Answer:
Dr cash($8800+$33+$165) $8,998
Cr notes receivable $8,800
Cr interest revenue $33
Cr interest receivable $165
Explanation:
As at January 15 when the note is received ,there is need to recognize interest revenue for 15 days of January i.e 15/360*9%*$8800=$33
From October 17 to December 31 ,interest receivable amount already recognized as revenue=75/360*9%*$8800=$165
The actual of amount of notes receivable is the original amount of $8,800
On January 1, the Sleepy Monk Coffee Shop paid $15,000 for a full year of rent beginning on January 1. The rent payment was appropriately recorded in the Cash and Prepaid Rent accounts. If financial statements are prepared on January 31, the journal entry to record the adjustment would be:
Answer:
If financial statements are prepared on January 31, the journal entry to record the adjustment would be debit rent expense and credit prepaid rent for $1,250
Explanation:
According to the given data the rent has been expired for one month so only one month's rent expense will be recorded. Therefore to calculate one month's rent expense we have to make the following calculation:
one month's rent=Total rent/period for which rent is paid*1
one month's rent=$15,000/12*1
one month's rent=$1,250
Therefore, If financial statements are prepared on January 31, the journal entry to record the adjustment would be debit rent expense and credit prepaid rent for $1,250
The amount of increase or decrease in revenue that is expected from a particular course of action as compared with an alternative is termed: Group of answer choices manufacturing margin contribution margin differential cost differential revenue Flag this Question Question 21 pts Partridge Co. can further process Product J to produce Product D. Product J is currently selling for $21 per pound and costs $15.75 per pound to produce. Product D would sell for $37 per pound and would require an additional cost of $9.25 per pound to produce. What is the differential cost of producing Product D
Answer:
a) The amount of increase or decrease in revenue that is expected from a particular course of action as compared with an alternative is termed:
Differential Revenue
b) The Differential cost of producing Product D is the additional cost of $9.25 per pound.
Explanation:
a) Differential Revenue is the difference in sales revenue that results from two different courses of action.
b) The corporate finance institute defines Differential cost as "the difference between the cost of two alternative decisions."
A furniture factory's employees work overtime in February to finish an order that is sold on February 28. The office sends a statement to the customer in early March and payment is received by mid-March. The overtime salaries should be expensed in:______
a) the period when the workers receive their cheques
b) either in February or March depending on when the pay period ends
c) February.
d) March.
Answer: February
Explanation:
Overtime is the amount of time that a person works beyond the normal working hours. From the question, we realise that a furniture factory's workers work overtime in February in order to finish an order that was sold on February 28.
Based on this scenario, the overtime wages should be expensed in February. This is because expenses are recognised when incurred while incomes are recognised when earned. Since the expenses are incurred in February, the overtime salaries should be expensed in February.
Use the following information to answer the question: There are three firms in an economy: X, Y, and Z. Firm X buys $400 worth of goods from Firm Y, and $200 worth of goods from Firm Z to produce 250 units of output at $3 per unit. Firm Y buys $250 worth of goods from Firm X and $250 worth of goods from Firm Z to produce 250 units of output at $4 per unit. Firm Z buys $100 worth of goods from Firm X and $500 worth of goods from Firm Y to produce 500 units at $2 per unit. Given this information, using the Value Added approach to eliminating intermediate goods and services (in order to avoid double-counting), what is the economy's GDP
Answer:
$1,050
Explanation:
Value Added Approach to calculating the GDP avoids double counting by adding only the value addition of all firms in an economy to obtain the GDP. Value addition for each firm can be calculated by deducting the intermediate purchase of each firm from its intermediate sales as follows:
Firm X value addition = ($250 * 3) - $400 - $200 = $750 - $600 = $150
Firm Y value addition = ($250 * 4) - $250 - $250 = $1,000 - $500 = $500
Firm Z value addition = (500 * 2) - $100 - $500 = $1,000 - $600 = $400
Therefore, we have:
The economy's GDP = $150 + $500 + $400 = $1,050
Askew Company uses a periodic inventory system. The June 30, 2018, year-end trial balance for the company contained the following information: Account Debit Credit Merchandise inventory, 7/1/17 32,800 Sales 388,000 Sales returns 12,800 Purchases 248,000 Purchase discounts 6,800 Purchase returns 10,800 Freight-in 18,600 In addition, you determine that the June 30, 2018, inventory balance is $40,800. Required: 1. Calculate the cost of goods sold for the Askew Company for the year ending June 30, 2018. 2. Prepare the year-end adjusting entry to record cost of goods sold.
