Answer:
a. $290,000
Explanation:
The relevant data provided in the question for computing the net sales is here below:-
Sales revenue = $320,000
Sales discounts = $12,000
Sales returns and allowances = $18,000
The computation of net sales on the income statement is shown below:-
The amount of net sales = Sales revenue - Sales discounts - Sales returns and allowances
= $320,000 - $12,000 - $18,000
= $320,000 - $30,000
= $290,000
Therefore for computing the amount of net sales we simply applied the above formula.
Jiminy’s Cricket Farm issued a 15-year, 10 percent semiannual bond 4 years ago. The bond currently sells for 91 percent of its face value. The company’s tax rate is 38 percent. Suppose the book value of the debt issue is $60 million. In addition, the company has a second debt issue on the market, a zero coupon bond with 11 years left to maturity; the book value of this issue is $35 million, and the bonds sell for 51 percent of par. What is the company’s total book value of debt? (Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.) Total book value $ What is the company’s total market value of debt? (Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.) Total market value $ What is your best estimate of the aftertax cost of debt? (Round your answer to 2 decimal places. (e.g., 32.16)) Cost of debt %
Answer:
Find the answers below
Explanation:
The total book value of the debt is the sum of the two bonds book values
total book value=$60 million+$35 million=$95 million
Total market value of bonds is the sum of the two bonds market values
total market values=$60 million*91%+$35 million*51%
=$54.6 million+$17.85 million=$72.45 million
After tax cost of debt =pretax cost of debt*(1-t) where t is the tax rate of 38% or 0.38
For the first bond:
=rate(nper,pmt,-pv,fv)
nper is the number of interest the bonds would pay from now on,i.e (15-4)*2=22
pmt is the semiannual interest payment,which is:$60 million*10%/2=$3 million
pv is the market value of $54.6 million
fv is the book value of $60 million
=rate(22,3,-54.6,60)=5.73%
5.73% is the semiannual rate ,where 11.46% is the annual rate
after tax cost of debt=11.46%*(1-0.38)=7.11%
the second bond:
nper is 11 (11 years left to maturity)
pmt is nil since it is a zero coupon bond
pv is $17.85 million
fv is $35 million
=rate(11,0,-17.85,35)=6.31%
after tax cost of debt=6.31% *(1-0.38)=3.91%
In January 2012, one US dollar was worth 50.0 Indian rupees. Suppose that over the next year the value of the Indian rupee decreases to 57.0 Indian rupees to one US dollar. Suppose also that the price level of all goods and services in India, as measured in rupees, falls 21.0%, so that the Indian price index falls from a value of 100 to 79.0. At the same time, suppose that the US price level increases by 6%, to 106.1. By what percentage did the value of the real exchange rate change over this period? Please give your answer to the nearest whole percentage point. 2. What will happen to the following as a result of the changes?a) America's consumption of Indian goods and services will likely _______.b) India's consumption of American goods and services will likely _______.
The value of the real exchange rate has increased by 35% over this period.
Explanation:The real exchange rate is the nominal exchange rate adjusted for changes in the price level of goods and services in each country. To calculate the percentage change in the real exchange rate, we need to compare the change in the price levels of both countries.
The percentage change in the price level in India is calculated as (100 - 79)/100 = -21%. The percentage change in the price level in the US is 106.1 - 100 = 6.1%.
To calculate the percentage change in the real exchange rate, we can use the formula: Percentage change in real exchange rate = Percentage change in nominal exchange rate - Percentage change in price levels
The percentage change in the nominal exchange rate is (57 - 50)/50 * 100 = 14%. Therefore, the percentage change in the real exchange rate is 14% - (-21%) = 35%.
The value of the real exchange rate has increased by 35% over this period.
Cherry Tree Company has the following balance sheet information as of December 31, 2019Cash $10,000Marketable Securities $20,000Accounts Receivable $30,500Prepaid Expenses $2,000Inventory $34,000Property, Plant and Equipment (net of Accumulated Depreciation) $54,000Accounts Payable $45,000Long-term Bonds Payable $50,000Owner's Equity $55,500What is Cherry Tree Company's current ratio?
Answer:
2.14 times
Explanation:
The computation of the current ratio is shown below:
Current ratio = Current assets ÷ Current liabilities
where,
Current assets is
= Cash + marketable securities + account receivable + prepaid expense + inventory
= $10,000 + $20,000 + $30,500 + $2,000 + $34,000
= $96,500
And, the current liabilities is account payable i.e $45,000
So, the current ratio is
= $96,500 ÷ $45,000
= 2.14 times
We simply applied the above formula
Which of the following is true? Internal equity is cheaper than external equity. The advantage of using debt for a firm is that it increases the chance of going bankruptcy. The chance of going bankruptcy tends to be very low for a firm, therefore, firms can ignore it when determining their capital structure. The before-tax and after tax cost of equity is different.
Answer:
Yes it is True that Internal equity is cheaper than external equity.
Explanation:
Internal equity compares the pay rates between colleagues in the same firm. It is used as standard to ensure fairness. It is the net income realized after subtracting tax and liabilities as well as expenses incurred.
External equity on the other hand is comparing the pay workers in different organizations. It helps to set a benchmark for payment of staff at the same grade level in different companies. It can be used as a yardstick to measure whether a particular company's pay rate competes favorably with other companies.
