Favaz began business at the start of this year and had the following costs: variable manufacturing cost per unit, $7; fixed manufacturing costs, $60,000; variable selling and administrative costs per unit, $3; and fixed selling and administrative costs, $263,000. The company sells its units for $48 each. Additional data follow. Planned production in units 10,000 Actual production in units 10,000 Number of units sold 9,500 There were no variances. The income (loss) under absorption costing is

Answers

Answer 1

Answer:

Favaz

The income (loss) under absorption costing is

= $41,000.

Explanation:

a) Data and Calculations:

Variable manufacturing cost per unit, $7

Fixed manufacturing costs, $60,000

Variable selling and administrative costs per unit, $3

Fixed selling and administrative costs, $263,000

Selling price per unit = $48

Planned production in units = 10,000

Actual production in units = 10,000

Number of units sold = 9,500

Ending inventory = 500 (10,000 - 9,500)

Income Statement

Sales revenue ($48 * 9,500)            $456,000

Cost of production:

Variable manufacturing        $70,000 ($7 * 10,000)

Fixed manufacturing costs,   60,000

Total cost of production     $130,000

Less Ending inventory             6,500 ($13 * 500)

Cost of goods sold                              123,500

Gross profit                                       $332,500

Expenses:

Variable selling and administrative

costs per unit, ($3 * 9,500)  $28,500

Fixed selling and

administrative costs,            263,000

Total expenses                                 $291,500

Net income                                          $41,000    


Related Questions

legal advisor and marketing researcher are examples of

Answers

Answer:

White-collar jobs.

Explanation:

A white-collar worker is a term used since the mid-20th century to describe any individual or social group engaged in a job that requires higher education and professional qualifications, or little or no physical work. Depending on the context, the term white collar may be synonymous with new forms, that is, the working class layer - as opposed to the traditional forms used for the term blue collar - or the middle class, and sometimes the upper class.

White collars are generally better educated and better paid than blue collars. They are characterized by individualism and a greater propensity for liberal ideas as opposed to blue-collar workers who prefer collectivism and conservative values.

On May 31, the Cash account of Teasel had a normal balance of $5,400. During May, the account was debited for a total of $12,600 and credited for a total of $11,900. What was the balance in the Cash account at the beginning of May?
a. A $0 balance.
b. A $6,100 debit balance.
c. A $6,100 credit balance.
d. A $4,700 debit balance.
e. A $4,700 credit balance.

Answers

Answer:

d. A $4,700 debit balance.

Explanation:

Note that the cash account is an asset account that a debit increases and a  credit reduce it, hence, the  balance at the beginning of May would be increased by debit entry and decreased as a result of the credit entry as shown thus:

closing balance=beginning balance+debit-credit

closing balance=$5,400

beginning balance=unknown

debit=$12,600

credit=$11,900

$5400=X+$12,600-$11,900

X=$5,400-$12,600+$11,900

X=$4,700(debit)

The purchase price and all costs to bring an asset to its desired condition and location for use should be ________.
a. accrued
b. capitalized
c. expensed

Answers

Answer:

b. capitalized

Explanation:

The purchase price and all costs to bring an asset to its desired condition and location for use should be capitalized.

Answer:b capitalized

Explanation:

Companies can use a spreadsheet to complete the statement of cash flows. Each item that follows is recorded in the transaction analysis columns of the spreadsheet.
Net income
Increases in current assets (other than Cash)
Decreases in current liabilities
Cash payment for the acquisition of plant assets
Cash receipt from the issuance of common stock
Depreciation expense
Identify each as being recorded by a Debit or Credit in the statement of cash flows section of the spreadsheet.

Answers

Answer and Explanation:

The categorization is as follows:

a. Debit, positive adjustment

b. Credit, negative adjustment

c. Credit, negative adjustment

d. Credit, negative adjustment

e.  Debit, positive adjustment

f.  Debit, positive adjustment

In this way the transactions should be categorized with respect to the statement of cash flows section

Hence, the same is to be relevant

Unexpected low inflation helps whom: Group of answer choices debtors students workers creditors capitalists

Answers

Answer:

creditors

Explanation:

Inflation is a persistent rise in the general price levels

Types of inflation

1. demand pull inflation – this occurs when demand exceeds supply. When demand exceeds supply, prices rise

2. cost push inflation – this occurs when the cost of production increases. This leads to a reduction in supply. Higher prices are the resultant effect  

Costs of inflation

Shoe leather cost is when people try to spend money immediately so they would not be holding money for a long time. This is because money loses its value in an inflation.

