Answer:
D1 is $3.72
Explanation:
The constant growth model of Dividend discount model approach (DDM) is used to calculate the fair price per share of a stock today when the dividends of a stock are growing at a constant rate forever. It values the stock based on the present value of the expected future dividends. The formula for price per share today is,
P0 = D1 / r - g
WHERE,
D1 is dividend expected for the next periodr is the required rate of return on the stockg is the growth rate in dividendsPlugging the values of the available variables, we calculate the value of D1 to be,
87.5 = D1 / (0.1025 - 0.06)
87.5 * 0.0425 = D1
D1 = $3.71875 rounded off to $3.72
Lease A does not contain a bargain purchase option, but the lease term is equal to 90% of the estimated economic life of the leased property. Lease B does not transfer ownership of the property to the lessee by the end of the lease term, but the lease term is equal to 75% of the estimated economic life of the leased property. Based on this information alone, how should the lessee classify these leases
Answer: Lease A Capital lease
Lease B Capital lease
Explanation:
A Capital lease is known as a lease agreement in which the lessor ( someone giving out the property) agrees to transfer the ownership rights to the lessee ( someone acquiring or needing the services of the property). After completion of the agreed lease period.
In a capital lease, the lessor is usually mandated to transfer the ownership rights of the asset to the lessee upon the end of the agreed lease term between both parties.
You are in talks to settle a potential lawsuit. The defendant has offered to make annual payments of $35,000, $39,000, $80,000, and $120,000 to you each year over the next four years, respectively. All payments will be made at the end of the year. If the appropriate interest rate is 5.7 percent, what is the value of the settlement offer today
Answer:
The value of the settlement today = $231,897.79
Explanation:
The value of the settlement today is the sum of the present value (PV) of cash inflows discounted at the discount rate of 5.7 %.
Year PV
1 35,000 × 1.057^(-1) = 33112.58
2 39,000× 1.057^(-2) = 34907.16
3. 80,000× 1.057^(-3) = 67743.09
4 120,000 × 1.057^(-4) =96134.94
The Pv of the total cash in flow =33,112.58 + 34,907.17 + 67,743.09 + 96,134.95 = 231,897.79
The value of the settlement today = $231,897.79
You invested $21000 in two accounts paying 5 % and 9 % annual interest, respectively. If the total interest earned for the year was $ 1610 comma how much was invested at each rate?
Answer:
$7,000 is invested at 5% interest
$14,000 is invested at 9% interest
Explanation:
Let A represent the amount of interest that was invested at 5%
= 5/100
= 0.05
Then 21,000-A will represent the amount that was invested at 9%
= 9/100
= 0.09
The amount invested at 5% can be calculated as follows
0.05A + 0.09(21,000-A)= 1,610
0.05A + 1,890 -0.09A= 1,610
Collect the like terms
0.05A - 0.09A = 1,610-1,890
-0.04A= -280
Divide both sides by the coefficient of A which is -0.04
-0.04A/-0.04= -280/-0.04
A= $7,000
Recall that 21,000-A represents the amount invested at 9%, since we have gotten the value of A then, It can be inputed into the expression
= $21,000-$7,000
= $14,000
Hence $7,000 was invested at 5% interest and $14,000 was invested at 9% interest.
Bret and Jay finalized their divorced in 2018. The divorce decree provides that Bret must pay Jay $20,000 per year until their child turns 18 years old in Year 5, upon which the payments will be reduced to $15,000 until Jay’s death. During Year 2, Bret and Jay agreed that Bret would pay $16,000 directly to Jay and $4,000 to a private school for their child’s tuition. What amount, if any, of these payments should be reported as taxable income in Jay’s Year 2 income tax return?
Answer:
First, it's important to note that the United States of America uses a progressive tax system.
Thus, the amount to be reported as taxable income depends on the method Jay opts for. When tax deductions, you can use the Standard Deduction Method or the Itemized Deduction Method.
Explanation:
The standard deduction basically is a flat-dollar reduction in ones Adjusted Gross Income (AGI). In this method, the reduction one is qualified for depends on their filing status. Various kinds of filing statues include:
Single Married, filing jointly Married, filing separately Head of householdGiven that Jay is now single, the amount she can declare as taxable income is $16,000 - $12,400 which is $3,600.
