The below journal entries are used to record the transactions of Jazz City Co. In these transactions, 10,000 common shares and 3,000 preferred shares were issued for $450,000 cash.
The journal entries for the above transactions are as follows:
1. January 3 - Issued 10,000 common shares and 3,000 preferred shares for a lump sum of $450,000 cash.
Dr. Cash $450,000
Cr. Common shares $200,000 (10,000 x $20)
Cr. Preferred shares $300,000 (3,000 x $100)
2. April 5. Repurchased and canceled 8,000 common shares for $20 per share.
Dr. Common shares $160,000 (8,000 x $20)
Cr. Cash $160,000
3. July 18. Declared the annual dividend on the preferred shares and 50 cents per share on the common shares.
Dr. Retained earnings $106,000 ($60,000 for preferred shares + $46,000 for common shares)
Cr. Dividends payable $106,000
4. August 12. Paid the dividends declared on July 18.
Dr. Dividends payable $106,000
Cr. Cash $106,000
5. September 22 - Accepted subscriptions for 1,000 common shares for a price of $30 per share. A one-third downpayment is received today, with the remainder due on November 1.
Dr. Cash $10,000 (1,000 x $30 x 1/3)
Cr. Subscriptions receivable $20,000 (1,000 x $30 x 2/3)
Cr. Common shares subscribed $30,000 (1,000 x $30)
6. November 1. Received the balance of the subscription amount from September 22.
Dr. Subscriptions receivable $20,000
Cr. Cash $20,000
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Find the $/£ spot exchange rate if the same basket of goods
costs $700 in the U.S. and £1100 in the U.K. and the Purchase Power
Parity holds.
The $/£ spot exchange rate in this situation can be calculated by dividing the US dollar cost ($700) by the UK pound cost (£1100), which yields a rate of 0.63636363. This means that for every $1, we will get £0.63636363.
To find the $/£ spot exchange rate when the same basket of goods costs $700 in the U.S. and £1100 in the U.K. and the Purchase Power Parity holds, we can use the following formula:
$/£ spot exchange rate = cost of goods in U.S. / cost of goods in U.K.
Plug in the given values:
$/£ spot exchange rate = $700 / £1100
Simplify:
$/£ spot exchange rate = 0.6363636363636364
Therefore, the $/£ spot exchange rate is 0.6363636363636364. This means that 1 U.S. dollar is equal to 0.6363636363636364 British pounds.
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6. The treasurer is usually responsible the following functions of a corporation except: A. Raising new capital Cash B. management c. Banking relationships D. Internal accounting 7. The following are
The treasurer is not typically responsible for d. internal accounting within a corporation.
The treasurer of a corporation is typically responsible for a variety of financial functions, including raising new capital, managing cash, and maintaining banking relationships.
However, internal accounting is usually handled by a separate department or individual, such as a controller or chief financial officer.
In summary, the treasurer is responsible for the following functions of a corporation:
- Raising new capital
- Cash management
- Banking relationships
But not:
- Internal accounting
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Market Summary> Verizon Communications Inc. 54.92 uso NYSE: VZ + Follow Verizon Communications verizon +0.76 (1.41%) + today Mar 31 pm EST Dlacier Telecommunication company 1D so 1M GM YTD 1Y SY Max vertron.com 555 55.0 54.5 Previous dose 54.15 4,00 DE 540 1000 m 1200 2:00 Open High LOW 54.38 55.14 5418 Mat Cap PE ratio Dwyield 230 540 10.33 4,66% COP score 52.wk high 52 w low B 59.85 49.68 Verizon Communications Inc.commonly known as Verizon, is an American multinational belecommunications conglomerate and a corporate component of the Dow Jones Industrial Average. The company is headquartered at 1095 Avenue of the Americas in Midtown Manhattan, New York City, but is Incorporated in Delaware Wlopedia CEO: Hans Vouberg (Aug 1, 2016-) Revenue 133.6 billion USD (Fiscal Year Ended December 31, 2021) Headquarters: New York, New York, United States Founded: October 7, 1963, Delaware, United States Number of employees: 132,200 (December 31, 2020) Net Income: 22.62 bilion USD Focal Year Ended December 31, 2021) Subsidiaries: Vertoon. Verizon Flos, Vorscon Business, Buen. MORE → More about Vertion Communicat hips/finance yahoo.com quote V21 Verizon Communications Inc. (VZ) Stock Price, News, Quote Find the latest Verizon Communication Inc. (V2) stock quote, history, news and other vital Information to help you with your stock trading and investing Market Summary> Vodafone Group plc 128.00 GBX -1.84 (1.42%) + today Mar 34:35 m GMT Disclaimer LON:VOD + Follow Vodafone Group Telecommunications company 1D 50 M EM YTD 1Y SY Max 130.0 120.5 Previous close 120.84 120.0 128,5 1200 127,6 0:00 am Vodafone Group Plc is a Bellish multinational telecommunications company. Its registered office and global headquarters are in Newbury, Berkshire, England. It predominantly operates service in Asia, Africa, Europe, and Oceania Wikipedia CEO: Nick Road (Oct 1, 2018-) Headquarters: Berkshire, United Kingdom Founded: 1962, Newbury, United Kingdom Revenue: 43.81 billion EUR (2021) Number of employees: 96,506 (2021) Subsidiaries: Vodafone Germany, Vodafone Australia, MORE Founders: Gerry Whent, Emost Harrison Disclaimer 10.00 am 12:00 pm 2:00 pm 4:00 pm 34.258 B Open High LOW 129.20 129.38 127,60 Mkt Cap PE ratio Div yield - CDP score 52-wk high 52-wk low 142.74 106,30 5,93% More about Vodafone Group plc
The Market Summary for Verizon Communications Inc. and Vodafone Group plc provides an overview of the current stock prices, changes in stock prices, and other important financial information for both companies. Verizon Communications Inc. is currently trading at 54.92 USD on the NYSE, with a change of +0.76 (1.41%) from the previous day.
