Answer:
WACC=9.26%
Explanation:
Calculation for the company's WACC
First step is to calculate the Total Market Value
Total Market Value = 8,000,000*68+ 65,000,000*93% + 50,000,000*105%
Total Market Value = 544,000,000+60,450,000+52,500,000
Total Market Value = $656,950,000
Second step is to calculate the % Value of Equity,% Value of First Bond and % Value of Second Bond
% Value of Equity =544,000,000/$656,950,000*100
% Value of Equity = 82.81%
% Value of First Bond = 60,450,000/$656,950,000*100
% Value of First Bond= 9.20%
% Value of Second Bond = 52,500,000/$656,950,000*100
% Value of Second Bond =7.99%
Third step is to calculate Ke Using this formula
Ke = Cost of Equity = Dividend/Market Value per share + Growth Rate
Let plug in the formula
Ke = 4.2/68 + 4.3%
Ke= 6.18% + 4.3%
Ke= 10.48%
Last step is to calculate WACC using this formula
WACC = % Value of Equity * Cost of Equity + % Value of Debt * Cost Of Debt (1- Tax Rate)
Let plug in the formula for
WACC= 82.81% * 10.48% + 9.20% * 5% (1-0.24) + 7.99%* 4%(1-0.25)
WACC= 8.67%+ 9.20% * 5%(0.76)+7.99%* 4%(0.76)
WACC= 8.67%+ 9.20% * 3.8%+7.99%* 3.04%
WACC=8.67%+0.35%+0.24%
WACC=9.26%
Therefore the company's WACC will be 9.26%
Fontaine and Monroe are forming a partnership. Fontaine invests a building that has a market value of $356,000; the partnership assumes responsibility for a $128,000 note secured by a mortgage on the property. Monroe invests $103,000 in cash and equipment that has a market value of $78,000. For the partnership, the amounts recorded for the building and for Fontaine's Capital account are:_______.
a. Building $356,000; Fontaine, Capital $309,000.
b. Building $356,000; Fontaine, Capital $356,000.
c. Building $228,000; Fontaine, Capital $128,000.
d. Building $228,000; Fontaine, Capital $228,000.
e. Building $356,000; Fontaine, Capital $228,000.
Answer: e. Building $356,000; Fontaine, Capital $228,000.
Explanation:
The company would record the building which Fontaine brought in at its Market value which is $356,000.
However, because the partnership assumes responsibility for a $128,000 note secured by a mortgage on the property, this cannot be counted as a capital contribution from Fontaine so this will be removed from their capital contribution;
= 356,000 - 128,000
= $228,000
you are a euro-based portfolio manager and you have invested in the technology sector of the U.S. stock market. You want to keep your exposure to tech stocks but are worried about an impending financial crisis in the United States. What is the best way to manage your dollar currency risk
Answer: You enter into Euro/USD forward contract.
Explanation:
Based on the information given in the question, the best way to manage the dollar currency risk is to enter into Euro/USD forward contract.
A forward contract is a contract between two parties whereby an asset is being bought it sold at a particular price in the future. It should be noted that forward contract is good for speculations.
Marquis Company uses a weighted-average perpetual inventory system and has the following purchases and sales: August 211 units were purchased at $2 per unit. August 1816 units were purchased at $4 per unit. August 2913 units were sold. What is the amount of the cost of goods sold for this sale
Answer:
$41.41
Explanation:
The Weighted Average Cost Method recalculates the unit cost after every new purchase. The goods are then sold at the recent calculated average cost before the sale.
Average Cost Before sale = Total Cost ÷ Units Available for sale
= ( 11 units × $2 + 16 units × $4) ÷ ( 11 units + 16 units)
= $3.185
Therefore,
Cost of Goods Sold = Units Sold × Average Unit Cost Before sale
= 13 units × $3.185
= $41.41
Conclusion :
The amount of the cost of goods sold for this sale is $41.41.
In the management assistance area, the Small Business Administration (SBA) provides all of the following EXCEPT: Group of answer choices free college credit courses in management toll-free advice numbers training and educational programs counseling by business development officers free publications on business topics
Answer: Free college credit courses in management
Explanation:
The Small Business Administration (SBA) is a Federal government agency that aims to help small businesses and entrepreneurs by providing them with resources to make them grow.