Answer and Explanation:
a. The computation of the cost of goods sold is shown below:
Beginning inventory $32,800
Add: Net purchase
Purchase $248,000
Less: Purchase discount -$6,800
Less: Purchase returns -$10,800
Add: Freight in $18,600
Total net purchased $249,000
Less: ending inventory -$40,800
Cost of goods sold $241,000
2. The year end adjusting entry is
Cost of goods sold Dr $241,000
Ending inventory Dr $40,800
Purchase discount Dr $6,800
Purchase returns Dr $10,800
To Beginning inventory $32,800
To Purchase $248,000
To freight in $18,600
(Being the cost of goods sold is recorded)
A lockbox plan is most beneficial to firms that a. receive payments in the form of currency, such as fast food restaurants, rather than in the form of checks. b. have widely dispersed manufacturing facilities. c. have suppliers who operate in many different parts of the country. d. have a large marketable securities portfolio and cash to protect. e. have customers who operate in many different parts of the country.
Answer:
E. Have customers who operate in many different parts of the country.
Explanation:
Details about a lockbox plan and services explains that this is a banking service to companies by a certain bank or banks that proceeds and receives receipts of payments from its customers where they are directly channeled to a plan inwhich they work with the bank on behalf of the company instead of contacting the said company as the bank helps or fastens the receipt processing and. The lockbox is virtually known to be advantageous to customers who operate in many different parts of the country.
It is generally known to assist companies with a very efficient way of depositing customer payments, this is for companies that find it a bit hard to check and respond to mails.
Ravelo Corporation has provided the following data from its activity-based costing system:
Activity Cost Pools Total Cost Total Activity
Assembly $498,520 44,000 machine-hours
Processing orders $54,263 1,100 orders
Inspection $77,589 1,100 inspection-hours
Data concerning the company's product L19B appear below:
Annual unit production and sales 430
Annual machine-hours 990
Annual number of orders 70
Annual Inspection hours 20
Direct materials cost $37.74 per unit
Direct labor cost $10.45 per unit
According to the activity-based costing system, the average cost of product L19B is closest to:
a. $4819 per unit
b. $82.31 per unit
c. $85.56 per unit
d. $7753 per unit
Answer:
Activity Cost Pools Total Cost Total Activity
Assembly $498,520 44,000 machine-hours
Processing orders $54,263 1,100 orders
Inspection $77,589 1,100 inspection-hours
Explanation:
Activity Cost Pools Total Cost Total Activity
Assembly $498,520 44,000 machine-hours
Processing orders $54,263 1,100 orders
Inspection $77,589 1,100 inspection-hours
Uber has made several decisions creating new product lines aimed at growing revenue, such as establishing UberEats, Uber Fresh, and UberTASTE for food delivery; UberRUSH for package delivery; and UberCARGO and UberVAN for moving goods. This strategy is known as
Answer:
The strategy described above is known as Umbrella (or Family) Brand Strategy
Explanation:
Family branding is a marketing concept where a company with strong equity uses a single brand name to sell two or more products under the same category.
In the question we see two broad categories:
Foods;CargoAnd there, you have under each broad group, sub-categories using the brand Uber.
Real-life examples of successful umbrella brands are:
Apple (iPhone, iMac, iPod etc)AdidasPokémon etc.The advantage of Umbrella Branding as a business strategy is that the cost required to launch a product under a different brand is significantly avoided if the new product is affixed with the existing brand.
If however, the company fails to get it right, by enveloping a different line of product in the existing brand, it may water down the brand and also confuse customers.
Cheers!
Mr. Grove's argument is to provide additional incentives to U.S. firms for domestic investment in more mass production. If implemented, this would have the largest impact on firms using which of the four integration-responsiveness strategies?A) Transnational strategy because such incentives help differentiation.B) Multi-domestic strategy because incentives would increase global responsiveness.C) Global-standardization strategy because incentives would lower domestic costs.D) International strategy because these incentives would reduce pressure for responsiveness globally.E) Global-standardization strategy because incentives align with the death-of-distance.
Answer:
The correct answer is the option C: Global-standarization strategy because incentives would lower domestic costs.
Explanation:
To begin with, the term of ''global-standarization strategy'' in the field of business is known because of being part of the group of the four integration-responsiveness strategies and is the one that focus in the standarization of the product in a globally way. Therefore that this type of strategy is the one that would be used in the case of looking for an investment in the mass production locally due to the fact that the firms will be producing goods in a standard way and therefore that they would use universal supplies in every production in order to increase the amount of the production to achieve a mass number.