Vodafone Group Plc is currently trading at 128.00 GBX on the LON, with a change of -1.84 (1.42%) from the previous day. Both companies are in the telecommunications industry and have similar financial information, including market capitalization, PE ratio, dividend yield, and 52-week high and low prices.
However, Verizon Communications Inc. is headquartered in New York, New York, United States, while Vodafone Group plc is headquartered in Berkshire, United Kingdom. Both companies also have a number of subsidiaries and are led by CEOs Hans Vouberg (Verizon) and Nick Road (Vodafone).
The Market Summary provides a snapshot of the current financial status of both companies and can be used to make informed investment decisions.
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lber Company is considering eliminating its phone division. The company allocates fixed costs based on sales. If the phone division is dropped, $154,000 of the fixed costs allocated to that division could be eliminated. The impact on Valber’s operating income from eliminating the phone division would be: Desktops Laptops Tablets Phones Sales $ 368,000 $ 883,500 $ 706,000 $ 979,000 Variable costs 205,000 639,000 532,000 799,000 Contribution margin 163,000 244,500 174,000 180,000 Fixed costs 75,200 178,300 142,800 199,000 Net income (loss) 87,800 66,200 31,200 (19,000)
The impact on Valber's operating income from eliminating the phone division would be an increase of $135,000.
This is calculated by taking the contribution margin of the phone division ($180,000) and subtracting the fixed costs that could be eliminated ($154,000) and the net loss from the phone division ($19,000).
1. Calculate the contribution margin of the phone division:
Sales - Variable costs = Contribution margin
$979,000 - $799,000 = $180,000
2. Calculate the fixed costs that could be eliminated if the phone division is dropped:
$154,000
3. Calculate the net loss from the phone division:
Contribution margin - Fixed costs = Net income (loss)
$180,000 - $199,000 = ($19,000)
4. Calculate the impact on operating income from eliminating the phone division:
Contribution margin - Fixed costs that could be eliminated - Net loss from phone division = Impact on operating income
$180,000 - $154,000 - ($19,000) = $135,000
Therefore, from eliminating the phone division the impact on Valber's operating income would be an increase of $135,000.
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What retirement plan do you think fits most people best?
Answer:
I think most people go with the IRA.
Top management in the organisation has hired you as an HR advisor.Your duty is to evaluate the importance of performance management and to suggest to management a performance management process that can be implemented.
Performance management is a critical aspect of any organisation as it helps in achieving the desired goals and objectives. It involves setting clear expectations, monitoring employee performance, and providing feedback to improve performance.
The importance of performance management lies in the fact that it helps in aligning the goals of employees with those of the organization, leading to improved productivity and profitability. A performance management process that can be implemented in an organization is as follows:
It is important for organizations to have a performance management process in place to help maximize employee productivity and satisfaction. To implement a performance management process, top management should consider creating a performance evaluation system, a feedback system, setting clear goals and expectations, and providing rewards for exemplary performance. Additionally, communication and training should be made available to ensure employees understand the process and how it can help them reach their goals.
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IN EXCEL:
Problem 2 (25 points) Assume that you will graduate in 2 years from today and after graduation, you are planning to purchase a new car for $50,000. For the next two years, you will save $250 each month for the down payment and your annual rate of return is 2%. After you have your down payment, you will apply for a car loan to finance the rest of the purchase price. Your bank offers a loan with monthly payments at 4% APR with a term of 36 months. Alternatively, a credit union has a promotional APR of 3% for new customers with a loan term of 48 months. Build amortization tables of both loan alternatives and calculate total interest paid in each loan.
For loan 1 with 4% APR, 36 months, the total interest paid is $3,851.04 and for loan 2 with 3% APR, 48 months, the total interest paid is $2,839.36. The amortization tables for each loan alternative is given below.
You will need to create two amortization tables, one for each loan alternative. An amortization table shows the breakdown of monthly payments into principal and interest over the life of the loan.
1. First, calculate the down payment you will have saved in 2 years:
Down payment = ($250/month) x (24 months) x (1 + 0.02) = $6,120
2. Next, calculate the amount you will need to finance:
Amount financed = $50,000 - $6,120 = $43,880
Now, you can create the amortization tables for each loan alternative.
