Answer and Explanation:
The Journal entries are shown below:-
1. Cash Dr, $4,06,00,000 (14,50,000 × $28)
To Common Stock Dr, $14,50,000 (14,50,000 × $1)
To Paid in Capital in Excess of par value - Common Stock $3,91,50,000
(Being issue of shares at the premium is recorded)
2. Dividend Dr, $43,50,000 (14,50,000 × $3)
To Dividend Payable $43,50,000
(Being declaration of the cash dividend is recorded)
3. Dividend payable Dr, $43,50,000
To Cash $43,50,000
(Being payment of cash dividend is recorded)
4. Treasury Stock Dr, $95,70,000 (2,90,000 × $33)
To Cash $95,70,000
(Being Purchase of the Treasury stock is recorded)
5. Cash Dr, $56,55,000 (1,45,000 × $39)
To Treasury Stock $47,85,000 (1,45,000 × $33)
To Paid in Capital in Excess of par value - Common Stock $8,70,000
(Being Reissue of the stock is recorded)
B. The Preparation of stockholders' equity section of the balance sheet as of December 31, 2018 is prepared below:-
Stockholder's Equity
For the year ended 31 Dec, 2018
Particulars Amount
Paid in Capital
Common Stock $14,50,000
Paid in Capital in excess of Par - Common $3,91,50,000
Paid in Capital in excess of Par - Treasury $8,70,000
Retained Earnings ($7,000,000)
Less: Dividend ($43,50,000) $26,50,000
Less: Treasury Stock ($47,85,000)
Total Stockholder's Equity $3,93,35,000
Financial leverage: Group of answer choices is the ratio of a firm's revenues to its fixed expenses. is equal to the market value of a firm divided by the firm's book value. increases the potential return to the stockholders. is inversely related to the level of debt. increases as the net working capital increases.
Answer: Increases the potential return to the stockholders.
Explanation:
Financial Leverage is the use of more debt to fund company assets. This can lead to higher potential returns to the Stockholders if the interest rate attached to the debt is less than the Company's required rate of return. That way, the difference between the rates will bring about a positive return for shareholders.
Also, having more debt provides a sort of tax shield to the earnings of the Stockholders because Debt is Tax Deductible. This will therefore increase the earnings going to the Stockholders.
Othello S. Corporation produces and sells a single product. The information about their operation for the last month is given below. Price per unit $40.00 Contribution margin ratio 50% Fixed expenses $8000 Operating leverage 2 Q: How many units did they sell during the last month
Answer:
400 units
Explanation:
price per unit $40
variable costs per unit $20
fixed expenses $8,000
operating leverage = fixed costs / total costs
operating leverage = 2fixed costs = $8,000total costs = ($8,000 + total variable costs)2 = $8,000 / ($8,000 + total variable costs)
2($8,000 + total variable costs) = $8,000
$4,000 + 0.5(total variable costs) = $8,000
0.5(total variable costs) = $4,000
total variable costs = $4,000/0.5 = $8,000
total variable costs = total output x variable cost per unit
$8,000 = total output x $20
total output = $8,000 / $20 = 400 units
Suppose the rate of return on short-term government securities (perceived to be risk-free) is about 5%. Suppose also that the expected rate of return required by the market for a portfolio with a beta of 1 is 12%. According to the capital asset pricing model: a. What is the expected rate of return on the market portfolio?
Answer: 12%
Explanation:
The Capital Asset Pricing Model can be used to calculate the expected return of the portfolio using the formula;
Expected Return = Risk-free rate + beta ( market return - risk-free rate)
Expected Return = 5% + 1(12% - 5%)
Expected Return= 5% + 7%
Expected Return = 12%
Managers today need to look past traditional viewpoints in determining the success of their company's strategy. One such approach is known as the balanced scorecard. This approach involves looking past just one measure and involves taking a comprehensive view of the organization. This is a useful tool for new managers to understand and add to their "toolbox" of management expertise.
The balanced scorecard give managers a quick and comprehensive view of organizational performance using four primary indicators: customer satisfaction, internal processes, innovation and improvement activities, and financial measures. This "scorecard" is visually represented on a strategy map.
Bryan was recently tasked with developing a balanced scorecard for his new employer, KanO Mines. Bryan is preparing a presentation for upper management and needs to complete a visual chart of the components of the balanced scorecard approach.