Alyeska Services Company, a division of a major oil company, provides various services to the operators of the North Slope oil field in Alaska. Data concerning the most recent year appear below:
Sales $17,600,000
Net operating income $6,200,000
Average operating assets $36,000,000
Required:
a. Compute the margin for Alyeska Services Company.
b. Compute the turnover for Alyeska Services Company.
c. Compute the return on investment (ROI) for Alyeska Services Company.
Answer:
a. The margin for Alyeska Services Company: 35.23%
b. The turnover for Alyeska Services Company: 0.49
c. The return on investment (ROI) for Alyeska Services Company: 17.22%
Explanation:
a. The profit margin reflects a company's overall ability to turn income into profit, is calculated by formula:
Profit margin = (Net operating income/Net sales ) x 100% = $6,200,000/$17,600,000 x 100% = 35.23%
b. Asset turnover helps investors understand how effectively companies are using their assets to generate sales. Asset turnover is calculated by using following formula:
Asset Turnover = Total Sales/ Average Total Assets = $17,600,000/$36,000,000 = 0.49
c. Return on investment (ROI) is calculated by using following formula:
ROI = Net income/Total investment x 100%
In Alyeska Services Company,
ROI = Net operating income/Average operating assets x 100% = $6,200,000/$36,000,000 x 100% = 17.22%
A company’s trial balance included the following account balances: Accounts Payable $ 19,207 Accounts Receivable 81,336 Cash 73,324 Income Tax Payable 3,512 Inventory 25,816 Note Payable, due in two years 1,709 Equipment 54,128 Stockholders’ Equity 202,808 Supplies 5,512 Wages Payable 12,880 What is the amount of the current ratio? (Round your answer to 2 decimal places.)
Answer:
5.22
Explanation:
The formula for calculating the current ratio is as follows:
Current ratio = Current assets / Current liabilities .......... (1)
From the question, we have:
Current assets = Accounts Receivable + Cash + Inventory + Supplies = $81,336 + $73,324 + $25,816 + $5,512 = $185,988.
Note: Equipment is not a current asset but a fixed asset.
Current liabilities = Accounts Payable + Income Tax Payable + Wages Payable = $19,207 + $3,512 + $12,880 = $35,599.
Note: Note Payable, due in two years is not a current liability but a long term liability since it is not payable within one year.
Substituting the values into equation (1) we have:
Current ratio = $185,988 / $35,599 = 5.22
The current ratio of 5.22 indicates that the company more than enough current assets, 5.22 times, to pay of its current liabilities.
Tedd E. Bear has an annual salary of $48,000 with no other loans outstanding. Using the 25% guideline from class and with a 20% down payment, how expensive of a home can Tedd purchase using a 4%, 30 year mortgage
Answer:
The total loan value would be of $261,825
Explanation:
In order to calculate how expensive of a home can Tedd purchase using a 4%, 30 year mortgage we would have to calculate first the amount of annual payments as follows:
amount of annual payments = $48,000*0.25 = $12,000
PMT = 12,000/12 = 1000
FV = 0
rate = 4%/12
N = 30*12
Hence, use FV function in Excel amount after down payment = $209,461.24
this represents 80% of the loan , so total loan value = $209,461.24/0.8 = $261,825
The total loan value would be of $261,825
The total loan amount is $261,825.
The calculation is as follows:Amount of annual payments = 25% of $48,000 = $12,000
PMT = 12,000 ÷ 12 = $1,000
FV = $0
Rate = 4% ÷ 12 = 0.333%
N = 30 × 12 = 360
Here we have to apply the FV function in the excel.
So,
Amount after downpayment = 209,461.24
The above amount represents 80% of the loan
Now
Total loan value is
= $209,461.24 ÷ 0.8
= $261,825
Learn more: brainly.com/question/6201432
Compute ending merchandise inventory, cost of goodssold, and gross profit using the (1) FIFO inventory costingmethod, (2) LIFO inventory costing method, and (3) weighted-average inventory costing method. (Round weighted-average cost per unit to the nearest cent and all other amounts to the nearest dollar.)
Begin by determining ending merchandise inventory and cost of goods sold under each of the three methods.
Requirement 1.
FIFO
Plus:
Less:
Cost of goods sold
Requirement 2.
LIFO
Requirement 3.