Under the itemized deduction method, Jay can claim a lot of credits. The more credit she claims, the less tax she'll have to pay. However, based on the question, given that she is the one taking care of the child, she can claim up to 20% to 35% of up to $3,000 of daycare and similar costs for a child under if their child is less than thirteen years of age.
Cheers!
the jackson -timberlake wardrobe co. just paid a dividend of $1.95 per share on its stock, the dividends are expected to grow at a constant rate of 4 percent per year indefinitely. if investors require a return of 10.5 percent on the stock, what is the current price
Answer:
Current Price of the stock is $31.20
Explanation:
Price of the stock is the present value of the future dividends associated with the stock.
As per given data
Dividend = $1.95
Growth rate = 4%
Required rate of return = 10.5%
Current Price of the stock can be determined using following formula
Price of Stock = Dividend ( 1 + growth rate ) / ( Required rate of return - Growth rate )
Price of Stock = $1.95 ( 1 + 4% ) / ( 10.5% - 4% )
Price of Stock = $2.028 / 6.5%
Price of Stock = $31.20
Last year Jain Technologies had $250 million of sales and $100 million of fixed assets, so its Fixed Assets/Sales ratio was 40%. However, its fixed assets were used at only 40% of capacity. Now the company is developing its financial forecast for the coming year. As part of that process, the company wants to set its target Fixed Assets/Sales ratio at the level, it would have had, had it been operating at full capacity. What target Fixed Assets/Sales ratio should the company set
Answer:
16%
Explanation:
The computation of the target fixed assets sales ratio is shown below:
As we know that
Target Fixed asset - Sales ratio is
= Fixed Assets ÷ Full Capacity Sales
where,
Fixed assets is $100 million
And the full capacity sales is
= $250 million × 40%
Now putting these values to the above formula
So, the target fixed asset sales ratio is
= $100 million ÷ $250 million × 40%
= 16%
In general, the better candidates for shortening are: Early tasks opposed to later tasks. Later tasks opposed to early tasks. Burst tasks opposed to merge tasks. Merge tasks opposed to burst tasks.
Answer:
Early tasks opposed to later tasks.
Explanation:
Shortening is a strategic procedure used by project managers to reduce or shorten a project's duration by cutting the duration of critical path tasks.
The rationale behind shortening of a project is basically to have a competitive advantage or edge in the market. In order to compete successfully, project managers are always expected to be spontaneous in bringing their company's goods and services to the market in a flash.
There are two important ways of shortening a particular project, these are;
1. Crashing.
2. Task splitting.
In project management, the longest task is considered to be the most effective and efficient candidate activities to shorten a project's duration.
In general, the better candidates for shortening are early tasks opposed to later tasks. The early start of tasks represents one of the primary date used in project scheduling and it's the earliest date a project manager commences an activity, with respect to all its predecessors and successors.
Early tasks usually involves the use of an easy approach to project kickoff while later tasks uses the difficult approach.
The Green Giant has a 6 percent profit margin and a 37 percent dividend payout ratio. The total asset turnover is 1.2 times and the equity multiplier is 1.4 times. What is the sustainable rate of growth
Answer:
0.0678
Explanation:
Given:
Profit margin = 6% = 0.06
Dividend payout ratio = 37% = 0.37
Total asset turnover = 1.2
Equity multiplier = 1.4
Required:
Find the sustainable rate of growth.
First find the return on equity using the formula: Equity Multiplier × Assets turnover × Profit margin
= 1.4 * 1.2 * 0.06
= 0.1008
Return on equity = 0.1008
To find the sustainable growth, we have the following:
[tex]= \frac{0.1008 (1 - 0.37)}{1 - (0.1008 (1 - 0.37))}[/tex]
[tex]= \frac{0.063504}{1 - 0.063504} = 0.0678[/tex]
Therefore, sustainable growth = 0.0678
Prior to creating a network, it is important to: Identify the party responsible for each activity. Calculate the float for each activity. Understand the activity precedence. Identify all loops through activities.
Answer:
The correct answer to the following question will be Option C (Understand the activity precedence).
