Answer:
Net working capital is the only expenditure where at least a partial recovery can be made at the end of a project.
Explanation:
Net working capital is the difference between current assets and current liabilities. Net working capital measures a company's liquidity.
In project analysis, net working capital is part of the cost. It is usually subtracted from cash inflows.
Net working capital is a cash outflow.
Net working capital is the only expenditure where at least a partial recovery can be made at the end of a project.
A company issued 7%, 15-year bonds with a par value of $510,000 that pay interest semiannually. The market rate on the date of issuance was 7%. The journal entry to record each semiannual interest payment is: ________
a) Debit Bond Interest Expense $17,850, credit Cash $17,850
b) Debit Bond Interest Expense $35,700: credit Cash $35,700
c) Debit Bond Interest Payable $34,000, credit Cash $34,000.
Answer: A. Debit Bond Interest Expense $17,850, credit Cash $17,850
Explanation:
Since the company issued 7%, 15-year bonds with a par value of $510,000 that pay interest semiannually with a market rate of 7%, then the journal entry to record each semiannual interest payment will be:
Debit Bond Interest Expense $17,850
Credit Cash $17,850
(To record semi annual interest payment)
Note that bond interest expense was calculated as:
= $510,000 × 7% × 6/12
= $510,000 × 0.07 × 0.5
= $17850
Wayland Company has a standard of 5.0 hours of labor per unit, at $11.00 per hour. In producing 800 units, Wayland used 3,800 hours of labor at a total cost of $41,000. What is Wayland's labor price variance
Answer:
Direct labor rate variance= $798 favorable
Explanation:
To calculate the direct labor rate variance, we need to use the following formula:
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Direct labor rate variance= (11 - 10.79)*3,800
Direct labor rate variance= $798 favorable
Actual rate= 41,000 / 3,800= $10.79
LUVFINANCE, Inc. is estimating its WACC. The firm could sell, at par, $100 preferred stock that pays a 10 percent annual dividend and incurs 6.22% flotation costs. What is the cost of new preferred stock financing?
Answer:
the cost of new preferred stock financing is 10.66%
Explanation:
The computation of the cost of new preferred stock financing is given below:
= Annual dividend ÷ [ Price × (1 - flotation cost) ]
= $10 ÷ [ $100 × (1 - 0.0622) ]
= $10 ÷ $ 93.78
= 10.66%
Hence, the cost of new preferred stock financing is 10.66%
The same is to be considered and relevant
If the constructor function is a machine to create object instances, then the _____ is the blueprint for the objects that are created.
I think ( prototype)
If the constructor function is a machine to create object instances, then the prototype is the blueprint for the objects that are created.
The treasurer of a large corporation wants to invest $43 million in excess short-term cash in a particular money market investment. The prospectus quotes the instrument at a true yield of 3.47 percent; that is, the EAR for this investment is 3.47 percent. However, the treasurer wants to know the money market yield on this instrument to make it comparable to the T-bills and CDs she has already bought. If the term of the instrument is 77 days, what are the bond equivalent and discount yields on this investment? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)
Bond equivalent yield %
Discount yield %
Answer and Explanation:
The computation is shown below:
Given that,
EAR = 3.47%
1.0347 = (1+R ×77 ÷ 365)^365 ÷ 77
Now Take 365/77th root both sides
So,
1+R × 77 ÷ 365 = 1.00722
1+R × 0.2109 = 1.00722
R × 0.2109 =0.00722
R = 0.03423
Thus, Bond Equivalent Yield = 3.423%
Now
Discount Yield = (360 × 0.03423) ÷ (365+77 × 0.03423)
= 12.3244 ÷ 367.6361
= 0.03352
Thus, Discount Yield = 3.352%
Which of the following sentences apply correct number style?
a. More than $5,000,000.00 has been allocated to technology infrastructure upgrades.
b. Twenty-seven percent of our entry-level employees have majored in accounting.
c. Dan Yannotti, Director of Health Initiatives, turns 32 this year.
Answer:
The sentence that applies the correct number style is:
c. Dan Yannotti, Director of Health Initiatives, turns 32 this year.
Explanation:
Sentence A's number style should have been formatted like: "More than $5 million ..." Alternatively, it could be formatted as "Five Million Dollars."
Sentence B's number style should have been formatted like: "27% of our ...."
This leaves sentence C as the sentence that applies the correct number style.
