g On January 1, you win $50,000,000 in the state lottery. The $50,000,000 prize will be paid in equal installments of $6,250,000 over eight years. The payments will be made on December 31 of each year, beginning on December 31 of this year. If the current interest rate is 12%, determine the present value of your winnings. Use the present value tables in Exhibit 7. Round to the nearest whole dollar. $ Will the present value of your winnings using an interest rate of 12% be more than the present value of your winnings using an interest rate of 5%?

Answers

Answer 1

Answer:

Present value = $31,047,749

No. The present value when the interest rate is 12% is less than the present value when the interest rate is 5%

Explanation:

Present value is the sum of discounted cash flows.

Present value can be calculated using a financial calculator

Cash flow each year from year 1 to 8 = $6,250,000

I = 12%

Present value = $31,047,748.54

Present value when interest rate is 5% = $40,395,079.75

The present value when interest rate is 5% is greater than the present value when interest rate is 12%

To find the NPV using a financial calacutor:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

I hope my answer helps you


Related Questions

Marcellus Company is involved in a lawsuit. Footnote disclosure of the contingent liability which could arise does not have to be presented if the probability of Marcellus owing money as a result of the lawsuit is A) reasonably possible and the amount cannot be reasonably estimated. B) probable and the amount cannot be reasonably estimated. C) reasonably possible and the amount can be reasonably estimated. D) remote and the amount can be reasonably estimated.

Answers

Answer:

The answer is option B) probable and the amount cannot be reasonably estimated.

Explanation:

Contingency liability is the likelihood that a liability might occur sometimes in the future in the face of uncertain circumstances. To validate a contingency liability, the fa cts presented has to be reasonably possible and reasonably estimated.

in the case of Marcellus Company, footnote disclosure of the contingent liability which could arise does not have to be presented if the probability of Marcellus owing money as a result of the lawsuit is probable and the amount cannot be reasonably estimated.

Which statement is false? Marginal cost and marginal productivity are inversely related. Marginal cost is the change in a firm's total cost due to a one unit change in output. Costs that are small and unimportant with little impact on profits are called marginal costs. A marginal cost curve will always intersect the average total cost curve at the minimum average total cost. Consider the table. Output 0 1 2 3 4 5 6 7 8 9 10 Total cost 100 110 115 125 140 160 190 230 280 340 420 What is the marginal cost of the fifth unit based on the table? $0 −$20 $20 $160

Answers

Answer:

Option (c) Marginal cost of fifth unit = $20

Explanation:

According to the scenario, computation of the given data are as follows:

1)

Option (b) : Marginal cost is the change in the total cost of firm due to one unit change in output.

We can calculate the marginal cost by using following formula :

Marginal cost = Total cost ÷ Quantity

2)

Marginal cost of fifth unit = Total cost at unit 5 - total cost at unit 4

= $160 - $140

= $20

Alden Trucking Company is replacing part of their fleet of trucks by purchasing them under a note agreement with Kenworthy on January 1, 2009. The note agreement will require $10 million in annual payments starting on December 31, 2009 and continuing for a total of five years (final payment December 31, 2013). Kenworthy will charge Alden Trucking Company the market interest rate of 10% compounded annually.
Required:
1. How much will Alden record as a debit to their equipment account and as acredit to their notes payable account on January 1, 2009?
2. How much ofthe first $10 million payment on December 31, 2009 isinterest?
3. What is theremaining obligation on January 1, 2010 after the first payment hasbeen made?

Answers

Answer:

1. $37,907,868

2. $3,790,787

3. $31,698,654

Explanation:

The cost of the  trucks according to IAS 16, is the amount of cash or cash equivalent paid or the fair value of the other consideration given to acquire an asset at the time of its acquisition.

Thus=, we need to find the Fair Value or Present Value of the Note as Follows:

Pmt = $10,000,000

P/yr = 1

i = 10%

N = 5

Pv = ?

Pv = 37,907,868

Therefore Alden will record $37,907,868 as a debit to their equipment account and as a credit to their notes payable

Interest on First Payment =  $37,907,868×10%

                                          = $3,790,787

Remaining Obligation = $37,907,868 - $6,209,213 (Capital Portion) - $3,790,787 (Interest Portion)

                                     = $31,698,654

Suppose the market for widgets can be described by the following​ equations: ​Demand: P equals 14minus2.00Q ​Supply: P equals 2.00Qminus4​, where P is the price in dollars per unit and Q is the quantity in thousands of units. What is the equilibrium price and​ quantity? The equilibrium quantity is 4.5 thousand units and the equilibrium price is ​$ 5. ​(Enter your responses rounded to two decimal places.​) Suppose the government imposes a tax of ​$1 per unit to reduce widget consumption and raise government revenues. What will be the new equilibrium​ quantity? What price will the buyer​ pay? What amount per unit will the seller​ receive? The new equilibrium quantity will be 4.25 thousand units. ​(Enter your response rounded to two decimal places.​) The price paid by buyers will be ​$ 5.5. ​(Enter your response rounded to two decimal places.​) The amount kept by sellers will be ​$ 4.5. ​(Enter your response rounded to two decimal places.​)

Answers

Answer:

Explanation:

