Based on the given information, the fair price for Builtrite stock is $100.00 (option d).
To determine the fair price of Builtrite common stock, we can use the dividend discount model (DDM). The DDM calculates the present value of expected future dividends.
The formula for the DDM is as follows:
Fair Price = Dividend / (Required Return - Dividend Growth Rate)
In this case, the dividend just paid is $3.00, the expected dividend growth rate is 9% (0.09), and the required return is 12% (0.12).
Fair Price = $3.00 / (0.12 - 0.09) = $3.00 / 0.03 = $100.00
Therefore, based on the given information, the fair price for Builtrite stock is $100.00 (option d).
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Which asian nation ranks higher than china in the world bank's doing business report, and why?
In the World Bank's Doing Business Report, Singapore ranks higher than China. Singapore is the easiest Asian nation to conduct business in, according to the report, with a ranking of second globally in 2020, whereas China ranked 31st.
The country was also ranked among the top ten nations with the most business-friendly regulations, coming in at number two overall.The Doing Business Report is a yearly study that investigates and compares regulatory environments in countries around the world. The report assesses a variety of indicators that impact a nation's economy, including starting a company, obtaining permits, registering property, securing credit, and enforcing contracts.
In general, the doing business report rankings are based on how business-friendly countries are when it comes to dealing with the regulations that pertain to businesses. The rankings are based on data gathered from various businesses within the countries, with more than 100 economies evaluated in the most recent report.
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a. What were the strategic objectives behind McDonalds deciding
to implement this project?
McDonald's is a renowned fast-food chain that is present in more than 119 countries around the world. The company has introduced various projects that have helped it to enhance its customer base and increase its profitability. One of these projects was the introduction of self-order kiosks in the majority of its outlets.
The strategic objectives behind McDonald's deciding to implement this project are as follows:
1. Increase Efficiency: McDonald's introduced the self-order kiosks with the primary objective of increasing efficiency. Customers could place their orders themselves, without the assistance of a server. This helped to reduce the waiting time of customers and ensured that they received their orders quickly. The reduction in waiting time also helped to increase customer satisfaction levels.
2. Reduce Labor Costs: The implementation of the self-order kiosks also helped to reduce labor costs for McDonald's. The company could now hire fewer servers as customers could place their orders themselves. The money saved from labor costs could be used to invest in other areas of the business.
3. Enhance Customer Experience: Another strategic objective of implementing the self-order kiosks was to enhance the overall customer experience. Customers could now customize their orders according to their preferences and avoid any potential language barriers with servers. The kiosks also helped to reduce any order errors that could occur due to miscommunication.
4. Increase Revenue: Finally, the implementation of the self-order kiosks helped McDonald's to increase its revenue. The kiosks also allowed McDonald's to collect valuable data about customer preferences, which it could use to develop new products or promotions to increase sales.
In conclusion, the strategic objectives behind McDonald's decision to implement self-order kiosks in the majority of its outlets were to increase efficiency, reduce labor costs, enhance the customer experience, and increase revenue.
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Imboden Manufacturing Company established the following standard price and cost data: Sales price $15 per unit
Variable manufacturing cost $7 per unit Fixed manufacturing cost $32,500 total Fixed selling and administrative cost $24,000 total Imboden planned to produce and sell 18,000 units.It actually produced and sold 19,000 units.
Required a. Prepare the pro forma income statement that would appear in a master budget. Use the contribution margin format
b. Prepare the pro forma income statement that would appear in a flexible budget. Use the contibution margin format
The pro forma income statements for Imboden Manufacturing Company, both in the master budget and flexible budget, show an operating income of $95,500.
a. Pro Forma Income Statement (Master Budget)
Sales Revenue: (19,000 units * $15 per unit) = $285,000
Variable Manufacturing Costs: (19,000 units * $7 per unit) = $133,000
Contribution Margin: $285,000 - $133,000 = $152,000
Fixed Manufacturing Costs: $32,500
Fixed Selling and Administrative Costs: $24,000
Total Fixed Costs: $32,500 + $24,000 = $56,500
Operating Income: $152,000 - $56,500 = $95,500
b. Pro Forma Income Statement (Flexible Budget)
Sales Revenue: (19,000 units * $15 per unit) = $285,000
Variable Manufacturing Costs: (19,000 units * $7 per unit) = $133,000
Contribution Margin: $285,000 - $133,000 = $152,000
Fixed Manufacturing Costs: $32,500
Fixed Selling and Administrative Costs: $24,000
Total Fixed Costs: $32,500 + $24,000 = $56,500
Operating Income: $152,000 - $56,500 = $95,500
Both the pro forma income statements in the master budget and flexible budget show the same operating income of $95,500.
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TRUE / FALSE. An organization has current assets of $365,725,000 and current liabilities of $131,339,000. Note: For numeric responses, do not include commas (i.e., 1,000 should be entered as 1000). Round ratio responses to the nearest one hundredth (i.e., 1 would be 1.00). What is the amount of working capital? $ What is the working capital ratio? Question 11 1 pts The Balance Sheet is easier to interpret than the Income Statement. O True False
The working capital ratio is 2.79.
The amount of worksing capital is $234,386,000. And the working capital ratio is 2.79. The statement that is presented is FALSE. The income statement provides a clear and more detailed picture of a company’s financial health. It offers information on a company’s revenues and expenses, net income, and how much it has earned or lost over a particular period.What is the amount of working capital?The amount of working capital can be calculated using the formula below:Working Capital = Current Assets – Current Liabilities= $365,725,000 - $131,339,000= $234,386,000Therefore, the amount of working capital is $234,386,000.What is the working capital ratio?Working capital ratio can be calculated using the formula below : Working Capital Ratio = Current Assets / Current Liabilities= $365,725,000 / $131,339,000= 2.79 (rounded to two decimal places).
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In order to develop our schedule, we first need to define the activities, sequence them in the right order, estimate the resources needed, and estimate the time it will take to complete the tasks. Consider the Stake Dinner Project below. Identify the relevant activities, sequence the activities, estimate their durations and develop a Work Breakdown Structure and Network Diagram for this project.