A construction manager just starting in private practice needs a van to carry crew and equipment. She can lease a used van for $3,510 per year, paid at the beginning of each year, in which case maintenance is provied. Alternatively, she can buy a used van for $5,185 and pay for maintenance herself. She expects to keep the van for three years at which time she could sell it for $1,330. What is the most she should pay for uniform annual maintenance to make it worthwhile to buy the van instead of leasing it, if her MARR is 20%
Answer:
$2,116
Explanation:
The computation is shown below:
Option 1 - Leasing
= 3510 + ( 3510 ÷ 1.2 ) + ( 3510 ÷ 1.2 ^ 2 )
= 8872.5
Now
Option 2 - Buying
Given that
Initial Cost - 5185
PV of salvage value = 1330 ÷ 1.2 ^ 3
= 769.68
So,
Cost = 5185 - 769.68
= 4457.176
Now the payment should be
= 4457.176 × 0.47473 (PV annuity factory for 20% at 3 years)
= $2,115.955
= $2,116
The preferred stock of a company pays a $2.75 quarterly dividends. If the preferred stockholders' required return is 7.25% for these shares, what price should the preferred stock sell for?
82.35
151.72
92.31
114.29
167.74
Answer:
$151.72
Explanation:
Quarterly dividends of preferred stock = $2.75
Annual dividend of preferred stock = 4 * Quarterly dividend
Annual dividend of preferred stock = 4 * $2.75
Annual dividend of preferred stock = $11
Required return = 7.25% = 0.0725
Return = Dividend / Current price
0.0725 = $11 / Current price
Current price = $11 / 0.0725
Current price = 151.724138
Current price = $151.72
So, the preferred stock should sell for $151.72.
Adophus, Inc.'s 2010 income statement reported total revenues of $850,000 and total expenses (including $40,000 depreciation) of $720,000. The 2010 balance sheet reported the following: accounts receivable beginning balance of $50,000 and ending balance of $40,000; accounts payable beginning balance of $22,000 and ending balance of $28,000. Therefore, based only on this information and using the indirect method, the 2010 net cash inflow from operating activities was:
Answer:
Adolphus, Inc.
Therefore, based only on this information and using the indirect method, the 2010 net cash inflow from operating activities was:
= $186,000.
Explanation:
a) Data and Calculations:
Total revenues = $850,000
Total expenses 720,000
Operating income $130,000
Depreciation = 40,000
Beginning Ending Changes
Accounts receivable $50,000 $40,000 -$10,000
Accounts payable $22,000 $28,000 +$6,000
Operating activities section of the Statement of Cash Flows, 2010:
Net income $130,000
Non-cash expenses:
Depreciation 40,000
Changes in working capital:
Accounts receivable 10,000
Accounts payable 6,000
Net cash inflow = $186,000
Materials costs of $720000 and conversion costs of $800800 were charged to a processing department in the month of September. All materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. There were no units in beginning work in process, 120000 units were started into production in September, and there were 8000 units in ending work in process that were 30% complete at the end of September. What was the total amount of manufacturing costs assigned to those units that were completed and transferred out of the process in September
Answer:
The total amount of manufacturing costs assigned to those units that were completed and transferred out of the process in September is:
= $1,456,000.
Explanation:
a) Data and Calculations:
Units Materials Conversion Total
Incurred during September $720,000 $800,800 $1,520,800
Equivalent units of production:
Units Materials Conversion
Started into production 120,000
Ending work in process 8,000 8,000 (100%) 2,400 (30%)
Completed and transferred out 112,000 112,000 (100%) 112,000 (100%)
Equivalent units 120,000 114,400
Total cost of production $720,000 $800,800
Equivalent units 120,000 114,400
Cost per equivalent units $6 $7
Cost assigned to:
Units completed and transferred out $672,000 $784,000 $1,456,000
Ending work in process 48,000 16,800 64,800
Total cost assigned & accounted for $720,000 $800,800 $1,520,800
The Wisconsin Lottery will pay a lottery winner a lump sum payment of $19,046,180 as the final payment of her winnings in four years. If the appropriate discount rate for the payment is 8.6% what is the present value of the payment?
a. $5,191,977.
b. $5,408,309.
c. $116,741.
d. $17,899,197.
e. $17,899,197.
Answer: $13,692,683.93
Explanation:
Present value = Amount / (1 + rate) ^ number of periods
= 19,046,180 / (1 + 8.6%)⁴
= $13,692,683.93
Options are most probably for a variant of this question.
Brockton Corporation, which allocates manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations.
Actual manufacturing overhead costs incurred $35,000
Manufacturing overhead allocated to jobs 33,800
Underallocated or overallocated Manufacturing overhead ?
Required:
Calculate the manufacturing overhead and indicate if the remainder is underallocated or overallocated for the year.
