Answer:
1. An Australian company buys steel from a US Firm
Account: Current Account
Direction of Flow: Payment to foreigners
2. The federal reserve buys $252 billion worth euros
Account: Financial Account
Direction of Flow: Payment to foreigner
3. Profit earned by a US based mining company operating in Mexico
Account: Current account
Direction of Flow: Payment from foreigners
4. An English company buy a US confectionary manufacturer
Account: Financial Account
Direction of Flow: Payment from Foreigners
ower Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive has 100,000 shares of common stock outstanding as of the beginning of 2021. Power Drive has the following transactions affecting stockholders' equity in 2021. March 1 Issues 52,000 additional shares of $1 par value common stock for $49 per share. May 10 Purchases 4,700 shares of treasury stock for $52 per share. June 1 Declares a cash dividend of $1.35 per share to all stockholders of record on June 15. (Hint: Dividends are not paid on treasury stock.) July 1 Pays the cash dividend declared on June 1. October 21 Resells 2,350 shares of treasury stock purchased on May 10 for $57 per share. Power Drive Corporation has the following beginning balances in its stockholders' equity accounts on January 1, 2021: Common Stock, $100,000; Additional Paid-in Capital, $4,200,000; and Retained Earnings, $1,700,000. Net income for the year ended December 31, 2021, is $570,000. Required: Prepare the stockholders' equity section of the balance sheet for Power Drive Corporation as of December 31, 2021. (Amounts to be deducted should be indicated by a minus sign.)
Answer and Explanation:
The preparation of the statement of stockholder equity is presented below:
Power Drive Corporation
Balance sheet
(Stockholder's Equity Section)
At December 31, 2021
Stockholder's Equity:
Common stock $1,52,000
Additional Paid - in - Capital $67,07,750
Total Paid - in Capital $68,59,750
Retained earnings $20,71,145
Treasury Stock -$1,22,200
Total Stockholder's Equity $88,08,695
Workings note
Paid in capital in excess of par value, Common stock $24,96,000
(52000 × $48)
Paid in capital in from sale of treasury stock $11,750
[2350 × ($57-$52)]
Total Additional Paid - in - Capital $25,07,750 Now
Dividend declared [(152000 - 4700) × $1.35] $1,98,855
Treasury Stock [(4700 - 2350) × $52] $1,22,200
Particulars Beg. Balance Additions Deductions End. Bal
Common stock $100,000 $52,000 $152,000
Additional Paid - $42,00,000 $25,07,750 $67,07,750
in - Capital
Retained earnings $1,700,000 $570,000 $1,98,855 $20,71,145
Marquette purchased 7% of RST stock for $50,000 on 1/1/21. Data regarding these securities follow: Year-end Date Market Value December 31, 2021 $47,000 December 31, 2022 57,000 December 31, 2023 68,000 The 12/31/23 balance of the Securities Fair Value Adjustment account will be: Select one:
Answer:
The security at December 31th 2023 will be listed for 68,000 under current assets.
Explanation:
The securities will be listed at their fair balance.
But, as the gain is unrealized until sale the company will record it within the concept of other comprehensive income.
The dividend will be considered gain of the period thus, they will be recognized ither cash or shares are received.
you have just deposited $11000 in to an account that promises to pay you an annual interest rate of 6.5 percent each year for the next 6 years. You will leave the money invested in the account and 10 years from today. you need to have $26300 in the account. What annual interest rate must you earn over the last 4 years to accomplish this goal
Answer:
Over the last 4 years to accomplish this goal the annual interest rate must be 13.14 %.
Explanation:
First find the Future value (FV) of $11,000 at the end of the 6th year as follows :
PV = -$11,000
r = 6.50%
p/yr = 1
n = 6
Pmt = $0
FV = ?
Using a financial calculator, the Future Value (FV) is $16,050.57
Therefore, the amount invested will amount to $16,050.57 in 6 year.
Next we then calculate the interest rate that will give us $26300 in the next four years (remainder of the 10 years)
PV = -$16,050.57
FV = $26,300
P/yr = 1
n = 4
Pmt = $0
r = ?
Using a financial calculator, the Interest rate (r) is 13.14 %
Conclusion :
Over the last 4 years to accomplish this goal the annual interest rate must be 13.14 %.
Short-term notes payable: Multiple Choice Cannot replace an account payable. Can be issued in return for money borrowed from a bank. Are not negotiable. Are a conditional promise to pay. Rarely involve interest charges.
Answer:
Can be issued in return for money borrowed from a bank.
