Answer:
74 units and 90 units.
Explanation:
So, we have the demand for the first six months, K1 = 600 units = 600 units/ 6months = 100 units; the demand for the second six months, K2 = 900 units = 900/6 = 150 units; holding cost,J = $2 per unit ; process cost, P = $55 per order.
The formula for determining an order size that will minimize the sum of ordering and carrying costs for each of the six-month periods is the Economic Order Quantity formula which is given below;
Economic Order Quantity = √[ (2 × K1 × P)/ J ].
(1). For the first six months;
Economic Order Quantity = √ [ ( 2 × 100 × 55)/ 2].
Economic Order Quantity = 74 units.
(2). For the second six months.
Economic Order Quantity = √ [ ( 2 × 150 × 55)/ 2].
Economic Order Quantity = 90 units.
Bonita Industries estimates its sales at 160000 units in the first quarter and that sales will increase by 27000 units each quarter over the year. They have, and desire, a 25% ending inventory of finished goods. Each unit sells for $25. 40% of the sales are for cash. 70% of the credit customers pay within the quarter. The remainder is received in the quarter following sale. Cash collections for the third quarter are budgeted at
a.$2981500.
b.$4387000.
c.$5228500.
d.$6613938.
Oil wells and seasonal resorts will often shut down temporarily because Multiple Choice variable costs for pumping oil and operating resorts fluctuate significantly. fixed costs temporarily rise, making production unprofitable. prices for their output temporarily fall below their average variable costs of production. government regulations require seasonal shutdowns for maintenance purposes.
Answer:
Oil wells and seasonal resorts will often shut down temporarily because prices for their output temporarily fall below their average variable costs of production.
Explanation: If the price is below the minimum average variable cost, the firm would lose less money by shutting down. In contrast, in scenario 3 the revenue that the center can earn is high enough that the losses diminish when it remains open, so the center should remain open in the short run.
In economics, firms face the decision to shut down temporarily or continue operations when prices fall below their average variable costs. Shutting down can result in smaller losses compared to staying open and incurring fixed costs. Government regulations may also require seasonal shutdowns for maintenance purposes.
Explanation:In economics, fixed costs refer to the expenses a firm must incur before producing any output, while variable costs are the expenses incurred during the production process. When the price of a firm's output falls below its average variable costs, the firm is unable to generate enough revenue to cover its variable costs. In such cases, shutting down and producing no output would result in smaller losses compared to staying in operation and incurring fixed costs, in addition to some variable costs.
The point at which the average variable cost curve intersects with the marginal cost curve is called the shutdown point. If a perfectly competitive firm faces a market price above this point, it is at least covering its average variable costs. However, if the price falls below this point, the firm is not even covering its variable costs, and staying open would result in larger losses. In the case of oil wells and seasonal resorts, this can lead to temporary shutdowns.
Government regulations may also require seasonal shutdowns for maintenance purposes. By temporarily shutting down, firms can reduce their overall costs and avoid operating at a loss. It is important for firms to closely analyze their costs and prices to make informed decisions about shutting down temporarily or continuing operations.
Learn more about Shutting down temporarily vs. continuing operations here:https://brainly.com/question/34173513
#SPJ12
Jacque decides to open her own business and earns $50,000 in accounting profit for the first year. When deciding to open her own business she withdrew $20,000 from her savings which earned 5% interest. She also turn down three separate job offers with annual salaries of $30,000, $40,000, and $45,000. What is Jacqui’s economic profit from running her own business
Jacque's economic profit is calculated by subtracting her opportunity costs from her accounting profit. After turning down the highest paying job offer of $45,000 and forgoing $1,000 in interest from her savings, her economic profit is $4,000.
To calculate Jacque's economic profit, we must consider both explicit costs and implicit (opportunity) costs. Jacque has an accounting profit of $50,000, but to calculate the economic profit, we subtract the opportunity costs she incurred by opening her business.
Firstly, the $20,000 withdrawn from her savings account could have earned her 5% interest, which is $1,000 ($20,000 x 0.05). Secondly, she turned down job offers with salaries of $30,000, $40,000, and $45,000. We consider the highest paying job forgone, which is $45,000. These are her opportunity costs.
Therefore, her total implicit costs amount to $45,000 (highest foregone salary) + $1,000 (interest foregone) = $46,000. Subtracting this from her accounting profit ($50,000 - $46,000) gives us an economic profit of $4,000 for the first year.
Using the cut-and-try method for aggregate operations planning, we can calculate the ending inventory and then calculate the safety stock as a percent of forecast demand. Suppose that the beginning inventory is 300, the production requirement in units of product is 1,350, demand forecast is 1,500, what is the ending inventory and percent safety stock?
Answer: a) Ending inventory is 150 units
b) Percent Safety Stock is 10%
Explanation:
a) The Ending Inventory can as well be calculated using the following,
Ending inventory = Production Requirement + Beginning Inventory - Demand forecast
Plugging in the figures gives us,
= 1350+300-1500
= 150 units
Ending Inventory is 150 units.
b) To calculate the percent safety stock, the following formula can be used,
Safety stock % = Production Requirement - Demand forecast + Beginning Inventory
Safety stock should be a percentage of Demand as the question says. Denoting it as 's' we have,
1500*(s/100) = 1350-1500+300
15s = 150
s = 10%
The percent safety stock is therefore 10%.