Internal equity also called retained earnings is generally less expensive than external equity for tax reasons among others.
Schaeffer Shippers announced on May 1 that it will pay a dividend of $1.20 per share on June 15 to all holders on record as of May 31st. The firm's stock price closed today at $42 a share. Assume all investors are in the 28 percent tax bracket. If tomorrow is the ex-dividend date, what would you expect the opening price to be tomorrow morning assuming all else is held constant
Answer:
$41.14
Explanation:
Declared dividend per share = $1.20
Tax on declared dividend per share = $1.20 * 28% = $0.3360
Net Declared dividend per share = $1.20 - $0.3360 = $ 0.864
Firm's closing stock price per share today = $42
Opening share price tomorrow = $42 - $0.8640 = $41.1360, approximately $41.14.
Final answer:
An investor would be willing to pay for a share of stock in Babble, Inc. based on the present discounted value of the expected dividends. Assuming a PDV of total profits at $51.3 million for 200 shares, the price per share is calculated to be approximately $256,500.
Explanation:
To calculate what an investor is willing to pay for a share of stock in Babble, Inc., we need to compute the present value of the future dividends, as these are the profits that investors will receive. Since the company will be disbanded in two years, we will not consider any growth beyond that point, and instead, we will focus on the present value of the dividends to be received over the next two years.
Firstly, one must find the present value (PV) of each dividend payment separately using a suitable discount rate, which reflects the rate of return investors require. Generally, the discount rate can be considered equivalent to the opportunity cost of capital or the expected return rate provided by other investments with a similar risk profile. However, the question does not provide the discount rate, so we'll assume that it has been calculated elsewhere.
Once the present discounted value (PDV) for each of the dividend amounts has been found, the sum of these represents the total PDV of the future dividends payable to the company's shareholders. The PDV of total profits must be divided by the number of shares to find the price per share. If the PDV of the profits is $51.3 million and there are 200 shares, then the price per share would be:
PV of total profits / Number of shares = $51.3 million / 200
= $256,500 per share.
This calculation gives the price that an investor might be willing to pay for a share of Babble, Inc., considering the dividends they would receive.
Divisional Income Statements
The following data were summarized from the accounting records for Ruiz Industries Inc. for the year ended November 30, 20Y8:
Cost of goods sold: Support department allocations:
Commercial Division $316,230 Commercial Division $43,120
Residential Division 163,680 Residential Division 28,350
Administrative expenses: Sales:
Commercial Division $57,500 Commercial Division $479,140
Residential Division 58,460 Residential Division 292,280
Prepare divisional income statements for Ruiz Industries Inc.
Ruiz Industries Inc.
Divisional Income Statements
For the Year Ended November 30, 20Y8
Commercial Division Residential Division
$ $
$ $
$ $
$ $
Answer and Explanation:
The Preparation of divisional income statements is following below:-
Ruiz Industries Inc.
Divisional Income Statements
For the Year Ended November 30, 2018
Commercial Division Residential Division
Sales a $479,140 $292,280
Cost of goods sold b $316,230 $163,680
Gross profit c = (a - b) $162,910 $128,600
Administrative expenses d $57,500 $58,460
Operating income $105,410 $70,140
(e = c - d)
Support department
allocations f $43,120 $28,350
Segment Income $62,290 $41,790
(g = e - f)
So, to reach at segment income we subtract the Support department allocations from operating income.
Longhorn Company reports current E&P of $100,000 in 20X3 and a deficit of ($200,000) in accumulated E&P at the beginning of the year. Longhorn distributed $300,000 to its sole shareholder on January 1, 20X3. The shareholder's tax basis in his stock in Longhorn is $100,000. How is the distribution treated by the shareholder in 20X3?
Answer: Dividend of $100,000, Capital Gain of $100,000 and Tax Free Return on basis of $100,000
Explanation:
Longhorn Company reports current E&P of $100,000 in 20X3 and still distributed $300,000 to it's sole shareholder. Because it had $100,000 in current E&P, that is all it can declare as Dividends. For this reason, the shareholder will recognize $100,000 as Dividends.
The Shareholder has a basis of $100,000 in the stock of Longhorn. As a result of this, $100,000 of the Distribution will be termed a TAX FREE Return on Basis because he is receiving a return on his basis that is neither a dividend nor capital gain.
The remaining $100,000 will be considered a Capital Gain as it reflects a rise in his stock.
15-10 A firm has 60,000 shares whose current price is $45.90. Those stockholders expect a return of 14%. The firm has a 3-year loan of $1,900,000 at 7.3%. It has issued 22,000 bonds with a face value of 1000, 20 years left to maturity, semiannual compounding, a coupon interest rate of 7%, and a current price of $925. Using market values for debt and equity, what is the firm’s cost of capital: A) Before taxes? B) After taxes with a tax rate of 21%?
