To convert the margin of safety in dollars to the margin of safety in terms of the number of units sold, divide the margin of safety in dollars by the selling price per unit. Your answer: Selling price per unit.
There are two applications to define the margin of safety: In budgeting and break-even analysis, the margin of safety is the gap between the estimated sales output and the level by which a company’s sales could decrease before the company becomes unprofitable. It signals to the management the risk of loss that may happen as the business is subject, To convert the margin of safety in dollars to the margin of safety in terms of the number of units sold, divide the margin of safety in dollars by the unit contribution margin.
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which of the following income received this year by artemis is taxable to him? a. $1,000 of interest from a municipal bond. b. $50,000 received as compensatory damages due to bodily injuries sustained in a car accident. c. $18,000 scholarship used to pay tuition at state university. d. $30,000 received as punitive damages due to a car accident in which the other driver was severely negligent.
The taxable income received by Artemis this year is $30,000 received as punitive damages due to a car accident in which the other driver was severely negligent. The correct option is d.
Punitive damages are awarded in cases where the defendant's actions are found to be willful, malicious, or grossly negligent, and are intended to punish the wrongdoer rather than compensate the victim. As such, punitive damages are considered taxable income and must be reported on the recipient's income tax return. In Artemis's case, the $30,000 received as punitive damages due to a car accident in which the other driver was severely negligent is taxable income.
However, the $50,000 received as compensatory damages for bodily injuries sustained in the same car accident is not taxable income, as it is intended to compensate Artemis for actual losses and is not considered income. It is important to correctly report all sources of income, including taxable punitive damages, on one's income tax return to avoid potential penalties or legal consequences. The correct option is d.
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consider the following information on large-company stocks for a period of years. arithmetic mean large-company stocks 13.1 % inflation 3.6 a. what was the arithmetic average annual return on large-company stocks in nominal terms? (do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. what was the arithmetic average annual return on large-company stocks in real terms? (do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
The nominal average annual return on large-company stocks is 16.7%, while the real average annual return, adjusted for inflation, is 9.5%.
a) The arithmetic mean of large-company stocks for a period of years is given as 13.1%, and the inflation rate during the same period is 3.6%. To calculate the nominal average annual return on large-company stocks, we simply add the inflation rate to the arithmetic mean. Thus, the nominal average annual return on large-company stocks is:
Nominal average annual return = Arithmetic mean of large-company stocks + Inflation rate
Nominal average annual return = 13.1% + 3.6%
Nominal average annual return = 16.7%
Therefore, the nominal average annual return on large-company stocks is 16.7%.
b) To calculate the real average annual return on large-company stocks, we need to adjust for inflation by subtracting the inflation rate from the arithmetic mean. The real average annual return reflects the actual purchasing power of the investment after accounting for inflation. Thus, the real average annual return on large-company stocks is:
Real average annual return = Arithmetic mean of large-company stocks - Inflation rate
Real average annual return = 13.1% - 3.6%
Real average annual return = 9.5%
Therefore, the real average annual return on large-company stocks is 9.5%.
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campbell company has current assets of $10 million of which $3,000,000 are accounts receivable. its current liabilities total $7 million of which $2,000,000 are accounts payable and $500,000 are wages payable. campbell's net credit is:
Based on the provided accounts receivable, accounts payable, and wages payable, the campbell's net credit is $500,000.
To calculate Campbell Company's net credit, we will consider its accounts receivable, accounts payable, and wages payable. The question states that Campbell Company has:
Current assets of $10,000,000
Accounts receivable of $3,000,000
Current liabilities of $7,000,000
Accounts payable of $2,000,000
Wages payable of $500,000
To find the net credit, follow these steps:1. Subtract the accounts payable and wages payable from the accounts receivable.
Net credit = Accounts receivable - (Accounts payable + Wages payable)
Net credit = $3,000,000 - ($2,000,000 + $500,000)
2. Calculate the final value.
Net credit = $3,000,000 - $2,500,000
Net credit = $500,000
So, Campbell's net credit is $500,000.
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Stu has a collection of rare comic books. He wants to purchase theft insurance for his collection, separate from his home and other property. What term most accurately describes the type of policy Stu would purchase?
The type of policy that Stu would purchase to insure his collection of rare comic books is called "collectibles insurance". This type of insurance is specialized to protect valuable collections against damage, loss, and theft.
The term that most accurately describes the type of policy Stu would purchase is "collectibles insurance." Collectibles insurance is a specialized type of insurance designed to protect valuable collections, such as rare comic books, coins, stamps, and artwork, against damage, loss, and theft.