Demand P = 14 - 2Q

Supply P = 2Q - 4

Since Demand = Supply

14 - 2Q = 2Q - 4

Collect the like terms on either side

-2Q - 2Q = -4 - 14

-4Q = -18

Dividing both sides by -4, we will have

Q = -18/-4

Q = 4.50 units

P = 14 - 2Q

P = 14 - 2(4.5)

P = 14 - 9

P = $5.00

Therefore Equilibrium price is $5.00 and Equilibrium unit is 4.50

If the government impose a tax of $1 per unit. If price paid but buyer is P, then price received by seller will be (P - 1)

for demand

P = 14 - 2Q

2Q = 14 - P

Q = 7 - 0.5P

For supply

P = 2Q - 4

Q = 2 + 0.5P

Q = 2+ 0.5(P - 1)

Q = 2 + 0.5P - 0.5

Q = 2-0.5 + 0.5P

Q = 1.5 + 0.5P

if Demand = Supply

7 - 0.5P = 1.5 + 0.5P

Collect the like terms on either sides

-0.5P - 0.5P = 1.5 - 7

-1P = -5.5

Dividing both sides by -1, we will have

P = -5.5/-1

P = $5.50

Q = 1.5 + 0.5P

If we substitute 5.5 for P in the above eqn, we will have

Q = 1.5 + 0.5(5.5)

Q = 1.5 + 2.75

Q = 4.25 units

On 3/1/14 Fox Corp bought back 1,000 shares of their common stock for $15 per share. There were no shares in the treasury prior to that. On 5/23/14 they sold 200 of those shares for $17 each. On 6/19/14 they sold another 400 shares of those shares for $10 per share. Consider writing out all of your entries on scratch paper to assist you in answering questions 31 and 32. What will the remaining balance in the treasury stock account be after all of the above transactions have been recorded

Answers

Answer:

For question (31) $ 6000 (32) The net impact on retained earning is         1600 (Which is a negative

Explanation:

Question 31

                                                 No. Rate   Value

Purchase of Treasury Stock   1000       15              15000  

Less: Sold on 5/23/14              200        15              3000  

Less: Sold on 6/19/14               400        15              6000  

Net remaining value                                                 6000

Note: to calculate the closing value of treasury stock, rate of selling stock need to be taken same as of date of purchase.

For question 31 the answer is $ 6000

Question 32

Impact on retained earning on first sale

                                                         No. Rate     Value

Sale VALUE                                      200 17         3400  

Less: Purchase of Treasury Stock  200 15         3000

Credit Retained earning                                             400

Impact on retained earning on second sale

                                                          No. Rate     Value

Sale VALUE                                       400 10         4000  

Less: Purchase of Treasury Stock   400 15         6000

Debit Retained earning                                            -2000

Net Impact on retained earning         1600 (Negative i.e. Debit)

Therefore the remaining balance in the treasury stock account be after all of the above transactions have been recorded is $6000

Note: Kindly find an attached copy of the complete question to this solution

The Widget Co. purchased all of its fixed assets three years ago for $4 million. These assets can be sold today for $2 million. The current balance sheet shows net fixed assets of $2,500,000, current liabilities of $1,375,000, and net working capital of $725,000. If all the current assets were liquidated today, the company would receive $1.9 million in cash. The book value of the total assets today is ________ and the market value of those assets is ________. $6,500,000; $3,900,000 $4,600,000; $3,125,000 $5,000,000; $3,125,000 $4,600,000; $3,900,000 $5,000,000; $3,900,000

Answers

Answer:

$4,600,000; $3,900,000

Explanation:

Book value of the asset are the recorded costs of the assets included any adjustments like depreciation or amortization. Market value is the fair value and Ne realizable value of the assets.

Total Assets = Fixed Assets + Current Assets

Total Assets  = Fixed Assets + (Working capital + Current Liabilities)

Placing Value in above formula

Total Assets = $2,500,000 + ($725,000 + $1,375,000)

Total Assets = $4,600,000

Market Value = Fair value of Fixed assets + Current assets fair value

Market Value = $2,000,000 + $1,900,000 = $3,900,000

If the distribution of water is a natural monopoly, then a. a single firm cannot serve the market at the lowest possible average total cost. b. multiple firms would likely each have to pay large fixed costs to develop their own network of pipes. c. allowing for competition among different firms in the water-distribution industry is efficient. d. average cost increases as the quantity of water produced increases.

Answers

Answer:

The correct option is C) If the distribution of water is a natural monopoly, average cost increases as the quantity of water produced increases.

Explanation:

Natural monopoly occurs when there is a hig cost of entry into a particular market niche. The high cost is usually caused by expensive equipment and infrastructural set up for manufacturing as well as maintenance costs.

Therefore, If the distribution of water is a natural monopoly, average cost increases as the quantity of water produced increases.

Distribution of water falls into the category of natural monopoly. Due to the prevailing circumstances, Fixed cost is larger comparable to variable cost such that it is cheaper for a single firm to serve the market.

Assume that an economy is initially in​ long-run equilibrium. Explain the ​short-run effect of monetary policy that causes an increase in interest rates. As a result of higher interest​ rates, the A. ​long-run aggregate supply curve will shift left. B. aggregate demand curve will shift left. C. ​short-run aggregate supply curve will shift left. D. aggregate demand curve will shift right. The new equilibrium will be A. where the original aggregate demand curve intersects the original​ short-run aggregate supply curve. B. where the new aggregate demand curve intersects the original​ short-run aggregate supply curve. C. where the new aggregate demand curve intersects the original aggregate demand curve.

