Night Shades Incorporated to determine the overall expenses for the year, we must sum the total of all variable expenses to the total of all fixed expenses. Total variable costs equal $15.50 x 200,000, or $3,100,000. The correct answer is c. units 211,709.
Variable cost per unit is equal to total production.Therefore,
$3,100,000 + $500,000
= $3,600,000 as the total cost for the year. We must divide the total fixed costs by the contribution margin per unit to determine the cash break-even point. The selling price per unit less the variable cost per unit equals the contribution margin per unit. Margin of contribution per unit is
$40.50 – $15.50
= $25.00. Cash break-even point is calculated as follows
$500,000 / $25.00
= 20,000 units; total fixed costs; contribution margin per unit.The variable materials cost is $2 per unit, and the variable labor cost is $3.4 per unit.
Complete question:
10 Night Shades Incorporated (NSI) manufactures biotech sunglasses. The variable materials cost is $2 per unit, and the variable labor cost is $3.4 per unit. a. What is the variable cost per unit? Variable cost 5 5.40 nts eBook Print eferences b. Suppose the company incurs fixed costs of $680,000 during a year in which total a production is 374,000 units. What are the total costs for the year? Total cost $ 2,699,600 C. If the selling price is $9.7 per unit, what is the NSI break-even on a cash basis? Cash break-even point 158,140 units Preu d. If depreciation is $187.000 per year, what is the accounting break-even point? Accounting break-even point 158 140
a. units 201,628
b. units 158,140
c. units 211,709
d. units 191,547 units
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a policyowner provides a check to the producer for her initial premium. how soon from receiving the check must the producer remit it to the insurer?
When a policyowner provides a check to the producer for the initial premium, it is the producer's responsibility to remit the payment to the insurer in a timely manner. Generally, the producer should remit the payment as soon as possible after receiving it from the policyowner.
This ensures that the policy is put into effect without any delays or interruptions. It is important to note that the producer is acting as an agent for the insurer in this transaction and is responsible for properly handling the funds.
If there is a delay in remitting the payment, it could potentially cause issues with the policy and could result in cancellation or other complications. Therefore, it is important for both the policyowner and producer to ensure that the payment is processed in a timely manner to avoid any potential issues with the policy.
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On April 1st last year, Company S had assets of £79.0 million and liabilities of £27.1 million. In the year ended March 31st this year, Company S made a profit of £12.3 million before tax, of which £2.3 million is payable in tax and £3.3 million has been distributed as a dividend. No further dividends have been announced. Company S has 300 million ordinary shares in issue, each with a nominal value of 10p of which 200 million are listed on the London Stock Exchange. On April 1st last year, the market price of each of these shares was 165.56p. On March 31st this year it was 140.25p. None of Company S's assets were revalued during the year. Company S did not acquire or sell any other companies, did not issue any further shares or bonds and did not redeem any shares or bonds. There were no changes in reserves other than those stated above. How much was the book value of the shareholders' equity in Company S at March 31st this year, in millions of £? Give your answer to 1 decimal place in £ million, without commas. For example, for £33.762 million enter 33.76 Answer:
The book value of the shareholders' equity in Company S at March 31st this year was £60.4 million.
To find the book value of the shareholders' equity, we need to calculate the total equity of the company by subtracting its liabilities from its assets.
As no revaluations were done during the year and there were no changes in reserves other than those stated in the problem, we can assume that the equity at the beginning of the year was equal to the book value of the equity at the end of the year.
Therefore, the total equity of the company at March 31st this year can be calculated as:
Total Equity = Assets - Liabilities
Total Equity = £79.0 million - £27.1 million
Total Equity = £51.9 million
We can then calculate the book value of the shareholders' equity by multiplying the number of outstanding ordinary shares by the nominal value of each share:
Book Value of Shareholders' Equity = Number of Ordinary Shares x Nominal Value of each Share
Book Value of Shareholders' Equity = 300 million x £0.10
Book Value of Shareholders' Equity = £30 million
Finally, we can calculate the book value of the listed shareholders' equity by multiplying the book value of the total shareholders' equity by the ratio of listed ordinary shares to total ordinary shares:
Book Value of Listed Shareholders' Equity = Book Value of Shareholders' Equity x (Listed Ordinary Shares / Total Ordinary Shares)
Book Value of Listed Shareholders' Equity = £30 million x (200 million / 300 million)
Book Value of Listed Shareholders' Equity = £20 million
To convert this to the book value of the listed shareholders' equity in millions of £, we divide by 1 million:
Book Value of Listed Shareholders' Equity in millions of £ = £20 million / £1 million
Book Value of Listed Shareholders' Equity in millions of £ = £20.0 million
As the question asks for the book value of the shareholders' equity, not just the listed shareholders' equity, we add the book value of the unlisted shareholders' equity:
Book Value of Shareholders' Equity = Book Value of Listed Shareholders' Equity + Book Value of Unlisted Shareholders' Equity
Book Value of Shareholders' Equity = £20.0 million + (£51.9 million - £30.0 million)
Book Value of Shareholders' Equity = £60.4 million
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describe each of the five objectives of the phoenix project. what level of effort would be required to accomplish these objectives?
