Answer:
The profit-maximizing price is $14, and the profit-maximizing quantity is 8.
Explanation:
This is because for a monopolistically competitive firm, the profit-maximizing quantity occurs where marginal revenue equals marginal cost. What the firm does is looking for the point in the demand curve that is exactly above the marginal cost-marignal revenue intersection, and charges the corresponding price and quantity.
We can see that for the quantity of 8, and the price of $14, both marginal revenue and marginal cost are $8, meaning that these are the quantity and price that are profit-maximizing.
A production line at V. J. Sugumaran's machine shop has three stations. The first station can process a unit in 9 minutes. The second station has three identical machines, each of which can process a unit in 15 minutes (each unit only needs to be processed on one of the three machines). The third station can process a unit in 7 minutes. Which station is the bottleneck station?
Answer:
Station 1 is a bottleneck station because the processing time taken to process the product in such station is 9 minute when compared with Station 2 and Station 3
Explanation:
Station 1 = Processing time is 9 minutes
Station 2 = Processing time is 5 minutes per unit (15 minutes / 3 machines)
Station 3 = Processing time is 7 minutes
Thus, the Station 1 is the bottleneck station with a bottleneck time of 9 minutes per unit.
Describe Reid Hoffman the founder and creator Linkedln?
Answer:
Reid Garrett Hoffman is an American internet businessman, tech entrepreneur, writer. Hoffman became co-founder and president of LinkedIn, an enterprise-oriented social media network mainly utilized for business networking. In 2016, Hoffman transferred LinkedIn for $26.2 billion in cash to Microsoft, then entered the board for Microsoft.
Emmitt had the following final balances after the first year of operations: assets, $55,000; stockholders' equity, $25,000; dividends, $3,000; and net income, $10,000. What is the amount of Emmitt's liabilities
Answer:
$30,000
Explanation:
Calculation for Emmitt amount of liabilities
Using this formula
Liabilities =Assets -Stockholders's equity
Let plug in the formula
Liabilities =$55,000-$30,000
Liabilities =$30,000
Therefore the amount of Emmitt liabilities will be $30,000
Bond issuance: 20% of total funds, requires 15% interest per year Bank loan: 60% of total funds, requires 9.5% interest per year Preferred Stock issuance: 20% of total funds, requires 5% dividend per year What is Valentino’s average rate of return on the new project?
Answer: 28.57%
Explanation:
Average return given the variables will be;
[tex]Average rate of return = \frac{Annual net income}{Average investment}[/tex]
Average rate of return = [tex]\frac{1,000,000}{\frac{7,000,000}{2} }[/tex]
Average rate of return = 1,000,000/3,500,000
Average rate of return = 28.57%
Mary buys an annuity that promises to pay her $1,500 at the end of each of the next 20 years. The appropriate interest rate is 7.5%. What is the value of this 20-year annuity today?
Answer:
PV= $15,291.74
Explanation:
Giving the following information:
Annual cash flow= $1,5000
Number of years= 20
Interest rate= 7.5%
To calculate the present value, first, we need to determine the future value using the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual cash flow
FV= {1,500*[(1.075^20) - 1]} / 0.075
FV= $64,957.02
Now, we can calculate the present value:
PV= FV/(1+i)^n
PV= 64,957.02/(1.075^20)
PV= $15,291.74
The following General Fund information is available for the preparation of the financial statements for the City of Eastern Shores for the year ended September 30, 2017:
Revenues:
Property taxes $ 27,025,000
Sales taxes 13,323,000
Fees and fines 1,332,000
Licenses and permits 1,730,000
Intergovernmental 2,375,000
Investment earnings 661,000
Expenditures:
Current:
General government 11,731,000
Public safety 24,451,000
Public works 6,219,000
Health and sanitation 1,171,000
Culture and recreation 2,163,000
Transfer to capital project fund 1,127,000
Special item—proceeds from sale of land 831,000
Fund balance, October 1, 2016 1,819,000
From the information given above, prepare a General Fund Statement of Revenues, Expenditures, and Changes in Fund Balances for the City of Eastern Shores General Fund for the year ended September 30, 2017. (Deductions should be entered with a minus sign.)