The Stake Dinner Project involves a series of activities ranging from planning and coordination to execution and follow-up.
By identifying the relevant activities, sequencing them in the right order, estimating their durations, and developing a Work Breakdown Structure and Network Diagram, the project team can effectively schedule and manage the event, ensuring its successful execution within the desired timeframe.
The Stake Dinner Project involves organizing a dinner event for stakeholders. The relevant activities can be identified as follows:
Define event objectives and requirements., Determine the budget and secure funding., Select and book a suitable venue., Hire a catering service., Create a guest list and send out invitations., Arrange for decorations and ambience., Plan and coordinate the menu., Confirm attendance and dietary restrictions.,
Organize transportation for guests, if necessary., Prepare a program for the evening., Arrange for audiovisual equipment and technical support., Coordinate guest speakers or entertainment., Set up registration and check-in process., Manage event logistics on the day of the dinner., Conduct the stake dinner event., Follow up with attendees and gather feedback.
To sequence the activities, some dependencies need to be considered. For example, activities like securing funding, selecting a venue, and hiring a catering service should be completed before sending out invitations and confirming attendance. The durations for each activity will vary depending on the complexity and scale of the event.
A Network Diagram, such as a Gantt chart or a PERT chart, can be created to visualize the sequence of activities and their dependencies. This diagram will help identify the critical path, which represents the longest sequence of activities that determines the overall project duration.
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Driver Company Ltd has set the following standards for the production of one unit of product. Normal production each month is 500 units Standard Costs per unit: Direct materials: 8kg at $6.50 per kg Direct labour: 4 hours at $7.00 per hour During June, actual production amounted to 420 units. All direct material was purchased and used this month. Actual costs amounted to: Direct material: 3500kgs at a total cost of $21875 Direct labour: 1720 hours at a total cost of $12212 Required: Determine the standard material quantity allowed for June production
When all direct material was purchased and used this month, Standard material quantity allowed for June production is 3360 kgs.
To determine: Standard material quantity allowed for June production
The formula for determining the standard quantity is given as:
Standard quantity (SQ) = Actual Output × Standard Input for actual output
= 420 units × 8 kg
= 3360 kgs
Here, The standard input is 8 kg per unit as given in the problem.
The actual output for June is 420 units.
Direct materials: Standard material price (SP) = $6.50 per kg
Total actual cost of direct material (AC) = $21,875
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claudia smith, a real estate attorney, solved complicated legal problems to make the sale of the conner's farm. broker albert mclin, agent for the sellers, appreciated smith's work and sent smith a check after he collected his commission on the sale. is this commission sharing permissible?
Claudia, a real estate attorney, solved complicated legal problems to make the sale of the Conner's farm. The broker Albert Mclin, agent for the sellers, appreciated Smith's work and sent Smith a check after he collected his commission on the sale.
In general, commission sharing between a real estate attorney and a real estate broker or agent is not permissible. This is because it would be considered a violation of the legal ethics rules. The purpose of the real estate attorney is to provide legal advice to clients, while the purpose of the broker or agent is to bring buyers and sellers together and negotiate the terms of a sale.
When a broker or agent shares their commission with an attorney, it can create conflicts of interest, with the attorney potentially putting the interests of the broker or agent ahead of their client's interests. In addition, it can create the impression that the attorney is receiving an illegal kickback for their services. Therefore, it is generally prohibited for real estate attorneys to share in commissions with brokers or agents.
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In the consumer product sector, brand names have tha inionaly allowed a firm to charge higher prices and enjoy much larger profit margins.
a. In a project analysis, how does the effect of a brand name show up in the estimates.
b. What are the implications of declining brand-name loyalty for the capacity of a consumer product firm like Procter and Gamble or Unilever to maintain high returns on its projects?
a. Brand name can affect estimates by influencing sales volume, market share, customer loyalty, and intangible value in project analysis.
b. Declining brand-name loyalty can reduce the capacity of consumer product firms to maintain high project returns, leading to increased competition, price pressures, and the need for strategic adaptations.
How does brand name impact project estimates and what are the implications of declining brand-name loyalty on project returns for consumer product firms?a. In a project analysis, the effect of a brand name can show up in the estimates through several aspects. Firstly, it can influence the projected sales volume and market share, as consumers may be willing to pay a premium for a well-established brand.
This can result in higher revenue projections and potentially higher profit margins. Secondly, the brand name can also impact customer loyalty and repeat purchases, which can lead to more stable and predictable cash flows over the project's lifespan. Finally, the brand name may have intangible value that needs to be accounted for, such as reputation, brand recognition, and customer perception, which can affect the overall valuation of the project.
b. Declining brand-name loyalty can have significant implications for the capacity of consumer product firms to maintain high returns on their projects. When brand loyalty decreases, it becomes more challenging for firms to command higher prices and sustain larger profit margins. Without the ability to leverage brand recognition and customer loyalty, firms may face increased competition, price pressures, and a need to invest more in marketing and advertising to maintain market share.
This can erode profitability and make it harder for firms to generate the same level of returns on their projects. Firms may need to adapt their strategies, invest in innovation, or explore new markets to counterbalance the impact of declining brand-name loyalty and maintain profitability.
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Compare and contrast the following terms as used in
public sector accounting
1. Cash Basis of Accounting and Accrual Basis of
Accounting
2. Appropriation Accounting and Commitment
Accounting
Cash Basis of Accounting: This method records revenues and expenses when cash is received or paid. It focuses on the actual inflows and outflows of cash.
Under the cash basis, revenue is recognized when cash is received, and expenses are recognized when cash is paid. It does not consider the timing of when transactions are incurred or earned.
Accrual Basis of Accounting: This method recognizes revenues and expenses when they are earned or incurred, regardless of when cash is received or paid. It matches revenues with the expenses incurred to generate them, providing a more accurate picture of financial performance and position. Under the accrual basis, revenue is recognized when it is earned, and expenses are recognized when they are incurred.