The five objectives of improvement of the Phoenix Project are to improve:
Business/IT Alignment, Project Delivery Efficiency, IT Operations Efficiency, Continuous Improvement and Security and Compliance.
What are the objectives of the Phoenix ProjectThe five objectives of the Phoenix Project are to improve the following areas:
1. Business/IT Alignment:
Ensuring that IT projects and resources are aligned with the organization's strategic goals, requiring effective communication and collaboration between business and IT teams.
2. Project Delivery Efficiency:
Streamlining the delivery of IT projects by eliminating bottlenecks, adopting agile methodologies, and utilizing automation where appropriate. This may require significant effort in process improvement and team training.
3. IT Operations Efficiency:
Enhancing the performance and reliability of IT systems by implementing best practices in areas like incident management, monitoring, and capacity planning. This can be moderately to highly effort-intensive, depending on the current state of operations.
4. Continuous Improvement:
Fostering a culture of continuous learning and improvement within the organization, which may involve regular reviews, feedback, and training. The level of effort required varies based on the organization's current maturity and willingness to adapt.
5. Security and Compliance:
Ensuring that IT systems and processes comply with relevant regulations and are secure from potential threats. This objective typically requires a significant amount of effort in the form of regular audits, vulnerability assessments, and remediation of identified issues.
The level of effort required to accomplish these objectives depends on the organization's current state and the resources allocated for the project. The more mature an organization is in these areas, the less effort will be needed to achieve the objectives.
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steelworker mike lefevre cannot take pride in his work because:
Mike Lefevre, a steelworker, cannot take pride in his work because he is facing a challenging economic environment. The steel industry has been hit hard by global competition and automation, leading to job losses and a decrease in wages.
This has left Mike, along with many other steelworkers, struggling to make ends meet. Mike is also facing the threat of losing his job due to the increased efficiency of automated processes. These economic pressures have made it difficult for Mike to take pride in his work, as he is constantly aware of the precariousness of his situation. Furthermore, Mike is also dealing with the psychological burden of not knowing what the future holds for him and his family.
These factors combine to make it difficult for Mike to take pride in his work, even if he is performing his job duties well.
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a strategy that promotes a superior alignment between the organization and its environment and the achievement of strategic goals is a(n) .
A strategy that promotes a superior alignment between the organization and its environment and the achievement of strategic goals is called a strategic fit.
A strategic fit ensures that an organization's resources, capabilities, and competitive advantages are aligned with its external environment, including the market, competition, and technological changes.
A strategic fit involves assessing the external environment to identify opportunities and threats, and aligning the organization's resources and capabilities to capitalize on those opportunities and overcome the threats. This includes aligning the organization's mission, values, and culture with the external environment to achieve a shared vision and purpose.
A strategic fit is essential for achieving long-term success and sustainability, as it helps organizations adapt to changing environments and stay competitive. It also enables organizations to optimize their resources and capabilities to achieve their strategic goals efficiently and effectively. A strategic fit is a dynamic process that requires ongoing evaluation and adjustment to ensure that the organization remains aligned with its environment and strategic goals.
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QUESTION 5 Rocket corp has 100 bonds outstanding. The bonds are annual coupon bonds with a face value of $1000, a coupon rate of 6.4%, and 11 years until the bond matures. If the YTM of the bonds is 7.5%, what is the total market value of the bonds for Rocket corp?
The total market value of the bonds for Rocket Corp is $94,480.
To find the total market value of the bonds for Rocket Corp, you need to calculate the present value of the bond's cash flows, which consists of the annual coupon payments and the face value at maturity. Here's a step-by-step explanation:
1. Calculate the annual coupon payment: Face value ($1000) x coupon rate (6.4%) = $64
2. Determine the number of periods (years) until maturity: 11 years
3. Find the yield to maturity (YTM) as a decimal: 7.5% = 0.075
4. Calculate the present value of the coupon payments using the formula:
(Coupon payment x (1 - (1 + YTM)^(-number of periods))) / YTM = ($64 x (1 - (1 + 0.075)^(-11))) / 0.075 ≈ $525.42
5. Calculate the present value of the face value at maturity:
Face value / (1 + YTM)^(number of periods) = $1000 / (1 + 0.075)^11 ≈ $419.38
6. Add the present values of the coupon payments and the face value to find the market value of a single bond:
$525.42 + $419.38 ≈ $944.80
7. Multiply the market value of a single bond by the number of bonds outstanding (100) to find the total market value of the bonds for Rocket Corp:
$944.80 x 100 = $94,480
So, the total market value of the bonds for Rocket Corp is $94,480.
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What type of credit is a monthly telephone bill? a) single -payment credit b) installment credit c) revolving credit.
A monthly telephone bill is an example of revolving credit i.e. option C. This type of credit allows a borrower to continuously use and repay the credit line as long as they make at least the minimum payments required each month.
With revolving credit, the amount of credit available to the borrower can change depending on how much they have used and paid back. In contrast, single-payment credit requires the borrower to repay the entire amount borrowed in one lump sum, while installment credit involves fixed payments over a set period of time. Monthly telephone bills typically have a minimum payment due each month, and the balance can carry over to the next billing cycle if not paid in full. Therefore, it falls under the category of revolving credit.
Thus, the right option is C.
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The type of credit that a monthly telephone bill falls under is revolving credit.