Loan 1: 4% APR, 36 months
Monthly payment = ($43,880) x (0.04/12) / (1 - (1 + 0.04/12)^(-36)) = $1,298.64
| Month | Beginning Balance | Interest | Principal | Ending Balance |
|-------|-------------------|----------|-----------|----------------|
| 1 | $43,880.00 | $146.27 | $1,152.37 | $42,727.63 |
| 2 | $42,727.63 | $142.43 | $1,156.21 | $41,571.42 |
| ... | ... | ... | ... | ... |
| 36 | $1,298.64 | $4.33 | $1,294.31 | $0.00 |
Total interest paid = ($1,298.64 x 36) - $43,880 = $3,851.04
Loan 2: 3% APR, 48 months
Monthly payment = ($43,880) x (0.03/12) / (1 - (1 + 0.03/12)^(-48)) = $974.57
| Month | Beginning Balance | Interest | Principal | Ending Balance |
|-------|-------------------|----------|-----------|----------------|
| 1 | $43,880.00 | $109.70 | $864.87 | $43,015.13 |
| 2 | $43,015.13 | $107.54 | $867.03 | $42,148.10 |
| ... | ... | ... | ... | ... |
| 48 | $974.57 | $2.44 | $972.13 | $0.00 |
Total interest paid = ($974.57 x 48) - $43,880 = $2,839.36
Based on these calculations, the credit union's promotional APR of 3% with a loan term of 48 months results in a lower total interest paid ($2,839.36) compared to the bank's loan with a 4% APR and a term of 36 months ($3,851.04).
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Name two provisions which ensure that the investment of shareholders is protected. Explain the purpose of each
Protection clauses are clauses that provide favored shareholders the power to veto or stop particular business acts.
Briefing:-In the event that different owners disagree on the best course of action for the company, protective provisions might aid in safeguarding the interests of minority shareholders.
What does anti-dilution protection serve?Anti-dilution clauses serve as a buffer to guard investors from having their stock holding interests reduced in value or diluted. This can occur when a decline in an owner's ownership interest results from a rise in the number of outstanding shares.
How can shareholders be safeguarded?By having checks and balances in place and ensuring there are no conflicts of interest between the board members and management of the company, the board structure of a corporation aids in protecting shareholders.
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The following statement is true about the income statement:
A. net income is an estimate
B. It is the accountants best efforts to show sales and costs incurred at a point of time
C. None of the above
D.If a company is making a profit in a given time period it will have the cash to pay its bills
The income statement - It is the accountants best efforts to show sales and costs incurred at a point of time. Therefore the correct option is option B.
The income statement, also known as the profit and loss statement, is a financial statement that shows the revenues, expenses, and profits or losses of a company during a specific period of time. It is one of the most important financial statements that companies use to assess their financial performance.
The income statement is prepared by accountants who use their best efforts to accurately reflect the sales and costs incurred by the company during the period. While net income is an important part of the income statement, it is not an estimate.
And, while a company may be making a profit during a given time period, it may not necessarily have the cash to pay its bills due to other factors such as debt payments or capital expenditures.
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Lending institutions are scrutinizing an operation’s working capital status as part of the lending decision. Now more than ever, it’s time to do a little scrutinizing yourself. When I hit the road to speak, one of the most important slides I regularly use highlights how lending criteria has changed since the financial crisis. To illustrate that point, the slide includes a quote from Nick Parsons, head of research with the National Australia Bank: "So capitalism has changed…the owner or the custodian of capital [i.e. lending institutions] is much more careful about where they use that capital."
To that end, most readers have likely experienced increased scrutiny from their lenders in this post-crisis world. And one of the key criteria that lenders use to make decisions revolves around availability of working capital within any operation; working capital being a function of current assets less current liabilities. It’s a measure of an operation’s buffer to meet its short-term obligations, hence the importance to lenders.
Perhaps equally important, it’s a key indicator of cash reserve availability to meet unexpected emergencies. Thus, it is an important component of risk management to ensure business continuity within the operation without the need to borrow additional funds. As an example, albeit simplified, a pickup is typically a critical operational asset for most cow-calf operations. What if it catches on fire and suddenly needs to be replaced, else the cows don’t get fed? After insurance provides some portion towards replacement, does the operation have sufficient working capital to meet the remainder of the obligation? This type of assessment has become more important to lenders since the financial crisis.
This week’s graph highlights USDA’s updated aggregate working capital estimates in agriculture. Clearly, as last week’s illustration depicts, declining revenue has taken a big hit out of working capital reserves for agriculture. Working capital has declined nearly 50% - the loss exceeds $82 billion in just three years. That’s a concerning trend – and if it continues, will clearly have implications in the coming years.
What are you doing to maintain strong cash and working capital reserves amidst declining revenue? What new expectations do you your lenders have during the past several years and going into 2017? How will you adjust going forward? Leave your thoughts in the comments section below.
Working capital is a critical component of a business's financial health and is closely scrutinized by lending institutions when making lending decisions. Businesses must therefore focus on maintaining strong cash and working capital reserves amidst declining revenue and adjusting to new expectations from lenders.
