Answer:
A) For which event was the labor productivity higher?
Productivity is defined as the capacity to produce with a set amount of inputs, these inputs being workers and capital. A higher productivity occurs when more output is produced with the same or less amount of inputs.
Labor productivity was higher for the the anniversary celebration last week because with 7 workers, the catering company managed to serve 250 meals. Meanwhile, the week before, with 1 more worker (8 in total), the company only served 200 meals.
B) What are some possible reasons for the productivity differences?
The reasons can be very varied. One common reason though is the law of diminishing marginal product. This economic law establishes that there is an optimal amount of workers to employ in an economic activity, and any amount above or below will be less productive.
In this case, the optimal amount may have been 7 workers, and adding the 8 worker could have created a productivity loss represented by the lesser production.
Assume the total cost of a college education will be $395,000 when your child enters college in 18 years. You presently have $65,000 to invest. What annual rate of interest must you earn on your investment to cover the cost of your child’s college education?
Answer:
8.87%
Explanation:
Calculation for the annual rate of interest you must earn on your investment to cover the cost of your child’s college education
Using this formula
FV = PV(1 + r)t
Based on the information we were told to calculate for annual rate of return, this means we would be Solving for r
r = (FV / PV)1 / t– 1
Where,
FV =$300,000
PV=$65,000
=1 / t =1/18 years
Let plug in the formula
r = ($300,000 / $65,000)1/18– 1
r=(4.6153846)^0.055555 -1
r=1.08867-1
r= 0.0887 *100
r=8.87%
Therefore the annual rate of interest you must earn on your investment to cover the cost of your child’s college education will be 8.87%
According to Colgate’s 2013 10-K, what factors led to lower effective non-GAAP tax rate during the year as compared to the company’s effective GAAP tax rate?
Answer:
2012 restructuring program
Venezuela devaluation charge
Business realignment and other cost saving initiatives
Charge associated with European competition law matter.
Explanation:
Colgate has been through restructuring program in 2012, which has contributed to reduced non-GAAP tax rate. There was Venezuela devaluation charge, Sale of land in Mexico and charge with European competition law matter. These all contributed to effective lower non-GAAP tax rate of the company.
26) A tenant wants to lease a building for $50,000 per year. She signs a five-year rental agreement that states that she will pay $25,000 every six months for the next five years. Draw the timeline for her rental payments, assuming she makes the first payment immediately?
Answer:
Please check the attached image for time line
Explanation:
A time orders series of event in a chronological order.
Because the tenant is paying money, it is cash outflow and thus would have a negative sign in front of it.
I hope my answer helps you
An individual has $20,000 invested in a stock with a beta of 0.4 and another $65,000 invested in a stock with a beta of 1.8. If these are the only two investments in her portfolio, what is her portfolio's beta
Answer:
Beta= 1.478
Explanation:
Giving the following information:
An individual has $20,000 invested in a stock with a beta of 0.4 and another $65,000 invested in a stock with a beta of 1.8.
To calculate the portfolio beta, we need to use the following formula:
Beta= (proportion of investment A*beta A) + (proportion of investment B*beta B)
The proportion of investment:
A= 20,000/85,000= 0.23
B= 65,000/85,000= 0.77
Beta= (0.23*0.4) + (0.77*1.8)
Beta= 1.478
A customer calls his agent on Friday after the markets have closed and tells him to sell his position in XYZ stock when the market opens on Monday. The customer is holding the XYZ shares at his home, but is leaving tomorrow on a 2 week vacation. The customer asks the broker to come over to his house tonight to pick up the securities. Under the Uniform Securities Act, the agent should:
Answer:
Explanation:
Under the Uniform Securities Act, the agent should not take custody of the securities but should have the customer send the securities directly to the brokerage firm by registered mail or delivery service. The agent should never take custody of physical security assets since many unfortunate events can occur which may result in the loss of those assets. Therefore sending it by registered mail would be the safest and fastest option will still maintaining the responsibility of those assets to the owner.
