What is the future value of a $900 annuity payment over five years if interest rates are 8 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Answer:

Its basic earnings per share is $2.75

Explanation:

Basic Earnings Per Share (BEPS) = Earnings Attributable to Holders of Common Stocks ÷ Weighted Average of Common Stocks Outstanding

                                                      = $687,500 ÷ 250,000 shares

                                                      = $2.75

Answer:

The amount of uncollectible accounts is calculated as follows:

Amount of uncollectible accounts to be adjusted = 6% * Account receivables

= 6% * $138,500

=$8,310

Therefore, amount of uncollectible accounts is $8,310.

Bad debt Expenses = Opening balance of allowance for doubtful account (Credit balance) - Uncollectible account

Bad debt Expenses = $8,310 - $1,005

Bad debt Expenses = $7,305

The journal entry to record allowance for bad debts is as follows:

Account Titles and Explanation                  Debit         Credit

Bad debt Expenses                                       $7,305

Allowance for doubtful account                                      $7,305

(To record adjusting entry for bad debt)

Answer:

$69.33

Explanation:

Calculation for how much are you willing to pay today to purchase one share of the company's stock

Using this formula

P(0)=[Annual dividend *(Increase in future dividend)]/ (Rate of return- Increase in future dividend)

Let plug in the formula

P(0)=[$2.75*(1+0.059)]/(0.101-0.059)

P(0)=$2.75*1.059/0.042

P(0)=$2.91225/0.042

P(0)=$69.33

Therefore the amount you are willing to pay today to purchase one share of the company's stock will be $69.33

Answer:

Project A should be accepted.

Explanation:

The initial investment of project A = $78000

The initial investment of project B = $78000

The cash inflows of project A = $32000

The time period for project A = 3 years

The cash inflow of project B = $44400

The time period for project B = 2 years.

Interest rate (r ) = 10%

Now find the net present value of both project and then decide which one has to accept.

The net present value of project A:

[tex]=\frac{A(1-(1+r)^{-n})}{r} - \text{initial investment} \\= \frac{32000(1-(1+0.1)^{-3})}{0.1} - 78000 \\= 79579.26 – 78000 \\= $1579.26[/tex]

The net present value of project B:

[tex]=\frac{A(1-(1+r)^{-n})}{r} - \text{initial investment} \\= \frac{44400(1-(1+0.1)^{-2})}{0.1} - 78000 \\= - 942.14[/tex]

Project A should be accepted because project B has a negative net present value.

Answer:

1. Increasing

2. A. The elasticity of private saving with respect to the after-tax real interest rate

B. The response of private saving to changes in the government budget deficit

C. The elasticity of investment with respect to the interest rate

Explanation:

1. It is difficult to implement both of these policies at the same time because reducing taxes on private spending has the effect of Increasing the government budget deficit.

A Government budget deficit is acquired when the government spends more than it earns. The Government earns money from taxes and if it spends more than it receives in taxes, that will lead to a deficit. If taxes on Private spending are reduced, this will lead to less tax revenue for the government thereby increasing the Deficit.

2. All of the listed options are useful in determining which policy would be a more effective way to raise investment.

The elasticity of private saving with respect to the after-tax real interest rate refers to how much private saving changes in reaction to a change in the tax rates. This can enable one decide how much investment will be expected if the Government reduces or increases taxes.

The response of private saving to changes in the government budget deficit is also a useful factor to look at because private savings reduce when government deficits reduce.

Also how much does investment change by due to interest rates. This will be important to note in terms of Private Investment to see if it will be beneficial to use it over reducing the government budget deficit given a certain interest rate.

Answer:

1. 28.09 %

2.0.50 times

3.13.97 %

Explanation:

Margin = Profit / Sales × 100

            = $ 5,000,000 / $ 17,800,000 × 100

            = 28.09 % (2 decimal places.)

Turnover = Sales / Total Assets

               = $ 17,800,000 / $ 35,800,000

               = 0.50 times (2 decimal places.)

Return on investment = Divisional Profit Contribution / Assets employed in the  division × 100

                                    =  $ 5,000,000 / $ 35,800,000 × 100

                                    = 13.97 % (2 decimal places.)