Final answer:
The ending inventory is 150 units and the percent safety stock is 10% of the forecast demand.
Explanation:
The cut-and-try method for aggregate operations planning is an iterative approach to balance demand with production capacity by adjusting production rates, workforce levels, and inventory holdings. When solving for the ending inventory, we begin with the beginning inventory, add the production requirement, and subtract the forecasted demand. In the given scenario, the beginning inventory is 300 units, the production requirement is 1,350 units, and the forecast demand is 1,500 units.
The calculation for the ending inventory would be:
Beginning Inventory + Production Requirement - Forecast Demand = Ending Inventory
300 + 1,350 - 1,500 = 150 units
To calculate the percent safety stock, you would take the ending inventory as a percentage of the forecast demand. This calculation would be:
(Ending Inventory / Forecast Demand) x 100 = Percent Safety Stock
(150 / 1,500) x 100 = 10%
Therefore, the ending inventory is 150 units, and the safety stock is 10% of the forecast demand.
Your colleague started to calculate the weighted average cost of capital for your company, but suddenly became ill and had to go home. The Vice President of Finance gives you the following information and asks you to complete the calculation of the weighted average cost of capital. The market values and after-tax costs are as follows: Debt, $42,000,000 and 7.65%; Preferred stock, $6,300,000 and 5.00%; Common stock, $50,000,000 and 17.80%. Your company's weighted average cost of capital is:
Answer:
12.64%
Explanation:
WACC is the average cost of capital of the firm based on the weightage of the debt and weightage of the equity multiplied to their respective costs. weightage can be calculated by using the market value of the equity and debt.
The formula for WACC is
Weighted average cost of capital = ( Cost of Common Stock x Weightage of equity ) + ( Cost of debt x Weightage of debt ) + ( Cost of Preferred stock x Weightage of Preferred stock )
As per given data
Debt, $42,000,000 7.65%
Preferred stock, $6,300,000 5.00%
Common stock, $50,000,000 17.80%
Total $98,300,000
Placing Value in the formula
Weighted average cost of capital = ( 17.80% x $50,000,000 / $98,300,000 ) + ( 7.65% x $42,000,000 / $98,300,000 ) + ( 5.00% x $6,300,000 / $98,300,000 )
Weighted average cost of capital = 9.05% + 3.27% + 0.32 = 12.64%
Net income was $469,000. Issued common stock for $80,000 cash. Paid cash dividend of $17,000. Paid $130,000 cash to settle a note payable at its $130,000 maturity value. Paid $116,000 cash to acquire its treasury stock. Purchased equipment for $92,000 cash. Use the above information to determine this company's cash flows from financing activities. (Amounts to be deducted should be indicated with a minus sign.)
Answer:
-$183,000
Explanation:
The cash flow statement categories the company's transactions in a financial period into 3 groups; these are operating, investing and financing.
The net profit/loss, depreciation, changes in current assets (other than cash) and liabilities are considered as operating activities including income taxes.
The sale of assets, interest received, purchase of investments are examples of investing activities while the issuance of stocks, debt principal deduction (loan settlement), issuance of debt securities etc are examples of financing activities.
An increase in assets other than cash is an outflow while an increase in liabilities is an inflow. Depreciation and other non-cash expenses deducted in the income statements are added back while the non-cash income such gain on asset are deducted from net income.
The company's cash flows from financing activities
= $80,000 - $17,000 - $130,000 - $116,000
= -$183,000
he government of Junta took Fuel Safe Corp., a domestic energy firm, into state ownership to save the company from bankruptcy. However, the other private competitors in the energy industry were enraged by this decision. As a result, the government had to reduce the tax burden on all private energy firms so that both the state-owned enterprise and private firms could coexist. What type of economy does this portray?
Answer: Mixed economy
Explanation:
A mixed economic system is a form of economic system that combines private and state enterprise. A mixed economic system combines aspects of capitalism and socialism. A mixed economic system safeguards private property, allows a level of economic freedom during the usage of capital, and also allows governments to interfere in the economic activities so as to achieve social aims.
The example in the question shows that the private and public sector are playing a role in the economy and hence, it's a mixed economy.
Michael Corporation is evaluating a capital investment opportunity. This project would require an initial investment of $36,000 to purchase equipment. The equipment will have a residual value at the end of its life of $5000. The useful life of the equipment is 4 years. The new project is expected to generate additional net cash inflows of $19,000 per year for each of the four years. Michael's required rate of return is 10%. The net present value of this project is closest to:
Answer:
$27,645
Explanation:
The computation of the net present value is shown below
Net Present value = Present value of cash inflow + Present value of residual value - Initial investment
= $19,000 × 3.170 + $5,000 × 0.683 - $36,000
= $27,645
The 3.170 is the PVIFA factor for 4 years at 10% and the discount factor for 4 year at 10% is 0.683 and we considered the same
Cornett Company reported the following information: cash received from the issuance of common stock, $150,000; cash received from the sale of equipment, $14,800; cash paid to purchase an investment, $20,000; cash paid to retire a note payable, $50,000; and cash collected from sales to customers, $225,000. What amount should Cornett report on its statement of cash flows as net cash flows provided/used by investing activities
Answer:
The correct option is B,-$5,200 as found in the attached.
Explanation:
The net cash flows provided/used by investing activities are cash flows(both inflows and outflows) on assets that are capable of generating earnings directly or indirectly for the business.