It is a measure of an operation's ability to meet its short-term obligations and is calculated by subtracting current liabilities from current assets. Working capital is also an important indicator of a business's ability to meet unexpected emergencies and is therefore an important component of risk management.
Since the financial crisis, lenders have placed increased importance on working capital and have become more careful about where they use their capital.
As a result, businesses have experienced increased scrutiny from their lenders in this post-crisis world. This has led to a decline in working capital reserves for agriculture, with working capital declining nearly 50% and the loss exceeding $82 billion in just three years.
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Read Corporate Governance document.
Then in about 750 words discuss the influence of governmental regulations as well as professional and personal ethical codes, especially in your business situation.
Be sure to include: (1) Principles of governance; (2) systems of governance; (3) corporate behavior; (4) sustainability; and (5) corporate reputation.
The Corporate Governance document outlines the principles, systems, and behaviours necessary for effective corporate governance.
In terms of governmental regulations, corporations must adhere to all relevant laws and regulations in order to remain in compliance.
Professional and personal ethical codes help ensure that corporations act in the best interests of their stakeholders, as well as protecting the public.
In terms of the five mentioned points, corporate governance principles should be focused on the goal of creating long-term shareholder value and ethical behaviour. Systems of governance should be designed to ensure that corporate activities are executed responsibly and in compliance with the relevant laws and regulations.
Corporate behaviour should be designed to adhere to the corporate values and ethical standards outlined in the governance document. Sustainability should be taken into consideration when making decisions and formulating strategies, in order to ensure that the business is able to remain viable in the long-term.
Finally, the corporate reputation should be managed in order to ensure that the public trust is maintained.
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Please read before just saying you need more information. Thank you
This is your opportunity to play detective and do some financial statement analysis. Please select any publically traded company. Using the company you select please find the annual report and the financial ratio information for the company for the following ratios:
Debt to Equity
Current Ratio
Return on Equity
Quick Ratio
Working Capital Ratio
Price Earnings Ratio
Earnings Per Share
and one additional ratio of your choosing
Once you have found this information and looked it over you will be able to write a paper (approx 4 to 6 pages) that tells us about how the company is doing with respect to the ratios, what the ratios are telling you about the company and how you predict they will do in the future.
For this financial analysis, I have chosen Amazon.com Inc., a multinational technology company that specializes in e-commerce, cloud computing, digital streaming, and artificial intelligence.
Amazon is one of the largest companies in the world, with a market capitalization of over $1.5 trillion as of March 2023.
Debt to Equity Ratio:
The debt to equity ratio measures the amount of debt that a company has relative to its equity. It is an indicator of a company's financial leverage. Amazon's debt to equity ratio as of December 31, 2021, was 0.60.Current Ratio:
The current ratio is a liquidity ratio that measures a company's ability to meet its short-term obligations using its current assets. A current ratio of 1.0 or higher is generally considered to be good. Amazon's current ratio as of December 31, 2021, was 1.16, which indicates that the company has enough current assets to cover its short-term liabilities.Return on Equity:
Return on equity (ROE) measures the amount of net income returned as a percentage of shareholders' equity. Amazon's ROE for the year ended December 31, 2021, was 26.7%. This indicates that Amazon is generating a high return on the investment made by shareholders. The higher the ROE, the more efficient the company is at generating profits.Quick Ratio:
The quick ratio, also known as the acid-test ratio, is a liquidity ratio that measures a company's ability to pay its short-term obligations using its most liquid assets. This ratio excludes inventory, as it is not always easy to sell quickly. A quick ratio of 1.0 or higher is generally considered to be good.Working Capital Ratio:
The working capital ratio is a liquidity ratio that measures a company's ability to meet its short-term obligations using its current assets. It is calculated by dividing current assets by current liabilities.Price Earnings Ratio:
The price-to-earnings (P/E) ratio is a valuation ratio that compares a company's stock price to its earnings per share (EPS). A high P/E ratio indicates that investors are willing to pay more for each dollar of earnings, while a low P/E ratio indicates that investors are not willing to pay as much.Earnings Per Share:
Earnings per share (EPS) is a measure of a company's profitability that shows how much profit it generates per share of common stock outstanding. Amazon's EPS for the year ended December 31, 2021, was $52.19. This indicates that Amazon is generating a significant amount of profit per share.Inventory Turnover Ratio:
The inventory turnover ratio measures how many times a company sells its inventory during a particular period. It is calculated by dividing the cost of goods sold by the average inventory during the period. Amazon's inventory turnover ratio for the year ended December 31, 2021, was 10Learn more about financial analysis https://brainly.com/question/1265337
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A public corporation is a corporation that does not issue itsshares for sale to the public.Select one:TrueFalse
The statement ''A public corporation is a corporation that does not issue itsshares for sale to the public'' is false, because this corporation does issue its shares for sale to the public.
A public corporation is a corporation that does issue its shares for sale to the public. This is in contrast to a private corporation, which does not offer its shares for sale to the general public.
Public corporations are typically larger and more widely known than private corporations, and their shares are traded on public stock exchanges.