This is because the amount owed on the bill can fluctuate from month to month based on usage and is paid off in varying amounts each month rather than a set single or installment payment. A monthly telephone bill is an example of a single-payment credit (option a). This is because you receive the service for a specific period and then pay the entire amount due in a single payment at the end of that period.
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Define what is meant by basis. State three situations that couldresult in non-zero basis at maturity.
A non-zero basis at maturity in finance refers to the difference between the spot price and the futures price of an asset, and it can occur due to supply and demand imbalances, transportation costs, or changes in interest rates.
What is definition and causes of non-zero basis at maturity in finance?In finance, the term "basis" refers to the difference between the spot price of an asset and the futures price of the same asset. This difference is usually expressed as a percentage or a dollar amount.
A non-zero basis at maturity occurs when the spot price of the asset and the futures price of the same asset are not equal when the futures contract expires. Here are three situations that could result in a non-zero basis at maturity:
Supply and demand imbalances: If there is a shortage of a particular commodity, the spot price may be higher than the futures price. Conversely, if there is an oversupply of the commodity, the spot price may be lower than the futures price. These imbalances can result in a non-zero basis at maturity.Transportation costs: If the cost of transporting a commodity from the spot market to the delivery location specified in the futures contract is higher than expected, the spot price may be higher than the futures price. This can result in a non-zero basis at maturity.Interest rates: If interest rates rise during the term of a futures contract, the futures price may be lower than the expected spot price at maturity. This is because the cost of carrying the commodity over the term of the contract is higher when interest rates are high. This can result in a non-zero basis at maturity.Learn more about non-zero basis.
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1. short discussion on the marketing strategies, demand andprojected sales of smart dc stand fan.2. short description on production requirements, quality controlproduction cost of smart dc stand fa
When it comes to marketing strategies for the smart DC stand fan, it's important to first identify the target market.
This type of fan would likely appeal to those who prioritize energy efficiency and technology in their home appliances. One strategy could be to promote the fan's energy-saving capabilities and convenient features (such as remote control and programmable settings) through social media and targeted online ads. Another strategy could be to partner with sustainable living organizations or influencers to promote the fan as a green option for cooling.
In terms of demand and projected sales, it would depend on factors such as pricing, competition, and overall consumer interest. Market research and testing would be necessary to determine the potential success of the product. In terms of production requirements, the smart DC stand fan would require materials for the fan blades, motor, housing, and electronics (such as the remote control). Quality control would be important to ensure the fan meets safety and performance standards, as well as customer expectations.
Production costs would depend on factors such as the cost of materials, labor, and overhead expenses. Implementing efficient production processes and minimizing waste would also be important for reducing costs.
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All of the following are needed to determine the annual accretion amount on an original issue municipal discount bond EXCEPT:
A Dated date
B Maturity date
C Acquisition cost
D Sale price
To determine the annual accretion amount on an original issue municipal discount bond, you need the following information:
A. Dated date
B. Maturity date
C. Acquisition cost
The one term you do NOT need to determine the annual accretion amount is:
D. Sale price
Dated date: The dated date of a municipal discount bond is the date from which the bond starts accruing interest. It is also known as the "issue date" or "origination date" of the bond.
The dated date is an important factor in calculating the annual accretion amount as it determines the number of days for which the bond has been outstanding and accruing interest.
Maturity date: The maturity date of a municipal discount bond is the date on which the bond is scheduled to mature and the principal amount is due to be repaid to the bondholder.
The maturity date is used in determining the total period for which the bond is held until maturity, which is an important factor in calculating the annual accretion amount.
Acquisition cost: The acquisition cost of a municipal discount bond is the price at which the bond was purchased or acquired by the bondholder. It includes the purchase price, any transaction costs, and any accrued interest that may be due at the time of acquisition.
The acquisition cost is used in calculating the annual accretion amount as it forms the basis for determining the increase in the bond's value over time.
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Consider a project with a life of 4 years with the following information: initial fixed asset investment = $360,000; straight-line depreciation to zero over the 4-year life; zero salvage value; price = $40; variable costs = $18; fixed costs = $172,800; quantity sold = 100,224 units; tax rate = 23 percent. How sensitive is OCF to changes in quantity sold? Multiple Choice a. $19.31 b. $16.94 c. $0.06
The sensitivity of OCF to changes in quantity sold is $19.31.(A)
To calculate the sensitivity of OCF (Operating Cash Flow) to changes in quantity sold, follow these steps:
1. Calculate the contribution margin per unit: price - variable costs = $40 - $18 = $22.
2. Calculate the operating income before tax: (contribution margin * quantity sold) - fixed costs = ($22 * 100,224) - $172,800.
3. Calculate the income tax: operating income before tax * tax rate = operating income before tax * 23%.
4. Calculate the OCF: operating income before tax - income tax.
5. Calculate the sensitivity of OCF to changes in quantity sold: contribution margin per unit * (1 - tax rate) = $22 * (1 - 23%) = $19.31.(A)
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if nominal gdp in 2010 is greater than real gdp in 2011 (using 2010 prices), then
The given scenario is possible when there's a combination of inflation and/or economic contraction between 2010 and 2011. Real GDP, adjusted for inflation using 2010 prices, provides a more accurate picture of the economy's performance, as it allows for a fair comparison between different time periods.
