Answer:
240 units
Explanation:
The Economic Order Quantity (EOQ) is the order quantity that minimizes annual ordering and holding costs. It is calculated as :
EOQ = √(2 x annual demand x cost per order) ÷ holding cost per unit
therefore,
EOQ = √(2 x 1,000 x 12 x $6) ÷ $2.50
= √57,600
= 240 units
Thus, 240 units would be the order quantity that minimizes annual ordering and holding costs
A trust has been established to fund scholarships in perpetuity. The next annual distribution will be $1,200, and future payments will increase by 3 percent per year. What is the value of this trust at a discount rate of 7.4 percent
Answer:
PV= $27,272.73
Explanation:
Giving the following information:
Annual distribution (Cf)= $1,200
Interest rate (i)= 7.4% = 0.074
Growth rate (g)= 3% = 0.03
To calculate the present value (PV) of the fund, we need to use the following formula:
PV= Cf / (i - g)
PV= 1,200 / (0.074 - 0.03)
PV= $27,272.73
Merchant Company issued 10-year bonds on January 1. The 6% bonds have a face value of $727,000 and pay interest every January 1 and July 1. The bonds were sold for $604,217 based on the market interest rate of 7%. Merchant uses the effective interest rate method to amortize bond discounts and premiums. On July 1 of the first year, Merchant should record interest expense (rounded to the nearest dollar) of
Answer:
Merchant Company
On July 1 of the first year, Merchant should record interest expense (rounded to the nearest dollar) of:
= $22,472.
Explanation:
a) Data and Calculations:
Face value of bonds = $727,000
Price of bonds = 604,217
Discounts = $122,783
Period of bonds = 10 years
Coupon rate of interest = 6%
Market interest rate = 7%
Payment of interest = Semi-annually (Jan. 1 and July 1)
July 1:
Cash payment = $21,810 ($727,000 * 3%)
Interest based on market rate = 21,148 ($604,217 * 3.5%)
Discount amortization = $662
Interest expense = $22,472 ($21,810 + $662)
A firm has estimated Free Cash Flows of $300,000, $310,000 and $360,000 for the next three (3) years. If this firm has a WACC of 9.40% and expects these cash flows to grow by 2.10% in perpetuity, then what is the Terminal Value of these expected perpetual cash flows.
Answer: $5,035,068.49
Explanation:
Terminal value is calculated based on the last cashflow and the growth rate in perpetuity.
The Gordon Growth Model is best used here:
= Free Cash Flow₄ / (WACC - Growth rate)
= (FCF₃ * (1 + growth rate) ) / (WACC -Growth rate)
= (360,000 * (1 + 2.10%)) / (9.40% - 2.10%)
= 367,560 / 7.3%
= $5,035,068.49
Your firm is considering a project with a discount rate of 9%. If you start the projecttoday, your firm will incur an initial cost of $490 and will receive cash inflows of$365 per year for 3 years. If you instead wait one year to start the project, the initial cost will rise to $530 and the cash flows will increase to $405 a year for the following 3 years. Would your firm be better off starting the project now or waiting to start the project in a year? Explain clearly including an estimate of the value of the option to wait.
Answer:
If the company start the project today then NPV of the project,
Year Cash Flow PV of Cash flow
0 -490 -490
1 365 365/1.09= 334.86
2 365 365/1.09^2 = 307.21
3 365 365/1.09^3= 281.85
NPV = 433.92
NPV of Project0= $ 433.92
If a company start a project after one year,
Year Cash Flow PV of Cash flow
0 0 0
1 -530 -530/1.09= -486.24
2 405 405/1.09^2 =340.88
3 405 405/1.09^3 = 312.73
4 405 405/1.09^4 = 286.91
NPV = 454.28
NPV of Project1= $ 454.28
Here for project start after one year has more Net Present Value of cash flow compared to which start now.
So, Starting a project after one year is more profitable.
Pick the correct statement from below. Multiple Choice Project analysis should only include the cash flows that affect the income statement. A project can create a positive operating cash flow without affecting sales. The depreciation tax shield creates a cash outflow for a project. Interest expense should always be included when analyzing cost-cutting projects. A bid price maximizes profits on a project for the bidding firm.
Answer:
A project can create a positive operating cash flow without affecting sales.
