Answer:
year two
Explanation:because less time still you'll have 2,000
A management control system is a logical integration of techniques to gather and use data and to evaluate performance.
a. True
b. False
Answer:
The correct answer is the option A: True.
Explanation:
To begin with, a management control system is understood as an ensemble of different subsystems that work with each other in order to cooperate to do the task and obtain the objectives that the user is looking for. In this case in particular, this type of system focus primarily in the objective of gathering data with the purpose of using it to evaluate the performances of the members of the organization so that would help the manager to take decisions when he has to. That is why that this system is a logical integration of techniques that would ensemble data to be used.
Inefficient output and price, few choices for consumers, and rent seeking are all problems associated with
Answer: c. Monopolies.
Explanation:
Because Monopolies have no competition, the main incentive to be efficient is missing. This leads to a situation where Monopolies are not as efficient as they are to be in production as well as price because they will charge a price that does not match the optimal quantity associated with that price.
With no or few competition in the market, consumers will not have a lot of choices on entities to source the good from and there is a problem of Rent seeking with Monopolies as well. Rent seeking for monopolies occurs when they charge people above the price they are to charge if they were in a competitive market. They are therefore making more money than they should at the expense of customers.
Journalize the following entries for the month:
a. Materials are purchased to produce 960 units.
b. Conversion costs are applied to 910 units of production.
c. The cell completes 860 units, which are placed into finished goods.
Answer:
Journal Entries without $ amounts:
a. Debit Materials Inventory for 960 units
Credit Cash Account or Accounts Payable for 960 units.
To record the purchase of materials for the production of 960 units
Debit Work in process for 960 units
Credit Materials Inventory for 960 units
To record the transfer of materials to work in process.
b. Debit Conversion Costs for 910 units
Credit Cash Account for 910 units
To record conversion expenses.
Debit Work in process for conversion costs
Credit Conversion Costs
To record the transfer of conversion costs to WIP.
c. Debit Finished Goods Inventory for 860 units
Credit Work in Process for 860 units
To record the transfer of 860 units out of WIP, (materials and conversion costs).
Explanation:
Journals serve multi-purposes for the initial recording of business transactions. They also play important roles for period-end and other adjustments. Journals come in hand for closing entries of transactions. Importantly, they identify the accounts that are debited and credited respectively. There are many kinds of journals for various purposes, from the general to so many of the specialized kinds. We can even use journal entries to record exchange of quantities, not only dollar amounts, as demonstrated above.
Tom and Lynda also inform you that the monthly individual membership fee is $100and that the monthly family membership fee is $160. Hercules offers a 10% discount if amember pays the entire year’s fee in a lump sum. About 180 individuals and 60 families takeadvantage of this offer – these numbers are spread evenly throughout the year. Herculespays for 60% of its purchases during the month of the purchase, and the remainder thenext month. Other variable costs (paid in cash) amount to $25 per month for each individualmembership and $45 per month for each family membership. Hercules also incurs$41,000 (which includes $12,500 in depreciation) toward fixed costs each month. Finally,Tom and Lynda inform you that they have to pay $20,000 toward the purchase of newequipment in September, and that they take out $15,000 each month as their profit. Finally,Hercules began September with a cash balance of $6,000.Required:What is Hercules’ cash budget for September?
Answer:
Net Cash $2,170
Explanation:
Cash Budget for September:
Beginning Balance $6,000
Individual membership fee revenue $1,350
Family membership fee revenue $720
Less:Variable Cost Individual ($25 * 15) $375
Less:Variable Cost Family ($25 * 5) $125
Less:Purchase of Machine $20,000
Less:Fixed cost $41,000
Net Cash $2,170
Individual membership fee revenue
$100 * 90% * 180 = 16,200 per year
16,200 / 12 = 1,350 per month.
Memberships per month = 180/12 = 15
Family membership fee revenue
$160 * 90% * 60 = 8,640 per year
8,640 / 12 = 720 per month.
Memberships per month = 60/12 = 5
A stock has a beta of 1.28, the expected return on the market is 12 percent, and the risk-free rate is 4.5 percent. What must the expected return on this stock be? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer:
Expected return on stock =14.1 0%
Explanation:
The Capital Asset pricing Model (CAPM) can be used to determined the expected return on the stock.
According to the Capital Asset pricing Model the expected return on stock is dependent on the level of reaction of the the stock to changes in the return on a market portfolio.
These changes are captured as systematic risk. The magnitude by which a stock is affected by systematic risk is measured by beta.
Under CAPM, Ke= Rf + β(Rm-Rf)
Rf-risk-free rate (treasury bill rate), β= Beta, Rm= Return on market, Ke-return on stock
Using this model, we can work out the return on stock as follows:
DATA
Ke-?
Rf- 4.5%
β-1.2 8
Rm- 12%
Ke = 4.5% + 1.28× (12-4.5)%=14.1 0%
Expected return on stock =14.1 0%
Given money demand, by how much would the Moola central bank need to change the money supply to close the output gap?
