Answer: False
Explanation:
Dta mining is the generation of new information by examining large databases that are already in existence. In data mining, raw data will be eventually turned to useful information which will be used to increase sales, develop marketing strategies, and decrease costs.
The information that data mining is important because any customer can become a brand advocate or adversary by freely expressing opinions and attitudes that reach millions of other customers on social media is false.
Members of the board of directors of have received the following operating income data for the year ended: May 31, 2018:
Members of the board are surprised that the industrial systems product line is not profitable. They commission a study to determine whether the company should drop the line. Company accountants estimate that dropping industrial systems will decrease fixed cost of goods sold by and decrease fixed selling and administrative expenses by $10,000.
Requirements:
1. Prepare a differential analysis to show whether Safety Point Safety Point should drop the industrial systems product line.
2. Prepare contribution margin income statements to show Safety Point's Safety Point's total operating income under the two alternatives: (a) with the industrial systems line and (b) without the line. Compare the difference between the two alternatives' income numbers to your answer to Requirement 1.
3. What have you learned from the comparison in Requirement 2?
Product Line
Industrial Household
Systems Total
Net Sales Revenue $340,000 $370,000 $710,000
Cost of Goods Sold:
Variable 36,000 46,000 82,000
Fixed 250,000 69,000 319,000
Total Cost of Goods
Sold 286,000 115,000 401,000
Gross Profit 54,000 255,000 309,000
Selling and Administrative Expenses:
Variable 65,000 72,000 137,000
Fixed 45,000 22,000 67,000
Total Selling and Administrative
Expenses 110,000 94,000 204,000
Operating Income
(Loss) ($56,000) $161,000 $105,000
Question Completion:
Safety Point Company accountants estimate that dropping industrial systems will decrease fixed cost of goods sold by $50,000 and decrease fixed selling and administrative expenses by $10,000.
Answer:
Safety Point Company1. Differential Analysis, showing Safety Point Dropping the Industrial Systems Product Line:
Net Sales Revenue $370,000
Cost of Goods Sold:
Variable 46,000
Fixed 269,000
Total Cost of Goods Sold 315,000
Gross Profit 55,000
Selling and Administrative Expenses:
Variable 72,000
Fixed 57,000
Total Selling and Administrative
Expenses 129,000
Operating Income (Loss) ($74,000)
2. Safety Point Company's Contribution Margin Income Statements for the year ended May 31, 2018, under the two alternatives:
Without With
Industrial Systems
Net Sales Revenue $370,000 $710,000
Variable costs:
Cost of Goods Sold 46,000 82,000
Selling and Administrative 72,000 137,000
Total Cost of Goods Sold 118,000 219,000
Contribution Margin 252,000 491,000
Fixed Expenses:
Cost of goods sold 269,000 319,000
Selling and Administrative 57,000 67,000
Total Fixed Expenses 326,000 386,000
Operating Income (Loss) ($74,000) $105,000
3. The comparison in requirement 2 shows that eliminating the Industrial Systems Product Line makes Safety Point Company unprofitable with an operating loss of $74,000. This loss cannot be compared to the total operating income of $105,000 which is made with the industrial systems. So, it is not the Industrial System Product line that is causing Safety Point Company to record a loss of $56,000. It is the fixed cost of $60,000 which cannot be eliminated with the elimination of the Industrial System product line that causes the loss and reduces total operating for the company.
Explanation:
a) Data:
Safety Point
Income Statement for the year ended May 31, 2018:
Product Line
Industrial Household
Systems Systems Total
Net Sales Revenue $340,000 $370,000 $710,000
Cost of Goods Sold:
Variable 36,000 46,000 82,000
Fixed 250,000 69,000 319,000
Total Cost of Goods Sold 286,000 115,000 401,000
Gross Profit 54,000 255,000 309,000
Selling and Administrative Expenses:
Variable 65,000 72,000 137,000
Fixed 45,000 22,000 67,000
Total Selling and Administrative
Expenses 110,000 94,000 204,000
Operating Income (Loss) ($56,000) $161,000 $105,000
5. Kroger can use __________ gathered from ClickList orders to determine which products they should keep more or less of in stock.