Differences:
Timing: The key difference between cash basis and accrual basis accounting lies in the timing of revenue and expense recognition. Cash basis recognizes transactions when cash is received or paid, while accrual basis recognizes transactions when they are earned or incurred.
Accuracy: Accrual basis accounting provides a more accurate representation of financial performance and position by matching revenues and expenses. Cash basis accounting may not reflect the true financial position as it does not consider the timing of when transactions occur.
Compliance: In public sector accounting, accrual basis accounting is generally preferred as it provides a more comprehensive view of financial transactions and conforms to Generally Accepted Accounting Principles (GAAP) and International Public Sector Accounting Standards (IPSAS).
Appropriation Accounting and Commitment Accounting:
Appropriation Accounting: This method is used in public sector accounting to track and control government funds and expenditures. It involves the allocation and utilization of budgeted funds based on specific purposes or objectives, known as appropriations. Appropriation accounting focuses on the budgetary control and compliance with budget limits.
Commitment Accounting: This method tracks and records commitments made for future expenditures before the actual payment is made. It helps in planning and managing future cash flows by identifying and reserving funds for committed expenses. Commitment accounting provides information about the financial obligations of an organization.
Differences:
Focus: Appropriation accounting primarily focuses on the allocation and control of budgeted funds, ensuring that expenditures stay within the authorized limits. Commitment accounting focuses on recording and managing future financial commitments and obligations.
Timing: Appropriation accounting is concerned with the current fiscal year's budget and expenses incurred within that period. Commitment accounting looks ahead to future financial commitments and ensures that sufficient funds are reserved for those commitments.
Usage: Appropriation accounting is used to monitor and control government spending and adherence to budgetary limits. Commitment accounting aids in financial planning, budgeting, and ensuring funds are available when commitments become due.
In summary, cash basis of accounting records transactions based on cash inflows and outflows, while accrual basis of accounting recognizes transactions based on when they are earned or incurred. Appropriation accounting focuses on budgetary control and compliance, while commitment accounting tracks and manages future financial commitments and obligations.
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How often should you update you check register
Answer:
Review your checkbook register at least once a week. Your second goal should be to reconcile your checkbook as soon as possible after receiving your monthly statement. Once you've mastered the following steps, you should be able to balance your account each month within 30 minutes to 45 minutes.
Answer :Review your checkbook register at least once a week.
Explanation:
Current Attempt in Progress Garver Industries has budgeted the following unit sales: 2022 Units January 10,000 February 8,000 March April May 9,000 11,000 15,000 The finished goods units on hand on December 31, 2021, was 2.000 units. Each unit requires 3 pounds of raw materials that are estimated to cost an average of $4 per pound. It is the company's policy to maintain a finished goods inventory at the end of each month equal to 20% of next month's anticipated sales. They also have a policy of maintaining a raw materials inventory at the end of each month equal to 30% of the pounds needed for the following month's production. There were 8,640 pounds of raw materials on hand at December 31, 2021. For the first quarter of 2022, prepare a production budget. GARVER INDUSTRIES Production Budget For the first quarter of 2022, prepare a production budget. January GARVER INDUSTRIES Production Budget For the Quarter Ended March 31, 2022 February March Total Viewing Que Question 2 Muple Choice Question 3 Multiple Choice Question 4 Multiple Cheste Question 5 Mutiple Choice Question 6 Mutiple Choices Question 7 Multiple Choice Question & Mutiple Choice Question 9 Multiple Chace 3 > > January GARVER INDUSTRIES Direct Materials Budget February Mar Quest Quest Mutule Questi Multiple Questi Multiple a Questi Mullaieட் Questic Mujer C stia Miple Ch Questio Matiple Che Question Mute Che
The total required direct materials cost for the first quarter of 2022 is $372,000.The required units of raw material for each month are determined by multiplying the units of production in the month by the amount of raw material required per unit.
Here is a table of the calculations for raw material production budget for the first quarter of 2022:GARVER INDUSTRIES Raw Materials Production Budget For the Quarter Ended March 31, 2022Jan uary February March Total Unit sales 10,0008,0009,00011,00038,000.
Desired EI Units 1,8001,8001,8001,800 BS Units 2,0001,8001,8001,8007,200 Production Needs 8,8006,0007,2009,00031,000 Pounds Per Unit 3. 003.003.003. 003.00
Total Pounds Required 26,40018,00021,60027,00093,000 Required DM cost per pound for $4 Total Direct Materials Cost$105,600$72,000$86,400$108,000$372,000.
Thus, the company must budget for the purchase of $105,600 of raw materials in January, $72,000 of raw materials in February, and $86,400 of raw materials in March. The total required direct materials cost for the first quarter of 2022 is $372,000.
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We will study the individual units of the society; the consumer and the producer and their interactions in different market structures ranging from competition to monopoly. Students will also analyze the influence of these market structures on social welfare. In addition, students will be asked to reflect on the competing economic and ethical concerns of minimum wage legislation, taxation, provision of public goods and environmental protection.
Students are required to write a minimum of 500 words (1000 total) doing at least two of the following:
analyzing historical or contemporary perspectives on issues related to human society and organization, including a diversity of cultures;
using that knowledge to compare solutions to complex problems; and
exploring ethical modes of citizenship and collective action on local and global scales.
The market structure refers to the market environment in which the exchange of goods and services occurs.
The market structure ranges from competition to monopoly and influences social welfare. The students in this context will study the individual units of society; the consumer and the producer and their interactions in different market structures ranging from competition to monopoly.In addition, students will analyze the influence of these market structures on social welfare.
The students will also be asked to reflect on the competing economic and ethical concerns of minimum wage legislation, taxation, provision of public goods and environmental protection. Students are required to write a minimum of 500 words (1000 total) doing at least two of the following:The analysis of historical or contemporary perspectives on issues related to human society and organization, including a diversity of cultures
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Based on following information.