Explanation:
The short term note payable is a note payable that can be issued against the borrowed amount. Since it is short term so its duration is within one year and it is an amount of loan in which the person has to pay within the specified time period along with the interest charges. It is shown in the liabilities side of the balance sheet
Hence, the second option is correct
The burn down chart for a team showed a peculiar trend. It started dropping rapidly at the beginning of the Sprint and then seemed to plateau in the middle. A day before the Sprint, the line dipped rapidly and reached the horizontal axis. Whiat is the most likely reason for this trend?
Answer:
Explanation:
In the scenario being described, it is the most likely that the team encountered a major blocking issue in the middle of the Sprint which was resolved only toward the end. This can be deduced from the graph due to it plateauing in the middle, which usually happens when tasks are not finishing, which ultimately causes a blocking issue and since the chart went back to normal afterwards, they most likely resolved the blocking issue.
An online-only bank currently offers a 7-year CD (certificate of deposit) paying simple interest rate of 4% per quarter. If you want to get $4,240 from this CD 7 years later, how much do you have to purchase today?
Answer:
The answer is $1,413.94
Explanation:
Number of periods(N) = 28 periods (7 years x 4 quarters)
Interest rate(I/Y) = 4% per quarter. Therefore, interest rate per year is 16% per year(4% x 4 quarters)
Future value(FV) = $4,240
Present Value (PV) = ?
Let's use a financial calculator:
N = 28; I/Y = 4, FV = 4,240; CPT PV= -1,413.94
Therefore, the present value is $1,413.94
suppose a German company issues a bond with a par value of €1,000, 23 years to maturity, and a coupon rate of 3.8 percent paid annually. If the yield to maturity is 4.7 percent, what is the current price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
Price of bond = €875.09
Explanation:
The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV).
Value of Bond = PV of interest + PV of RV
The value of bond would be worked out as follows:
Step 1
Calculate the PV of interest payments
Annual interest payment
= 3.8% × 1,000 = 38
PV of interest payment = A ×(1- (1+r)^(-n))/r
r- annual yield = 4.7%
n- 23
PV of interest payment= 38 × (1-(1.047^(-23)/0.047 = €527.37
Step 2
PV of redemption Value
PV = RV × (1+r)^(-n)
PV = 1,000 × (1.047)^(-23) = €347.717
Step 3
Price of bond
= 527.37+ 347.717 = €875.09
Price of bond = €875.09
If each of two competing monopolists undertakes equal advertising efforts to attract consumers away from the other, the total result is Group of answer choices
Complete Question:
If each of two competing monopolists undertakes equal advertising efforts to attract consumers away from the other, the total result is
Group of answer choices:
A. they will both increase market share.
B. they will simply neutralize one another's efforts.
C. they will both lose market share.
D. they will both improve their industrial position.
Answer:
B. they will simply neutralize one another's efforts.
Explanation:
If each of two competing monopolists undertakes equal advertising efforts to attract consumers away from the other, the total result is they will simply neutralize one another's efforts.
A monopolist can be defined as an individual who is engaged in selling a unique product in a market without any competitor. Also, a monopolistic competition involves various firms engaged in monopoly competes with one other, but selling products that are unique and distinct from the other.
Hence, when two competing monopolists undertakes equal advertising efforts to attract consumers away from the other, this would result in one monopolist effort canceling or nullifying the effort of the other. This simply means that, it would have been as though none of them had made any effort at all because they were both involved in doing the same thing. Thus, making the market the same as it were originally prior to their advertising efforts.
Factory Overhead Rates, Entries, and Account Balance Eclipse Solar Company operates two factories. The company applies factory overhead to jobs on the basis of machine hours in Factory 1 and on the basis of direct labor hours in Factory 2. Estimated factory overhead costs, direct labor hours, and machine hours are as follows: Factory 1 Factory 2 Estimated factory overhead cost for fiscal year beginning August 1 $18,500,000 $44,000,000 Estimated direct labor hours for year 800,000 Estimated machine hours for year 1,250,000 Actual factory overhead costs for August $1,515,800 $3,606,300 Actual direct labor hours for August 64,500 Actual machine hours for August 105,000 a. Determine the factory overhead rate for Factory 1. Round your answer to two decimal places.