By direct ,I mean assets that are used directly in the business to enhance the business earnings while indirect relates those that are not used in core business operations.
Cash flow from investing activities is computed:
Cash received from sale of equipment $14,800
cash paid to purchase investment ($20,000)
Cash flow used in investing activities ($5,200)
The correct option is B as found in the attached .
Consider a product with a daily demand of 400 units, a setup cost per production run of $100, a holding cost per unit of $24.00, and an annual production rate of 292,000 units. The firm operates and experiences demand 365 days per year. a. What is the Production Order Quantity? (Select] b. What is the max inventory on hand? (Select] c. What is the average inventory? (Select] d. What are the total holding costs? $ (Select] e. What does it cost to manage the inventory?
Answer:
a. The Production Order Quantity is 1,560 units
b. The Maximum inventory is 780 units
c. The Average inventory is 390 units
d. The Total holding cost is $9,360
e. To manage the inventory cost $18,718.97
Explanation:
a. According to the given data we have the following:
Annual Production rate = 292,000 units
Daily production rate(p) = Annual production rate / number of days per year = 292,000/365 = 800 units
Demand rate(d) = 400 units per day
Number of days per year = 365
Annual demand(D) = d × number of days per year = 400 × 365 = 146,000 units
Set up cost(S) = $100
Holding cost (H) = $24
Therefore to calculate the Production Order Quantity we have to use the following formula:
production order quantity(Q) = √ {2DS / H [1-(d/p)]}
= √ {(2x146,000x100) /24[1-(400/800)]}
= √ [29,200,000/24(1-0.5) ]
= √ [29,200,000/(24 x 0.5)]
= √ (29,200,000/12)
= √2,433,333.3333
= 1,560 units
b. To calculate the Maximum inventory we use the following formula:
Maximum inventory ( I - max) = (Q/p) (p-d) = (1560/800)(800-400) = 1.95 x 400 = 780 units
c. To calculate the Average inventory we use the following formula:
Average inventory = I-max/2 = 780/2 = 390 units
d. To calculate the Total holding cost we use the following formula:
Total holding cost = [(I-max / 2) H] = (780/2)24 = 390 × 24 = $9,360
e. To calculate What does it cost to manage the inventory we use the following formula:
Total cost = Annual holding cost + Annual setup cost
Annual setup cost = (D/Q) S = (146000/1560)100 = $9,358.97
Therefore, Total cost =$9,360 + $9,358.97
= $18,718.97
Check my work Check My Work button is now disabledItem 5Item 5 6 points The aftertax cost of debt: Multiple Choice varies inversely to changes in market interest rates. will generally exceed the cost of equity if the relevant tax rate is zero. will generally equal the cost of preferred if the tax rate is zero. is unaffected by changes in the market rate of interest. is highly dependent upon a company's tax rate.
Answer: is highly dependent upon a company's tax rate.
Explanation:
The after-tax cost of debt is defined as the net cost of debt that is determined by adjusting the gross cost of debt incurred for its tax benefits. The after-tax cost of debt
equals the pre-tax cost of debt which is then multiplied by (1 – tax rate).
The after-tax cost of debt is the cost of debt which is included while calculating the weighted average cost of capital and it has a greater effect on the cost of capital of a firm when there's an increase in the debt-equity ratio.
The most important elements in a business model include all of the following except: A. Selecting a growth strategy B. Verifying that sufficient demand exists for a given product at a given price in a particular market C. Selecting unique features and technologies to be imbedded into the products or services D. Determining how to capture a portion of the value created in terms of revenues and profits E. Identifying market segments to be targeted
Answer:
Option A
Explanation:
In simple words, business model refers to the strategy for creating a profit for a product. This defines the goods or services that the company is trying to offer, the intended audience that it has defined as well as the costs it plans.
A creative technology company must include a business plan, if only to draw funding, help it retain talent, and inspire leaders and managers. Established companies frequently have to review and revise their operating strategies, or struggle to predict emerging developments and obstacles. Investors will study and analyse the corporate strategies of all businesses that are involved in them.
Choosing a development procedure for growth is not really a part of a business framework, but a point of performance of the growth model. Other choices specifically address which kind of goods should be selected in a company with which specific market group and how you'd like to benefit from your package's particular quality.
You must evaluate a proposal to buy a new milling machine. The base price is $120,000, and shipping and installation costs would add another $15,000. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $70,000. The applicable depreciation rates are 33%, 45%, 15%, and 7% as discussed in Appendix 12A. The machine would require a $6,000 increase in net operating working capital (increased inventory less increased accounts payable). There would be no effect on revenues, but pretax labor costs would decline by $46,000 per year. The marginal tax rate is 35%, and the WACC is 12%. Also, the firm spent $5,000 last year investigating the feasibility of using the machine. What is the total year 3 cash flow (year 3 operating cash flow year 3 terminal cash flow) for the proposed milling machine
Answer:
$91,795
Explanation:
The computation of the total year 3 cash flow is shown below:
Total year 3 cash flow = After tax saving in labor cost + depreciation expense × tax rate + working capital recovery + after tax salvage value
where,
After tax salvage value is
= Sale value - tax on capital gain
= $70,000 - {($70,000 - $135,000 × 7%) × 35%}
= $48,807.50
Now total year 3 cash flow is
= $46,000 × 0.65 + ($135,000 × 15%) × 0.35 + $6,000 + $48,807.50
= $91,795
The $135,.000 is come from
= $120,000 + $15,000
We simply applied the above formula
Which is and example of a short-term investment
Answer:
Savings account
Explanation:
Edginuity 2020
High-yielding savings accounts, recurring deposits, debt funds, and government securities are just a few of the short-term investing Examples.