Answer:
City of Eastern Shores
General Fund Statement of Revenues, Expenditures and
Changes in Fund Balances for the year ended
September 30, 2017.
Particulars Amount($) Amount($)
Revenues
Property Taxes 27,025,000
Sales Taxes 13,323,000
Fees and Fines 1,332,000
Licenses and Permits 1,730,000
Inter Governmental 2,375,000
Investment Earnings 661,000
Total Revenues $46,446,000 $46,446,000
Expenditures
Current
General Government 11,731,000
Public Safety 24.451,000
Public Works 6,219,000
Health and Sanitation 1,171,000
Culture and Recreation 2,163,000
Total Expenditures $45,735,000 - $45,735,000
Excess of Revenue over Expenditure $711,000
Less : Transfer to capital project fund -$1,127,000
Add : Special Item - Proceeds from Sale of Land $831,000
Net Change in Fund Balance $415,000
Add : Fund Balance, Oct. 1, 2017 $1,819,000
Fund Balance, Sep. 30, 2017 $2,234,000
has a margin of safety percentage of 20% based on its actual sales. The break-even point is $759000 and the variable expenses are 60% of sales. Q: Given this information, the actual profit is:
Answer: $379,500
Explanation:
Total Sales = Break-even sales + Margin of Safety
The Break-Even sales are therefore = 100% - 20%
= 80% of sales
Total Sales is therefore;
Break-even = 80% * Total Sales
Total Sales = Break-even/80%
= 759,000/0.8
= $948,750
Assuming no fixed costs, actual profit will be Sales less Variable expenses;
=Sales - Variable expenses
= 1 - 60%
Actual profit = 40% * Sales
= 40% * 948,750
= $379,500
On May 22, Jarrett Company borrows $7,500 from Fairmont Financing, signing a 90-day, 8%, $7,500 note. What is the journal entry needed to record the transaction by Jarrett Company
Answer:
Debit cash with $7,500
Credit notes payable with $7,500
Explanation:
The journal entry needed to record the transaction by Jarret company is
Cash account. Dr $7,500
Notes payable account $7,500
Since Jarret company borrowed $7,500, it means an increase in cash hence increase in asset will be debited. Cash will therefore be debited. Because the company signed a note payable against cash, it means note payable account will be credited.
On May 22, Jarrett Company borrowed $7,500 frog Fairmont Financing. signing a 90-day, 8%. $7,500 note. The journal entry is made to record the transaction by Jarrett Company. Debit cash with $7,50
Credit notes payable with $7,500
The journal entry needed to record the transaction by Jarret company is
Cash account. Dr $7,500
Notes payable account $7,500
Because Jarret Company borrowed $7,500, a rise in cash and thus an increase in asset will be debited. As a result, cash will be deducted. Because the corporation signed a note payable against cash, the account will be credited.
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Which type of business is likely to have purchasing activities related primarily to consumable goods rather than products that will later be resold to consumers?
A. Printing business
B. Service oriented business
C. Retail business
D. Manufacturing business
Answer:
B. Service oriented business
Which type of business is likely to have purchasing activities related primarily to consumable goods rather than products that will later be re-sold to customers? Answer is service oriented business
Explanation:
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Zisk Co. purchases raw materials on account. Budgeted purchase amounts are: April, $99,000; May, $129,000; and June, $139,000. Payments are made as follows: 70% in the month of purchase and 30% in the month after purchase. The March 31 balance of accounts payable is $41,000. Prepare a schedule of budgeted cash payments for April, May, and June.
Answer and Explanation:
The preparation of a schedule of budgeted cash payment for the three months i.e April, may and June is presented below:
Particulars April May June
Purchase $99,000 $129,000 $139,000
Payment made in
Latest Month (70%) $69,300 $90,300 $97,300
Payment made in
Next Month (30%) $29,700 $38,700 $41,700
Cash Disbursements
Particulars April May June
Payment made in
Current Month (70%) $69,300 $90,300 $97,300
Add:
Last Month
Purchases (30%) $41,000 $29,700 $38,700
Budgeted
Cash Payments $110,300 $120,000 $136,000
Maurer, inc.,has an odd dividend policy. The company has just paid a dividend of $2 per share and has announced that it will increase the dividend by $6 per share for each of the next five years, and then never pay another dividend. If yoy require a return of 10 percent on the company's stock, how much will you pay for a share today?