Answer:
A. 5%
B. $20
C.-$20
D. $100 increase
E.$2
Explanation:
a. Calculation for the equilibrium interest rate in Moola
When we look at the table we would actually see that Money supply amount of $500 equal the Money demand amount of $500 which means that the equilibrium interest rate will be 5 percent.
b. The level of investment at the equilibrium interest rate.
Since we have 5% as the equilibrium interest rate which means that the investment at the equilibrium interest rate will be $20.
c. If we look at table we are going to see that the potential GDP of the amount of $330 and the actual GDP of the amount of $350 are beside the interest rate of 5 percent and we could as well see that actual GDP is lower than potential GDP which means that there is negative recessionary GDP gap.
Hence,
Recessionary GDP gap= Actual GDP - Potential GDP
Recessional GDP gap=Actual GDP $330- Potential GDP=-$20
Therefore-$20 will be the recessionary GDP gap.
d. In order for us to eliminate the recessionary gap, so that actual GDP amount can equal potential GDP , this means we have to increase the money supply to the amount of $600 which will inturn lead to an increase of $100
e. Calculation for the expenditure multiplier,
Expenditure multiplier=(Potential GDP $350-Actual GDP $330)/($20-$10)
Expenditure multiplier=$20/10
Expenditure multiplier=$2
Therefore the Expenditure multiplier will be $2
The question is incomplete as the table is not given.
In economics, demand and supply are the most important factors for any business to analyze the market. There is an inverse relationship between demand and supply. If the demand is high and supply is low then there will be higher prices of the goods.
The Moola central bank needs to change the supply of money by increasing $100 to close the output gap.
Reason:
In order to make the actual GDP amount to be equal to the potential GDP, that means by increasing the money supply of $600 will give the effect of $100 for covering the gap.
To know more about demand and supply, refer to the link:
https://brainly.com/question/14741584
The owner of a leased property conveys possession of the property to the tenant providing them with uninterrupted us of the property without interference from the owner. This is known as
Answer:
Quiet enjoyment
Explanation:
Quiet enjoyment is a clause in lease agreement that provides a guarantee that the tenant will occupy the property in peace without interference from any other claimants or the landlord.
For example this clause protects a tenant from being removed from a property by someone of higher rank or authority like an agent.
The law recognises quiet enjoyment even when it is not stated explicitly in a lease agreement. It is assumed that every tenant has a right to quiet enjoyment
The statement of cash flows reports all but which of the following: Multiple Choice The financial position of the company at the end of the accounting period. Cash flows from financing activities. Cash flows from operating activities. Cash flows from investing activities. Significant noncash financing and investing activities.
Answer:
The financial position of the company at the end of the accounting period.
Explanation:
The cash flow statement is the statement that includes all the cash payment and cash receipts transactions held in the business. There are mainly three types of activities i.e operating activities, investing activities, and the financing activities
Also, it involves Significant noncash financing and investing activities.
but it does not reported the financial position of the business at the end of the accounting period
Hence, the first option is correct
Barb bought a house with 20% down and the rest financed by a 30-year mortgage with monthly payments calculated at a nominal annual rate of interest 8.4% compounded monthly. She notices that one-third of the way through the mortgage she will still owe 200,000. Determine the purchase price of the house.
Answer:
$282,706
Explanation:
Calculation to Determine the purchase price of the house
First step
In order for us to determine the purchase price of the house we would be using TVM Calculation to find the PMT
Hence,
PMT =
PV = 200,000
FV = 0
N = 240
I = 0.084/12
Thus,PMT = $1,723.01
The Second step will be to Calculate the Loan Amount Using TVM Calculation,
PV =
FV = 0
PMT = -1,723.01
N = 360
I = 0.084/12
Thus, PV = $226,164.98
Last step is to Determine the purchase price of the house
Using this formula
Purchase price=PV/(100%-20% down)
Let plug in the formula
Purchase price =226,164.98/(0.80)
Purchase price = $282,706
Therefore the purchase price of the house will be $282,706
A company would like to evaluate two incentive schemes that take effect once the worker exceeds standard performance. In the first case the benefits are split 30% to the worker and 70% to the company up to 120% performance. If the worker exceeds 120% performance, all of the earnings go to the worker. In the second case, all earnings beyond standard performance are split 50/50 between the worker and the company.
a. Plot the earnings for each scheme.
b. Derive the equations for worker earnings and normalized unit labor costs for each scheme
c. Find the point at which the two plans break even.
d. Which do you think would the company prefer?