Answer:
Underapplied overhead= $1,200
Explanation:
Giving the following information:
Actual manufacturing overhead costs incurred $35,000
Manufacturing overhead allocated to jobs 33,800
To calculate the under/over allocation, we need to use the following formula:
Under/over applied overhead= real overhead - allocated overhead
Under/over applied overhead= 35,000 - 33,800
Underapplied overhead= $1,200
Suppose GDP consists of eggs and ham. In 2002, 100 dozen eggs are sold at $3 per dozen, and 50 pounds of ham are sold at $4 per pound. If in 2001, the base year, eggs sold at $1.50 per dozen and ham sold at $5 per pound, nominal 2002 GDP is
Answer:
Nominal GDP = $500
Explanation:
Given the price of eggs in 2002 = $3
Quantity of eggs = 100 dozens
Price of ham in 2002 = $4
Quantity of ham = 50 pounds
Nominal GDP = Current year price x current year quantity
Nominal GDP = 100 x 3 + 50 x 4
Nominal GDP = 300 + 200
Nominal GDP = $500
Assume the following macroeconomic variable ( in $ billion) for an economy: Y = national income = Aggregate Expenditures Aggregate Expenditures = Consumption + Investment + Government Spending + Net Export Assuming that the full employment level in $6,000 billion, determine the change in government spending needed to reach full employment. (Hint: calculate the current GDP, then calculate aggregate expenditures using national income of $6,000 and find the difference)
Answer:
440
Explanation:
Calculation to determine the change in government spending needed to reach full employment.
At Y=6000,
C=300+0.64Y
C=300+0.64*6000
C=300+3840
C=4140
Second step
Imports=0.08*Y=0.08*6000
Imports=480
Aggregate expenditure=4140+800+700+400-480
Aggregate expenditure=5560
Full employment G=6000-5560
Full employment G=440
New G=700+440
New G=1140
Y=300+0.64Y+800+1140+400-0.08Y
Y=2640+0.56Y
Y=2640/0.44
Y=6000
Therefore the change in government spending needed to reach full employment must Increase by 440.
A convertible preferred stock is convertible at $10, pays a 4% annual dividend, is callable at $110, and is trading at a current market price of $116. Based on these details, what is the parity price of the common stock
Answer:
$11.60
Explanation:
In ascertaining the parity price of the common stock, we need to ascertain the conversion ratio which is the par price of the preferred stock divided by the convertible price
The par value of the preferred stock=$100(since call price is $110)
convertible price=$10
conversion ratio=$100/$10=10
The parity price is the current market price of the preferred stock divided by the conversion ratio
Parity price=$116/10
Parity price=$11.60
Transactions that affect earnings do not necessarily affect cash. Identify the effect, if any, that each of the following transactions would have upon cash and net income.
(a) Purchased $100 of supplies for cash.
(b) Recorded an adjusting entry to record use of $20 of the above supplies.
(c) Made sales of $1,200, all on account.
(d) Received $800 from customers in payment of their accounts.
(e) Purchased equipment for cash, $2,500.
Answer:
(a) Cash reduction, no effect on net income
(b) Net income reduction, no effect on cash
(c) Net income increment, no effect on cash
(d) Cash increase, no effect on net income
(e) Cash reduction, no effect on net income
Explanation:
When items or services are exchanged for cash, these may be recognized as assets or expenses. While expenses reduce income, assets do not as it forms the exchange of one asset (cash) for another.
Considering the transactions in light of the above,
a) Purchased $100 of supplies for cash - Supplies are inventory (an asset) and would not reduce net income until it is used up
(b) Recorded an adjusting entry to record use of $20 of the above supplies. No effect on cash, entry is a reduction in supplies and recognition of cost of goods sold. As such net income reduces.
(c) Made sales of $1,200, all on account. - Sales on account are credit sales. This will be recognized as a credit to sales (increase in net income) and a debit to accounts receivable.
(d) Received $800 from customers in payment of their accounts. - To recognize this, we debit cash (increase in cash) and debit accounts receivable. This has no effect on net income.
(e) Purchased equipment for cash, $2,500 - Again, this is he exchange of cash for an asset. This has no effect on income.
The cost of a parcel of land is 50 cents per square foot. Candace wants to purchase one acre. How much will this cost?
1 acre = 43,560 square feet.
Multiply square feet by cost per square feet
43,560 x 0.50 = $21,780
Total cost: $21,780
Common stockholders' equity as of 1/1/2017 $7,031,250 Common stockholders' equity as of 12/31/2017 $8,593,750 Net sales for the year 2017 $3,906,250 Net income for the year 2017 $250,000 Common stock dividends paid during 2017 $10,000 Calculate the company's Payout Ratio.