Answer:
Predetermined manufacturing overhead rate= $14.8 per machine hour
Explanation:
Giving the following information:
Factory 1
Estimated factory overhead= $18,500,000
Estimated machine hours for year 1,250,000
To calculate the predetermined manufacturing overhead rate we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 18,500,000/1,250,000
Predetermined manufacturing overhead rate= $14.8 per machine hour
Computing and analyzing acid-test and current ratios LO A1
Case X Case Y Case Z
Cash $ 2,000 $ 110 $ 1,000
Short-term investments 50 0 580
Current receivables 350 470 700
Inventory 2,600 2,420 4,230
Prepaid expenses 200 500 900
Total current assets $ 5,200 $ 3,500 $ 7,410
Current liabilities $ 2,000 $ 1,000 $ 3,800
Compute the current ratio and acid-test ratio for each of the above separate cases.
Current Ratio
Choose Numerator: Choose Denominaa Current Ratio
/ = Current ratio
Case X / = to 1
Case Y / = to 1
Case Z / = to 1
Acid-Test Ratio
Choose Numerator: Choose Denominator: Choose cid-Test Ratio
/ = Acid-test ratio
Case X / = to 1
Case Y / = to 1
Case Z / = to 1
Answer:
Current ratio
Case X 2.60
Case Y 3.50
Case Z 1.95
Acid -test ratio
Case X 1.20
Case Y 0.58
Case Z 0.60
Explanation:
Computation of the current ratio and acid-test ratio
CURRENT RATIO
Particulars Choose Numerator / Choose denominator = Current Ratio
Formula Current Assets / Current Liabilities = Current Ratio
Case X $5,200.00 / $2,000.00 = 2.60 to 1
Case Y $3,500.00 / $1,000.00 = 3.50 to 1
Case Z $7,410.00 / $3,800.00 = 1.95 to 1
ACID - TEST RATIO
Particulars Choose Numerator / Choose denominator = Acid Test Ratio
Formula Quick Assets / Current Liabilities = Acid Test Ratio
Case X $2,400.00 / $2,000.00 = 1.20 to 1
Case Y $580.00 / $1,000.00 = 0.58 to 1
Case Z $2,280.00 / $3,800.00 = 0.60 to 1
Note:
Quick Asset
Case X
Cash $ 2,000
Short-term investments 50
Current receivables 350
=$2,400
Case Y
Cash $ 110 $
Short-term investments 0
Current receivables 470
=$580
Case Z
Cash $ 1,000
Short-term investments 580
Current receivables 700
=$2,280
Therefore:
Current ratio will be:
Case X 2.60
Case Y 3.50
Case Z 1.95
Acid -test ratio will be:
Case X 1.20
Case Y 0.58
Case Z 0.60
Journalize Payroll Tax The payroll register of Patel Engineering Co. indicates $2,880 of social security withheld and $720 of Medicare tax withheld on total salaries of $48,000 for the period. Earnings of $14,400 are subject to state and federal unemployment compensation taxes at the federal rate of 0.8% and the state rate of 5.4%. Provide the journal entry to record the payroll tax expense for the period. If an amount box does not require an entry, leave it blank. Round to two decimal places. Payroll Tax Expense Social Security Tax Payable 2,880 Medicare Tax Payable 720 State Unemployment Tax Payable Federal Unemployment Tax Payable
Answer and Explanation:
The Journal entry is shown below:-
Payroll Tax Expense Dr, $4,493
To Social Security Taxes Payable $2,880
To Medicare Taxes Payable $720
To State Unemployment Tax Payable $778 ($14,400 × 5.4%)
To Federal Unemployment Tax Payable $115 ($14,400 × 0.8%)
(Being payroll tax expense for the period is recorded)
Here we debited the payroll tax expenses as it increased the expenses and we credited the Social Security Taxes Payable, Medicare Taxes Payable, State Unemployment Tax Payable, Federal Unemployment Tax Payable as it increased the liabilities
Stock Y has a beta of .9 and an expected return of 11.2 percent. Stock Z has a beta of .5 and an expected return of 7.2 percent. What would the risk-free rate have to be for the two stocks to be correctly priced
Answer:
Required risk free rate for two stocks to be correctly priced would be 2.20%.
Explanation:
In order to determine this, the Capital Asset Pricing Model (CAPM) formula is used as follows:
Rs = Rf + (Beta * MR) .................................... (1)
Where;
For Stock Y:
Rs = Expected return on stock = 11.2%, or 0.112
Rf = Risk free return = ?
Beta = 0.9
MR = Market risk premium = ?
Substituting the values into equation (1), we have:
0.112 = Rf + (0.9 * MR) ................................. (2)
For Stock Z:
Rs = Expected return on stock = 7.2%, or 0.072
Rf = Risk free return = ?
Beta = 0.5
MR = Market risk premium = ?