Match one perspective, goal, and measure, with each of the four components that Bryan has identified.
Growth: This would concentrate on an increase in sales.
Innovation and Learning: This perspective is concerned with making sure employees learn and grow so they can continually innovate.
Service: This would be the level of customer service.
Customer: This perspective concentrates on things like customer service.
Financial: This perspective has to do with the conversion of performance into financial performance and the creation of value.
Survey: This would be the results of an online customer satisfaction survey.
Analysis: This would use data from the ERP system to look into success levels of company processes.
Training: This would focus on providing enhanced training opportunities for employees.
Productivity: This would concentrate on changes to the process involved in production.
Internal business: This perspective focuses on the things that a company has to do internally to meet and exceed customer expectations.
Sales: This would be the annual sales figures.
Results: This would look at changes in the skill level of employees.
How do we look to our shareholders?
What do we need to excel at?
Can we continue to improve and create value?
How do our customers see us?
Identify one perspective, goal, and measure, to correspond with the above goals.
Answer:
The Balanced Scorecard
Customer satisfaction:
Perspective: Customer: This perspective concentrates on things like customer service.
Goal: Service: This would be the level of customer service.
Measure: How do our customers see us? Survey: This would be the results of an online customer satisfaction survey.
Internal processes:
Perspective: Internal business: This perspective focuses on the things that a company has to do internally to meet and exceed customer expectations.
Goal: Productivity: This would concentrate on changes to the process involved in production.
Measure: How do we look to our shareholders? Analysis: This would use data from the ERP system to look into success levels of company processes.
Innovation and improvement activities:
Perspective: Innovation and Learning: This perspective is concerned with making sure employees learn and grow so they can continually innovate.
Goal: Training: This would focus on providing enhanced training opportunities for employees.
Measure: What do we need to excel at? Results: This would look at changes in the skill level of employees.
Financial measures:
Perspective: Financial: This perspective has to do with the conversion of performance into financial performance and the creation of value.
Goal: Growth: This would concentrate on an increase in sales.
Measure: Can we continue to improve and create value? Sales: This would be the annual sales figures.
Explanation:
The balanced scorecard which Bryan is developing for KanO Mines helps KanO Mines to understand how to create value in the organization. With the balanced scorecard as a strategic planning and management tool, organizational goals are communicated to KanO Mines, so that his daily activities are aligned with the organizational strategy. It also helps him to prioritize his projects, products, and services. The balanced scorecard does not only deal with perspectives and goals, it also helps KanO Mines and his manager, Bryan, to measure and monitor his progress towards achieving the set organizational strategic goals.
Skysong, Inc. acquires a delivery truck at a cost of $54,000. The truck is expected to have a salvage value of $13,000 at the end of its 5-year useful life. Compute annual depreciation expense for the first and second years using the straight-line method.
Answer:
Annual depreciation= $8,200
Explanation:
Giving the following information:
Skysong, Inc. acquires a delivery truck for $54,000. The truck is expected to have a salvage value of $13,000 at the end of its 5-year useful life.
To calculate the depreciation expense, we need to use the following formula:
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (54,000 - 13,000)/5
Annual depreciation= $8,200
Movements in individual stock prices tend to be Group of answer choices positively correlated positively correlated with inflation negatively correlated positively correlated with changes in interest rates
Answer:
Option A (positively correlated) is the correct choice.
Explanation:
A stock for whom the valuation hasn't adjusted from over timeframe would have a slight Weighted Analysis and perhaps a product where price has plummeted and over timeframe would have a measured Analysis loss.The share price would typically vary considerably as shareholders purchase securities during the business day. Because more customers look to purchase something and decrease as companies began consuming more than just the stock, the stock value will change.The other three choices are not related to the given situation. So that Option A would be the correct one.
What is a rule of solid database design regarding calculated values?
Calculates values should not be stored in the data base.
What are calculated value?This are value computed using electronic devices such as computer.
The values are advised not to be stored in data base of the computer because it update itself as the data is worked upon.
Hence, storing it will only give access to the values that was saved and not update it
Therefore,
Calculates values should not be stored in the data base.
