Let RUS be the annual risk free rate in the United States, RUK be the risk free rate in the United Kingdom, F be the futures price of $/BP for a 1-year contract, and E the spot exchange rate of $/BP. Which one of the following is true?
A. if RUS > RUK, then E > F
B. if RUS < RUK, then E < F
C. if RUS > RUK, then E < F
D. if RUS < RUK, then F = E E.
There is no consistent relationship that can be predicted.

Answers

Answer 1

Answer:

If RUS > RUK, then E < F ( C )

Explanation:

RUS = annual risk free rate in united states

RUK = annual risk free rate in United kingdom

F = futures price of $/BP  for 1 year

E = spot exchange rate for $/BP

To get a higher the future price

this conditions must be met

The annual risk free rate of the united states must be higher than the annual risk free rate of the united kingdom. if this condition is met then the the British pound will have a forward premium ( F ) > ( E )


Related Questions

Mercury Company reports depreciation expense of $49,000 for Year 2. Also, equipment costing $168,000 was sold for its book value in Year 2. There were no other equipment purchases or sales during the year. The following selected information is available for Mercury Company from its comparative balance sheet. Compute the cash received from the sale of the equipment. At December 31 Year 2 Year 1 Equipment $ 655,000 $ 823,000 Accumulated Depreciation-Equipment 464,000 545,000 Multiple Choice $49,000. $87,000. $38,000. $81,000. $40,500.

Answers

Answer:

The cash received from sale is $38000

Explanation:

We first need to calculate the book value of the equipment that is sold.

Book value = Cost - Accumulated depreciation

The accumulated depreciation on the equipment sold can be calculated by calculating the change in overall accumulated depreciation. Using the following equation to calculate the closing balance of accumulated depreciation, we can calculate the accumulated depreciation for the equipment that is sold.

Closing balance = Opening balance + Depreciation expense for the year - Accumulated depreciation on the asset disposed

Let Accumulated depreciation on the asset disposed be x.

464000 = 545000 + 49000 - x

x = 594000 - 464000

x = 130000

Thus, the book value of the asset sold was,

Book value = 168000 - 130000  =  $38000

As the asset is sold for its book value, the cash received from sale is also $38000

Blue Space Corporation launches exploratory space flights to the moon and Mars. The purpose is to discover and retrieve minerals and other resources. Under U.S. Law, Blue Space a. must share with all interested parties what it retrieves in space. b. cannot profit from resources retrieved in space. c. cannot legally retrieve resources in space. d. owns what it retrieves in space.

Answers

Answer:

D. Owns what it retrieves in space.

Explanation:

This explains the right of an american that entails that anybody that retrieves minerals or other useful resources own or has control over what it retrieves in space.

Americans however should have the right to engage in commercial exploration, recovery, and use of resources in outer space, consistent with applicable law. Outer space is a legally and physically unique domain of human activity, and the United States does not view it as a global commons. Accordingly, it shall be the policy of the United States to encourage international support for the public and private recovery and use of resources in outer space, consistent with applicable law.

On January 1, 2020, Martinez Company makes the two following acquisitions. 1. Purchases land having a fair value of $330,000 by issuing a 4-year, zero-interest-bearing promissory note in the face amount of $483,153. 2. Purchases equipment by issuing a 6%, 9-year promissory note having a maturity value of $380,000 (interest payable annually). The company has to pay 10% interest for funds from its bank. (a) Record the two journal entries that should be recorded by Martinez Company for the two purchases on January 1, 2020. (b) Record the interest at the end of the first year on both notes using the effective-interest method.

Answers

Answer:

Explanation:

a)

Date Account Titles and Explanation Debit Credit

January 1, 2020 Land $360,000.00

Discount on notes payable $246,621.00

Notes payable $ 606,621.00

(To record purchase of land by issuing note payable)

PV of $606,621 discounted at 11% =606,621/(1.11)^5 = $ 360,000

2.

Computation of the discount on notes payable:

Maturity value $560,000

Present value of $560,000 due in 8 years at 11% = $560,000 * 0.43393 = $ 243,000

Present value of $39,200 payable annually for 8 years at 11% annually—$39,200 * 5.14612 = $ 201,728

Present value of the note = $ 243,000 + $ 201,728 = $ 444,728

Discount = $ 560,000 - $ 444,728 = $ 115,272

Date Account Titles and Explanation Debit Credit

January 1, 2020 Equipment $444,728.00

Discount on notes payable $115,272.00

Notes payable $ 560,000.00

(To record purchase of equipment by issuing note payable)

b)

1.

Date Account Titles and Explanation Debit Credit

December 31, 2020 Interest expense ($ 360,000*11%) $39,600

Discount on notes payable $39,600

(To record the interest expense recorded and discount amortized)

2.