CPO spot price = $ 980/ton
Risk-free rate = 6% /year
Annual storage cost = 4%/year ($ 39.20/ ton)
a. Is arbitrage possible? Explain
b. Explain, How do you do arbitrage?
c. Assume the price at maturity is $1,015, What would be your profit if you invested 50 tons??
Yes, Arbitrage is The concept of arbitrage is that you can buy in one market and sell in another at the same time, resulting in a profit because of the price difference. = Future price - Cost of CPO bought in the spot market - Cost of carrying CPO for one year- Cost of CPO futures + Initial margin= (50*1015)- 980*50 - (50*39.20) - (50*1019.20) + 25,480= 50*1015 - 980*50 - 50*39.20 - 50*1019.20 + 25,480= 50750 - 49000 - 1960 - 50960 + 25480= -$790. The result of the arbitrage is a loss of $790.
Yes, Arbitrage is possible. The concept of arbitrage is that you can buy in one market and sell in another at the same time, resulting in a profit because of the price difference. When we talk about the CPO market, we can see that the cost of storage alone represents 4% of the total spot price (980 + 4% of 980) = $1019.20/ton. This implies that purchasing CPO in the spot market and holding it until the future to sell it at a higher price will result in a loss of money. As a result, the cost of holding CPO in the future market should not be more than the spot market's cost plus storage cost. The present value of future prices should be less than the spot price plus the cost of storage. Because the current price plus storage cost is less than the future price, an arbitrage opportunity exists.
b. Explain, How do you do arbitrage?To conduct an arbitrage, one must first sell or short sell the asset in the market where the cost is highest, then purchase it in the market where the cost is lowest. The result is a profit because of the price difference. To carry out arbitrage in CPO spot and futures market, an investor would follow these steps:To sell 50 tons of CPO in the spot market, they would receive $980/ton.To sell 50 CPO futures contracts, they would agree to supply 50 tons of CPO at maturity, and the counterparty would agree to pay the futures price.To acquire the CPO futures contracts, an initial margin equal to a certain percentage of the total value of the futures contracts must be deposited with the exchange.To hold the CPO spot, they would need to pay $39.20 per ton for one year. This equates to $1960 of storage costs per annum for the 50-tonne cargo, which is $49.00 per tonne.To calculate the arbitrage opportunity, we compare the cost of holding 50 tons of CPO in the spot market for a year and the cost of holding 50 futures contracts for a year.If a CPO future contract for 50 tons for a year is $1,019.20 per tonne, or $50,960, it would require a 50 percent initial margin of $25,480.The cost of the future contract per tonne for 50 tons is: 50,960/50 = $1019.20, which is less than the spot price plus storage cost of $1019.20/ton.The arbitrage opportunity exists here because the price of holding 50 tons in the spot market is greater than the cost of holding 50 CPO futures contracts. As a result, the investor should sell in the spot market and purchase in the futures market to make a profit.
c. Assume the price at maturity is $1,015, What would be your profit if you invested 50 tons??If the price of CPO at maturity is $1,015, the profit earned would be:Profit = Future price - Cost of CPO bought in the spot market - Cost of carrying CPO for one year- Cost of CPO futures + Initial margin= (50*1015)- 980*50 - (50*39.20) - (50*1019.20) + 25,480= 50*1015 - 980*50 - 50*39.20 - 50*1019.20 + 25,480= 50750 - 49000 - 1960 - 50960 + 25480= -$790. The result of the arbitrage is a loss of $790.
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Answer the following questions:
a. The price of a stock when you sell it in a year is predicted to be $65. If dividend is expected to be $1.5 next year, and the required return is 4.5%, what should be the price of the stock today?
b. You believe that a corporation's dividends will grow 5 percent on average into the foreseeable future. If the yearly dividend payment is $2, assuming a 4 percent required return, what is the price of the stock today?
a. If the dividend is expected to be $1.5 next year, and the required return is 4.5%, the price of the stock today is $98.33. b. If the yearly dividend payment is $2, assuming a 4 percent required return, the price of the stock today is $250.
a. In order to calculate the price of the stock today, the current stock price (P0) should be calculated. Using the constant growth model, we get:
P0 = [D1 / (r - g)] + P1,
where D1 = next year's dividend,
g = constant growth rate,
P1 = stock price at the end of the year, and
r = required rate of return.
Substituting the given values, D1 = $1.5, g = 0, P1 = $65, and r = 4.5%.P0 = [$1.5 / (0.045 - 0)] + $65P0 = $33.33 + $65P0 = $98.33
b. In order to calculate the price of the stock today, the current stock price (P0) should be calculated. Using the constant growth model, we get: P0 = [D1 / (r - g)] + P1, where
D1 = next year's dividend, g = constant growth rate,
P1 = stock price at the end of the year, and
r = required rate of return.
Substituting the given values,
D1 = $2, g = 5%, P1 = ?, and r = 4%.
We know that the constant growth rate (g) is greater than the required rate of return (r). Therefore, the stock price is positive.
P0 = [$2 / (0.04 - 0.05)] + P1P0 = -$40 + P1P1 = P0 + $40
We also know that the price of the stock at the end of the year (P1) is equal to the future dividend payment (D2) divided by the difference between the required rate of return and the constant growth rate.
P1 = [D2 / (r - g)]
Substituting the given values,
D2 = $2 x 1.05 = $2.10
P1 = [$2.10 / (0.04 - 0.05)]
P1 = $210
Therefore, P0 = P1 + $40 = $210 + $40 = $250.