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Answer:
B
Explanation:
Corey buys 10 Tuff lift 4-post, 4.5-ton car hoists for his parking garage at a total cost of $410,000. He finances this with a five-year loan at 6.2% APR with monthly payments. After he has made the first 20 payments, how much is the outstanding principal balance on his loan
Answer:
$291,707
Explanation:
Here first we need to determine the monthly payments using the "PMT" function in excel. The inputs are: rate = 7%/12, nper = 5 years*12 = 60 and PV = 414,000
Thus PMT(7%/12, 60, 414000) = $8,197.70
Now let's make a loan amortization table as shown below:
Month Loan left Monthly Interest Principal Loan balan
at the start payment at the end
of the month of the month.
1. 414,000.00 8,197.70 2,415.00 5,782.70 408,217
2. 408,217.30 8,197.70 2,381.27 5,816.43 402,401
3. 402,400.88 8,197.70 2,347.34 5,850.36 396,551
4. 396,550.52 8,197.70 2,313.21 5,884.48 390,666
5. 390,666.03 8,197.70 2,278.89 5,918.81 384,747
6. 384,747.22 8,197.70 2,244.36 5,953.34 378,794
7. 378,793.88 8,197.70 2,209.63 5,988.07 372,806
8. 372,805.82 8,197.70 2,174.70 6,023.00 366,783
9. 366,782.82 8,197.70 2,139.57 6,058.13 360,725
10. 360,724.69 8,197.70 2,104.23 6,093.47 354,631 11. 354,631.22 8,197.70 2,068.68 6,129.01 348,502
12. 348,502.21 8,197.70 2,032.93 6,164.77 342,337
13. 342,337.44 8,197.70 1,996.97 6,200.73 336,137
14. 336,136.72 8,197.70 1,960.80 6,236.90 329,900
15. 329,899.82 8,197.70 1,924.42 6,273.28 323,627
16. 323,626.54 8,197.70 1,887.82 6,309.87 317,317
17. 317,316.66 8,197.70 1,851.01 6,346.68 310,970
18. 310,969.98 8,197.70 1,813.99 6,383.70 304,586
19. 304,586.28 8,197.70 1,776.75 6,420.94 298,165
20. 298,165.33 8,197.70 1,739.30 6,458.40 291,707
Discuss the requisite skills a person needs to lead change for a chosen organization. How can the organization’s structure accommodate change?
Explanation:
Organizational changes can create insecurity in workers, often caused by a lack of sufficient information and fear of the unknown.
Therefore, in the case of any organizational change, however small, it must be properly communicated to all employees, then communication is the essential ability of a leader to promote a transition of some practice or procedure in a rational, objective and clear way.
It is ideal that the leader knows how to communicate the changes using various channels, such as e-mail, panel, meetings, and explain in detail that the change will generate positive results for the work and for the organization, in order to make the workers safe and prepared.
It is also essential to provide adequate training in the event of changes in work, technological innovations, etc. The essential thing is that people management is geared towards the improvement of the employee along with the changes that are necessary and happen in every organization.
ohnson, LLC’s bonds have exhibited a substantial trading volume in the past few years. Its bonds would be referred to a
Answer:
Seasonal issue
Explanation:
The seasoned issue or seasonal issue is that issue which is made for extra securities held from the company i.e established and it considered those securities who are already traded in the secondary market. The bond which are outstanding and traded in the secondary markets is known as seasoned issued
Since in the question it is mentioned that there is a substantial trading volume in the past few years so this represents the seasoned issue
In Mordica Company, total materials costs are $42,000, and total conversion costs are $54,480. Equivalent units of production are materials 10,000 and conversion costs 12,000.
A. Compute the unit costs for materials and conversion costs. (Round answers to 2 decimal places, e.g. 2.25)
Materials cost per unit $
Conversion cost per unit $
B. Compute total manufacturing costs. (Round answers to 2 decimal places, e.g. 2.25)
Total manufacturing cost per unit $
Answer:
A Unit cost of material= $42 per unit
Unit cost of conversion cost= $4.54 per unit
B Total manufacturing cost = $96,480
Explanation:
Unit cost of material = Material cost/ Equivalent unit
Unit cost of material = $42,000/ 10,000 = $42 per unit
Unit cost of material= $42 per unit
Unit cost of conversion cost = Conversion cost/Equivalent unit
Unit cost of conversion cost = 54,480/12,000 = $4.54 per unit
Unit cost of conversion cost= $4.54 per unit
Total manufacturing cost = material cost + conversion cost
Total manufacturing cost = $42,000+ $54,480 = $96,480
Total manufacturing cost = $96,480
Which income statement line item had the largest percentage increase from the prior year to the current year? Current Year Prior Year Sales $120,000 $100,000 Cost of Goods Sold 80,000 60,000 Depreciation Expense 30,000 20,000 Interest Expense 2,000 5,000
Answer:
the depreciation expense increased by 50% during the current year.