Fast Spirit Calendars imprints calendars with college names. The company has fixed expenses of $1,095,000 each month plus variable expenses of $4.00per carton of calendars. Of the variable expense, 71%is cost of goods sold, while the remaining 29% relates to variable operating expenses. The company sells each carton of calendars for $12.00.
Requirement:
1. Compute the number of cartons of calendars that Fast Spirit Calendars must sell each month to breakeven.
2. Compute the dollar amount of monthly sales Fast Spirit Calendars needs in order to earn $312,000 in operating income.
3. Prepare the company's contribution margin income statement for June for sales of 455,000 cartons of calendars.
4. What is June's margin of safety (in dollars)? What is the operating leverage factor at this level of sales?
5. By what percentage will operating income change if July's sales volume is 11% higher?
Original volume (cartons)Add: Increase in volumeNew volume (cartons)Multiplied by: Unit contribution marginNew total contribution marginLess: Fixed expensesNew operating incomevs. Operating income before change in volumeIncrease in operating incomePercentage change
Answer and Explanation:
1. The computation of the number of cartons is shown below:-
Operating income = Sales - Variable expenses - Fixed expense
The break-even sales = Fixed expenses ÷ (Selling price - Variable cost)
= $1,095,000 ÷ (12 - 4)
= $136,875
2. The computation of the dollar amount of monthly sales is shown below:-
Contribution margin ratio = Contribution ÷ Sales
= $8 ÷ 12
= 66.6666%
Target sales in dollars = (Fixed expenses + Operating income) ÷ Contribution margin ratio
= ($1,095,000 + $312,000) ÷ 66.6666%
= $2,110,500
3. The preparation of the company's contribution margin income statement for June is shown below:-
Particulars Amount
Sales (455,000 × $12) $5,460,000
Less: Variable cost of goods sold
(4 × 71% × 455,000) -$,1292,200
Gross contribution margin $4,167,800
Less: Variable operating expenses -$527,800
(4 × 29% × 455,000)
Net contribution margin $3,640,000
Less: Fixed expenses -$1,095,000
Net operating income $2,545,000
4. The computation of June's margin of safety and operating leverage factor is shown below:-
Margin of safety (in dollars) = Total sales - Break-even sales
= $5,460,000 - ($12 × 136,875)
= $3,817,500
Operating leverage factor = Contribution margin ÷ Net operating income
= $3,640,000 ÷ $2,545,000
= 1.430
4. The computation of percentage will operating income is shown below:-
If volume rises by 11%, then operating income increase by
= 11% × 1.430
= 15.73%
Particulars Amount
Original volume of cartons $455,000
Add: Increase in volume $50,050 ($455,000 × 11%)
New volume of cartons $505,050
Unit contribution margin $8
New total contribution margin $4,040,400
($505,050 × $8)
Less: Fixed expense ($1,095,000)
New operating income $2,945,400
Operating income before
change in volume $2,545,000
Increase in operating income $400,400
Percentage change 15.73%
Assume that you have a marginal tax rate of 28 percent, a state income tax rate of 4 percent, and have a city income tax rate of 1 percent. The tax for Social Security and Medicare is 7.65 percent. What would be the effective marginal tax rate on your last dollar of earnings
Answer: 40.65%
Explanation:
The Effective Marginal Tax rate is the amount of a person's additional dollar in income that is taken as taxes.
This means therefore, that all the taxes applicable to an additional dollar are added up to find the Effective Marginal Tax Rate.
= Marginal tax rate + State income tax rate + City income tax rate + Social Security and Medicare
= 28 + 4 + 1 + 7.65
= 40.65%
g Pluto Company owns 80 percent of the common stock of Star Corporation. During the year, Pluto reported sales of $1,000,000, and Star reported sales of $500,000, including sales to Pluto of $80,000. The amount of sales that should be reported in the consolidated income statement for the year is:
Answer:
The answer is $1,420,000
Explanation:
Consolidated income statement is the combination of both Pluto and Star individual income statement.