Answer:
B) plan 1 : worker earning y = x - 0.14 , unit labor = [tex]\frac{x-(0.14)}{x}[/tex]
plan 2 : worker earning y = 0.5x + 0.5, unit labor = (0.5x + 0.5) / x
C) At 128%
D ) plan D IS PREFERABLE
Explanation:
In the first case Benefits are split : 30% to worker , 70% to company ( up to 120% ) performance
In the second case benefits 50% go to the worker and 50% go the company
B) The equations for worker earnings and normalized unit labor costs for each scheme
Plan 1 :
y ( percentage earning of worker ) = 1
unit labor cost = Y / 1
y = 0 - 30
unit labor = 0.3 / x
y = x - 0.14 therefore unit labor = [tex]\frac{x-(0.14)}{x}[/tex]
plan 2 :
y ( percentage earning of worker ) = 1, y = 0.5x + 0.5
unit labor cost : Y / 1 = (0.5x + 0.5) / x
C ) The point at which the two plans break even
0.5x + 0.5 = x - 0.14
0.5 + 0.14 = x - 0.5x
0.64 = x(1 - 0.5 )
x = 0.64 / 0.5 = 1.28 = 128%
D) The company would prefer plan 1
Jim and Kay Ross contributed to the support of their two children, Dale and Kim, and Jim's widowed parent, Grant. During the year, Dale, a 19-year-old full-time college student, earned $5,500 as a babysitter. Kim, a 23-year-old bank teller, earned $12,000. Grant received $5,000 in dividend income and $4,000 in nontaxable Social Security benefits (dividends, but not social security benefits, will be included in Grant's gross income). Kim and Grant currently reside with Jim and Kay. Dale's main place of residence is with Jim and Kay, and he is currently on a temporary absence to attend school. How many dependents can Jim and Kay claim on their joint income tax return?
Answer: 1 dependent
Explanation:
Only Dale can be claimed as a dependent as he is a qualifying child who is under 24 and is a full time student.
Kim cannot be claimed as a dependent as Kim is above the age of 19. To be a qualifying child for dependency, Kim would have to be less than 19 or less than 24 were Kim a full time student.
Grant also does not qualify as a dependent under the Qualifying relative designation as Grant's gross income of $5,000 exceeds the limit of $4,200 that Grant would have to be making less than in 2019 to be claimed as a qualifying relative.
In September 2009 a U.S. investor chooses to invest $500,000 in German equity securities at a then current spot rate of $1.30/euro. At the end of one year the spot rate is $1.35/euro.
1. Refer to Instruction, how many euros will the U.S. investor acquire with his initial $500,000 investment?
A) €650,000B) €370,370C) €500,000D) €384,6152. Refer to Instruction, at an average price of €60/share, how many shares of stock will the investor be able to purchase?A) 8333 sharesB) 6410 sharesC) 6173 sharesD) 10,833 shares3. Refer to Instruction, at the end of the year the investor sells his stock that now has an average price per share of €57. What is the investor's average rate of return before converting the stock back into dollars?A) 5.0%B) -3.0%C) -5.0%D) 3.0%
4. Refer to Instruction, at the end of the year the investor sells his stock that now has an average price per share of €57. What is the investor's average rate of return after converting the stock back into dollars?A) -1.35%B) 5.0%C) -5.0%D) -7.24%
Answer:
1. Refer to Instruction, how many euros will the U.S. investor acquire with his initial $500,000 investment?
D) €384,615$500,000 / $1.30 = €384,615.38
2. Refer to Instruction, at an average price of €60/share, how many shares of stock will the investor be able to purchase?
B) 6410 shares€384,615 / €60 = 6,410.25
3. Refer to Instruction, at the end of the year the investor sells his stock that now has an average price per share of €57. What is the investor's average rate of return before converting the stock back into dollars?
C) -5.0%(€57 - €60) / €60 = -5%
4. Refer to Instruction, at the end of the year the investor sells his stock that now has an average price per share of €57. What is the investor's average rate of return after converting the stock back into dollars?
A) -1.35%[(6,410 x €57) + €15] x $1.35 = $493,269.75
($493,269.75 - $500,000) / $500,000 = -1.35%
Buyers want to pay the lowest possible price, so why would they be willing to pay more than $12 for a pizza?
Read the scenario, and answer the question.You are a manager attending a presentation about conflict resolution. You notice that the speaker seems at ease and comfortable in front of a large audience. You are to talk to the speaker and ask her what she does to be so relaxed. After the presentation, you decide Choose the best response the speaker could give in the scenario above.
a. I read from my notes and make sure the room is darkened.
b. I just go into a room and say what is on my mind.
c. I rehearse repeatedly and practice stress reduction techniques
Answer: I rehearse repeatedly and practice stress reduction techniques
Explanation:
The best response that the speaker can give will be that "rehearse repeatedly and practice stress reduction techniques".
By rehearsing repeatedly and practice stress reduction techniques, one will be at ease and comfortable in front of a large audience.