Answer: Data analytics
Explanation:
Data analytics simply has to do withcanalyzing raw data to make conclusions about a particular information. Data analytics is used by organizations in order to optimize their business performance.
Kroger can use data analytics gathered from ClickList orders to determine which products they should keep more or less of in stock.
Byrd Corporation is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 205,000 shares of stock outstanding. Under Plan II, there would be 125,000 shares of stock outstanding and $1.73 million in debt outstanding. The interest rate on the debt is 8 percent and there are no taxes. a. Use MM Proposition I to find the price per share. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the value of the firm under each of the two proposed plans? ((Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.)
Answer:
a) $21.63
b) $4,433,125
Explanation:
plan I, total stocks outstanding = 205,000
plan II, total stocks outstanding = 125,000, and $1,730,000 in debt ($1,730,000 x 8% = $138,400 in interests)
under MM proposition I, a firm's total value is equal whether it uses external financing (debt) or not:
205,000P₀ = 125,000P₀ + $1,730,000
205,000P₀ - 125,000P₀ = $1,730,000
80,000P₀ = $1,730,000
P₀ = $1,730,000 / 80,000 = $21.625 = $21.63
the firm's total value = $21.625 x 205,000 = $4,433,125
Kingbird Itzek manufactures and sells homemade wine, and he wants to develop a standard cost per gallon. The following are required for production of a 50-gallon batch. 3,360 ounces of grape concentrate at $0.02 per ounce 54 pounds of granulated sugar at $0.55 per pound 60 lemons at $0.90 each 150 yeast tablets at $0.26 each 250 nutrient tablets at $0.14 each 2,400 ounces of water at $0.005 per ounce Kingbird estimates that 4% of the grape concentrate is wasted, 10% of the sugar is lost, and 25% of the lemons cannot be used. Compute the standard cost of the ingredients for one gallon of wine. (Round intermediate calculations and final answer to 2 decimal places, e.g. 1.25.)
Answer:
$5.272
Explanation:
The computation of the standard cost of the ingredients for one gallon of wine is shown below:-
But before that we need to do the following calculations
3,360 ounces of grape concentrate at $0.02 per ounce is (Considering 4%)
= 3,360 × $0.02 ÷ 96%
= $70
54 pounds of granulated sugar at $0.55 per pound is (Considering 10%)
= 54 × $0.55 ÷ 90%
= $33
60 lemons at $0.90 each is (Considering 25%)
= 60 × $0.90 ÷ 75%
= $72
150 yeast tablets at $0.26 each is
= 160 × $0.26
= $41.6
250 nutrient tablets at $0.14 each is
= 250 × $0.14
= $35
2,400 ounces of water at $0.005 per ounce is
= 2,400 × $0.005
= $12
Therefore 50 gallon cost is = $70 + $33 + $72 + $41.6 + $35 + $12
= $263.6
So, cost per gallon = $263.6 ÷ 50
= $5.272
You are calculating the performance of your project. If the actual cost is $80,000, the planned value is $70,000 and the earned value is $65,000, what is the cost performance index?
Answer:
Cost performance index is 81.25%
Explanation:
Actual cost = $80,000
Planned value = $70,000
Earned value = $65,000
Cost performance index (CPI) is the ratio of earned value to actual cost and can be used to estimate the projected cost of completing the project.
CPI = EV / AC
= $65,000 / $80,000
= 0.8125
= 0.8125 x 100
= 81.25%
If the government wants to raise tax revenue, which of the following items are good candidates for an excise tax? Why?
a. granola bars.
b. cigarettes.
c. toilet paper.
d. automobile tires.
e. bird feeders.
Answer:
B,C
Explanation:
An excise tax is actually a tax that is levied on a good at purchase.