Explanation:
Current Year Prior Year % change
Sales $120,000 $100,000 +20%
Cost of Goods Sold $80,000 $60,000 +33.33%
Depreciation Expense $30,000 $20,000 +50%
Interest Expense $2,000 $5,000 -60%
Even though the interest expense changed in a higher percentage (-60%), the question asked for which item increased the most, but the interest expense decreased.
_____ is the method used to determine the number of units a firm must sell at a specific price to cover all costs.
Answer:
Breakeven analysis.
Explanation:
Breakeven analysis is the method used to determine the number of units a firm must sell at a specific price to cover all costs. It is a concept that allow business owners or financial experts to determine and know what they need to sell either on a monthly or annual (yearly) basis, in order to be able to cover the costs of doing the business.
Basically, it helps us to determine the amount of revenue required for the smooth operation of a business, amount of money needed to cover both fixed and variable costs. Using the breakeven analysis, production costs can be categorized as;
1. Variable costs: these are costs that usually change with respect to changes in the level of production or output. Examples are direct labor, maintenance of equipment or machines, raw materials costs etc.
2. Fixed costs: these are the costs which are not directly related to the level of production or not affected by the quantity of output in an organization. Examples are rent, depreciation, administrative cost, research and development costs, marketing costs etc.
Consider a fast food café of your choice. Apply 4 V’s of Operation. Describe each V as ‘High’, ‘Low’ or ‘Moderate’ with one liner reason.
Answer:
4 V's of Operation
The 4 V's of operation are Volume, Variety, Variation, and Visibility. Let us take Mrs. Happy Food Cafe with over 100 outlets in Fiacton Town, as an example to illustrate the 4 V's of operation.
Volume: As a food cafe, the volume of production that will be required for some foods and drinks is so high that their provision requires repetitive tasks. Based on this, procedures are normally standardized in order to achieve low cost for foods and drinks. However, it is harder to standardize services, since personal touches are added by the servers based on their individual perceptions and abilities.
Variety: Mrs. Happy Food Cafe tries to bring some variety in her offerings to satisfy the various needs of her customers. While variety is naturally low in the Food Cafe sector, some cafes like Mrs. Happy Good Cafe, try to satisfy customers' demands by varying the foods with Continental, African, Latino cuisines and dishes.
Variation: At Mrs Happy Food cafes, the food and drinks do not vary much as customers expect to be served the same quality of services at any of their cafes. This is because the processes are standardized to achieve low cost. So, the variation is moderate.
Visibility: Customers of Mrs Happy Food cafes are not able to see and track their experiences of the the processes for the food preparation that they order. But, they can track the processes for the services because services are consumed as they are offered. So, visibility is 'Moderate," as it is divided between the hard goods and the soft goods. With respect to goods visibility is 'Low.' However, with respect to the services the customers' visibility of processes is high.
Explanation:
The 4 V's of operation describe the different characteristics of the processes that various entities use to transform their inputs into outputs of goods and services. They may be high, low, or moderate. They include, volume, variety, variation, and visibility.
research and describe an organization that you believe has been highly innovative ( excluding apple). which of the four types of innovation – radical, incremental, disruptive, or architectural did it use? did the firm use different types over time?
Answer:
The innovative Uber Company.
Explanation:
This company used disruptive innovation to disrupt the taxi industry after they started off as a ride sharing platform in 2010/2011. From humble beginnings, just after a few years after lunch, this company has over 110 million users worldwide.
However, over the years Uber has also used radical innovation to diversify into other services such as Uber Food– for deliveries etc.
Note that disruptive innovation is marked by creating a change from the status quo; which may invariably affect the normal trend– in this case commercial taxi cab.
All of the following are items typically included in the job specification EXCEPT ________. educational requirements required compensation physical capabilities personality traits g
Answer:
Required compensation.