Explanation:
Networking is not only useful in the growth of a business or the improvement of one's personal life but could also play an important role throughout the social life benefit of the entire.Professional connections or networks can support one's career in certain aspects, whether someone is taking a job, obtaining a progression, or exploiting a pay raise. Nevertheless, to go through all things, clients, therefore, need to move beyond their usual environment or start socializing in a certain profession.The other given choices are not related to the given situation. So that Option C would be the appropriate one.
Prepare the journal entry to record Zende Company’s issuance of 66,000 shares of $5 par value common stock assuming the shares sell for: $5 cash per share. $6 cash per share.
Answer:
The journal entry to record Zende Company’s issuance of 66,000 shares of $5 par value common stock assuming the shares sell for $5 cash per share would be
Debit Credit
Cash $330,000
Common stock $330,000
The journal entry to record Zende Company’s issuance of 66,000 shares of $5 par value common stock assuming the shares sell for $6 cash per share would be
Debit Credit
Cash $396,000
Common stock $330,000
Paid in capital in excess of par value $66,000
Explanation:
The journal entry to record Zende Company’s issuance of 66,000 shares of $5 par value common stock assuming the shares sell for $5 cash per share would be as follows:
Debit Credit
Cash $330,000
Common stock $330,000
Par values of the share of common stock=$66,000*5
Par values of the share of common stock=$330,000
The journal entry would be prepared by debiting cash and crediting common stock by $330,000
The journal entry to record Zende Company’s issuance of 66,000 shares of $5 par value common stock assuming the shares sell for $6 cash per share would be as follows:
Debit Credit
Cash $396,000
Common stock $330,000
Paid in capital in excess of par value $66,000
cash=66,000*$6
cash=$396,000
Common stock=$66,000*5=$330,000
Paid in capital in excess of par value=$396,000-$330,000=$66,000
What is the opportunity cost of owning a business? I. The economic profits that the business earns II. The accounting profits that the business earns III. The profits that could be earned in another business using the same amount of resources
Answer:
III. The profits that could be earned in another business using the same amount of resources.
Explanation:
Opportunity cost also known as the alternative forgone, can be defined as the value, profit or benefits given up by an individual or organization in order to choose or acquire something deemed significant at the time.
Simply stated, it is the cost of not enjoying the benefits, profits or value associated with the alternative forgone or best alternative choice available.
Hence, the opportunity cost of owning a business is the profits that could be earned in another business using the same amount of resources.
For instance, if you decide to invest resources such as money in a food business (restaurant), your opportunity cost would be the profits you could have earned if you had invest the same amount of resources in a salon business or any other business as the case may be.
A stockholder in a Subchapter S corporation:
a. is not allowed to vote in elections to choose members of the S corporation’s board of directors.
b. cannot vote by proxy at stockholders' meetings.
c. cannot become a member of the board of directors.
d. cannot be a nonresident alien.
Answer:
The answer is C.
Explanation:
The shareholders are the owners of the company while board of directors are the agents( although many directors now have shares in the company) that runs the business on behalf of the shareholders. The problem associated with directors not pursuing the interests of the shareholders is known as agency problem.
Board of directors/directors are to make sure the business run smoothly while the shareholders provide the fund to meet emergencies.
A company had beginning inventory... A company had beginning inventory of 10 units at a cost of $20 each on March 1. On March 2, it purchased 10 units at $22 each. On March 6 it purchased 6 units at $25 each. On March 8, it sold 22 units for $54 each. Using the FIFO perpetual inventory method, what was the cost of the 22 units sold
Answer:
COGS= $470
Explanation:
Giving the following information:
Beginning inventory= 10 units for $20 each
On March 2, it purchased 10 units at $22 each.
On March 6 it purchased 6 units at $25 each.
On March 8, it sold 22 units for $54 each.
We need to determine the cost of goods sold for the 22 units under the FIFO (first-in, first-out) method. Using this method, we need to use the cost of the firsts units incorporated into inventory.
COGS= 10*20 + 10*22 + 2*25= $470
On January 1, 2016, Pearson Corp has beginning inventory of 240 surfboards. Pearson estimates it will sell 400 units during the first quarter of 2016 with a 5.00% increase in unit sales each quarter. Each surfboard is sold for $200.00. How much is budgeted sales revenue for the third quarter of 2016?