NIKE, Inc., is the best-known sports shoe, apparel, and equipment company in the world because of its association with athletes such as LeBron James, Roger Federer, and Madison Keys. Some of the items included in its recent statement of cash flows presented using the indirect method are listed here. Indicate whether each item is disclosed in the operating activities (O), investing activities (I), or financing activities (F) section of the statement or use (NA) if the item does not appear on the statement.1. Additions to long-term debt.2. Depreciation3. Additions to equipment.4. Increase (decrease) in notes payable. (The amount is owed to financial institutions.)5. (Increase) decrease in other current assets6. Cash received from disposal of equipment.7. Reductions in long-term debt.8. Issuance of stock.9. (Increase) decrease in inventory.10. Net income
Answer and Explanation:
The statement of cash flow involves 3 kinds of activities mentioned below:
1. Operating activities: Many transactions are based that affect the working capital following net income. It would increase the growth in current assets and a decrease in current liabilities, whereas adding the decrease in current properties and an increase in current liabilities.
This should mitigate any work capital shifts. Furthermore, the cost of depreciation is attributed to the net income and the loss on the sale of assets is attributed while the benefit on the sale of assets is deducted
2. Investing: it monitors activities involving the acquisition and selling of long-term assets. The purchase is cash outflow while the selling is cash inflow
3. Financing activities: it monitors activities that impact on the shareholders' long-term debt and equity balance. Share issue is cash inflow whereas cash outflows are redemption and dividend.
Therefore based on the above explanation, the classification is as follows
1 Financing Activity
2. Operating activity
3 Investing activity
4 Financing Activity
5 Operating activity
6 Investing activity
7 Financing Activity
8 Financing Activity
9 Operating activity
10 Operating activity
Bi-Lo Traders is considering a project that will produce sales of $33,300 and have costs of $19,700. Taxes will be $3,500 and the depreciation expense will be $1,900. An initial cash outlay of $1,600 is required for net working capital. What is the project's operating cash flow?
Answer: $10,100
Explanation:
Based on the information that have been given in the question, the project's operating cash flow goes thus:
Sales. $33,300
Less: cost. $19,700
Less: depreciation. $1,900
Profit before tax $11,700
Less: tax. $3500
Net profit. $8200
Add: depreciation. $1900
Operating cash flow. $10,100
Steel Tariffs Appear to Have Backfired on Bush
President Bush set aside his free-trade principles last year and imposed heavy tariffs on imported steel to help out struggling mills in Pennsylvania and West Virginia. Some economists say the tariffs may have cost more jobs than they saved, by driving up costs for automakers and other steel users.
Source: The Washington Post, September 19, 2003
Explain how a high tariff on steel imports can help domestic steel producers.
Explain how a high tariff on steel imports can harm steel users.
When a high tariff is placed on steel imports, U.S. steel producers produce______steel and they pay a ________price.
A. less; higher
B. more; lower
C. less; lower
D. more; higher
Answer:
Steel industry in the United States of America has had its up and down over the years. this is especially going by the fact that it is cheaper to import steel from outside America than to buy those produced in U.S. However, high tariff on steel import would enable the domestic steel producers to meet their obligation as well as recoup their investments in the steel industry in U.S.
For example, most construction based organisation would prefer to buy from domestic steel producer if the price and tariff of imported ones makes it extremely difficult to purchase.
On the other-hand, the high tariff placed on steel import could also harm steel users due to the fact that, the quality of steel which they buy from outside U.S would no longer be available to them.
Also, they would be forced to buy at whatever price from domestic producers whether they had need for the steel or not due to high tariff on imported ones.
When a high tariff is placed on steel imports, U.S. steel producers produce more steel and they pay a higher price.
Answer: D. more; higher
Explanation:
Entries for Stock Investments, Dividends, and Sale of Stock Seamus Industries Inc. buys and sells investments as part of its ongoing cash management. The following investment transactions were completed during the year:
Feb. 24 Acquired 1,000 shares of Tett Co. stock for $85 per share plus a $150 brokerage commission.
May 16 Acquired 2,500 shares of Issacson Co. stock for $36 per share plus a $100 commission.
July 14 Sold 400 shares of Tett Co. stock for $100 per share less a $75 brokerage commission.
Aug. 12 Sold 750 shares of Issacson Co. stock for $32.50 per share less an $80 brokerage commission.
Oct. 31 Received dividends of $0.40 per share on Tett Co. stock.
Required:
Journalize the entries for these transactions.
Answer:
Date Account Titles and Explanation Debit$ Credit$
Feb 24. Investment - Company T 85,150
Cash {(1,000 * $85) + $150} 85.150
(To record the purchase of stock)
May 16 Investment - Company I 90,100
Cash{(2,500 * $36) + $100) 90,100
(To record the purchase of stock)
June 14 Cash{(400 * $100) - $75} 39,925
Investment {($85,150 * (400/1,000)} 34,060
Gain on sales of investment 5,865
(To record the sale of stock)
Aug 12. Cash {(750 * $32.50) - $80} 24,295
Loss on sale of investment 2,735
Investment {$90,100 * (750/1,500)} 27,030
(To record the sale of stock)
Oct 31 Cash ($0.4 * 600) 240
Dividend income 240
(To record dividend income)
Investing activities on the statement of cash flows generate cash inflows and outflows related to borrowing from and repaying principal to creditors and completing transactions with the company’s owners such as selling or repurchasing shares of common stocks and paying dividends.