Answers

Answer:

As a result of higher interest​ rates, the

B. aggregate demand curve will shift left.

The new equilibrium will be

B. where the new aggregate demand curve intersects the original​ short-run aggregate supply curve.

Explanation:

A contractionary monetary policy will increase the interest rates, lowering investment and consumption. This will result in a leftward shift of the aggregate demand curve.

The new equilibrium (E1) will be at the point where the new aggregate demand curve (AD1) intersects the original short run aggregate supply curve (SRAS) and the long run aggregate supply curve (LRAS).

Stellar Plastics is analyzing a proposed project with annual depreciation of $19,500 and a tax rate of 34 percent. The company expects to sell 12,000 units, plus or minus 5 percent. The expected variable cost per unit is $3.20 plus or minus 4 percent, and the expected fixed costs are $30,000 plus of minus 2 percent. The sales price is estimated at $7.50 a unit, plus or minus 4 percent. What is the operating cash flow for a sensitivity analysis using total fixed costs of $31,000

Answers

Answer:

$20,226

Explanation:

expected sales = 11,400 - 12,000 - 12,600

expected sales price = $7.20 - $7.50 - $7.80

expected variable cost = $3.072 - $3.20 - $3.328

total fixed costs = $31,000

if you use an excel spreadsheet you can calculate all the different possible simulations and combine all the expected sales x 3 different price levels x 3 different variable costs and 1 fixed cost. Once you get all the 27 possible solutions, you just get the average.

I attached it because there is no room here.

The Stores and Service Fund of the City of Monroe had the following account balances as of January 1, 2017:
Debits Credits
Cash $28,000
Due from other funds 27,000
Inventory of supplies 27,500
Land 18,000
Buildings 84,000
Accumulated depreciation—buildings $30,000
Equipment 46,000
Accumulated depreciation—equipment 25,000
Accounts payable 19,000
Advance from water utility fund 30,000
Net position 126,500
Totals $ 230,500
Required:
a. Open a general journal for the City of Monroe Stores and Service Fund and record the following transactions.
(1) A budget was prepared for FY 2017. It was estimated that the price charged other departments for supplies should be 1.25% of cost to achieve the desired breakeven for the year.
(2) The amount due from other funds as of January 1, 2017, was collected in full.
(3) During the year, supplies were ordered and received in the amount of $307,000. This amount was posted to accounts payable.
(4) $15,000 of the advance from the Water Utility Fund, originally provided for construction, was repaid. No interest is charged. (5) During the year, supplies costing $250,560 were issued to the General Fund, and supplies costing $46,400 were issued to the Water Utility Fund. These funds were charged based on the previously determined markup ($ 313,200 to General Fund and 58,000 to the Water Utility Fund).
(6) Operating expenses, exclusive of depreciation, were recorded in accounts payable as follows: Purchasing, $15,000; Warehousing, $16,900; Delivery, $17,500; and Administrative, $9,000.
(7) Cash was received from the General Fund in the amount of $310,000 and from the Water Utility Fund in the amount of $50,000.
(8) Accounts payable were paid in the amount of $365,000.
(9) Depreciation in the amount of $10,000 was recorded for buildings and $4,600 for equipment.

Answers

Answer and Explanation:

The Journal entry is shown below:-

1. No Journal entry is required

2. Cash Dr, $27,000

          To Due from other funds $27,000

(Being the cash collected which is due from others is recorded)

3. Inventory of suppliers Dr, $307,000

            To Accounts payable $307,000

(Being purchase of supplies is recorded)

4. Advance from water utility fund Dr, $15,000

           To Cash $15,000

(Being repayment of advance of water utility fund is recorded)

5. Operating expenses Dr, $296,960

($250,560 + $46,400)

           To Inventory of supplies $296,960

(Being issue of supplied is recorded)

5. Due from other funds Dr, $371,200

($313,200 + $58,000)

            To Revenue charged for services and sales $371,200

(Being the charge of supplies is recorded)

6. Operating expenses of sale and services Dr, $49,400

($15,000 + $16,900 + $17,500)

Operating expenses of administrative Dr, $9,000

            To Accounts payable $58,400

(Being operating expenses is recorded)

7. Cash Dr, $350,000

($310,000 + $50,000)

          To Due from others $350,000

(Being cash received from general fund is recorded)

8. Accounts Dr,$365,000

          To Cash  $365,000

(Being the payment of accounts payable is recorded)

9. Operating expenses cost of depreciation Dr, $14,600

          To Accumulated Dep - Building $10,000

           To Accumulated Dep - Equipment $4,600

(Being depreciation expenses is recorded)

Revenue charged for sales and services Dr, $444,200

          To operating expenses cost of depreciation $14,600

          To operating expenses cost of administrative $9,000

          To operating expenses cost of sale and services $49,400

          To operating expenses cost of sale $371,200

(Being transfer the operating expenses is recorded)

Blossom Companyhad the following transactions during 2022: 1. Issued $182500 of par value common stock for cash. 2. Recorded and paid wages expense of $87600. 3. Acquired land by issuing common stock of par value $73000. 4. Declared and paid a cash dividend of $14600. 5. Sold a long-term investment (cost $4380) for cash of $4380. 6. Recorded cash sales of $584000. 7. Bought inventory for cash of $233600. 8. Acquired an investment in Zynga stock for cash of $30660. 9. Converted bonds payable to common stock in the amount of $730000. 10. Repaid a 6-year note payable in the amount of $321200. What is the net cash provided by investing activities

Answers

Answer:

($26,280)

This represents net cash used up by investing activities

Explanation:

The cash flow statement categories the company's transactions in a financial period into 3 groups; these are operating, investing and financing.