Answer:
Pearson Corp
Budgeted Sales Revenue for the third quarter of 2016:
The budgeted sales revenue = $88,200 (441 x $200)
Explanation:
If First Quarter Sales = 400 units
Second Quarter Sales = 420 units (400 x 1.05)
Therefore, Third Quarter Sales = 441 units (420 x 1.05)
Another way to work it out is to compound the rate for two years:
(1.05)ⁿ = (1.05)∧2 = 1.1025
Sales in first quarter = 400 x $200 = $80,000
Sales in third quarter = $80,000 x 1.1025 = $88,200
The compounding of the rate of increase yield a compound factor that can be applied to the value of the sales in the first quarter to arrive at a sales value for the third quarter without working out the sales value for the second quarter also.
"The XYZ Company has sales of $500,000, a gross profit margin of 40%, operating expenses (excluding depreciation) of $70,000, depreciation expense of $30,000, interest expense of $40,000, taxes of $10,000 and dividends paid of $5,000. What is XYZ's earnings before interest and taxes (EBIT)
Answer:
The answer is $60,000
Explanation:
Solution
Given that
Sales = $500,000
The gross profit margin = 40%
Operating expenses = $70,000
Depreciation expense = $30,000
Interest expense =$40,000
Taxes =$10,000
Dividend paid =$5,000
Now, let us find the earnings before interest and taxes (EBIT)
Thus
The earnings before taxes = Gross profit - Operating expenses - Depreciation expense - Interest expense
EBT = ($500,000*40%) - $70,000 - $30,000 - $40,000
= $200,000 - $140,000
= $60,000
Therefore the EBIT for XYZ is $60,000
To illustrate the law of large numbers (see also Exercise 5.54 on page 172), use the normal approximation to the binomial distribution to determine the probabilities that the proportion of heads will be anywhere from 0.49 to 0.51 when a balanced coin is flipped
(a) 100 times;
(b) 1,000 times;
(c) 10,000 times.
Answer:
(a) 0.1585
(b) 0.4713
(c) 0.9545
Explanation:
The random variable X can be defined as the number of heads.
The coin provided is balanced, i.e. P (H) = P (T) = 0.50
The outcome of tossing the coin are: (H and T). Each of these outcomes are independent of each other.
The random variable X thus follows a Binomial distribution with probability of success as 0.50.
For a large sample a Normal approximation to binomial can be applied to approximate the distribution of p if the following conditions are satisfied:
1. np ≥ 10
2. n(1 - p) ≥ 10
(a)
n = 100
Check the conditions as follows:
[tex]np=100\times 0.50=50>10\\\\n(1-p)=100\times(1-0.50)=50>10[/tex]
Thus, a Normal approximation to binomial can be applied.
So, [tex]p\sim N(0.50,\ 0.05 )[/tex]
Compute the probability hat the proportion of heads will be anywhere from 0.49 to 0.51 as follows:
[tex]P(0.49<p<0.51)=P(\frac{0.49-0.50}{0.05}<\frac{p-\mu}{\sigma}<\frac{0.51-0.50}{0.05})[/tex]
[tex]=P(-0.20<Z<0.20)\\\\=P(Z<0.20)-P(Z<-0.20)\\\\=0.57926-0.42074\\\\=0.15852\\\\\approx 0.1585[/tex]
Thus, the probability hat the proportion of heads will be anywhere from 0.49 to 0.51 when a balanced coin is flipped 100 times is 0.1585.
(b)
n = 1000
Check the conditions as follows:
[tex]np=1000\times 0.50=500>10\\\\n(1-p)=1000\times(1-0.50)=500>10[/tex]
Thus, a Normal approximation to binomial can be applied.
So, [tex]p\sim N(0.50,\ 0.016 )[/tex]
Compute the probability hat the proportion of heads will be anywhere from 0.49 to 0.51 as follows:
[tex]P(0.49<p<0.51)=P(\frac{0.49-0.50}{0.016}<\frac{p-\mu}{\sigma}<\frac{0.51-0.50}{0.016})[/tex]
[tex]=P(-0.63<Z<0.63)\\\\=P(Z<0.63)-P(Z<-0.63)\\\\=0.73565-0.26435\\\\=0.4713[/tex]
Thus, the probability hat the proportion of heads will be anywhere from 0.49 to 0.51 when a balanced coin is flipped 1000 times is 0.4713.