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Take me to the text Red Ray DVD Company (Red Ray) manufactures portable DVD players. The company requires a 15% rate of return on its investments. To start up the business, an investment of $650,000 was required. General and administrative expenses total $450,000. Each year, the sales volume is equal to 25,000 DVD players, each with a unit product cost of $90. Assuming that the company uses the formula method, determine the markup percentage that Red Ray would apply in a cost-plus pricing scheme. Do not enter percentage signs or commas in the input boxes. Round your answer to 2 decimal places. Markup Percentage: %
Markup Percentage: 46.67%.To calculate the markup percentage that Red Ray would apply in a cost-plus pricing scheme, we use the following formula:
Step1. Unit product cost = Variable cost per unit + Fixed cost per unit Markup price = Unit product cost + Markup Markup percentage = Markup price ÷ Unit product cost × 100%Unit product cost is calculated as follows: Unit product cost = Total cost ÷ Sales volume We know that: Total cost = Investment + General and administrative expenses + Variable costs Variable costs = Cost of goods sold - Fixed costs Fixed costs = 0.
Step2. We are given that the investment required is $650,000, and general and administrative expenses total $450,000. The cost of goods sold is equal to the unit product cost, which is $90. Therefore, we have: Total cost = $650,000 + $450,000 + ($90 × 25,000) = $3,100,000Unit product cost = $3,100,000 ÷ 25,000 = $124Markup price is calculated as follows:
Step3. Markup price = Unit product cost × (1 + Desired rate of return on investment)We are given that the company requires a 15% rate of return on its investments. Therefore: Markup price = $124 × (1 + 0.15) = $142.60Finally, we can calculate the markup percentage as follows: Markup percentage = Markup price ÷ Unit product cost × 100% = $142.60 ÷ $90 × 100% ≈ 46.67%Rounded to 2 decimal places, the markup percentage is 46.67%.
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Question 3 of 5 View Policies Show Attempt History Current Attempt in Progress 0.25/1 : Your answer is partially correct. Sheridan Co. uses a standard job cost system with a normal capacity of 24,500
Sheridan Co. utilizes a standard job costing system with a regular capacity of 24,500. The standard job costing system is used by businesses to estimate costs for producing or manufacturing goods or services. A standard job costing system assigns expenses to specific jobs or products, making it easier to determine the cost of producing each product.
Sheridan Co. uses a predetermined overhead rate for allocating overhead costs to individual jobs. The company's predetermined overhead rate is determined by dividing the total budgeted manufacturing overhead costs by the estimated activity level for the year.
The formula to determine Sheridan Co.'s predetermined overhead rate is as follows: Predetermined overhead rate = Total budgeted manufacturing overhead costs ÷ Estimated activity level for the yearFor example, if Sheridan Co.'s total budgeted manufacturing overhead costs are $1,000,000, and the estimated activity level for the year is 20,000 direct labor hours, the predetermined overhead rate will be $50 ($1,000,000 ÷ 20,000 direct labor hours).
In conclusion, Sheridan Co. uses a standard job costing system to estimate costs for manufacturing goods or services. It uses a predetermined overhead rate to allocate overhead costs to individual jobs based on the estimated activity level for the year.
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Apexbooks has 4 billion shares with a price of $25 per share. Meanwhile, Ironbooks has 3 billion shares with a price of $30 per share. Apexbooks plans to issue new shares to acquire Ironbooks, with an exchange ratio of 1.68. If this transaction is a zero-NPV project for Apexbooks, the synergies for each share of the target from this transaction will be closest to:
a.$14.
b.$16.
c.$10.
d.$12.
NPV means the Net Present Value. It's a finance term that tells us the difference between the present value of cash inflows and the present value of cash outflows.
The correct option is c .
It can be calculated for any future cash flow, which makes it useful for making investment decisions.In the given case, we have to find the synergies for each share of the target from this transaction if the transaction is a zero-NPV project for Apexbooks. The formula for the exchange ratio is Exchange Ratio = Price per share of acquiring company ÷ Price per share of the target company.
Exchange Ratio = 25 ÷ 30 = 0.83.The synergies for each share of the target from this transaction will be equal to the difference between the price of the acquiring company's share per share and the exchange ratio times the price per share of the target company. If the company has 3 billion shares, then the synergies for each share of the target will be Synergies for each share of the target = 2.5/1.68 = $1.48. Therefore, the synergies for each share of the target from this transaction will be closest to $10 (rounded off to the nearest whole number).
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calculate the net present value of a business deal that costs $2,500 today and five years pays a return at the end of the year for five years. at the end of the first year the return is $1,500 at the end of the next year the return is $1,700, and the remaining rears the return is $2200. if all things remain the same except the interest rate is 10% rather than 13%, does the npv go up or down or it depends ?
The NPV goes down when the interest rate decreases from 13% to 10%.
To calculate the net present value (NPV) of the business deal, we need to discount the future cash flows to their present value using the given interest rate. Then we subtract the initial cost from the sum of the present values.
Using an interest rate of 13%:
Year 1: $1,500 / [tex](1 + 0.13)^1[/tex] = $1,327.43
Year 2: $1,700 / [tex](1 + 0.13)^2[/tex] = $1,342.47
Years 3-5: $2,200 / [tex](1 + 0.13)^3[/tex] + $2,200 / [tex](1 + 0.13)^4[/tex]+ $2,200 / [tex](1 + 0.13)^5[/tex]= $4,754.67
NPV = ($1,327.43 + $1,342.47 + $4,754.67) - $2,500 = $5,924.57
Using an interest rate of 10%:
Year 1: $1,500 / [tex](1 + 0.10)^1[/tex]= $1,363.64
Year 2: $1,700 / [tex](1 + 0.10)^2[/tex] = $1,479.34
Years 3-5: $2,200 / [tex](1 + 0.10)^3[/tex] + $2,200 / [tex](1 + 0.10)^4[/tex] + $2,200 /[tex](1 + 0.10)^5[/tex] = $4,734.05
NPV = ($1,363.64 + $1,479.34 + $4,734.05) - $2,500 = $5,077.03
Comparing the NPVs, we can see that the NPV decreases from $5,924.57 at an interest rate of 13% to $5,077.03 at an interest rate of 10%.