Answer:
the payout ratio is 4%
Explanation:
The computation of the payout ratio is shown below:
The payout ratio is
= Dividend ÷ net income
= $10,000 ÷ $250,000
= 4%
We simply divided the dividend from the net income so that the payout ratio could come
Hence, the payout ratio is 4%
Answer:
it is 4%
Explanation:
5. If a company had $15,000 in net income for the year, and its sales were $300,000 for the same year, what is its profit margin
Answer:
5%
Explanation:
Net income is $15,000
Sales is $300,000
The profit margin can be calculated as follows
= 15,000/300,000
= 0.05×100
= 5%
Profit margin is 5%
Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $1,250,000 $2,000,000 Variable costs (750,000) (1,250,000) Contribution margin $500,000 $750,000 Fixed costs (400,000) (450,000) Operating income $100,000 $300,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. Beck Inc. fill in the blank 1 Bryant Inc. fill in the blank 2 b. How much would operating income increase for each company if the sales of each increased by 20%? Dollars Percentage Beck Inc. $fill in the blank 3 fill in the blank 4 % Bryant Inc. $fill in the blank 5 fill in the blank 6 % c. The difference in the of operating income is due to the
Answer:
1. Operating leverage = Contribution margin / Net income
Beck Inc.
Operating leverage = $500,000 / $100,000
Operating leverage = 5
Bryant Inc.
Operating leverage = $750,000 / $300,000
Operating leverage = 2.5
2. Income from operations increase = Increase in sales * Degree of operating leverage
Dollar increase = Net income * Percentage
Beck Inc.
Percentage = 5*20 = 100% (Income from operations increase)
Dollar increase = $100,000 * 100% = $100,000
Bryant Inc.
Percentage = 2.5*20 = 50% (Income from operations increase)
Dollar increase = $300,000 * 50% = $150,000
Kingbird, Inc. purchased a piece of equipment for $72,200. It estimated a 8-year life and a $3,400 salvage value. At the end of year four (before the depreciation adjustment), it estimated the new total life to be 10 years and the new salvage value to be $7,200.
Compute the revised depreciation assuming Kingbird uses the straight-line method.
Revised annual depreciation
$enter the revised annual depreciation in dollars
Depreciation Expense 3,060
Accumulated Depreciation 3,060
72,200-3,400=68,800/8yr=8,600*4yrs=34,400-72,200=37,800
37,800-7,200=30,600/10yr=3,060 annual depreciation
72,200-3,400=68,800/8yr
=8,600*4yrs
=34,400-72,200=37,800
37,800-7,200=30,600/10yr
=3,060 annual depreciation
Therefore, the Depreciation Expense of 3,060.
What is depreciation?Depreciation is a term used in accounting to describe two different aspects of the same idea: first, the actual decline in an asset's fair value as it is used and worn, such as the annual decline in value of factory equipment, and second, the allocation in accounting statements of the asset's original cost to the periods in which the asset is used (depreciation with the matching principle).
Depreciation is the process of reallocating, or "writing down," the cost of a physical item (such as equipment) over the course of that asset's useful life. It also refers to the decline in asset value. Long-term assets are depreciated by businesses for accounting and tax reasons. A company's or entity's balance sheet is impacted by the asset's decline in value, and the income statement they report is impacted by the process of depreciation from an accounting standpoint.
Learn more about depreciation here:
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Lion Company accepted a $15,000, 30-day, 6% note on December 16 from Diaz Co, granting a time extension on his past-due account receivable. The adjusting entry on December 31 for Lion Company would include a credit to:
Answer:
Interest Revenue for $37.50
Explanation:
The interest that has accrued on the note receivable from December 16 till December 31(for 15 days) needs to be recognized at the end of the year since the interest for those days has been earned.
Based on 30-day month counting, the interest that would be credited to interest revenue and debited to interest receivable on 31 December is computed thus:
interest receivable=$15000*6%*15/360
interest receivable=$37.50
Suppose that the equilibrium exchange rate (Euro/$) is .90 and the The Federal Reserve decides to fix the exchange rate at .70. What will the Federal Reserve have to do in order to maintain this fixed exchange rate
Answer:
C. The Federal Reserve will need to have official reserves of euros to purchase dollars in the foreign exchange market.
Explanation:
Federal Reserve required to have a euros reserves as it can applied it also at the case when the exchange rate is move upward or downward
For the other things, the fed could restrict the supply with respect to the dollar in the foreign exchange market in order to get it stable that opposed with euro
Therefore the option c is correct
Athena Company's salaried employees earn two weeks of vacation per year. It pays $910,000 in total employee salaries for 52 weeks but its employees work only 50. Record Athena Company's weekly journal entry to record the vacation expense:
Answer:
If $910,000 is paid as employee salary for the year then the weekly salary is:
= 910,000 / 52
= $17,500
The cost of 2 vacation weeks is therefore:
= 17,500 * 2
= $35,000
There are 50 weeks to be worked so vacation expense needs to be apportioned to these weeks:
= 35,000 / 50
= $700
Weekly journal entry is:
Date Account Title Debit Credit
XX-XX-XXXX Vacation Benefits Expense $700
Vacation Benefits Payable $700
Carpenter Inc. had a balance of $89,000 in its quality-assurance warranty liability account as of December 31, 2020. In 2021, Carpenter's warranty expenditures paid were $454,000. Its warranty expense is calculated as 1% of sales. Sales in 2021 were $40.9 million. What was the balance in the warranty liability account as of December 31, 2021
Answer:
$44
Explanation:
Calculation to determine what
was the balance in the warranty liability account as of December 31, 2021
Warranty liability account as of December 31, 2021=(1%*89,000)+(40,900,000*.01)-(1%*$454,000)
Warranty liability account as of December 31, 2021=89+(40,900,000*.01)-454
Warranty liability account as of December 31, 2021=$44
Therefore the balance in the warranty liability account as of December 31, 2021 was $44
Discount Mart utilizes the allowance method of accounting for uncollectible receivables.
On December 12, the company receives a $540 check from Chad Thomas in settlement of Thomas's $1,280 outstanding accounts receivable. Due to Thomas's failing health, he is closing his company and is expecting to make no further payments to Discount Mart.
Journalize this transaction. If an amount box does not require an entry, leave it blank.
Answer: See explanation
Explanation:
From the question, we are given the information that on December 12, the company receives a $540 check from Chad Thomas in settlement of Thomas's $1,280 outstanding accounts receivable, then the journal entry based on the above will be:
December 12:
Debit Cash $540
Debit Allowance for doubtful account $740
Credit Account receivable $1280
Note that the allowance for doubtful account was calculated as:
= Account receivable - Cash
= $1280 - $540
= $740
Thomas is concerned about his company's ability to pay off its short-term debts. If he wants to know more about his company's liquidity, what should he do?
Calculate his debt to equity ratio
Calculate his net working capital
Calculate his total assets
Calculate his total liabilities
Answer: Calculate his net working capital
Explanation:
The net working capital shows a company's ability to pay off its short term obligations using its current assets.
It is calculated by subtracting the current liabilities of a company from its current assets. When net working capital is high, a company has enough to ensure that it can grow in the short run but when the net working capital is little or negative, the company will have a hard time paying off short term obligations which will affect its financial health.
Two years ago Sam bought a newly issued three-year US government bond (a risk-free asset) with a principle of $1000 and a 5% coupon rate. This year, one year before maturity, Sam decides to sell the bond and sees that the price people are willing to pay for his bond is now $1019.
Required:
a. Has the interest rate gone up or down since Sam purchased the bond?
b. What is the the current interest rate for bonds when Sam decides to sell?
Answer and Explanation:
In the case when sam purchased the bond, the rate of interest on the bond is
= 50 ÷ 1000
= 5%
Now, after the change in price, the interest rate is:
= 50 ÷ 1019
= 4.907%
a. So here the rate of interest is reduced or gone
b. And ,the current interest rate is 4.907%
so the same is to be considered and relevant
Explain how an employee stock ownership plan (ESOP) can be used to fund the sale of a company to employees. Research and explain the process that enabled the employees to be the majority owners of Publix Super Markets to enrich the discussion about employee stock ownership plans.
Answer:look just bee the boss
Explanation:cause thats all ik
If the old equipment is replaced now, it can be sold for $60,000. Both the old equipment’s remaining useful life and the new equipment’s useful life is 5 years. What is the net cost of the new equipment? g
Answer:
$315,000
Explanation:
The below is missing from the question, hence, my solution would be based on the original question and additional details below:
Old Equipment New Equipment
Purchase price $225,000 $375,000
Accumulated depreciation $90,000 - 0 -
Annual operating costs $300,000 $240,000
The net cost of the equipment is the actual expenditure to the firm by acquiring the new equipment which is the cost of new equipment minus the amount receivable from selling the old equipment
net cost of new equipment=$375,000-$60,000
net cost of new equipment=$315,000