Weighted-Average
Additional Information:
June.1 Beginning merchandise inventory 17 units at $15each
12 Purchase 5 units at $19each
20 Sale 14 units at $37each
24 Purchase 11 units at $23each
29 Sale 13 units at $37each
Answer:
a) Ending Merchandise Inventory and Cost of Goods Sold under FIFO:
Beginning Inventory, 17 units at $15each $255
Plus Purchases:
June 12 Purchase, 5 units at $19each 95
June 24 Purchase, 11 units at $23each 253
Cost of Goods Available for Sale $603
Less Ending Inventory 138
Cost of Goods Sold $465
b) Ending Merchandise Inventory and Cost of Goods Sold under LIFO:
Beginning Inventory, 17 units at $15each $255
Plus Purchases:
June 12 Purchase, 5 units at $19each 95
June 24 Purchase, 11 units at $23each 253
Cost of Goods Available for Sale $603
Less Ending Inventory 90
Cost of Goods Sold $513
c) Ending Merchandise Inventory and Cost of Goods Sold under Weighted Average:
Beginning Inventory, 17 units at $15each $255
Plus Purchases:
June 12 Purchase, 5 units at $19each 95
June 24 Purchase, 11 units at $23each 253
Cost of Goods Available for Sale $603
Less Ending Inventory 109.62
Cost of Goods Sold $493.38
2. Ending Inventory = 6 units (17 units + 5 - 14 + 11 - 13)
FIFO LIFO Weighted Average
Ending Inventory value = $23 *6 = $138; $15 *6 = $90; $18.27 *6 = $109.62
Weighted Average = Cost of Goods Available for Sale / Quantity Available for Sale = $603/33 = $18.27 per unit
Explanation:
FIFO: First In, First Out: This is a method of costing inventory which assumes that goods remaining in stock are those that were brought in last. This means that goods are sold out according to the time they are bought, with earlier bought goods being sold before later bought goods.
LIFO: Last In, First Out: This costing method assumes that goods that are sold are those that were bought later leaving those bought earlier to remain in stock. The entity using this method exhausts the last quantity bought before selling the earlier quantities.
Weighted Average: This is another technique which weighs the averages of the cost of inventory before determining the value of inventory. The weighted average method divides the cost of the goods available for sale by the number of those units still on the shelf. The result is the weighted average cost per unit, which can be used to assign a cost to both the ending inventory and the cost of goods sold.
The text states, "Over sufficiently long time periods, net income equals cash inflows minus cash outflows, other than cash flows with owners." Demonstrate the accuracy of this statement in the following scenario: Two friends contributed $50,000 each to form a new business. The owners used the amounts contributed to purchase a machine for $100,000 cash. They estimated that the useful life of the machine was five years and the salvage value was $20,000. They rented out the machine to a customer for an annual rental of $25,000 a year for five years. Annual cash operating costs for insurance, taxes, and other items totaled $6,000 annually. At the end of the fifth year, the owners sold the equipment for $22,000, instead of the $20,000 salvage value initially estimated. (Hint: Compute the total net income and the total cash flows other than cash flows with owners for the five-year period as a whole.)
Answer:
Cash Equipment Common stock Net income
Cash contributed
by Owners $ 100,000 $ 100,000
Purchase of
machine for cash $ (100,000) $ 100,000
Recoginition of
rent revenue $125,000 $125,000
Recoginition of
operating
expense $(30,000) $(30,000)
Recoginition of
Depreciation $ (80,000) $(80,000)
Sale of Machine $ 22,000 $ (20,000) $ 2,000
Totals $ 117,000 $0 $100,000 $ 17,000
Explanation:
g Job 397 was recently completed. The following data have been recorded on its job cost sheet: Direct materials $ 44,000 Direct labor-hours 630 DLHs Direct labor wage rate $ 12 per DLH Number of units completed 2,000 units The company applies manufacturing overhead on the basis of direct labor-hours. The predetermined overhead rate is $12 per direct labor-hour. Required: Compute the unit product cost that would appear on the job cost sheet for this job.
Answer:
$29.56
Explanation:
The computation of unit product cost is shown below:-
Unit product cost = (Direct material + Direct labor + Manufacturing overhead) ÷ Number of units completed
= ($44,000 + (63 × $12) + ($12 × 630)) ÷ 2,000
= ($44,000 + $7,560 + $7,560) ÷ 2,000
= $59,120 ÷ 2,000
= $29.56
Therefore for computing the unit product cost we simply applied the above formula.
Quisco Systems has 6.6 billion shares outstanding and a share price of $18.41. Quisco is considering developing a new networking product in house at a cost of $498 million. Alternatively, Quisco can acquire a firm that already has the technology for $913 million worth (at the current price) of Quisco stock. Suppose that absent the expense of the new technology, Quisco will have EPS of $0.74.
A. Suppose Quisco develops the product in house. What impact would the development cost have on Quisco’s EPS. Assume all costs are are incurred this year.and are treated as an R&D expense. Quisco’s tax rate is35%, and the number of shares outstanding is unchanged.
