Answer:
12.5%
4 years
NPV = $302,387
PV of cash flows = $1,552,387
Amount invested = $1,250,000
Explanation:
Average rate of return = net income / amount invested
Net income = cash flow - depreciation
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
1,250,000 / 8 = 156,250
Net income = $312,500 - 156,250 = $156250
(156250 / $1,250,000) x 100 = 12.50%
Payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative cash flows
Payback period = Amount invested / cash flow
$1,250,000 / $312,500 = 4 years
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
Cash flow in year 0 = $-1,250,000
Cash flow each year from year 1 to 8 = $312,500
I = 12%
NPV = $302,387
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
Hudson Corporation is considering three options for managing its data warehouse: continuing with its own staff, hiring an outside vendor to do the managing (referred to as outsourcing), or using a combination of its own staff and an outside vendor. The cost of the operation depends on future demand. The annual cost of each option (in thousands of dollars) depends on demand as follows:
Demand
Staffing Options High Medium Low
Own staff 650 650 600
Outside vendor 900 600 300
Combination 800 650 500
Required:
a. If the demand probabilities are 0.2, 0.5, and 0.3, which decision alternative will minimize the expected cost of the data processing operation?
b. Construct a risk profile for the optimal decision in part (a).
Answer:
Explanation:
a. If the demand probabilities are 0.2, 0.5, and 0.3, which decision alternative will minimize the expected cost of the data processing operation?
Expected value own staff = 0.2(650 + 0.5(650) + 0.3(300) = 635
EV outside vendor = 0.2(900) + 0.5(600) + 0.3(300) = 570
EV combination = 0.2(800) + 0.5(650) + 0.3(500) = 635
Therefore, the correct answer is outside vendor since it has the minimum expected value.
b. Construct a risk profile for the optimal decision in part (a)
Demand Cost Probability
Low. 300000. 0.3
Medium. 600000. 0.5
High 900000. 0.2
The required probability is 0.2
Kari is a limited partner in Lizard Partnership. This year, Kari's share of partnership ordinary income is $20,000, and she received a cash distribution of $30,000. Kari's tax basis in her partnership interest at the beginning of the year was $50,000. Her marginal tax rate is 22 percent. Kari qualifies for the QBI deduction, without regard to the wage or taxable income limitations.
a. Calculate the tax cost of Kari's partnership earnings this year Tax cost
b. Compute Kari's after-tax cash flow from her partnership activity this year After-tax cash flow
c. Compute Kari's tax basis in her partnership interest at the ending of the year. Assume no change in her share of partnership during the year.
Answer: a. $3520
b. $26480
c. $40000
Explanation:
a. Calculate the tax cost of Kari's partnership earnings this year Tax cost
Ordinary Income = $20000
Less: 199A deduction = 20% × $20000 = $4000
Ordinary Income share = $16000
The tax cost of Kari's partnership earnings this year Tax cost will be:
= 22% × $16000
= 0.22 × $16000
= $3520
b. Compute Kari's after-tax cash flow from her partnership activity this year After-tax cash flow
This will be:
= Cash distribution - Tax cost
= $30000 - $3520
= $26480
c. Compute Kari's tax basis in her partnership interest at the ending of the year. Assume no change in her share of partnership during the year.
Basis at start of year = $50000
Add: Ordinary income = $20000
Adjusted basis = $50000 + $20000 = $70000
Less: Cash distribution = $30000
End of year basis = $40000
Steps in the Accounting Cycle Listed below, out of order, are the steps in an accounting cycle.
1. Prepare the unadjusted trial balance.
2. Post journal entries to general ledger accounts.
3. Analyze transactions from source documents.
4. Journalize and post adjusting entries.
5. Prepare the financial statements.
6. Record transactions in a journal.
7. Prepare the post-closing trial balance.
8. Prepare the adjusted trial balance.
9. Journalize and post closing entries.
(a) Place the numbers from the above list in the order in which the steps in the accounting cycle are performed.
3, 6, 2, 1, 4, 8, 5, 9, 7
2, 3, 6, 1, 4, 8, 5, 9, & 7
3, 6, 2, 1,4,8,5,7, & 9
6, 3, 2, 1, 4, 8, 5, 9, & 7
(b) identify the steps in the accounting cycle that occur daily.