Menu costs are the costs of changing price constantly as a result of inflation, When there is inflation, prices increases regularly. As a result prices needs to be updated regularly.

When inflation is low, creditors benefit because they lend in nominal terms. Thus, loss in the amount borrowed is minimal

If five different errands are allocated to five time slots, 12-1pm,1-2pm,2-3pm,3-4pm and 4-5pm, how many distinct schedules are possible

Answers

Answer:

120

Explanation:

There are 5 different errands and five different time slots for the errands. We are then required to find in how many ways these errands would be arranged in the time slots schedules.

The number of ways the errands can be arranged in the time slot is 5!

5! = 1×2×3×4×5= 120

Therefore there are 120 different ways to arrange the errands in the times slots schedules(5) available.

Multiple Versus Single Overhead Rates, Activity Drivers Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment $548,080 Number of setups 680 Ordering costs 313,200 Number of orders 17,400 Machine costs 939,400 Machine hours 42,700 Receiving 343,000 Receiving hours 9,800 Deoro produces two models of dishwashers with the following expected prime costs and activity demands:
Model A Model B
Direct materials $600,000 $800,000
Direct labor $480,000 $480,000
Units completed 16,000 8,000
Direct labor hours 6,000 2,000
Number of setups 400 200
Number of orders 6,000 12,000
Machine hours 24,000 18,000
Receiving hours 3,000 7,000
The company's normal activity is 8,000 direct labor hours.
Required:
1. Determine the unit cost for each model using direct labor hours to apply overhead.
Unit Cost
Model A $
Model B $
2. Determine the unit cost for each model using the four activity drivers. Round your answers to nearest cent.
Unit Cost
Model A $
Model B $
3. Which method produces the more accurate cost assignment?

Answers

Answer:

Deoro Company

1. Unit cost using direct labor hours to apply overhead:

Unit Cost

Model A $167.985

Model B $226.99

2. Unit cost using the four activity drivers:

Unit Cost

Model A $133.97  

Model B $287.28

3. Activity-based costing method always produces the more accurate cost assignment.

Explanation:

a) Data and Calculations:

Activity                    Expected Cost      Activity Driver    Activity Capacity

Setting up equipment   $548,080       Number of setups          680

Ordering costs                 313,200        Number of orders     17,400

Machine costs                 939,400        Machine hours         42,700

Receiving                         343,000        Receiving hours         9,800

Total overhead costs $2,142,680

Activity Rates:

Setting up equipment   $806 per setup ($548,080/680)

Ordering costs              $18 per order ($313,200/17,400)

Machine costs              $22 per machine hour ($939,400/42,700)

Receiving                     $35 per receiving hour ($343,000/9,800)

                                    Model A            Model B

Direct materials        $600,000          $800,000

Direct labor               $480,000          $480,000

Overhead applied  $1,063,500        $1,018,200

Total costs              $2,143,500      $2,298,200

Units completed            16,000               8,000

Cost per unit                $133.97         $287.275

Direct labor hours          6,000               2,000

Number of setups             400                  200

Number of orders          6,000             12,000

Machine hours             24,000             18,000

Receiving hours             3,000               7,000

The company's normal activity is 8,000 direct labor hours.

Assignment of overhead costs:

                                        Model A                               Model B

Number of setups         $322,500 (400 * $806)    $161,200 (200 * $806)

Number of orders            108,000 (6,000 * $18)      216,000 (12,000 * $18)

Machine hours                528,000 (24,000 * $22)  396,000 (18,000 * $22)

Receiving hours               105,000 (3,000 * $35)    245,000 (7,000 * $35)

Total overhead applied $1,063,500                    $1,018,200

Overhead based on direct labor hours:

Total overhead costs = $2,143,680

Total direct labor hours = 8,000 (6,000 + 2,000)

Overhead rate per DLH = $267.96

Allocation of overhead:

                                    Model A                           Model B

Direct labor hours          6,000                            2,000

Overhead (DLH) $1,607,760 ($267.96 *6,000) $535,920 ($267.96  * 2,000)

                                    Model A            Model B

Direct materials        $600,000          $800,000

Direct labor               $480,000          $480,000

Overhead applied  $1,607,760          $535,920

Total costs             $2,687,760        $1,815,920

Units completed           16,000                8,000

Cost per unit            $167.985            $226.99

Consider golfers who led the Professional Golfers' Association of America (PGA) in winnings at different points in time. Note that the winnings are nominal figures (unadjusted for inflation).