B. Suppose Quisco does not developthe product in house but instead acquire the technology. What effect would the acquisition have on Quisco’s EPS thisyear?
C. Which method of acquiring the technology has a smaller impact on earning? Is this method cheaper?Explain.
Answer:
A) EPS will decrease by $0.05 to $0.69
B) EPS will decrease by $0.01 to $0.73
C) The impact on EPS is smaller if the company is acquired. This doesn't mean that it is cheaper to do it that way, but since the EPS is very low, any significant increase in costs will result in steep reduction of EPS. The cheapest way would be to issue new stocks to cover the expenses of developing the new technology.
Explanation:
6.6 billion shares outstanding and a share price of $18.41, current EPS $0.74, total current earnings = $4,884 million
in house development = $498 million will reduce net earnings by $498 x 65% = $323.7 million or $0.05 per share
EPS = $0.74 - $0.05 = $0.69
if Quisco decides to acquire the company, then total shares will increase by $913,000,000 / $18.41 = 49,592,613 shares
total outstanding shares = 6,600,000,000 + 49,592,613 = 6,649,592,613 shares
EPS = $4,884,000,000 / 6,649,592,613 = $0.73
A company is investing in a solar panel system to reduce its electricity costs. The system requires a cash payment of $125,374.60 today. The system is expected to generate net cash flows of $13,000 per year for the next 35 years. The investment has zero salvage value. QS 24-15 Net present value LO P3 The company requires an 8% return on its investments. 1-a. Compute the net present value of this investment. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your present value factor to 4 decimals.) 1-b. Should the project be accepted?
Answer:
NPV is positive,the project should be accepted
Explanation:
In determining whether or not the project should be accepted ,we need to ascertain the Net Present value of the project which is present value of cash inflows of $13,000 for 35 years minus the initial investment of $125,374.60 committed today.
The annuity factor for 8% for 35 year horizon is 11.6546 using annuity table.
Present of cash inflow=cash inflow*annuity factor=$13,000*11.6546=$151,509.80
Net present value=$ 151,509.80-$125,374.60=$ 26,135.20
The investment has a positive NPV,hence should be accepted
After hearing a knock at your front door, you are surprised to see the Prize Patrol from a large, well-known magazine subscription company. It has arrived with the good news that you are the big winner, having won $34 million. You have three options. (a) Receive $1.7 million per year for the next 20 years. (b) Have $11.5 million today. (c) Have $3.25 million today and receive $1,400,000 for each of the next 20 years. Your financial adviser tells you that it is reasonable to expect to earn 14 percent on investments.
Answer:
The requirement is to calculate the present value of each option:
$ 11.26 million
$11.5 million
$ 12.52 million
Explanation:
The present value formula in excel is very useful in this case:
=-pv(rate,nper,pmt,fv)
rate is the 14% interest rate to be earned per year
nper is duration of the payment
pmt is the amount of payment expected per year
fv is the is the future worth of the payment which is unknown
Option 1:
=-pv(14%,20,1.7,0)=$ 11.26 million
Option 2:
The amount receivable today is the present value i.e $11.5 million
option 3:
=-pv(14%,20,1.4,0)=$9.27 million
total =amount received today+$ 9.27 million=$3.25 million+$ 9.27 millon=$ 12.52 million
Introduction to the future value of money. Under the concepts of the time value of money, you can determine the future value of an amount invested today that will earn a given interest rate over a given amount of time. This technique can be used to calculate the future value of:
(1) a single receipt or payment made
(2) a series of receipts or payments.
Lexi and Luke are sitting together, with their notebooks and textbooks open, at a coffee shop. They've been reviewing the latest lecture from Dr. Thibodeaux's financial management class by asking each other questions Today's topic addressed the calculation of future values for both simple and compound interest-earning accounts. Complete the missing information in the conversation that follows. Round your final answer to all computations to two decimal places. However, if you compute any interest factors as an intermediate step in your calculations, round them to four decimal places.
Lexi So, why is it important to be able to calculate the future value of some amount invested?
Luke First, remember that the amount invested is usually called _______maturity payment and the amount earned during the investment period is called_________interest.It is important to be able to calculate a future value so that you can know in advance what a given amount of principal will be worth after earning a specified________ interest rate for a known_________
Lexi OK, I understand that, and I know the amount of principal invested today can be called the ________ value of the investment, whereas the amount realized after the passage of t period of time is called its _________ value. But what causes the present and future values to be different values?
Luke Two things cause the present and future values to be different amounts. First, the _________ earned during the investment period causes the future value to be greater than, equal to, or less than the present value. Second, the method used to calculate the interest earned-that is, whether the account pays ______________ interest-determines the________.