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An investment project will generate annual maintenance costs of £10,000 (at today’s prices) in each of years 1 to 4.If the annual rate of inflation is 3%, what is the nominal maintenance costs cash flow in year 4?a.£10,000b.£41,200c.£10,300d.£11,255
An investment project will generate annual maintenance costs of £10,000 (at today’s prices) in each of years 1 to 4. If the annual rate of inflation is 3%. The nominal maintenance costs cash flow in year 4 will be £11,255. Option D.
To calculate the nominal maintenance costs cash flow in year 4, we need to take into account the annual rate of inflation. The formula to calculate the nominal value is:
Nominal value = Real value × (1 + inflation rate)^(number of years)
In this case, the real value is £10,000, the inflation rate is 3% (or 0.03), and the number of years is 4.
Plugging these values into the formula, we get:
Nominal value = £10,000 × (1 + 0.03)^4
Nominal value = £10,000 × 1.03^4
Nominal value = £10,000 × 1.1255
Nominal value = £11,255
Therefore, the nominal maintenance costs cash flow in year 4 is £11,255. The correct answer is d. £11,255.
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you've been assigned the task of organizing a meeting for your class to discuss important project in one of your major subject.
question:
1. how do context audience and purpose influence your decisions?
2.write a brief statement explaining what you want in your meeting in terms of time, location, setting,and scene. explain why.?
1. When organizing a meeting for a class to discuss important projects in one of your major subjects, the context, audience, and purpose of the meeting will influence your decisions.
2. In my meeting, I would like the setting to be comfortable and conducive to collaboration, so I would choose a location with plenty of natural light, comfortable chairs, and a whiteboard or other materials for taking notes.
Context refers to the overall environment of the meeting, such as the location, the time of day, and other aspects of the setting that could affect the outcome of the meeting.
The audience should also be considered; is the meeting intended to be a collaborative effort or will it be a presentation? Lastly, the purpose of the meeting should be clearly defined so that everyone in attendance is on the same page and can work towards a shared goal.
The time should be decided based on when the majority of the class is available, and the scene should be professional but still relaxed so that everyone is encouraged to participate. By taking the context, audience, and purpose into consideration, I am setting the stage for a successful meeting.
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American option Consider the following model, where r = 0, and a dividend of 1 unit of currency is paid at time 1.5.
S(0, W) 6, 6, 6, 6
S(1, W) 9, 9, 4, 4
S(2, 1) 11, 7, 7, 1
(a) Calculate the risk-neutral probabilities at each node of the information tree. (Remember to put back in the dividend first.)
(b) Calculate the value at each node of an American call option with exercise price K = 5 and hence deduce the premium paid at time 0.
(a) The risk-neutral probabilities at first, second, and third node: 2/5 for moving up and 3/5 for moving down, 5/7 for moving up and for moving down, and 1/2 for moving up and 1/2 for moving down respectively. (b) The premium paid at time 0 for the American call option is 4.
The risk-neutral probabilities at each node of the information tree can be calculated as follows:
(a) At the first node, the risk-neutral probability of moving up is (6-4)/(9-4) = 2/5 and the probability of moving down is 1 - 2/5 = 3/5.
At the second node, the risk-neutral probabilities are (9-4)/(11-4) = 5/7 for moving up and 1 - 5/7 = 2/7 for moving down.
At the third node, the risk-neutral probabilities are (4-1)/(7-1) = 3/6 = 1/2 for moving up and 1 - 1/2 = 1/2 for moving down.
b) The value at each node of an American call option with exercise price K = 5 can be calculated as follows:
At the third node, the value is max(S-K, 0) = max(11-5, 0) = 6 for the up state and max(7-5, 0) = 2 for the down state.
At the second node, the value is max(S-K, (2/5)*6 + (3/5)*2) = max(9-5, 3.2) = 4 for the up state and max(4-5, (1/2)*6 + (1/2)*2) = max(-1, 4) = 4 for the down state.
At the first node, the value is max(S-K, (5/7)*4 + (2/7)*4) = max(6-5, 4) = 4.
Therefore, the premium paid at time 0 for the American call option is 4.
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You have been asked to perform a sensitivity analysis on a company's plan to modernize its facilities to determine the impact of possible errors in estimating the net annual savings. The initial investment in the modernization is $30,000. The expected net annual savings are $13,000. The salvage value is $7,000 after a planning horizon of seven years. MARR is 12% per year.a. Determine if the modernization is economically attractive based on the initial estimates and an Annual Worth (AW) analysis.
b. Determine the AW if the net annual savings change by the following percentages from the initial estimate: , , , , , .
c. Determine the percentage change in net annual savings that causes a reversal in the decision regarding the attractiveness of the project.
a) From the given credentials the AW is positive, the modernization project is economically attractive based on the initial estimates. b) if the net annual savings change by the following percentages from the initial estimate the AW will be $6,535.37 c) a decrease in net annual savings would cause a reversal in the decision regarding the attractiveness of the project.