Nominal GDP refers to the monetary value of all goods and services produced in an economy within a specific time period, without considering inflation or changes in the price level. It is measured using the current market prices during that time period. Real GDP, on the other hand, measures the value of all goods and services produced within an economy during a specific time period, but adjusts for inflation or changes in the price level. This situation can occur due to the following reasons:
1. Inflation: If the prices of goods and services increased significantly between 2010 and 2011, nominal GDP in 2010 could be greater than real GDP in 2011, as the latter adjusts for changes in the price level. This means that the economy's growth rate may be overstated when comparing nominal GDP values without accounting for inflation
. 2. Economic Contraction: If the economy experienced a contraction between 2010 and 2011, the production of goods and services could have decreased, leading to a lower real GDP in 2011.
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Topic: BOND AND STOCK VALUATION
solve by hand, using a financial calculator or excel.b. ABC Retailers just issued 200 16-year bonds with face value of €5,000. The quoted price of those bonds is 96.268, and they pay coupon twice a year. If the yield to maturity on this bond is 5.27%, what is the coupon rate? What is the dollar price of each of those bonds? What is the total value of the bonds outstanding?
The coupon rate for ABC Retailers' 16-year bonds is 5.674%, the dollar price of each bond is €4,813.40, and the total value of the bonds outstanding is €962,680.
To calculate the coupon rate, we can use the following formula:
Coupon Rate = (Yield to Maturity * Face Value) / Quoted Price
Plugging in the given values:
Coupon Rate = (0.0527 * €5,000) / 96.268 = €273.34 / 96.268 = 2.837
Since the bond pays coupons twice a year, the annual coupon rate is:
Annual Coupon Rate = 2 * 2.837 = 5.674%
Now, let's find the dollar price of each bond. The quoted price is given as a percentage of the face value, so:
Dollar Price = (Quoted Price / 100) * Face Value
Dollar Price = (96.268 / 100) * €5,000 = €4,813.40
Lastly, to find the total value of the bonds outstanding, multiply the dollar price by the number of bonds:
Total Value = Dollar Price * Number of Bonds
Total Value = €4,813.40 * 200 = €962,680
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An analyst claims, ‘‘It is not worth my time to develop detailed forecasts of sales growth, profit margins, etcetera, to make earnings projections. I can be almost as accurate, at virtually no cost, using the random walk model to forecast earnings.’’ What is the random walk model? Do you agree or disagree with the analyst’s forecast strategy? Why or why not?
The random walk model is a financial theory that assumes that stock price movements are unpredictable and follow a random pattern. According to this model, the best predictor of future stock prices is the current price, as there is no correlation between past and future price movements.
As for the analyst's forecast strategy, I respectfully disagree with their claim. While the random walk model may offer a low-cost and easy way to forecast earnings, it is not the most accurate method.
Developing detailed forecasts of sales growth, profit margins, and other financial factors can provide more reliable and accurate predictions, as these factors are often closely related to a company's future earnings.
In conclusion, the random walk model is a financial theory that assumes stock price movements are unpredictable and follow a random pattern.
However, relying solely on this model to forecast earnings may not be the most accurate approach. Instead, a more comprehensive analysis that includes sales growth, profit margins, and other factors should be considered for a more accurate forecast.
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ryan neal bought 2,400 shares of ford (f) at $16.02 per share. assume a commission of 1% of the purchase price. ryan sells the stock for $20.33 with the same 1% commission rate.what is the gain or loss for ryan?
Ryan gained $9,471.60 from selling 2400 Ford shares, including commissions.
How much did Ryan gain or lose from selling the Ford shares?The gain or loss for Ryan can be calculated as follows:
First, let's calculate the total cost of purchasing the shares of Ford:
Purchase price per share = $16.02
Number of shares purchased = 2,400
Total purchase price = $16.02 x 2,400 = $38,448
Now, let's calculate the commission Ryan paid for the purchase:
Commission rate = 1%
Commission paid = 1% x $38,448 = $384.48
So, the total cost of purchasing the shares, including the commission, was:
Total cost = $38,448 + $384.48 = $38,832.48
Next, let's calculate the total proceeds from selling the shares of Ford:
Selling price per share = $20.33
Number of shares sold = 2,400
Total selling price = $20.33 x 2,400 = $48,792
Now, let's calculate the commission Ryan paid for the sale:
Commission rate = 1%
Commission paid = 1% x $48,792 = $487.92
So, the total proceeds from selling the shares, after deducting the commission, were:
Total proceeds = $48,792 - $487.92 = $48,304.08
Finally, let's calculate the gain or loss for Ryan:
Gain/Loss = Total proceeds - Total cost
Gain/Loss = $48,304.08 - $38,832.48
Gain/Loss = $9,471.60
Therefore, Ryan's gain from selling the shares of Ford was $9,471.60
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when mcdonald's sells cheeseburgers in india, there is absolutely no beef or pork used. the mcdonald's menu in india features indian burgers that are 100 percent vegetarian. india is predominantly a hindu country, and hindus are strict in terms of not eating beef because they consider the cow as a holy manifestation of the divinity. this scenario is an example of . group of answer choices product correctness product adaptation product innovation product variation
The scenario described is an example of product adaptation, which is the process of modifying a product or service to better meet the needs and preferences of a specific market or culture.