Answer:
Principal
interest
interest for a known period
present value
future value
interest
simple or compound interest
the amount by which the future value differs from the present value
Explanation:
The initial amount invested is known as the principal amount.
The increase over and above the principal invested is called interest.
The duration of the investment is the period which the interest is earned.
present value is the present worth of investment
future value is the future amount that the investment would worth after been invested for a known period
Skilled versus unskilled labor markets Consider the labor markets for unskilled workers and skilled workers in the United States. Suppose you read the following newspaper headline: "The U.S. Department of Education Issues Report on Increased Productivity Effects of a College Education, but College Enrollment Remains Constant." The previous scenario primarily affects the labor market for ______ workers.
Answer: Skilled Workers.
Explanation:
Skilled workers refers to those with the skills and abilities required to work in their various tasks. Often these skills are gained from tertiary level institutions such as Universities, Colleges or Technical Schools.
When the report speaks of how having a college education leads to increased productivity, it is targeting skilled workers who as the definition states, have probably gone to College or Universities and the like.
This report will increase the labour market for skilled college education holders as companies might want to hire them more to gain from the reported increased productivity.
Following are transactions for Valdez Services, a company owned by Brina Valdez. Brina Valdez invested $20,000 cash in the company in exchange for common stock. The company provided services to a client and immediately received $900 cash. The company received $10,000 cash from a client in payment for services to be provided next year. The company received $3,500 cash from a client in partial payment of accounts receivable. The company borrowed $5,000 cash from the bank by signing a note payable.
Required:
Prepare general journal entries for the above transactions of Valdez Services.
The following data were provided by Rider, Inc, which produces a single product:
Units in beginning inventory 0
Units produced 5,000
Units sold 4,500
Variable costs per unit:
Manufacturing $10
Selling and administrative $4
Fixed costs in total:
Manufacturing $15,000
Selling and administrative $10,000
a. lower than the net operating income under variable costing.b. higher than the net operating income under variable costing.c. the relation between absorption costing and variable costing net operating incomes cannot be determined.d. the same as the net operating income under variable costing.
Answer:
The correct option is B, higher than the net operating income under variable costing
Explanation:
In calculating the net operating profit under variable costing, the fixed manufacturing cost of $15,000 is deducted as a whole in arriving at net profit.
However, under absorption costing method, only the goods sold are charged with their own portion of fixed manufacturing cost totaling $15,000
Fixed under variable costing method=$15,000
fixed cost under absorption costing method=$15,000/5,000*4500=$13500
Since fixed cost is lower under absorption costing method, net profit tends to be higher.
You have a portfolio that is invested 14 percent in Stock R, 50 percent in Stock S, and the remainder in Stock T. The beta of Stock R is .81, and the beta of Stock S is 1.36. The beta of your portfolio is 1.30. What is the beta of the Stock T
Answer:
1.41 Approx
Explanation:
The computation of the beta for the stock T is shown below:
Beta of portfolio = Respective betas × Respective investment weights
1.30 = (0.14 × 0.81) + (0.5 × 1.36) + (0.36 × beta of the Stock T)
1.30 =0.7934 + (0.36 × beta of the Stock T)
beta of the Stock T = (1.3 - 0.7934) ÷ 0.36
= 1.41 Approx
We simply multiplied the beta of each stock with its investment weights order to calculate the beta of the stock T as portfolio beta is given
What are the benefits and risks of being acquired by a larger company?
Rosnan Industries' 2013 and 2012 balance sheets and income statements are shown below.
Balance Sheets:
2013 2012
Cash and equivalents $100 $85
Accounts receivable 275 300
Inventories 375 250
Total current assets $750 $635
Net plant and equipment 2,300 1,490
Total assets $3,050 $2,125
Accounts payable $150 $85
Accruals 75 50
Notes payable 150 75
Total current liabilities $375 $210
Long-term debt 450 290
Common stock 1,225 1,225
Retained earnings 1,000 400
Total liabilities and equity $3,050 $2,125
Income Statements:
2013 2012
Sales $2,600 $1,400
Operating costs excluding depreciation 1,250 1,000
EBITDA $1,350 $400
Depreciation and amortization 100 75
EBIT $1,250 $325
Interest 62 45
EBT $1,188 $280
Taxes (40%) 475 112
Net income $713 $168
Dividends paid $53 $48
Addition to retained earnings $600 $120
Shares outstanding 100 100
Price $25.00 $22.50
WACC 10.00%
The balance in the firm's cash and equivalents account is needed for operations and is not considered "excess" cash. Using the financial statements given above, what is Rosnan's 2013 free cash flow (FCF)? Use a minus sign to indicate a negative FCF.