(c)
n = 10,000
Check the conditions as follows:
[tex]np=10000\times 0.50=5000>10\\\\n(1-p)=10000\times(1-0.50)=5000>10[/tex]
Thus, a Normal approximation to binomial can be applied.
So, [tex]p\sim N(0.50,\ 0.005)[/tex]
Compute the probability hat the proportion of heads will be anywhere from 0.49 to 0.51 as follows:
[tex]P(0.49<p<0.51)=P(\frac{0.49-0.50}{0.005}<\frac{p-\mu}{\sigma}<\frac{0.51-0.50}{0.005})[/tex]
[tex]=P(-2<Z<2)\\\\=P(Z<2)-P(Z<-2)\\\\=0.97725-0.02275\\\\=0.9545[/tex]
Thus, the probability hat the proportion of heads will be anywhere from 0.49 to 0.51 when a balanced coin is flipped 10,000 times is 0.9545.
Richards Corporation uses the FIFO method of process costing. The following information is available for October in its Fabricating Department: Units: Beginning Inventory: 80,000 units, 60% complete as to materials and 20% complete as to conversion. Units started and completed: 250,000. Units completed and transferred out: 330,000. Ending Inventory: 30,000 units, 40% complete as to materials and 10% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: $37,200. Costs in beginning Work in Process - Conversion: $79,700. Costs incurred in October - Direct Materials: $646,800. Costs incurred in October - Conversion: $919,300. Calculate the cost per equivalent unit of conversion
Answer:
$2.90 per unit
Explanation:
The computation of the cost per equivalent unit of conversion is attached below:-
The formulas are shown below:-
Equivalent material = Direct material × Percentage completion
Equivalent conversion = Conversion × Percentage completion
The cost per equivalent unit come from
= Total cost ÷ number of equivalent units
hence, the cost per equivalent unit of conversion is $2.90 per unit
J Corporation has gathered the following data on a proposed investment project (Ignore income taxes.): Investment required in equipment $ 33,500 Annual cash inflows $ 7,400 Salvage value of equipment $ 0 Life of the investment 15 years Required rate of return 10 % The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment. The simple rate of return for the investment (rounded to the nearest tenth of a percent) is:
Answer:
15.4%
Explanation:
required initial investment $33,500
annual cash flows $7,400
useful life 15 years, no salvage value
depreciation expense per year = $33,500 / 15 = $2,233.33
simple rate of return = annual incremental net operating income / Initial investment
annual incremental net operating income = $7,400 - $2,233.33 = $5,166.67initial investment = $33,500simple rate of return = $5,166.67 / $33,500 = 15.4%
Super Carpeting Inc. just paid a dividend of $2.64 and its dividend is expected to grow at a constant rate of 5.50% per year. If the required return on Super's stock is 13.75% what is the intristic value of Super's shares?
A- $48.00 per share
B- $32.00 per share
C- $33.76 per share
D- $38.40 per share
Which of the following statements is true about the constant growth model?
A- the constant growth model can be used if a stock's expected constant growth rate is more than its required return
B- The constant growth model can be used if a stock's expected constant growth rateis less than its required return
Use the constant growth model to calculate the appropriate values to complete the following statements about Super Carpeting Inc.
If Super stock is equilibrium, the current expected dividend yield on the stock will be ______ per share
Super's expected stock price one year from today will be ____ per share
If Super's stock is in equilibrium, the current expected capital gains yield on Supers stock will be _____
Answer:
1. C. $33.76 per share
2. B- The constant growth model can be used if a stock's expected constant growth rateis less than its required return
3. 8.25% ; $35.62 ; 5.5%
Explanation:
1. Using the Constant Growth Model to calculate the intrinsic value would be best given the above values.
The formula is;
Value = Next Dividend / (Required Return - Growth rate)
Value = (2.64 * ( 1 + 5.5%)) / ( 13.75% - 5.5%)
Value = 2.7852/8.25%
Value = $33.76
2. Going by the formula, if the expected growth rate is more than the required return, the intrinsic value would be a negative number and a stock's price cannot go below 0. The growth rate has to be less than the required return for this to work.