Cigarettes and tissue paper are good candidates for excise duty. This is because of the fact that both goods are inelastic. There would be no decrease in their consumption if an excise tax is placed on them. People would still purchase them. Tissue paper has no substitute while cigarette would still have buyers regardless of an increase in price.
Following is information on two alternative investments being considered by Jolee Company. The company requires a 6% return from its investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1). (Use appropriate factor(s) from the tables provided.) Project A Project B Initial investment $ (174,325 ) $ (152,960 ) Expected net cash flows in year: 1 41,000 44,000 2 60,000 53,000 3 72,295 68,000 4 87,400 81,000 5 59,000 30,000For each alternative project compute the net present value.
Answer and Explanation:
The computation of the net present value is presented in the attachment below:
For project A, the net present value is $91,771.53 and for project B, the net present value is $79,390.69
It is computed after considering the discounting factor that comes from
= 1 ÷ (1 + discount rate)^number of years
for year 1, it is
= 1 ÷ (1 + 0.06)^1
The same applied for the remaining years
Velocity Company estimates the following for the next year, when common stock is expected to trade at a price-earnings ratio of 7. Earnings before interest and taxes $45 million Interest expense $5 million Effective income tax rate 30% Preferred stock dividends $10 million Common shares outstanding 2 million Common stock payout ratio 25% What is Velocity's approximate expected common stock market price per share next year?
Answer:
$63
Explanation:
The computation of the expected common stock market price per share for the next year is shown below:
Price earning ratio = Share price ÷ earning per share
where
Price earning ratio is 7
Earning per share is
= (Net income - preference dividend) ÷ number of common shares outstanding
= {($45 million - $5 million) × (1 - 0.30) - $10 million)} ÷ 2 million shares
= $9
Now placing these values to the above formula
So, the expected common stock market price is
= 7 × $9
= $63
Telecom Systems can issue debt yielding 7 percent. The company is in a 30 percent bracket. What is its aftertax cost of debt
Answer:
After tax cost of debt = 0.049 or 4.9%
Explanation:
The after tax cost of debt is the rate of debt after deducting the benefit from tax savings due to interest payments required by the debt which are deductible before calculating tax. The after tax cost of debt is somewhat an effective cost of debt. It is calculated using the following formula,
After tax cost of debt = Cost of debt * (1 - tax rate)
After tax cost of debt = 0.07 * (1 - 0.3)
After tax cost of debt = 0.049 or 4.9%
If bookstore ABC Books determines it is going to sell books at its profit-maximizing price of $15 in a market facing monopolistic competition, calculate total profit for the store
ABC Books Revenue and Cost
Quantity Price Total Revenue Marginal Revenue Total Cost Marginal Cost
0 $26 $0 $325
10 $23 $230 $23 $365 $4
20 $20 $400 $17 $425 $6
30 $18 $540 $14 $505 $8
40 $16 $640 $10 $605 $10
50 $14 $700 $6 $725 $12
60 $12 $720 $2 $865 $14
Answer: $35
Explanation:
Profit will be the Total Revenue less the total costs involved with selling the goods.
Total Revenue at $16 is $640.
Total Cost at $16 is $605.
Profit = 640 - 605
= $35
Note; Your question has $15 as the maximizing price which is not available in the table. It might be a typo so I attached the question.
A 70-year old client wants to invest in U.S. Treasury securities. When performing the suitability determination, the client informs the registered representative that he is looking for after-tax income, liquidity, and to avoid market risk. The registered representative should be LEAST concerned with the:
Answer: client's age
Explanation:
From the question, we are informed that a 70-year old client wants to invest in U.S. Treasury securities and that when performing the suitability determination, the client informs the registered representative that he is looking for after-tax income, liquidity, and to avoid market risk.
The client's age should be the least the registered representative should be concerned about. Rather, the representative should be concerned with the coupon of the recommended treasury securities and the tax bracket of the client for tax purposes.
balance sheet reports assets of $6900000 and liabilities of $2700000. All of Ivanhoe’s assets’ book values approximate their fair value, except for land, which has a fair value that is $410000 greater than its book value. On 12/31/21, Oriole Corporation paid $7030000 to acquire Ivanhoe. What amount of goodwill should Oriole record as a result of this purchase?