A. True
B. False
Answer: False
Explanation:
The cash flow from investing activities is a cash flow section that shows cash generated or the cash that is spent which relates to activities involving investment and this include buying physical assets, the investments in securities, or sale of assets or securities.
Therefore, the above analysis I the question is wrong.
Project A Project B
Time 0 -10,000 -5,000
Time 1 4,000 3,000
Time 2 3,000 2,000
Time 3 10,000 2,000
If WiseGuy Inc. uses payback period rule to choose projects, which of the projects (Project A or Project B) will rank highest?
a) Project A
b) Project B
c) Project A and B have the same ranking
d) Cannot calculate a payback period without a discount rate
Answer: b) Project B
Explanation:
Payback period works by checking how long it will take a project to pay back the initial amount invested in it. Project A.
Project A
Payback Period = Year before Payback happens + Amount left till payback/Cash inflow in year of payback
= Time 1 + Time 2
= 4,000 + 3,000
= $7,000
This amount is not enough to cover the investment of $10,000 so the investment will be paid in Time 3 and remains $3,000.
= 2 + 3,000/10,000
= 2.3 Times
Project B
= Time 1 + Time 2
= 3,000 + 2,000
= $5,000
At the end of Time 2, Project B has paid off its initial investment of $5,000. Its Payback period is 2 Times. This is lower than Project A so this project will rank higher.
Explain whether each of the following events shifts the short-run aggregate-supply curve, the aggregate-demand curve, both, and neither. Households decide to save a larger share of their income. Florida orange groves suffer a prolonged period of below-freezing temperatures. Increased job opportunities overseas cause many people to leave the country.
Answer:
1. Households decide to save a larger share of their income. - Aggregate-Demand Curve
If households in the economy started saving more of their money then this would leave less money for consumption which is one of the components of Aggregate Demand. When Consumption decreases so also will Aggregate Demand thereby shifting the Aggregate-Demand Curve to the left.
2. Florida orange groves suffer a prolonged period of below-freezing temperatures. - Short-run Aggregate Supply Curve
With the Florida Orange Groves suffering from below freezing temperatures, the oranges will not grow as much leading to a poor harvest. This will reduce the supply of oranges in the economy and shift the short-run Aggregate supply curve left.
3. Increased job opportunities overseas cause many people to leave the country. Both Aggregate-Demand Curve and Short-run Aggregate Supply Curve.
With less people in the Economy, there will be less people spending on goods and services which will cause the Aggregate Demand curve to shift to the left.
Also with people leaving the country, the labor force will decrease which will mean that less people are available to produce goods and services so the short-run Aggregate supply curve will shift left.
The face value is $81,000, the stated rate is 10%, and the term of the bond is eight years. The bond pays interest semiannually. At the time of issue, the market rate is 8%. What is the present value of the bond at the market rate?
Present value of $1:
4% 5% 6% 7% 8%
15 0.555 0.481 0.417 0.362 0.315
16 0.534 0.458 0.394 0.339 0.292
17 0.513 0.436 0.371 0.317 0.270
18 0.494 0.416 0.350 0.296 0.250
19 0.475 0.396 0.331 0.277 0.232
a. $91,561
b. $47,773
c. $43,673
d. $84,788
Answer:
The Present Value of the bond at the market rate = $90,438.36
Explanation:
The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV).
Value of Bond = PV of interest + PV of RV
The value of bond can be worked out as follows:
Step 1
PV of interest payments
Semi annul interest payment
= 10% × 81000 × 1/2 = 4050
Semi-annual yield = 8%/2= 4 % per six months
Total period to maturity (in months)
= (2 × 8) = 16 periods (Note the bond term is 8 yeras)
PV of interest = 4050 × (1-1.04^(-16))/0.04 = 47,191.79
Step 2
PV of Redemption Value
Assuming a redemption value equals to the nominal value =
PV of RV = 81,000 × 1.04^-16 = 43,246.56
Step 3 :Total Present Value
Total prent value = 43,246.56 + 47,191.79721 = 90,438.36
The Present Value of the bond at the market rate = $90,438.36
E Corporation produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 44,000 units per month is as follows:
Per Unit
Direct materials $44.60
Direct labor $8.50
Variable manufacturing overhead $1.50
Fixed manufacturing overhead $18.10
Variable selling & administrative expense $2.60
Fixed selling & administrative expense $12.00
The normal selling price of the product is $94.10 per unit. An order has been received from an overseas customer for 2,400 units to be delivered this month at a special discounted price. This order would not change the total amount of the company's fixed costs. The variable selling and administrative expense would be $1.60 less per unit on this order than on normal sales.