Date Account Titles and Explanation Debit Credit

December 31, 2020 Interest expense ($444,728 * 11%) $48,920

Discount on notes payable $9,720

Interest Payable ( $ 560,000 * 7%) $39,200

(To record the interest expense recorded)

Vandy Corporation's balance sheet and income statement appear below: Comparative Balance Sheet Ending Balance Beginning Balance Assets: Cash and cash equivalents $ 31 $ 29 Accounts receivable 61 73 Inventory 59 61 Property, plant, and equipment 684 550 Less accumulated depreciation 349 319 Total assets $ 486 $ 394 Liabilities and stockholders' equity: Accounts payable $ 53 $ 54 Accrued liabilities 20 21 Income taxes payable 52 48 Bonds payable 203 190 Common stock 61 60 Retained earnings 97 21 Total liabilities and stockholders' equity $ 486 $ 394 Income Statement Sales $ 807 Cost of goods sold 492 Gross margin 315 Selling and administrative expense 182 Net operating income 133 Gain on sale of equipment 16 Income before taxes 149 Income taxes 45 Net income $ 104 The company sold equipment for $18 that was originally purchased for $14 and that had accumulated depreciation of $12. It paid a cash dividend of $28 during the year and did not retire any bonds payable or repurchase any of its own common stock. Required: Prepare a statement of cash flows for the year using the indirect method.

Answers

Answer:

See below the statement of Cash flow from Vandy Corporation.

Explanation:

Vandy Corporation

Statement of Cash Flow

CASH FLOW FROM OPERATING ACTIVITIES:

Net Income                                                                                     $104

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation on Fixed Assets ($349-$319+$12)                             $42

Gain on Sale of Equipment                                                              ($16)

(Increase) Decrease in Current Assets:

Accounts Receivables                                                                       $12

Inventory                                                                                             $2

Increase (Decrease) in Current Liabilities:

Accounts Payable                                                                              ($1)

Accrued Liabilities                                                                              ($1)

Income taxes payable                                                                        $4

Net Cash provided by Operating Activities                                $146

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from sale of Equipment                                                    $18

Purchase of Property, plant and equipment ($684-$550+$14)     ($148)

Net Cash Flow from Investing Activities                                      ($130)

CASH FLOWS FROM FINANCING ACTIVITIES:

Bonds Payable                                                                                       $13

Issuance of Common Stock                                                                   $1

Payment of Dividends                                                                       ($28)

Net Cash from Financing Activities                                                ($14)

Net Increase (Decrease) in Cash                                                        $2

Opening Cash Balance                                                                       $29

Ending Cash Balance                                                                           $31

Beerbo purchased a patent from Mitter Lite Co. for $1,000,000 on January 1, 2018. At that time, the patent's useful life was 10 years, expiring on December 31, 2027. In early 2020, Beerbo determined that the economic benefits of the patent would not last longer than 4 more years (6 years from the date of acquisition). Given the revised useful life, Beerbo expects the useful life of the patent to expire on December 31, [a1]. (Input year; e.g. "2020") At the end of 2019 / beginning of 2020, what was the value / net book value of the patent in Beerbo's books

Answers

Answer:

$800,000

Explanation:

As per the data given in the question,

Beerbo expects patent's useful life to expire on Dec-31 2023.

At the beginning of 2020 / end of 2019, the value of the patent in Beerbo's book = $1,000,000 - ($1,000,000 ÷ 10×2))

= $800,000

Amortix patent year = 4

Patent amortization expense at the end of 2020 = $800,000 ÷ 4

=$200,000

An acquisition premium is the amount by which the price offered for an existing business exceeds the Select one: a. amount paid as a down payment to be held in escrow until closing. b. difference between the amount that was offered and the amount that is escrowed c. comparable value of similar companies within the same market. d. preacquisition market value of the target company e. fair market value of similar companies in the same geographic locale.

Answers

Answer:

d. pre-acquisition market value of the target company.

Explanation:

An acquisition premium is the amount by which the price offered for an existing business exceeds the pre-acquisition market value of the target company.

An acquisition premium gives the difference between the actual amount of money paid in acquiring a target firm and the estimated real value of obtaining the firm before the acquisition.

Acquisition premium are usually recorded on the balance sheet as "goodwill."

Indicate the effect—Understate, Overstate, No Effect—that each of the following errors has on 2020 net income and 2021 net income. 2020 2021 (a) Equipment (with a useful life of 5 years) was purchased and expensed in 2018. Select an option Select an option (b) Wages payable were not recorded at 12/31/20. Select an option Select an option (c) Equipment purchased in 2020 was expensed. Select an option Select an option (d) 2020 ending inventory was overstated. Select an option Select an option (e) Patent amortization was not recorded in 2021. Select an option Select an option

Answers

Answer: The answer is provided below

Explanation:

The net income is excess of revenues over expenses after the adjustment for depreciation expense and the income tax expense. Net income is also called the net profit.

(a) Equipment (with a useful life of 5 years) was purchased and expensed in 2018.

2020 : It will be overstated in the net income.

2021: It will be overstated in the net income.

b. Wages payable were not recorded at 12/31/20.

2020: It will be overstated in the net income.

2021: It will be understated in the net income.

c. Equipment purchased in 2020 was expensed.

2020: It will be understated in the net income.

2021: It will be overstated in the net income

d. 2020 ending inventory was overstated.

2020: It will be overstated in the net income.