Explanation:
A project cash flow analysis permits to look the cash inflows and cash outflows that are along with the existing or upcoming project. Also it addressed the opportunity cost
So as per the given situation, it involved that project in which it establish the positive operating cash flow without impacting the sales
Therefore as per the given options, the above statement represent an answer
A manufacturer uses machine hours to assign overhead costs to products. Budgeted information for the next year follows. Budgeted factory overhead costs $ 669,600 Budgeted machine hours 7,200 Compute the plantwide overhead rate for the next year based on machine hours.
Answer: $93 per machine hour
Explanation:
The plantwide rate shows the cost per labor hour(machine hour in this case) for overhead incurred by the entire production plant.
Plantwide overhead rate based on machine hours:
= Budgeted factory overhead costs / Budgeted machine hours
= 669,600 / 7,200
= $93 per machine hour
Paul's new plans created a crisis situation for the deli. When Paul initially met with his team, he emphasized the importance of pleasing customers, despite the changes he was suggesting. He outlines each team member's work and the expected output for the next two weeks. At the end of the meeting, it is understood that every person who remains at the deli will put in extra hours of work. Nobody questions Paul because they feel his decision cannot be altered. What ethical lines did Paul cross in this situation
Answer:
Analyzing the above scenario, it is correct to state that manager Paul crossed ethical boundaries in this situation because he did not offer clear and assertive communication to team members.
What happened was that he did not communicate his decision bi-directionally, that is, he did not allow his decision to change the work to receive feedback from the team, although the established changes would impact the way the team performs its work, so it can to say that Paul used his hierarchical position to express his authority, which meant that there were no questions because the workers felt that the manager's decision could not be changed.
In a work environment, bidirectional communication is essential, the leader must guide his team strategically to achieve organizational goals, but receiving feedback from employees is essential to maintain a work environment focused on development, creativity, motivation and productivity.
A partial list of Waterways' accounts and their balances for the month of November 2016 follows:
Accounts Receivable $ 275,000
Advertising Expenses 54,000
Cash 260,000
Depreciation-Factory Equipment 16,800
Depreciation-Office Equipment 2,400
Direct Labor 42,000
Factory Supplies Used 16,800
Factory Utilities 10,200
Finished Goods Inventory, November 30 68,800
Finished Goods Inventory, October 31 72,550
Indirect Labor 48,000
Office Supplies Expense 1,600
Other Administrative Expenses 72,000
Prepaid Expenses 41,250
Raw Materials Inventory, November 30 52,700
Raw Materials Inventory, October 31 38,000
Raw Materials Purchases 184,500
Rent Factory Equipment 47,000
Repairs-Factory Equipment 4,500
Salaries 325,000
A list of accounts and their values are given above. From this information, prepare a partial balance sheet for Waterways Corporation for the month of November. (List Current Assets in order of liquidity.)
Answer:
Total current assets = $697,750
Explanation:
The partial balance sheet is as follows:
Waterways Corporation
Balance Sheet (Partial)
For the month of November 2016
Details $ $
Current Assets
Cash 260,000
Accounts Receivable 275,000
Finished Goods Inventory, November 68,800
Raw Materials Inventory, November 52,700
Prepaid Expenses 41,250
Total current assets 697,750
Note:
Cash is the most liquid of assets.
Accounts receivable which should be collected within 30 to 60 days are less liquid than cash, but more liquid than inventory.
Finished Goods Inventory which is expected to be sold and converted to cash within one year, and Raw Materials Inventory which is expected to be converted to finished good within one year are more liquid than Prepaid expense.
Therefore, the least liquid among current assets’ item above is the Prepaid Expense as it is cash paid for services not yet received..
A company changes from the straight-line method to an accelerated method of calculating depreciation, which will be similar to the method used for tax purposes. The entry to record this change will include a
Answer: c. credit to Accumulated Depreciation.
Explanation:
When using the accelerated method of depreciation, depreciation amounts are higher in the earlier years unlike the straight-line method where depreciation is constant throughout the life of the asset.
The difference between the depreciation according to Straight-line and depreciation will be sent to the accumulated depreciation account as a credit to reflect the change and the depreciation for the period.