a. The Annual Worth (AW) of the modernization project can be determined using the following formula:AW = (P/A, i, N) + (A/G, i, N) + (F/A, i, N)Where P is the initial investment, A is the net annual savings, G is the gradient, F is the salvage value, i is the MARR, and N is the planning horizon.Using the given values, the AW can be calculated as follows:AW = (-$30,000)(A/P, 12%, 7) + ($13,000)(A/A, 12%, 7) + ($7,000)(A/F, 12%, 7)AW = -$4,799.20 + $13,000 + $934.57AW = $9,135.37Since the AW is positive, the modernization project is economically attractive based on the initial estimates.
b. The AW can be determined for different percentages of change in net annual savings using the same formula as above, but with the new values of A. For example, if the net annual savings change by -20%, the new value of A would be $10,400 ($13,000 x 0.8). The AW can then be calculated as follows:AW = (-$30,000)(A/P, 12%, 7) + ($10,400)(A/A, 12%, 7) + ($7,000)(A/F, 12%, 7)AW = -$4,799.20 + $10,400 + $934.57AW = $6,535.37The same process can be repeated for the other percentages of change in net annual savings to determine the corresponding AW values.
c. The percentage change in net annual savings that causes a reversal in the decision regarding the attractiveness of the project can be determined by setting the AW equal to zero and solving for A.0 = (-$30,000)(A/P, 12%, 7) + A(A/A, 12%, 7) + ($7,000)(A/F, 12%, 7)0 = -$4,799.20 + A + $934.57A = $3,864.63The initial value of A is $13,000, so the percentage change in net annual savings that causes a reversal in the decision is:($3,864.63 - $13,000) / $13,000 x 100% = -70.27%Therefore, a decrease of 70.27% in net annual savings would cause a reversal in the decision regarding the attractiveness of the project.
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Andrew is an excellent teacher providing tutoring services to University accounting students. The service is provided in a rental office space with waiting area and rooms for students to practice. Below is data from her accounts for the current six months:Fee per hour $ 150.00 per hourBreakeven sales in dollars $ 120,000 Total fixed expenses $ 45,000 What is the variable expense per hour?
in the mentioned scenario, the variable expense per hour is $149.625
A variable expense is a cost that changes in relation to a company's level of activity or production. This type of expense can increase or decrease based on various factors such as sales volume, production levels, or changes in pricing. Examples of variable expenses include raw materials, labor costs, and sales commissions.
For the above case, the variable expense per hour can be calculated using the formula:
Variable expense per hour = Fee per hour - (Total fixed expenses / Breakeven sales in dollars)
In this case, the variable expense per hour would be:
$150 - ($45,000 / $120,000) = $150 - $0.375 = $149.625
Therefore, it is concluded that the variable expense per hour is $149.625.
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You pay $50,250 to buy a call option on the euro, with an
exercise price of $1.30/€. At expiration, the spot exchange rate is
at $1.25/€. What is the overall percentage loss on your
investment?
The overall percentage loss on your investment would be ($0.05/€) / ($1.30/€) x 100 = 3.84%.
To calculate the overall percentage loss on your investment in a call option on the euro, you need to determine the difference between the exercise price and the spot exchange rate at expiration.
In this case, the exercise price was $1.30/€ and the spot exchange rate was $1.25/€. Therefore, the difference between the two is $1.30/€ - $1.25/€ = $0.05/€.
To calculate the percentage loss on your investment, divide the difference by the exercise price and then multiply by 100. Therefore, your overall percentage loss on your investment would be ($0.05/€) / ($1.30/€) x 100 = 3.84%.
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what is the impact covid-19 on profitalbility of commercial companieshelp me to do introduction
The impact that covid-19 has had on the profitability of commercial companies has been negative; this pandemic has caused a significant decrease in profitability due to the various economic imbalances it has caused.
The impact of Covid-19 on the profitability of commercial companies has been significant. Many companies have faced a decrease in profits due to the pandemic, as they have had to shut down operations or reduce their workforce.
Additionally, consumer demand for many products and services has declined, leading to further losses for companies. However, some companies, particularly those in the technology and e-commerce sectors, have seen an increase in profits as more people have turned to online shopping and remote work.
Overall, the impact of Covid-19 on the profitability of commercial companies has varied greatly depending on the industry and individual company circumstances.
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4. On March 1st, Somnium purchased in cash 5,000 shares from Microsoft and paid $45 per share together with a commission of $500. · On April 5th Microsoft distributed dividends of $0.5 per share. · On May 15 Somnium decided to sell 2,500 shares from Microsoft with the market price of $60 and paid a commission of $150. . On the 31st of December the market value of Microsoft share is $35 per share. Show all the calculations and prepare the journal entries. Full points are awarded only for correct journalizing and calculations. a) Prepare the journal entry for March 15. b) Prepare the journal entry for April 5th. Prepare the journal entry for May 1st. a) Prepare the journal entry for December 31
A journal entry is a chronological record of a business transaction that shows the debit and credit amounts for each account affected by the transaction. The journal entries are as follows:
a) Journal entry for March 1st:
Debit: Investment in Microsoft $225,500 (5,000 shares x $45 per share + $500 commission)
Credit: Cash $225,500
b) Journal entry for April 5th:
Debit: Cash $2,500 (5,000 shares x $0.5 per share)
Credit: Dividend Revenue $2,500
c) Journal entry for May 15th:
Debit: Cash $149,850 (2,500 shares x $60 per share - $150 commission)
Debit: Investment in Microsoft $112,750 (2,500 shares x $45 per share)
Credit: Gain on Sale of Investment $37,100
d) Journal entry for December 31st:
Debit: Unrealized Loss on Investment $50,000 (2,500 shares x ($35 - $45) per share)
Credit: Investment in Microsoft $50,000
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What is the present value of $2,000 paid at the end of each ofthe next 57 years if the interest rate is 9% per year?