Year Golfer Nominal Winnings (Dollars) U.S. CPI (1983 = 100) Winnings in 2009 Dollars
1965 Jack Nicklaus 140,752 31.5
1970 Lee Trevino 157,037 38.8
1982 Craig Stadler 446,462 96.5
2009 Tiger Woods 10,508,163 214.5 10,508,163

Fill in the missing values in the table above.

Answers

Answer:

Professional Golfers' Association of America (PGA)

Winnings at Different Points in Time

Year     Golfer                 Nominal              U.S. CPI          Winnings

                                Winnings (Dollars)  (1983 = 100)   in 2009 Dollars

1965    Jack Nicklaus     140,752                31.5               958,454  

1970    Lee Trevino        157,037                38.8               868,156  

1982   Craig Stadler      446,462               96.5              992,395  

2009  Tiger Woods  10,508,163              214.5           10,508,163

Explanation:

a) Data and Calculations:

Year     Golfer                 Nominal                U.S. CPI          Winnings

                                Winnings (Dollars)    (1983 = 100)   in 2009 Dollars

1965    Jack Nicklaus          140,752                 31.5

1970    Lee Trevino             157,037                38.8

1982   Craig Stadler           446,462               96.5

2009  Tiger Woods       10,508,163              214.5               10,508,163

Calculating the missing values:

Year     Golfer                 Nominal              U.S. CPI          Winnings

                                Winnings (Dollars)  (1983 = 100)   in 2009 Dollars

1965    Jack Nicklaus     140,752                31.5               958,454 (140,752*214.5/31.5)

1970    Lee Trevino        157,037                38.8               868,156 (157,037*214.5/38.8)

1982   Craig Stadler      446,462               96.5              992,395 (446,462*214.5/96.5)

2009  Tiger Woods  10,508,163              214.5           10,508,163

Be-The-One is a motivational consulting business. At the end of its accounting period, December 31, 20Y2, Be-The-One has assets of $395,000 and liabilities of $97,000. Using the accounting equation, determine the following amounts: a. Stockholders' equity as of December 31, 20Y2. $fill in the blank 1 b. Stockholders' equity as of December 31, 20Y3, assuming that assets decreased by $65,000 and liabilities increased by $36,000 during 20Y3. $fill in the blank 2

Answers

Answer:

a. Stockholders' equity as of December 31, 20Y2

Assets = Equity + Liabilities

395,000 = Equity + 97,000

Equity = 395,000 - 97,000

= $298,000

b. Stockholders' equity as of December 31, 20Y3.

Assets = Equity + Liabilities

(395,000 - 65,000) = Equity + (97,000 + 36,000)

330,000 = Equity + 133,000

Equity = 330,000 - 133,000

= $197,000

What is the similarity between high-technology firms and service-based firms that makes them risky as restructuring candidates

Answers

Answer:

Thet are both human-resource dependent.

Explanation:

Human resources refers to the group of people who make up a firm's workforce or personnel and are considered a valuable asset in terms of skills and talents.

Restructuring is the phrase used in corporate management to describe the process of rearranging a firm's legal, ownership, operational, or other structures in order to make it more lucrative or better organized for its current needs.

Because the firm's personnel are human, they have the capacity to resist any restructuring they believe will negatively affect them. This makes high-tech and service-based firms which are human-resource dependent to be particularly risky restructuring candidates.

You are to receive the following payments at the end of the following periods:

Year 1 : $250
Year 2: $300
Year 3: $450

The interest rate is 15% per year.

Required:
What is the future value of these cash flows 20 years from now?

Answers

Answer: $12,113.14

Explanation:

Find out the future value of each payment 20 years from now then sum up the values.

Year 1:

= 250 * ( 1 + 15%)¹⁹

= $3,557.94

Year 2:

= 300 * ( 1 + 15%)¹⁸

= $3,712.636

Year 3:

= 450 * ( 1 + 15%)¹⁷

= $4,842.5688

Future value of all:

= 3,557.94 + 3,712.636 + 4,842.5688

= $12,113.14

Trudeau’s Body Shop incurs total costs given by TC = 2,400 + 100 Q. If the price it charges for a paint job is $120, what is its break-even level of output?

Answers

Answer:

The break-even level of output is 120 units.

Explanation:

Since Total Cost formula is provided, we can use elements contained in the formulae to determine the break-even level of output.