The net profit/loss, depreciation, changes in current assets (other than cash) and liabilities are considered as operating activities including income taxes.  

The sale of assets, interest received, purchase of investments are examples of investing activities while the issuance of stocks, debt principal deduction (loan settlement), issuance of debt securities etc are examples of financing activities.

An increase in assets other than cash is an outflow while an increase in liabilities is an inflow and vice versa.

Hence net cash provided by investing activities

= $4380 - $30660

= ($26,280)

Other activities are operating and financing activities.

Which of the following is the most likely negative consequence of excessive change in an organization? Group of answer choices Staff being asked to do too much Staff being restricted to a single activity The operation of the organization at less than capacity The establishment of a system for prioritizing projects

Answers

Answer:

Staff being asked to do too much.

Explanation:

Excessive change in an organization is defined as a process when organizations pursue several differing, unrelated and sometimes changes that are conflicting simultaneously. It can also be, when an organization involves in introducing new changes before previous changes are being accomplished.

Additionally, when staffs or employees perceives change as being excessive, they react in various ways. Some of their reactions to excessive change includes;

• They become overwhelmed.

• Lack of motivation.

• They're stressed out.

• Frustration and anger builds among them.

• Inadequacy, uncertainty

and incompetence.

The lower level staffs and middle managers are most likely to experience, the negative consequence of excessive change in an organization because they're being asked to do too much.

Discuss economic theory related to the quote above. Be sure to include a definition of Labor Force Participation Rate (LFPR) within your discussion. Locate and incorporate outside research that gives evidence and explanation as to the possible causes of these declines in the Labor Force Participation rate. Integrate biblical insights into your discussion board thread. In what way does scripture influence our decision to work

Answers

Answer:

The labor force is the group of individuals for employment. The labor force investment rate is the proportion of labor force partitioned by all out populace of the applicable age. As per month to month work survey, the labor force support rate keeps on falling. As indicated by different market analysts, this wonder is because of the blend of segment, basic, and repetitive elements. Also, due to LFPR , the support of youth and the primary age bunch is required to decay. Likewise, the investment paces of laborers of more seasoned age are additionally anticipated to increment, yet remain essentially lower than those of the prime age group. These aspects have applied descending weight on the general labor force support proportion over the 2012–2022 time period and the proportion is relied upon to decrease further, to 61.6% in 2022.  

The drawn out issue of joblessness is because of repetitive and auxiliary reasons, when numerous individuals the segment organization of a nation mirrors the portions of men, ladies, and the distinctive age, race, and ethnic gatherings inside that populace. The case of the time of increased birth rates age in segment change influences the labor force investment rate. Consistently after 2000, the portion of the time of increased birth rates populace has moved into the 55-years-and-more seasoned age bunch which transfers from the principal age gathering to one with considerable lesser investment proportions, origins the general cooperation of the labor force to decay.

Martinez Company received the following selected information from its pension plan trustee concerning the operation of the company’s defined benefit pension plan for the year ended December 31, 2020.

January 1, 2020 December 31, 2020
Projected benefit obligation $1,517,000 $1,545,000
Market-related and fair value of plan assets 803,000 1,132,300
Accumulated benefit obligation 1,580,000 1,698,300
Accumulated OCI (G/L)—Net gain 0 (201,700 )

The service cost component of pension expense for employee services rendered in the current year amounted to $78,000 and the amortization of prior service cost was $118,300. The company’s actual funding (contributions) of the plan in 2020 amounted to $249,000. The expected return on plan assets and the actual rate were both 10%; the interest/discount (settlement) rate was 10%. Accumulated other comprehensive income (PSC) had a balance of $1,183,000 on January 1, 2020. Assume no benefits paid in 2020.

Determine the amounts of the components of pension expense that should be recognized by the company in 2020.

Answers

Answer:

$1,337,700

Explanation:

The computation of the amounts of the components of pension expense is shown below:

Service cost $78,000

Amortization of Prior Service cost $1,183,000 ($1,698,300 - $1,580,000)

Interest on PBO  $157,000 ($1,517,000 ×10%)

Less: Expected return on plant assets $80,300  ($803,000 × 10%)

Pension expense $1,337,700

We simply applied the above formula so that the amount of pension expense could come

LaserLife Printer Company is a decentralized organization with several autonomous divisions. The division managers are evaluated, in part, on the basis of the change in their return on invested assets. Operating results for the Packer Division for 2019 are budgeted as follows:
Sale $5,000,000
Less variable costs 2,500,000
Contribution margin 2,500,000
Less fixed expenses 1,800,000
Net operating income $ 700,000
Invested capital for the division are currently $3,600,000. For 2019, the division can add a new product line for an investment of $600,000. The new product line will generate sales of $1,600,000 and will incur fixed expenses of $600,000 annually. Variable costs of the new product will average 60% of the selling price.
REQUIRED:
1. What is current ROI? Profit margin (or Return on sales)? Investment (or Capital) turnover?
2. What is the effect on ROI of accepting the new product line?
If the company's required rate of return is 6% and residual income (RI) is used to evaluate managers, would this encourage the division to accept the new product line? Explain and show computations.