They have toll-free phone numbers that entrepreneurs and small businesses can call for advice, they have trading training programs and business development offices who offer advice and counsel on business techniques and they even free publications on business topics.
They do not however offer free college credit courses in management.
In the Sheffield Corp., indirect labor is budgeted for $108000 and factory supervision is budgeted for $36000 at normal capacity of 160000 direct labor hours. If 180000 direct labor hours are worked, flexible budget total for these costs is:_______
a. $157500.
b. $144000.
c. $162000.
d. $148500.
Answer:
Total flexible cost= $157,500
Explanation:
Factory supervisor is a fixed cost.
First, we need to calculate the unitary variable cost:
Unitary variable cost= 108,000/160,000= $0.675
Now, the total flexible cost for 180,000 hours:
Total flexible cost= 0.675*180,000 + 36,000
Total flexible cost= $157,500
find median for the following terms is 72 76 64 80 68 61 85 91 62 82
Answer: 74 ? i think
Suppose a perfectly competitive market is suddenly transformed into a monopoly (all competing firms are consolidated into a single entity). We would expect price to _____, output to _____, consumer surplus to _____ and deadweight loss to _____.
just you know what it must be that i think
Explanation:
suppose a perfectly competitive market is sufdenly what think so
When a company issues 25,000 shares of $1 par value common stock for $10 per share, the journal entry for this issuance would include: Multiple Choice A credit to Common Stock for $250,000. Incorrect A debit to Cash for $25,000. A debit to Additional Paid-in Capital for $25,000. A credit to Additional Paid-in Capital for $225,000.
Answer:
A credit to Common Stock for $25,000
Explanation:
Based on the information given in a situation where a company issues 25,000 shares of $1 par value common stock for $10 per share, the journal entry for this issuance would include:A credit to Common Stock for $25,000
Dr Cash $250,000
Cr Common Stock 25,000
Cr Additional Paid-In Capital 225,000
($250,000-25,000)
Yanita Company, an IFRS reporting firm, has three bank accounts. The respective account balances are as follows: Account 1: $50,000; Account 2: $70,000; Account 3: $(10,000). Consistent with IFRS, cash and cash equivalents are equal to:
Answer:
Consistent with IFRS, cash and cash equivalents are equal to:
$110,000.
Explanation:
a) Data and Calculations:
Account 1: $50,000
Account 2: $70,000
Account 3: $(10,000)
Total $110,000
b) Yanita's cash and cash equivalents are the assets that are cash or can be converted into cash immediately, which include bank accounts and marketable securities such as commercial paper and short-term government bonds. Under IFRS, cash and cash equivalents also include bank overdrafts, which are recorded under current liabilities on the Balance Sheet. However, under US GAAP, bank overdrafts are not treated as part of the cash and cash equivalents. This implies that under US GAAP, Yanita's cash and cash equivalents would be totaling $120,000.
If the reserve ratio is 10 percent, $1,000 of additional reserves can create A. $5,000 of new money. B. $9,000 of new money. C. $10,000 of new money. D. None of the above is correct.
Answer:
C. $10,000 of new money.
Explanation:
The computation of the additional reserve developed is as follows;
= Additional reserve ÷ reserve ratio
= $1,000 ÷ 0.10
= $10,000
Hence, it would create $10,000 of new money
We simply applied the above formula so that the correct value could come
And, the same is to be considered
Therefore the correct option is C
A business finds that sales increase when the outdoor temperature decreases. Identify the relation between sales and temperature. Select the correct answer below: Sales and temperature are positively correlated. An increase in sales causes an increase in temperature. Sales and temperature are negatively correlated. An increase in temperature causes an increas
an increase in temp causes qnd increase in sales
An increase in temperature causes an increase in sale is the relation between sales and temperature. Hence, option D is correct.
What is the increase in sales?The sales growth rate measures how successfully your company can generate revenue from sales over a specific period of time. This rate is used by investors to assess if your company is growing or starting to plateau. It is used by your firm to evaluate internal successes and difficulties.
Effective sales enable you to acquire quality leads and clients who are also useful to you. If the business was experiencing excellent sales, the employees would also be happy.
In reality, it will enhance worker performance and enable them to do their responsibilities in a more systematic and expert manner.
Thus, option D is correct.