The  break-even level of output is the level of activity where a firm makes neither a Profit nor a Loss. In other words, Profit = $0

Step 1 : Collect data

So given :

TC = 2,400 + 100 Q

This means :

Fixed Costs = $2,400

Variable Costs = $100 per unit

Additional Information gives :

Selling Price per unit =  $120

Step 2 : Determine the break-even level of output

Break even (units) = Fixed Costs ÷ Contribution per unit

where,

Contribution per unit = Selling Price - Variable Cost

                                   = $20

thus,

Break even (units) = $2,400 ÷ $20

                              = 120 units

Conclusion :

The break-even level of output is 120 units.

If the coupon rate on a bond is higher than the yield to maturity, Multiple Choice the bond sells at a discount. the coupon rate on the bond has decreased. interest rates have probably increased since the bond was issued. the current yield on the bond is lower now than when the bond was originally issued.

Answers

Answer:

the current yield on the bond is lower now than when the bond was originally issued.

Explanation:

A bond can be defined as a debt or fixed investment security, in which a bondholder (investor or creditor) loans an amount of money to the bond issuer (government or corporations) for a specific period of time. The bond issuer are expected to return the principal (face value) at maturity with an agreed upon interest (coupon), which are paid at fixed intervals.

A yield to maturity can be defined as the bond's total rate of return required by the secondary market while the coupon rate is defined as the annual interest of a bond divided by its face value.

Hence, if the coupon rate on a bond is higher than the yield to maturity, the current yield on the bond is lower now than when the bond was originally issued.

g A person with a diminishing marginal utility of income: Group of answer choices will be risk neutral will be risk averse will be risk loving

Answers

Answer: Risk averse

Explanation:

A person with a diminishing marginal utility of income will derive less utility from income as income increases. A risk averse person is one who would rather avoid risk but still prefers a high income.

Such a person will have a diminishing marginal utility in income because income increases more when there is more risk. A risk averse person does not want that risk and so will go for a lower income which means that they don't want more income as it is riskier to them.

Which Company/Security report would be best for someone looking to compare a company to its peers in a single display

Answers

Which Company/Security report would be best for someone looking to compare a company to its peers in a single display is Comps.

In short, locating comps involves searching out current income of homes as similar to your very own belongings as viable, then evaluating your own home to them and adjusting your rate to account for the differences.

Comparable (comps) are utilized in valuations in which a currently offered asset is used to decide the price of a comparable asset.  Comparable, regularly utilized in actual property to discover the honest price of a domestic, are a listing of latest asset income that replicate the traits of the asset and proprietor is seeking to promote.

Simply put, actual property comparable – or “comps” – are similar houses in a selected place that you are looking to shop for or promote in.  Comps are used to decide the price of a domestic through evaluating it to comparable houses offered withinside the equal community or in a place as near as viable to the residence being valued.

Learn more about Comps here:

https://brainly.com/question/25950911

#SPJ1

Select any local/international brand of your choice
• Assess the advertisements of brand to identify the following:
o What factors of perception the brand Is implying to break clutter and gain attention?
o What type of learning theory is the brand using and how is it promoting memory retrieval with respect to the brand?
o How is the brand motivating the customer? (use theories to strengthen your answer)
o Describe the brands personality using the brand personality theory.
o Describe the message appeal being used in the advertisement and how?

Answers

Answer:

Following are the response to these questions:

Explanation:

Coca-Cola is my international brand this business leverages media and internet marketing, using TV and other social media platforms. The company uses cognitive and emotional learning theory to draw attention and promote memory restoration from branding.

The company's products ads are full of sadness to encourage customers to acquire their goods. Coca-Cola uses theory to establish its brand accurately that resonates with the correct customer. It aims to generate a positive emotional response in this context from a targeted consumer demographic. Its company's newest appeal message for the advertisement is 'Taste the feeling' and it causes people to feel like continuing to use Coca-Cola drinks.

Diminishing returns are a reason that fixed costs remain constant. the marginal cost curve is upward sloping. the average fixed cost curve is downward sloping. the marginal cost curve is downward sloping.

Answers

Answer:

the marginal cost curve is upward sloping.

Explanation:

Utility can be defined as any satisfaction or benefits a customer derives from the use of a product or service.

This ultimately implies that, any satisfaction or benefits a customer derives from the use of a product or service is generally referred to as a utility.

Basically, the marginal utility of goods and services is the additional satisfaction that a consumer derives from consuming or buying an additional unit of a good or service.