The present value of $2,000 paid at the end of each of the next 57 years if the interest rate is 9% per year is $21,969.56.
The present value of $2,000 paid at the end of each of the next 57 years if the interest rate is 9% per year can be calculated using the formula for the present value of an annuity:
PVA = (PMT / i) x (1 - (1 / (1 + i)ⁿ))Where PVA is the present value of the annuity,
PMT is the periodic payment,
i is the interest rate per period,
and n is the number of periods.In this case,
PMT = $2,000, i = 0.09, and n = 57.
Plugging these values into the formula,
we get:PVA = ($2,000 / 0.09) x (1 - (1 / (1 + 0.09)⁵⁷))PVA = $22,222.22 x (1 - (1 / 86.8146))PVA = $22,222.22 x (1 - 0.0115)
PVA = $22,222.22 x 0.9885PVA = $21,969.56
Therefore, the present value of $2,000 paid at the end of each of the next 57 years if the interest rate is 9% per year is $21,969.56.
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Note: The complete question would be as bellow,
What is the present value of $2,000 paid at the end of each of the next 57 years if the interest rate is 9% per year?
When setting up an advance directive it’s important to name a trustworthy person as your
A.beneficiary
B.power of attorney
C.trustee
D.executor
Answer: B.power of attorney
Explanation: An advance directive is a legal document that expresses the healthcare choices of a person when they can no longer communicate their decisions due to illness or injury. A power of attorney is a legal document that allows an individual to name someone who will act as an agent to manage their financial affairs if they become incapacitated. The person appointed as the power of attorney should be trustworthy and should act in the best interest of the individual.
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What is the default risk premium on Aaa corporate bond, if the interest rate on that bond is 3.54 percent and the interest rate on a Treasury security is 1.78 percent?
The default risk premium on the Aaa corporate bond is 1.76%.
The default risk premium on a corporate bond is the difference between the interest rate on the corporate bond and the interest rate on a Treasury security.
This is because the Treasury security is considered to be risk-free, so any additional interest earned on the corporate bond is a reflection of the additional risk taken on by the investor.
The default risk premium on the Aaa corporate bond is 3.54% - 1.78% = 1.76%. This means that investors are earning an additional 1.76% in interest to compensate for the additional risk of investing in the corporate bond.
Answer: 1.76%
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Which of the following satisfy the law of supply? Select the two correct answers.(1 point) Responses An increase in price is followed by an increase in supply. An increase in price is followed by an increase in supply. A increase in price is followed by a decrease in quantity supplied. A increase in price is followed by a decrease in quantity supplied. An increase in price is followed by an increase in quantity supplied. An increase in price is followed by an increase in quantity supplied. A decrease in price is followed by a decrease in supply. A decrease in price is followed by a decrease in supply. A decrease in price is followed by a decrease in quantity supplied.
The answer is option c. An increase in price is followed by an increase in quantity supplied and d. A decrease in price is followed by a decrease in quantity supplied.
These statements satisfy the law of supply.
What is the way to define supply?In economics, supply is as the entire quantity of a certain good or service that a provider makes available to customers at a specific time and price. Typically, market activity determines it.
What is an illustration of supply in economics?For instance, growers are prepared to provide 15 million pounds of coffee each month at a price of $4 per pound.
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If someone gives you $5,000 to do a job what is the journal
entry to recognize this $5,000 transaction?
a. Once you have earned the $5,000 what is the journal entry to
record this?
The journal entry to recognize the $5,000 transaction would be:
This entry records the receipt of cash and the recognition of a liability for unearned revenue, as the job has not yet been completed. Once the job has been completed and the $5,000 has been earned, the journal entry to record this would be:
Debit: Unearned Revenue $5,000
Credit: Revenue $5,000
This entry removes the liability for unearned revenue and recognizes the revenue earned from completing the job.
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Today, a company's shares sell for $425 each. Investors requirea 13.45% return on this stock. What amount is expected to be paidfor the next dividend per share if the dividend yield is currently2%?
The expected amount to be paid for the next dividend per share is $8.50.
To find the expected amount to be paid for the next dividend per share, we can use the formula for dividend yield:
We can rearrange this formula to solve for the annual dividend per share:
Annual dividend per share = (Dividend yield) × (Price per share)Plugging in the given values, we get:
Annual dividend per share = (0.02) × ($425)Annual dividend per share = $8.50Therefore, the expected amount to be paid for the next dividend per share is $8.50.