In this case, McDonald's adapted its menu to the Indian market by offering 100 percent vegetarian burgers that do not include beef or pork, which are not consumed by Hindus due to religious beliefs.Product adaptation is a common strategy used by companies when entering new markets, especially when cultural or religious factors need to be taken into consideration.
By adapting its products to local tastes and preferences, companies can increase their chances of success in new markets and better connect with their target customers.In the case of McDonald's in India, product adaptation has allowed the company to successfully operate in the country and cater to the needs and preferences of its predominantly Hindu customer base.
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dollar amounts stated are in thousands. a. compute trend percentages for the above items taken from the financial statements of lopez plumbing over a five-year period. treat 2017 as the base year. b. state whether the trends are favorable or unfavorable.
This is a two part question and the answer is given in two separate headings.
Trend Percentages
Year 2021 2020 2019 2018
Sales* 58% 30% 22% 14%
Cost of Goods Sold** 153% 67% 66% 34%
The difference between the current year's sales and the base year's sales is divided by 100 to compute sales. The proportion, for instance, is 14% for 2018 [(57,000 - 50,000) / 50,000 * 100]. in the same manner as previous years' calculations. The difference between the current cost of goods sold and the base year cost of goods sold has been divided by the base year cost of goods sold 2017 * 100 to get the cost of goods sold.
The proportion, for instance, is 14% for 2018 [(40,200 - 30,000) / 30,000 * 100]. in the same manner as previous years' calculations. However, the cost of goods sold has been rising quickly; by the most recent trending year, it had climbed by 153% when compared to the base year of 2017.
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true or false if the stock owned by a mutual fund increases in value the net value of the fund will fall
The statement "If the stock owned by a mutual fund increases in value, the net value of the fund will fall" is false because When the stock owned by a mutual fund increases in value, it means the assets held by the fund are appreciating.
As a result, the net asset value (NAV) of the mutual fund will also increase. The NAV is calculated by dividing the total value of the fund's assets by the number of shares outstanding.
When the value of the underlying assets, such as stocks, goes up, the NAV will also rise, as the total value of the fund's assets increases. Therefore, an increase in the stock value will not cause the net value of the fund to fall, but rather to rise.
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AllCity Inc. is financed 40% with debt, 15% with preferred stock, and 45% with common stock. Its pre-tax cost of debt is 6%; its preferred stock pays an annual dividend of $3.25 and is priced at $28. It has an equity beta of 1.3. Assume the risk-free rate is 2%, the market risk premium is 6%, and AllCity's tax rate is 35%. What is its after-tax WACC? What is its after-tax WACC? 'wacc (Round to five decimal places.)
The after tac WACC for the AllCity Inc. financed 40% with debt, 15% with preferred stock, and 45% with common stock is 7.71%.
The weighted average cost of capital (WACC), which includes ordinary stock, preferred stock, bonds, and other types of debt, is the average after-tax cost of capital for a company. The WACC is the typical interest rate that a business anticipates paying to finance its assets.
Because WACC reflects the return that both bondholders and shareholders require in order to provide the firm with capital in a single value, it is frequently used to calculate necessary rate of return (RRR). Because investors will want larger returns, a company's WACC is likely to be higher if its stock is very volatile or if its debt is seen as hazardous.
Debt = 40%
Preferred Stock = 15%
Common Stock = 45%
Pre Tax Cost of Debt = 6%
Annual Dividend of Preferred Stock = $3.25
Price of Preferred Stock = $28
Using the Formula of Preferred Stock,
Cost of Preferred stock = [tex]\frac{Annual\ dividend}{Market\ Price}[/tex]
= 3.25 / 28
= 0.1160714285714
= 11.61%.
Using the Formula of Capital Asset Pricing Model
Equity Beta = 1.3
Risk-free rate = 2%
Market Risk Premium = 6%
[tex]ER_i=R_f+\beta(ER_m-R_f)[/tex]
= 2% + 1.3(6%)
= 2% + 7.8%
[tex]ER_i[/tex] = 9.8%.
Tax rate = 35%
Using the Formula of After-Tax WACC
[tex]WACC=W_D K_P(1-T)+W_EK_E+W_PK_P[/tex]
= 040 x 6%(1-0.35) + 0.45 x 9.8% + 0.15 x 11.61%
= 1.56 + 4.41 + 1.7415
WACC = 7.71%.
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A stock has expected return of 0.05. If its expected dividend growth increases from 0.01 to 0.02, its price changes by a. -25% b. 33% c. 100% d. it depends on the current dividend of the stock
Changes in the price of a stock depend upon the current dividend of the stock. The correct answer is option D " it depends on the current dividend of the stock"
The price of a stock is determined by its expected future cash flows, which include both the expected dividends and the expected price appreciation. If the expected dividend growth rate increases, it means that the company is expected to pay out more dividends in the future.
However, if the current dividend of the stock is already high, the impact of the increased dividend growth rate on the stock price may be smaller than if the current dividend is low. Therefore, depending on the stock's current dividend prices vary.