Suppose there is ample idle capacity to produce the units required by the overseas customer and the special discounted price on the special order is $80.40 per unit. The monthly financial advantage (disadvantage) for the company as a result of accepting this special order should be:_______
Answer:
financial advantage for accepting special order = $59,520
Explanation:
relevant production costs for special order (2,400 units):
direct materials $44.60
direct labor $8.50
variable manufacturing overhead $1.50
variable selling & administrative expense $1
total costs per unit = $55.60
total revenue from special order = 2,400 x $80.40 = $192,960
relevant costs associated to special order = 2,400 x $55.60 = ($133,440)
financial advantage for accepting special order = $59,520
A company's strategy evolves over time as a consequence of : Select one: a. The need to keep strategy in step with changing market conditions and changing customer needs and expectations b. The proactive efforts of company managers to fine-tune and improve one or more pieces of the strategy c. The need to respond to the newly-initiated actions and competitive moves of rival firms d. All of the above
Answer:
The correct answer is the option D: All of the above.
Explanation:
To begin with, a company's primary strategy that focus on completing the main goal of the company of increasing the sales and with that the profits is considered to be the most important element that the business has in order to keep existing and therefore that as the time passes and the context around the organization changes, that strategy evolves. And there are a lot of reasones why that could happen, including the market conditions that vary over the pass of years as well as the need to react to the competitors decisions in order to keep fighting for the market. And other consequence that may help the change of the strategy is the effort itself of managers to make the strategy better as ideas turn to came out.
An investor buys a total of 360 shares-year bond with a $1,000 face value for $800. The bond's coupon rate is 8% and interest payments are made semi-annually. Waht are the bond's yield to maturity and effective annual yield?
Answer:
YTM (Annual( = 10.13%
Effective Annual Yield =10.40%
Explanation:
In order to calculate Yield to maturity, we need to use yield to maturity formula.
Formula: Yield to maturity = [C +(F – P)/n]/(F + P)/2
Where,
C = Coupon amount
F = Face value
n = number of periods
P = Current price
Data
C = 1000 x 8 % = 80
C (6months) = 80 x 6/12 = 40
F = $1000
n = 30 years
P = $800
Solution
YTM = 40 + (1000 – 800/30)/(1000 + 800)/2
YTM = 40 + (200/30)/(1800/2 )
YTM = 40 +( 200/30)/900
YTM = 5.068 semiannual
YTM (Annual( = 10.13%
Effective Annual Yield = [tex](\frac{1+0.1014}{2})^{2-1}[/tex]
Effective Annual Yield =10.40%
a. What were HCA's liabilities-to-assets ratios and times-interest-earned ratios in the years 2005 through 2009?
b. What percentage decline in EBIT could HCA have suffered each year between 2005 and 2009 before the company would have been unable to make interest payments out of operating earnings, where operating earnings is defined as EBIT?
c. How volatile have HCA's cash flows been over the period 2005 - 2009?
d. Calculate HCA's return on invested capital (ROIC) in the years 2005 - 2009.
HCA INC
ANNUAL INCOME STATEMENT
($ MILLIONS, EXCEPT PER SHARE)
Dec09 Dec08 Dec07 Dec06 Dec05
Sales $ 30,052 $ 28,374 $ 26,858 $ 25,477 $ 24,455
Cost of Goods Sold 24,826 24,023 22,480 21,448 20,391
Gross Profit 5,226 4,351 4,378 4,029 4,064
Depreciation 1,425 1,416 1,426 1,391 1,374
Operating Profit 3,801 2,935 2,952 2,638 2,690
Interest Expense 1,987 2,021 2,215 955 655
Non-Operating Income/Expense 188 256 661 179 412
Pretax Income 2,002 1,170 1,398 1,862 2,327
Total Income Taxes 627 268 316 625 725
Minority Interest 321 229 208 201 178
Net Income $ 1,054 $ 673 $ 874 $ 1,036 $ 1,424
ANNUAL BALANCE SHEET
ASSETS Dec09 Dec08 Dec07 Dec06 Dec05
Cash & Equivalents $ 312 $ 465 $ 393 $ 634 $ 336
Net Receivables 3,692 3,780 3,895 3,705 3,332
Inventories 802 737 710 669 616
Other Current Assets 1,771 1,319 1,207 1,070 931
Total Current Assets 6,577 6,301 6,205 6,078 5,215