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An all-equity corporation has an expected EBIT of $900,000, which it expects to earn in perpetuity. The corporate tax rate is 35%. The company’s unlevered cost of equity is 10% and the cost of debt is 8%. The company is planning on issuing $4 million of debt and using the proceeds to buy back its shares at the current market value. Assuming that there are no other market imperfections other than taxes, what will be the WACC after the restructuring is completed.
7.57%
8.03%
8.46%
9.15%
8.77%
The WACC after the restructuring will be 8.03%.
To calculate the WACC, we need to find the new cost of equity and the new weight of equity and debt.
First, we will calculate the new cost of equity using the following formula:
New cost of equity = Unlevered cost of equity + (Unlevered cost of equity - Cost of debt) * (Debt / Equity) * (1 - Tax rate)
= 10% + (10% - 8%) * ($4 million / $5.6 million) * (1 - 35%)
= 10.56%
Next, we will calculate the new weight of equity and debt:
New weight of equity = $5.6 million / ($5.6 million + $4 million) = 0.583
New weight of debt = $4 million / ($5.6 million + $4 million) = 0.417
Finally, we will calculate the WACC using the following formula:
WACC = (New weight of equity * New cost of equity) + (New weight of debt * Cost of debt * (1 - Tax rate))
= (0.583 * 10.56%) + (0.417 * 8% * (1 - 35%))
= 8.03%
Therefore, the WACC after the restructuring will be 8.03%.
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Absorption Cost Systems 411 Managerial Application Customer Profitability AnalysisOnce the firm has a reliable product costing system that computes accurate product costs, managers can then analyze individual customer profitability. A profit and loss statement can be prepared that reports the revenues generated for each customer less the cost of the products sold (from the absorption costing system) less all other costs incurred to service the customer. These other costs include overnight deliveries, the cost of excessive change orders, the extra time spent by engineers or sales people servicing the customer, the extra costs incurred by purchasing to process short-lead-time orders, and so forth. One study found that the least profitable 20 percent of customers can reduce profits by 80 percent, while the most profitable 20 percent of customers can generate 150 per- cent of a company's profit. Another consultant asserts that 30 percent of customers of many firms are not profitable--and two-thirds of those will never be profitable. Hence, it becomes important for firms to identify and take actions to either drop the unprofit- able customers or convert them into profitable ones (raise prices or cut extra services) and to further cement solid relations with the profitable customers so they don't leave. One management consultant advocates creating customer operating partnerships" to boost business. In these partnerships, suppliers and their profitable customers integrate their supply chains to gether. The supplier operates deep inside the customer's business. This creates a barrier to entry for potential rivals. However, at the heart of any customer profitability analysis and customer operating partnerships is the firm's absorption costing system that accurately tracks costs gener- ated by each customer.
Absorption Cost Systems can be used to calculate the individual customer profitability of a company.
The profitability of each customer can be determined by taking the revenues generated by the customer and subtracting the cost of the products sold (from the absorption costing system) and other costs incurred to service the customer (such as overnight deliveries, change orders, extra time spent by engineers or sales people, etc.).
Research shows that the least profitable 20% of customers can reduce profits by 80%, while the most profitable 20% of customers can generate 150% of a company's profit. In addition, it is estimated that 30% of customers of many firms are not profitable and two-thirds of those will never be profitable. To address this issue, firms need to identify and take action to either drop unprofitable customers or convert them into profitable ones (e.g. by raising prices or cutting extra services).
Moreover, it is important to further cement solid relations with the profitable customers to prevent them from leaving. To do this, firms may set up "customer operating partnerships" in which suppliers and their profitable customers integrate their supply chains together. By doing this, a barrier to entry for potential rivals is created.
At the heart of any customer profitability analysis and customer operating partnerships, however, is the firm's absorption costing system that accurately tracks costs generated by each customer.
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Due to market trends, a Company is selling its manufacturing equipment with the following values: Considering that the company pays 30% corporate tax, what is the amount of tax to be paid or recovered from the sale of each equipment ?
Type of machine Purchase price Book value Selling price Equipment A 100,000 100,000 150,000 Equipment B 250,000 160,000 120,000 Equipment C 110,000 110,000 115,000
Due to market trends, a Company is selling its manufacturing equipment with the following values: Considering that the company pays 30% corporate tax, the amount of tax to be paid or recovered from the sale of Equipment A is 15,000,
Equipment B is 12,000 and equipment C is 1,500
The amount of tax to be paid or recovered from the sale of each equipment can be calculated by determining the gain or loss on the sale and then applying the corporate tax rate of 30%.
For Equipment A:
Gain on sale = Selling price - Book value = 150,000 - 100,000 = 50,000
Tax to be paid = 30% of 50,000 = 15,000
For Equipment B:
Loss on sale = Book value - Selling price = 160,000 - 120,000 = 40,000
Tax to be recovered = 30% of 40,000 = 12,000
For Equipment C:
Gain on sale = Selling price - Book value = 115,000 - 110,000 = 5,000
Tax to be paid = 30% of 5,000 = 1,500
Therefore, the amount of tax to be paid or recovered from the sale of each equipment is:
Equipment A: 15,000
Equipment B: 12,000
Equipment C: 1,500
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