Answer:
$395,000
Explanation:
A company has a beginning balance of $400,000
The company has a net income of $50,000
The company also declared and paid a cash dividend of $55,000
Therefore, the ending balance in the retained earnings can be calculated as follows
Beginning balance+ net income -Dividend paid
= $400,000+$50,000-$55,000
= $395,000
Hence the ending balance in the retained earnings is $395,000
At a computer-consulting firm, the number of new clients that they have obtained each month has ranged from 0 to 6. the number of new clients has the probability distribution that is shown below. determine the expected number of new clients per month. # of clients probability 0 0.05 1 0.10 2 0.15 3 0.35 4 0.20 5 0.10 6 0.05
Answer:
3.05
Explanation:
The computer consulting firm is analyzing the performance of its company based on new clients each month. The data is given for six months and the probability distribution for number of new clients per month that the company has gained. The probability sum equals to 1 for the six months. The variance distribution is the squared value of each the difference by the mean. values of probability are squared and then their sum is taken to calculate variance deviation.
For each of the following scenarios, determine if there is an increase or a decrease in supply for the good in italics.
a. The price of silver increases.
b. Growers of tomatoes experience an unusually good growing season.
c. New medical evidence reports that consumption of organic products reduces the incidence of cancer.
d. The wages of low-skill workers, a resource used to help produce clothing, increase.
Answer:
a. The price of silver increases. - Supply Increase
As the price of silver increases, it will make silver more profitable therefore producers will increase production to take advantage of the higher prices to make more profit in total.
b. Growers of tomatoes experience an unusually good growing season. - Supply Increase
If growers of tomatoes experience a good season, it means that there will be more tomatoes to harvest. This will increase the supply of tomatoes.
c. New medical evidence reports that consumption of organic products reduces the incidence of cancer. - Supply Increase.
Supply of organic products will increase as a result of an anticipated and an actual increase in the demand for organic products as more people will buy them to avoid getting cancer.
d. The wages of low-skill workers, a resource used to help produce clothing, increase. - Supply Decrease
When inputs into the production process increase, producers will tend to cut down production to enable them save cost and maintain profitability. If the wages of low-skill workers increase, it will mean that an input is now more expensive so production of clothing will reduce thereby reducing its supply.
Identifying the median voter
Sam, Andrew, and Darnell are roommates who are trying to decide how much money to spend on heat in their apartment each month.
A. Andrew would ideally contribute $15. However, he would prefer contributing $55 to contributing $0 because he does not want to freeze.
B. Sam hates being cold. Therefore, he would ideally like each to contribute $55 to heat, and his utility declines at a constant rate as the roommates decrease the amount of money they spend.
C. Darnell does not care about heat and is on a tight budget. Therefore, he prefers to contribute no money to heat, and his utility declines at a constant rate as the roommates increase the amount of money they spend.
Suppose the three roommates vote on spending either so, $15, or $55 on heat using the Borda count system of voting. That is, each roommate awards three points to his first choice, two points to his second choice, and one point to his third choice
Answer:
The median voter here is $55 based on the allocated points in order of preference.
This is the vote that avoids the two extremes of 5 and 7
Explanation:
Voting with the Borda count system of voting:
$0 $15 $55
Andrew 1 3 2
Sam 1 2 3
Darnell 3 2 1
Total points 5 7 6
The median voter is the selection that is based on choosing the median in a spectrum, so that the extremes are avoided. In this case, the extremes win points 5 and 4, with the median as 6.
The voting was done by using the Borda count system of voting. With this system, points are allocated based on personal preferences. The preference that is favored most is given the highest point, and so on. This implies that the preference that is least favoured is given the lowest point.
Sales revenue for a sporting goods store amounted to $528,000 for the current period. All sales are on account and are subject to a sales tax of 11?%.
Which of the following would be included in the journal entry to record the sales? transaction?
A. A debit to Accounts Receivable for $ 586,080.
B. A credit to Accounts Receivable for $528,000.
C. A debit to Sales Tax Payable for $58,080.
D. A debit to Sales Revenue for $ 528,000.
Answer:
The answer is A. A debit to Accounts Receivable for $ 586,080
Explanation:
Sales tax is an additional amount of money one pays based on a percentage of the selling price of goods and services that are purchased.
The sales tax amount will be added to sales revenue to form the total bill.