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Comment on the cash flow management of Motherson Sumi Syste following figures. (Rs/Crs) Particulars Mar-20 Mar-19 Mar-18 Mar-17 Operating Activities 6,352 4,312 3,264 3,799 Investing Activities -2,239 -3,310 -3,194 -6,726 Financing Activities -2,802 -224 -2,221 5,517 Others 19 0 580 Net Cash Flow 1,328 769 -2,151 3,171 -8
The cash flow management of Motherson Sumi Systems appears to have improved over the years, as indicated by the positive net cash flow in the most recent period.
Has Motherson Sumi Systems effectively managed its cash flows?Motherson Sumi Systems has demonstrated consistent growth in operating cash flows with the figures increasing from Rs 3,264 crore in 2018 to Rs 6,352 crore in 2020. This shows company ability to generate cash from core business operations.
On investing side, the company has been consistently investing in its growth and expansion with the figures ranging from Rs 3,194 crore to Rs 6,726 crore.
Despite the negative cash flows from investing activities, the positive operating cash flows indicate that the investments are contributing to the company's growth.
The financing activities, have been fluctuating over the years. In 2017, the company had a significant positive cash flow from financing activities which is primarily driven by an increase in borrowings.
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Which of the following is a liability?
A. machinery
B. accounts payable from goods
C. motor vehicles
D. cash at bank
Answer:
B. accounts payable from goods is a liability.
How to solve this please (all requirements)
Suppose the Hockey Hall of Fame in Toronto has approached Active-Cardz with a special order. The Hall of Fame wants to purchase 58,000 hockey card packs for a special promotional campaign and offers $
Cost per card = 1.176 x / (58,000 x 10) = $0.00202 per card. Hence, the cost per card is $0.00202, or approximately $0.002, after rounding to the nearest cent.
Active-Cardz can proceed with the special order from the Hockey Hall of Fame in Toronto by following these steps: Step 1: Calculate the cost per card first, and calculate the cost per card by dividing the offer amount by the number of card packs. We are given that the Hall of Fame wants to purchase 58,000 hockey card packs. The offer amount is missing, let us denote it by 'x'.Hence, the cost per card is the cost per card = x / (58,000 x 10) = x / 580,000.
Step 2: Add the profit margin. The profit margin is given to be 15%. This means Active-Cardz wants to earn 15% of the total cost. Let the total cost of the order be y. Then,y = x + 15% of you can simplify this by converting 15% to a decimal:y = x + 0.15yRearranging the above equation, we get:0.85y = xy = 1.176 Now, we have calculated the offer amount. We can substitute this value in the expression for the cost per card to obtain the final answer: cost per card = 1.176 x / (58,000 x 10) = $0.00202 per audience, the cost per card is $0.00202, or approximately $0.002, after rounding to the nearest cent.
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You manage a company that competes in an industry that is comprised of five equal-sized firms. A recent industry report indicates that a tariff on foreign imports would boost industry profits by $30 million—and that it would only take $5 million in expenditures on (legal) lobbying activities to induce Congress to implement such a tariff.
Discuss your strategy for improving your company’s profits.
As a manager in a company that competes in an industry that is made up of five equal-sized firms, the following is a strategy for improving your company's profits when a tariff on foreign imports is implemented and how to induce Congress to support such a tariff:
Approach Congress to convince them to implement the tariff: To enhance profits, the business needs to lobby Congress to enforce a tariff on foreign imports. This means that the company must make the expenditures on legal lobbying activities as the recent industry report suggests, which amounts to $5 million. The reason for this expenditure is that it will lead to an increase in profits for the company when the tariff is implemented. The tariff on foreign imports would improve industry profits: According to the industry report, when Congress enforces a tariff on foreign imports, the industry profits are expected to increase by $30 million. This will also help improve the company's profits when the tariff is implemented. Finally, to improve the company's profits in the long run, it is recommended that the company invest in research and development. This will help the company improve its production efficiency, lower its production costs, and improve its competitiveness in the industry. It would assist the company in increasing its profits as it will be able to supply its goods to consumers at a lower cost than its competitors.
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On January 1, 1998, the reserve for discount on Debtors was $. 250. During 1998, discount allowed to debtors amounted to $. 150. The debtors on December 31, 1998, were $. 6.000. Make a provision of 5% debtors for discount. Show the Journal, Ledger and Balance Sheet.
Provision for Discount: $300. Debtors: $6,000. (No change to Discount Allowed and Reserve for Discount on Debtors mentioned).
To resolve the inquiry and give an extensive reaction, we should go through the vital stages to record the diary section, update the record, and set up the accounting report.
1) Diary Section: Date: January 1, 1998, Account Charge Credit no diary section required as it specifies the save for rebate on account holders toward the start of the year.
Date: December 31, 1998, Account Charge Credit.
Markdown Permitted $150
Arrangement for Markdown $300
Clarification: We charge the Rebate Permitted record to record the markdown given to debt holders during the year, and credit the Arrangement for Rebate record to build the arrangement sum.
2) Record, Rebate Permitted:
Date Portrayal Charge Credit Equilibrium Dec 31, 1998 To Arrangement $150. Arrangement for Rebate:
Date Portrayal Charge Credit Equilibrium, Dec 31, 1998 By Markdown Permitted $150 $300.
3) Monetary record:
As of December 31, 1998: Resources, Indebted individuals: $6,000 and Liabilities. Arrangement for Markdown: $300
Save for Rebate on Account holders: $250
The arrangement for markdown is determined as 5% of the debt holders' surplus, which adds up to $300. This arrangement is kept in the arrangement for rebate account and is displayed as a responsibility yet to be determined sheet. The hold for rebate on indebted individuals stays at $250 as referenced toward the start of the year.
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In the definition of the two good budget set, {(x1, x2) E Rp1x1 + p2x2 ≤m}; we argued that we could normalize the price of good 2 to be 1. (a) Express the budget set corresponding to p₁ = 7, P2= 3.5, and m = 10.5 in such a form. Draw this budget set. = (b) Repeat the above exercise for pi 8, P2= 2, and m = 12 and draw this budget set on the same axes. = 15, and (c) Repeat the above exercise for pi 10, P2 = 5, and m = draw this budget set also on the same axes.