Explanation:
Job Specification provides details about the job as well as education, experiences and traits required to perform the job. Job Specification does not however disclose the required compensation as this follows agreement with successful candidates taking into account both the employer and employee circumstances.
The job specification does not provide the compensation.
What is job specification:
It gives the details related to the job also the education, experience are needed for performing the job. Moreover, the job specification provides the type of the job that the employee need to do perform. In additonal to this, it does not disclose the compensation requirement
Therefore, the second option is correct.
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The ideal marketing objective is ________. idealistic, quantifiable, and consumer-oriented situational, unattainable, and internal time specific, realistic, and quantifiable realistic, qualitative, and competitive quantifiable, research-based, and without regard to ethics
Answer:
The correct answer is: Time specific, realistic and quantifiable.
Explanation:
To begin with, a good marketing campaign must follow certain objectives in order to be fully successfull or at least as high as possible. Therefore that the best objectives to look for regarding marketing expertises are the facts that the objectives are realistic, so that means that it can be possible done by the budget of the company; quantifiable, so that means that the company can measure the benefits of using the campaign and see that the costs were worthy; and finally, time specific objectives, so that means that the company can know if their goals are being accomplished in the time expected.
Meredith, the General Manager at Gladfle Inc., is planning to use certain new strategies to control and reduce the health care benefit costs to her company. What should she include in her list of strategies?
Answer:
Switching to consumer driven health plans
Explanation:
Meridith should include switching to consumer driven health plans in her list of strategies since she is trying to reduce health care benefits costs.
A consumer-driven health plan allows the workers in an organization, it could be both employers and their employees, to put aside amounts of money usually pre-tax money, which could be used to pay for qualified medical expenses not covered by their health plan.
Currently, the yield curve is ascending. A customer believes that the Federal Reserve will start to tighten credit by raising short-term interest rates; and also believes that long term yields will move downwards from current levels because of record demand for long-term Treasury obligations by pension funds. To profit from this, the best recommendation would be to
Answer:
Short-selling long-term bonds and taking long position on short-term assets
Explanation:
When the yield curve ascends, the long-term bond's price will go down. Hence, do short-sell the long-term bonds. On the other hand, short-term asset's price will be depreciated because Fed tightens credit and raise short-term rate, which is the chance to purchase and make profits from capital gains.
When individuals acquire, process, and act on relevant economic information promptly in their own self-interest and investigate its impact on others, they are said to have __________ expectations.
Answer: rational
Explanation:
Rational expectations is a way by which individuals make their decisions based on their past experience, self interest, human rationality and the information that they have.
Therefore, when individuals acquire, process, and act on relevant economic information promptly in their own self-interest and investigate its impact on others, they are said to have rational expectations.
Jonas is a 60% owner of Ard, an S corporation. At the beginning of the year, his stock basis is zero. Jonas’s basis in a $20,000 loan made to Ard and evidenced by Ard’s note has been reduced to $0 by prior losses. During the year, Jonas’s net share of Ard’s taxable income is $10,000. At the end of the year, Ard makes a $15,000 cash distribution to Jonas. After these transactions, what is Jonas’s basis in his stock, and what is his basis in the debt? What is Jonas’s recognized capital gain?
Answer:
The person ‘J’ basis in the stock is $0.
The person ‘J’ basis in his debt is $0.
The capital gain arises as result of distribution is $5,000
Explanation:
J’ share of net income is $10,000 and the distribution of cash to person ‘J’ is $15,000, therefore, the person ‘J’ basis in his stock is first increased by $10,000 and then decreased by $15,000 but it cannot be negative, hence the person ‘J’ basis in his stock is reduced to $0.
During the current year the person ‘J’ share in taxable income is $10,000, hence there is no loss, So the shareholders ‘J’ basis on debt remains $0 or when the company starts making money again, the basis of loan will automatically increase.
The person ‘J’ basis in his debt is $0.
The capital gain on distribution of cash is calculated as follows;
Capital Gain = Cash Distribution - J's basis in is stock
=$15,000 - $10,000
=$5,000
Therefore, the capital gain on distribution of cash is $5,000.
For the cash flow series below, calculate the external rate of return, using the return on invested capital approach with an investment rate of 14% per year.
Year Cash Flow, $
0 .......... 3000
1 .......... –2000
2 .......... 1000
3 ......... –6000
4 .......... 3800
Answer:
15.04%
Explanation:
When calculating the external rate of return, any excess cash flows are supposed to earn the MARR. It is used when there are multiple IRRs.