Answer:

$340,500

Explanation:

From the above information, the below data are given;

Purchase discounts $5,600, freight in $7,800, purchases 350,000, beginning inventory $23,500, closing inventory $28,800, purchase returns and allowance $6,400

Therefore, using the periodic system,

Cost of goods sold .

Cost of goods sold using the periodic system is computed by adding beginning inventory and cost of goods purchased( purchases plus freight in minus purchases return minus purchases discount) and then subtracting ending inventory.

= $23,500 + ($350,000 +$7,800 - $6,400 -$5,600) - $28,800

= $340,500

Answer:

The amount of the incremental income  from accepting the order is  $21,750 .

Explanation:

Incremental analysis of Accepting Special Order

Hint : Consider Incremental Amounts Only

Sales (2,000 units × $36)                      $72,000

Less Expenses

Direct Materials ($5  × 2,000)               ($10,000)

Direct Labor ($10  × 2,000)                  ($20,000)

Variable Overhead ($7 × 2,000)          ($14,000)

Special stamping machine                     ($6250)

Incremental income/ (loss)                    $21,750

Note : There is excess capacity of 3,000 units (10,000 units - 7,000 units) to meet the Special Order. Hence

Fixed Overheads will be the same whether or not the special order is accepted, hence they are not included in the analysis.

Conclusion :

The amount of the incremental income  from accepting the order is  $21,750 .

Answer: B. Penetration pricing

Explanation:

Penetration pricing is a strategy that is used by new companies in a market to capture market share from more established competitors. The process is for the new company to charge a lesser price than the amount that the other companies are charging which will bring people to the new firm for patronage.

It will thus capture market share and due to the high demand, be able to make profits due to Economies of Scale.

By charging less than its competitors, the new bar's owner is most likely pursuing a Penetration Strategy.

Answer and Explanation:

The Journal entry is shown below:-

1. Cash Dr, $10,400

             To Sales $10,000

              To Sales taxes payable $400

(Being the cash is recorded)

Here we debited the cash as  it increased the assets and we credited the sales and sales tax payable as  it increased the sales and the liabilities

2. Cost of goods sold Dr, $5,000

                 To Merchandise inventory $5,000

(Being cost of goods sold is recorded)

Here we debited the cost of goods sold as it increased the expenses and we credited the merchandise inventory as  it reduced the assets

3. Unearned services revenue Dr, $50,000

              To Earned services revenue $50,000

(Being unearned service revenue is recorded)

Here we debited the unearned service revenue as it decreased the liabilities  and we credited the earned service revenue as it increased the revenue

Answer:

(a). Book value of equity is (6,000,000 * $5) = $30,000,000

Book value of debts ($145,000,000 + $130,000,000) = $275,000,000

Total book value of the corporation ($30,000,000 + $275,000,000) = $305,000,000

Weight equity ($30,000,000 / $305,000,000) = 0.0984

Weight debts ($275000000 / $305000000) = 0.9016

Equity / Value =   0.0984

Debt / Value     =  0.9016

(b). Market value of equity is (6,000,000 * $84) = $504,000,000

Market value of debts ($145,000,000 * 0.95) + ($130,000,000 * 1.07)

= ($137,750,000 + $139,100,000)

= $276,850,000

Total market value of the corporation ($504,000,000 + $276,850,000) = $780,850,000

Weight equity ($504,000,000 / $780,850,000) = 0.6455

Weight debts ($276850000 / $780850000) = 0.3545

Equity / Value   =  0.6455

Debt / Value      = 0.3545

(C). Answer is Market value  . As we know that market value weights are more relevant because such weights are on the basis of the prevailing market prices, hence such weights will show more accurate picture of the capital structure.

Answer:

Option 2. Product costs may be inaccurate because support department services may be used more heavily by some products than others.

Explanation:

Option 1 is not a misguide about this approach as all the depreciation costs are considered as general or administration expenses.

Option 3 is incorrect because cost drivers of cost pools are always accurate, they can not be used inaccurately while using Activity Based Costing.