Sales revenue ----------------- $528,00
Sales tax -------------------------- 11%
Sales tax amount
$528,00 x 0.11
= $58,080
Therefore, total bill is:
$528,00 + $58,080
=$586,080.
Debit increases an asset(accounts receivable) while credit decreases an asset(accounts receivable).
Since the accounts receivable will increase, it will be on debit side.
Which of the following is a reason cash flows may differ from accounting income? The total number of units sold will be different for accounting income and cash flows. Depreciation is a tax-deductible expense but is not a cash outlay. Which of the following best describes incremental cash flows? They are the difference between the cash flows the firm will have if it accepts the project versus the cash flows it will have if it rejects the project. Incremental cash flows are not relevant because they will occur whether or not the project is accepted.
Answer:
1. Depreciation is a tax-deductible expense but is not a cash outlay.
2. They are the difference between the cash flows the firm will have if it accepts the project versus the cash flows it will have if it rejects the project.
Explanation:
1. Depreciation as a non-cash outlay is removed from the Net Income when it is calculated for tax purposes. However, when calculating the Net Cash-flow, it is added back because the Cash-flow statement deals with how much actual money the business has and because depreciation does not actually take any money, it would need to be added back in the cash-flows as opposed to Accounting income where it is removed.
2. Incremental Cash-flows get their name from the fact that they will add income to a firm. This cash-flow comes if the company accepts a project as opposed to rejecting it and the cash they get from this increases their cash-flow making it incremental.
Smiling Elephant, Inc., has an issue of preferred stock outstanding that pays a $6.10 dividend every year, in perpetuity. If this issue currently sells for $80.65 per share, what is the required return?
Answer:
7.56%
Explanation:
Calculation for the required return for Smiling Elephant
Using this formula
Required return =D/P0
Where,
D=$6.10
P0=$80.65
Let plug in the formula
Required return =$6.10/$80.65
Required return =0.0756×100
Required return =7.56%
Therefore the Required return for Smiling Elephant Inc will be 7.56%
A company’s perpetual preferred stock pays an annual dividend of $2.10 per share. The preferred stock’s market value is $36.04 per share and the company’s tax rate is 30%. If the flotation costs for preferred stock are 6%, what is the company’s annual cost of new preferred stock financing? Question 4 options: 1) 5.87% 2) 7.25% 3) 6.54% 4) 6.20% 5) 5.41%
Answer:
6.20%
Explanation:
The company’s annual cost of new preferred stock financing is the annual dividend payable on the preferred stock divided by the net price of the stock
annual dividend is $2.10
net price=market price*(1-flotation cost %)
net price=$36.04 *(1-6%)
net price=$ 33.88
company’s annual cost of new preferred stock financing=$2.10/$33.88
company’s annual cost of new preferred stock financing==6.20%
Tucker Company makes chairs. Tucker has the following production budget for January - March.
January February March
Units Produced 9666 11971 9743
Each chair produced uses 4 board feet of wood. Management wants ending inventory levels of raw materials to equal 20% gf the production needs (in wood) for the next month.
How many board feet of wood does Tucker need to purchase in February? Round your answer to the nearest whole number.
Answer: 46,101 board feet of wood
Explanation:
Purchases can be calculated using the formula;
Purchases = Total Production Needs + Ending Inventory - Beginning Inventory
Total Production Needs
= Units produced * boards required per unit
= 11,971 * 4
= 47,884 units needed.
Ending Inventory.
This should be 20% of production needs for the next month
= 20% * (9,743 * 4)
= 7,794 units
Beginning Inventory
This will be the ending inventory of January. The ending inventory of January is 20% of February needs.
= 20% * 47,884
= 9,577 units.
Purchases for February = 47,884 + 7,794 - 9,577
= 46,101 board feet of wood
Capital budgeting is the process of planning and controlling investments in assets that are expected to produce cash flows for one year or less. This statement is: False True
Answer:
false
Explanation:
Capital budgeting is the process taken to evaluate and determine the profitability of an investment. capital budgeting can be done for projects that have cash flows of more than one year
capital budgeting methods include :
Net present value
internal rate of return
accounting rate of return
payback period
Alpha can produce either 18 oranges or 9 apples an hour, while Beta can produce either 16 oranges or 4 apples an hour. If the terms of trade are established as 1 apple for 4 oranges, then: Group of answer choices
Answer:
But if they both work together in a way that Alpha produces only apples Beta produces only oranges then they would benefit from trade.