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Novak Corp.'s trial balance reported the following balances at the end of its first year: Cash $17080 Prepaid insurance 850 Accounts receivable 4270 Accounts payable 3420 Notes payable 5120 Common stock 6590 Dividends 850 Revenues 35380 Expenses 21350 What amount did Novak Corp.'s trial balance show as total credits
Answer:
Explanation:
Novak Corp.'s
Trail Balance
Debit ($) Credit ($)
Cash $17,080
Prepaid insurance $850
Accounts receivable $4,270
Accounts payable $3,420
Notes payable $5,120
Common stock $6,590
Dividends $850
Revenues $35,380
Expenses $21,350
Credit Total $50,510
18. A company's flexible budget for 12,000 units of production showed sales, $48,000; variable costs, $18,000; and fixed costs, $16,000. The sales expected if the company produces and sells 16,000 units is: a. $24,000. b. $18,000. c. $48,000. d. $40,000. e. $64,000.
Answer:
e. $64,000.
Explanation:
The computation of the sales expected in the case of 16,000 units
Sales on 16,000 units is
= Budgeted sales ÷ Budgeted volume × Actual volume
= $48,000 ÷ 12,000 units × 16,000 units
= $64,000
hence, the sales expected in the case of 16,000 units is $64,000
Therefore the correct option is e
Hence, the same is to be considered
If a preferred stock from Pfizer Inc. (PFE) pays $4.00 in annual dividends, and the required return on the preferred stock is 8.00 percent, what's the value of the stock?
a. $50.00
b. $0.32
c. $32.00
d. $0.50
Answer:
Option a ($50.00) seems to be the right approach.
Explanation:
The given values are:
Annual dividend is,
= $4.00
Required return is,
= 8.00% i.e., 0.08
By using the formula, we get
⇒ [tex]Value \ of \ the \ stock=\frac{Annula \ Dividend}{Required \ return}[/tex]
On putting the above given values, we get
⇒ [tex]=\frac{4.00}{0.08 }[/tex]
⇒ [tex]=50[/tex] ($)
During periods of bad weather, as compared with periods of clear weather, how many additional gallons of fuel on average should FreeEx expect its planes to consume because of airport congestion?
Answer:
the question is incomplete:
arrival rate = 20 per hourlanding rate with good weather = 60 per hourlanding rate with bad weather = 30 per hourλ = 20
μ₀ = 30
μ₁ = 60
Ls for good weather = 20 / (60 - 20) = 20/40 = 0.5
Ls for bad weather = 20 / (30 - 20) = 20/10 = 2
Ws for good weather = 60 / 40 = 1.5
Ws for bad weather = 60 / 10 = 6
Wg for good weather = 1.5 - (60 / 60) = 1.5 - 1 = 0.5
Wg for bad weather = 6 - (60 / 30) = 6 - 2 = 4
Fuel consumed due to slack:
good weather = Ws x λ = 1.5 x 20 = 30 gallons
bad weather = Ws x λ = 6 x 20 = 120 gallons
So each plane should expect to consume 120 - 30 = 90 additional gallons of fuel due to bad weather
Bezos moved to Seattle, Washington because _________ and ______
a. no state taxes on retail purchases
b. of federal funding of his new project
c. it was near IBM
d. take advantage of the software talent
Answer:
a
Explanation:
A present value of $2600 is invested in an account with an annual interest rate of 4.1% . Determine the minimum amount of time required for the present value to triple, assuming the interest is compounded monthly. The minimum amount of time required is:
Answer:
The minimum amount of time required is:
26.82 years.
Explanation:
Present value = $2,600
Future value = $7,800 ($2,600 * 3)
Annual interest rate = 4.1%
Monthly interest rate = 4.1%/12 = 0.342%
$2,600 will need to be invested for 321.781 (26.82 years) periods to reach the future value of $7,800.00.