(a) Budget set: (2/7)x₁ + x₂ ≤ 3. Draw a line starting from (0,3) with a slope of -(2/7).
(b) Budget set: (1/4)x₁ + x₂ ≤ 6. Draw a line starting from (0,6) with a slope of -(1/4).
(c) Budget set: (1/2)x₁ + x₂ ≤ 3. Draw a line starting from (0,3) with a slope of -(1/2).
(a) To communicate the spending plan set comparing to p₁ = 7, p₂ = 3.5, and m = 10.5 in the standardized structure, we partition the two sides of the spending plan limitation by p₂ (which is 3.5 for this situation) to get:
(x₁/3.5) + (x₂/1) ≤ 10.5/3.5
Working on the situation, we have: (2/7)x₁ + x₂ ≤ 3
This addresses the spending plan set in the standardized structure. To draw the spending plan set, we plot the x₁-x₂ plane. The spending plan set comprises of the relative multitude of attainable mixes of x₁ and x₂ that fulfill the given disparity.
It is a straight line with a capture of 3 on the x₂-hub and an incline of - (2/7) (negative on the grounds that the coefficient of x₁ is negative). The line begins from the point (0,3) and reaches out towards the negative x₁ bearing.
(b) For p₁ = 8, p₂ = 2, and m = 12, the standardized spending plan set is:(x₁/8) + (x₂/2) ≤ 12/2. Disentangling, we get: (1/4)x₁ + x₂ ≤ 6
The comparing spending plan set is one more straight line with a block of 6 on the x₂-hub and an incline of - (1/4). It begins from the point (0,6) and reaches out towards the negative x₁ heading.
(c) For p₁ = 10, p₂ = 5, and m = 15, the standardized financial plan set is:
(x₁/10) + (x₂/5) ≤ 15/5. Disentangling, we have: (1/2)x₁ + x₂ ≤ 3
The spending plan set is a straight line with a block of 3 on the x₂-hub and an incline of - (1/2). It begins from the point (0,3) and reaches out towards the negative x₁ heading.
To draw these spending plan sets on similar tomahawks, plot the x₁-x₂ plane and define every one of the three boundaries addressing the spending plan sets.
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A bank is currently offering a savings account paying an interest rate of 10.8 percent compounded quarterly. Interest is paid once per month at the end of each month. It would like to offer another account, with the same effective annual rate, but compounded monthly.
What is the equivalent rate compounded monthly? (Round answer to 4 decimal places, e.g. 25.1254%.)
The value of the equivalent rate compounded monthly is 12.50% p.a. (rounded to 4 decimal places).
To calculate the equivalent rate compounded monthly, we will first compute the annual interest rate. This is because, if the bank pays the same effective annual rate, then the annual interest rate will be constant, regardless of the compounding frequency.
Using the formula, we will determine the nominal interest rate.
Nominal rate = ((1 + r/m)^m) - 1
Where, r is the effective annual rate and m is the compounding frequency.
Substituting the given values
Nominal rate = ((1 + 0.108/4)⁴) - 1= ((1.027)⁴) - 1= 0.1255 or 12.55% approx
Therefore, the nominal interest rate is 12.55% p.a. compounded quarterly. Now we will calculate the equivalent rate compounded monthly.
Using the formula
Nominal rate = ((1 + r/m)^m) - 1Where, r is the effective annual rate and m is the compounding frequency.
Substituting the given values
Nominal rate = ((1 + r/12)^12) - 1
Given that, r = 0.108 p.a. or 10.8% p.a.
Nominal rate = ((1 + 0.108/12)¹²) - 1= ((1.009)¹²) - 1= 0.1250 or 12.50% approx
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on 40 t red dout of question: 0242.50 The Smith family's disposable income rose from $40 000 per year to $42 000 and his desired consumption expenditure rose from $38 000 to $39 600. It can be concluded that their O a. average propensity to save decreased from 0.950 to 0.943. O b. marginal propensity to consume is 0,050. O c. marginal propensity to consume increased from 0.050 to 0.058. d. marginal propensity to save is 0.80. O e. average propensity to consume decreased from 0.950 to 0.943. Clear my choice 1 2 10 11 19 20 28 29 37 38 39 Finish attempt... 3 4 5 6 7 12 13 14 15 16 21 22 23 24 25 30 31 32 33 34 40
The Smith family's average propensity to consume decreased from 0.950 to 0.943 is a correct option. All other options (a) the average propensity to save decreased from 0.950 to 0.943 (b) marginal propensity to consume is 0,050. (c) marginal propensity to consume increased from 0.050 to 0.058. (d) marginal propensity to save is 0.80. are in correct answers.
Initial disposable income = $40000
Initial desired consumption expenditure = $38,000
Final disposable income = $42,000
Final desired consumption expenditure = $39,600
Now, let us calculate the average propensity to save:
The average propensity to save (APS) = Total savings ÷ Total disposable income. This can be written as APS = (Disposable income - Desired consumption expenditure) ÷ Disposable income, We know the initial disposable income is $40,000 and the initial desired consumption expenditure is $38,000. Hence the initial average propensity to save is: APS = ($40,000 - $38,000) ÷ $40,000 = 0.050 Now, let us calculate the final average propensity to save: APS = ($42,000 - $39,600) ÷ $42,000 = 0.057. This shows that the average propensity to save has increses from 0.050 to 0.057. Hence, option (a) is the incorrect answer.
To determine the marginal propensity to consume (MPC) we need to divide the change in consumption by the change in income.
MPC = Change in Consumption / Change in Income
MPC = (39600 - 38000) / (42000 - 40000)
MPC = 1600 / 2000
MPC = 0.8
Hence, Option (b) is incorrect.
To determine the average propensity to consume (APC), we divide consumption by income. APC = Consumption / Income
APC before = 38000 / 40000 = 0.95
APC after = 39600 / 42000 = 0.943
This shows that the average propensity to save has decreased from 0.950 to 0.943. Hence, option A is the incorrect answer. Hence, option (e) is the correct answer.