Substituting the values into equation (1), we have:
0.072 = Rf + (0.5 * MR) ................................. (3)
If we deduct equation (3) from equation (2) and solve for MR, we have:
(0.112 - 0.072) = (Rf - Rf) + (0.9MR - 0.5MR)
0.04 = 0 + 0.4MR
MR = 0.04 / 0.4
MR = 0.10, or 10%
Substituting MR = 0.01 into equation (2) and solve for Rf, we have:
0.112 = Rf + (0.9 * 0.10)
0.112 = Rf + 0.09
Rf = 0.112 - 0.09
Rf = 0.022, or 2.20%
Therefore, required risk free rate for two stocks to be correctly priced would be 2.20%.
Poison Corporation holds 70 percent of Snake Company’s voting common shares but none of its preferred shares. Summary balance sheets for the companies on December 31, 20X1, are as follows:
Poison Corporation Snake Company
Assets
Cash $20,000 $29,000
Accounts Receivable 32,000 42,000
Inventory 120,000 74,000
Buildings and Equipment 295,000 215,000
Less: Accumulated Depreciation (138,000) (63,000)
Investment in Snake Company 123,900
Total Assets $452,900 $297,000
Liabilities and Owners’ Equity
Accounts Payable $77,900 $64,000
Wages Payable 40,000
Preferred Stock 100,000 56,000
Common Stock ($10 par value) 120,000 100,000
Retained Earnings 115,000 77,000
Total Liabilities and Owners’ Equity $452,900 $297,000
Neither of the preferred issues is convertible. Poison’s preferred pays a 9 percent annual dividend and Snake’s preferred pays a 10 percent dividend. Snake reported net income of $52,000 and paid a total of $21,000 of dividends in 20X1. Poison reported $65,000 of income from its separate operations and paid total dividends of $47,000 in 20X1.
Required:
Compute 20X1 consolidated EPS. Ignore any tax consequences. (Round your answer to 2 decimal places.)
Answer:
Common Stock
Poison Corp's Common stock = $120,000 / $10 = 12,000 shares
Snake Co's Common stock = $100,000 / $10 = 10,000 shares
Poison Corp owned Common stock in Snake Co. = 10,000 shares *70% = 7,000 shares
Preferred Stock Dividend
Poison Corp = $100,000 * 9% = $9,000
Snake Co = $56,000 * 10%= $5,600
Net Income which is the Adjusted Net income in absence of any information:
Poison Corp - $65,000
Snake Co - $52,000
Subsidiary Basic EPS = (Adjusted Net Income of Subsidiary - Preferred Stock Dividend ) / Subsidiary Common shares outstanding
Therefore Basic EPS of Snake Co. = (52,000 - 5,600) / 10,000 shares
= $4.64
Consolidated Basic EPC = [ (Parent Adjusted Net Income generated Internally - Parent Preferreed Stock Dividend) + (Parent Owned Subsidiary Common shares * Subsidiary EPS) ] / Parent Common shares outstanding
Therefore Consolidated EPS of Poison Corp = [(65,000 - 9,000) + (7,000 shares * 4.64)} / 12,000 shares
= (56,000 + 32,550) / 12,000 shares
= $7.3781
=$7.38
The consolidated Earnings per Share (EPS) for Poison Corporation for the year 2021 will be $7.9 per share.
Earnings per Share (EPS) are the amount of profits or gains a company earns over its common total stock outstanding in the market and subscribed fully.
We know that the Earnings Per Share can be calculated as using the following formula for the Poison Corporation which is a holding company of Snake Corporation holding its 70% equity.[tex]\rm Earnings\ per\ Share= \dfrac{Total\ Net\ Earnings}{Total\ Stock\ Outstanding}[/tex]We can calculate the no. of shares of Snake Co. held by Poison Corp by the following method.[tex]\rm Total\ holdings\ in\ Snake\ Co.= 0.70\ x\ 10000[/tex]We can say that Poison Co. holds 7000 shares in Snake Co. Now we can calculate the adjusted net income as ,[tex]\rm Adjusted \ net\ Income\ after\ Dividends= 65000-9000[/tex]So the net adjusted income for Poison Corp will be $56,000 and the adjusted net income of Snake Co. will be $46800 (52000-5600).EPS of Snake Co. will be,[tex]\rm EPS= \dfrac {46400}{10000}\\\\\\\rm EPS = 4.64[/tex]EPS of Poison Corp will be ,[tex]\rm EPS\ of\ Poison= \dfrac {56000}{12000}\\\\\\\rm EPS\ of\ Poison = 4.66[/tex]So now as we know that Poison holds 70% in Snake Co. we can say that their share in Snake Co. will be ,[tex]\rm EPS\ of\ Poison\ in\ Snake= 0.70\ x\ 4.64\\\\\\ EPS\ of\ Poison\ in\ Snake= 3.24[/tex]Now adding the values of EPS of Poison standalone and the EPS of Poison in Snake Co. we get ,[tex]\rm Consolidated\ EPS\ Of\ Poison\ Corp.= EPS\ standalone+ EPS\ in\ Snake\ Co.\\\\\\\rm Consolidated\ EPS\ Of\ Poison\ Corp.= 4.66+3.24\\\\\\\rm Consolidated\ EPS\ Of\ Poison\ Corp.=7.9[/tex]Hence, the consolidated EPS of Poison Corp will be $7.9 per share.