Answer:
before taxes:
WACC 8.74959%
after a 21% tax-rate:
WACC 7.23587%
Explanation:
Equity: 60,000 x $45.90 = 2,754,000
Liabilities: 1,900,000 + 22,000 x 925 = 22,250,000
Value: 25,004,000
We solve for weights:
Ew = 2,754,000 / 25,004,000 = 0,1101423772196449
Lw = 22,250,000 / 25,004,000 = 0,8898576227803551
Cost of debt will be the market value rate of the bond That is the rate at which the future coupon payment and maturity matches the market price of the bond
we solve this using excel goal seek:
[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
C 35.00
time 20
rate 0.040545327
[tex]35 \times \frac{1-(1+0.0405453269606019)^{-20} }{0.0405453269606019} = PV\\[/tex]
PV $473.3728
[tex]\frac{Maturity}{(1 + rate)^{time} } = PV[/tex]
Maturity $1,000.00
time 20.00
rate 0.04055
[tex]\frac{1000}{(1 + 0.0405453269606019)^{20} } = PV[/tex]
PV 451.6270
PV c $473.3728
PV m $451.6270
Total $924.9998
a semiannual rate of 0.04055 is the market rate thus, cost of debt is
0.04055 x 2 = 0.081
Now we can solve for the WACC without taxes:
[tex]WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})[/tex]
Ke 0.14000
Equity weight 0.1101
Kd 0.081
Debt Weight 0.8899
t 0
[tex]WACC = 0.14(0.1101) + 0.081(1-0)(0.8899)[/tex]
WACC 8.74959%
wiht taxes of 21%
t 0.21
[tex]WACC = 0.14(0.1101) + 0.081(1-0.21)(0.8899)[/tex]
WACC 7.23587%
According to the U.S. Treasury Group of answer choices companies must accept some form of cash payment for goods and services, but not necessarily U.S. dollars. firms do not have to accept cash as payment for goods and services. the government will not accept cash in payment of taxes. U.S. dollars must be accepted as payment for any good or service sold in the United States.
Answer:
According to the U.S. Treasury U.S. dollars must be accepted as payment for any good or service sold in the United States.
Explanation:
The United States Treasury is charged with the responsibility of managing the dollar currency which is generally accepted as a legal tender in U.S.
They also manage the federal finances by collecting taxes. They accept cash as taxes.They manage the federal government's accounts and debt.They pay manage treasury bill.they also enforce financial policies made by government regarding taxes.In summary, the U.S. Treasury U.S. enforces the use of dollars as an acceptable form of payment for any good or service sold in the United States.
U.S. currency is declared to be the legal tender for all debts in the United States. Apart from cash, other modes of payment can also be accepted. In international trade, the currencies of the respective countries are usually involved.
Explanation:The U.S. currency, known as fiat money, is declared by the U.S. government to be legal tender for all debts, public and private, in the United States. This means that if you owe a debt, then legally speaking, you can pay that debt with U.S. currency.
While U.S. dollars must be generally accepted as payment in the United States, it's important to note that transactions don't strictly have to be performed using cash. For example, businesses can choose to accept cards or digital payments. In an international context, when trade across borders occurs, payments need to flow across borders too, usually in the form of different currencies. For instance, a Chinese firm exporting abroad will earn U.S. dollars but will need Chinese yuan to pay its inside expenses.
Learn more about Legal Tender and International Trade here:https://brainly.com/question/39652514
#SPJ12
Suppose that there is asymmetric information in the market for used cars. Sellers know the quality of the car that they are selling, but buyers do not. Buyers know that there is a 40% chance of getting a "lemon", a low quality used car. A high quality used car is worth $30,000, and a low quality used car is worth $15,000. Based on this probability, the most that a buyer would be willing to pay for a used car is $ nothing. (Enter your response rounded to the nearest dollar.) Which of the following would best "solve" the asymmetric information problem in this market? A. High-quality sellers could offer warranties or product guarantees. B. Prohibiting the sale of low-quality cars. C. Low-quality sellers could establish industry standards. D. It is not possible to solve the asymmetric information problem in this market.
Answer:
Correct answer is A and C
Explanation:
Solution
For the price of the car,
The buyers willingly to pay for the used call is computed below:
From the question given, the probability the buyers know that there is a 40 % change of having a low quality used car
A quality of a higher used call is worth = $30,000'
A quality of a lower used call is worth= $15,000.
So,
The price of the car = lower quality of 40% * Higher quality of 60%
= 0.4 (15,000- X) + 0.6 (30,000)
X = 6000+ 18000
Therefore X = 24000
The value of buyers ready to pay for the car that is not new, but ude already is =$ 24,000
Congratulations! You were the 10th caller on the KMTH morning show and you just won $4,000.00. After you calm down, you decide to put the money into a bank account so that you will have even more money for a trip to Europe. Snurling Bank tells you that they will pay 7% per year compounded monthly. How much money will you have for your trip in 7 years
Answer:
$6,519.98
Explanation:
According to the scenario, computation of the given data are as follows:
Present value = $4,000
Rate = 7%
Rate compounded monthly = 7% ÷ 12
Time period = 7 × 12 = 84
So, we can calculate the future value by using financial calculator.
The attachment is attached below:
FV = $6,519.98
Ari, Inc. is working on its cash budget for December. The budgeted beginning cash balance is $14,000. Budgeted cash receipts total $127,000 and budgeted cash disbursements total $126,000. The desired ending cash balance is $40,000. Any borrowing is in multiples of $1,000 and interest is paid in the month following the borrowing.To attain its desired ending cash balance for December, the company needs to borrow:________.
A. $0.
B. $25,000.
C. $55,000.
D. $40,000.
Answer:
The company needs to borrow $25000 and option B is the correct answer.
Explanation:
If the ending amount of cash for the year is less than the desired ending balance, then the company will need to borrow to maintain the desired level of cash balance.