The marginal propensity to save (MPS) can be calculated as follows
MPS = Change in Saving / Change in IncomeS =
Before, S = 40000 - 38000 = 2000
After, S = 42000 - 39600 = 2400
Change in Saving = 2400 - 2000 = 400
Change in Income = 42000 - 40000 = 2000
MPS = Change in Saving / Change in Income
MPS = 400 / 2000
MPS = 0.2
Hence, option (d) is the incorrect answer.
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As a long-term investment, Painters' Equipment Company purchased 20% of AMC Supplies Inc.'s 510,000 shares for $590,000 at the beginning of the fiscal year of both companies. On the purchase date, the fair value and book value of AMC’s net assets were equal. During the year, AMC earned net income of $360,000 and distributed cash dividends of 30 cents per share. At year-end, the fair value of the shares is $626,000.
Required:
1. Assume no significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year.
Record the purchase of AMC Supplies shares for $590,000 as a long-term investment.
Record Painters' Equipment's share of AMC Supplies' $360,000 net income.
Record the cash dividend of 30 cents per share.
Record any necessary year-end adjusting journal entry when the fair value of the shares held are $626,000 at year-end.
2. Assume significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year.
Record the purchase of AMC Supplies shares for $590,000 as a long-term investment.
Record Painters' Equipment's share of AMC Supplies' $360,000 net income.
Record the cash dividend of 30 cents per share.
Record any necessary year-end adjusting journal entry when the fair value of the shares held are $626,000 at year-end.
Assume no significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year The solution of the given problem is as follows 1. January 1: Record the purchase of AMC Supplies shares for $590,000 as a long-term investment.
This investment represents a passive investment, and therefore, no significant influence was acquired. Therefore, the cost of investment will be recorded as $590,000. Record the journal entry for the transaction on January 1. Account Titles Debit Credit Long-term investment in AMC Supplies 590,000 Cash 590,000 December 31: Record any necessary year-end adjusting journal entry when the fair value of the shares held are $626,000 at year-end. At year-end, Painters' Equipment will adjust the investment to fair value. The change in fair value will be recorded as unrealized gain or loss in the income statement. The journal entry to record the adjustment will be as follows:
Assume significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year:If Painters' Equipment acquires significant influence over AMC Supplies, it should record the investment using the equity method. The solution of the given problem is as follows:1. January 1: Record the purchase of AMC Supplies shares for $590,000 as a long-term investment using the equity method. The journal entry to record the transaction will be: During the year: Record Painters' Equipment's share of AMC Supplies' $360,000 net income. Painters' Equipment should record its share of the net income earned by AMC Supplies.
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You researched Turnkey Investment's financial data and gathered the following information: Current price per share of stock = $86 Expected market risk premium = 8.7% Dividend per share paid just recently = $4.68 Risk-free interest rate = 4.5% Expected annual growth of dividend per share = 5% Stock Beta = 1.56 Calculate the company's cost of equity using the Dividend Growth Model approach. Your answer should be in percent, not in decimals: e.g., 12.34 rather than 0.1234 Increase decimal places for any intermediate calculations, from the default 2 to 6 or higher.
The company's cost of equity using the Dividend Growth Model approach is approximately 10.44%.
The Dividend Growth Model approach calculates the cost of equity by considering the expected dividend payments and the growth rate of those dividends. The formula for the cost of equity using this approach is:
Cost of Equity = (Dividend per share / Current price per share) + Expected annual growth rate of dividend
In this case, the dividend per share paid just recently is $4.68, and the current price per share of stock is $86. The expected annual growth rate of the dividend is 5%.
Cost of Equity = ($4.68 / $86) + 0.05
Calculating this, we get:
Cost of Equity = 0.0544 + 0.05
Cost of Equity = 0.1044
To convert this to a percentage, we multiply by 100:
Cost of Equity = 0.1044 * 100
Cost of Equity ≈ 10.44%
Therefore, the company's cost of equity using the Dividend Growth Model approach is approximately 10.44%.
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An insurance company offers you $1,000 annually during the next 5 years. If Interest rates are 9% How much you will pay this financial product PRESENT YOUR ANSWER ROUNDED WITH ZERO DECIMAL PLACES
The amount you'll pay for the financial product is $3,890. This is rounded to zero decimal places. Interest rates are a percentage charged on the principal amount borrowed.
They are used to calculate the interest that will be paid for a loan, bond, or any other financial product. To calculate the amount you will pay for a financial product, you can use the formula for the present value of an annuity. Present value of an annuity formula PV = PMT x [1 - (1 + r/n)^(-nt)] / (r/n) Where: PV = Present Value, PMT = Payment per period, r = Interest rate, n = Number of payments per year, t = Number of years.
The problem provides us with the following information. Present value = $1,000, r = 9%, n = 1, t = 5. Using this information, we can substitute into the formula and solve for PV.
PV = $[tex]1,000 * [1 - (1 + 0.09/1)^{(-1x5)} / (0.09/1)[/tex] PV = $3,890Rounding to zero decimal places, the amount you will pay for the financial product is $3,890.
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6) The business cycle is usually illustrated using movements in A) the inflation rate. B) labor productivity. C) real GDP. D) the size of the labor force.
The business cycle is usually illustrated using movements in real GDP. Option C is the correct answer. What is a business cycle? Business cycles refer to the recurring fluctuations in economic activity that happen over time.
It involves shifts in the economy's production, employment, and overall economic activity. There are four phases of the business cycle: expansion, peak, contraction, and trough. The business cycle is usually illustrated using movements in real Gross Domestic Product (GDP).
It is the broadest measure of economic activity and is the most popular method for evaluating an economy's state. GDP is calculated as the total value of all goods and services produced within a country during a specified time frame, usually a year or a quarter. The GDP data are used to determine the state of an economy and whether it is in an expansion or contraction phase of the business cycle.
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