Pluto sales for the year is $1,000,000
Star reported sales $500,000
Sales from star to Pluto $80,000
The amount of sales that will be reported in the consolidated income statement for the year is therefore,
$1,000,000 + $500,000 - $80,000
=$1,420,000
Which of the following is true regarding the effect of a debtor offering to pay a different type of payment, for example, goods instead of money, on a debt for which there is not a dispute over the amount or existence of the debt, and the creditor agrees?
A. A liquidated debt is involved, and there is an accord and satisfaction.
B. A liquidated debt is involved, and there is an accord but no satisfaction.
C. A liquidated debt is involved, and there is not a satisfaction or an accord.
D. An un-liquidated debt is involved, and there is an accord and satisfaction.
E. An un-liquidated debt is involved, and there is an accord but not satisfaction.
Answer:
D. An un-liquidated debt is involved, and there is an accord and satisfaction.
Explanation:
The impact when debtor offers to pay the different type of payment like goods instead of money, non dispute debt arises when the unliquidated debt is involved that means the amount is owed as mentioned in the contract or it is under dispute
Plus it also accord and satisfaction
Therefore the correct option is d.
The interest rate on loan would be an effective 5% per semiannual, compounded monthly. What is the APY(annual percentage yield)
Answer:
The APY is 10.43%.
Explanation:
The annual percentage yield (APY) can be described as the real rate of return that is earned on investment or a saving deposit considering the impact of compounding interest. It is different from a simple interest rate that does take into account the effect of compounding interest.
APY can be calculated using the following formula:
APY = [(1 + r)^n] - 1 ............................... (1)
Where, for this question;
r = monthly interest rate = 5% / 6 = 0.83%, or 0.0083
n = Number of compounding periods per year = 2 semiannual in a year * 6 months = 12
Substituting values into equation (1), we have:
APY = [(1 + 0.0083)^12] - 1
APY = 1.1043 - 1
APY = 0.1043, or 10.43%
Therefore, the APY is 10.43%.
Your company is trying to decide which of the two following devices should be selected.
Device A: costs $1,000 but can save $300 annually
Device B: costs $1,350 but can save $300 the first year, but savings is increased $50 annually thereafter.
Both devices have 5-year useful life and no salvage value
a) Draw cash flow diagram for each option
b) If interest rate is 7%, which device should your company purchase?
Answer:
a) Find the attached jpeg file for the cash flow diagram
b) The company should purchase Device B.
Explanation:
a) Draw cash flow diagram for each option
A project cash flow diagram is a tool that is used to present a visual representation of the cost of a project and cash it is expected to generate over a specified period of time. On the diagram, x-axis represents the year, and y-axis represents cash out flows and/or inflows.
Note: See the attached jpeg for the cash flow diagram.
b) If interest rate is 7%, which device should your company purchase?
To determine this, we compare the Net Present Value (NPV) of the 2 devices.
Note: See the attached excel file for the calculation of the NPVs of the two devices.
From the attached excel file, we have:
NPV of Device A = $230
NPV of Device B = $262
Decision: Since $262 NPV of Device B is greater than the $230 NPV of Device A, the company should purchase Device B.
When the balance of an equity account, like Capital Stock, increases, it means that the account has been: Multiple Choice Deposited None of the choices are correct Credited Debited
Answer:
Credited
Explanation:
Equity Account increase on the credit side and decrease on the debit side.
So, when the account increased, we say it has been credited. This means further stock has been issued to new or existing owners.
One of the objectives of facility location analysis is to select a site with the lowest cost. Is suppliers one of the hidden costs?
Answer: No it is not.
Explanation:
The 2 main hidden costs to watch out for when selecting a site are;
Movement of Pre-production Material between locations.If the site is located such that the movement of goods to be manufactured from one site to the other would be quite expensive, this is a hidden cost that should be included in the analysis.
Becoming less responsive to the customer.This can happen if the site is located too far from where the Customers are primarily based. Should this happen, the distance will make responding to the customer harder and responsiveness will invariably become less.