Year Cash Flow
0 $3,000
1 -$2,000 discounted at Year 0 = -$2,000/1.14 = -$1,754.39
2 $1,000
3 -$6,000 discounted at Year 0 = -$6,000/1.14³ = -$4,049.83
4 $3,800
total discounted at Year 0 = -$5,804.22
now we calculate the future value of our cash inflows:
Year Cash Flow
0 $3,000 FV at end of Year 4 = $3,000 x 1.14⁴ = $5,066.88
2 $1,000 FV at end of Year 4 = $1,000 x 1.14² = $1,299.60
4 $3,800 FV at end of Year 4 = $3,800
total future value at end of Year 4 = $10,166.48
now we have the following equation:
-$5,804.22 x (1 + i)⁴ = $10,166.48
(1 + i)⁴ = $10,166.48 / -$5,804.22 = -1.751567
⁴√(1 + i) = ⁴√-1.751567
1 + i = 1.1504
i = 0.1504 = 15.04%
Elements of a Flexible Budgets
Presented are partial flexible cost budgets for various levels of output.
Required
Solve for items "a" though "n"
Rate per unit Units
1,000 1,500 2,000
Direct materials $10,000
Direct labor 3,000
Variable overhead
$3.00
Fixed overhead
Total $40,000
Answer:
1000 units$25,000
1,500 units 32,500
2,000 units $40,000
Explanation:
Partial flexible cost budgets for various levels of output
Rate per unit Units 1,000 1,500 2,000
DIRECT MATERIALS
Rate per unit
a.$10 ($10,000 / 1,000 units)
Units
1000 units
$10,000
1500 units
b. $15,000 (1,500 units * $10)
2000 units
c. $20,000 (2,000 units * $10)
DIRECT LABOR
Rate per units
d. $2 ($3,000 / 1,500 units)
Units
1000 units
e. $2,000 (1,000 units * $2)
2000 units
3,000
1000 units
f. $4,000 (1,000 units * $2)
VARIABLE OVERHEAD
Rate per units
$3.00
Units
1000 units
g. $3,000 (1,000 units * $3)
1500 units
h. $4,500 (1,500 units * $3)
2000 units
i. $6,000 (2,000 units * $3)
FIXED OVERHEAD
Units
1000 units
j.$10,000
1500 units
k.$10,000
2000 units
l.$10,000 (40,000 - 20,000 - 4,000 - 6,000)
TOTAL
1000 Units
Direct materials $10,000
Direct labor $2,000
Variable overhead $3,000
Fixed cost $10,000
= m. $25,000
1500 Units
Direct materials $15,000
Direct labor $3,000
Variable overhead $4,500
Fixed cost $10,000
=n. $32,500
2000 Units
Direct materials $20,000
Direct labor $4,000
Variable overhead $6,000
Fixed cost $10,000
= $40,000
Therefore :
1000 units$25,000
1,500 units 32,500
2,000 units $40,000
Pet Stop Inc., a pet wholesale supplier, was organized on May 1. Projected sales for each of the first three months of operations are as follows: May $380,000 June 420,000 July 580,000 All sales are on account. Of sales on account, 51% are expected to be collected in the month of the sale, 44% in the first month following the sale, and the remainder in the second month following the sale. Prepare a schedule indicating cash collections from sales for May, June, and July.
Answer:
Results are below.
Explanation:
Giving the following information:
May $380,000 June 420,000 July 580,000
All sales are on account. Of sales on account, 51% are expected to be collected in the month of the sale, 44% in the first month following the sale, and the remainder in the second month following the sale.
We need to calculate the cash collection for May, June, and July.