To calculate the amount needed to be borrowed, we first compute the ending cash balance for December. The ending cash balance will be,
Closing Balance = Opening Balance + Receipts - Payments
Closing Balance - December = 14000 + 127000 - 126000
Closing Balance - December = $15000
The difference between the closing cash balance and the desired closing cash balance is the amount that the firm will need to borrow.
Amount need to be borrowed = 40000 - 15000 = $25000
Ari, Inc. needs to borrow $25,000 to reach its desired ending cash balance for December after accounting for its beginning balance, cash receipts, and disbursements.
Explanation:To determine how much Ari, Inc. needs to borrow in December, we need to consider the desired ending cash balance, initial cash balance, total cash receipts, and total cash disbursements. The calculation is as follows:
Beginning cash balance: $14,000Add: Budgeted cash receipts: $127,000Less: Budgeted cash disbursements: $126,000Equals: Projected ending cash balance without borrowing: $15,000However, the company desires an ending cash balance of $40,000. Therefore, Ari, Inc. needs to borrow the difference between the projected ending balance and the desired ending balance.
Desired ending balance - Projected ending balance without borrowing = Amount to borrow
$40,000 - $15,000 = $25,000
Ari, Inc. will need to borrow $25,000 to reach its desired ending cash balance for December.
Learn more about Borrowing Calculation here:https://brainly.com/question/31786658
#SPJ3
You are valuing a company that is projected to generate a free cash flow of $10 million next year, growing at a stable 3.0% rate in perpetuity thereafter. The company has $22 million of debt and $8.5 million of cash. Cost of capital is 10.0%. There are 50 million shares outstanding. How much is each share worth according to your valuation analysis
Answer:
$2.67 per share
Explanation:
To start with,we calculate the present worth of the company using the below formula:
present worth of the company=free cash flow*(1+g)/r-g
g is the growth rate of the free cash flow which is 3.0%
r is the cost of capital of 10%
present worth=$10 million*(1+3%)/10%-3%
=10.3/7%
=$ 147.14 million
However ,the value of total equity is computed thus:
equity=present worth+cash-debt
cash is $8.5 million
debt is $22 million
equity=$ 147.14 +$8.5-$22
equity=$133.64 million
value of each share=equity value /number of shares
number of shares is 50 million
value of each=$133.64 million/50 million=$2.67 per share
In 2016, Greece faced another set of hurdles in its ongoing saga of managing its debt. In order for Greece to maintain its obligations under the IMF and European Central Bank bailout packages, it must continue to cut government spending, particularly pensions that have put a strain on the budget. Greece's leaders, meanwhile, have argued that the required spending cuts will push the economy back into a recession. What will the required budget cuts do to an economy that is still experiencing slow growth
Answer:
AS decreases with negative impacts on aggregate output and prices.
Explanation:
Greece is cutting government spending, particularly pensions that have put a strain on the budget. This action will reduce the amount of money the citizens have and reduces the amount in the economy that can be used to increase production.
There are over 2.7 million pensioners in Greece, so a lot of households depend on them to make ends meet.
A reduction in pension will reduce disposable income that could have been put into local production. Aggregate supply will decrease, and the effect on output and prices will be a negative one.
Floral Beauty, Inc., is a large floral arrangements store located in Asheville Mall. Bridal Lilies, which are a specially created bunch of lilies for bridal bouquets, cost Floral Beauty $19 each. There is an annual demand for 22,000 Bridal Lilies. The manager of Floral Beauty has determined that the ordering cost is $85 per order, and the carrying cost, as a percentage of the unit cost, is 14%. Floral Beauty is now considering a new supplier of Bridal Lilies. Each lily would cost only $17.50, but to get this discount, Floral Beauty would have to buy shipments of 2,000 Bridal Lilies at a time.
Should Floral Beauty use the new supplier and take this discount for quantity buying?
Determine:
a) What is the EOQ for the current supplier?
b) What is the annual ordering cost for the current supplier?
c) What is the holding cost per unit per year for the current supplier?
d) What is the total annual inventory cost (including purchase cost) for the current supplier?
e) What is the annual holding cost for the new supplier (when purchasing 3,000 each order)?
f) What is the total annual inventory cost (including purchase cost) for the new supplier (when purchasing 3,000 each order)?
Answer:
a. 1186
b. $1,576.73
c. $2.66
d. $419,578.96
e. $623,33
f. $389,298.33
Explanation:
a) What is the EOQ for the current supplier?
EOQ = √(2×Annual Demand×Ordering Cost) / Holding Cost per unit
= √(2×22,000×$85) / $19 × 14%
= 1186
b) What is the annual ordering cost for the current supplier
annual ordering cost = Total demand / EOQ × Cost per order
= 22,000/1186 × $85
= $1,576.73
c) What is the holding cost per unit per year for the current supplier?
holding cost per unit = $19 × 14%
= $2.66
d) What is the total annual inventory cost (including purchase cost) for the current supplier
total annual inventory cost = Purchase Cost + Ordering Cost + Carrying Cost
= 22,000×$19 + $1,576.73 + (1186/2) × $2.66
= $419,578.96
e) What is the annual holding cost for the new supplier (when purchasing 3,000 each order)
annual ordering cost = Total demand / EOQ × Cost per order
= 22,000/3,000 × $85
= $623,33
f) What is the total annual inventory cost (including purchase cost) for the new supplier (when purchasing 3,000 each order)?
total annual inventory cost = Purchase Cost + Ordering Cost + Carrying Cost
= 22,000×$17.50 + $623,33 + (3,000/2) × ($17.50 × 14%)
= $389,298.33
Novak Corp. has 7400 shares of 6%, $50 par value, cumulative preferred stock and 148000 shares of $1 par value common stock outstanding at December 31, 2020, and December 31, 2019. The board of directors declared and paid a $14000 dividend in 2019. In 2020, $70000 of dividends are declared and paid. What are the dividends received by the preferred stockholders in 2020?