It is based on perceived characteristics such as style, fashion or peer acceptance.
Answer:
Consumer buying behavior
Explanation:
Due to various factors that affect consumer's purchase decision, crucial among them is emotional factors.Thus, many consumer marketing put more efforts in creating a stimulating discretionary buying behavior through catchy and enticing advertisement to create and increase demand.
Hence, considering that often times consumer goods are discretionary products people may want but don’t necessarily need, such as entertainment services and vacation travel, it can be concluded that CONSUMER BUYING BEHAVIOR is based on perceived characteristics such as style, fashion or peer acceptance.
QS 10-9 Bond retirement by call option LO P4 On July 1, 2017, Advocate Company exercises an $6,400 call option (plus par value) on its outstanding bonds that have a carrying value of $329,600 and par value of $320,000. The company exercises the call option after the semiannual interest is paid on June 30, 2017. Record the entry to retire the bonds.
Answer: The answer has been attached.
Explanation:
The journal is an accounting book that is used to record the transactions that take place in a business.
The entry to retire the bonds have been recorded. It should be noted that the bonds payable and the premium on
the bonds payable are debited while
the gain on the retirement of bonds and cash was credited.
Kindly, check attached file.
For each part below, determine whether the following actions will increase or decrease productivity, and name the component of productivity that each affects.
Impact on Component of
productivity productivity
a. The local government builds a new school.
b. Teachers in the new school hold classes for young students.
c. A manufacturer installs robots on its assembly line.
d. A research team designs a more efficient system of irrigation.
e. A soft drink company discovers a new source of underground water that can be used to make its products.
f. A professor writes a new and improved economics textbook.
g. A large number of people have less access to health care.
h. A worker receives on-the-job training to be a mechanic.
The impact on productivity options are: increase or decrease
The component of productivity options are: Technology, Natural Resources, Human Capital, Physical Capital
Answer:
a - Increase productivity by adding physical capital to the economy in the present and increasing the human capital in the future.
b - Increase the productivity of the economy by adding more jobs and stimulate the education by increasing the human capital of the future.
c - Increase the productivity of the economy by adding physical capital that is basically technology.
d - Increase the productivity of the economy by adding technology.
e - Increase the productivity by adding new natural resources to the production.
f - Increase the productivity by adding education and increasing the human capital of the future.
g - Decrease the productivity by affecting directly to the human capital and its ability to produce regarding the fact that is the most important factor of production.
h - Increase the productivity by adding more education to the workers and therefore increasing the human capital capacities.
Explanation:
To begin with, all of the actions, except one, will increase the productivity of the economy due to the fact that all of them focus on a way to increase it by adding more value to the workforce or adding more physical capital to the production process of the companies. There is only one action that will decrease the productivity and it does it by affecting directly to the workforce.
What do economists call the period when prices are rising even through the
quantity of goods and services remains constant?
A. Stagnation
B. Contraction
C. Disinflation
D. Inflation
Answer:
D. Inflation
Explanation:
Inflation-a general increase in prices and fall in the purchasing value of money
The situation when prices are rising even through the quantity of goods and services remains constant, is known as inflation. Thus, the correct option is D). Inflation.
What does the term inflation mean?In economics, the term inflation generally refers to the general increase in the prices of goods and services in an economy. It is the rate of increase in prices over a given period of time.
When the general price level rise in an economy, then the particular and each unit of currency buys fewer goods and services that directly means the inflation corresponds to a reduction in the purchasing power of money.
Thus, it can be said the period when prices are rising even through the quantity of goods and services remains constant, the economists call that period inflation.
Learn more about inflation here:-
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Phoenix Company can invest in each of three cheese-making projects: C1, C2, and C3. Each project requires an initial investment of $252,000 and would yield the following annual cash flows. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Negative amounts should be indicated by a minus sign.)