What is short-term investment?A short-term investment is a debt or equity security that will be sold or converted to cash within the next three to twelve months.
It's a stock or boId that management intends to sell in the current accounting period in order to generate a rapid profit. These are the most widely held short-term securities.
Thus, short-term investment is debt funds, government securities and other accounts.
For more details about short-term securities click here:
https://brainly.com/question/6564414
Carlos is risk-neutral and has an ancient farmhouse with great character for sale in Slaterville Springs. His reservation price for the house is $130,000. The only possible local buyer is Whitney, whose reservation price for the house is $150,000. The only other houses on the market are modern ranch houses that sell for $125,000, which is exactly equal to each potential buyer’s reservation price for such a house. Suppose that if Carlos does not hire a realtor, Whitney will learn from her neighbor that Carlos’s house is for sale and will buy it for $140,000. However, if Carlos hires a realtor, he knows that the realtor will put him in touch with an enthusiast for old farmhouses who is willing to pay up to $350,000 for the house. Carlos also knows that if he and this person negotiate, they will agree on a price of $300,000.
Answer:
The question is not complete, this part could complete the question:
"If Realtors charge a commission of 5 percent of the selling price and all Realtors have opportunity costs of $2,000 for negotiating a sale, will Carlos hire a Realtor? If so, how will total economic surplus be affected?"
The answer is, the total economic surplus increased from $20,000 to $248,000
Explanation:
Firstly it is important to understand what marginal cost, marginal benefit and Asymmetric information is. Marginal cost is the cost added from the spending of one more unit of resource while marginal benefit is considered as the benefit from spending one more unit of resource. Asymmetric information is a situation whereby one part of the transaction possess more information and material facts than other parts.
Carlos reservation price is $130,000. He wishes to sell to sell for $140,000 to Whitney who has a reservation price of $150,000. Therefore the surplus to Carlos is 140,000 - 130,000 = $10,000 and surplus to Whitney is 150,000 - 140,000 = $10,000. Therefore, the total economic surplus is $20,000
If Carlos sells through a realtor who charges 5% if the property is sold for $300,000 to someone with a reservation price of $350,000. The surplus will be:
5% × 300,000 - 2000 = $13,000.
Now, the surplus is 300,000 - 130,000 + 15,000 = $185,000
Therefore, the surplus to the buyer is
350,000 - 300,000 = $50,000
Hence, the total economic surplus increased from $20,000 to $248,000
The actual financial surplus grew from $20,000 to $248,000 in the last year.
To begin, it is necessary to comprehend the concepts of marginal cost, marginal gain, and asymmetric knowledge.
The expense of expending one more unit of material is referred to as marginal cost, and the benefit of expending one more unit of material is referred to as marginal benefit.
Carlos reservation price = $130,000
Wishes sales = $140,000
Whitney reservation price = $150,000
Carlos surplus = $140,000 - $130,000
Carlos surplus = $10,000
Whitney surplus = 150,000 - 140,000
Whitney surplus = $10,000
Total economic surplus = $10,000 + $10,000
Total economic surplus = $20,000
Carlos sells by realtor
New surplus = [5% × $300,000] - $2000
New surplus = $13,000
Total surplus = $300,000 - 130,000 + 15,000 = $185,000
Total new economic surplus = $185,000 + $13,000 + ($350,000 - $300,000)
Total new economic surplus = $248,000
Learn more:
https://brainly.com/question/14851866?referrer=searchResults
Day Corporation, an S corporation, reported a $73,000 ordinary loss for Year 1 (a non-leap year). Day uses the calendar year as its taxable year, as do all of its shareholders. Individual B owns 25% of the Day stock at all times during Year 1. B’s basis in his Day Corporation stock at the beginning of Year 1 was $10,000. B materially participates in Day’s business. At the end of Year 1, Day is liable for the following:
Third-party creditors $15,000
Individual B 3,000
Other shareholders 9,000
What amount of Day’s losses may be deducted by B in Year 1, and what amount of Day’s losses can be carried over by B to Year 2?
Individual B can deduct a total of $13,000 in losses from Day Corporation in Year 1. The remaining $5,250 of B's loss share can be carried over to Year 2.
Explanation:Individual B's deductible losses from Day Corporation are limited to the amount of B's basis in the stock and the amount of B’s at-risk amount.
At the beginning of Year 1, B’s basis was $10,000. In calculating the at-risk amount, we add to this basis any amount Day Corporation owes to B, which is $3,000, for a total of $13,000.
However, the ordinary loss reported by Day Corporation amounted to $73,000, and B's share of the loss, given that B owns 25% of the Day's stock, would be 25% of $73,000 = $18,250. Since $18,250 exceeds B's basis + at-risk amount of $13,000, B can only deduct up to $13,000 of these losses in Year 1.
The remainder, i.e., $18,250 - $13,000 = $5,250, can be carried over by B to Year 2 to be deducted from his income generated by Day Corporation in that year, provided he has sufficient basis and at-risk amount in Year 2.