Answer:
Price of stock = $44.05
Explanation:
The price of a share can be calculated using the dividend valuation model
According to this model the value of share is equal to the sum of the present values of its future cash dividends discounted at the required rate of return.
To determine the price of the stock to , we calculate the present value for each of the dividend payable for the next five years and then sum them.
The formula below would help
PV = G× (1+r)^(-n)
PV = Present Value, r required rate of return - 10%, n- the year, G- dividend payable in a particular year
Year PV of dividend
1 2+6 ×× 1.1^-1 = 7.27
2 10 × 1.1^-2 = 8.26
3 12× 1.1^-3 = 9.02
4 14 × 1.1^-4 =9.56
5 16 × 1.1^-5 = 9.93
Total Present Value of dividend = 7.27 + 8.26 +9.02 +9.56 +9.93 = 44.05
Price of stock = $44.05
Maurer, inc.,has an odd dividend policy. The company has just paid a dividend of $2 per share and has announced that it will increase the dividend by $6 per share for each of the next five years, and then never pay another dividend. If yoy require a return of 10 percent on the company's stock, how much will you pay for a share today?
Answer:
Price of stock = $44.05
Explanation:
The price of a share can be calculated using the dividend valuation model
According to this model the value of share is equal to the sum of the present values of its future cash dividends discounted at the required rate of return.
To determine the price of the stock to , we calculate the present value for each of the dividend payable for the next five years and then sum them.
The formula below would help
PV = G× (1+r)^(-n)
PV = Present Value, r required rate of return - 10%, n- the year, G- dividend payable in a particular year
Year PV of dividend
1 2+6 ×× 1.1^-1 = 7.27
2 10 × 1.1^-2 = 8.26
3 12× 1.1^-3 = 9.02
4 14 × 1.1^-4 =9.56
5 16 × 1.1^-5 = 9.93
Total Present Value of dividend = 7.27 + 8.26 +9.02 +9.56 +9.93 = 44.05
Price of stock = $44.05
Choose three distinct but related business functions (e.g., inventory control, purchasing, payroll, accounting, etc.). Write a short paper describing how interfacing the information systems of these three functions can improve an organization’s performance.
Answer:
The three functions can be described as follows:
i) Inventory control
ii) Procurement
iii) Sales
Explanation:
Following are the description of the given points:
In point (i):
It is also the center of the operational activities, in which it would be accountable to always get rid of a perfect product inventory and thus not have an untouched inventory in the storage facility.
In point (ii):
This is the first step for just a brand until it hits the end user. It is sourcing, which most appropriate and progressed necessity for both the manufacturing of the company.
In point (iii):
For the business, it primarily provides, a large number of alternative considerations. However, certain expenses it control, including the expense of keeping as well as the wastefulness in raw resources, all will be determined from selling price.
Identify the sentences with correct parallel structure.
1. Al is tasked with researching, analyzing, and to write the Simpson Inc. recommendation report.
2. Sarah would like to meet her sales goals, run a marathon, and get her promotion before the end of July. Last month, I traveled for business, pleasure, and community service
3. On the second floor, past the green door, next to the green vase, you'll see your umbrella
4. Next month, we anticipate that Hassam Creamery will consolidate, Nicolette Dairy Systems will be acquired, and General Lactose will go out of business.