For example, buying a candy stick and eating it may satisfy your cravings but eating another one (an additional or extra unit) wouldn't give you as much satisfaction as the first due to diminishing marginal utility.

In Economics, the law of diminishing marginal utility states that as the unit of a good or service consumed by an individual increases, the additional satisfaction he or she derives from consuming additional units would start decreasing or diminishing as the units of good or service consumed increases.

Marginal cost can be defined as the additional or extra cost that is being incurred by a company as a result of the production of an additional unit of a product or service.

Generally, marginal cost can be calculated by dividing the change in production costs by the change in level of output or quantity. A marginal cost curve is upward sloping because of the law of diminishing returns.

The managing director of top dog companies

Answers

Answer:

What???

Explanation:

Jens-Peter Clausen. Managing Director and DE GmbH Partner.

Katrin Clausen. Manager.

Im not sure if my answer is right ▪_▪

1- You deposit $200 today, another $200 a year from now, and an additional $400 three years from now. If the interest rate is 5%, what is the value of your investment in 5 years

Answers

Answer:

939.36

Explanation:

Using the following year-end information for WorkFit calculate the acid-test ratio:
Cash 58110
Short-term investments 14000
Accounts receivable 58000
Inventory 270000
Supplies 5600
Accounts payable 108000
Wages payable 31,900
a. 0.77
b. 0.42

Answers

Answer:

0.97

Explanation:

The computation of the acid-test ratio is given below:

= Quick assets ÷ current liabilities

= (cash + short term investment + account receivable + supplies) ÷ (accounts payable + wages payable)

= ($58,110 + $14,000 + $58,000 + $5,600) ÷ ($108,000 + $31,900)

= $135,710 ÷ $139,900

= 0.97

Jayco has the following expected cash flows from a project. Calculate the payback period of the project. Year 0 (685,000) Year 1 255,000 Year 2 355,000 Year 3 455,000 Year 4 555,000

Answers

Answer:

2.16 years

Explanation:

Sassy, Inc. needs $115 million to build a new distribution center. If it issues common stock to raise the funds, the issuance costs will be 8 percent of the total amount issued. If Sassy can issue stock at $40 per share, how many shares of common stock must be issued so that it has $115 million after flotation costs to use to fund the construction of the distribution center

Answers

Answer: 3,125,000 shares.

Explanation:

The number of shares of common stock that must be issued will be calculated as follows:

Let the amount to be raised be represented by x. Therefore,

x - (8% × x) = $115 million

x - (0.08 × x) = $115 million

x - 0.08x = $115 million

0.92x = $115 million

x = $115 million/0.92

x = $125 million

Then the number of shares that'll be issued will be:

= Amount raised / Issue price of stock.

= $125 million / 40

= 3,125,000 shares.

Product K has a unit contribution margin of $120. Product L has a unit contribution margin of $100. Product K requires five furnace hours, while Product L requires four furnace hours. Determine the most profitable product, assuming the furnace is a bottleneck constraint.

Answers

Answer: Product L is more profitable

Explanation:

The unit contribution margin per production of product K per bottleneck hour will be:

= $120/5

= $24

The unit contribution margin per production of product L per bottleneck hour will be:

= $100/4

= $25

Product L is more profitable as it gives a profit of ($25 - $24) = $1 more than product K

On April 30, 2019, Aggie Corporation purchased Smith Corporation 10%, 5-year bonds with a face value of $12,000 at par plus four months of accrued interest. Assume that on June 30, Aggie received interest on the Smith Corporation bonds. Required: Prepare the June 30 journal entries to record the receipt

Answers

Answer:

Date                    Account Title                                          Debit           Credit

April 30,2019      Held to Maturity investment             $12,000

                            Interest receivable                              $400

                            Cash                                                                           $12,400

Interest receivable:

4 months of accrued interest:

= 12,000 * 4/12 * 10%

= $400

Date                    Account Title                                          Debit              Credit

June 30,2019      Cash                                                      $600

                           Interest receivable                                                         $400

                           Interest revenue                                                             $200

Interest revenue

2 months have passed:

= 12,000 * 2/12 * 10%

= $200

Under the temporal method, income statement items that relate to newly recognized assets and liabilities generally are remeasured using the:

Answers

Answer: historical exchange rate

Explanation:

The temporal method is also referred to as the historical method. Under this method, the currency of a foreign subsidiary is being converted into the currency of the parent company.