FV (Future Value) $7,800.00
PV (Present Value) $2,600.00
N (Number of Periods) 321.781
I/Y (Interest Rate) 0.342%
PMT (Periodic Payment) $0.00
Starting Investment $2,600.00
Total Principal $2,600.00
Total Interest $5,200.00
1. The capital structure weights used in computing the weighted average cost of capital: A. are based on the book values of total debt and total equity. B. are based on the market values of total debt and total equity. C. are restricted to the firm's debt and common stock only D. remain constant over time unless the firm issues new securities.
a stock has a beta of 1.5 and an expected return of 16.35%. What is the risk free rate if the markert rate of return is 12.5%
Answer:
4.8%
Explanation:
Calculation for the risk free rate if the market rate of return is 12.5%
Using this formula
Expected rate of return = Risk free rate + Beta( Market rate -Risk-free rate)
Let plug in the formula
0.1635 =Risk-free rate of return + 1.5(0.125 -Risk free rate of return)
0.1635 =Risk-free rate of return + 0.1875 - 1.5(Risk-free rate of return)
0.1635 - 0.1875 =Risk-free rate of return - 1.5Risk-free rate of return
−0.024 = - (1-0.5 Risk-free rate of return)
−0.024 = - 0.5 Risk-free rate of return
Risk-free rate of return =0.024 / 0.5
Risk-free rate of return = 0.048
Risk-free rate of return = 0.048 * 100%
Risk-free rate of return = 4.8%
Therefore the risk free rate if the market rate of return is 12.5% is 4.8%
Collins, Inc. issued a nontaxable stock dividend of one share for each share owned. Melissa, a shareholder of Collins, had a total basis in her 500 shares of stock of $5,000. The total basis of Melissa's 1,000 shares of stock after the dividend is ______.
Answer:
$5,000
Explanation:
Based on the information given we were told that had a total basis in her 500 shares of stock of the amount of $5,000 which means that The total basis of Melissa's 1,000 shares of stock after the dividend is $5,000 which is her total basis in her 500 shares of stock.
Charlie's Chocolates' owner made investments of $66,000 and withdrawals of $28,000. The company has revenues of $99,000 and expenses of $72,000. Calculate its net income.
Answer:
$27,000
Explanation:
Charlie's chocolate has investments of $66,000
Withdrawals is $28,000
The company revenues is $99,000
Expenses is $72,000
Therefore the net income can be calculated as follows
= Revenue - expenses
= $99,000-$72,000
= $27,000
Hence the net income is $27,000
An asset group is being evaluated for an impairment loss. The following financial information is available for the asset group: Carrying value $100,000,000 Sum of the undiscounted cash flows $95,000,000 Fair value $80,000,000 What amount of impairment loss, if any, should be recognized
Answer:
The amount of the impairment loss that should be recognized is:
$20,000.
Explanation:
a) Data and Calculations:
Undiscounted cash flows = $95,000
Carrying value = $100,000
Fair value = 80,000
Impairment loss = $20,000
b) Impairment loss for the asset group is the difference between the fair value and the carrying value. It is recognized when the fair value declines from the carrying value. This implies that the calculation to determine the impairment loss is achieved by deducting the fair value from the carrying value.
air transportation results in lower inventory holding costs.” True or false?
Answer:
I think its false
On January 1, 2020, Marvel Company purchased an investment in Stark Industries for $5 million, representing 35% of the book value of Stark Industries. During the year, Stark reported net income of $1,200,000 and pays cash dividends of $100,000. At the end of the year, the fair value of Marvel’s investment is $5.4 million. Required At what amount is the investment reported on Marvel’s balance sheet at year-end? What amount of income from investments does Marvel report? Prepare journal entries to record the transactions for Marvel Company.
Answer:
1. Investment at beginning $5,000,000
Add: Net Income (1200000*35%) $420,000
Less: Dividend (100000*35%) $35,000
Investment at year end $5,385,000
2. Amount of Income from Investment = $1,200,000*35% = $420,000
3. Journal entries to record transactions
Particulars Debit Credit
Investment in Marvel Co. $420,000
Equity Income $420,000
(Recording receipt of net income)
Cash $35,000
Investment in Marvel Co $35,000
( Recording receipt of dividend)
Private investment during a year includes Group of answer choices spending on plant and equipment plus capital formation the value of inventories plus the values of stocks and bonds spending on plant and equipment plus government spending plus household spending on stocks and bonds stocks and bonds purchased by firms spending on plant and equipment, new housing construction, and changes in inventories
Answer:
spending on plant and equipment, new housing construction, and changes in inventories
Explanation:
A private investment can be defined as funds used by business firms to purchase capital assets such as plants and equipments, new office building and inventories required for the smooth running of the business and are typically expected to generate revenues in the future (cash-flow) and appreciate in value.