2021: It will be understated in the net income.

e. Patent amortization was not recorded in 2021.

2020: It will be no effect in the net income.

2021: It will be overstated in the net income

Warren Buffet opposes stock splits to lower the share price because he believes:________.
a. lower share price will encourage other companies to try to take over the company from existing shareholders.
b. lower stock price encourages short term investing, whereas he is looking for long-term investors.
c. stock splits encourage long-term investing, which is detrimental to his firm's investment policy.
d. lower share price indicates poor growth prospects..

Answers

Answer:. b. lower stock price encourages short term investing, whereas he is looking for long-term investors.

Explanation:

Warren Buffet has stated that he does not want to split Berkshire Hathaway's stock because he believes that it would attract short term investors whereas he is looking for long term investors. He believes that a stock being split makes it susceptible to investors who just want to buy it for the meantime, wait for it to appreciate a bit and then sell. He however prefers Companies with a long term potential so he prefers people investing for the long run.

agpie Corporation uses the total cost method of product pricing. Below is cost information for the production and sale of 60,000 units of its sole product. Magpie desires a profit equal to a 25% return on invested assets of $700,000. Fixed factory overhead cost $38,700 Fixed selling and administrative costs 7,500 Variable direct materials cost per unit 4.60 Variable direct labor cost per unit 1.88 Variable factory overhead cost per unit 1.13 Variable selling and administrative cost per unit 4.50 The cost per unit for the production and sale of Magpie's product is

Answers

Answer:

$12.88

Explanation:

given information

units sold 60,000

desired profit = 25% x $700,000 = $175,000

fixed factory overhead = $38,700

fixed S&A = $7,500

direct materials per unit = $4.60

direct labor per unit = $1.88

variable overhead per unit = $1.13

variable S&A per unit = $4.50

the cost per unit:

direct materials per unit = $4.60direct labor per unit = $1.88variable overhead per unit = $1.13variable S&A per unit = $4.50fixed factory overhead = $38,700 / 60,000 = $0.645fixed S&A = $7,500 / 60,000 = $0.125total cost per unit = $12.88

the desired profit = $2.92, so the selling price to achieve the desired profit should = $15.80

Brownley Company has two service departments and two operating (production) departments. The Payroll Department services all three of the other departments in proportion to the number of employees in each. The Maintenance Department costs are allocated to the two operating departments in proportion to the floor space used by each. Listed below are the operating data for the current period: Service Depts. Production Depts. Payroll Maintenance Cutting Assembly Direct costs $ 20,400 $ 25,500 $ 76,500 $ 105,400 No. of personnel 15 15 45 Sq. ft. of space 10,000 15,000 The total cost of operating the Maintenance Department for the current period is:

Answers

Answer:

The total cost of operating the Maintenance Department for the current period is $29,580

Explanation:

In order to calculate The total cost of operating the Maintenance Department for the current period we would have to calculate first the Overhead allocated to Maintenance from Payroll department as follows:

Overhead allocated=Payroll overhead×(Maintenance payroll personnel/Total personnel)

Overhead allocated=$ 20,400×(15/15+15+45)

Overhead allocated=$4,080

Therefore, to calculate the The total cost of operating the Maintenance Department for the current period we would have to use the following formula:

Total cost of operating Maintenance Department=Overhead allocated+Direct overhead incurred

Total cost of operating Maintenance Department=$4,080+$25,500

Total cost of operating Maintenance Department=$29,580

The total cost of operating the Maintenance Department for the current period is $29,580

Sheffield Corp. issued $7080000 of 11%, ten-year convertible bonds on July 1, 2020 at 96.1 plus accrued interest. The bonds were dated April 1, 2020 with interest payable April 1 and October 1. Bond discount is amortized semiannually on a straight-line basis. On April 1, 2021, $1416000 of these bonds were converted into 600 shares of $20 par value common stock. Accrued interest was paid in cash at the time of conversion. If "interest payable" were credited when the bonds were issued, what should be the amount of the debit to "interest expense" on October 1, 2020

Answers

Answer:

The amount of the debit to "interest expense" on October 1, 2020 is $194,700

Explanation:

According to the given data we have the following:

Bond face value=$7,080,000

interest rate=11%

There are 3 months interest recognized from july to september, therefore, to calculate the amount of the debit to "interest expense" on October 1, 2020 we would have to make the following calculation:

amount of the debit to "interest expense" on October 1, 2020=$7,080,000*11%*3 months / 12 months

amount of the debit to "interest expense" on October 1, 2020=$194,700

The amount of the debit to "interest expense" on October 1, 2020 is $194,700

The Baldwin Company currently has the following balances on their balance sheet: Total Assets $255,213 Total Liabilities $151,328 Retained Earnings $47,588 Suppose next year the Baldwin Company generates $44,200 in net profit, pays $12,000 in dividends, total assets increase by $55,000, and total liabilities remain unchanged. What will ending Baldwins balance in Common Stock be next year? Select: 1 $79,097 $509,129 $381,753 $143,497

Answers

Answer:

$79,097

Explanation:

The accounting equation shows the relationship between the elements of a balance sheet which are assets liabilities and equity. This may be expressed mathematically as

Assets = Liabilities + Equity

While assets include fixed assets, cash, inventories, account receivables etc, liabilities include accounts payable, loans payable, accrued expenses etc.