Answer:
The dividends received by the preferred stockholders in 2020 are $30400.
Explanation:
The cumulative preferred stock is the form of preferred stock that accumulates or accrues dividends in case the company does not pay or partially pay dividends to preferred stock in a particular year. This means that the dividends are accrued and the company will need to pay these dividends first in the future whenever it declares dividends.
The total dividends per year on preferred stock is,
Preferred Stock dividends = 50 * 0.06 * 7400 = $22200 per year
The preferred stock dividend that was accrued at the end of 2019 after the dividend payment of $14000 is,
Accrued dividends - Preferred stock = 22200 - 14000 = $8200
In 2020 the company will need to pay this accrued dividend along with the dividend for 2020 on preferred stock. Thus, in 2020 the preferred stock holders will receive dividends of,
Preferred stock dividend to be paid in 2020 = 8200 + 22200 = $30400
Robertson and Enrickson prepared an agreement to enter into a partnership. Both of the partners realized that outside capital was needed for the firm to begin operations; however, they also realized that their individual and combined credit ratings would not attract sufficient funds. In order to improve the new partnership’s ability to attract investment capital, and with the approval of Enrickson, Robertson added his friend Thompson’s name to the partnership agreement. Thompson, a well-known personality from a family of means, was not asked to be a partner and knew nothing of Robertson's and Enrickson's actions. Upon seeing Thompson's name on the partnership agreement, a local bank readily agreed to advance Robertson and Enrickson the total sum required to begin operations. The partnership has now failed, and the bank would like to hold Thompson, Robertson and Enrickson liable for the amount of the loan. Will the bank recover from Thompson, Robertson and Enrickson?
Answer:
No the bank can’t pursued to embrace Thompson liable for the loan as Thompson isn't a business partner any more within the business and not has remained informed that his name was related to the shape as a business partner .
Here during this case Thompson isn't a companion by rule of evidence as he has not delineate himself because the business partner and has no part to play within the research of the business partnership contract. what is more he's additionally uninformed concerning his name getting used in the business.
Thus, he can't be hold liable for the loan , relatively Erickson and Oscar Robertson are going to be accused for deception or misrepresentation for mistreatment Thompson's name while not his assent and data.
Infinity Clock Company prepared the following static budget for the year: Static Budget Units/Volume 9 comma 000 Per Unit Sales Revenue $ 5.00 $ 45 comma 000 Variable Costs 1.50 13 comma 500 Contribution Margin 31 comma 500 Fixed Costs 3 comma 000 Operating Income/(Loss) $ 28 comma 500 If a flexible budget is prepared at a volume of 9 comma 800 units, calculate the amount of operating income. The production level is within the relevant range.
Answer:
Net operating income= 31,300
Explanation:
Giving the following information:
Static Budget:
Units= 9,000
Selling price per unit= $5
Variable Costs per unit= $1.50
Fixed Costs= 3,000
We need to determine the operating income if 9,800 units were sold:
Sales= (9,800*5)= 49,000
Total variable costs= (9,800*1.5)= (14,700)
Contribution margin= 34,300
Fixed costs= (3,000)
Net operating income= 31,300
MC Qu. 89 A company is planning... A company is planning to purchase a machine that will cost $57,000 with a six-year life and no salvage value. The company expects to sell the machine's output of 3,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below. What is the payback period for this machine
Answer:
The payback period for this machine is = 3.01 years
Explanation:
Solution
Payback Period = Investment Required (Cost of Asset), Net annual cash Inflow
so,
The Cost of Asset=$57,000
Now,
The Net annual cash Inflow =Net Income after Tax + Depreciation
=$ 9425 + $ 9500 = $18,925
Thus, Payback Period is = $57,000/18925
= 3.01 Years
Note: kindly find an attached document of the part of the complete question in this example below
The bounded rationality decision-making model:
A. describes a series of steps that decision makers should consider if their goal is to maximize their outcome and make the best choice.
B. recognizes the limitations of decision making processes by having individuals knowingly limit their options to a manageable set and choose the best alternative without conducting an exhaustive search of alternatives.
C. refers to arriving at decisions without conscious reasoning, arguing that experts make decisions by scanning the environment for cues to recognize patterns.
D. refers to arriving at decisions after first gathering information about the problem and then setting the problem consciously aside until an insightful solution to the problem arises.