3. At Equilibrium, the stock dividend is growing as it should.
Dividend Yield should therefore be;
= Next Dividend / Stock Value * 100
= (2.7852 / 33.76) * 100
= 8.25%
Stock Price should grow at the growth rate so;
= 33.76 * ( 1 + 0.055)
= $35.62
Gains yield refers to what rate the stock will change in value. Growth rate is 5.5% so that will be the answer.
Determine the amounts American Eagle reports for net cash flows from operating activities, investing activities, and financing activities in its statement of cash flows for the most recent year. What are total cash flows for the year f
Answer:
According to the most recent report:
Net cash flows from operating activities: amounted to 415.4 million during 2019 fiscal year, $456.6 million for 2018 fiscal year.Net cash flows from investing activities: $210.4 million in capital expenditure for 2019 fiscal year, compared to 189.0 million in capital expendtires for 2018 fiscal year. Net cash flows from financing activites: $1112.4 million in purchases of common stock, $92.8 million in dividend payments, and $8.1 million in repurchases of common stock.
Rajan Company's most recent balance sheet reported total assets of $1.84 million, total liabilities of $0.83 million, and total equity of $1.01 million. Its Debt to equity ratio is:
Answer:
82.17%
Explanation:
Calculation of Rajan Company's Debt to equity ratio
Using this formula
Debt to equity ratio= Total liabilities/Total Equity
Where,
Total liabilities=$830,000
Total Equity=$1,010,000
Hence,
Let plug in the formula
Debt to equity ratio =$830,000/$1,010,000
Debt to equity ratio =0.8217 ×100
Debt to equity ratio =82.17%
Therefore Rajan's Company Debt to equity ratio is 82.17%
At the Wedge Natural Co-op in Minneapolis, employees talked about how the long-time general manager had fired almost the entire staff when he took over because they did not show the work ethic he required. This_____reinforced the idea that, though it had grown out of the hippie culture of the 1970s, the food co-op was a serious business that delivered great customer service and made money for its member-owners.
Answer:
story
Explanation:
Based on the inforamation provided describing the scenario it can be said that the underlined missing word is "story". That refers to the entire event that the employee was explaining, which that individual employee experienced first hand. He seems to have explained this story to show how the food co-op was evolving into a more customer service focused company that valued a very specific work ethic.
The efficient market hypothesis would support which of the following: The market price of securities on average equals the price that would be computed using all public information. The price of securities is reflective of the information available. Mutual fund managers cannot earn more return unless they have "special/private" information. All of the above. None of the above
Answer:
All of the above.
Explanation:
The hypothesis of an efficient market can be defined as the statement that financial markets are efficient in relation to information, that is, the prices of securities must reflect all available information. This hypothesis holds that the expected return on a security is equal to the return on equilibrium, which means that an agent is not able to achieve returns above the market average, as his returns would be consistent with the public information that must be available at the time that the investment is made.
So all of the above are true.
Wages expense Wages payable Utilities expense Accounts payable Unearned service revenue Service revenue Equipment Intangible assets Long-term investments Adjusting entries: 1. Accrue wages expense. 2. Accrue utilities expense. 3. Adjust the Unearned Service Revenue account to recognize earned revenue.