C1 C2 C3
Year 1 $20,000 $104,000 $188,000
Year 2 116,000 104,000 68,000
Year 3 176,000 104,000 56,000
Totals $312,000 $312,000 $312,000
Assuming that the company requires a 10% return from its investments, use net present value to determine which projects, if any, should be acquired. (Round your answers to the nearest whole dollar.)
Answer:
C3 should be chosen
Explanation:
Net present value is the present value of after tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator:
For project C1:
Cash flow in year 0 = $-252,000
Cash flow in year 1 =$20,000
Cash flow in year 2 =116,000
Cash flow in year 3 =176,000
I = 10%
NPV = $5,719
For project C2
Cash flow in year 0 = $-252,000
Cash flow in year 1 = $104,000
Cash flow in year 2 = $104,000
Cash flow in year 3 = $104,000
I = 10%
NPV = $6,633
For project C3
Cash flow in year 0 = $-252,000
Cash flow in year 1 = $188,000
Cash flow in year 2 =68,000
Cash flow in year 3 =56,000
I = 10%
NPV = $17,181
C3 should he accepted because it has the highest NPV
To find the NPV using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
I hope my answer helps you
if General-Mills significantly raises the price of Professor Groth's favorite cereal, Cinnamon Toast Crunch, Professor Groth will probably buy a different cereal, since there are many different breakfast cereals on the market. Which concept does this example illustrate?
Answer:
The substitution effect
Explanation:
Substitution effect occurs when consumers change the products they buy when prices increase. Substitutes are products that can be used interchangeably.
So when the price of a particular good increases consumers tend to look for an alternative (substitute) that will serve the same purpose.
In the given scenario Professor Groth has a favourite cereal, Cinnamon Toast Crunch.
As the price of this cereal increases the Professor is looking at replacing it with other cereals. This is the substitution effect.
Sam owns 70 percent of the stock of Club Corporation. Unrelated individuals own the remaining 30 percent. For a stock redemption of Sam's stock to be treated as an exchange under the "substantially disproportionate" test, what percentage of Club stock must Sam own after the redemption
Answer: C.Any percentage less than 50 percent
Explanation:
In relation to the law on meeting the criteria to be treated as an exchange under the "substantially disproportionate" test as stipulated by U.S. Code § 302.Distributions in redemption of stock, Sam must own the lesser of 2 options of Club Corporation stock;
1. Less than 50% of the stock after the redemption
2. Less than 80% of Sam's previous ownership percentage
= 80% * 70%
= 56%
The lesser option is that of owning less than 50% so Sam must own less than 50% of stock after the redemption to meet the requirement to be treated as an exchange under the "substantially disproportionate" test.
If P represents the price of goods and services measured in money, then 1/P is the value of money measured in terms of goods and services True False
Answer:
The answer is True
Explanation:
There is an inverse relationship between the price level and value of money (also known as purchasing power). An increase in the price level is the same as an decrease in the value of money.
As the price level decreases money is able to buy more goods and services and as the price level increases, money is able to buy less goods and services. inflation decrease the value of money or consumers' purchasing power.
Every product has a life cycle. A fad product such as a fidget spinner, can have a very short cycle,
whereas a popular automobile, such as the Honda Civic, can have a very long life cycle. Explain the
characteristics of the growth and decline stages of the life cycle and related marketing objectives
and strategies.
Answer:
A product's life cycle is generally divided into four stages:
Introduction: requires a very large marketing effort (a lot of money invested), sales are generally low but the goal is to establish the product in the customers' minds. Growth: Sales start to pick up as customers accept the new product or service, and new competitors might appear. Companies have to try to differentiate their product from the competition. Maturity: sales reach their highest peak. Many companies extend the growth stage by making small changes and different versions of the product or service. Competition is generally very intense at this stage and since the market growth stalls, each company tries to win the market share of other companies. Decline: sales start to decline since the product or service might become obsolete. Competition starts to shrink since companies start to exit the market. Companies might extend the decline stage by adding new uses for their products or cutting prices.A stock just paid an annual dividend of $0.40 per share. The firm expects to increase the dividend by 20 percent per year for the next four years and 3 percent per year thereafter. The discount rate is 11 percent. Which one of these is correct regarding the two-stage growth formula?