Equity which represents the amount owed to the owners of the business includes retained earnings (which is the accumulation of the net income/loss over the years less dividends paid) and common shares.

Hence in current year,

Total equity = $255,213 - $151,328

= $103,885

If retained earnings is $47,588 then common stock

= $103,885  - $47,588

= $56,297

Change to equity next year

= $55,000

Change to retained earnings

= $44,200 - $12,000

= $32,200

Hence change in common stock

= $55,000 - $32,200

= $22,800

Common stock balance

= $56,297  + $22,800

= $79,097

Scenario 28-1 Suppose that the Bureau of Labor Statistics reports that the entire adult population of Mankiwland can be categorized as follows: 25 million people employed, 3 million people unemployed, 1 million discouraged workers, and 1 million people who are either students, homemakers, retirees, or other people not seeking employment. Refer to Scenario 28-1. How many people are unemployed

Answers

Answer: 3 million.

Explanation:

Unemployment is defined as when a member of a Country's labor force is jobless but actively looking for work.

In the Scenario 28-1, the discouraged people are not counted as they are discouraged and not looking for work and 1 million other people being students and retirees amongst others are not looking for work either.

The unemployed section of Mankiwland is therefore the 3 million unemployed people.

Cully Furniture buys two products for resale: king beds (K) and queen beds (Q). Each king bed costs $500 and requires 100 cubic feet of storage space, and each queen bed costs $250 and requires 80 cubic feet of storage space. The company has $80,000 to invest in shelves this week, and the warehouse has 30,000 cubic feet available for storage. Profit for each king bed is $400 and for each queen bed is $200. 1). (10’) Please set up the LP model for the above situation.2). (20’) How many king beds (K) and how many queen bed (Q) should be purchased at optimal? 3). (10’) Whether we have slack or surplus variable applicable in this question? If we do, what is the value of slack (or/and surplus) variable? What is the meaning behind it?4). (10’) If the furniture company purchases no king beds and 300 queen beds, which resources will be completely used (at capacity)?

Answers

Answer:

1) 500K + 250Q ≤ 80,000

  100K+80Q≤ 30,000

K≥0

Q≥0

P= 400K + 200Q

2) zero king beds and 320 queen beds

or zero queen beds and 160 king beds

3) surplus variable

surplus variable is storage space

values of surplus variable is 14,000 cubic feet if zero queen beds and 160 king beds

value of surplus variable is 4,400 cubic feet if zero king beds and 320 queen beds.

surplus is the extra amount available after all resources have been utilized to theri maximum.

4) none of the resources will be completely used. There will be surplus of both

Explanation:

1) Implicit variables: K≥0 ;   Q ≥ 0

Explicit variables:

500K + 250Q ≤ 80,000-------------------------- from investment constraint

  100K+80Q≤ 30,000 ---------------------- from storage space constraint

LP:  P= 400K + 200Q

2) See the attachment for profit maximization graph

3) From graph in the attachment, it can be inferred that storage space is the surplus variable since graph of that equation lies completely outside of optimal area.

Also,

if K=160 and Q=0, the inequality of investment gives

500(160) + 250(0)= 80,000

if K=0 and Q=320, the inequality of investment gives

500(0)+ 250(320) =80,000

if K=0 and Q = 320, the inequality of space gives

100(0) + 80(320)= 25,600

surplus= 30,000- 25,600= 4,400

if K=160 and Q=0, the inequality of space gives

100(160) +250(0)= 16000

surplus= 30000-16000= 14000

4) K=0 and Q=300

investment inequality gives

500(0) + 250(300) ≤ 80,000

75,000≤ 80,000

space inequality gives

100(0) + 80(300) ≤ 30,000

24,000≤ 30,000

Both space and investment are in surplus

Zolezzi Inc. is preparing its cash budget for March. The budgeted beginning cash balance is $27,000. Budgeted cash receipts total $104,000 and budgeted cash disbursements total $87,000. The desired ending cash balance is $70,000. The company can borrow up to $90,000 at any time from a local bank, with interest not due until the following month. Required: Prepare the company's cash budget for March in good form. Make sure to indicate what borrowing, if any, would be needed to attain the desired ending cash balance.

Answers

Answer:

                                                     Zolezzi Inc.

                                          Cash budget for March

                                                       Amount in $'000                          

Opening balance                                27

Add;

Cash receipts                                    104      

Less;

Cash disbursements                        (87)                

Ending balance                                  44  

Amount to be borrowed                   26  

Desired ending balance                   70                                                                                                

Explanation:

The cash budget a forecast of the expected movement in cash balance. This is as a result of expected cash receipts and disbursements and may be expressed mathematically as

opening cash balance + cash receipts - Cash disbursed = closing cash balance

27 + 104 - 87 = ending balance

Ending balance = 44

Desired ending balance = 70

Amount to be borrowed = 70 - 44

= 26

Exercise 24-5 Payback period computation; even cash flows LO P1 Compute the payback period for each of these two separate investments: A new operating system for an existing machine is expected to cost $520,000 and have a useful life of six years. The system yields an incremental after-tax income of $150,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $10,000. A machine costs $380,000, has a $20,000 salvage value, is expected to last eight years, and will generate an after-tax income of $60,000 per year after straight-line depreciation.