Bramble Corp.’s cost of goods sold is $280000 variable and $170000 fixed. The company’s selling and administrative expenses are $160000 variable and $220000 fixed. If the company’s sales is $1080000, what is its net income?
Answer:
the net income is $250,000
Explanation:
The computation of the net income is given below:
= Sales - variable cost of goods sold - fixed cost of goods sold - variable selling & admin expense - fixed selling & admin expense
= $1,080,000 - $280,000 - $170,000 - $160,000 - $220,000
= $250,000
Hence, the net income is $250,000
The above formula should be applied for the same
Variable costs as a percentage of sales for Lemon Inc. are 71%, current sales are $551,000, and fixed costs are $207,000. How much will operating income change if sales increase by $37,600? a.$10,904 increase b.$26,696 decrease c.$26,696 increase d.$10,904 decrease
Answer: a.$10,904 increase
Explanation:
Operating income before sales increase:
= Sales - Variable costs - Fixed costs
= 551,000 - (71% * 551,000) - 207,000
= -$47,210
Operating income after sales increase:
Sales increases to:
= 551,000 + 37,600
= $588,600
= 588,600 - (71% * 588,600) - 207,000
= -$36,306
Difference:
= -47,210 - (-36,306)
= Increase of $10,904
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Answer:
of the three other members who have submitted their report on 6th century
You are considering investing in the stock of PartyWagon, Inc. You expect a dividend of $1.25 next year, $1.31 in year 2, and $1.38 in year 3. At the end of three years, you expect to be able to sell the stock for $65. If you can purchase the stock for $32, what rate of return do you expect to earn
Answer: 29.93%
Explanation:
You can use Excel to solve for this.
Bear in mind that when given a series of cashflows, the expected return is the Internal Rate of Return (IRR).
Initial investment = $32
First cashflow = $1.25
Second cashflow = $1.31
Third cashflow = $1.38 + $65 selling price = $66.38
IRR = 29.93%
Shelton Co. purchased a parcel of land six years ago for $860,500. At that time, the firm invested $132,000 in grading the site so that it would be usable. Since the firm wasn't ready to use the site itself at that time, it decided to lease the land for $47,500 a year. The company is now considering building a warehouse on the site as the rental lease is expiring. The current value of the land is $912,000. What value should be included in the initial cost of the warehouse project for the use of this land
The value should be included in the initial cost of the warehouse project for the use of this land is $912,000.
When embarking on a project, the value of the assets to be used should be their current market value because they reflect the current state of the assets at the time the project was embarked on thereby allowing for more accurate analysis for instance in terms of depreciation or net worth of the project.
The current market price of the parcel of land as the firm is about to embark on a project is $912,000 so this should be the considered the initial cost of project in terms of land.
Additional information on market value can be found at https://brainly.com/question/13950288.
You have just made your first $5,837 contribution to your retirement account. Assume you earn a return of 9.8 percent per year and make no additional contributions. What will your account be worth when you retire in 45 years
Stine Inc. had 1,000,000 shares of common stock issued and outstanding at December 31, 2020. On July 1, 2021 an additional 1,000,000 shares were issued for cash. Stine also had stock options outstanding at the beginning and end of 2021 which allow the holders to purchase 300,000 shares of common stock at $28 per share. The average market price of Stine's common stock was $35 during 2021. The number of shares to be used in computing diluted earnings per share for 2021 is
The number of shares to be used in computing diluted earnings per share for 2021 is 1,560,000
Diluted earnings per share=(1,000,000* 6/12) + (2,000,000 *6/12) + [((35 – 28) ÷35) *300,000]
Diluted earnings per share=500,000+1,000,000+60,000
Diluted earnings per share= 1,560,000
Therefore The number of shares to be used in computing diluted earnings per share for 2021 is 1,560,000
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On Friday of each week, Prawn Company pays its factory personnel weekly wages amounting to $55,000 for a five-day work week.
Required:
a. Prepare the necessary adjusting entry at year end, assuming December 31 falls on Wednesday.
b. Prepare the journal entry for payment of the week’s wages on the payday which is Friday, January 2 of the next year.
Answer and Explanation:
The journal entry is shown below:
a.