Answer:
2. Sarah would like to meet her sales goals, run a marathon, and get her promotion before the end of July. Last month, I traveled for business, pleasure, and community service
3. On the second floor, past the green door, next to the green vase, you'll see your umbrella
Explanation:
The parallel structure refers to the structure in which there is the same words example that reflects a minimum two words or thoughts that contains the same importance
In the given options the second and third statement represents the parallel structure as it involves various thoughts that have one objective to accomplish that
Hence, all the other options are incorrect
Data for 2021 were as follows: PBO, January 1, $243,000 and December 31, $278,000; pension plan assets (fair value) January 1, $186,000, and December 31, $233,000. The projected benefit obligation was underfunded at the end of 2021 by:
Answer:
$45,000
Explanation:
Computation for the projected benefit obligation
December 31 PBO($278,000)
December 31 Plan assets 233,000
Funded status($45,000)
Therefore the projected benefit obligation was underfunded at the end of 2021 by: $45,000
Pell Corporation is a company that manufactures computers. Assume that Pell: allocates manufacturing overhead based on machine hours estimated 9,000 machine hours and $ 90, 000 of manufacturing overhead costs actually used 15,000 machine hours and incurred the following actual costs: (click the icon to view the actual costs.) The company allocated manufacturing overhead of $150, 000 using a predetermined overhead rate of $ 10.00 per machine hour. The total actual manufacturing overhead costs are $84. What entry would Pell make to adjust the manufacturing overhead account for overallocated or underallocated overload?
Answer:
Adjusting entry is given below
Explanation:
DATA
Estimated Overhead = $150,000
Actual Overhead = $84,000
Under/Over allocated =?
Solution
Under/Over allocated Overhead = Estimated Overhead - Actual Overhead
Under/Over allocated Overhead = $150,000 - $84,000
Under/Over allocated Overhead = $66,000
We had over-allocated manufacturing overhead with $66,000
To adjust manufacturing Overhead account we should make the following entry
Entry DEBIT CREDIT
Manufacturing Overhead $66,000
Cost of goods sold $66,000
In the mid 1980s, what emerging product market did a major foreign competitor capitalized on and Kodak miss due to a poor understanding of the company's core competency
Answer:
Kodak missed the digital camera revolution that it started.
Explanation:
According to history, Kodak's Steve Sasson was the first to invent a digital camera prototype in 1975.
But, Kodak relied on its past successes to the extent that it could not see beyond its shoulders. Kodak spotted digital technology opportunity in its business, but it lacked the foresight to sharpen its core competency so that it could redefine the market and its business from a film producing and selling company to one that gives consumers the opportunity to share images online. It lacked the competency to understand the emerging needs of its customers and woefully failed to invest rightly in digital technology.
On the other hand, Fuji created new opportunities for itself that were related to its core business by branching into magnetic tape optics, videotape, copiers, and office automation. As a result, it overtook Kodak in market share while Kodak submerged into bankruptcy, from which it later emerged stronger better than it was before the bankruptcy but smaller.
From 1991 to 2000, the U.S. economy had an annual inflation rate of around 2.76%. The historical annual nominal risk-free rate for this same period was around 5.71%. Using the approximate nominal interest rate equation and the true nominal interest rate equation, compute the real interest rate for that decade. What is the estimated real interest rate using the approximate nominal interest rate equation for that decade?
Answer:
2.95% and 2.87%
Explanation:
The computation of the approximate real rate and the estimated real interest rate is shown below:
The Approximate real rate is
= Historic annual nominal risk free rate - Annual inflation rate
= 5.71% - 2.76%
= 2.95%
And, the estimated real interest rate is
= (1 + historical annual nominal risk free rate) ÷ (1 + annual inflation rate) - 1
= (1 + 0.0571) ÷ (1 + 0.0276) - 1
= 2.87%
We simply applied the above formulas so that each one could be determined
Bookmark question for later Cross-training workers does the following for your workers a. creates a sense of achievement and job satisfaction b. workers take pride as they help their companies compete through higher productivity c. helps reduce turnover d. all of the above e. only a and b
Answer:
d. all of the above
Explanation:
Cross-training applies to workers, who are trained for different spectrum other than their job responsibilities.
Cross-training workers are multitasking and do the following tasks:
They helps other employees to appreciate each other’s jobs.They help companies through higher efficiency & productivity and are proud of that. Cross-training forces also helps in reducing the turnover to gain more profit.So, Cross-training workers helps to train other employees to perform new tasks in addition to their usual duties and the correct option is "d".
If Takeoff withdraws a $100 bill from his checking account and Quavo deposits another $100 bill in his saving account how much will M1 and M2 change
Answer:
M2 Will be unchanged
while M1 will decrease by $100
Explanation:
M1 will be the cash and coins + checking account + traveler check (it is consideread near-money)
Takeoff Transactions is whitin the M1 metric. Quavo transactions is not included thus, M1 decrease by 100
While M2 includes M1 and it adds the saving deposits thereofre, Quavo operation is included in this concept so we get:
-200 from takoff + 100 from Quavo = zero
No change arise from the combination of this transactions.