Learn more about Loss Deduction and Carryover here:https://brainly.com/question/31060041
#SPJ12
Summer Manufacturing Company uses an average of 30 gallons of cleaning fluid a day. Usage tends to be normally distributed with a standard deviation of 3 gallons per day. Lead time is normally distributed averaging 7 days with a standard deviation of 4 days. The company hopes to keep the desired service level is 90 percent. What amount of safety stock is appropriate if a fixed order size of 600 gallons is used?
Answer:
Safety Stock = 153.94 [tex]\approx[/tex] 154 gallons
Solution:
Average Demand =[tex]D_{avg} = 30 gallons/day[/tex]
Standard deviation of demand = [tex]\sigma_{d} = 3 gallons[/tex]
Average Lead Time = [tex]LT_{avg} = 7 days[/tex]
Standard deviation of Lead Time= [tex]\sigma_{LT} = 4 days[/tex]
Service Level = 90%
For Service Level 90%, Z-Score = 1.28
Z-score is called Service Factor
Calculation of Safety Stock:
Safety Stock = [tex]Z \times \sqrt{[(LT_{avg}\times \sigma_{d}^2)+(\sigma_{LT}\times D_{avg})^2]}[/tex]
Safety Stock =[tex]1.28 \times \sqrt{[(7\times 3^2)+(4\times 30)^2]}[/tex]
Safety Stock = [tex]153.94 \approx 154 gallons[/tex]
g Pepper Department store allocates its service department expenses to its various operating (sales) departments. The following data is available for its service departments: Expense Basis for allocation Amount Rent Square feet of floor space $ 24,000 Advertising Amount of dollar sales $ 30,000 Administrative Number of employees $ 45,000 The following information is available for its three operating (sales) departments: Department Square Feet Dollar Sales Number of employees A 3,000 $ 280,000 6 B 3,400 $ 300,000 8 C 3,600 $ 420,000 10 Totals 10,000 $ 1,000,000 24 What is the total advertising expense allocated to Department B?
Answer: $9,000
Explanation:
Advertising is allocated on the basis of dollar sales at $30,000.
There was a total of $1,000,000 in dollar sales.
$300,000 in dollar sales was allocated to department B
To find the advertising expense for Department B therefore is,
= (Advertising Expense / Total Dollar Sales) * Dollar sales allocated to Department B
= (30,000/ 1,000,000) * 300,000
= $9,000
$9,000 is the total advertising expense allocated to Department B.
In which of the following cases will the size of the central bank's balance sheet change? Case A: The Federal Reserve conducts an open market purchase of $90 million U.S. Treasury securities. Case B: A commercial bank borrows $90 million from the Federal Reserve. Case C: The amount of cash in the vaults of commercial banks falls by $90 million due to withdrawals by the public
Answer:
Case A: The Federal Reserve conducts an open market purchase of $90 million U.S. Treasury securities.
Case B: A commercial bank borrows $90 million from the Federal Reserve.
Explanation:
In the two cases that is A and B there will be an change in the balance sheet.
The balance sheet shows the financial position of a business at a given point in time.
It makes use of the accounting equation.
Asset= Liabilities + Owners Equity
In case A there will be an increase of $100 million on the asset side as a result of rise in reserves, and on the other side a rise in owner equity (securities) by $100 million.
In case B there will be a rise in assets by $100 million as a result of increased reserves. On the other side there will be a rise in loans (liabilities) by $100 million
MC Qu. 99 The following data concerns a proposed equipment... The following data concerns a proposed equipment purchase: Cost $ 158,000 Salvage value $ 5,500 Estimated useful life 4 years Annual net cash flows $ 53,100 Depreciation method Straight-line Ignoring income taxes, the annual net income amount used to calculate the accounting rate of return is:
Answer:
$14,975
Explanation:
Depreciable amount = $158,000 - $5,500 = $152,500
Annual depreciation = $38,125
Annual net income = $53,100 - $38,125 = $14,975.
Therefore, the annual net income amount used to calculate the accounting rate of return is $14,975.
The articles of partnership stipulate that profits and losses be assigned in the following manner: ∙ Each partner is allocated interest equal to 5 percent of the beginning capital balance. ∙ Bernard is allocated compensation of $18,000 per year. ∙ Any remaining profits and losses are allocated on a 3:3:4 basis, respectively. ∙ Each partner is allowed to withdraw up to $5,000 cash per year. Assuming that the net income is $60,000 and that each partner withdraws the maximum amount allowed, what is the balance in Collins capital account at the end of that year?
Answer:
$80,700
Explanation:
A partnership begins its first year with the following capital balances:
Alfred, Capital $50,000 Bernard, Capital $60,000 Collins, Capital $70,000the partnership's net profits should be allocated the following way (drawings made by the partners should decrease their basis, but since the company made a profit they can be included in this distribution)
net income $60,000
partners' drawings plus salaries:
Alfred ⇒ $5,000 Bernard ⇒ $18,000 + $5,000 = $23,000Collins ⇒ $5,000interests owed to partners:
Alfred ⇒ $50,000 x 5% = $2,500Bernard ⇒ $60,000 x 5% = $3,000Collins ⇒ $70,000 x 5% = $3,500the remaining $18,000 should be distributed:
Alfred ⇒ $18,000 x 30% = $5,400Bernard ⇒ $18,000 + 30% = $5,400Collins ⇒ $18,000 x 40% = $7,200Collins's basis should increase by $3,500 + $7,200 = $10,700, ending balance = $70,000 + $10,700 = $80,700
A leverage effect will occur if: a. fixed operating costs are greater than zero or if interest expense is less than zero b. fixed operating costs are greater than zero or if interest expense is greater than zero c. fixed operating costs are less than zero or if interest expense is greater than zero d. fixed operating costs are less than zero or if interest expense is less than zero
Answer:
B. fixed operating costs are greater than zero or if interest expense is greater than zero
Explanation: The "leverage effect" refers to the well-established relationship between stock returns and both implied and realized volatility: volatility increases when the stock price falls.