Gross Plant, Property & Equipment 24,669 23,714 22,579 21,907 20,818
Accumulated Depreciation 13,242 12,185 11,137 10,238 9,439
Net Plant, Property & Equipment 11,427 11,529 11,442 11,669 11,379
Investments at Equity 853 842 688 679 627
Other Investments 1,166 1,422 1,669 1,886 2,134
Intangibles 2,577 2,580 2,629 2,601 2,626
Deferred Charges 418 458 539 614 85
Other Assets 1,113 1,148 853 148 159
TOTAL ASSETS 24,131 24,280 24,025 23,675 22,225
LIABILITIES
Long Term Debt Due In One Year 846 404 308 293 586
Accounts Payable 1,460 1,370 1,370 1,415 1,484
Taxes Payable - 224 190 - -
Accrued Expenses 2,007 1,912 1,981 1,868 1,825
Total Current Liabilities 4,313 3,910 3,849 3,576 3,895
Long Term Debt 24,824 26,585 27,000 28,115 9,889
Deferred Taxes - - - 390 830
Minority Interest 1,008 995 938 907 828
Other Liabilities 2,825 2,890 2,612 1,936 1,920
TOTAL LIABILITIES 32,970 34,380 34,399 34,924 17,362
Preferred Stock 147 155 164 125 -
Common Stock 1 1 1 1 4
Capital Surplus 226 165 112 - -
Retained Earnings (9,213) (10,421) (10,651) (11,375) 4,859
Common Equity (8,986) (10,255) (10,538) (11,374) 4,863
TOTAL EQUITY (8,839) (10,100) (10,374) (11,249) 4,863
TOTAL LIABILITIES & EQUITY $ 24,131 $ 24,280 $ 24,025 $ 23,675 $ 22,225
Answer:
HCA
a. HCA's Liabilities-to-assets ratios and times-interest-earned ratios in the years 2005 through 2009:
1. Liabilities-to-assets ratios = Total liabilities/Total Assets
Dec. 09 Dec. 08 Dec. 07 Dec. 06 Dec. 05
136.63% 141.60% 143.18% 147.51% 78.12%
2. Times-interest-earned ratios = EBIT/Interest Expense
Dec. 09 Dec. 08 Dec. 07 Dec. 06 Dec. 05
1.91 times 1.45 times 1.33 times 2.76 times 4.11 times
b. The percentage decline in EBIT that HCA could have suffered each year between 2005 and 2009 to make it unable to make interest payments out its operating earnings, where operating earnings is defined as EBIT:
Dec. 09 Dec. 08 Dec. 07 Dec. 06 Dec. 05
191% 145% 133% 276% 411%
c. The volatility of HCA's cash flows over the period 2005 to 2009:
The standard deviation of the cash flows (cash and cash equivalents) is 115, showing that there is so much volatility in the cash flows.
d. HCA's return on invested capital (ROIC) in the years 2005 - 2009:
= Net Income - Dividend / Total Liabilities + Equity x 100
ROIC = 4.37% 2.77% 3.64% 4.38% 6.41%
Explanation:
a) Data and Calculations:
HCA INC
ANNUAL INCOME STATEMENT
($ MILLIONS, EXCEPT PER SHARE)
Dec. 09 Dec. 08 Dec. 07 Dec. 06 Dec. 05
Sales $ 30,052 $ 28,374 $ 26,858 $ 25,477 $ 24,455
Cost of Goods Sold 24,826 24,023 22,480 21,448 20,391
Gross Profit 5,226 4,351 4,378 4,029 4,064
Depreciation 1,425 1,416 1,426 1,391 1,374
Operating Profit 3,801 2,935 2,952 2,638 2,690
Interest Expense 1,987 2,021 2,215 955 655
Non-Operating
Income/Expense 188 256 661 179 412
Pretax Income 2,002 1,170 1,398 1,862 2,327
Total Income Taxes 627 268 316 625 725
Minority Interest 321 229 208 201 178
Net Income $ 1,054 $ 673 $ 874 $ 1,036 $ 1,424
ANNUAL BALANCE SHEET
ASSETS Dec. 09 Dec. 08 Dec. 07 Dec. 06 Dec. 05
Cash & Equivalents $ 312 $ 465 $ 393 $ 634 $ 336
Net Receivables 3,692 3,780 3,895 3,705 3,332
Inventories 802 737 710 669 616
Other Current
Assets 1,771 1,319 1,207 1,070 931
Total Current
Assets 6,577 6,301 6,205 6,078 5,215
Gross Plant, Property
& Equipment 24,669 23,714 22,579 21,907 20,818
Accumulated
Depreciation 13,242 12,185 11,137 10,238 9,439
Net Plant, Property
& Equipment 11,427 11,529 11,442 11,669 11,379
Investments
at Equity 853 842 688 679 627
Other Investments 1,166 1,422 1,669 1,886 2,134
Intangibles 2,577 2,580 2,629 2,601 2,626
Deferred Charges 418 458 539 614 85
Other Assets 1,113 1,148 853 148 159
TOTAL ASSETS 24,131 24,280 24,025 23,675 22,225
LIABILITIES
Long Term Debt Due
In One Year 846 404 308 293 586
Accounts
Payable 1,460 1,370 1,370 1,415 1,484
Taxes Payable - 224 190 - -
Accrued
Expenses 2,007 1,912 1,981 1,868 1,825
Total Current
Liabilities 4,313 3,910 3,849 3,576 3,895
Long Term
Debt 24,824 26,585 27,000 28,115 9,889
Deferred Taxes - - - 390 830
Minority
Interest 1,008 995 938 907 828
Other
Liabilities 2,825 2,890 2,612 1,936 1,920
TOTAL LIA-
BILITIES 32,970 34,380 34,399 34,924 17,362
Preferred
Stock 147 155 164 125 -
Common
Stock 1 1 1 1 4
Capital
Surplus 226 165 112 - -
Retained