Use the information provided below to answer the following question (same for set of 5 questions). Nash began April with accounts receivable of $49,000 and a credit balance in Allowance for Uncollectible Accounts of $1,000. They made $500,000 in credit sales (sales on account) during April. Collections from customers totaled $493,003. One customer, frank Jones, could not pay his $1, 200 account receivable. On April 7, he negotiated to exchange his past-due account for a $1, 200, 4%, 90-day note receivable. Historically, 1% of credit sales have prove uncollectible. During April, 3375 of old accounts receivable were written off as uncollectible.
The necessary adjusting entry at April 30 would include:
a) Debit to Interest Receivable, $11, 84
b) Credit to Interest Payable, $48.00
c) Debit to Note Receivable, $3.02
d) Credit to Interest Revenue, $3.02
e) Both C and D.
Answer:
d) Credit to Interest Revenue, $3.02
Explanation:
beginning balance of accounts receivable $49,000
allowance for doubtful accounts $1,000
net credit sales $500,000
collections on accounts receivable $493,003
$6,997
Frank Jones:
Dr Notes receivable 1,200
Cr Accounts receivable 1,200
Write offs:
Dr Allowance for doubtful accounts 3,375
Cr Accounts receivable 3,375
the adjusting entry in this question refers to the notes payable from frank Jones:
we must determine the interest revenue for the month of April = $1,200 x 0.04 x (23 days/365 days) = $3.02
the journal entry should be:
April 30, accrued interest from notes receivable
Dr Interest receivable 3.02
Cr Interest revenue 3.02 ⇒ OPTION D
Ray’s Radios believed the synergies between radio production and battery production could be realized if he expanded. However, due to overseeing the battery expansion Ray devoted less time to the radio business leading to the radio unit costs increasing. At this point, Ray’s Radios should
Answer:
C. Shut down the production of the batteries
Explanation:
Since in the question it is mentioned that The Ray trust that the synergies between the radio production and the battery production is realized when it is expanded but by due to overseeing it ray spend less time to the radio business.
As from the above information provided first of all its trust is not be pratical. nor he search for an expansion he should more concentrate on the radio production as it is the main product
Answer:
a
Explanation:
In 2008, the United States began to witness one of the worst recessions since the 1930s. The collapse of the housing bubble in 2006 led to a massive decline in real estate prices, affecting consumers and institutions, especially banking and financial entities. Severe liquidity shortfalls in the United States as well as other global markets led to a serious credit crisis. During the credit crisis of 2008–2009, several banks and other businesses went through a reorganization process or were forced to liquidate. Consider the following example:________.
In January 2009, American electronics retailer Circuit City Inc. closed all of its stores and sold all of its merchandise.
The above is an example of:______.
A. Reorganization
B. Liquidation.
Answer:
B. Liquidation.
Explanation:
Liquidation is and aftermath of the inability of a company or establishment to meet up with her obligations at the required moment. Thus, the company folds-up, lay off her staff and stop operating. While reorganization is a form of restructuring in a company or establishment. It may involve change of positions and duties among capable staff.
The example in the given scenario is that of liquidation because it ceased from operation.
Multiple Product Performance Report Storage Products manufactures two models of DVD storage cases: regular and deluxe. Presented is standard cost information for each model:
Cost Components Regular Deluxe
Direct materials
Lumber 2 board feet × $3 = $6.00 3 board feet × $3 = $9.00
Assembly kit = 2.00 = 2.00
Direct labor 1 hour × $4 = 4.00 1.25 hours × $4 = 5.00
Variable overhead 1 labor hr. × $2 = 2.00 1.25 labor hrs. × $2 = 2.50
Total $14.00 $18.50
Budgeted fixed manufacturing overhead is $13,000 per month. During July, the company produced 5,000 regular and 2,000 deluxe storage cases while incurring the following manufacturing costs:
Direct materials $70,000
Direct labor 31,000
Variable overhead 11,500
Fixed overhead 15,500
Total $128,000
Prepare a flexible budget performance report for the July manufacturing activities.