Answer:
I forgot it dang it
Explanation:
XYZ CORP HAS THE FOLLOWING DATA: BUDGETED OVERHEAD $168,000 BUDGETED MACHINE HOURS (DRIVER) 35,000 ACTUAL MACHINE HOURS: JOB 17 11,700 JOB 18 9,750 JOB 19 13,650 JOB 20 3,900 JOBS 17, 18 & 19 WERE FINISHED. JOB 17 WAS SOLD. TOTAL ACTUAL OVERHEAD = $189,000. WHAT IS ACTUAL OVERHEAD IN FINISHED GOODS? (ASSUME OVERHEAD VARIANCE ALLOCATED AMONG WIP, FG AND COGS) ACTUAL OVERHEAD FG_________
Answer:
The Actual overhead in finished goods is $ 113,400
Explanation:
In order to calculate the ACTUAL OVERHEAD IN FINISHED GOODS we would have to use the following formula:
Actual overhead in finished goods= overheads allocated to job 18 and 19 + underapplied overheads allocated finished inventory
Actual overhead in finished goods=(($9,750+$13,650)/($11,700+$9,750+$13,650+$3,900)*$168,000) + ($23,400/$39,000* ($189,000 - ($39,000*$168,000/$35,000))
= $112,320 + $1,080
= $ 113,400
The Actual overhead in finished goods is $ 113,400
The actual overhead of finished goods is $113,400. It was calculated by proportioning the machine hours used by each job to the total budgeted machine hours, and allocating the overhead accordingly.
Explanation:The actual overhead in finished goods is calculated using the proportion of machine hours utilized for the finished jobs relative to the total budgeted machine hours. Here the Jobs 17, 18, and 19 are finished using 11,700, 9,750 and 13,650 machine hours respectively. This totals to 35,100 machine hours. The total budgeted machine hours is 35,000 hours. Hence, the proportion of machine hours used is 35,100 / 35,000 = 1.003. The actual overhead adjusted with this proportion is $189,000 * 1.003 = $189,567.
However, this value is more than the budgeted overhead hence the jobs must've used more resources than expected. Now, to get actual overhead in finished goods, we'll subtract the overhead from the unfinished job (Job 20) from the total actual overhead. The overhead for Job 20 can be found similar way as above. The proportion of machine hours for Job 20 with respect to total budgeted hours is 3,900/35,000 = 0.111.
Hence overhead for Job 20 = $189,000 * 0.111 = $20,979. Subtracting this from total overhead gives the actual overhead in finished goods as $189,567 - $20,979 = $168,588, but as this exceeds the $189,000 limit, expenses must've been misallocated to Job 20. Hence the actual overhead of finished goods ends up being $ 113,400 after correcting.
Learn more about Overhead Cost Calculation here:https://brainly.com/question/17268819
#SPJ12
Suppose the spouse of the primary earner in the household is considering joining the labor force. The spouse currently cares for two children and, if employed, would earn $20 per hour for 40 hours per week. The cost of child care would be $10 per hour for 50 (not 40) hours per week. Assume that the marginal tax rate on work is 50%. Assume that child care is tax deductible and that child care at home is NOT imputed and taxed. What is the after-tax, after-child-care addition to family income of the spouse working each week?
Answer: -$100
Explanation:
Assuming that that child care is tax deductible and that child care at home is NOT imputed and taxed then we shall tax the earnings and deduct child care from it.
The couple makes $20 per week per 40 hour week.
= 20 * 40
= $800
Marginal tax rate is 50% so,
= 800 * 50%
= $400
After tax addition is $400
Childcare is $10 per hour for 50 (not 40) hours per week so,
= 10 * 50
= $500
After-Child-Care Contribution is,
= 400 - 500
= -$100
The after-tax, after-child-care addition to family income of the spouse working each week is -$100
Discretionary fiscal policy that might occur is ______. Automatic fiscal policy that might occur is ______. A. a decrease in transfer payments and an increase in taxes with no interference by Congress; a decrease in government expenditure and an increase in taxes by a decision of Congress B. an increase in transfer payments and a fall in taxes with no interference by Congress; an increase in government expenditure and a cut in taxes by a decision of Congress C. an increase in government expenditure and a cut in taxes by a decision of Congress; an increase in transfer payments and a fall in taxes D. a decrease in government expenditure and an increase in taxes by a decision of Congress; a decrease in transfer payments and an increase in taxes with no interference by Congress
Answer: a decrease in government expenditure and an increase in taxes by a decision of Congress; a decrease in transfer payments and an increase in taxes with no interference by Congress (D)
Explanation:
Discretionary fiscal policy is a government policy that changes government spending or taxes. The purpose of discretionary fiscal policy is to either expand or shrink the economy. It needs approval from the Congress and President. Its examples are increases in spending on bridges, roads, stadiums etc.
Automatic fiscal policy use spending in the form of taxes and transfer payments to automatically steady the economy. An example is when unemployed become eligible for the unemployment benefits after when losing their jobs during a recession.
Continent Construction Company is a building contractor specializing in small commercial buildings. The company has the opportunity to accept one of two jobs; it cannot accept both because they must be performed at the same time and Continent does not have the necessary labor force for both jobs. Indeed, it will be necessary to hire a new supervisor if either job is accepted. Furthermore, additional insurance will be required if either job is accepted. The revenue and costs associated with each job follow:
Cost Category Job A Job B
Contract price $ 870,000 $ 820,000
Unit-level materials 257,000 227,000
Unit-level labor 274,000 324,000
Unit-level overhead 47,000 37,000
Supervisor’s salary 77,000 77,000
Rental equipment costs 29,500 32,500
Depreciation on tools (zero market value) 23,400 23,400
Allocated portion of companywide facility-sustaining costs 11,100 9,300
Insurance cost for job 19,600 19,600
Required
Assume that Continent has decided to accept one of the two jobs. Fill in the information relevant to selecting one job versus the other. Recommend which job to accept.