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Larned Corporation recorded the following transactions for the just completed month.
1. $89,000 in raw materials were purchased on account.
2. $87,000 in raw materials were used in production.
3. Of this amount, $76,000 was for direct materials and the remainder was for indirect materials.
4. Total labor wages of $128,500 were paid in cash. Of this amount, $103,000 was for direct labor and the remainder was for indirect labor.
5. Depreciation of $190,000 was incurred on factory equipment.
Required:
Record the above transactions in journal entries.
Answer with its Explanation:
Part 1: $89,000 in raw materials were purchased on account.
The purchase of raw material inventory on account is treated as increase in raw material inventory and accounts payables. The journal entry would be as under:
Dr Raw Material Inventory $89,000
Cr Accounts Payables $89,000
Part 2: $87,000 in raw materials were used in production. Of this amount, $76,000 was for direct materials and the remainder was for indirect materials.
The entry would be increase in work in progress by $76,000 & Manufacturing overhead by $11,000 and would decrease the raw material inventory with $87,000.
The journal entry would be as under:
Dr Work In Progress $76,000
Dr Manufacturing Overhead $11,000
Cr Raw Material Inventory $87,000
Part 3: Total labor wages of $128,500 were paid in cash. Of this amount, $103,000 was for direct labor and the remainder was for indirect labor.
The direct cost are allocated to the work in progress and indirect costs are allocated to manufacturing overheads.
The journal entry would be as under:
Dr Work In Progress $128,500
Dr Manufacturing Overhead $103,000
Cr Cash Account $231,500
Part 4: Depreciation of $190,000 was incurred on factory equipment.
The depreciation of the factory equipment is an indirect cost and all the indirect costs are charged to manufacturing overhead.
The journal entry would be as under:
Dr Manufacturing Overhead $190,000
Cr Cash Account $190,000
A $20,000 loan with interest at 3.5% is being repaid by 35 level annual payments. The first payment is due one year after the loan is issued. Beginning with the seventeenth payment, the borrower is permitted to pay only one-third the normal annual payment. After the twelfth reduced payment, the loan is renegotiated. The revised level payment P will yield the lender 4% per year over the remaining seven years. Find P.
Answer:
To find EMI (P) we know that the yearly EMI for the loan of $20000 for 35 years at an interest of 3.5% is $992 per year.
Therefore upon calculating the loan after the seventeenth year we have $19252
The EMI calculated after the one-third permitted on the seventeenth payment is, therefore: $992*1/3= 992/3=$330
Therefore, the balance calculated after the twenty-seventh instalment = $6150
Therefore the yearly EMI (P) for the loan of $6150 at 4% for the remaining eight years is $900 per year.
Explanation:
To find EMI (P) we know that the yearly EMI for the loan of $20000 for 35 years at an interest of 3.5% is $992 per year.
Therefore upon calculating the loan after the seventeenth year we have $19252
The EMI calculated after the one-third permitted on the seventeenth payment is, therefore: $992*1/3= 992/3=$330
Therefore, the balance calculated after the twenty-seventh instalment = $6150
Therefore the yearly EMI (P) for the loan of $6150 at 4% for the remaining eight years is $900 per year.
Efficiency is attained when a. total surplus is maximized. b. producer surplus is maximized. c. all resources are being used. d. consumer surplus is maximized and producer surplus is minimized
Answer:
A.
Explanation:
Efficiency is attained when total surplus is maximized. At this point consumer surplus is equal to producers surplus which means that they are in equilibrium.
When efficiency is reached, the sum of the total amount of consumer surplus and producer surplus is maximized.
In cost-volume-profit analysis, all costs are classified into the following two categories: a.variable costs and fixed costs b.discretionary costs and sunk costs c.sunk costs and fixed costs d.mixed costs and variable costs
Answer: a.variable costs and fixed cost
Explanation:
In cost-volume-profit analysis, all costs are classified into the fixed cost and the variable cost. The fixed cost is the type of cost which doesn't depend on the production level because it is normally constant and doesn't varies.