$
Answer:
–$32
Explanation:
Rosnan Industries' 2013 free cash flow (FCF)
Details $
Net income 713
Add Non-Cash Expenses:
Depreciation and amortization 100
(Increase) decrease in non-cash current assets:
Decrease in accounts receivable (300 - 275) 25
Increase inventories (375 - 250) (125)
Increase (decrease) in current liabilities:
Increase in total current liabilities (375 - 210) 165
Capital expenditure:
Increase in net plant and equipment (2,300 - 1,490) (810)
Depreciation and amortization (100)
Free cash flow (32)
Therefore, Rosnan's 2013 free cash flow (FCF) minus $32.
To increase productivity, your project team has completed the task to develop potential ideas for approval by senior management. While receiving feedback and guidance (message-receiving process) from senior management, you should IDEALLY:
Answer and Explanation:
A lot of the information and suggestions in this section assume a staff of at least five or six members, which is the number at which sustaining internal communication can become particularly difficult. This is not meant to imply that smaller organizations don't have internal communication needs, or that the need for good internal communication is any less in an organization with three staff members than in one with 30. If your staff is larger than one, internal communication is an issue that you can't afford to ignore. Most of the material that follows is relevant to small organizations as well as large ones. This section will help you establish an atmosphere and set up systems that will lead to good internal communication and to the effectiveness of your organization.
The majority of the advice and tips in this area are predicated on a team of at least five or six people, which is the threshold at which maintaining internal communication may be very challenging.
What is the Communication?Giving, receiving, and exchanging information are all parts of communication, which might take the form of talking, writing, listening, or reading. Listen intently, talk or write properly, and appreciate many points of view when communicating
This is not intended to imply that smaller firms don't require effective internal communication or that the need for it is any less in a company with three employees than in one with 30. Internal communication is a problem that you cannot afford to neglect if your staff is more than one. The majority of the information that follows applies to both small and large enterprises.
Therefore, It could be difficult to keep the lines of communication open inside.
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Niler Corporation reported the following after-tax information for its current fiscal year: $35,000 income from continuing operations, $8,400 income from operations of discontinued Line C, and $12,500 loss on disposal of Line C.
Starting with income from continuing operations, prepare a partial income statement for Niler for the current year. Ignore earnings per share.
Answer:
The net income for Niler Corporation for the current year is $30,900.
Explanation:
When there is a discontinued operation, the income from the discontinued operation is added to the income from continuing operations while the loss on disposal of the same operation is added to obtain the net income for the company. This can be done as follows for this question:
Niler Corporation
Partial Income Statement
Details $
Income from continuing operations 35,000
income from operations of discontinued Line C 8,400
Loss on disposal of Line C (12,500)
Net income 30,900
Therefore, the net income for Niler Corporation for the current year is $30,900.
Klingon Widgets, Inc., purchased new cloaking machinery three years ago for $6 million. The machinery can be sold to the Romulans today for $5.1 million. Klingon’s current balance sheet shows net fixed assets of $3.4 million, current liabilities of $895,000, and net working capital of $235,000. If the current assets and current liabilities were liquidated today, the company would receive a total of $1.15 million cash. a. What is the book value of Klingon’s total assets today? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.) b. What is the sum of the market value of NWC and the market value of fixed assets? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)
Answer:
a. What is the book value of Klingon’s total assets today?
total assets = net fixed assets + current assets
net fixed assets = $3,400,000current assets = net working capital + current liabilities = $235,000 + $895,000 = $1,130,000total assets = $3,400,000 + $1,130,000 = $4,530,000
b. What is the sum of the market value of NWC and the market value of fixed assets?
market value of NWC = $1,150,000market value of fixed assets = $5,100,000FMV of NWC + fixed assets = $1,150,000 + $5,100,000 = $6,250,000
Paragraph coherence occurs when the ideas in a paragraph are linked and there is a logical flow from one idea to the next. Which of the following are techniques that you can use to help the reader follow your ideas?
A) Place prepositions near the end of the sentence.
B) Show connections with transitional expressions.
C) Avoid repetition of words and phrases.
D) Use pronouns to refer to previous nouns.
E) Use bullets and lists to connect similar ideas.
Answer:
B) Show connections with transitional expressions.
Explanation:
When paragraphs are formed there needs to be a smooth flow so the reader can clearly understand what is being communicated. Paragraph coherence is used to achieve this.
An important method in achieving paragraph coherence is the use of transitions.
Transitions are words or a set of word that connects sentences and ideas together in a paragraph. It makes the relationship between ideas clear and understandable.