Answer: $2,420,000
Explanation:
Goodwill is the amount over the fair value of a company that it is purchased for.
Goodwill = Acquisition price - Net Assets
Net Assets = Assets - Liabilities
= (6,900,000 + 410,000) - 2,700,000
= $4,610,000
Goodwill = 7,030,000 - 4,610,000
= $2,420,000
The BRS Corporation makes collections on sales according to the following schedule: 40% in month of sale 55% in month following sale 5% in second month following saleThe following sales have been budgeted: Sales April $210,000 May $160,000June $150,000 Budgeted cash collections in June would be:______.a. $150,840.b. $158,000.c. $149,000.d. $150,000.
Answer:
Total cash collection= $158,500
Explanation:
Giving the following information:
Cash collection:
40% in the month of sale
55% in the month following sale
5% in the second month following sale
Sales:
April $210,000
May $160,000
June $150,000
Cash collection June:
Sales in cash from June= 150,000*0.4= 60,000
Sales on account from May= 160,000*0.55= 88,000
Sales on account from April= 210,000*0.05= 10,500
Total cash collection= $158,500
The difference between total sales revenue and total cost of goods sold is the: A. Trade margin B. Gross marketing contribution C. Net marketing contribution D. All of the above
Answer:
A. Trade margin
Explanation:
The profit obtained from trading operations is known as gross profit or trade margin.This is calculated as sales less costs of goods sold.
The difference between total sales revenue and total cost of goods sold is the gross marketing contribution.
The following information is considered:
When the cost of goods sold is deducted from the sales revenue so the gross marketing contribution should come. Neither it is trade margin, nor net marketing contribution.In other words, the difference is called as gross margin.Therefore we can conclude that the correct option is B.
Learn more: brainly.com/question/16115373
BioGrow Pharma Inc. wanted its research partner, an R&D company, to develop a cancer vaccine. However, the project required huge capital investments, and its research partner was not ready to solely face the risks involved. Thus, to gain its partner's confidence and to prove its involvement, BioGrow Pharma invested $100 million in the project. This investment made by BioGrow Pharma will result in a _____.
Answer: credible commitment
Explanation:
From the question, we are informed that BioGrow Pharma Inc. wanted its research partner, an R&D company, to develop a cancer vaccine but that the project required huge capital investments, and its research partner was not ready to solely face the risks involved.
Therefore, to gain its partner's confidence and to prove its involvement, BioGrow Pharma invested $100 million in the project. This investment made by BioGrow Pharma will result in a credible commitment.
Which of the following statements would best characterize someone who is not culturally competent in working with others from different cultures?a. The person varies the rate of their speaking.b. The person uses facial expressions when communicating.c. The person pays attention to verbal and non-verbal behavior.d. The person fills "silence" during conversations.
Answer: The person fills "silence" during conversations
Explanation:
Culture is simply regarded as people's way of life. The way if life include their food, the kind of music they listen to, their religion, language, their beliefs, values etc.
Someone who is not culturally competent in working with others from different cultures would usually be silent during conversations. This is because the person doesn't know much about the culture and can't really be involved in the conversation.
Folsom Advertising, Inc. is considering an investment in a new information system. The new system requires an investment of $1,800,000 and either has
a. Even cash flows of $750,000 per year or
b. The following expected annual cash flows: $450,000, $225,000, $600,000, $600,000, and $150,000.
Required:
Calculate the payback period for each case
Answer:
Payback period=2 years 5 months
Payback period=3 years 8 months
Explanation:
The payback period is the estimated length of time in years it takes .