Option 4 is also incorrect because direct costs are prime cost which are easily attributable to products and in this scenario, the indirect costs are considered inappropriate to be assigned to the product cost.

Option 2 is correct because considering support department costs to be facility-level costs would result in inappropriate cost allocations to some products as a single appropriate basis would be used to allocate the support department services cost to each product. This means if appropriate basis is not chosen correctly then this would result in inaccurate allocation as some of the products will be using the support services heavily than others.

Answer:

A. They might also compete to make riskier loans, potentially imperiling the safety of the banking system.

Explanation:

Banks may compete to make riskier loans if they had to pay higher interest rates, which might jeopardize the stability of the banking system. As a result, choice (A) is the appropriate response.

A loan is an act of one or more people, businesses, or other entities lending money to other people, businesses, or other entities. The recipient, or borrower, incurs a debt and is often responsible for both the main amount borrowed as well as interest payments on the debt until it is repaid.

The promissory note or equivalent document used to prove the debt will typically include information such as the principal borrowed amount, the interest rate being charged by the lender, and the due date. The subject asset is temporarily reallocated between the borrower and the lender as part of a loan.

The payment of interest encourages the lender to make the loan.

Hence, option (A) is accurate.

Learn more about loans, from:

brainly.com/question/11794123

#SPJ2

Answer:

Total Stockholders’ Equity is in error by: $25.

Explanation:

It is important to remember that Stockholders’ Equity consist of Retained Profit and Common Stock and effect on the errors on these elements ultimately affects Stockholders’ Equity.

The correct entry for expiration of  prepaid insurance

Insurance Expense $12 (debit)

Prepaid Insurance $12 (credit)

Effect on net profit of the error : overstatement of profit by $12

Effect on common stock  of the error : none

The correct entry for Issuance of  bonds :

Investments in Bonds $12 (debit)

Cash $12 (credit)

Effect on net profit of the error : none

Effect on common stock  of the error : overstatement  by $13

Conclusion :

Total Effect on Stockholders’ Equity = Overstatement of $25.

Answer:

Exchange Rates

Labelling each statement as either True or False:

1. The value of one currency in terms of another currency is called a currency rate.

True

2. A real exchange rate takes into account differences in countries' price levels.

True

3. A fried chicken dinner in Tennessee costs $10. Suppose Jared can convert $10 into 7.5 euros. He can purchase the same chicken dinner in Portugal for 7.5 euros. This relationship is called purchasing power parity.

True

4. After her plane touches down in Moscow, Maggie notices that $1 is worth 25 rubles (Russia's currency). A week later, Maggie returns to the airport to go home and notices that $1 is worth 28 rubles. The ruble has appreciated in value against the dollar.

False

5. The yen is Japan's currency. In the dollar/yen foreign exchange market, if more yen are being demanded than are being offered, the yen will depreciate in value relative to the dollar.

True

Explanation:

1. The meaning of currency rate can be illustrated with the US dollar exchange rate or currency rate with the Swiss francs.  The rate tells the value of the dollar in relation to the Swiss francs.

2. Price levels in Country A  and Country B determine the exchange rates between Country A's currency and Country B's.  The price levels of these two countries are influenced by their economies' inflation and interest rates.

3. Purchasing Power Parity measures the prices of goods and services in different countries based on their dollar prices.  It is a way of equalizing prices of goods and services in other countries with the dollar.

4. When US dollar increases in its rate relative to another Japanese yen, the US dollar  has depreciated in value.  But, the US dollar appreciates when the rate reduces relative to the Japanese yen.

5. Higher demand for the dollar by Japanese businesses than its supply depreciates a Japan's yen since according to the law of supply and demand, "the price (rate) goes up with increasing demand."  The reverse is the case with higher supply than demand.

Answer: True

Explanation:

Marginal benefit is the maximum amount that a consumer will be willing to pay for an extra product. It should be known that as consumption rises, the marginal benefit starts reducing.

The marginal cost is the extra cost that a producer incurs when an extra unit of a product is made. Economic decisions made by economic agents are typically based on marginal as it'll be possible to know the impact of an extra decision made on a variable.