Assume that Job A is no longer available. Continent's choice is to accept or reject Job B alone. Fill in the information relevant to this decision. Recommend whether to accept or reject Job B.
Decision Job A Job B
Contract price
Unit-level materials
Unit-level labor
Unit-level overhead
Supervisor’s salary
Rental equipment costs
Depreciation on tools (zero market value)
Allocated portion of companywide facility-sustaining costs
Insurance cost for job
Contribution to profit (loss) $0 $0
Recommend which job to accept?
Decision Job B
Contract price
Unit-level materials
Unit-level labor
Unit-level overhead
Rental equipment costs
Depreciation on tools (zero market value)
Allocated portion of companywide facility-sustaining costs
Supervisor’s salary
Insurance cost for job
Contribution to profit (loss) $0
Recommend whether to accept or reject job B?
Final answer:
The detailed answer provides a breakdown of costs and revenue for Job A and Job B, advising to accept Job A and reject Job B due to profit considerations.
Explanation:
Decision:
Job A:Contract price: $870,000Total Costs:Unit-level materials: $257,000Unit-level labor: $274,000Unit-level overhead: $47,000 Supervisor’s salary: $77,000 Rental equipment costs: $29,500 Depreciation on tools: $23,400 Allocated portion of facility-sustaining costs: $11,100 Insurance cost for job: $19,600Calculating Total Costs for Job A:Total Costs for Job A = Sum of all costsTotal Costs for Job A = $257,000 + $274,000 + $47,000 + $77,000 + $29,500 + $23,400 + $11,100 + $19,600 = $739,600Contribution to Profit for Job A = Contract price - Total Costs for Job AContribution to Profit for Job A = $870,000 - $739,600 = $130,400Job B:Contract price: $820,000Total Costs: Unit-level materials: $227,000 Unit-level labor: $324,000 Unit-level overhead: $37,000 Supervisor’s salary: $77,000 Rental equipment costs: $32,500 Depreciation on tools: $23,400 Allocated portion of facility-sustaining costs: $9,300 Insurance cost for job: $19,600Calculating Total Costs for Job B:Total Costs for Job B = Sum of all costsTotal Costs for Job B = $227,000 + $324,000 + $37,000 + $77,000 + $32,500 + $23,400 + $9,300 + $19,600 = $749,800Contribution to Profit for Job B = Contract price - Total Costs for Job BContribution to Profit for Job B = $820,000 - $749,800 = $70,200Decision for Job A:Contribution to Profit for Job A: $130,400Recommendation: Accept Job A as it yields a higher contribution to profit.Decision for Job B (if Job A is no longer available):Contribution to Profit for Job B: $70,200Recommendation: Accept Job B alone if Job A is no longer available as it generates a positive contribution to profit, albeit lower than Job A.Alfonso began the year with a tax basis in his partnership interest of $15,000. His share of partnership debt at the beginning and end of the year consists of $7,000 of recourse debt and $10,000 of nonrecourse debt. During the year, he was allocated $32,000 of partnership ordinary business loss. Alfonso does not materially participate in this partnership and he has $3,000 of passive income from other sources.A. How much of Alfonso’s loss is limited by his tax basis?
B. How much of Alfonso’s loss is limited by his at-risk amount?
C. How much of Alfonso’s loss is limited by the passive activity loss rules?
Answer:
A.Alfonso began the year with a tax basis in his partnership interest of $15,000 which means Alfonso’s basis before the loss allocation is $15,000 and $17,000 of which $32,000 loss allocation is been limited by his tax basis which definitely will be carry over to the next following year.
B.$5,000 of loss will remains after the tax basis and at-risk limitations, and Alfonso will have a $10,000 at-risk carryover.
C. $2,000
Explanation:
A.
Alfonso began the year with a tax basis in his partnership interest of $15,000 which means Alfonso’s basis before the loss allocation is $15,000 and $17,000 of which $32,000 loss allocation is been limited by his tax basis which definitely will be carry over to the next following year.
b.
Out of the $15,000 loss not limited by Alfonso’s tax basis, $10,000 is limited due to the fact that Alfonso’s at-risk amount is only $5,000( $15,000-$10,000)
Therefore $5,000 of loss will remains after the tax basis and at-risk limitations, and Alfonso will have a $10,000 at-risk carryover.
C.
Since Alfonso doesn’t participate in the partnership materially , he may try to only deduct the $5,000 loss which was left after the tax basis and at-risk limitations to the extent he has passive income from other sources. Hence, he may deduct $3,000 out of the $15,000 loss which will make him to have $2,000 as his passive activity loss carryover.
The Donaldson Furniture Company produces three types of rocking chairs: the children's model, the standard model, and the executive model. Each chair is made in three stages: cutting, construction, and finishing. Stage Children's Standard Executive Cutting 5 hr 4 hr 7 hr Construction 3 hr 2 hr 5 hr Finishing 2 hr 2 hr 4 hr The time needed for each stage of each chair is given in the chart. During a specific week the company has available a maximum of 162 hours for cutting, 104 hours for construction, and 84 hours for finishing. Determine how many of each type of chair the company should make to be operating at full capacity.