It is the number of years it takes the cash project to break-even
a) Payback period
Total cash flow for two years = 750× 2 = 1500.000
Balance of cash flow required to make up= 1800000- 1500,000 300,000
Payback period = 2 years + 300,000/750,000× 12 months= 2 years 5 months
Payback period=2 years 5 months
b) Payback period
Total cash flow for 3 years = 450,000 + $225,000 +600,000=1,275 ,000
Balance o cash required to make up 1800,000 = 1,800,000 -1275,000= 525,000
Pay back period = 3 years + 525,000/750,000× 12 months
= 3 years 8 months
Payback period=3 years 8 months
Ford Motor Company is discussing new ways to recapitalize the firm and raise additional capital. Its current capital structure has a % weight in equity, % in preferred stock, and % in debt. The cost of equity capital is %, the cost of preferred stock is %, and the pretax cost of debt is %. What is the weighted average cost of capital for Ford if its marginal tax rate is %?
Complete Question:
Ford Motor Company is discussing new ways to recapitalize the firm and raise additional capital. Its current capital structure has a 10% weight in equity, 25% in preferred stock, and 65% in debt. The cost of equity capital is 17%, the cost of preferred stock is 11%, and the pretax cost of debt is 9%. What is the weighted average cost of capital for Ford if its marginal tax rate is 40%?
Answer:
7.96%
Explanation:
We can calculate WACC using the formula:
WACC = Cost of equity * Equity %age / 100% +
After Tax Cost of Debt * Debt %age / 100% +
Cost of Preferred Stock * Preferred Stock %age / 100%
Here,
Cost of equity is 17%
Cost of preferred stock is 11%
Post tax cost of debt = Pre-Tax cost * (1 - Tax rate)
This implies,
Post tax cost of debt = 9% * (1 - 40%) = 5.4%
Equity weight is 10% weight in equity
Preferred stock weight is 25%
Debt Weight is 65%
By putting value in the formula given in the attachment, we have:
WACC = 17% * (10% / 100%) + 11% * (25% / 100%) + 5.4% * (65% / 100%)
WACC = 1.7% + 2.75% + 3.51%
WACC = 7.96%
Beverages manufactures its own . The bottles are made from polyethylene terephthalate (PET), a lightweight yet strong plastic. uses as much PET recycled resin pellets in its bottles as it can, both because using recycled PET helps to meet its sustainability goals and because recycled PET is less expensive than virgin PET.
Riley is continuing to search for ways to reduce its costs and its impact on the environment. PET plastic is melted and blown over soda bottle molds to produce the bottles. One idea Riley's engineers have suggested is to retrofit the soda bottle molds and change the plastic formulation slightly so that 25 % less PET plastic is used for each bottle. The average kilograms of PET per soda bottle before any redesign is 0.004 kg. The cost of retrofitting the soda bottle molds will result in a one-time charge of $22,112, while the plastic reformulation will cause the average cost per kilogram of PET plastic to change from $3.00 to $3.30.
Required:
a. Using the original data (before any redesign of soda bottles ), prepare a direct materials budget to calculate the cost of PET purchases in each quarter for the upcoming year and for the year in total.
b. Assume that the company retrofits the soda bottle molds and changes the plastic formulation slightly so that less PET plastic is used in each bottle. Now prepare a direct materials budget to calculate the cost of PET purchases in each quarter for the upcoming year and for the year in total for this possible scenario.
c. Compare the cost of PET plastic for Requirement 1 (original data) and for Requirement 2 (making change to using less PET.) What is the direct material cost savings from making the change to using less PET?
Answer:
I prepared an excel spreadsheet because there is not enough space here.
C) total savings = previous materials costs - total cost per year after retrofitting - cost of retrofitting the molding machine = $137,105.10 - $102,168.00 - $22,112 = $12,825.10
Someone offers to buy your car for four, equal annual payments, with the first payment coming 2 years from today. If you think that you could sell your car to another purchaser for an immediate payment of $9,000 and the interest rate is 10%, what is the minimum annual payment that you would accept from this buyer?
Answer:
4i8484884858585848484i
Which of the following items would be a way to manipulate the cash flow from operating activities amount on the statement of cash flows?
a.