1, 2, 3, & 6
2, 3, & 4
1, 2, 3, 4,&6
2, 3, & 6
Answer:
Steps in the Accounting Cycle
a) The order in which the steps in the accounting cycle are performed is:
3, 6, 2, 1, 4, 8, 5, 9, 7
b) The steps in the accounting cycle that occur daily are:
2, 3, & 6
Explanation:
The correct ordered steps in the account cycle are:
3. Analyze transactions from source documents.
6. Record transactions in a journal.
2. Post journal entries to general ledger accounts.
1. Prepare the unadjusted trial balance.
4. Journalize and post adjusting entries.
8. Prepare the adjusted trial balance.
5. Prepare the financial statements.
9. Journalize and post closing entries.
7. Prepare the post-closing trial balance.
A maximum price control on cellular telephones (cellular telephones) A. A surplus of cellular telephones B. An increase in demand for cellular telephones C. A decrease in supply of cellular telephones D. An increase in quantity supplied and decrease in quantity demanded of cell telephones E. None of the above
Answer:
A. A surplus of cellular telephones
Explanation:
In the case where the maximum price that are controlled on the cellular telephones so there would be the surplus of cellular telephones as the maximum price are charged from the customers due to which the company is able to generate the high profit that results in the surplus of the cellular telephones and the same would be controlled
Hence, the option b is correct
With regard to social welfare, oligopolists forming a cooperative alliance is Group of answer choices good because it leads to less disagreement and lower prices and more variety. good because forming a cooperative alliance closely resembles a perfectly competitive outcome. bad because prices will then be too high and output will be too low. bad because output will then be too high and prices will be too high. Flag question: Question 11
Reform Traders current net operating income is $16,800 and its average operating assets are $90,000. The company's required rate of return is 15%. A new project being considered would require an investment of $28,000 and would generate annual net operating income of $3,100. What is the residual income of the new project
Answer:
- $4,200
Explanation:
residual income = net operating income - cost of investment
therefore
residual income = $3,100 - $28,000 x 15%
= - $4,200
The residual income of the new project is - $4,200
Moses Moonrocks Inc. has developed a balanced scorecard with a measure map that suggests that the number of erroneous shipments has a direct effect on operating profit. The company estimates that every shipment error leads to a reduction of revenue by $3,000 and increased costs of about $2,000.
Sales $230,000
Cost of goods sold 150,000
Depreciation expense 30,000
Other expenses 20,000
Answer:
6
Explanation:
The computation of the shipping errors in the case of break even is given below;
But before that the net operating income is
Sales $230,000
Less: Cost of goods sold 150,000
Less: Depreciation expense 30,000
Less: Other expenses 20,000
Net operating income $30,000
Now the shipping errors is
= $30,000 ÷ ($3,000 + $2,000)
= 6
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Agency has a capital structure of 60 percent common stock, 5 percent preferred stock, and 35 percent debt. The dividend payout ratio is 30 percent, the company's beta is 1.21, and the tax rate is 21 percent. Given this, which one of the following statements is correct?
a. The aftertax cost of debt will be greater than the current yield-to-maturity on the company's outstanding bonds.
b. The company's cost of preferred is most likely less than the company's actual cost of debt.
c. The cost of equity is unaffected by a change in the company's tax rate.
d. The cost of equity can only be estimated using the capital asset pricing model.
e. The weighted average cost of capital will remain constant as long as the company's capital structure remains constant.
Answer: c. The cost of equity is unaffected by a change in the company's tax rate.
Explanation:
The cost of debt can be adjusted for taxes because interest payments are tax deductible. This is not the case with Equity. Equity is not tax deductible so there is not adjustment to the cost of Equity for taxes.
This means therefore, that the calculation of cost of equity will not change in any way due to the company's tax rate. For this reason, the cost of equity is usually higher than that of debt.
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everything on the scale is a good idea for me to church.
do u want to go to gym at the same time and I
In mid-2019, an article in the Wall Street Journal quoted an investment analyst as stating that "heightened expectations of a [federal funds] rate cut may now force the Fed to act sooner than intended to avoid disappointing the market and driving up stocks' volatility over the summer." Source: Jessica Menton and Nathan Allen, "U.S. Stocks Edge Lower, Extending Losses," Wall Street Journal, June 12, 2019. Is avoiding volatility part of the Fed's dual mandate?
Answer: B. No, this is not part of the Fed's dual mandate of price stability and high employment.
Explanation:
For any economy to grow there needs to be price stability in the economy as it helps investors plan their future spending amongst other things. This is why the Fed has the mandate to keep prices stable.
The Fed however, does not have to maintain the stability of prices in the stock market which can be a very volatile market where the volatility is one of the very ways to make gains.