Answers

Answer:

1. The current ROI is 19.44%. The Profit margin (or Return on sales) is 14%. TheInvestment (or Capital) turnover is 1.39 times.

2. The effect on ROI of accepting the new product line is 17.62%.  ROI will be decreased by 1.82%

If the company's required rate of return is 6% and residual income (RI) is used to evaluate managers the residual income amount would be of $4,000 and so Managers should accept the new product line

Explanation:

1. To calculate the profit margin we have to use the following formula:

Profit margin= Net operating income/Sale

Hence, Profit margin = $700,000/$5,000,000 = 14%

ROI= Net operating income/Invested capital

Hence, ROI = $700,000/$3,600,000 = 19.44%

Investment (or Capital) turnover=Sale/Invested capital

Hence, Investment (or Capital) turnover = $5,000,000/$3,600,000 = 1.39 times

2. The Net operating income= ($5,000,000+$1,600,000)-($2,500,000+1,600,000*60%)-$(1,800,000+$600,000) = $740,000

Hence, ROI = $740,000/$4,200,000 = 17.62%

ROI will be decreased by (19.44-17.62) 1.82%.

In order to know if the division would accept the new product line If the company's required rate of return is 6% and residual income (RI) is used to evaluate managers, we would have to calculate the residual income as follows:

Residual income = operating income - invesed capital*required rate of return

= ($740,000-$700,000)-$600,000*6%

= $4,000

Therefore, Managers should accept the new product line.

A company incurs $3,600,000 of overhead each year in three departments: Processing, Packaging, and Testing.

The company performs 800 processing transactions, 200,000 packaging transactions, and 2,000 tests per year in producing 400,000 drums of Oil and 600,000 drums of Sludge.

The following data are available:

Department Expected Use of Driver Cost
Processing 800 $1,500,000
Packaging 200,000 1,500,000
Testing 2,000 600,000
Production information for the two products is as follows:

Oil Sludge
Department Expected Use of Driver Expected Use of Driver
Processing 300 500
Packaging 120,000 80,000
Testing 1,600 400

The amount of overhead assigned to Sludge using ABC is

a. $1,800,000.

b. $1,657,500.

c. $1,942,500.

d. $1,380,000.

Answers

Answer:

its 1,800,000

because it the answer

Vaughn Manufacturing expects to purchase $180000 of materials in July and $170000 of materials in August. Three-fourths of all purchases are paid for in the month of purchase, and the other one-fourth are paid for in the month following the month of purchase. How much will August's cash disbursements for materials purchases be?

Answers

Answer:

The August's cash disbursements for materials purchases would be

$172,500.00   for Vaughn Manufacturing

Explanation:

The cash disbursements in the month of August consist of the three-fourth cost of the August purchases and the one-fourth of the July purchases since the 3/4 of the cost of materials purchased is paid in the same month as purchases and the balance of 1/4 of purchase cost in the succeeding month

Cash disbursements in August=($170,000*3/4)+($180,000*1/4)=$127500 +$45,000=$172,500.00  

Kellen orders 1,000 pounds of strawberries from Lucy so he can make his famous strawberry sundaes at his ice cream store. Lucy ships him 1,000 pounds of blueberries instead. Kellen puts the blueberries in cold storage and notifies Lucy that she sent the wrong stuff. Lucy does not pay for the storage. Kellen sells the blueberries to a grocery store, keeping a commission on the sale and sending the rest of the money to Lucy. This sale represents _____.

a. a mitigation of damages.b. rescission and restitution.c. specific performance.d. a breach of contract.

Answers

Answer:

B. Rescission and Restitution

Explanation:

This sale represents rescission and restitution.

Rescission can be describe as when the contract is voided, and the parties are placed in the same position as if they had never joined in the first place.

Restitution can be defined as when item or the monetary worth of item loss is returned to the rightful owner.

Here Lucy ships 1,000 pounds of blueberries instead of strawberries and Kellen sold blueberries to grocery store shows rescission whereas Kellen sends the money of sale to Lucy shows restitution.

Learn more: https://brainly.com/question/21543929

Medallion Cooling​ Systems, Inc., has total assets of $9,800,000​, EBIT of $2,050,000​, and preferred dividends of $201,000 and is taxed at a rate of 40%. In an effort to determine the optimal capital​ structure, the firm has assembled data on the cost of​ debt, the number of shares of common stock for various levels of​ indebtedness, and the overall required return on​ investment:

Capital structure/debt Cost of​ debt Number of stock shares Rate of​ return
0% 0% 200,000 12.3%
15 7.8 175,000 13.1
30 9.1 140,000 14.2
45 12.1 111,000 16.3
60 15.2 75,000 20.1

Calculate earnings per share for each level of indebtedness.