Unlike standard homeowners or renters insurance policies, collectibles insurance typically provides broader coverage for the full value of the collection and may offer additional benefits, such as coverage for restoration costs and protection against market fluctuations in the value of the collection.
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We collected data about the characteristics of households and draw conclusions about the individuals in those households. This approach may suffer fromChoose matching definition
assessing the measurability of concepts
the ecological fallacy.
all the other answers are true
a pretest
We collected data about the characteristics of households and draw conclusions about the individuals in those households. This approach may suffer from ecological fallacy.
The correct answer is (C)
The ecological fallacy is a type of error in reasoning that occurs when conclusions about individuals are drawn based solely on data collected at the group level (e.g., households, neighborhoods, cities, etc.). This fallacy assumes that characteristics of the group are representative of the individuals within that group, which is not always the case.
Assessing the measurability of concepts and conducting pretests are important steps in research to ensure that data is collected accurately and that concepts are well-defined. However, they are not directly related to the issue of the ecological fallacy.
Therefore, the correct answer is option (c)
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which of the following costs is relevant in a decision-making process? a. sunk costs b. historical costs c. prepaid insurance costs d. variable costs
The correct option is d. Variable cost. In the context of decision-making and considering the given options, the relevant cost is d. variable costs.
Variable costs are relevant in the decision-making process because they change based on the level of output or production, which can directly affect a company's profitability and decision-making strategy. Sunk costs, historical costs, and prepaid insurance costs are not relevant as they are already incurred, cannot be changed, and do not affect future decisions.
Thus, the correct option is d. variable cost.
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under the cost method of accounting for treasury stock transactions, when the proceeds from a sale are greater than the cost, the excess over cost is treated as a(n)
Group of answer choices
increase in Additional Paid-in Capital from Treasury Stock.
increase in Other Expenses from Treasury Stock Sales.
None of these choices.
increase in a contra-shareholders' equity account.
When the proceeds from a sale are greater than the cost, the excess over cost is treated as a(n) increase in Additional Paid-in Capital from Treasury Stock, option A.
Treasury stock, commonly referred to as treasury shares or reacquired stock, denotes previously outstanding stock that the issuing business has acquired from investors. The overall number of outstanding shares on the open market declines as a result. Treasury stock is still issued but is not taken into account for calculating dividends or earnings per share (EPS).
The balance sheet's shareholders' equity part includes a contra equity account for treasury stock. Treasury stock lowers shareholders' equity by the price paid for the stock since it indicates the number of shares that were bought back on the open market.
Treasury shares have no voting rights in addition to not paying dividends and not being counted in EPS calculations. A company's buyback of Treasury shares may be limited by the regulatory agency for its country. Buybacks are governed in the US by the Securities and Exchange Commission (SEC).
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n the middle-class industrial household, "home" became __________.
In the middle-class industrial household, "home" became a place of refuge from the demands of work and a symbol of social status and respectability.
With the emergence of assiduity and the expansion of metropolitan centres, a new social class arose that prized sequestration, comfort, and domesticity. The home was viewed as a retreat from the harsh realities of megacity life, where families could make particular connections, entertain callers, and demonstrate their social position through the design, cabinetwork, and decorations of their home.
The home was likewise unsexed in this terrain, with women anticipated to take major responsibility for ménage administration and keep, while males were supposed to give fiscal support for the family. As a result, the house came a position of unsexed places and prospects, with women's labour constantly being unseen and devaluated.
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Carla Vista Co, issued $580,000, 10-year, 8% bonds at 103. Your answer is correct. Prepare the journal entry to record the sale of these bonds on January 1, 2022. (Credit account titles are automatically indented when the amount is entered. Do not indent manually) Date Account Titles and Explanation Debit Credit Jan. 1 Cash 597400 580000 Bonds Payable 17400 Premium on Bonds Payable e Textbook and Media List of Accounts Attempts: 1 of 10 used Suppose the remaining Premium on Bonds Payable was $10,440 on December 31, 2025. Show the balance sheet presentation on this date. CARLA VISTA CO.
Balance Sheet (December 31, 2025) and journal entry to record the sale of Carla Vista Co.
What is balance sheet?
A balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time, typically at the end of a fiscal quarter or year. It shows the company's assets, liabilities, and equity, providing investors and analysts with insights into the company's financial health and solvency. The balance sheet is based on the accounting equation, which states that a company's assets must equal its liabilities plus its equity.
CARLA VISTA CO.