Answers

Answer and Explanation:

The computation of the payback period is shown below:

1. Payback period = Initial investment ÷ Net cash flow      

where,

Initial investment is $520,000

Net cash flow is =  incremental after-tax income + depreciation expense

= $150,000 + $85,000

= $235,000

The depreciation expense is

= ($520,000 - $10,000) ÷ (6 years)

= $85,000

Now the payback period is

= $520,000 ÷ $235,000

= 2.21 years

2. Payback period = Initial investment ÷ Net cash flow      

where,

Initial investment is $380,000

Net cash flow is =  incremental after-tax income + depreciation expense

= $60,000 + $45,000

= $105,000

The depreciation expense is

= ($380,000 - $20,000) ÷ (8 years)

= $45,000

Now the payback period is

= $380,000 ÷ $105,000

= 3.62 years

The management of Unter Corporation, an architectural design firm, is considering an investment with the following cash flows: Year Investment Cash Inflow 1 $ 59,000 $ 5,000 2 $ 9,000 $ 10,000 3 $ 20,000 4 $ 21,000 5 $ 24,000 6 $ 22,000 7 $ 20,000 8 $ 18,000 9 $ 17,000 10 $ 17,000 Required: 1. Determine the payback period of the investment. 2. Would the payback period be affected if the cash inflow in the last year were several times as large

Answers

Answer:

4.5 years

No

Explanation:

The Payback period calculates the amount of time it takes to recover the amounts invested in a project from its cumulative cash flows.

Total investments = $-59,000 - $9,000 = $-68,000

In the first year: $-68,000 + $5,000 = $-63,000 is recovered

In the 2nd year: $-63,000 + $ 10,000 = $-53,000 is recovered

In the 3rd year: $-53,000 +  $ 20,000 = $-33,000 is recovered

In the 4th year $-33,000 + 21,000 = $-12,000

In the 5th year $-12000 + $24,000 = $12,000

The amount invested is recovered between the 4th and 5th year

4 years + $-12000 / $24,000 = 4.5years

The Payback period  would not be affected if the cash inflow in the last year were several times as large because the cash flow would have been recovered by the 5tj year.

I hope my answer helps you

Answer:

Explanation:

Year        Investment               Cash Inflow         Accumulate Cash Inflow

1               $59,000                   $5,000       $5000

2              $9,000                     $10,000       $15000

3                                               $20,000       $35000

4                                                $21,000       $56000

5                                                $24,000       $12000

6                                               $22,000       $34000

7                                                $20,000       $54000

8                                               $18,000       $72000

9                                               $17,000       $89000

10                                              $17,000                        $106000

Pay back period ⇒ 4.5year ⇒ 68000/68000 + 12000/24000

⇒ 4.5years

2. Dexrease payback period

Davis Hardware Company uses a perpetual inventory system. How should Davis record the sale of inventory costing $620 for $960 on account?A. Inventory 620Cost of Goods Sold 620Sales Revenue 960Accounts Receivable 960B. Accounts Receivable 960Sales Revenue 960Cost of Goods Sold 620Inventory 620C. Inventory 620Gain 340Sales Revenue 960D. Accounts Receivable 960Sales Revenues 620Gain 340

Answers

Answer:

B. Accounts Receivable 960

   Sales Revenue 960

   Cost of Goods Sold 620

    Inventory 620

Explanation:

Under perpetual inventory system the sale is recorded separately by sale value and the cost of the sold inventory is deducted from the inventory and added in the cost of goods sold.

Ne benefit of $340 (960-620) is automatically recorded and it will be measure at end of the period by formatting the income statement. It does not need to be recorded separately.

Blue Sky Company’s 12/31/15 balance sheet reports assets of $6,000,000 and liabilities of $2,400,000. All of Blue Sky’s assets’ book values approximate their fair value, except for land, which has a fair value that is $360,000 greater than its book value. On 12/31/15, Horace Wimp Corporation paid $6,120,000 to acquire Blue Sky. What amount of goodwill should Horace Wimp record as a result of this purchase?

Answers

Answer:

$2,160,000

Explanation:

Goodwill is the amount of excess consideration payment over net asset value of acquiring company. It is the net value of consideration payment and Fair value of net assets.

To calculate goodwill first we need to determine fair value of assets and Liabilities.