Wages Expense $33,000 ($55,000 ÷ 5 days ×3days)
To Wages Payable $33,000
(being wages expense is recorded)
Here wages expense is debited as it increased the assets and credited the wages payable as it also increased the liabilities
b. Wages Expenses $22000
Wages Payable $33000
To Bank $55,000
(Being payment is recorded)
Here wages expense is debited as it increased the assets, the wages payable is also debited as it decreased the liabilities and credited the bank as it decreased the assets
Which of the following is true of email?
A. It’s illegal for employers to monitor it.
B. Many companies monitor employee messages.
C. Deleting ensures the messages are never read.
D. Only the recipient has the ability to open it.
Answer:D
Explanation:
Melissa, a new employee at Epic Electronics, is required to perform a variety of bookkeeping and clerical tasks at a workstation. Epic has training software on its workstations that can answer many of the questions she has about what to do on her new job, and how to do it. The software is so good that she rarely asks her supervisor for help. It even tracks the way Melissa performs certain tasks, and offers suggestions to improve her productivity. This software is an example of:__________
Answer:
The way businesses are using knowledge technology to move relevant information to the people who need it.
Explanation:
Knowledge technology can be regarded as Intelligent as well as information and nteraction technologies which gives support to creation as well as management of knowledge at various individual and to all social levels. This technologies can be regarded as term used in describing technologies that is is been provided as result of collection of knowledge as well as process and storage of this knowledge, then how this knowledge is been transmitted to any place and the access of this information from anywhere.
(a) A lamp has two bulbs of a type with an average lifetime of 1800 hours. Assuming that we can model the probability of failure of these bulbs by an exponential density function with mean μ = 1800, find the probability that both of the lamp's bulbs fail within 2000 hours.
(b) Another lamp has just one bulb of the same type as in part (a). If one bulb burns out and is replaced by a bulb of the same type, find the probability that the two bulbs fail within a total of 1000 hours.
Answer:
a) 0.45
b) 0.11
Explanation:
A) P( both bulbs fail within 2000 hours ) = 0.45
Given data:
Average lifetime of bulbs = 1800 hours
mean μ = 1800
b) P( both bulbs fail within 1000 hours ) =
Attached below is a detailed solution of the given question
A company's overhead rate is 60% of direct labor cost. Using the following incomplete accounts, determine the cost of direct materials used.
Goods in process inventory:
Beginning balance $100,800
D.M.
D.L.
O.H. F.G.
Ending balance $131,040
Answer: $113,120
Explanation:
Direct material used = Total cost of manufacturing - Direct labor - Factory overhead
Total cost of manufacturing = Ending WIP + Cost of manufacturing - Beginning WIP
= 131,040 + 324,800 - 100,800
= $355,040
Direct labor = Factory overhead * 100/60
= 90,720 * 100/60
= $151,200
Direct materials used = 355,040 - 151,200 - 90,720
= $113,120
In his work Divine Comedy, the 14-century Italian poet Dante described a trip into space. As he traveled away from Earth, he visited the following celestial bodies in order: the moon, Mercury, Venus, the sun, Jupiter, and Saturn. What view of solar system structure did Dante hold? How do you know? Compare this view with a modern understanding of the solar system’s structure.
According to Italian poet Dante;
Dante believed in a geocentric conception of the planetary system, wherein the Earth seems to be at the centre while the moon, sun, and other planets revolve around it.
Explanation:
Researchers understand Dante had a geocentric perspective of the solar system since he would have visited Venus earlier Mercury in a sun-centered worldview.According to Dante's interpretation of the solar system, the crescent, sun, and planet all revolve around Earth. According to current thinking, only the moon revolves Earth; the Earth and then all the planets remain in orbit of sun.Learn more:
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2. An entrepreneur must make sure to budget carefully since they oversee their own company's finances.
True
False
Answer:
True .....this is because the entrepreneur is the risk bearer of the business...he is liable for any profit/loss.
Various financial data for the past two years follow. LAST YEAR THIS YEAR Output: Sales $ 200,200 $ 202,000 Input: Labor 30,005 40,005 Raw materials 34,500 44,500 Energy 5,000 6,100 Capital 48,990 48,990 Other 2,000 3,005 a. Calculate the total productivity measure for this company for both years.