Balance Sheet (December 31, 2025)
ASSETS
Current Assets:
Cash $XXX
Total Current Assets XXX
Long-term Investments:
Bonds Issued at 103 $XXX
TOTAL ASSETS XXX
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Bonds Payable $580,000
Premium on Bonds Payable $10,440
Total Liabilities XXX
Stockholders' Equity:
Common Stock
Retained Earnings
Total Stockholders' Equity XXX
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY XXX
What is an equity?
In accounting and finance, equity refers to the ownership interest or residual value in an asset after deducting liabilities. In other words, equity represents the net assets of an entity that belongs to its owners. It is also referred to as shareholders' equity in the context of a corporation, where it represents the residual value of the assets that remain after the company has paid off all its debts and obligations. The equity is typically divided into shares, which are owned by the shareholders of the company.
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Other things equal, which reduces competition in an industry?Select one:a. Patent laws b. Freedom of entry for new firmsc. An increase in the number of producersd. An increase in the number of buyers
The correct option to the question will be a. Patent laws, as they can restrict competition by granting exclusive rights to inventors or assignees and limiting the ability of others to enter the market with similar inventions.
a. Patent laws. Patent laws grant exclusive rights to an inventor or assignee for a certain period of time, allowing them to prevent others from making, using, or selling their invention without permission. This can reduce competition in an industry by limiting the ability of other firms to enter the market with similar products or technologies, thereby reducing competition for the patent holder.
b. Freedom of entry for new firms. Freedom of entry for new firms means that there are no barriers or restrictions on new firms entering a particular industry. This promotes competition by allowing new players to enter the market and compete with existing firms, potentially leading to increased competition in the industry.
c. An increase in the number of producers. An increase in the number of producers typically leads to increased competition in an industry. When there are more firms producing similar goods or services, it can result in price competition, innovation, and other competitive strategies to attract customers, thereby reducing market power and increasing competition.
d. An increase in the number of buyers. An increase in the number of buyers may not necessarily reduce competition in an industry. In fact, it may have the opposite effect by creating more demand and potentially attracting more firms to enter the market, thereby increasing competition.
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Which items are usually cheaper in poorer countries? a. services b. computers c. iPods d. Big Macs
Cheaper items in poorer countries include services (option A).
In poorer countries, services such as manual labor and domestic help as well as food and basic necessities like clothing and housing, transportation, and other locally provided services tend to be cheaper due to lower wages and costs of living. However, items such as computers, iPods, and Big Macs may actually be more expensive in these countries due to import taxes and tariffs.
A developing or poor country is a country with a relatively low standard of living, an undeveloped industrial base, and a moderate to low Human Development Index (HDI). This index is a comparative measure of poverty, literacy, education, life expectancy, and other factors for countries worldwide.
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Also key to reporting a contingent liability is its __________ amount. The amount of potential loss is classified as either known, reasonably estimable, or not reasonably estimable.
The contingent liability's dollar amount must be reported, which is also important. There are three categories for prospective loss amounts: known, fairly estimable, and not reasonably estimable liability's.
When a future occurrence is likely to occur and its value can be fairly calculated, rules provide that contingent liabilities should be reflected in the accounts. In other words, a loss would be documented (as a debit) and a liability would be established (as a credit) before the settlement.
Depending on the likelihood of occurrence and the capacity to predict the projected outflow of resources, contingent liabilities are either recorded and reported as a liability or stated as a contingency in a footnote to the financial statements.
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Assume today is December 31, 2013. Barrington Industries expects that its 2014 after-tax operating income (EBITC1 - T) will be 5430 million and its 2014 depreciation expense will be $70 million. Barrington's 2014 gross capital expenditures are expected to be $100 million and the change in its net operating working capital for 2014 will be $20 million. The firm's free cash flow is expected to grow at a constant rate of 5% annually. Assume that its free cash flow occurs at the end of each year. The firm's weighted average cost of capital is 8.34; the market value of the company's debt is $3 billion and the company has 190 million shares of common stock outstanding. The firm has no preferred stock on its balance sheet and has no plans to use it for future capital budgeting projects. Using the corporate valuation model, what should be the company's stock price today (December 31, 2013)? The company's stock price will be equal to Blank 1 per share. Round your answer to the nearest cent. Do not round intermediate calculations Blank 1 Add your answer
The company's stock price today (December 31, 2013) should be $953.64 per share (rounded to the nearest cent).