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A 20-year maturity bond with face value of $1,000 makes annual coupon payments and has a coupon rate of 9.7%. (Do not round intermediate calculations. Enter your answers as a percent rounded to 3 decimal places.) a. What is the bond's yield to maturity if the bond is selling for $1,070? Yield to maturity __% b. What is the bond's yield to maturity if the bond is selling for $1,000? Yield to maturity __ % c. What is the bond's yield to maturity if the bond is selling for $1,270? Yield to maturity __ %
a. The bond's yield to maturity is 8.000%. b. The bond's yield to maturity is 9.700%. c. The bond's yield to maturity is 6.316%.
a. To calculate the bond's yield to maturity when it is selling for $1,070, we need to solve for the interest rate (yield) that equates the present value of the bond's future cash flows (coupons and principal) to its current price.
Using a financial calculator or spreadsheet, we can enter the following values into the appropriate formula:
N = 20 (number of years)
I/Y = ? (yield to maturity)
PMT = $97 (annual coupon payment, which is 9.7% of the face value)
FV = $1,000 (face value)
PV = -$1,070 (negative because we are buying the bond)
Solving for I/Y, we find that the bond's yield to maturity is 8.000%.
b. When the bond is selling for its face value of $1,000, its yield to maturity is simply equal to its coupon rate of 9.7%.
c. When the bond is selling for $1,270, its yield to maturity can be calculated using the same formula as in part a, but with PV = -$1,270:
N = 20
I/Y = ?
PMT = $97
FV = $1,000
PV = -$1,270
Solving for I/Y, we find that the bond's yield to maturity is 6.316%.
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The records of Blue Spruce Company at the end of the current year show Accounts Receivable $63,900, Credit Sales $664,200; and Sales Returns and Allowances $32,800. (a) If Blue Spruce uses the direct write-off method to account for uncollectible accounts and Blue Spruce determines that Matisse's $738 balance is uncollectible, what will Blue Spruce record as bad debt expense? (b) If Allowance for Doubtful Accounts has a balance of $902 and Blue Spruce concludes bad debts are expected to be 10% of accounts receivable, what will Blue Spruce record as bad debt expense? eTextbookand Media
(a) If Blue Spruce uses the direct write-off method to account for uncollectible accounts and determines that Matisse's $738 balance is uncollectible, Blue Spruce will record $738 as bad debt expense.
(b) If Allowance for Doubtful Accounts has a balance of $902 and Blue Spruce concludes bad debts are expected to be 10% of accounts receivable, Blue Spruce will record $5,898 ($63,900 x 10% - $902) as bad debt expense.
(a) If Blue Spruce Company uses the direct write-off method and determines that Matisse's $738 balance is uncollectible, Blue Spruce will record a bad debt expense of $738. If the Allowance for Doubtful Accounts has a balance of $902 and Blue Spruce expects bad debts to be 10% of accounts receivable ($63,900), the expected bad debts will be $6,390. To adjust the allowance account to the expected amount, Blue Spruce will record a bad debt expense of $6,390 - $902 = $5,488.
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(a) If Blue Spruce uses the direct write-off method to account for uncollectible accounts and determines that Matisse's $738 balance is uncollectible, Blue Spruce will record the full amount of the uncollectible account as bad debt expense. Therefore, the bad debt expense recorded will be $738.
(b) If Allowance for Doubtful Accounts has a balance of $902 and Blue Spruce concludes that bad debts are expected to be 10% of accounts receivable, Blue Spruce will need to calculate the required balance in the Allowance for Doubtful Accounts. The required balance in the allowance can be calculated as follows:
Required balance = (Accounts Receivable * % Estimated Uncollectible) - Existing Balance in Allowance for Doubtful Accounts
= ($63,900 * 10%) - $902
= $6,390 - $902
= $5,488
Since the existing balance in the Allowance for Doubtful Accounts is $902 and the required balance is $5,488, Blue Spruce will need to adjust the Allowance for Doubtful Accounts by debiting bad debt expense and crediting the Allowance for Doubtful Accounts for $4,586 ($5,488 - $902). This adjustment will bring the Allowance for Doubtful Accounts to the required balance of $5,488. Therefore, the bad debt expense recorded will be $4,586.
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T/F the company's bank reconciliation is a critical means by which an auditor completes audit procedures over the cash balance in the financial statements.
The statement "The company's bank reconciliation is a critical means by which an auditor completes audit procedures over the cash balance in the financial statements" is true. Bank reconciliations are an essential part of the audit process as they help auditors verify the accuracy of a company's cash balance in the financial statements.
A bank reconciliation involves comparing the company's internal records of cash transactions and balances with the corresponding information provided by the bank. This process helps identify any discrepancies between the two sets of records, such as timing differences, errors, or potential fraud.
1. Obtain the company's cash records and bank statements for the period being audited.
2. Compare the beginning and ending balances in the company's cash records to the corresponding balances on the bank statements.
3. Identify any outstanding deposits, checks, or other transactions that have been recorded by the company but not yet reflected in the bank statement.
4. Adjust the company's cash records for any errors or omissions discovered during the reconciliation process.
5. Confirm that the adjusted cash balance in the company's records agrees with the adjusted bank balance.
By completing a thorough bank reconciliation, the auditor can gain assurance that the company's cash balance is fairly stated in the financial statements. This process not only helps to detect errors or fraud but also strengthens the overall reliability of the financial reporting.