Total Fair value of Assets = $6,000,000 + $360,000 = $6,360,000

Liabilities = $2,400,000

Net Asset value = Assets - Liability = $6,360,000 - $2,400,000 = $3,960,000

Goodwill = Consideration - Net Asset Value = $6,120,000 - $3,960,000 = $2,160,000

Axelia Corporation has two​ divisions, Refining and Extraction. The​ company's primary product is Luboil Oil. Each​ division's costs are provided​ below: Extraction​: Variable costs per barrel of oil $ 12 Fixed costs per barrel of oil $ 4 Refining​: Variable costs per barrel of oil $ 27 Fixed costs per barrel of oil $ 30 The Refining Division has been operating at a capacity of 40 comma 200 barrels a day and usually purchases 26 comma 000 barrels of oil from the Extraction Division and 15 comma 900 barrels from other suppliers at $ 57 per barrel. What is the transfer price per barrel from the Extraction Division to the Refining​ Division, assuming the method used to place a value on each barrel of oil is 120​% of full​ costs? A. $ 82.80 B. $ 19.20 C. $ 46.00 D. $ 16.00

Answers

Answer:

Transfer price  = $19.2

Explanation:

The transfer price is the price at which goods are exchanged between the divisions of the same group.

The transfer price is stated to be 120% of the full cost

Full cost of extraction = Variable cost + fixed cost

                                      = $ 12 + $ 4 = $16 per barrel

Transfer price =   120%× $16 = $19.2

The average starting salary for this year's graduates at a large university (LU) is $20,000 with
a standard deviation of $8,000. Furthermore, it is known that the starting salaries are normally
distributed.
a. What is the probability that a randomly selected LU graduate will have a starting salary
of at least $30,400? (3 marks)
b. What is the probability that a randomly selected LU graduate will have a salary of
exactly $30,400? (2 marks)
c. Individuals with starting salaries of less than $15600 receive a low income tax break.
What percentage of the graduates will receive the tax break? (2 marks)
d. If 189 of the recent graduates have salaries of at least $32240, how many students
graduated this year from this university? (3 marks)

Answers

Answer:

a) The probability that a randomly selected LU graduate will have a starting salary of at least $30,400 = P(x ≥ 30400) = 0.0968

b) The probability that a randomly selected LU graduate will have a salary of exactly $30,400 = 0.000021421

c) Percentage of students that will receive a tax break = 29.12%

d) Total Number of graduates this year = 3,000

Explanation:

This is a normal distribution problem with

Mean = μ = $20,000

Standard deviation = σ = $8,000

a) The probability that a randomly selected LU graduate will have a starting salary of at least $30,400 = P(x ≥ 30400)

We first normalize or standardize $30,400

The standardized score for any value is the value minus the mean then divided by the standard deviation.

z = (x - μ)/σ = (30400 - 20000)/8000 = 1.30

The required probability

P(x ≥ 30400) = P(z ≥ 1.30)

We'll use data from the normal probability table for these probabilities

P(x ≥ 30400) = P(z ≥ 1.30) = 1 - P(z < 1.30)

= 1 - 0.90320

= 0.0968

b) The probability that a randomly selected LU graduate will have a salary of exactly $30,400

Here, we will use the normal distribution formula. The normal distribution formula is presented in the attached image

P(X = x) = f(x) = [1 ÷ σ√(2π)] × e^(-0.5z²)

x = $30,400

σ = $8,000

z = 1.30

P(X = 30400) = f(30400) = 0.000021421

c) Individuals with starting salaries of less than $15600 receive a low income tax break.

What percentage of the graduates will receive the tax break?

Required probability = P(x < 15600)

We first normalize or standardize $15,600

z = (x - μ)/σ = (15600 - 20000)/8000 = -0.55

The required probability

P(x < 15600) = P(z < -0.55)

We'll use data from the normal probability table for these probabilities

P(x < 15600) = P(z < -0.55)

= 0.29116 = 29.116% = 29.12%

d) If 189 of the recent graduates have salaries of at least $32240, how many students

graduated this year from this university?

We first find the percentage of LU graduates with salaries more than $32240

Required probability = P(x ≥ 32240)

We first normalize or standardize $32,240

z = (x - μ)/σ = (32240 - 20000)/8000 = 1.53

The required probability

P(x ≥ 32240) = P(z ≥ 1.53)

We'll use data from the normal probability table for these probabilities

P(x ≥ 32240) = P(z ≥ 1.53) = 1 - P(z < 1.53)

= 1 - 0.93699

= 0.06301 = 6.301%

So, 6.301% of the graduates this year = 189

Total Number of graduates this year = (189/0.06301) = 2999.5 = 3000 graduates this year.

Hope this Helps!!!

Selected data from the Florida Fruit Company are presented below: Total assets $1,500,000 Average total assets 1,850,000 Net income 175,000 Net sales 1,300,000 Average common stockholders' equity 1,000,000 Net cash provided by operating activities 275,000 Assume that no dividends were declared or paid during the period. Collapse question part (a) Calculate the profit margin. (Round answer to 1 decimal place, e.g. 15.2%.) Profit margin Enter percentages rounded to 1 decimal place %

Answers

Answer:

13.5%

Explanation:

Relevant data provided for computing the profit margin which is here below:-

Net Income = $175,000

Net Sales = $1,300,000

The computation of profit margin is shown below:-

Profit Margin = (Net Income ÷ Net Sales) × 100

= ($175,000 ÷ $1,300,000) × 100

= 13.5%

Therefore for computing the profit margin we simply applied the above formula.