Earnings (9,213) (10,421) (10,651) (11,375) 4,859
Common
Equity (8,986) (10,255) (10,538) (11,374) 4,863
TOTAL
EQUITY (8,839) (10,100) (10,374) (11,249) 4,863
TOTAL LIABILITIES &
EQUITY $24,131 $ 24,280 $ 24,025 $ 23,675 $ 22,225
ii) Liabilities-to-assets ratio:
Dec. 09 Dec. 08 Dec. 07 Dec. 06 Dec. 05
Liabilities 32,970 34,380 34,399 34,924 17,362
Assets 24,131 24,280 24,025 23,675 22,225
136.63% 141.60% 143.18% 147.51% 78.12%
iii) Times Interest Earned:
Operating Profit 3,801 2,935 2,952 2,638 2,690
Interest Expense 1,987 2,021 2,215 955 655
1.91 times 1.45 times 1.33 times 2.76 times 4.11 times
iv) Volatility: This is the degree of change of the cash flows, showing its tendency to change from one period to the other. As calculated, the volatility is very high, showing that the cash flows have higher risk of change. See below:
Dec. 09 Dec. 08 Dec. 07 Dec. 06 Dec. 05
Cash & Equivalents $ 312 $ 465 $ 393 $ 634 $ 336
Mean = $428
Deviation from mean -116 37 -35 206 -92
Squared deviation 13,456 1,369 1,225 42,436 8,464
Sum of squared deviation = 66,950
Mean = 13,390
Square root of mean or Standard Deviation = 115
v) Return on Invested Capital = Net Income/Total liabilities + Equity
Dec. 09 Dec. 08 Dec. 07 Dec. 06 Dec. 05
Net Income $ 1,054 $ 673 $ 874 $ 1,036 $ 1,424
TOTAL LIABILITIES &
EQUITY $24,131 $ 24,280 $ 24,025 $ 23,675 $ 22,225
ROIC = 4.37% 2.77% 3.64% 4.38% 6.41%
How much will be in the Prepaid Insurance account at the end of the year, after the adjusting entries have been prepared and posted
Answer: $8,400
Explanation:
The $9,600 is for 2 years in advance. This can be apportioned per month at a rate of;
= 9,600/24
= $400 per month.
October to the end of the year is 3 months so;
= 400 * 3
= $1,200 will be recorded for the year.
Prepaid Insurance will therefore reduce to;
= 9,600 - 1,200
= $8,400
At the beginning of 2023, the Mackinac Company purchased a machine for $510,000 (salvage value of $60,000) that had a useful life of 6 years. The bookkeeper used straight-line depreciation, but failed to deduct the salvage value in computing the depreciation base. Depreciation has been recorded through 2025. The errors were discovered on 1/10/26; the 2025 books are still open. Correcting journal entries would include what entry to 1/1/25 Retained Earnings?
Answer:
$10,000 credited
Explanation:
DATA
Machine cost = 510,000
Salvage value = $60,000
Useful life = 6 years
Depreciation = $60,000/6years
Depreciation = $10,000
It means that we have overstated depreciation expense for the year with the amount of $10,000.
Retained earnings will be credited by $10,000 As the depreciation expense was overstated mistakenly by $10,000
If a company reorganizes its operation to gain efficiency, the cost associated with this reorganization is classified as
Answer: Restructuring cost
Explanation:
Restructuring cost could be described as making expenses on rejuvenating or reviving or rebranding the company through spendings, which affects most of it's mode of operations, brings a change and innovation and ways to improve existing methods. This is capital intensive due to the work and changes required during the process.
Sheffield Corp. budgeted costs for 45000 linear feet of block are: Fixed manufacturing costs$24000 per month Variable manufacturing costs$16 per linear foot Sheffield installed 30000 linear feet of block during March. How much is budgeted total manufacturing costs in March
Answer:
Manufacturing cost =$744,000
Explanation:
The total manufacturing cost is the sum of the variable manufacturing cost and the fixed manufacturing cost.
Manufacturing cost = variable cost + Fixed cost
This can be represent using the formula below
Y = bx + a
Y -Manufacturing cost
b- Variable cost per unit
a- Fixed cost
X- number of units
Y = (45,000× 16) + 24,000 = $744000
Budgeted Manufacturing cost =$744,000
Answer:
The answer is $504,000
Explanation:
Budgeted total manufacturing cost is the total variable cost and fixed cost the company had calculated for the production of a particular product.
Budgeted total manufacturing costs in March is:
(Variable manufacturing cost x Linear feet installed) + Fixed manufacturing cost
($16 x 30,000 linear feet) + $24,000
= $480,000 + $24,000
=$504,000