Variable cost is a cost that varies with production level. Examples of variable cost are the cost of raw materials that are used in production and the direct labor costs.
In cost-volume-profit analysis, all costs are classified into the following two categories: variable costs and fixed costs.
Variable costs are costs that vary in direct proportion to changes in the level of production or sales. These costs increase or decrease as the volume of production or sales increases or decreases. Examples of variable costs include the cost of raw materials, direct labor, and sales commissions. For example, if a company produces more units, it will require more raw materials and labor, resulting in higher variable costs.
Fixed costs, on the other hand, are costs that remain constant regardless of the level of production or sales. These costs do not change in the short term, even if the volume of production or sales fluctuates. Examples of fixed costs include rent, salaries of permanent employees, and insurance premiums. For example, even if a company produces fewer units, it still needs to pay the same amount of rent and salaries.
By classifying costs into variable and fixed categories, cost-volume-profit analysis helps companies understand how changes in sales volume impact their profitability. This analysis allows companies to determine the break-even point, which is the level of sales at which total revenue equals total costs. It also helps companies calculate the contribution margin, which is the difference between sales revenue and variable costs.
In summary, in cost-volume-profit analysis, costs are classified into variable costs and fixed costs. Variable costs vary with changes in production or sales volume, while fixed costs remain constant regardless of the level of production or sales. Understanding these cost categories helps companies analyze their profitability and make informed decisions about pricing, production levels, and sales strategies.
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The following information is available for the first month of operations of Lane Inc., a manufacturer of mechanical pencils:
Sales $416,720
Gross profit 242,950
Indirect labor 90,430
Indirect materials 45,220
Other factory overhead 13,750
Materials purchased 128,350
Total manufacturing costs for the period 239,610
Materials inventory, end of period 17,090
Using the above information, determine the following:
a. The cost of finished goods available for sale minus the ending finished goods inventory.Cost of goods sold.
b. The cost of materials that are an integral part of the finished product.Direct materials cost.
c. The wages of factory workers who are directly involved in converting materials into a finished product.Direct labor cost.
Answer:
a. Cost of goods sold = Sales - Gross profit
= $416,720 - $242,950
= $173,770
b. Direct materials cost = Materials purchased -Indirect materials - Materials inventory, end of period
= $128,350 - $45,220 - $17,090
= $66,060
c. Direct labor cost =Total manufacturing costs for the period - Direct materials cost - Factory overhead
= $239,610 - $66,060 - ($90,430 + $45,220 + $13,750)
= $239,610 - $66,060 - $149,380
=$239,610 - $215,440
=$24,170
Project x has cash flows of $8000, $7500 and $7000 for years 1 to 4, respectively. Project y has cash flows of 7000,7500, 8000, and 8500 for years 1 to 4 respectivel. which one of the following statements is true concerning these two project given a positive discount rate?
a. Both projects have the same future value at the end of Year 4.
b. Both projects have the same value at Time 0.
c. Both projects are ordinary annuities.
d. Project Y has a higher present value than Project X.
e. Project X has both a higher present and a higher future value than Project Y.
Answer:
e. Project X has both a higher present and a higher future value than Project Y.
Explanation:
year project X project Y
1 8,500 7,000
2 8,000 7,500
3 7,500 8,000
4 7,000 8,500
One of the basic principles in economics and finance is the time value of money. One dollar today is worth more than one dollar tomorrow. In this case, the more money you receive during the first years, the higher the value of the money. E.g. if you receive $1,000 today, you can invest it and earn interests and it will be worth more than $1,000 that you receive in a couple of years.
Checking a diversified firm's business portfolio for the competitive advantage potential of cross-business strategic fits entails consideration of Group of answer choices
Complete Question:
Checking a diversified firm's business portfolio for the competitive advantage potential of cross-business strategic fits entails consideration of:
Group of answer choices
A. whether the parent's company's competitive advantages are being deployed to maximum advantage in each of its business units.
B. whether the competitive strategies employed in each business act to reinforce the competitive power of the strategies employed in the company's other businesses.
C. whether the competitive strategies in each business possess good strategic fit with the parent company's corporate strategy.
D. the extent to which there are competitively valuable relationships between the value chains of sister business units and what opportunities they present to reduce costs, share use of a potent brand name, create competitively valuable new capabilities via cross-business collaboration, or transfer skills or technology or intellectual capital from one business to another.