Answer:
Flexible budget performance report for the July manufacturing activities
Direct Materials : $62,000
Lumber :
Regular ($6.00 × 5,000) $30,000
Deluxe ($9.00 × 2,000) $18,000
Assembly kit :
Regular ($2.00 × 5,000) $10,000
Deluxe ($2.00 × 2,000) $4,000
Labor : $30,000
Regular ($4.00 × 5,000) $20,000
Deluxe ($5.00 × 2,000) $10,000
Variable overhead : $15,000
Regular ($2.00 × 5,000) $10,000
Deluxe ($2.50 × 2,000) $5,000
Fixed manufacturing overhead $13,000
Total $120,000
Explanation:
A Flexed Budget is a Master budget that has been adjusted to reflect the Actual Level of Operation.
On October 1, 2017, Waterway, Inc. assigns $1,160,700 of its accounts receivable to Wildhorse National Bank as collateral for a $747,900 note. The bank assesses a finance charge of 3% of the receivables assigned and interest on the note of 9%. Prepare the October 1 journal entries for both Waterway and Wildhorse.
Answer:
Waterway, Inc.
General Journal Debit Credit
Cash $713,079
Interest Expense ($1,160,700 * 3%) $34,821
Notes Payable $747,900
Wildhorse National Bank
General Journal Debit Credit
Notes Receivable $747,900
Cash $713,079
Interest Revenue ($1,160,700 * 3%) $34,821
Lupo Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 30,400 Total fixed manufacturing overhead cost $ 425,600 Variable manufacturing overhead per machine-hour $ 5.00 Recently, Job T687 was completed with the following characteristics: Number of units in the job 10 Total machine-hours 20 Direct materials $ 590 Direct labor cost $ 1,180 The amount of overhead applied to Job T687 is closest to:
Answer:
The amount of overhead applied to Job T687 is closest to: $280.
Explanation:
Predetermined rate = Budgeted Overheads / Budget Activity
= $ 425,600 / 30,400
= $14.00 per machine-hour
Applied overheads to job T687 = Predetermined rate × Actual machine hours used
= $14.00 × 20
= $280
Conclusion :
The amount of overhead applied to Job T687 is closest to: $280.
Paragon Properties built a shopping center at a cost of $50M in year 2010. The company started leasing space in July of 2014. The land was purchased for $5M. Determine the depreciation charges through 2017 if the property was sold in November 2017.
Year = 2014
Cost= $50 M - $5 M = $45 M
Rate =1.177%
Depreciation= 1.177% * $45 M = $529,650
Year=2015
Cost = $45 M
Rate= 2.564%
Depreciation= $45 M * 2.564% = $1,153,800
Year = 2016
Cost = $45 M
Rate =2.564%
Depreciation= $45 M * 2.564% = $1,153,800
Year = 2017
Cost = $45 M
Rate =2.564%
Depreciation= $45 M * 2.564% = $1,153,800
therefore, total depreciation= $1,153,800 + $1,153,800 + $1,153,800 + $529,650 = $3,991,050
Depreciation charges through 2017 = $3,991,050 .
The Depreciation charges through 2017, if property was sold in November 2017 will be $3,991,050.
DepreciationIn the following question we are provided with information as follows:
The Value of the Property in the year 2010 = $50M. The Company started leasing space in July of 2014.
Land was purchased for $5M, which means the Cost of property is now $50M - $5M = $45M. The Depreciation rate in 2014 is 1.17%,
Depreciation value in 2014 = $45M × 1.17 =Depreciation rate in 2016 = 2.5%, Depreciation value = $45M × 2.5% = $529,650
Depreciation rate in 2015 = 2.5%, which give Depreciation value in 2015 = $45M × 2.5% = $1,153,800.
Depreciation rate in 2016 = 2.5%, Depreciation value = $45M × 2.5% = $1,153,800.
Depreciation rate in 2017 = 2.5%, Depreciation value = $45M × 2.5% = $1,153,800.