In its most recent financial statements, Del-Castillo Inc. reported $70 million of net income and $960 million of retained earnings. The previous retained earnings were $943 million. How much in dividends did the firm pay to shareholders during the year? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000.

Answers

Answer:

$53,000,000

Explanation:

The amount of dividends paid by Del-Castillo Inc. can be ascertained using the retained earnings formula as follows:

retained earnings=net income+previous year retained earnings-dividends paid

retained earnings for current year is $960 million

net income is $70 million

previous year retained earnings were $943 million

dividends paid is unknown

dividends=net income+previous year retained earnings-current year retained earnings

dividends=$70 million+$943 million-$960 million

dividends=$53 million

An individual is planning to set-up an education fund for his grandchildren. He plans to invest $17,500 annually at the end of each year. He expects to withdraw money from the fund at the end of 10 years and expects to earn an annual return of 8%. What will be the total value of the fund at the end of 10 years? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Answers

Answer:

Pv=$8105.86

Fv=$37,781.18

Pva=$691,014.62

Fva=$117426.42

Explanation:

Kindly check the attached picture for detailed explanation

Consider a portfolio manager with a $20,500,000 equity portfolio under management. The manager wishes to hedge against a decline in share values using stock index futures. Currently a stock index future is priced at 1250 and has a multiplier of 250. The portfolio beta is 1.25. Calculate the number of contracts required to hedge the risk exposure and indicate whether the manager should be short or long.

Answers

Answer:

Assume that a month later the equity portfolio has a market value of $20,000,000 and the stock index future is priced at 1150 with a multiplier of 250. Calculate the profit on the equity position.

Calculate the overall profit.

$1,550,000

Explanation:

Assume that a month later the equity portfolio has a market value of $20,000,000 and the stock index future is priced at 1150 with a multiplier of 250. Calculate the profit on the equity position.

Calculate the overall profit.

The manager should be short on the stock index futures because the position on the equity portfolio is long.

Number of contracts required to hedge

= [$20,500,000/(1250*250)] * 1.25 = 82 contracts

Profit on the equity portfolio

= $20,000,000 - $20,500,000 = -$500,000

Profit on the stock index future

= [(1250)(250) – (1150)(250)] x 82 = $2,050,000

Overall profit

=  $2,050,000 - $500,000

= $1,550,000

therefore, the overall profit is  $1,550,000

On December 31,2018,Infinity Inc.records an adjusting entry to accrue interest on a note.On January 31,2019,Infinity receives a check for $4,680,which represents two months of accumulated interest on the note.Upon receipt of this interest payment,Infinity should debit: A)Interest Receivable for $2,340,debit Cash $2,340,and credit Interest Revenue for $4,680. B)Cash for $4,680,credit Interest Receivable for $2,340,and credit Interest Revenue for $2,340. C)Cash for $4,680 and credit Interest Receivable for $4,680. D)Cash for $4,680 and credit Interest Revenue for $4,680.

Answers

Answer:

D)Cash for $4,680 and credit Interest Revenue for $4,680.

Explanation:

The Journal entry with their narrations and explanation is here shown below:-

Cash Dr, $4,680

   To Interest revenue $4,680

(Being receipt of interest payment is recorded)

Therefore for recording this entry here we debited the cash as it is received and we credited the interest revenue as it is decreasing.

Assume that you are a retail customer. Use the information below to answer the following question. Bid Ask Borrowing Lending S0($/€) $1.42 = €1.00 $1.45 = €1.00 i$ 4.25% APR 4% APR F360($/€) $1.48 = €1.00 $1.50 = €1.00 i€ 3.10% APR 3% APR If you borrowed $1,000,000 for one year, how much money would you owe at maturity? A. $1,450,352 B. $1,042,500 C. € 1,024,500 D. $1,525,400

Answers

Answer:

$1,042,500.

Explanation:

From the question above, we are given the following parameters; under the bid, we have $1.42 = €1.00 and $1.48 = €1.00; the borrowing and lending are $ 4.25% and 4% APR respectively for S0($/€).

Also, for F360($/€), the bid and ask values are: $1.48 = €1.00 and $1.50 = €1.00 respectively; the borrowing and lending values are 3.10% APR and 3% APR.

Therefore, the Borrowing rate is ($) 4.25% in $ . Thus, $1,000,000 for one year, one we owe

$1,000,000 × (1 + 0.0425) = $1,042,500 at maturity.

Question 2--/20 View Policies Current Attempt in Progress Stellar Company sponsors a defined benefit pension plan. The corporation’s actuary provides the following information about the plan. January 1, 2020 December 31, 2020 Vested benefit obligation $1,610 $1,910 Accumulated benefit obligation 1,910 2,590 Projected benefit obligation 2,400 3,120 Plan assets (fair value) 1,680 2,430 Settlement rate and expected rate of return 10 % Pension asset/liability 720 ? Service cost for the year 2020 400 Contributions (funding in 2020) 660 Benefits paid in 202- 180 (a) Compute the actual return on the plan assets in 2020.