Adding depreciation back to net income to determine cash flow from operating activities.
b.
Including interest expense and tax expense in the calculation of cash flow from operating activities.
c.
Recording an item that should be recorded as an operating activity as an investing activity.
d.
The cash flow statement cannot be manipulated.
Answer:
C. Recording an item that should be recorded as an operating activity as an investing activity.
Explanation:
Hope it helped
All reports required to can be found online at sec.gov.
Per Twitter’s amended S-1 filing, what are the maximum estimated capital expenditures in 2013? Please provide your answer in millions without comma separator or decimal.
Answer:
Twitter's amended S-1 filing
Maximum estimated capital expenditures in 2013:
= $98 million
Explanation:
Twitter's capital expenditures in 2013 can be estimated by subtracting the long-term or non-current assets of 2012 from 2013.
The 2013 long-term assets (Property and equipment, net) are worth $284,024,000
The 2012 long-term assets (Property and equipment, net) are worth $185,574,000
The capital expenditure in 2013 = $98,450,000
The implication is that Twitter added to (or increased) its property and equipment by $98,450,000, which represent new capital expenditures in 2013.
Twitter filed SEC Form 1-A (S-1) with the Securities and Exchange Commission (SEC) when it was seeking exemption for registration requirements for its public offerings as an "emerging growth company," as it is "allowed by the federal securities laws to elect to comply with certain reduced public company reporting requirements for future filings."
In the Assembly Department of Hannon Company, budgeted and actual manufacturing overhead costs for the month of April 2017 were as follows.
Budget Actual
Indirect materials $14,200 $13,700
Indirect labor 19,100 19,900
Utilities 11,400 12,100
Supervision 4,600 4,600
All costs are controllable by the department manager.
Prepare a responsibility report for April for the cost center.
Answer:
HANNON COMPANY
Assembly Department
Manufacturing Overhead Cost Responsibility Report
For the Month Ended April 30,2017
Controllable Cost Budget$ Actual$ Difference$ Remark
Indirect materials 14,200 13,700 500 Favourable
Indirect Labor 19,100 19,900 -800 Unfavourable
Utilities 11,400 12,100 -700 Unfavourable
Supervision 4,600 4,600 0 None
Total 49,300 50,300 -1,000 Unfavourable
Calculate the monthly implicit costs for a business owner who devotes 200 hours per month to his business that could be spent working at $50/hour for someone else.
Answer:
Implicit cost = $10,000
Explanation:
Implicit cost is the opportunity cost of using resources a business already owns.
This business owner passes this income by being in a business for himself
200 hours per month multiplied by $50/hour
200 x 50
= 10000
Implicit cost = $10,000
U.S. net capital outflow Group of answer choices is a source of the supply of loanable funds, and the source of the supply of dollars in the foreign exchange market. is a source of the supply of loanable funds, and a source of the demand for dollars in the foreign exchange market. is a part of the demand for loanable funds, and the source of the supply of dollars in the foreign exchange market. is a part of the demand for loanable funds, and a source of the demand for dollars in the foreign exchange market.
Answer:
Option D would be the correct choice.
Explanation:
The net capital outflow has been the discrepancy among purchasing foreign assets from a region, as well as selling domestic currency worldwide. Find a basket of products similar across both the United States or even just Taiwan. Such net capital outflows allude to something like the disparity between households and businesses acquiring overseas investments versus non-residents acquiring domestic currency.The other options in question aren't relevant to the particular context. So choice D is perhaps the right one.
1. Chang Industries has 1,900 defective units of product that have already cost $13.90 each to produce. A salvage company will purchase the defective units as they are for $4.90 each. Chang's production manager reports that the defects can be corrected for $6.10 per unit, enabling them to be sold at their regular market price of $20.80. The incremental income or loss on reworking the units is:_______.
a. $18,620 income.
b. $30,210 income.
c. $27,930 income.