V = (FCF1 / (WACC - g))
FCF1 = (EBITC1 - T + Depreciation - Capital Expenditures - Change in Net Operating Working Capital)
= (5430 - 70 - 100 - 20)
= 5240 million
V = (5240 / (0.0834 - 0.05))
= 180,891.16 million
Stock price = V / Number of shares
= 180,891.16 / 190
= 953.6366316
Stock price refers to the current market value at which a share of stock is being traded on a stock exchange. It is determined by the forces of supply and demand in the market and reflects the perceived value of the company that issued the stock.
The price of a stock can be influenced by a variety of factors, including the company's financial performance, news and events related to the company, and broader economic and political trends. Investors use stock prices to evaluate the potential risks and rewards of investing in a particular company's stock. They may also use stock prices to make decisions about buying or selling shares of stock in order to achieve their investment goals.
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The Begal Cycle and The Chocom Saved Help Save & Exit Submit Check my work 80 38 Imperial Jewelers manufactures and sells a gold bracelet for $402.00. The company's accounting system says that the unit product cost for this bracelet is $267.00 as shown below Direct materials $ 149 Direct labor Manufacturing overhead Unit product cost $ 267 The members of a wedding party have approached Imperial Jewelers about buying 22 of these gold bracelets for the discounted price of $362.00 each.
The Bengal Cycle and The Chocom Saved are not relevant terms to the question you have asked.
As for the question itself, Imperial Jewelers manufactures and sells a gold bracelet for $402.00 with a unit product cost of $267.00. The unit product cost is calculated by adding the cost of direct materials, direct labor, and manufacturing overhead. The wedding party has approached Imperial Jewelers about buying 22 of these gold bracelets for the discounted price of $362.00 each. It is important to consider if selling the bracelets at a discounted price will still allow the company to cover their unit product cost and make a profit.
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describe briefly the a-b-c approach to inventory control
The ABC approach, also known as the ABC analysis, is a method used to categorize inventory items based on their value and importance. It helps businesses prioritize their inventory management efforts to improve efficiency and reduce costs.
The approach consists of three categories:
A - High-value items: These items contribute significantly to the company's revenue and usually have a high cost or require careful handling. They represent a small percentage of the total inventory, but their value is significant. These items require close monitoring and strict control measures to prevent stockouts and minimize holding costs.
B - Medium-value items: These items have a moderate impact on the company's revenue and costs. They represent a larger percentage of the inventory but still require some level of control and monitoring to ensure optimal stock levels and avoid overstocking or stockouts.
C - Low-value items: These items contribute the least to the company's revenue and typically have a low cost. They represent the majority of the inventory items but have a relatively low impact on the overall business performance. These items require less strict control measures and can be managed using more straightforward and cost-effective methods.
To implement the ABC approach to inventory control, follow these steps:
1. Categorize inventory items into A, B, and C groups based on their value and importance.
2. Establish appropriate control measures for each group, such as tighter control for A items and more relaxed control for C items.
3. Monitor and review inventory levels regularly, adjusting control measures as needed to ensure optimal stock levels and minimize costs.
Using the ABC approach, businesses can focus their resources on high-value items, streamline their inventory management processes, and ultimately improve profitability.
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Why should investors be careful about using the CAPM forvaluation purposes?
The CAPM is a widely-used finance theory that establishes a relationship between the expected return of an investment and its risk.
1. Market efficiency: CAPM assumes that markets are efficient, meaning that all relevant information is already factored into the prices of assets. However, markets may not always be efficient, which can lead to incorrect estimates of expected returns.
2. Risk-free rate: The model uses a risk-free rate as a base for calculating expected returns. In reality, a truly risk-free investment does not exist, as even government bonds carry some degree of risk.
3. Beta as a measure of risk: CAPM uses beta to represent the systematic risk of an investment. However, beta may not accurately capture all the risks associated with an investment, especially for individual stocks or assets with unique characteristics.
4. Linearity: The model assumes a linear relationship between risk and return, but this may not always be the case. In some situations, the relationship could be nonlinear or more complex.
Due to these limitations, investors should be cautious when using the CAPM for valuation purposes and consider supplementing it with other methods or tools to obtain a more accurate and comprehensive valuation.
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A _____ is a form element used for entering data and running commands.a. macrob. form commandc. moduled. form control
The correct answer is d. form control. A "form control" is a form element used for entering data and running commands.
It can be used in various types of forms such as data entry forms, survey forms, and contact forms. Form controls allow users to interact with a form by entering data, selecting options, and submitting information.