Thomlin Company forecasts that total overhead for the current year will be $11,742,000 with 164,000 total machine hours. Year to date, the actual overhead is $7,547,000 and the actual machine hours are 83,000 hours. The predetermined overhead rate based on machine hours is Round the factory overhead rate to the nearest dollar before multiplying by the number of hours. a.$46 per machine hour b.$141 per machine hour c.$91 per machine hour d.$72 per machine hour
Answer:
d.$72 per machine hour
Explanation:
Predetermined overhead rate = Budgeted Overheads ÷ Budgeted Activity
therefore,
Predetermined overhead rate = $11,742,000 ÷ 164,000
= $71.598 or $72
The predetermined overhead rate based on machine hours is $72 per machine hour.
TB MC Qu. 10-144 (Algo) Doogan Corporation makes a product ... Doogan Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Direct materials 2.0 grams $ 7.00 per gram Direct labor 0.8 hours $ 16.00 per hour Variable overhead 0.8 hours $ 4.00 per hour The company produced 4,400 units in January using 10,140 grams of direct material and 2,120 direct labor-hours. During the month, the company purchased 10,710 grams of the direct material at $7.40 per gram. The actual direct labor rate was $16.95 per hour and the actual variable overhead rate was $3.70 per hour. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for January is:
Answer:
Material quantity variance = $9,380 adverse
Explanation:
A material usage variance occurs when the standard quantity required to active a particular level of production is higher or lower than than the actual actual quantity used. A favorable variance would mean than less quantity of materials were used than the standard to achieve a given output level. And an adverse variance would mean the opposite
We can calculate it as follows:
grams
4,400 units should have used (4,400× 2 grams) 8,800
but did use 10,140
1,340 adverse
standard price per g × $7______
Material quantity variance $ 9,380 adverse
Material quantity variance = $9,380 Adverse
Neumann Corporation issues convertible preferred stock that is mandatorily redeemable five years from the date of issuance. During the last two years that the preferred shares are outstanding, investors may convert each one share of preferred stock to two shares of common stock. Prior to conversion or redemption, the preferred shares should be classified on the balance sheet as:
Answer:
Equity
Explanation:
The preferred shares should be classified on the balance sheet as equity. Equity is the residue after Liabilities are deducted from the Assets. They also represents owners investments in the company.
The preferred shares should be recorded as equity on the balance sheet. After Liabilities are subtracted from Assets, Equity is the remaining amount. They also symbolize the company's investments by its owners.
About Equity:
The worth of a company's own shares is referred to as equity. This is most commonly used in the context of a company's balance sheet, and its valuation is determined by a precise computation. More exactly, equity is a company's total, liquid value less any outstanding loans or liabilities. Understanding what this term signifies is critical to comprehending a company's finances.
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Given the following information, calculate the debt coverage ratio for this investment. Potential gross income: $120,000, Vacancy rate: 9%, Net operating income: $57,900, Operating expenses: $51,300, Acquisition Price: $520,000, Debt service: $40,000.
Answer:
the debt coverage ratio is 1.4475 times
Explanation:
The computation of the debt coverage ratio is shown below;
The Debt coverage ratio for investment is
= net operating income ÷ Total debt
= $57,900 ÷ $40,000
= 1.4475 times
BY dividing the net operating income by the total debt we can get the debt coverage ratio
hence, the debt coverage ratio is 1.4475 times
On January 1, Year 1, Parker Company purchased an asset costing $20,000. The asset had an expected five-year life and a $2,000 salvage value. The company uses the straight-line method. What are the amounts of depreciation expense and accumulated depreciation, respectively, that will be reported in the Year 2 financial statements
Answer:
3600
7200
Explanation:
Robert Nozick's direct criticism of the importance of income equality is that: a. trade performed on a cumulative basis would result in equal outcomes and opportunities for people. b. All of the answers are correct. c. peaceful trade should not be condemned even when it leads to large differences in wealth. d. equality results only from freely chosen market transactions, devoid of coercive force or fraud.
Answer: c. peaceful trade should not be condemned even when it leads to large differences in wealth.
Explanation:
Income inequality simply refers to the unevenly distribution of income in a population. It should be noted that the less equal the distribution, the higher the income inequality will be.
According to Robert Nozick, the direct criticism of the importance of income equality is that peaceful trade should not be condemned even when it leads to large differences in wealth.
Kierofree Air Tours has the following payroll data for its November 5 pay date:
Nov 5 Wages and salaries expense 522 $199,023.00
Federal withholding tax payable 220 $33,833.91
Social Security tax payable 221 11,442.35
Medicare tax payable 222 2,676.03
401(k) contributions payable 223 6,965.81
Health Insurance payable 224 14,468.97
Union Dues payable 227 4,975.58
Wages and salaries payable 226 ???