Therefore, it is better to evaluate economic decisions at the marginal, where the decision has to be made as long as its marginal benefit exceeds its marginal cost, if not equal to its marginal cost.

Answer:

155,000

Explanation:

The computation of the required units of production is shown below:-

Required units of production = Sales units + Ending finished goods - Beginning finished goods

= 160,000 units + 15,000 units - 20,000  units

= 155,000

Therefore for computing the required units of production we simply applied the above formula.

Answer:

COGS= $880,000

Explanation:

Giving the following information:

Beginning inventory= $45,000

Ending inventory= $35,000

Total Purchase= 870,000

To calculate the cost of goods sold (COGS), we need to use the following formula:

COGS= beginning finished inventory + cost of goods purchased - ending finished inventory

COGS= 45,000 + 870,000 - 35,000

COGS= $880,000

Answer: A. . The free movies as a distraction from the poor economy will likely raise interest rates as the government borrows more money to finance the purchase.

B. This policy will likely be accompanied by an impact lag as the policy takes time to make its way to the people.

E. Crowding-out will occur as individuals choose to rely on free movies instead of purchasing their own

Explanation:

We are informed that during a recession, the government borrows money to provide free movies as a distraction from the poor economy.

The effect of this is that there will be a likely increase in the interest rates because the government borrows more money to finance the purchase of tickets.

Also, due to the free movies, there'll be an impact lag as the policy will take time before it make its way to the people and there will also be crowding-out because the individuals will rely on free movies instead of purchasing their own.

Answer:

1.Incremental loss $300

2.Alternative II Replacing the Old Machine is beneficial because we have Incremental Profit of $300

2b.$250,000

Explanation:

1. Preparation of the differential analysis dated May 29

Differential Analysis

Continue with old machine (Alternative I ) or Replace old machine (Alternative II )

Continue with Replace the Differential effect

Old Machine Old Machine

Alternative 1 Alternative 2 Alternative 2

Revenue:

Revenue from Sale of Old Machine

$0 $62,600 $62,600

Cost:

Purchase Cost

$0 $484,500 $484,500

Variable Production (8 Years)

$1,240,000 $818,400 -$422,400

Profit / (Loss) ($1,240,000) ($1,240,300) -$300

Incremental loss = $300

2. Calculation to Determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine.

Alternative II Replacing the Old Machine is not beneficial because we have Incremental loss of $300

2b. Calculation for the sunk cost in this situation

The Sunk Cost will be the Book Value of Old Machine = $600,700-$350,700

= $250,000

Variable production workings

($155,100×8=1,240,800)

($102,300×8= 818,400)

Answer:

Dr Retained earnings $14,000

Cr Inventory $14,000

Explanation:

There is a need to make adjustment to the inventory . Therefore,

Adjusted inventory

= New method of $171,000 - Old method of $185,000

= $14,000 decrease

It is to be noted that a lower inventory will have high costs associated with goods sold hence reduces profit/net income for the previous year by $14,000.

Also, the net income reports to retained earnings account hence decreases retained earnings.

Having made the above adjustment, we can assume that the average cost method was used for 2020 books.

Answer:

Dr Retained earnings for $14,000

Cr Inventory for $14,000

Explanation:

Calculation of the adjustment that Nidal would make for this change in inventory method

Based of the information given the adjustment will records the decrease in inventory of $14,000 which is calculated as ( Inventory of $185,000 − Ending inventory of $171,000) as well as the decrease in retained earnings, just as if average cost had been used in 2020.]

Therefore the adjustment that Nidal would make for this change in inventory method will be:

Dr Retained earnings for $14,000

Cr Inventory for $14,000.

Answer: $220

Explanation:

The following information can be derived from the question:

PV = $200

INT = 0.1 or 10%

N = 1 (years)

To calculate the future value of this investment, we will use the formula:

FV = PV( 1 + i)^n

FV = $200(1 + 0.1)

FV = $200(1.1)

FV = $220

The future value of this investment would be $220.

Answer:

a.

July 1

Accounts Receivable                23000 Dr

     Sales Revenue                         23000 Cr

b.

July 8

Sales Return                          2400 Dr

     Accounts Receivable           2400 Cr

c.