The leverage effect explains a company's Return on Equity in terms of its Return on Capital employed and Cost of debt. The leverage effect is the difference between Return on Equity and Return on Capital employed.
Leverage refers to the debt that is the borrows funds. Yet are made to enhance returns from an investment or a project. Companies use leverage to finance their assets. Such as issuing stocks or rising capital.
Leverage can take place if the company has a fixed stock that must be met with the sales volume. As leverage can increase the volatility of the stock. Increasing the levels of risks can in turn increase the returns.Hence the option b is correct.
Learn more about the leverage effect that will occur.
https://brainly.com/question/23611168.
You are a landlord for an office building. You just received a claim letter from a tenant asking for a refund of $2,000 for extra rent that was paid in June. You check your records and find out that the June rent was deducted twice from the tenant’s bank account. You think this must have been a bank error, but the double amount was transferred to your bank account. Write an adjustment letter to the tenant, and enclose a refund check.
Answer:
See the explanation below.
Explanation:
The Accounting Officer,
ABC Co.,
12, Ogbere Road,
Ibadan, Nigeria.
28 July 2019
Dear Mr. James,
Re: Refund of $2,000 Excess Receipt and Rent Adjustment
Kindly take this as response to your request for a refund of $2,00 for extra rent that was paid in June.
After a careful examination of my bank statement, I discovered that my account was credited twice with the sum of $2,000 for the rent due to a bank error.
The adjustment is hereby made as follow:
Details $
Amount received 4,000
Refund of excess payment (2,000)
Actual rent paid 2,000
Kindly find enclosed in this letter an amount of $2,000 as the refund of the excess payment.
I look forward to receiving your response and acknowledgment of the receipt of the refund.
Yours sincerely,
Amcool.
The following information is provided for Slickers, Inc. for year 2016: • Preferred stock, 5%, $20 par value, 1,500 shares issued and outstanding • Common stock, $50 par value, 3,000 shares issued and outstanding • Dividends in arrears for 2013, 2014, 2015 • Total dividends declared and paid during 2016 totaled $10,000 How much of the dividend is paid to the common stockholders during 2016 assuming the preferred stock is cumulative?
Answer:
The amount of dividends paid to common stockholders in 2016 is $4000
Explanation:
The cumulative preferred shares are the shares that accumulate dividends in case the dividends on these shares are not paid or paid partially in a year. The accumulated dividends will need to be paid first whenever the company declares dividends.
The amounts of dividends on preferred share for one year is,
Dividends - Preferred shares = 20 * 0.05 * 1500 = $1500
Thus, the accumulated dividends on these preferred shares at start of 2016 is,
Accumulated dividends - Preferred shares = 1500 * 3 = $4500
The common shares holders are paid after the preferred share holders have been paid. This means that we will deduct the amount of accumulated dividends on preferred shares and the dividends for this year on preferred shares from the total dividends to calculate the amount to be paid to common share holders as dividends.
Common stock dividends = 10000 - (4500 + 1500) = $4000
(Hard) Dozier Corporation is a fast-growing supplier of office products. Analysts project the attached free cash flows (FCFs) during the next 3 years, after which FCF is expected to grow at a constant 7% rate. Dozier's WACC is 13%. Suppose Dozier has $100 million of debt and 10 million shares of stock outstanding. What is your estimate of the current price per share (stock price)
Answer:
Find attached full question:
The correct option is D.$42.79
Explanation:
In order to determine the current price per share of the company now,we discount all future free cash flows to present value as well as the company's terminal value:
company's terminal is the value of the company after the considered timing horizon
terminal value=free cash in year three*(1+g)/r-g
free cash flow in year three is $40 million
g is the growth rate of free cash flow which is 7%
r is the WACC of 13%
terminal value=40*(1+7%)/(13%-7%)=$ 713.33 million
Present of the company=-$20/(1+13%)+$30/(1+13%)^2+$40/(1+13%)^3+$713.33/(1+13%)^3=$ 527.89 million
The company's value of equity=present worth-debt== 527.89-100=427.89 million
share price=value of equity/number of shares== 427.89/10=$42.79
The current stock price of Dozier Corporation can be estimated using a two-stage discounted cash flow model. This involves discounting the projected free cash flows for the next 3 years at the company's weighted average cost of capital (WACC), then calculating the present value of all future cash flows growing at a constant rate using the Gordon Growth Model. The market value of the firm obtained is then adjusted for debt and divided by the number of outstanding shares to yield the estimated current price per share.
