive  from doing business or investing in a business   to compensate for  the risks associated with the business. The more risky the investment, the more  high returns and the  less risky investment, the lower the returns.

Required Rate of Return = Risk Free Rate + Beta x (Whole Market Return – Risk Free Rate)

given

risk-free rate = 6%

market return= 12 %

beta = 1.2

Required Rate of Return = Risk Free Rate + Beta * (Whole Market Return – Risk Free Rate

= 6% + 1.2 x (12% - 6%) = 6% + 1.2 x 6% = 0.06 + 1.2x 0.06= 0.06 + 0.072=0.132  x 100 = 13.2% 

Answer:

31

Explanation:

The calculation of indifferent between your current mode of operation and the new option is shown below:-

Current Operation

Contribution Margin = Monthly Fees - Variable Cost

= $734.00 - $91.00

= $643.00

Total Fixed Cost = Rent and Utilities + Salaries + Insurance

= $5,435.00 + $6,171.00 + $1,545.00

= $13,151.00

New Operation

Contribution Margin = Monthly Fees - Variable Cost

= $1,054.00 - $158.00

= $896.00

Total Fixed Cost = Rent and Utilities + Salaries + Insurance

= $11,679.00 + $6,974.00 + $2,408.00

= $21,061.00

Here we will assume the indifferent number of students will be X

So,

Income under current option = Income under new option

$643.00 × X - $13,151.00 = $896.00 × X - $21,061.00

$253X = $7,910

X = $7,910 ÷ $253

= 31.26

or

= 31

Answer:

                               Alexion Systems, Inc.

                                 Income Statement

                 For the Year Ended December 31, 2021

                                       (in $ millions)

Sales revenue                                                       $437

Cost of goods sold                                             ($256)

Gross profit                                                            $181

Operating expenses:

Income from continuing operations b/ Taxes     $30

Income tax expense                                           ($7,5)

Income from continuing operations                                     $22.5

Other revenues and expenses:

Other revenues and expenses                                                  $9

Discontinued operations:

Income from discontinued operations                                    $90

Net income                                                                          $121.50

Earnings per share                                                                $12.15

Explanation:

I assumed income tax rate = 25% (I divided $43 / $172)