Final answer:
To operate at full capacity, the company should make 10 children's chairs, 10 standard chairs, and 10 executive chairs.
Explanation:
To determine how many of each type of chair the company should make to be operating at full capacity, we need to consider the available hours for each stage and the time needed for each chair. Let's start by calculating the maximum number of chairs that can be made for each stage:
Cutting stage: 162 hours / (5 hours for children's + 4 hours for standard + 7 hours for executive) = 162 / 16 = 10.125, so the maximum number of chairs is 10 for cutting.
Construction stage: 104 hours / (3 hours for children's + 2 hours for standard + 5 hours for executive) = 104 / 10 = 10.4, so the maximum number of chairs is 10 for construction.
Finishing stage: 84 hours / (2 hours for children's + 2 hours for standard + 4 hours for executive) = 84 / 8 = 10.5, so the maximum number of chairs is 10 for finishing.
To maximize the production capacity, the company should make 10 children's chairs, 10 standard chairs, and 10 executive chairs.
Exercise 10-2 Make or buy LO P1 Gelb Company currently manufactures 40,000 units per year of a key component for its manufacturing process. Variable costs are $1.95 per unit, fixed costs related to making this component are $65,000 per year, and allocated fixed costs are $58,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.50 per unit. Calculate the total incremental cost of making 40,000 units and buying 40,000 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier?
Answer:
Buy
Explanation:
Allocated fixed costs are irrelevant for this decision because they can not be avoided, regardless of the alternatives being considered.
Making
Variable Cost ($1.95×40,000 units) $78,000
Fixed Costs $65,000
Total $143,000
Buying
Price ($3.50×40,000 units) $140,000
It costs $3,000 more to make the component than to buy from outside supplier.
Therefore, buy this component from the outside supplier
A factory machine was purchased for $140,000 on January 1, 2022. It was estimated that it would have a $28,000 salvage value at the end of its 5-year useful life. It was also estimated that the machine would be run 40,000 hours in the 5 years. If the actual number of machine hours ran in 2022 was 4,000 hours and the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2022 would be
Answer:
$11,200
Explanation:
The computation of the depreciation expense using the units of activity method is shown below:
Before that first we have to find out the depreciation rate which is
= (Original cost - residual value) ÷ (estimated machine hours)
= ($140,000- $28,000) ÷ (40,000 hours)
= ($112,000) ÷ (40,000 hours)
= $2.8
Now for the depreciation expense is
= Machine hours × depreciation per machine hours
= 4,000 × $2.8
= $11,200
Benjamin Company had the following results of operations for the past year: Sales (16,500 units at $16) $ 264,000 Direct materials and direct labor $ 165,000 Overhead (20% variable) 33,000 Selling and administrative expenses (all fixed) 28,050 (226,050) Operating income $ 37,950 A foreign company offers to buy 4125 units at $10.40 per unit. In addition to variable manufacturing costs, selling these units would increase fixed overhead by $640 and selling and administrative costs by $580. Assuming Benjamin's productive capacity is 16,500 units per year and it accepts the offer, its profits will:
Answer:
profits will decrease by $1,220
Explanation:
Consider the Incremental Costs and Revenues that arise from accepting the offer.
Sales ( 4125 units×$10.40) 42,900
Direct materials and direct labor ( $ 165,000/16,500 ×4125 units) (41,250)
Variable Overheads (33,000×20%)/16,500 ×4125 units) (1,650)
Incremental Fixed overheads (640)
Incremental selling and administrative costs (580)
Incremental Income/(loss) (1,220)
Therefore profits will decrease by $1,220 if it accepts the offer.
If Benjamin Company accepts the foreign company's offer, its profits will decrease by $10,042.50.
Benjamin Company's current operation involves selling 16,500 units at $16 each, resulting in a total sales revenue of $264,000. The company incurs direct materials and direct labor costs of $165,000, variable overhead costs of $33,000, and fixed selling and administrative expenses of $28,050, resulting in an operating income of $37,950.
Now, if the company accepts the foreign company's offer to buy 4,125 units at $10.40 per unit, the new sales revenue from these units would be $42,840. However, this decision comes with additional costs. Selling these units would increase variable manufacturing costs, fixed overhead, and selling and administrative costs by $10,042.50 (calculated as $4.40 * 4,125 units + $640 + $580).
As a result, the overall effect on profits would be a decrease of $10,042.50. This reduction in profits is attributed to the lower selling price of the units and the added variable and fixed costs associated with the foreign company's offer.
For more questions on profits
https://brainly.com/question/1078746
#SPJ6
If a division that currently has negative residual income of $200,000 is considering an investment that will reduce this negative amount to $75,000, the investment: Multiple Choice should be pursued because it is attractive from both the divisional and corporate perspectives. should be pursued because it is attractive from the divisional perspective although not from the corporate perspective.
Answer:
Residual financial gain states to the surplus of revenue earned by the company, prodigious the lowest amount of return. the presentation of the corporate is that the outline of the division / local performance. Once there's a rise within the residual financial gain of the partition, it mechanically reflects within the residual financial gain of the corporate as an entire. within the given case, an asset decreases the adverse residual financial gain, therefore it's useful to each the partition also because the entire firm.