It should be noted that under the temporal method, the income statement items which relate to newly recognized assets and liabilities generally are remeasured using the historical exchange rate.

Quasik Corporation will be receiving 300,000 Canadian dollars (C$) in 90 days. Currently, a 90-day call option with an exercise price of $.75 and a premium of $.01 is available. Also, a 90-day put option with an exercise price of $.73 and a premium of $.01 is available. Quasik plans to purchase options to hedge its receivable position. Assuming that the spot rate in 90 days is $.71, what is the net amount received from the currency option hedge

Answers

Answer:

216000

Explanation:

($.73 - $.01) x 300,000

The net amount received from the currency option hedge is $216,000.

What is a call option?

A call option is a contract that grants the option buyer the right to purchase an underlying asset at a particular price and time period.

A call option grants you the right, but not the obligation, to buy a stock at a specified price known as the strike price by a specific date at the expiration of the option.

According to the given question, Quasik intends to hedge its receivable position by purchasing options. Because Quasi will get CAD in the future, it should purchase a put option, or the right to sell.

Put option purchase cost = 0.01 * 300,000

                                           = 3,000

Because the spot rate is $0.71 per CAD after 90 days, Quasik will exercise its option at the rate of $0.73 per USD.

Received amount = 0.73 * 300,000

                             = 219,000

After deducting the cost of purchasing the option, the net amount received is,

= 219,000 - 3,000

= 216,000.

The is $216,000 is the net gain from the currency option hedge.

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A government bond issued in France has a coupon rate of 5% (paid annually) and a face value of 100 euros, and it matures in 5 years. Calculate the price of the bond (in euros) if the yield to maturity is 3.5%.

Answers

Answer:

Bond Price​= 106.77

Explanation:

Giving the following information:

Face value= 100

Coupon= 100*0.05= 5

Yield To Maturity= 0.035

Years to maturity= 5 years

To calculate the price of the bond, we need to use the following formula:

Bond Price​= cupon*{[1 - (1+i)^-n] / i} + [face value/(1+i)^n]

Bond Price​= 5*{[1 - (1.035^-5)] / 0.035} + [100/(1.035^5)]

Bond Price​= 22.57 + 84.2

Bond Price​= 106.77

Recher Corporation uses part Q89 in one of its products. The company's Accounting Department reports the following costs of producing the 9,900 units of the part that are needed every year. Per Unit Direct materials $ 6.30 Direct labor $ 3.50 Variable overhead $ 6.90 Supervisor's salary $ 2.60 Depreciation of special equipment $ 2.20 Allocated general overhead $ 1.20 An outside supplier has offered to make the part and sell it to the company for $22.00 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company. If the outside supplier's offer were accepted, only $4,000 of these allocated general overhead costs would be avoided. In addition, the space used to produce part Q89 could be used to make more of one of the company's other products, generating an additional segment margin of $16,200 per year for that product.
Required:
a. Prepare a report that shows the financial impact of buying part Q89 from the supplier rather than continuing to make it inside the company.
b. Which alternative should the company choose

Answers

Yes, basically I have no Idea what you talking about. I heard that if you answer questions you can ask more. thanks.

Find the intrinsic value of XYZ Inc. The DPS at the end of year 1 is $2.00; at the end of year 2 is $2.40; at the end of year 3 is $2.70. After the third year, the DPS grows at a constant rate of 5%. The required rate of return is 12%.

Answers

Answer: 34.33

Explanation:

Firstly, we'll calculate the terminal value

which willl be:

= 2.70 × (1+5%)/(12% - 5%)

= 2.70 x 1.05/(0.12 - 0.05)

= 40.5

Then, the intrinsic value will be:

= 2/1.12 + 2.4/1.12² + (2.7 + 40.5)/1.12³

= 34.33

Therefore, the the intrinsic value of XYZ Inc is 34.33

The Aqua Liquid Assets Money Market Mutual Fund has a NAV of $1 per share. During the year, the assets held by this fund appreciated by 1.4 percent. If you had invested $50,000 in this fund at the start of the year, how many shares would you own at the end of the year

Answers

Answer:

Missing word "Final shares=? Net asset value=?"

Final shares is computed as follows:

= (Amount invested / NAV per share) * (1 + Fund appreciation)

= ($50,000 / $ 1) * (1 + 0.014)

= $50,000 * 1.014

= $50,700

As know that this is a Money Market Mutual Fund, hence the Net asset value of this fund at the end of the year will be also $1.

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