Answers

Answer:

Earnings per share:

0% debt = $5.145 per share

15% debt = $5.487 per share

30% debt = $6.203 per share

45% debt =  $6.386 per share

60% debt = $6.570 per share

Explanation:

The earnings per share is the monetary value of how much each share of common stock outstanding has earned. The earnings per share can be calculated by dividing the Net Income attributable to common stockholders by the number of common stock shares outstanding.

Net Income attributable to Common stockholders = Net Income - Preferred stock dividends

Thus, Earnings per share = (Net Income - Preferred stock dividends) / Number of common stock shares outstanding

To calculate Earnings per share at each level of indebtedness, we first need to calculate the net income at each debt level. The net income will change as interest is deducted before calculating net income.

Net Income = EBIT - interest - tax

Total debt = Total assets * weightage of debt in capital structure

Tax = EBT * tax rate

a. 0% debt

Net Income = 2,050,000 - 0 - (2050000 * 0.4) = $1,230,000

Earnings per share = (1230000 - 201000) / 200000   =  $5.145 per share

b. 15% debt

Total debt = 9,800,000 * 0.15 = 1470000

EBT = 2,050,000 - (1470000 * 0.078)  =  $1935340

Net Income = 1935340 - ( 1935340 * 0.4) = $1161204

Earnings per share = (1161204 - 201000) / 175000   =  $5.487 per share

c. 30% debt

Total debt = 9,800,000 * 0.30 = 2940000

EBT = 2050000 - (2940000 * 0.091)   =  $1782460

Net Income = 1782460 - (1782460 * 0.4) = $1069476

Earnings per share = (1069476 - 201000) / 140000   =  $6.203 per share

d. 45% debt

Total debt = 9,800,000 * 0.45 = 4410000

EBT = 2050000 - (4410000 * 0.121)   =  $1516390

Net Income = 1516390 - (1516390 * 0.4) = $909834

Earnings per share = (909834 - 201000) / 111000   =  $6.386 per share

e. 60% debt

Total debt = 9,800,000 * 0.60 = 5880000

EBT = 2050000 - (5880000 * 0.152)  =  $1156240

Net Income = 1156240 - (1156240 * 0.4) = $693744

Earnings per share = (693744 - 201000) / 75000   =  $6.570 per share

The student-run newspaper asks students to visit a web page and respond to questions regarding a proposed tuition increase. Only responses to the questions are recorded. Summary statistics based on the survey responses are used in an article published the following week, and no one outside of the newspaper has access to the individual responses. The newspaper's survey is considered to be A) confidential. B) anonymous. C) both anonymous and confidential. D) neither anonymous nor confidential.

Answers

Answer:

C) both anonymous and confidential

Explanation:

As the student-run, the new paper and ask other students to visit a link firm the new paper and respond to those questions and the responses for only those questions were recorded.  This indicates that the newspaper survey is anonymous and confidential as the ant student can fill the survey and the information that is confidential as none outside the newspaper has access to those responses.

8-27 Basic Flexible Budget The budgeted prices for materials and direct labor per unit of fi nished product are $8 and $7, respectively. The production manager is delighted about the following data: Static Budget Actual Costs Variance Direct materials $59,200 $49,900 $9,300 F Direct labor 51,800 39,200 12,600 F Is the manager’s happiness justifi ed? Prepare a report that might provide a more detailed explanation of why the static budget was not achieved. Good output was 5,300 units.

Answers

Answer:

Basic Flexible Budget

Flexible Budget:

Differential Analysis

Reject Order (Alt. 1) or Accept Order (Alt. 2)

September 5

                                     Flexible             Actual             Variance

Costs:                       5,300 units    5,300 units       0

Direct Materials           $42,400               $49,900            $7,500 U

Direct Labor              $ 37,100                $39,200            $2,100 U  

Total Variable costs    $79,500               $89,100             $9,600 U

Explanation:

Using the good output and a flexible budget, the static budget was not achieved favorably as depicted.

A flexible budget varies the budgeted units to agree with the volume of activity.  This produces a different result from the static budget, which does not vary the budgeted units according to the volume of activity.

A flexible budget is preferable as it reflects the correct performance given the activity level or volume of production or sales.

Miscavage Corporation has two divisions: the Beta Division and the Alpha Division. The Beta Division has sales of $235,000, variable expenses of $132,600, and traceable fixed expenses of $63,800. The Alpha Division has sales of $545,000, variable expenses of $309,800, and traceable fixed expenses of $121,500. The total amount of common fixed expenses not traceable to the individual divisions is $120,200. What is the company's net operating income

Answers

Answer:

Operating income $32,100

Explanation:

The operating income for the company is the to be determined by aggregating the sales and cost figures of the two divisions . This is done as follows

                                                                                                 $

Total sales   (235,000 + 545,000)          =                       780,000

Variable expenses(132600+309800)     =                      (442,400)

Traceable fixed expenses(63800+121500)  =                (185300)

Common fixed expenses                                                   (120200 )

Operating income                                                                  32,100

Equipment that cost $875,000 and had a book value of $390,000 was sold for $450,000. Data from the comparative balance sheets are: 12/31/18 12/31/17 Equipment $5,400,000 $4,875,000 Accumulated Depreciation 1,650,000 1,425,000 Equipment purchased during 2018 was:



a. $1,400,000.


b. $825,000.


c. $525,000.


d. $915,000.