How much is the net pay?
a) $199,023.00
b) $185,216.26
c) $142,578.94
d) $124,660.35
Answer:
a probably as far as I can solve
The following information is available for a company's utility cost for operating its machines over the last four months. Month Machine hours Utility cost January 940 $ 5,490 February 1,840 $ 6,980 March 2,480 $ 8,100 April 640 $ 3,900 Using the high-low method, the estimated variable cost per machine hour for utilities is:
Answer:
Variable cost per unit= $2.28
Explanation:
Giving the following information:
January 940 $ 5,490
February 1,840 $ 6,980
March 2,480 $ 8,100
April 640 $ 3,900
To calculate the variable cost per machine hour under the high-low method, we need to use the following formula:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (8,100 - 3,900) / (2,480 - 640)
Variable cost per unit= $2.28
When amortizing the discount on bonds payable, the amount of interest expense reported on the income statement will always be less than cash paid for interest. True or false?
Swifty Company has recorded the following items in its financial records. Cash in bank $47,300 Cash in plant expansion fund 102,000 Cash on hand 13,700 Highly liquid investments 36,000 Petty cash 530 Receivables from customers 96,600 Stock investments 63,500 The highly liquid investments had maturities of 3 months or less when they were purchased. The stock investments will be sold in the next 6 to 12 months. The plant expansion project will begin in 3 years. (a) What amount should Swifty report as "Cash and cash equivalents" on its balance sheet?
Answer:
$97,530
Explanation:
The computation of the cash & cash equivalent is shown below:
= Cash in Bank + Cash on Hand + Highly Liquid Investment + Petty Cash
= $47,300 + $13,700 + $36,000 + $530
= $97,530
We simply added the above four items so that the cash & cash equivalent could come
Therefore the amount that should be reported is $97,530
Your financial investments consist of U.S. government bonds maturing in twenty years and shares in a start-up internet company. If interest rates on newly-issued government bonds increase, then the price of your bonds will _____ and the price of the shares you own will _____.
Answer:
Decrease, Decrease
Explanation:
From the question we are informed about my financial investments which consist of U.S. government bonds maturing in twenty years and shares in a start-up internet company. In the case whereby the interest rates on newly-issued government bonds increase, then the price of my bonds will decrease and the price of the shares you own will decrease. Financial investment can be regarded as asset which one put money on hoping that there will be growth of the asset and the asset will appreciate to sum of money larger than the asset. Bond is an example of this, a bond can be explained as fixed income instrument which is a representation of a loan that is set up by an investor given out to a borrower. This borrower could be governmental or Corporate.
The Owners of bonds could be
debtholders as well as creditors of the firm that issue it i.e the issuer. Details of bonds is " end date"
On the statement of cash flows prepared by the indirect method, a $50,000 gain on the sale of investments would be: Group of answer choices added to dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends. added to net income in converting the net income reported on the income statement to cash flows from operating activities. deducted from net income in converting the net income reported on the income statement to cash flows from operating activities. deducted from dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends.
Answer: deducted from net income in converting the net income reported on the income statement to cash flows from operating activities.
Explanation:
Cashflows relating to investments that a company has should go to the Investing section of the cashflow statement. This includes proceeds from their sale.
The gain on sales however, is included in the calculation of net income and net income goes to the operating section of the cashflow statement. When putting the total sales proceeds for the asset in the investing section therefore, the gain must be subtracted from the net income in order to avoid double counting as it is already included in the full sales proceeds going to the Investing section.
TaskMaster Enterprises employs a standard cost system in which direct materials inventory is carried at standard cost. TaskMaster has established the following standards for the prime costs of one unit of product. Standard Standard Standard Quantity Price Cost Direct Materials 9 pounds $ 1.80 per pound $ 16.20 Direct Labor 0.25 hour $ 7.20 per hour 1.80 $ 18.00 During November, TaskMaster purchased 198,000 pounds of direct materials at a total cost of $376,200. The total factory wages for November were $46,000, 90% of which were for direct labor. TaskMaster manufactured 21,000 units of product during November using 170,000 pounds of direct materials and 6,000 direct labor hours. What is the direct labor efficiency variance for November
Answer:
Direct labor time (efficiency) variance= $5,400 unfavorable
Explanation:
Giving the following information:
Standard= Direct Labor 0.25 hour $ 7.20 per hour
Actual= 6,000 hours
Number of units= 21,000
To calculate the direct labor efficiency variance, we need to use the following formula:
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
Direct labor time (efficiency) variance= (21,000*0.25 - 6,000)*7.2
Direct labor time (efficiency) variance= (5,250 - 6,000)*7.2
Direct labor time (efficiency) variance= $5,400 unfavorable
Wilson, an employee in a private-sector bank, has been suspected of stealing company funds and subsequently threatening and harassing some of his coworkers who refused to participate in his plans. Wilson, however, completely denies the accusations and maintains that he is innocent. Because of the lack of strong evidence, the ethics committee of the company decides to administer a polygraph test to Wilson. To ensure compliance with the rules of the Employee Polygraph Protection Act, which of the following should the committee do while conducting the test?