Examples of form controls include text boxes, drop-down lists, radio buttons, checkboxes, and buttons. They are an essential component of user-friendly forms as they provide a convenient and intuitive way for users to input and manipulate data.
Overall, form controls play a crucial role in ensuring the usability and effectiveness of web forms.
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a stock has an expected return of 14.9 percent, the risk-free rate is 5.85 percent, and the market risk premium is 7.6 percent. what must the beta of this stock be? (do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.)
The beta of this stock must be 1.19.
The beta of a stock can be calculated using the Capital Asset Pricing Model (CAPM) formula, which is:
r = rf + β(rm - rf)
Where:
r = expected return of the stock
rf = risk-free rate
β = beta of the stock
rm = expected return of the market
rm - rf = market risk premium
Plugging in the given values:
r = 14.9%
rf = 5.85%
rm - rf = 7.6%
14.9% = 5.85% + β(7.6%)
Simplifying the equation:
14.9% - 5.85% = β(7.6%)
9.05% = β(7.6%)
β = 9.05% / 7.6% = 1.19 (rounded to 2 decimal places)
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Teks gambar yang ditranskripsi :19. Perusahaan X memiliki Return on Equity (ROE) sebesar 17%, total debt ratio sebesar 0,6. Jika perusahaan memiliki rasio perputaran aset tetap 0,54, berapa margin keuntungannya? a) 7,4% Ob) 3,08% Oc)9% O d) 8,5% O e) Tidak dapat ditentukan
The profit margin of the company X is 19.68%, which is not one of the options given. Therefore, the correct answer is e) Tidak dapat ditentukan (cannot be determined).
Based on the given information, we can use the DuPont analysis formula to calculate the profit margin of the company X.
ROE = Net Profit Margin x Total Asset Turnover x Equity Multiplier
Given:
ROE = 17%
Total Debt Ratio = 0.6
Asset Turnover Ratio = 0.54
Equity Multiplier = 1 + Debt-to-Equity Ratio
Debt-to-Equity Ratio = Total Debt / Total Equity
Total Debt = Total Debt Ratio x Total Equity
Total Equity = 1 - Total Debt Ratio
Total Equity = 1 - 0.6 = 0.4
Total Debt = 0.6 x 0.4 = 0.24
Debt-to-Equity Ratio = 0.24 / 0.4 = 0.6
Equity Multiplier = 1 + 0.6 = 1.6
Now we can rearrange the DuPont formula to find the Net Profit Margin:
Net Profit Margin = ROE / (Total Asset Turnover x Equity Multiplier)
Net Profit Margin = 17% / (0.54 x 1.6)
Net Profit Margin = 17% / 0.864
Net Profit Margin = 19.68%
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the weekly report you prepare for your supervisor about your team’s progress toward performance targets is considered:
Upward communication keeps managers aware of how employees feel about their jobs, policies and procedures, and the business in general.
What is upward communication?Upward communication is the transfer of knowledge from lower levels of a hierarchy to higher levels.
This type of communication is becoming more and more common as conventional methods of communication fall out of favour in businesses.
With more traditional organisational structures, such as a hierarchy, people are split into many levels.
Since at least the 1960s, the term "upward communication" has been used to describe the techniques used by lower status members of these hierarchies to communicate with higher status members.
When there is upward communication, employees are better able to express their demands, ideas, and feelings. The whistleblower policy typically makes use of upward communication.
Each employee is given the opportunity to speak with senior management directly about matters that require scrutiny from a vigilance perspective.
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Penny's direct material cost is $6 per unit. The direct labor rate is $10 per hour and each units takes 7 hour to produce Variable manufacturing overhead is $1 per unit and total budgeted fixed overhead is $5800 A sales commission of $2 is paid on each unit . Il Penny expects to produce 2700 units and sell 1400 units, what is the budget cost of goods sold per unit? Round your answer to the nearest 2 decimal places
Answer:
the budget cost of goods sold per unit is $81.15 rounded to the nearest 2 decimal places.
Explanation:
Direct materials cost per unit = $6
Direct labor cost per unit = 7 hours x $10/hour = $70
Variable manufacturing overhead per unit = $1
Total variable cost per unit = $6 + $70 + $1 = $77
To calculate the total fixed manufacturing overhead, we divide it by the expected production volume:
Total fixed overhead per unit = $5800 ÷ 2700 units = $2.15
Total cost per unit = Total variable cost per unit + Total fixed overhead per unit = $77 + $2.15 = $79.15
Finally, we add the sales commission per unit to get the budget cost of goods sold per unit:
Budget cost of goods sold per unit = $79.15 + $2 = $81.15
Therefore, the budget cost of goods sold per unit is $81.15 rounded to the nearest 2 decimal places.