Answer:
12.78
Explanation:
Two stage dividend growth model enables us to identify dividend value by incorporating the effect of multiple growth rates. This model assumes that dividend will pass out through 2 stages of growth. In first stage the dividend grows at a constant rate to a specified time then dividend grows at a further rate.
= Do (1 + g) + D1 (1 +g) + D2 (1 +g) + D3 (1 +g) + D3 * (1 +g2) / (r - g2)
0.4 * 1.2 + 0.48 * 1.2 + 0.6 * 1.2 + 0.7 *1.2 + 0.83 * 1.03 / 11 - 3
= 12.78.
Schwiesow Corporation has provided the following information:_________. Cost per Unit Cost per PeriodDirect materials $ 7.05 Direct labor $ 3.50 Variable manufacturing overhead $ 1.65 Fixed manufacturing overhead $ 11,000Sales commissions $ 1.00 Variable administrative expense $ 0.40 Fixed selling and administrative expense $ 5,500For financial reporting purposes, the total amount of product costs incurred to make 5,000 units is closest to:A. $72,000B. $61,000C. $11,000D. $77,000
Answer:
Total product cost= $72,000
Explanation:
Giving the following information:
Direct materials $7.05
Direct labor $3.50
Variable manufacturing overhead $1.65
Total unitary variable cost= $12.2
Fixed manufacturing overhead $11,000
The product costs are the sum of direct material, direct labor, and total manufacturing overhead:
Total product cost= 5,000*12.2 + 11,000
Total product cost= $72,000
A manager who possesses the skills to account for every task and resource in his department excels at which of the four management functions?
Multiple Choice Question
Answer: Controlling
Explanation:
Identified by Henry Fayol, being able to be in Control is considered a very useful management function because it involves being able to account for the resources that a manager has under them due to the constant monitoring of said resources including employee and work resources.
The end goal of the Controlling function is to ensure that the resources are being put towards the ultimate goals that the business has set forth and to make any corrections when needed.
The Polaris Company uses a job-Exercise 3-5 Journal Entries and T-accounts [LO3-1, LO3-2] The Polaris Company uses a job-order costing system. The following transactions occurred in October:order costing system. The following transactions occurred in October:
a. Raw materials purchased on account, $210,000.
b. Raw materials used in production, $189,000 ($151,200 direct materials and $37,800 indirect materials).
c. Accrued direct labor cost of $49,000 and indirect labor cost of $20,000.
d. Depreciation recorded on factory equipment, $106,000.
e. Other manufacturing overhead costs accrued during October, $130,000.
f. The company applies manufacturing overhead cost to production using a predetermined rate of $8 per machine-hour. A total of 76,400 machine-hours were used in October.
g. Jobs costing $511,000 according to their job cost sheets were completed during October and transferred to Finished Goods.
h. Jobs that had cost $452,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 34% above cost.
Required:
a. Prepare journal entries to record the transactions given above.
b. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $36,000.
Answer:
Required a
a.
Raw Materials $210,000 (debit)
Account Payable $210,000 (credit)
b.
Work In Process : Direct Materials $151,200 (debit)
Work In Process : Indirect Materials $37,800 (credit)
Raw Materials $189,000 (credit)
c.
Work In Process : Direct Labor $49,000 (debit)
Work In Process : Indirect Labor $20,000 (credit)
Salaries Payable $69,000 (credit)
d.
Work In Process : Depreciation $106,000 (debit)
Accumulated Depreciation $106,000(credit)
e.
Manufacturing Overheads $130,000 (debit)
Accounts Payable $130,000 (credit)
f.
Work In Process $611,200 (debit)
Manufacturing Overheads $611,200 (credit)
g.
Finished Goods Inventory $511,000 (debit)
Work In Process $511,000 (credit)
h.