Answers

Answer:

$270

Explanation:

The computation of the actual return on plant asset is shown below:

Fair value of the Plan assets at Ending of the year $2,430

Less: Fair value of the Plan assets at beginning of the year $1,680

Change in Plan Assets $750

Less  Contribution made -$660

Add: Benefits Paid $180

Actual Return $270

We simply applied the above equation to determine the actual return on the plant assets

Windsor Co. is building a new hockey arena at a cost of $2,420,000. It received a down payment of $510,000 from local businesses to support the project, and now needs to borrow $1,910,000 to complete the project. It therefore decided to issue $1,910,000 of 10%, 10-year bonds. These bonds were issued on January 1, 2019, and pay interest annually on each January 1. The bonds yield 9%.

Prepare the journal entry to record the issuance of the bonds on January 1, 2019.

Answers

Answer:

Dr    Cash   $2,032,577.26

Cr premium on bonds payable  $122,577.26  

Cr bonds payable                        $1,910,000

Explanation:

First and foremost the proceeds received from the bond issuance needs to determine the pv formula in excel as follows:

=-pv(rate,nper,pmt,fv)

rate is the yield  to maturity of 9%

nper is the number of annual coupons payable by the bond which is 10

pmt is the amount of annual coupon i.e  $1,910,000*10%=$191000

fv is the face value of the bond which is  $1,910,000

=-pv(9%,10,191000,1910000)=$2,032,577.26  

premium on bonds issuance= 2,032,577.26-1,910,000.00= $122,577.26  

oel purchased 100 shares of stock for ​$31 per share. During the​ year, he received dividend checks amounting to ​$202. Joel recently sold the stock for ​$58 per share. Joel is in a 35​% tax bracket. He would pay ​$945 in taxes if he held the stock for less than a year. How much would Joel save in taxes if he held the stock for more than a​ year, assuming he sold it for the same​ amount?

Answers

Answer:

Joel would save tax of $540 if the stock was held for more than a year

Explanation:

If the stock is held for more than one year and then sold then the gain on sale would be long term capital gain

The long term capital gain would be charged at preferential rate of 15%

Calculate long term capital gain tax on sale

Long term capital gain                    (Sale price - Purchase price)*No of shares

Long term capital gain                    (58-31)*100

Long term capital gain                    $2700

Tax on long term capital gain           2700*15%      

Tax on long term capital gain     $405

Savings in tax                                    945 - 405      

Savings in tax                                    $540

Thus, Joel would save tax of $540 if the stock was held for more than a year

Other Questions
HELP! BRAINLIEST PLUS POINTS. Images and captions are text features which often appear in articles. Writing in complete sentences, explain how images and captions can help you understand the main idea. Simplify, and then write in exponential form. Do not evaluate.(7^2)^4 What is the volume of this cube with a side length of 6 centimeters6 cm Which animal occupies a rainforest floor niche? beetle tapir spider monkey toucan 30 points + brainlyQuestion one ( both questions use the same picture)The histogram below represents the heights of the Boston Celtics. What size are the intervals on the histogram?2 inches3 inches4 inches5 inchesQuestion 2The histogram below represents the heights of the Boston Celtics. Which of the following statements is true?The mode interval of this set is 79 81.There are more players between 73 and 75 than there are between 82 and 84.The most number of players are in the interval between 76 and 78.The fewest number of players are in the interval between 82 and 84. Hi there! I hope everybody is safe. Here's my question for 10 points and Brainliest! What is the meaning of abuse? Why do people abuse other people? An outdoor space that is partially or fully enclosed by walls or a roof. Do you think college athletes should be paid to play? 1.) What three oceans border North America? On January 1, 2017, Culver Company issued 10-year, $2,060,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 15 shares of Culver common stock. Culvers net income in 2017 was $291,000, and its tax rate was 40%. The company had 108,000 shares of common stock outstanding throughout 2017. None of the bonds were converted in 2017.Required:(a) Compute diluted earnings per share for 2017. (Round answer to 2 decimal places, e.g. $2.55.)(b) Compute diluted earnings per share for 2017, assuming the same facts as above, except that $1,080,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Culver common stock. If the interest charge is 1.5 percent per month on an overdraft, how much interest is due one month after an overdraft of $50? A gym has two different membership offers. The usual offer is $10 per month (m) plus a $300 set-up fee. The promotional offer is $30 per month (m) with no set-up fee. Write a system of equations that models the total costs (c) that both memberships offer. Write your equations separately but do not include spaces within each equation. Which one of the following is NOT a power of the legislative branch Convert the angle \theta=260^\circ=260 theta, equals, 260, degrees to radians.Express your answer exactly.\theta==theta, equals radians Which are benefits of money market mutual funds? how did the undergound railroad work CAN YOU HELP ME ON NUMBER 19 WHOEVER COMES FIRST I WILL GIVE 5 STARS I PROMISE :) Use the Remainder Theorem to find the remainder for (2x^3- 3x^2+x)/(x-1) and state whether or not the binomial is a factor of thepolynomial. What is a set of ordered pairs How will the military and financial aid that President Truman is requesting support Greece become a democracy (just like Americas government)?