2. Poe Company is considering the purchase of new equipment costing $85,500. The projected net cash flows are $40,500 for the first two years and $35,500 for years three and four. The revenue is to be received at the end of each year. The machine has a useful life of 4 years and no salvage value. Poe requires a 10% return on its investments. The present value of an annuity of 1 and present value of an annuity for different periods is presented below. Compute the net present value of the machine.
Periods Present Value of 1 at 10% Present Value of anAnnuity of 1 at 10%
1 0.9091 0.9091
2 0.8264 1.7355
3 0.7513 2.4869
4 0.6830 3.1699
a. $(27,665).
b. $(14,857).
c. $27,665.
d. $35,709.
Answer:
1. $18620
2. $35709
Explanation:
1.we are required to find incremental loss.
= Defect(market price - price per unit - correction per unit)
Defect product = 900
Market price = 20.8
Price for each defect unit = 4.9
Price for defect correction = 6.1
1900(20.8-4.9-6.1)
= $18600
2. Present value of cash flow =
40500*0.9091 = 36818.55
40500*0.8264 = 33469.2
35500*0.7513 = 26671.15
35500*0.683 = 24246.5
Total = 121209
We subtract cost of new equipment from this value
121209-85500
= $35709
The firm has total fixed costs of $9 and a constant marginal cost of $3 per unit. The firm will maximize profit with a. 9 units of output. b. 15 units of output. c. 21 units of output. d. 30 units of output.
Answer:
b. 15 units of output.
Explanation:
information regarding sales price and quantity demanded is missing, so I looked it up (see attached file):
units sales revenue total costs profits
9 $216 $36 $180
15 $270 $54 $216
21 $252 $72 $180
30 $90 $99 ($9)
g Mason Company paid its annual property taxes of $240,000 on February 15, 20X9. Mason also anticipates that its annual repairs expense for 20X9 will be $1,200,000. This amount is usually incurred and paid in July and August when operations are shut down so that machinery and equipment can be repaired. What amount should Mason deduct for property taxes and repairs in each quarter for 20X9?
Answer:
$360,000
Explanation:
The total cost would be estimated as the expense anticipated plus the property taxes paid previously.
Now
Total Cost = $240,000 Property Taxes paid + $1,200,000 Property repairs anticipated
= $1,440,000
Now we will distribute the annual cost over the four quarters which mean we will divide the total annual cost by 4.
Quarterly Expenses = $1,440,000 / 4 = $360,000
. A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return is rs = 10.5%, and the expected constant growth rate is g = 6.4%. What is the stock's current price
Answer:
The answer is $18.29
Explanation:
We have many formulas to arriving at the stock price but here we use Gordon growth model.
Formula for getting stock price is:
D1/r - g
Where:
D1 - is the next year dividend or expected dividend to be paid next.
r is the rate of return
g is the growth rate
$0.75/0.105 - 0.064
$0.75/0.041
$18.29.
Therefore, the stock's current price is $18.29
Reed Company is in the process of preparing its financial statements for 2022. During 2022, Reed changed from the double-declining balance method for its building to the straight-line method. The building originally cost $900,000. It had an original useful life of 25 years and a salvage value of $60,000. Purchase date was 1/1/20. The 2022 depreciation expense for the building will be:
Answer:
$30,511.30
Explanation:
The double declining method was used for two years
Depreciation expense using the double declining method = Depreciation factor x cost of the asset
Depreciation factor = 2 x (1/useful life) = 2 /25 = 0.08
Depreciation expense in 2020 = 0.08 x $900,000 = $72,000
Book value = $900,000 - $72,000 = $828,000
Depreciation expense in 2021 = 0.08 x $828,000 = $66,240
book value = $828,000 - $66,240 = $761,760
Straight line depreciation expense = (book value - Salvage value) / useful life
useful life = 25 - 2 = 23
book value = $761,760
salvage value = $60,000.
( $761,760 - $60,000. ) / 23 = $30,511.30
The depreciation expense for the remaining useful life of the asset would $30,511.30