Accounts Receivable $605,680 (debit)
Cost of Goods Sold $452,000 (debit)
Sales Revenue $605,680 (credit)
Finished Goods Inventory $452,000 (credit)
Required b.
Manufacturing Overhead T- Account
Debit :
Indirect Materials $37,800
Indirect Labor $20,000
Depreciation $106,000
Accounts Payable $130,000
Over-Applied $317,400
Totals $611,200
Credit :
Work In Process $611,200
Totals $611,200
Totals
Work in Process T- Account
Debit :
Opening Balance $36,000
Direct Materials $151,200
Direct Labor $49,000
Manufacturing Overheads $611,200
Totals $847,400
Credit :
Finished Goods Inventory $511,000
Closing Balance $336,400
Totals $847,400
Explanation:
Manufacturing Cost Accumulate in the Work In Process Account.
When Goods are completed the cost is De-recognized from Work In Process Account to Finished Goods Inventory Account.
It is from this Finished Goods Inventory Account that Cost of Sales for Goods Sold are determined.
You have $6,000 and will invest the money at an interest rate of .23 percent per month until the account is worth $11,200. How many years do you have to wait until you reach your target account value
Answer:
22.94 years
Explanation:
The formula to calculate the number of periods of time is:
n = ln(FV / PV)/ln(1+r), where
n= number of periods of time
FV= Future value= $11,200
PV= Present value= $6,000
r= interest rate= 0.0023*12 (to calculate the rate per year)= 0.0276
n=ln(11,200/6,000)/ln(1+0.0276)
n=0.624/0.0272
n=22.94
According to this, you have to wait 22.94 years until you reach your target account value.
When or how does a contract become a legal document and is binding on all parties involved?
ZNet co. is a web based retail company. The company reports the following for the past year. The company's CEO believes that sales for next year will increase by 10% and both profit margin and the level of average invested assets will be the same as for the past year
1. Compute return on investment for 20172. Compute profit margin for 20173. If the CEO's forecast is correct, what will return on investment equal for 2018?4. If the CEO's forecast is correct, what will investment turnover equal for 2018?
Answer:
1. 17%
2. 42.5%
3. $2,748,900
4. 44%
Explanation:
1. Return on Investment for 2017
= [tex]\frac{Operating Income}{Average Invested Assets}[/tex]
= [tex]\frac{2,499,000}{14,700,000}[/tex]
= 17%
2. Profit Margin 2017
= [tex]\frac{Operating Income}{Sales}[/tex]
= [tex]\frac{2,499,000}{5,880,000}[/tex]
= 42.50%
3. Should the sales increase by 10% in 2018 then the new sales figure will be;
= $5,880,000 + ($5,880,000 *10%)
= $6,468,000
Profit = Sales * Profit Margin
= 6,468,000 * 42.5%
= $2,748,900
Return on Investment for 2018
= [tex]\frac{Operating Income}{Average Invested Assets}[/tex]
= [tex]\frac{2,748,900}{14,700,000}[/tex]
= 18.7%
4. Investment turnover equal for 2018
= [tex]\frac{ Sales}{Average Invested Assets}[/tex]
= [tex]\frac{6,468,000}{14,700,000}[/tex]
= 44%
A corporation has operating income of $75,000. What is its taxable income if it receives a $20,000 dividend from another corporation in which it has the following ownership?
a. 10% is:
b. 65% is:
c. 90% is:
Answer:
Taxable income is $ 85000, $82000, and $75000
Explanation:
Given operating income = $75000
The dividend received from other corporations = $20000
Dividend received is taxable as, if the percentage of ownership is less than 20 percent then the deduction is 50 percent. If between 20 percent to 80 percent then 65 percent deduction. If more than 80 percent then 100 percent deduction.
a.10 percent ownership.
Taxable income = 75000 + 20000(1 – 50%) = 85000
b.65 percent ownership.
Taxable income = 75000 + 20000(1 – 65%) = 82000
c.90 percent ownership.
Taxable income = 75000 + 20000(1 – 100%) = 75000