Answer:
The total productivity measures for this company for both years are:
LAST YEAR THIS YEAR
Total productivity 1.66 1.42
Explanation:
a) Data and Calculations:
LAST YEAR THIS YEAR
Output: Sales $ 200,200 $ 202,000
Input: Labor 30,005 40,005
Raw materials 34,500 44,500
Energy 5,000 6,100
Capital 48,990 48,990
Other 2,000 3,000
Total input 120,495 142,595
Total productivity = Output/Input
= $ 200,200/120,495 $ 202,000/142,595
= 1.66 1.42
what is probability/impact matrix
Explanation:
probability and impact metrix is a tool for the project team iad in prioritizing risks.
theo bạn, 1 sản phẩm đáng bán rất tốt có cần thiết đưa hàng hóa đó lên mạng không?
On January 2, 2021, L Co. issued at face value $22,000 of 3% bonds convertible in total into 1,400 shares of L's common stock. No bonds were converted during 2021. Throughout 2021, L had 1,400 shares of common stock outstanding. L's 2021 net income was $4,000. L's income tax rate is 30%. No potential common shares other than the convertible bonds were outstanding during 2021. L's diluted earnings per share for 2021 would be:
Assume that an analyst is using the constant dividend growth model to value a stock. Which of the following scenarios would be certain to cause her to decrease her estimate of the stock's value (assuming, of course, that all other factors are held constant)?
A. She believes the company has become riskier, and therefore increases her required rate of return for the stock.
B. She increases her estimate of the company’s next year’s dividend.
C. She increase her estimate of the expected annual rate of growth in the company’s dividends.
D. She decreases her required rate of return for the stock.
E. None of the above would cause her to decrease her estimate of the stock’s value.
Answer: A. She believes the company has become riskier, and therefore increases her required rate of return for the stock.
Explanation:
The formula for the Constant dividend growth model of valuing stock is:
= Next dividend / (Required return - growth rate)
From the formula above, one can tell that if the required return is higher, it would result in a lower value for stock because it would divide the numerator more.
If the analyst believes that the company is riskier and increases the required return, the value would therefore reduce if other measures are kept constant.
Colorado Cleaning has a 5-year maximum acceptable payback period. The firm is considering the purchase of a new washing machine and must choose between two alternative ones. The first machine requires an initial investment of $25,000 and generates annual after-tax cash inflows of $6,500 for each of the next 8 years. The second machine requires an initial investment of $75,000 and provides an annual cash inflow after taxes of $9,500 for 15 years.
Required:
a. Determine the payback period for each machine.
b. Comment on the acceptability of the machines, assuming that they are independent projects.
c. Which machine should the firm accept? Why?
d. Do the machines in this problem illustrate any of the weaknesses of using payback? Discuss.
Answer:
a) Payback period = period up to which cumulative cash flow is negative +
(negative cumulative cash flow /cash flow succeeding
the above period)
Project A - Up to year 4 ,cash flow recovered = 3000 * 4 = 12,000
Payback period =14,000/3,000 = 4.67 years
Project B= Cash flow recovered up to year 5 = 4000 * 5 = 20000
Payback period = 21,000/4,000 =5.25 years
b) On the basis of the Payback period, Project A should be selected, as it has a lower payback period and is also within the maximum acceptable payback period. back period.(4.67 < 5)
Project B should not be selected as its payback recovery is not within the maximum acceptable payback period (5.25 >5 )
c) Machine A should be selected as it has a lower payback period. than machine B.
d)The payback period ignores the life present value of cash flow and also the life of the machine each project has.
so the decision on the basis of the payback period may not be accurate.
Last year, you purchased a stock at a price of $64.00 a share. Over the course of the year, you received $2.20 per share in dividends and inflation averaged 2.7 percent. Today, you sold your shares for $69.00 a share. What is your approximate real rate of return on this investment
Answer:
8.55%
Explanation:
Calculation to determine your approximate real rate of return on this investment
First step is to calculate the Nominal return
Nominal return = ($69 - $64+ $2.20)/$64
Nominal return=7.2/$64
Nominal return= 0.1125
Now let calculate the Approximate real return
Approximate real return = 0.1125 - 0.027
Approximate real return= 0.0855*100
Approximate real return=8.55%
Therefore your approximate real rate of return on this investment is 8.55%