Answers

Answer:

a. $1,400,000.

Explanation:

Find the attachment

Matrix Corporation's balance sheet and income statement appear below: Comparative Balance Sheet Ending Balance Beginning Balance Assets: Cash and cash equivalents $ 23 $ 22 Accounts receivable 39 40 Inventory 43 44 Property, plant, and equipment 587 500 Less accumulated depreciation 359 347 Total assets $ 333 $ 259 Liabilities and stockholders' equity: Accounts payable $ 30 $ 26 Accrued liabilities 15 18 Income taxes payable 39 40 Bonds payable 109 120 Common stock 51 50 Retained earnings 89 5 Total liabilities and stockholders' equity $ 333 $ 259 Income Statement Sales $ 972 Cost of goods sold 620 Gross margin 352 Selling and administrative expense 200 Net operating income 152 Gain on sale of equipment 14 Income before taxes 166 Income taxes 50 Net income $ 116 The company sold equipment for $20 that was originally purchased for $7 and that had accumulated depreciation of $1. It paid a cash dividend during the year and did not issue any bonds payable or repurchase any of its own common stock. Required: Determine the net cash provided by (used in) operating activities for the year using the indirect method.

Answers

Answer:

Check the explanation

Explanation:

Cash flow from operating activities:  

Net income                                                                     $116

Adjustment to reconcile net income to cash basis:  

Depreciation expense ($359+1-347)                              $13

Gain on sale of equipment                                              (14)

Decrease in account receivable (40-39)                         $1

Decrease in inventory (44-43)                                          $1

Increase in account payable (30-26)                               $4

Decrease in accrued liabilities (18-15)                              (3)

Decrease in income tax payable (40-39)                         (1)

Net cash flow from operating activities                           $117

In the Assembly Department of Concord Company, budgeted and actual manufacturing overhead costs for the month of April 2020 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.

Answers

Answer and Explanation:

The preparation of responsibility report for April for the cost center is shown below:-

Concord Company,

Assembly Department

Manufacturing Overhead Cost Responsibility Report

For the Month Ended April

Controllable Cost         Budget      Actual     Difference       Remark

Indirect materials           $14,200     $13,700    $500        Favorable

Indirect Labor                 $19,100      $19,900   -$800     Unfavorable

Utilities                            $11,400      $12,100    -$700      Unfavorable

Supervision                     $4,600      $4,600      0            None

Total                                 $49,300  $50,300  -$1,000    Unfavorable

Brooke and John formed a partnership. Brooke received a 40% interest in partnership capital and profits in exchange for contributing land (basis of $30,000 and fair market value of $120,000). John received a 60% interest in partnership capital and profits in exchange for contributing $180,000 of cash. Three years after the contribution date, the land contributed by Brooke is sold by the partnership to a third party for $150,000. What gain must Brooke recognize on the land contribution when establishing the partnership

Answers

Answer:

$102,000

Explanation:

According to 26 US code Section 704(c) - Partner's distributive share :

Taxable gain to be recognized from sale = Sale value - ( Partner's share * Fair market value )

Brooke contributed the land, the gain realized before the land was contributed = $120,000 - $90,000 will be allocated entirely to her. She will also be allocated 40% of the gain after the contribution was made = ($150,000 - $120,000) x 40% = $30,000 x 40% = $12,000.

So the total gain recognized by Brooke will be $90,000 + $12,000 = $102,000.

Partnerships are pass through entities, the partners are taxed, not the partnership itself.

Consider two independent firms, BU1 and BU2, which transact with each other through spot market transactions in a competitive market. In a typical year, BU1 incurs total costs of $2 million in producing goods that BU2 buys. BU2 would be willing to pay up to $7.5 million for these goods, but because of the competitive market, ends up paying $5 million. What is the value captured by BU1 from these transactions?

Answers

Answer:

Value captured by BU1 = $5.5 million

Explanation:

Given:

Two firm = BU1 , BU2

BU1 cost of production = $2 million

BU2 will able to pay up-to =  $7.5 million

BU2 will pay = $5 million:

Find:

Value captured by BU1 = ?

Computation:

⇒ Value captured by BU1 = BU2 will able to pay up-to - BU1 cost of production

⇒ Value captured by BU1 = $7.5 million - $2 million

Value captured by BU1 = $5.5 million

Based on the information given  the value captured by BU1 from these transactions is $3 million.

The value captured by the seller (BU1)

Seller value =Value BU1 is willing to sell -Value at which he sold

Where:

Value BU1 is willing to sell=$5 million

Value at which he sold=$2 million

Let plug in the formula

Seller value=$5 million-$2 million

Seller value= $3 million

Inconclusion  the value captured by BU1 from these transactions is $3 million.

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Markley Manufacturing calculated its predetermined overhead rate to be 120% of direct labor cost. During June, the company incurred $90,000 of factory labor costs, of which $85,000 is direct labor and $5,000 is indirect labor. Actual overhead incurred was $84,000. Compute the amount of manufacturing overhead applied during the month. Determine the amount of under- or over-applied manufacturing overhead.