Therefore, Total Depreciation value in 2017 = $529,650 + $1,153,800 + $1,153,800 + $1,153,800 = $3,991,050
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The country of Morson has decided to privatize the state-owned cable television company. How can the country help this newly privatized industry succeed
Answer:
Government Support
Explanation:
Privatization is better for a country. It minimizes the monopoly and encourages healthy competition. Increased competition in the business world is good. There can be variety of services available to the consumers. Government should support privatization by introducing schemes of interest free loan for investors. There will be large number of firms that might want to enter business world but the money is not available to them for startup.
Dorpac Corporation has a dividend yield of 1.3 %1.3%. Its equity cost of capital is 7.4 %7.4%, and its dividends are expected to grow at a constant rate. a. What is the expected growth rate of Dorpac's dividends? b. What is the expected growth rate of Dorpac's share price?
Answer:
(A) 6.1%
(B) 6.1%
Explanation:
Dorpac corporation has a dividend yield of 1.3%
Its equity cost of capital is 7.4%
(a) The expected growth rate of Dorpac dividend can be calculated as follows
= Equity cost of capital-Dividend yield
= 7.4%-1.3%
= 6.1%
(b) Since the dividend is expected to grow at a constant growth rate then, the expected growth rate of Dorpac's share price is 6.1%
Angela has an annual contract with Stenbach Service Centre to provide property maintenance services; this includes lawn care, snow removal and parking lot maintenance. Angela spends, on average, 20 hours per week working at the company’s premises and is paid a flat amount monthly. She hires part-time workers, when necessary, to assist her. Angela does not have any other clients.
Angela uses her own small tools; however the company supplies and maintains a riding lawn mower and a snow plow for her use. Her contact at the company is Chris Moore, the Facilities Manager, who meets with her every Monday to discuss the work to be done that week. Chris approves Angela’s monthly invoices and submits them to Accounts Payable.
Does Angela have a contract of service or a contract for service with Stenbach Service Centre As the company’s Payroll Supervisor, explain to Chris the process and factors you used to make your decision.
Answer:
Angela and Stenbach Service Centre
Contract for Service and Contract of Service:
1. Angela has a contract for service.
2. Factors used to decide whether a contract is for service or of service:
a) Employment terms are slightly different from business contract terms.
b) Employees are paid Wages and Salaries, while contractors are paid fees.
c) Employees do not submit monthly invoices for payment, but contractors do.
d) Angela fills tax forms for herself and remits the taxes, so she is self-accounting with respect to her income taxes, unless withholding taxes like Sales taxes. An employee's income tax is deducted from her salary before payment and the company remits the taxes to the IRS.
Explanation:
The agreement between Angela, a self-employed individual, and Stenbach Service Centre is a contract for service. A contract of service is an employment contract between Stenbach Service Centre, the employer, and the Payables Supervisor, an employee, for example. Essentially, Angela can be described as an outsourcer for services vendor or service provider to Stenbach Service Centre, an outsourcer of service company. Angela is engaged for a fee to carry out property maintenance services, including lawn care, snow removal, and parking lot maintenance. She is an independent contractor with Stenbach. She does not need to work on any day and she can subcontract her work by hiring others to help her discharge the service. An employee, like Chris, cannot hire another person to discharge his responsibilities and must work on designed days.
Another important difference is that Angela submits monthly invoices for actual work done. An employee does not have to submit an invoice in order to be paid for work done. Angela's invoices will not be of the same amount from one month to the other, unlike Chris' whose salary pay sheet may be static in amount from month to month.
1. Suppose the Kenyan shilling (KS) is currently traded at KS 1.4/$.The Ethiopian Birr (EB) is traded at E B1.39/$.Ignoring transaction costs: A. Determine the KS/EB exchange rate consistent with these direct quotations
Answer:
The answer is KS 1.01/EB.
Explanation:
This is an example of a cross rate.
Cross rate refers to an exchange rate between two currencies that is calculated based on the exchange rate of each of the two currencies to a third currency.
For this question, the cross rate KS/EB will be estimated by reference the US dollar which is third currency. This can be calculated by simply dividing the KS 1.4/$ by the E B1.39/$ as follows:
KS/EB = 1.4 / 1.39 = 1.01
That is, the answer is KS 1.01/EB.