a. It should not inform Wilson or get his permission prior to conducting the test.
b. It should not allow Wilson to stop the test at any time depending on his personal will.
c. It should decide if Wilson is to be terminated or retained solely based on the results.
d. It should only use licensed, bonded examiners to conduct the test.
Answer: d. It should only use licensed, bonded examiners to conduct the test.
Explanation:
The purpose of the Employee Polygraph Protection Act is to ensure that employees get tested according to the highest levels of fairness and professionalism. To that end, only licensed examiners who have had training should be able to administer the test.
In addition to that, these examiners must sign a bond that they will be required to pay if it is shown that during the course of the exam, they engaged in practices that were unfairly or illegal towards the employee being examined.
Why would a Roth 401(k) investment plan allow you to invest the most amount of money?
Answer:
401k
Explanation:
investment plan allow you to invest the most amount of money? ... A Roth 401(k) plan takes money after tax has been removed from gross income, and has a contribution limit, but withdrawal is tax free. A Roth Individual Retirement Account allows you to draw a fixed amount that is not taxed.
Suppose you can only invest in the stock markets of two countries: US and China. The US has an expected return of 5.0% and a standard deviation of 15.0%. China has an expected return of 7.0% and a standard deviation of 22.0%. The correlation between the returns in the two markets is 0.3. The risk-free rate is 3.0%. What is the maximum Sharpe ratio you can obtain (rounded to the nearest 0.001)
Answer:
The maximum Sharpe ratio you can obtain is 0.182.
Explanation:
Sharpe ratio = (Stock's expected return - Risk-free rate) / Standard Deviation …………… (1)
Therefore, we have:
Sharpe ratio of the US stock market = (5.0% - 3.0%) / 15.0% = 0.133
Sharpe ratio of China stock market = (7.0% - 3.0%) / 22.0% = 0.182
Since you can only invest in the stock markets of US and China, and the Sharpe ratio of China stock market of 0.182 is greater than the Sharpe ratio of the stock market of 0.133, this implies that the maximum Sharpe ratio you can obtain is 0.182.
An agreement is formed between a new company and an existing well-established organization. The agreement states that the established company will provide financial capital and other resources and the start-up will contribute its technological expertise. This method of acquiring new technology is known as g
Answer:
Research partnership
Explanation:
The Research partnership is the partnership which can be designed for the particular new technology development. In this, the reasearchers and the stakeholders would be worked together in a research project that represent the important part of the research. In addition to this, the established company would give the financial capital & other resoruces also the startip would be able to contribute the technological expertise.
Therefore the above represent the answer
In management, An agreement that is set up between a new company and an existing well-established organization that can result to acquiring new technology is is Research partnership.
Research partnership serves as agreement that is usually signed by two companies i.e new one and established one.This agreement is about how the established organization will help the new one financially and with resources.This method di results to occurrence of technological expertise.
Therefore, Research partnership helps in
acquiring new technology.
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The charter of a corporation provides for the issuance of 99,983 shares of common stock. Assume that 38,266 shares were originally issued and 4,896 were subsequently reacquired. What is the amount of cash dividends to be paid if a $4 per share dividend is declared
Answer:
$1,337,480
Explanation:
Dividend is paid on outstanding shares. So, the amount of cash dividends to be paid = [38,266 - 4,896] * $4 = $33,4370 * $4 = $1,337,480
Cliff Company traded in an old truck for a new one. The old truck had a cost of $130,000 and accumulated depreciation of $65,000. The new truck had an invoice price of $135,000. Huffington was given a $63,000 trade-in allowance on the old truck, which meant they paid $72,000 in addition to the old truck to acquire the new truck. If this transaction has commercial substance, what is the recorded value of the new truck
Answer:
the recorded value of the new truck is $135,000
Explanation:
The computation of the recorded value of the new truck is given below;
In the case when the transaction has the commercial substance so the recorded value of the new truck would be equivalent to the invoice price or the fair value i.e. $135,000
Hence, the recorded value of the new truck is $135,000
The same would be considered and relevant
And all other values are to be ignored