Explanation:The current stock price of Dozier Corporation can be estimated using a two-stage discounted cash flow model because the free cash flow is expected to grow at a steady rate after a period of 3 years. In the first stage, we discount the free cash flows for the next 3 years at Dozier Corporation's weighted average cost of capital (WACC) of 13%. In the second stage, we use the Gordon Growth Model to calculate the present value of all future cash flows growing at a constant rate of 7%. The net present value (NPV) gives us the market value of the firm. To get the price per share, we deduct the debt and divide it by the number of shares outstanding.
Example Calculation
Given FCFs (free cash flows) of $15 million, $20 million, and $25 million for the next 3 years respectively. Stage 1: NPV of explicit forecast period (3 years) = $15m/(1+13%)^1 + $20m/(1+13%)^2 + $25m/(1+13%)^3. Stage 2: Value of perpetual cash flows from year 4 onwards = ($25m * (1+7%)) / (13% - 7%). Deduct $100m of debt from this total value and divide by 10 million outstanding shares to yield the estimated current price per share.
Learn more about Stock Price Estimation here:https://brainly.com/question/32683176
#SPJ11
Problem 9-17 Assume that the risk-free rate of interest is 4% and the expected rate of return on the market is 14%. A share of stock sells for $55 today. It will pay a dividend of $6 per share at the end of the year. Its beta is 1.5. What do investors expect the stock to sell for at the end of the year? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Answer:
The stock price at year end is $59.45
Explanation:
Given that:
risk-free rate of interest ([tex]r_f[/tex])= 4% = 0.04,
expected rate of return on the market[tex]E(r_m)[/tex] = 14% = 0.14
Beta ([tex]\beta[/tex]) = 1.5
Dividends (D) = $6
Current price of stock [tex]P_o[/tex] = $55
Therefore, the expected rate of return ([tex]E(r)[/tex]) is given as:
[tex]E(r) = r_f +\beta (E(r_m)-r_f) = 0.04+1.5(0.14-0.04)=0.04+1.5(0.1)=0.19[/tex]
The price of the stock at the end of the year ([tex]P_1[/tex]) is given as:
[tex]E(r)=\frac{D+P_1-P_o}{P_o} \\0.19=\frac{6+P_1-55}{55} \\10.45=6+P_1-55\\P_1=10.45+55-6=59.45[/tex]
P₁ = $59.45
Final answer:
The expected price of the share at the end of the year, considering the provided risk-free rate of interest, expected market return, dividend payment, and stock beta, is $65.45.
Explanation:
The question revolves around calculating the expected price of a share at the end of the year given certain financial metrics, including the risk-free rate, the expected market return, the dividend to be paid, and the stock's beta. To determine the expected price, we need to factor in the expected return on the stock based on the Capital Asset Pricing Model (CAPM), which is used to estimate the return an investor requires, given the stock's risk compared to the market.
The CAPM formula is: Expected Return = Risk-Free Rate + Beta ×(Market Return - Risk-Free Rate). In this case, it is: Expected Return = 4% + 1.5 ×(14% - 4%) = 4% + 1.5 ×10% = 4% + 15% = 19%.
The expected return includes both the dividend yield and the capital gain. Therefore, we can set up the equation: 19% = ($6 / $55) + (Price Next Year - $55) / $55. Solving for Price Next Year yields: Price Next Year = $55 ×(1 + 19%) - $6 = $65.45.
The following data is given for the Harry Company:
Budgeted production 26,000 units
Actual production 27,500 units
Materials:
Standard price per ounce $6.50
Standard ounces per completed unit 8
Actual ounces purchased and used in production 228,000
Actual price paid for materials $1,504,800
Labor:
Standard hourly labor rate $22 per hour
Standard hours allowed per completed unit 6.6
Actual labor hours worked 183,000
Actual total labor costs $4,020,000
Overhead:
Actual and budgeted fixed overhead $1,029,600
Standard variable overhead rate $24.50 per standard labor hour
Actual variable overhead costs $4,520,000
Overhead is applied on standard labor hours. (Round interim calculations to the nearest cent.)
The direct labor rate variance is:a. 6,000Ub. 6,000Fc. 33,000Fd. 33,000U
Answer:
Option (b) : $6,000 F
Explanation:
As per the data given in the question, computation are as follows:
Standard rate = $22.00
Actual labor hours = 183,000
Actual rate = Actual labor cost ÷ actual labor hour
= $4,020,000 ÷ 183,000 hours = $21.9672
Variance = (standard rate - actual rate) × actual labor hour
= ($22.00 - $21.9672) × 183,000
= $6,000 F
The aprroximated direct labor rate variance for Harry Company is $6,000 F.
What is a direct labor rate variance?This means the difference between the total cost of direct labor at standard cost and the actual direct labor cost.
Given data
Standard rate = $22.00
Actual labor hours = 183,000
Actual rate = Actual labor cost / actual labor hour
Actual rate = $4,020,000 / 183,000 hours
Actual rate = $21.9672
Variance = (Standard rate - Actual rate) × Actual labor hour
Variance = ($22.00 - $21.9672) × 183,000
Variance = $6,000 F
Therefore, the Option B is correct.
Read more about direct labor rate variance
brainly.com/question/23612911
#SPJ2
Park Corporation is preparing a bid for a special order that would require 720 liters of material SUN100. The company already has 560 liters of this raw material in stock that originally cost $6.30 per liter. Material SUN100 is used in the company's main product and is replenished on a periodic basis. The resale value of the existing stock of the material is $5.80 per liter. New stocks of the material can be readily purchased for $6.65 per liter. What is the relevant cost of the 720 liters of the raw material when deciding how much to bid on the special order?