Answer and Explanation:
The adjusting entries are shown below
1. Accrued wages expenses
Wages expense Dr XXXXX
To Wages payable XXXXX
(Being the accrued wages is recorded)
For recording this we debited the wages expense as it increased the expense and credited the wages payable as it also increased the liabilities
2. Accrued utilities expenses
Utilities expense Dr XXXXX
To Account payable XXXXX
(Being the accrued utilities expense is recorded)
For recording this we debited the utility expense as it increased the expense and credited the account payable as it also increased the liabilities
3. For adjusting the unearned service revenue
Unearned service revenue Dr XXXXX
To Service revenue XXXXX
(Being the unearned service revenue is recorded)
For recording this we debited the unearned service revenue as it decreased the liability and credited the service revenue as it increased the revenue
Lexington Company sells product 1976NLC for $20 per unit. The cost of one unit of 1976NLC is $18, and the replacement cost is $17. The estimated cost to dispose of a unit is $4, and the normal profit is 40% of selling price. At what amount per unit should product 1976NLC be reported, applying lower-of-cost-or-market
Answer:
The answer is $16
Explanation:
Solution
Given that:
Now
Market = Present replacement cost
The Upper Limit of Market =Net Realizable value = Estimated Selling Price -Cost of Completion and Disposal
The Net Realizable Value = $20 -$4 =$16
Thus
The Upper Limit of Market =Net Realizable value = $16
Market =Present replacement cost =$17
So,
Lower Limit of Market = Net realizable value - normal profit margin
Lower Limit of Market =16 (40% of 20)
= 16-8
=8
Thus
If the Present replacement cost is greater or higher than the selling, then the selling amount is the market amount
Therefore, the product should be reported at $16
Kitchens Sales inc. has excess capacity. Mr. Cifer wants the cabinets in cherry rather than oak, so direct material costs will increase by $66 per unit. The average marketing cost of Kitchens Sales product is $173 per order. Other than price, what other items should Kitchens Sales consider before accepting this one-time-only special order
Answer:
B) reaction of existing customers to the lower price offered to Mr. Louis Cifer
Explanation:
In case when the company accepts one-time special order the shareholder does not have any problem regarding it as it the company has excess capacity and in case of the special order, the income of the company is high as compared to before when the products are sold at lesser prices
Moreover, the one-time special order is the order that to be ordered one time only that means it never repeated again
So in this situation, option B is most appropriate
On December 31, Strike Company sold one of its batting cages for $219,597. The equipment had an original cost of $258,350 and has accumulated depreciation of $38,753. Depreciation has been recorded up to the end of the year. What is the amount of the gain or loss on this transaction
Answer:
Gain/loss= 0
Explanation:
Giving the following information:
On December 31, Strike Company sold one of its batting cages for $219,597. The equipment had an original cost of $258,350 and has accumulated depreciation of $38,753.
First, we need to determine the book value:
Book value= original cost - accumulated depreciation
Book value= 258,350 - 38,753= 219,597
The gain or loss from selling an asset depends on selling it for a higher or lower value than the book value.
Gail/loss= 219,597 - 219,597
Gain/loss= 0
whats perpetual inventory?
Explanation:
Permanent inventory is a method of inventory accounting that records the immediate sale or purchase of inventory through the use of computerized point-of-sale (POS) systems and enterprise asset management software.
Hope this helps..
Good Luck
You are examining two different MMMFs. Fund A is tax-exempt and pays 5%. Fund B is taxable and pays 6%. You live in a state that imposes no income taxes and are in a 28% federal tax bracket. At what tax rate would the two funds have identical yields
Answer:
Two Different MMMFs
The tax rate to produce identical yields is 16.67%
Explanation:
For Fund A & B to produce identical yields:
Fund's A yield of 5% must equal Fund B's 6% (1 - 0.28).
Therefore, 5% = 6% (1 - tax rate)
Let (1 - tax rate) be x.
That is 0.05 = 0.06x
x = 0.05/0.06 = 0.8333
Therefore, (1 - tax rate) = 0.8333
Tax rate = 1 - 0.8333
Tax rate = 0.1667
Check: if 5% = 6% (1 - tax rate)
0.05 = 0.06 (1 - 0.1667)
0.05 = 0.049998
0.05 = 0.05
The above calculation shows that if Fund B is taxed at 16.67% instead of 28%, it would have identical yields with Fund A.
Astute managers are alert for the presence of these clues: disciplinary actions being challenged, employees questioning managerial decisions, employees talking more openly with managers.
Answer: False
Explanation:
Astute Managers are alert for clues and opportunities to bring the company more profit and productivity by leveraging on those opportunities.
They recognize when the winds of change are blowing in the industry and work to realign resources and employee orientation to take advantage of this.
Astute leaders do not look for ways to disparage their employees by looking for signs of insubordination to use it against employees but rather maintain good relationships with employees so that they may move the company forward together.