E. how compatible the competitive strategies of the various sister businesses are and whether these strategies are properly aimed at achieving the same kind of competitive advantage.
Answer:
D. the extent to which there are competitively valuable relationships between the value chains of sister
business units and what opportunities they present to reduce costs, share use of a potent brand name, create competitively valuable new capabilities via cross-business collaboration, or transfer skills or technology or intellectual capital from one business to another.
Explanation:
Checking a diversified firm's business portfolio for the competitive advantage potential of cross-business strategic fits entails consideration of the extent to which there are competitively valuable relationships between the value chains of sister business units and what opportunities they present to reduce costs, share use of a potent brand name, create competitively valuable new capabilities via cross-business collaboration, or transfer skills or technology or intellectual capital from one business to another.
Generally, a strategic fit exists whenever one or more activities comprising the value chain of various business entities are evidently similar to avail the choice of transferring competitively valuable expertise, resources, or technology from one business entity to another or combine the similar value chain activities of the sister business unit into a single operation so as to maximize profits and lower the cost of production.
Singing Fish Fine Foods has a current annual cash dividend policy of $2.25. The price of the stock is set to yield a return of 14 %. What is the price of this stock if the dividend will be paid a. for 12 years? b. for 16 years? c. for 40 years? d. for 60 years? e. for 100 years? f. forever? a. What is the price of this stock if the dividend will be paid for 12 years?
Answer:
Price = $12.73
Explanation:
DATA:
Dividend = 2,25
Yield / r = 14%
n (number of years) = 12 years
Price = ?
Price of the stock can be calculated by the following formula
Formula: Price = Dividend x [tex]1-\frac{\frac{1}{(1+r)^{n} } }{r}[/tex]
Price = Dividend x [tex]1-\frac{\frac{1}{(1+0.14)^{12} } }{0.14}[/tex]
Price = $2.25 x 5.66
Price = $12.73
The price of this stock if the dividend will be paid for 12 years will be $12.73
How can there ever exist negative real interest rates in the economy?
Answer:
Negative real interest rates occur in "high inflation environments".
Explanation:
Rates of interest can sometimes be unfavorable, as can completely accurate rates. Under high-inflation environments, declining real expectations appear especially when inflation continues rising rapidly, that is, quicker than prices.If prices are 5 percent, however, unemployment is 7 percent, so the actual rate becomes 2 percent negative.10. Security X has expected return of 12% and standard deviation of 20%. Security Y has expected return of 15% and standard deviation of 27%. If the two securities have a correlation coefficient of 0.7, what is their covariance
Answer: 0.0378
Explanation:
The Covariance of securities refer to the relationship between two securities in terms of their movement together. A postie covariance means that securities usually move in the same direction while a negative means that they move in opposite directions. It can therefore be useful in portfolio diversification.
The formula is;
= Standard deviation of X * Standard deviation of Y * Correlation Coefficeint
= 20% * 27 * 0.7
= 0.0378
Suppose a monopolist produces two different products. If the marginal cost of producing one is lower than the marginal cost of producing the other, and the monopolist charges a different price for the two goods, then the monopolist is:
Answer:
perfectly price discriminating.
Explanation:
here are the options to this question :
not maximizing its profit.
imperfectly price discriminating.
not price discriminating.
perfectly price discriminating.
perfect price discrimination also known as first-degree discrimination is when a seller sells his product at the maximum possible price for each unit consumed. Due to the price variance, the seller captures all available consumer surplus.
A monopoly is when there is only one firm operating in an industry.
On December 31, it was estimated that goodwill of $51,500 was impaired. In addition, a patent with an estimated useful economic life of 12 years was acquired for $115,200 on April 1.
a. Journalize the adjusting entry on December 31 for the impaired goodwill
b. Journalize the adjusting entry on December 31 for the amortization of the paten
Answer:
a. The journal entries for the impaired goodwill as at Dec 31 would be:
Debit Impairment expense/charge $51,500
Credit Goodwill/Allowance for impairment $51,500
(To recognize impairment expense on goodwill)
b. Journal entries for the amortization of the patent as at Dec 31 would be:
Debit Amortization expense $9,600 [$115,200/12]
Credit Accumulated amortization $9,600
(To recognize amortization expense on patent)
Explanation:
A goodwill is impaired when its carrying value exceeds its fair value. The impairment test is carried out annually and the difference by which the carrying value of the goodwill exceeds the fair value is charged to the profit or loss account as impairment expense. The impairment reduces the goodwill to its fair value.
Goodwill belongs to a class of intangible asset and it arises essentially as a result of business combination. A business combination occurs when a company acquires another company.