Private investment during a year includes spending on plant and equipment, new housing construction, and changes in inventories.
Some business owners may decide to make more investment in their business on an annual (yearly) basis or perennially depending on the type of business and their level of capital expenditure.
Azim Services, a nongovernmental not-for-profit organization, received dues of $100 from its members. Azim provided its members with a newsletter that had a $25 value. All other services were valued at $10 per member. What is the amount of contribution made to Azim by each member?
Answer:
Each member of Azim Services pays $ 135 per month in contributions.
Explanation:
While Azim Services charges its members a fee of $ 100, in addition to delivering a newsletter that has a value of $ 25 and providing other services for the sum of $ 10, to determine the amount of money that each member contributes to Azim Services it is necessary to make the following calculation:
100 + 25 + 10 = X
125 + 10 = X
135 = X
Thus, each member of Azim Services pays $ 135 per month in contributions.
As of December 31, Frappe Company has a balance of $11,000 in accounts receivable. Of this amount, $1,100 is past due and the remainder is not yet due. Frappe has a credit balance of $105 in the Allowance for Doubtful Accounts. Frappe Company estimates its bad debt losses using the aging of receivables method, with estimated bad debt loss rates equal to 3% of accounts not yet due and 10% of past due accounts. How will the Bad Debt Expense account be included in the required adjusting journal entry at year-end
Answer:
Debit of $302
Explanation:
Provision required on AR past due = 1,100 * 10% = $110
Provision required on AR not yet due = (11,000-1,100) *3% = 9900 * 3% = $297
Total Allowance for Doubtful Accounts required = Provision required on AR past due + Provision required on AR not yet due
Total Allowance for Doubtful Accounts required = $110 + $297
Total Allowance for Doubtful Accounts required = $407
Existing Allowance for Doubtful Accounts = $105
Bad Debt Expense = Total Allowance for Doubtful Accounts required - Existing Allowance for Doubtful Accounts
Bad Debt Expense = $407 - $105
Bad Debt Expense = $302
So, Bad Debt Expense account will be included in the adjusting journal entry at year-end as Debit of $302
Marsha is 23 years old and single. She cannot be claimed as a dependent by another taxpayer. Marsha earned wages of $18,500 and had $1,500 of federal income tax withholding in tax year 2020. Marsha gave birth to Shelby on November 10, 2020. Marsha paid all the cost of keeping up a home and support for Shelby. Shelby and Marsha are U.S. citizens and have valid Social Security numbers. Marsha filed Single with no dependents on her 2019 tax return and received a $1,200 Economic Impact Payment in May 2020. 3. Marsha is not required to file a return, but should file a return to claim a refund of her federal income tax withholding. True False
Answer:
a. Marsha is required to file a tax return.
Explanation:
Since in the question it is mentioned that Marsha who is 23 years old and single she earned $18,500 wages and federal income tax of $1,500 also Shelby and Marsha are U.S citizens
So as per the given situation she needs to file a tax return
Hence, the correct option is a
And, the same is to be considered
Assuming a FICA tax rate of 8% on the first $100,000 in wages, and a federal income tax rate of 20% on all wages, what would be an employee's net pay for the year if he earned $120,000 for the year?
Answer:
the answer is c
Explanation:
Hannah makes the following charitable donations in the current year: Basis Fair Market Value Inventory held for resale in Hannah's business (a sole proprietorship) $ 8,000 $ 7,200 Stock in HBM, Inc., held as an investment (acquired four years ago) 16,000 40,000 Baseball card collection held as an investment (acquired six years ago) 4,000 20,000 The HBM stock and the inventory were given to Hannah's church, and the baseball card collection was given to the United Way. Both donees promptly sold the property for the stated fair market value. Disregarding percentage limitations, Hannah's current charitable contribution deduction is: a.$28,000. b.$67,200. c.$51,200. d.$52,000.
Answer:
c.$51,200.
Explanation:
Individual tax: Charitable contribution deduction ignoring % limit
Inventory will be valued at lower of FMV or basis $7,200
Stock in HBM (a capital investment assets $40,000
will be valued at FMV)
Baseball card collection (Non capital gain item, $4,000
valued at lower of FMV or basis)
Hannah's Current maximum charitable $51,200
contribution deduction