Answer:
$4,788
Explanation:
Data provided
Raw material in liters = 720
Purchased readily of new stock material = $6.65
The computation of relevant cost of the raw material is shown below:-
Relevant cost of the raw material = Raw material in liters × Purchased readily of new stock material
= 720 liters x $6.65
= $4,788
Therefore for computing the Relevant cost of the raw material we simply multiply the raw material in liters with purchased readily of new stock material.
The relevant cost of the 720 liters of raw material SUN100 for the special order is $4312, which includes the cost to purchase additional material and the opportunity cost of using the material in stock.
First, we need to determine the amount of additional material that needs to be purchased. Park Corporation already has 560 liters of SUN100 in stock, and the special order requires 720 liters. Therefore, the company needs to purchase an additional:
720 liters (required for the order) - 560 liters (in stock) = 160 liters
The cost to purchase this additional material is:
160 liters * $6.65 per liter = $1064
Next, we calculate the opportunity cost of using the material that is already in stock. The opportunity cost is the benefit that is foregone by not choosing the next best alternative. In this case, the next best alternative is to sell the material at its resale value. The opportunity cost is calculated as:
560 liters (in stock) * $5.80 per liter (resale value) = $3248
Now, we add the cost to purchase additional material to the opportunity cost of using the existing stock:
$1064 (cost of additional material) + $3248 (opportunity cost) = $4312
Therefore, the relevant cost of the 720 liters of raw material SUN100 for the special order is $4312.
Grouper Ltd. estimates sales for the second quarter of 2017 will be as follows.
Month Units
April 2,580
May 2,400
June 2,330
The target ending inventory of finished products is as follows.
March 31 2,020
April 30 2,200
May 31 2,130
June 30 2,330
Two units of material are required for each unit of finished product. Production for July is estimated at 2,660 units to start building inventory for the fall sales period. Grouper’s policy is to have an inventory of raw materials at the end of each month equal to 50% of the following month’s production requirements. Raw materials are expected to cost $6 per unit throughout the period.
Required:
Calculate the May raw materials purchases in dollars.
Answer:
July production = 2,660 units
raw materials per unit = $6
ending inventory of raw materials = 50% of next month production
RAW MATERIALS PURCHASESApril May June
units to be produced 2,200 2,130 2,330
+ ending inventory 1,065 1,165 1,330
EU raw materials
- beginning inventory -1,100 -1,065 -1,165
EU raw materials
total direct materials
purchases (in units) 2,165 2,230 2,495
cost of direct materials $6 $6 $6
per unit
total purchases $12,990 $13,380 $14,970
Create a crows foot erd using a specialization hierarchy if appropriate. Granite sales company keeps information on its employees and the departments in which they work. For each department, the department name,internal mailbox server, and office phone extension are kept. A department can have many assigned employees, and each employee is assigned to only one department. Employees can be salaried, hourly, or work on contract. All employees are assigned an employee number, which is kept along with the employee's name and address. For hourly employees, hourly wages and target weekly work hours are stored; for example , the company may target 40 hours/ wekk for some employees, 32 for others, and 20 for others. Some salaried employees are salespeople who can earn comission percentage on sales and commission percentage on profit are stored in the system. For example, John is a salesperson with a base salary of $50,000 per year plus a 2 percent comission on the sales price for all the sales he makes, plus another 5 percent off the profit on each of those sales. For contract employees, the beginning date and end date of their contracts are stored along with the billing rate for their hours.
Answer:
Check the explanation
Explanation:
From the below attached image Crow Foot Notation, the relationship between Super class and Sub class is shown clearly, i.e
Employee is super class, and the different types of employees are represented by specialization of three types, there are Salary, Hourly and Contract based. Again the Salary based employee is super class of Sales Employee, representing partially participation.
From the below attached image notation, "d" represents distinct i.e distinct employees of type Salary, Hourly and contract.
And "O" represents, Overlapped, means same object is aggregating two specific outcomes which are overlapped.
They are Salary based and Sale wages based employee.
The Granite Sales Company can create a Crow's Foot ERD using a specialization hierarchy. The ERD will include entities for Department, Employee, and Employee Type, with specific attributes for each type of employee.
Explanation:Entity Relationship Diagram (ERD)A specialization hierarchy can be used to represent the different types of employees in the Granite Sales Company. The ERD will have three main entities: Department, Employee, and Employee Type. The Department entity will include attributes such as department name, internal mailbox server, and office phone extension. The Employee entity will include attributes like employee number, name, and address. The Employee Type entity will include attributes specific to each employee type, such as hourly wages and target weekly work hours for hourly employees, commission percentage on sales and profit for salespeople, and beginning and end dates of contracts and billing rate for contract employees.
Example of an ERD:Department(DepartmentID, DepartmentName, MailboxServer, PhoneExtension)
Employee(EmployeeID, Name, Address, DepartmentID, EmployeeType)
EmployeeType(EmployeeTypeID, HourlyWages, TargetWeeklyWorkHours, CommissionPercentageSales, CommissionPercentageProfit, BeginDate, EndDate, BillingRate)
https://brainly.com/question/35127236
#SPJ3