Answers

Answer:

Applied Manufacturing Overheads are $102,000

Overapplied Manufacturing overheads are $18,000

Explanation:

Under or over applied manufacturing overhead can be determined by comparing the actual and applied manufacturing overheads.

Applied overheads can be calculated by multiplying pre-determined overhead rate and actual level of quantity. Predetermined overhead rate is calculated using estimated overhead and estimated activity on which overheads are applied.

In this question the predetermined overhead rate is 120% of direct labor cost.

Applied overhead = Direct labor cost x 120% = $85,000 x 120% = $102,000

Actual overheads incurred = $84,000

Overapplied Manufacturing overheads = $102,000 - $84,000 = $18,000

Dexter Industries purchased packaging equipment on January 8 for $116,600. The equipment was expected to have a useful life of three years, or 20,000 operating hours, and a residual value of $6,600. The equipment was used for 8,700 hours during Year 1, 7,380 hours in Year 2, and 3,920 hours in Year 3. Required: 1. Determine the amount of depreciation expense for the three years ended December 31 by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the three years by each method. (Note: For STRAIGHT-LINE ONLY, round the first two years to the nearest whole dollar, then round the third year as necessary. For DECLINING BALANCE ONLY, round the multiplier to five decimal places. Then round the answer for each year to the nearest whole dollar.) 2. What method yields the highest depreciation expense for Year 1

Answers

Answer:

Straight-line method: $36,667 yearly depreciation expense for 3 years. Unit-of-production method: Year 1 - $47,850, Year 2 -  $40,590, Year 3 - $21,560Double-declining method: Year 1 - $77,737, Year 2 -  $25,910, Year 3 - $6,353

Total for 3 years is $110,000 for all the depreciation methods.

Explanation:

(A) Under straight-line method, depreciation expense is (cost - residual value) / Estimated useful life = ($116,600 - $6,600) / 3 years = $36,667 yearly depreciation expense.

Accumulated depreciation for 3 years is $36,667 x 3 years is $110,000.

(B) The unit-of-production method is used when the asset value closely relates to the units of output it is able to produce. It is expressed with the formula below:

(Original Cost - Salvage value) / Estimated production capacity x Units/year

At Year 1, depreciation expense (DE) is: ($116,600 - $6,600) / 20,000 operating hours x 8,700 hours = $47,850

At Year 2, depreciation expense (DE) is: ($116,600 - $6,600) / 20,000 operating hours x 7,380 hours = $40,590

At Year 3, depreciation expense (DE) is: ($116,600 - $6,600) / 20,000 operating hours x 3,920 hours = $21,560

Accumulated depreciation for 3 years is $47,850 +$40,590 + $21,560 = $110,000.

Note that this depreciation method results in higher depreciation charge when the asset is heavily used, at this time, it was in Year 1.

(C) The double-declining method is otherwise known as the reducing balance method and is given by the formula below:

Double declining method = 2 X SLDP X BV

SLDP = straight-line depreciation percentage

BV = Book value

SLDP is 100%/3 years = 33.33%, then 33.33% multiplied by 2 to give 66.67% or 2/3

At Year 1, 66.67% X $116,600 = $77,737

At Year 2, 66.67% X $38,863 ($116,600 -  $77,737) = $25,910

At Year 3, 66.67% X $12,953 ($38,863 -  $25,910) = $8,636. This depreciation will decrease the book value of the asset below its salvage value $12,953 - $8,636 = $4,317 < $6,600. Depreciation will only be allowed up to the point where the book value = salvage value. Consequently the depreciation for Year 3 will be $6,353.

Accumulated depreciation for 3 years is $77,737 + $25,910 + $6,353 = $110,000.

revorrow Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During June, the company budgeted for 7,000 units, but its actual level of activity was 6,960 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June: Data used in budgeting: Fixed element per month Variable element per unit Revenue - $ 28.40 Direct labor $ 0 $ 2.80 Direct materials 0 10.70 Manufacturing overhead 38,000 1.50 Selling and administrative expenses 23,600 0.30 Total expenses $ 61,600 $ 15.30 Actual results for June: Revenue $ 205,320 Direct labor $ 18,974 Direct materials $ 72,252 Manufacturing overhead $ 48,320 Selling and administrative expenses $ 25,768 The overall revenue and spending variance (i.e., the variance for net operating income in the revenue and spending variance column on the flexible budget performance report) for June would be closest to:

Answers

Answer:

$9,906 F

Explanation:

Calculation as follows:

Budget Income Statement

Particular                                                       $

Revenue (28.4 x 7,000)                          198,800

Direct Labor (2.8 x 7,000)                       (19,600)

Direct Material (10.7 x 7,000)                  (74,900)

Manufacturing Overheads

(38,000 + [1.5 x 7,000] )                           (48,500)

Selling and administrative Expenses

(23,600 + [0.3 x 7,000] )                           (25,700)

Net Operating Income                               30,100

Actual Income Statement

Particular                                                       $

Revenue                                                   205,320

Direct Labor                                             (18,974)

Direct Material                                         (72,252)

Manufacturing Overheads                      (48,320)

Selling and administrative Expenses      (25,768)

Net Operating Income                             40,006

Activity variance for net operating income = Net operating income actual - Net operating income budgeted

Activity variance for net operating income = 40,006 - 30,100

 Activity variance for net operating income = $9,906 F

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