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You are in charge of planning a concert for Beyoncé at NRGstadium. You need to pay Beyoncé $2 million for the show, $50,000for the technical crew, $50,000 to the back up dancers, and$200,000 to r ent the stadium. You know you can sell tickets for $200 each. What is the breakeven number of tickets you must sell?A) 10,000B) 11,500C) 12,500D) 13,000
The corrrect answer is B) 11,500. The breakeven number of tickets that need to be sold for the Beyoncé concert at NRG stadium is 11,500.
To calculate the breakeven number of tickets that need to be sold, we need to determine the total cost of the concert and divide it by the price per ticket.
The total cost of the concert is the sum of Beyoncé's fee, the technical crew and backup dancers' fees, and the stadium rental cost, which is $2 million + $50,000 + $50,000 + $200,000 = $2,300,000.
To break even, the total revenue generated from ticket sales needs to equal the total cost of the concert, which is $2,300,000. Therefore, we can set up an equation:
$200 x = $2,300,000
where x is the number of tickets that need to be sold.
Solving for x, we get:
x = $2,300,000 ÷ $200
x = 11,500
Therefore, the breakeven number of tickets that need to be sold for the Beyoncé concert at NRG stadium is 11,500.
Answer: B) 11,500
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true or false? any component that, if it fails, could interrupt business processing is called a single point of failure (spof).
True. Any component that is crucial to the normal operation of a system or process and whose failure could cause a complete or partial shutdown is considered a single point of failure (SPOF).
This could be a hardware component like a server or network switch, or a software component like an operating system or database server. The failure of a SPOF can have significant consequences, including financial losses, loss of customer confidence, and damage to reputation.
Therefore, it is essential to identify and mitigate potential SPOFs through redundancy, backup systems, and disaster recovery planning.
In summary, any component that can interrupt business processing if it fails is a SPOF, and identifying and mitigating SPOFs is critical for ensuring system reliability and availability.
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if a stock consistently goes down (up) by 1.55% when the market
portfolio goes down (up) by 1.04%, then its beta equals?
The beta of the stock is 143.5.
To calculate the beta of the stock, we use the formula:
Beta = (covariance of stock returns with market returns) / (variance of market returns)
In this case, we know that the stock consistently goes down (up) by 1.55% when the market portfolio goes down (up) by 1.04%. This means that the covariance of the stock returns with market returns is:
covariance = -1.55 / -1.04 = 1.4904
We also know that the variance of the market returns is given as 1.04%, which is equivalent to 0.0104 (since variance is usually expressed in decimal form).
Therefore, the beta of the stock can be calculated as:
Beta = 1.4904 / 0.0104 = 143.5
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he trial balance will include a.only the credits of each account. b.only balance sheet accounts. c.the ending balance of each account. d.only the debits of each account.
The trial balance includes the ending balance of each account and serves as a tool to ensure that the accounting records are accurate.The correct answer to your question is c.
The trial balance will include the ending balance of each account. A trial balance is a summary of all the account balances in the general ledger at the end of a particular accounting period. It is used to ensure that the total debits and total credits are equal and that the accounting records are accurate. When preparing a trial balance, both the debit and credit balances of each account are listed separately.
The trial balance includes all accounts in the general ledger, including both balance sheet accounts (such as assets, liabilities, and equity) and income statement accounts (such as revenues and expenses). The purpose of the trial balance is to identify any errors in the accounting records.
If the total debits and credits are not equal, there is an error that needs to be corrected. The trial balance helps to ensure that the financial statements accurately reflect the company's financial position and performance. The correct answer to your question is c.
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2000 2001 2002
Current Assets
Cash 20,000 21,000 24,000
Short term Investment 60,000 81,000 145,000
A/R 100,000 90,000 140,000
Inventories 14,000 17,000 15,000
Prepaid Exp 13,000 12,000 14,000
Total Current Assets 207,000 221,000 338,000
Investment 43,000 35,000 40,000
Property and Equipment
Land 68,500 68,500 68,500
Building 810,000 850,000 880,000
Furniture and Equipment 170,000 190,000 208,000
1,048,500 1,108,500 1,156,500
Less: Accumulated Depreciation 260,000 320,000 381,000
Other Operationg Equipment 11,500 20,500 22,800
Total Assets 1,050,000 1,065,000 1,176,300
Current Liabilities
Accounts Payable 60,000 53,500 71,000
Accrued Income Taxes 30,000 32,000 34,000
Accured Expenses 70,000 85,200 85,000
Current Portion of Long-term debt 25,000 21,500 24,000
Total Current Liabilities 185,000 192,200 214,000
Long-term Debt
Mortgage Payable 425,000 410,000 400,000
Deferred Income Taxes 40,000 42,800 45,000
Total Long-term Debt 465,000 452,800 445,000
Total Liabilities 650,000 645,000 659,000
Owner's Equity
Common Stock 55,000 55,000 55,000
Paid-in Capital in Excess 110,000 110,000 110,000
Retained Earnings 235,000 255,000 352,300
Total Owner's Equity 400,000 420,000 517,300
Total Liabilities and Equity 1,050,000 1,065,000 1,176,300
1) Amount Change and % change from Year 2000 to Year2001
2) Current ratio, Acid Test Ratio, A/R turn-over, Avg collection period, Solvency Ratio, profit ratio for Year2001)
( Assume the 2002 Revenue 1,300,000, profit is 65,000 ) Operating Cash flow is 201,000.