Coherence is used to make the ideas expressed flow smoothly and logically.
Umatilla Bank and Trust is considering giving Pohl Company a loan. Before doing so, it decides that further discussions with Pohl’s accountant may be desirable. One area of particular concern is the Inventory account, which has a year-end balance of $275,000. Discussions with the accountant reveal the following.
1. Pohl Company sold goods costing $55,000 to Hemlock Company FOB shipping point on December 28. The goods are not expected to reach Hemlock until January 12. The goods were not included in the physical inventory because they were not in the warehouse.
2. The physical count of the inventory did not include goods costing $95,000 that were shipped to Pohl Company FOB destination on December 27 and were still in transit at year-end.
3. Pohl Company received goods costing $25,000 on January 2. The goods were shipped FOB shipping point on December 26 by Yanice Co. The goods were not included in the physical count.
4. Pohl Company sold goods costing $51,000 to Ehler of Canada FOB destination on December 30. The goods were received in Canada on January 8. They were not included in Pohl Company physical inventory.
5. Pohl Company received goods costing $42,000 on January 2 that were shipped FOB destination on December 29. The shipment was a rush order that was supposed to arrive December 31. This purchase was included in the ending inventory of $275,000.
Required:
Determine the correct inventory amount on December 31.
Answer: $309,000
Explanation:
First it is important to note the difference between the Shipping terms.
FOB (Free on Board) Shipping Point means that the goods being sold belong to the owner as soon as the seller leaves it at shipping point. Shipping point being as soon as the Carrier delivering it has picked it up from the seller. At this point it should no longer be included in the Seller's books but in the buyer's.
FOB Destination means that the goods only become that of the buyer when the buyer receives it. Until then, the goods are under the ownership of the Seller and need to be recorded in the books as such until the buyer receives it.
Reconciling the balance therefore,
Year end Balance is $275,000
1. Sales to Hemlock $55,000 not included in final balance is fine because it is FOB shipping point and as so it is not to be included in inventory.
2. Sales to Pohl FOB Destination of $95,000 not included in inventory count is fine because it should only be included when it is received as it was shipped FOB Destination.
3. Pohl company should have INCLUDED this $25,000 because it was shipped FOB Shipping point meaning that Pohl gets ownership as soon as Yanice Co sent it on December 26 which is within the period.
4. Pohl should INCLUDE the $51,000 because it shipped the goods FOB Destination meaning that it only relinquishes Ownership when Ehler of Canada receives it which was in the next period.
5. Pohl SHOULD NOT HAVE INCLUDED the $42,000 balance in the inventory amount because it was shipped FOB Destination which means that they only get Ownership when they receive it. They received it in the next period and as such should not include it in there period in question.
Calculating the inventory amount then gives,
= 275,000 + 25,000 + 51,000 - 42,000
= $309,000
The correct inventory amount on December 31 is $309,000
The correct inventory amount on December 31 is = $309,000
What is the Inventory amount?
Preferably, it is important to note the distinction between the Shipping terms.
FOB (Free on Board) Shipping Point suggests that the goods being sold belong to the proprietor as soon as the seller vamooses them at the shipping point. The shipping point is as soon as the Carrier delivering it has picked it up from the seller. At this moment, it should no longer be included in the Seller's books but in the buyer's.
FOB Terminus indicates that the goods only become that of the buyer when the buyer receives them. Until then, the goods are under the ownership of the Seller and also they need to be recorded in the books as such until the buyer receives them.
Negotiating the balance, therefore,
The year-end Balance is $275,000
1. Sales to Hemlock $55,000 not included in last balance is fine because it is FOB shipping point and as so it is not to be contained in inventory.
2. Sales to Pohl FOB Destination of $95,000 not retained in inventory count is fine because it should only be included when it is received as it was shipped to FOB Destination.
3. Pohl company should have INCLUDED this $25,000 because it was shipped FOB Shipping point definition that Pohl gets ownership as shortly as Janice Co sent it on December 26 which is within the time.
4. Pohl should INCLUDE the $51,000 because it shipped the goods FOB Destination suggesting that it only relinquishes Right when Ehler of Canada receives it which was in the next period.
5. Pohl SHOULD NOT HAVE INCLUDED the $42,000 reward in the stock amount because it was shipped FOB Terminus which suggests that they only get Ownership when they accept it. They received it in the next period and as such should not enclose it in their period in question.
Now the Calculating of the inventory amount then gives,
= 275,000 + 25,000 + 51,000 - 42,000
= $309,000
Therefore, The correct inventory amount on December 31 is $309,000
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