Cash collection May:
Sales on account from May= 380,000*0.51= 193,800
Cash collection June:
Sales on account from May= 380,000*0.44= 167,200
Sales on account from June= 420,000*0.51= 214,200
Total cash collection= $381,400
Cash collection July:
Sales on account from May= 380,000*0.09= 34,200
Sales on account from June= 420,000*0.44= 184,800
Sales on account from July= 580,000*0.51= 295,800
Total cash collection= $514,800
You observe a portfolio for five years and determine that its average return is % and the standard deviation of its returns in %. Would a 30% loss next year be outside the 95% confidence interval for this portfolio? The low end of the 95% prediction interval is nothing%. (Enter your response as a percent rounded to one decimal place.) A. Yes, you can be confident that the portfolio will not lose more than 30% of its value next year. This is because the low end of the prediction interval is less than 30%. B. No, you cannot be confident that the portfolio will not lose more than 30% of its value next year. This is because the low end of the prediction interval is greater than 30%. C. Yes, you can be confident that the portfolio will not lose more than 30% of its value next year. This is because the low end of the prediction interval is greater than 30%. D. No, you cannot be confident that the portfolio will not lose more than 30% of its value next year. This is because the low end of the prediction interval is less than 30%.
Answer:
A. Yes, you can be confident that the portfolio will not lose more than 30% of its value next year. This is because the low end of the prediction interval is less than 30%
Explanation:
Confidence Interval is a type of estimated probability that the observed data lies within the parameters. 95% confidence interval means that its is 95% certain that true mean of population is within the range. In the given scenario there is 95% confidence interval that the portfolio will not lose more than 30% of its value next year.
Assume that you are on the financial staff of Vanderheiden Inc., and you have collected the following data: The yield on the company's outstanding bonds is 7.75%; its tax rate is 40%; the next expected dividend is $0.65 a share; the dividend is expected to grow at a constant rate of 6.00% a year; the price of the stock is $15.00 per share; the flotation cost for selling new shares is F
Answer: 7.48%
Explanation:
Weighted Average Cost of capital is simply the weighted average of the costs of equity and debt.
Cost of Equity
= [tex]\frac{Next dividend}{Stock Price ( 1 - flotation Costs)} + growth rate[/tex]
= [tex]\frac{0.65}{19(1 -0.1)} + 0.06[/tex]
= 9.80%
Cost of debt
= Interest ( 1 - Tax)
= 0.075 (1 - 0.40)
= 4.65%
WACC = 9.80% * 0.55 + 4.65% * 0.45
= 7.48%
An employer who promises to pay her secretary $1000 in consideration of the services the secretary had provided over the years and later breaches the promise is a. liable for payment of the $1000. b. liable only if the promise was in writing. c. not liable because the consideration is inadequate. d. not liable because the consideration is in the past. e. C and D are both correct.
Answer:
d. not liable because the consideration is in the past.
Explanation:
In order for a valid contract to exist (and then be breached), consideration must be exchanged between the parties involved. E.g. if I just decide to give money to my school because of the good education I got there, it is considered a gift. The consideration from the school took place in the past, it is not exchanging anything with me right now.
The same happens here, the consideration which is the years served is part of the past, nothing is being exchanged in the present. This should be considered a gift from the employer.
"What are your goals when responding to the previous scenario"? Check all that apply. You are the owner of a cell phone store. A customer recently sent back a phone that she purchased at your store. She claims the phone won’t turn on. After examining the phone, you notice it has excessive water damage and is beyond repair. Unfortunately, the customer’s warranty expired three months ago.
Answer:
B. Explain clearly and completely.
C. Be fair.
D. Convey empathy and sensitivity.
Explanation:
The warranty for the device has already expired and it can be inferred that the water damage was from the customer because the warranty expired a while back. Since you cannot refund her, the best course of action is to explain to the customer in a clear, concise and complete tone, the problem with the phone. You should not place blame on the customer but rather be fair in your assessment. Your tone should also convey sensitivity and empathy because this is a problem that could happen to anyone and they need to know that.
For the first time in two years, Big G (the cereal division of General Mills) raised cereal prices by 4 percent. If, as a result of this price increase, the volume of all cereal sold by Big G changed by -5 percent, what can you infer about the own price elasticity of demand for Big G cereal
Answer:
the coefficient of elasticity is 1.25. therefore demand is elastic
Explanation:
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.
Price elasticity of demand = percentage change in quantity demanded / percentage change in price
5% / 4% = 1.25
If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes.
Demand is inelastic if a small change in price has little or no effect on quantity demanded. The absolute value of elasticity would be less than one
Demand is unit elastic if a small change in price has an equal and proportionate effect on quantity demanded
Hermes International produces a Kelly handbag, named for the late actress Grace Kelly. Craftsmen stitch the majority of each $7,000 bag by hand and sign it when they finish. This is an example of _____ production.