1)From 2000 to 2001, the company's total assets increased by $15,000 or 1.43%. The total current assets increased by $14,000 or 6.76%, with short-term investments showing the largest increase. The accounts receivable decreased by $10,000 or 10%, while inventories increased by $3,000 or 21.4%. The company's total liabilities increased by $5,000 or 0.77%, with current liabilities showing the largest increase. The owner's equity increased by $20,000 or 5%.
2)Current Ratio = $221,000 / $192,200 = 1.15
Acid Test Ratio = 1.16
Accounts Receivable Turnover = 13.68 times
Average Collection Period = 26.67 days
Solvency Ratio = 1.65
Profit Ratio = 0.05 or 5%
1)Amount Change and % change from Year 2000 to Year 2001:
Current Assets:
Cash: +$1,000 (+5%),
Short-term Investments: +$21,000 (+35%),
Accounts Receivable: -$10,000 (-10%),
Inventories: +$3,000 (+21%),
Prepaid Expenses: -$1,000 (-8%)
Total Current Assets: +$14,000 (+7%)
Investments: -$8,000 (-19%)
Property and Equipment:
Land: No change,
Building: +$40,000 (+5%),
Furniture and Equipment: +$20,000 (+12%)
Total Property and Equipment: +$60,000 (+6%)
Accumulated Depreciation: +$60,000 (+23%)
Other Operating Equipment: +$9,000 (+78%)
Total Assets: +$15,000 (+1.4%)
Current Liabilities:
Accounts Payable: -$6,500 (-11%),
Accrued Income Taxes: +$2,000 (+7%),
Accrued Expenses: +$15,200 (+22%),
Current Portion of Long-term Debt: -$3,500 (-14%)
Total Current Liabilities: +$9,200 (+5%)
Long-term Debt: -$12,200 (-3%)
Total Liabilities: -$5,000 (-0.8%)
Owner's Equity:
Common Stock: No change,
Paid-in Capital in Excess: No change,
Retained Earnings: +$20,000 (+9.6%)
Total Owner's Equity: +$20,000 (+5%)
Total Liabilities and Equity: +$15,000 (+1.4%)
2)Ratios for Year 2001:
Current Ratio = Current Assets / Current Liabilities = $221,000 / $192,200 = 1.15
Acid Test Ratio = (Cash + Short-term Investments + Accounts Receivable) / Current Liabilities = ($21,000 + $145,000 + $90,000) / $192,200 = 1.16
Accounts Receivable Turnover = Net Credit Sales / Average Accounts Receivable = Net Sales / [(Beginning Accounts Receivable + Ending Accounts Receivable) / 2] = $1,300,000 / (($100,000 + $90,000) / 2) = 13.68 times
Average Collection Period = 365 days / Accounts Receivable Turnover = 365 / 13.68 = 26.67 days
Solvency Ratio = Total Assets / Total Liabilities = $1,065,000 / $645,000 = 1.65
Profit Ratio = Net Income / Net Sales = $65,000 / $1,300,000 = 0.05 or 5%
Operating Cash Flow is not needed to calculate these ratios.
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2. a)
Dungeoness Corporation has excess cash of $3,000 that it would like to distribute to shareholders as an extra dividend. Current earnings are $0.80 per share, and the stock currently sells for $31 per share. There are 260 shares outstanding. Ignore taxes and other imperfections.
If Dungeoness Corp. pays a cash dividend, what will be the dividend per share? After the dividend is paid, what will the price per share be? What are earnings per share (EPS) and the price earnings (P/E) ratio? Enter your answers rounded to 2 DECIMAL PLACES.
Dividend per share=
Price per share =
Earnings per share (EPS) =
Price earnings (P/E) ratio=
The dividend per share is calculated by dividing the excess cash by the number of outstanding shares:
Dividend per share = $3,000 / 260 = $11.54
After the dividend is paid, the price per share will be adjusted downward by the amount of the dividend, which is $11.54:
Price per share = $31 - $11.54 = $19.46
The earnings per share can be calculated by dividing the current earnings by the number of outstanding shares:
EPS = $0.80 / 260 = $0.0031
The price earnings ratio is calculated by dividing the price per share by the earnings per share:
P/E ratio = $19.46 / $0.0031 = 6,277.42 (rounded to 2 decimal places)
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true or false: it is typical for an organization to only inspect work-in-process and finished items that the company produced. it is not typical to inspect purchased items.
The given statement is False. Quality control is a critical aspect of any organization's operations, and it is essential to ensure that all products meet the required standards before they are shipped to customers.
This includes purchased items as well. Inspecting purchased items is necessary to ensure that they meet the same quality standards as the organization's own products.
This is particularly important when the purchased items are key components of the organization's products or services. A failure in a purchased item can result in the entire product or service being of poor quality, leading to customer dissatisfaction and damage to the organization's reputation.
Therefore, organizations should have a well-defined process for inspecting all incoming materials, including purchased items, to ensure they meet the necessary quality standards. By doing so, the organization can avoid potential quality issues and ensure customer satisfaction.
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