You are researching the average SAT score, and you want to know how many people you should survey if you want to know, at a 98% confidence level, that the sample mean score is within 50 points of the true population mean. From above, we know that the population standard deviation is 194, and z0.01 -2.326. What is the minimum sample size that should be surveyed? Select the correct answer below: a. 20 people b. 244 people c. 81 people d. 82 people e. 37,636 people
The minimum sample size that should be surveyed to know, at a 98% confidence level, that the sample mean score is within 50 points of the true population mean is 82 people, as option (d) suggests.
The use of the formula for sample size calculation, which states that n = (z^2 * σ^2) / E^2, where n is the sample size, z is the z-score for the desired confidence level (in this case, z0.01 = -2.326), σ is the population standard deviation (given as 194), and E is the maximum allowable error (in this case, 50). Plugging in these values, we get:
n = (-2.326)^2 * 194^2 / 50^2 = 82.27
Since we cannot have a fraction of a person, we round up to 82 people as the minimum sample size.
To ensure a 98% confidence level that the sample mean score is within 50 points of the true population mean, at least 82 people should be surveyed.
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tanaka industrial systems company is trying to decide between two different conveyor belt systems. system a costs $320,000, has a 4-year life, and requires $117,000 in pretax annual operating costs. system b costs $400,000, has a 6-year life, and requires $111,000 in pretax annual operating costs. both systems are to be depreciated straight-line to zero over their lives and will have zero salvage value. suppose the company always needs a conveyor belt system; when one wears out, it must be replaced. assume the tax rate is 21 percent and the discount rate is 10 percent. calculate the eac for both conveyor belt systems.
System A has an EAC of $196,814.46 and System B has an EAC of $177,726.49. System B is the better choice as it has the lower EAC.
To calculate the EAC (Equivalent Annual Cost) for both conveyor belt systems, we need to find the annual cost of each system over its life and then discount those costs to their present value using the given discount rate. The EAC is then calculated as the present value of the costs divided by the present value factor for an annuity.
For System A:
Annual operating cost = $117,000
Depreciation = $320,000 / 4 = $80,000
Total annual cost = $117,000 + $80,000 = $197,000
The present value factor for an annuity of $1 per year for 4 years at a discount rate of 10% is 2.4869. Therefore, the present value of the costs for System A is:
Present value of costs = $197,000 x 2.4869 = $489,223.30
The EAC for System A is:
EAC = $489,223.30 / 2.4869 = $196,814.46
For System B:
Annual operating cost = $111,000
Depreciation = $400,000 / 6 = $66,666.67
Total annual cost = $111,000 + $66,666.67 = $177,666.67
The present value factor for an annuity of $1 per year for 6 years at a discount rate of 10% is 4.1116. Therefore, the present value of the costs for System B is:
Present value of costs = $177,666.67 x 4.1116 = $730,441.24
The EAC for System B is:
EAC = $730,441.24 / 4.1116 = $177,726.49
Therefore, the EAC for System A is $196,814.46 and the EAC for System B is $177,726.49. Based on the EAC analysis, System B would be the better choice since it has the lower EAC.
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Ecco Company has total fixed costs of $5,000, sells a product whose contribution margin is $50 and selling price per unit is $125, and has current sales of $15,000. The company's margin of safety ratio is 20%.TRUE OR FALSE
The statement "Ecco Company has total fixed costs of $5,000, sells a product whose contribution margin is $50 and selling price per unit is $125, and has current sales of $15,000. The company's margin of safety ratio is 20%." this is FALSE because, the company's margin of safety ratio is actually 16.67%, not 20%.
Here's the explanation:
1. Fixed costs: $5,000
2. Contribution margin per unit: $50
3. Selling price per unit: $125
4. Current sales: $15,000
First, we need to calculate the break-even point in units:
Break-even point (units) = Fixed costs / Contribution margin per unit = $5,000 / $50 = 100 units
Now, we need to find the actual number of units sold:
Units sold = Current sales / Selling price per unit = $15,000 / $125 = 120 units
Next, calculate the margin of safety in units:
Margin of safety (units) = Units sold - Break-even point (units) = 120 units - 100 units = 20 units
Finally, calculate the margin of safety ratio:
Margin of safety ratio = (Margin of safety (units) / Units sold) x 100% = (20 units / 120 units) x 100% = 16.67%
The company's margin of safety ratio is actually 16.67%, not 20%.