One of the oldest debates in economics is whether a currency should have a fixed or floating exchange rate. There is no single solution that fits all economies. The choice of an exchange rate system depends on many factors, including the openness to international trade, maturity of the financial system, inflation, labor market flexibility, and credibility of policymakers.
Consider two countries, Opland and Lovenia. Opland is a small, open economy with a large share of its national output created through trade. Lovenia has much higher inflation than its trading partners.
In the following table, indicate the exchange-rate system that would be more beneficial for each country.
Pegged (Fixed) Exchange Rates Flexible Exchange Rates
Opland
Lovenia
Answer:
Opland and Lovenia
Beneficial Exchange Rate:
Opland Flexible (Floating) Exchange Rates
Lovenia Pegged (Fixed) Exchange Rates
Explanation:
A flexible or floating exchange rate for Opland allows the market economy to determine the prevailing exchange rate between it and Lovenia, for instance. The market forces of demand and supply interacting in an open and mature financial system ensure that the appropriate exchange is established at each transaction point. In such a system, the credibility of policymakers is not under question, and the market enjoys labor flexibility with low inflation.
On the other hand, Lovenia, suffering from hyperinflation due to lack of investor confidence in its economy, will not be able to operate a floating exchange rate. It needs to rein on inflation by fixing the exchange rates for transactions with other nations in order to stop capital flight.
On October 5, Ivanhoe Company buys merchandise on account from Pharoah Company. The selling price of the goods is $5,240, and the cost to Pharoah Company is $3,180. On October 8, Ivanhoe Company returns defective goods with a selling price of $640 and a scrap value of $310. Record the transactions on the books of Pharoah Company, assuming a perpetual approach. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit choose a transaction date enter an account title to record credit sales Inventory enter a debit amount enter a credit amount enter an account title to record credit sales Accounts Payable enter a debit amount enter a credit amount (To record credit sales) enter an account title to record cost of goods sold on account Accounts Payable enter a debit amount enter a credit amount enter an account title to record cost of goods sold on account Inventory enter a debit amount enter a credit amount (To record cost of goods sold on account) choose a transaction date enter an account title to record credit granted for receipt of returned goods Accounts Receivable enter a debit amount enter a credit amount enter an account title to record credit granted for receipt of returned goods Sales Revenue enter a debit amount enter a credit amount (To record credit granted for receipt of returned goods) enter an account title to record scrap value of goods returned enter a debit amount enter a credit amount enter an account title to record scrap value of goods returned enter a debit amount enter a credit amount (To record scrap value of goods returned)
Answer:
From Pharaoh's point of view:
October 5, merchandise sold on account to Ivanhoe Company
Dr Accounts receivable 5,240
Cr Sales revenue 5,240
Dr Cost of goods sold 3,180
Cr Inventory 3,180
October 8, defective merchandise is returned
Dr Sales returns and allowances 640
Cr Accounts receivable 640
Dr Inventory 310
Cr Cost of goods sold 310
From Ivanhoe's point of view:
October 5, merchandise sold on account from Pharaoh Company
Dr Inventory 5,240
Cr Accounts payable 5,240
October 8, defective merchandise is returned
Dr Accounts payable 640
Cr Inventory 640
Which of the following stages in a buying sequence will result in a specific option or set of options from which price, delivery, system compatibility, and other characteristics can be determined?
a. Determine the characteristics
b. Establish specifications
c. Search for and qualify potential suppliers
d. Request proposals
Answer:
C.
Explanation:
Since determine of characteristics has already been established the next would be to search.
All of the following are normally found in a corporation's stockholders' equity section, exceptAll of the following are normally found in a corporation's stockholders' equity section, except a. Paid-in-capital in excess of par b. Unearned Rent c. Retained Earnings d. Common Stock
Answer:
b. Unearned Rent
Explanation:
Shareholders Equity is the residual amount of Assets after deducting the Liabilities.
The Unearned Rent is a Liability and is not found in the Shareholders Equity Section.
Liabilities are Present obligations of an entity that arise as a result of past events, the settlement of which will result in out flow of economic benefits from the entity.
"An analysis of yield curves of U.S. Government and lower medium quality corporate bonds shows the yield spread to be widening over the last 4 months. This is an indication that investors expect the economy to:"
Explanation:
recession
Answer:
To be going into recessionary situation over the coming time period. The widening spread indicates that the yield on lower grade corporate bond are higher than normal relative to yield bonds issued by government. This situation is happening due to investors investing highly in government bonds leading to increase in yields.