July 11

Cash                                                  20600 Dr

      Accounts Receivable                       20600 Cr

Explanation:

a.

The sales made on credit are recorded as a debit to the accounts receivable and a credit to sales revenue by the amount of sales assuming we use the gross method to record sale.

b.

The return of sales is recorded as a debit to the sales return account and a credit to the accounts receivable to reduce the amount due from accounts receivable.

c.

The remaining accounts receivable amount after sales return amounted to 23000 - 2400 = 20600

The sales terms were 2/10 which means a 2% discount was allowed if the accounts receivable pay within 10 days of sale. The payment is received after the discount period. Thus, we will not deduct the discount allowed and accounts receivable will pay fill $20600.

Answer:  d. 185.4

Explanation:

x1 = The time to make the product which is 5 hours

x2 = the number of different materials used which is 4

x3 = the amount spent on marketing the product  which is $100

The Regression equation is given as;

y = [tex]83 - 2x_{1} + 0.6x_{2} + 1.1x_{3}[/tex]

Cost = 83 - 2(5) + 0.6(4) + 1.1 (100)

Cost = 83 - 10 + 2.4 + 110

Cost = 185.4

Answer: 7. intended donee beneficiary

Explanation:

Intended donee beneficiaries are people who are gifted the benefit of a contract they are not involved in by one of the contracting parties. The person who was involved in the contract that gave the gift does not owe the person that the gift was promised to any debts which makes it like a donation. Russ is an intended donee beneficiary who was meant to receive a benefit from a contract between Clark and the Insurance company even though he was not party to it.

Answer:

i. Target Group - University Fraternities

The focus of the statement is all University fraternities as the person making the statement did not limit the number of Fraternities included by saying some or most.

ii. Sample - Several Frat Brothers and a Fraternity

In coming to their conclusion, the author of the text used a sample of several frat brothers who were arrested at a frat-house party as well as a fraternity which was kicked off campus for violating underage drinking laws.

iii. Relevant property - Illegal Activity

The relevant property that all University Fraternities seem to have in come is illegal activity and the author gets this from the several frat brothers as well fraternity that were punished for actions contravening the law.

Answer:

Stock A's beta= 2

The new required rate of return = 14%

Explanation:

The risk free return is 6%

The return of market portfolio is 10%

The return of security A is 14%

(A) The beta of stock A can be calculated as follows

Return of security A= Risk free return+ beta(return of market portfolio-risk free return)

14%= 6% + beta(10%-6%)

14%=6% + 4%beta

14%-6%= 4%beta

8%= 4%beta

beta= 8%/4%

beta= 2

(B) Stock A's required rate of return can be calculated as follows

Required rate of return= 6% + 2(10%-6%)

= 6% + 2(4%)

= 6% + 8%

= 14%

Hence the Stock A's beta is 2 and the required rate of return for A is 14%

Answer:

Journal entry:

Debit Cash Account $63,600

Credit Notes Receivable $60,000

Credit Interest Revenue $3,600

To record the settlement of notes receivable and interest.

Explanation:

On maturity of the note, the customer is expected to settle account by paying for both the Notes and the Interest Due.  The customer will pay $63,600 to settle the two accounts.  Cash balance will increase to $124,800 from $60,900 by this transaction.

Answer:

The correct answer is C.

Explanation:

The variable costing method incorporates all variable production costs (direct material, direct labor, and variable overhead).

We need to calculate the net operating income:

Sales= 120,000*40= 4,800,000

Total variable cost= (20 + 10)*120,000= (3,600,000)

Total contribution margin= 1,200,000

Fixed manufacturing costs= (600,000)

Fixed operating (nonmanufacturing) costs= (400,000)

Net operating income= 200,000

Answer: false

Explanation:

Annuity due is an annuity whereby the payment is normally due at the beginning of every period which can be annually, semi annually, monthly, or quarterly. Examples of payments with annuity due include rents and, leases.

In ordinary annuity, the main difference is that the payments have to be made at the end of every period.

It should be noted that the present value of an annuity due is typically worth more when it is compared to the present value of ordinary annuity.