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You took a short position in Ten December Crude Palm Oil (CPO) futures contracts when the futures price of this underlying was $1,800 per Metric Ton. Each contract is for a delivery of 25 Metric Tons. The initial margin is $22,500 and the maintenance margin is $17,000. During the second trading day the CPO futures price settled at $1,850 per Metric Ton. What is the balance of your margin account at the end of the second trading day and will there be a margin call?A. $35,000 and no margin callB. $35,000 and a margin call will triggerC. $10,000 and no margin callD. $10,000 and a margin call will trigger
To find the balance of your margin account at the end of the second trading day and determine if there will be a margin call, follow these steps:
1. Calculate the initial total value of the short position: 10 contracts * 25 Metric Tons per contract * $1,800 per Metric Ton = $450,000.
2. Calculate the total value of the short position at the end of the second trading day: 10 contracts * 25 Metric Tons per contract * $1,850 per Metric Ton = $462,500.
3. Find the change in the value of the short position: $462,500 - $450,000 = $12,500 loss.
4. Calculate the balance of the margin account: Initial margin - change in value = $22,500 - $12,500 = $10,000.
5. Determine if a margin call will be triggered: The balance of the margin account ($10,000) is above the maintenance margin ($17,000), so a margin call will not be triggered.
So the correct answer is C. $10,000 and no margin call.
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The insurer. is a set dollar amount that you are responsible for paying before any coverage is provided by your A coverage B deductible provision D no-fault
The deductible provision Is a set dollar amount that you are responsible for paying before any coverage is provided by your insurer. Option B is the correct response.
The deductible provision is a standard feature of many insurance policies, including health, auto, and homeowner's insurance. It refers to a fixed dollar amount that the policyholder must pay out of pocket before the insurer begins to provide coverage.
For example, if a health insurance policy has a $1,000 deductible, the policyholder must pay the first $1,000 of covered medical expenses before the insurer begins to pay. After the deductible has been met, the insurer will typically cover a portion of the remaining costs, up to the policy's limit. Deductibles help to keep insurance premiums lower by requiring policyholders to share some of the cost of their care.
Option B is the correct response.
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The common stock and debt of Windows Phone Corp. are valued at $57 million and $27 million, respectively. Investors currently require a 15% return on the common stock and an 7% return on the debt. There are no taxes. Calculate the weighted average cost of capital. Enter your answer as a percentage. Do not include the percentage sign in your answers. Enter your answer rounded to 2 DECIMAL PLACES. WACC =
As a percentage, rounded to two decimal places, the WACC is 12.43%.
How to calculate the weighted average cost of capital (WACC)To calculate the weighted average cost of capital (WACC) for Windows Phone Corp., we'll use the formula:
WACC = (E/V) * Re + (D/V) * Rd
where E is the market value of the common stock, D is the market value of the debt, V is the total value of the company (E + D), Re is the required return on common stock, and Rd is the required return on debt.
E = $57 million
D = $27 million
V = E + D = $57 million + $27 million = $84 million
Re = 15%
Rd = 7%
Now, we can plug in the values to calculate WACC:
WACC = ($57 million / $84 million) * 15% + ($27 million / $84 million) * 7%
WACC = 0.67857 * 15% + 0.32143 * 7%
WACC = 0.101786 + 0.0225001
WACC = 0.1242861
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why did Puma build a single centralized Web site rather than
continue with multiple web sites serving different countries and
regions?
Puma built a single centralized website rather than continuing with multiple websites serving different countries and regions to have better control over their online presence and branding.
There are several other reasons as well why Puma decided to build a single centralized website:
1. Consistency: A centralized website ensures a consistent brand image and user experience across all regions.
2. Simplified Management: Managing one website reduces the complexity and resources required to maintain multiple sites.
3. Cost Savings: A single website allows Puma to save on costs associated with development, maintenance, and updates of multiple sites.
4. Easier Updates: With a centralized site, Puma can easily implement changes, updates, or new features across all regions simultaneously which would be a hassle with multiple websites.
5. Centralized Data: A single website allows Puma to gather and analyze data from all regions in one place, making it easier to understand customer behavior and preferences.
In summary, Puma chose to build a single centralized website to ensure brand consistency, simplify management, save costs, streamline updates, and centralize data analysis.
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Problem 23-1 Expected yieldYou own a bond with an annual coupon rate of 5% maturing in two years and priced at 86%. Suppose that there is a 8% chance that at maturity the bond will default and you will receive only 44% of the promised payment. Assume a face value of $1,000.a. What is the bond’s promised yield to maturity? (Enter your answer as a percent rounded to 2 decimal places.)b. What is its expected yield (i.e., the possible yields weighted by their probabilities)? (Enter your answer as a percent rounded to 2 decimal places.)
a) the bond’s promised yield to maturity is 5.81%.
b) The value of expected yield is 6.53%
How to calculate the bond's promised yield to maturitya. To calculate the bond's promised yield to maturity, we need to use the formula:
Promised Yield to Maturity = Annual Coupon Payment / Bond Price + ((Face Value - Bond Price) / Number of Years) / 2
Where:
Annual Coupon Payment = Face Value * Annual
Coupon Rate = $1,000 * 5% = $50
Bond Price = $1,000 * 86% = $860
Face Value = $1,000 Number of Years = 2
Promised Yield to Maturity = $50 / $860 + (($1,000 - $860) / 2) / 2
Promised Yield to Maturity = 5.81%
Therefore, the bond's promised yield to maturity is 5.81%.
b. To calculate the bond's expected yield, we need to take into account the probability of default and the reduced payment in case of default.
The possible yields are:
- Yield with no default: 5.81% - Yield with default:
(44% * $1,000 + $50) / $860 = 60.47%
The probability of no default is 1 - 8% = 92%.
Therefore, the expected yield is:
Expected Yield = (92% * 5.81%) + (8% * 60.47%)
Expected Yield = 6.53%
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On June 1, 2020, Royal Palm Company sold 6,000 of its 6%, 20-year, $1,000 face value bonds at 96. Interest payment dates are December 1 and June 1, and the company uses the straight-line method of bond discount amortization. On February 1, 2018, Royal Palm took advantage of favorable prices of its stock to extinguish 4,000 of the bonds by issuing 500,000 shares of its $1 par value common stock. At this time, the accrued interest was paid in cash. The company’s stock was selling for $8.50 per share on February 1, 2018.
Instructions
Prepare the journal entries needed on the books of Royal Palm Company to record the following.
(a) June 1, 2020: issuance of the bonds.
(b) December 1, 2020: payment of semiannual interest.
(c) December 31, 2020: accrual of interest expense.
(d) February 1, 2019: extinguishment of 4,000 bonds. (No reversing entries made.)
Answer:
Explanation:
a) June 1, 2020: issuance of the bonds.
Cash received = 6,000 bonds × $1,000 face value × 0.96 = $5,760,000
Discount on bonds payable = 6,000 bonds × $1,000 face value × (1 - 0.96) = $240,000
Therefore, the journal entry is:
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Cash $5,760,000
Discount on Bonds Payable $240,000
Bonds Payable $6,000,000
(To record issuance of bonds on June 1, 2020)
(b) December 1, 2020: payment of semiannual interest.
Interest payment = 6,000 bonds × $1,000 face value × 6% × 6/12 = $180,000
Therefore, the journal entry is:
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Interest Expense $180,000
Cash $180,000
(To record payment of interest on December 1, 2020)
(c) December 31, 2020: accrual of interest expense.
Interest expense = $240,000 discount on bonds payable ÷ 40 semiannual periods
Therefore, the journal entry is:
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Interest Expense $6,000
Discount on Bonds Payable $6,000
(To record accrual of interest expense on December 31, 2020)
(d) February 1, 2019: extinguishment of 4,000 bonds. (No reversing entries made.)
The carrying value of the bonds is:
Carrying value = $6,000,000 face value - ($240,000 ÷ 40 semiannual periods × 1 semiannual period) = $5,880,000
The fair value of the 4,000 bonds extinguished is:
Fair value = 4,000 bonds × $1,000 face value × 0.96 + $180,000 accrued interest = $4,044,000
The gain or loss on the extinguishment is:
Gain or loss = Fair value - Carrying value = $4,044,000 - $5,880,000 = -$1,836,000 (loss)
The number of shares issued to extinguish the bonds is:
Number of shares = $4,044,000 fair value ÷ $8.50 per share = 476,470 shares
Therefore, the journal entry is:
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Bonds Payable $4,000,000
Discount on Bonds Payable $160,000
Loss on Bond Extinguishment $1,836,000
Common Stock $476,470
Paid-in Capital in Excess of Par - Common $3,683,530
(To record extinguishment of 4,000 bonds on February 1, 2019)
Interest Expense $180,000
Cash $180,000
(To record payment of accrued interest on February 1, 2019)