Explanation:
Then alpha should produce only 9 apples an hour, while Beta can produce either 16 oranges or 4 apples an hour.
If Alpha produces oranges there will be a loss because he produces less oranges. But Beta 's choice will not affect the trade.
There are no incentives for Beta to specialize and trade with Alpha.
But if they both work together in a way that Alpha produces only apples Beta produces only oranges then they would benefit from trade.
With an increase in product advertising of $50 million you expect to increase sales by 10,000 units. If unit grow margin is $4,800, will the additional advertising increase product contribution?
Answer:
Income will decrease by $2,000,000.
Explanation:
Giving the following information:
Advertising increase= $50,000,000
Units increase= 10,000 units
Unit contribution margin= $4,800
To calculate the total effect on income, we need to use the following formula:
Effect on income= total contribution margin - increase in fixed costs
Effect on income= 10,000*4,800 - 50,000,000
Effect on income= $2,000,000 decrease
Income will decrease by $2,000,000.
Movements in individual stock prices tend to be Group of answer choices positively correlated positively correlated with inflation negatively correlated positively correlated with changes in interest rates
Answer:
Option A (positively correlated) is the correct choice.
Explanation:
A stock for whom the valuation hasn't adjusted from over timeframe would have a slight Weighted Analysis and perhaps a product where price has plummeted and over timeframe would have a measured Analysis loss.The share price would typically vary considerably as shareholders purchase securities during the business day. Because more customers look to purchase something and decrease as companies began consuming more than just the stock, the stock value will change.The other three choices are not related to the given situation. So that Option A would be the correct one.
To create the proper style for an argumentative essay, a writer should
add personal statements.
O include vague language.
O incorporate slang words.
O provide clear statements.
Answer:
Provide clear statements
The government can pay for projects to create work
Explanation:
To create the proper style for an argumentative essay, a writer should
provide clear statements.
What is argumentative essay?An argumentative essay can be defined as a writing essay in which the writer is meant include evidence as well as detailed fact that will help to backup the argument.
When writing an argumentative essay it is important that the writer provide clear statement to as well focus on the evidence.
Therefore to create the proper style for an argumentative essay, a writer should provide clear statements.
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Smith Services, Inc., was a trucking company established in 2000 and owned by Tony Smith as the sole shareholder. Smith Services, Inc., had an account with Laker Express, a fuel provider, and often would charge fuel purchases for the company trucks to that account. Smith’s employees would fuel their vehicles and sign the account slip with a notation that the purchase was for Smith Services, Inc. Laker Express would bill Smith Services regularly for the charges on the account. After several months of low business, Smith Services ceased doing business and was dissolved in 2013, with its assets being distributed to creditors. Laker Express only recovered a small part of the amount owed by Smith Services, Inc. Tony Smith then opened up a new trucking service business as a sole proprietor. Laker Express sought to recover Smith Services' unpaid fuel charges, which amounted to about $35,000, from Smith. He argued that he was not personally liable for a corporate debt. Should a court hold Tony Smith personally liable?
Assume that in addition to the facts given, that evidence was presented to the court that Smith, his wife, and their kids regularly used the account at Laker Express to fill up their personal vehicles. Does this change the outcome?
1. Given this new evidence, a court likely (would, would not) find that Laker Express was tricked or misled into dealing with the corporation rather than the individual.
2. The court likely (would, would not) find that the corporation was undercapitalized.
3. The court likely (would, would not) find that the corporation was created to evade an existing legal obligation.
4. The court likely (would, would not) find that the corporation failed to comply with the required corporate formalities and meetings.
5. The court likely (would, would not) find that the personal and corporate interests were commingled to such an extent that the corporation had no separate identity with regard to the relationship with Laker Express.
6. Because of these findings, the court likely (would, would not) pierce the corporate veil and hold Tony Smith personally responsible for the debt to Laker Express.
Answer:
Smith Services, Inc. and Laker Express
a. A court should not hold Tony Smith personally liable for the corporate debt of Smith Services, Inc to the tune of $35,000 representing unpaid fuel charges to Laker Express. This decision is given based on the facts presented in the case, so far.
b. Assuming that in addition to the given facts, evidence was presented to the court that Smith, his wife, and their kids regularly used the account at Laker Express to fill up their personal vehicles, then this evidence changes the outcome. Smith Service, Inc. has met one of the conditions for piercing the corporate veil. This condition is commingling the corporate account with personal expenses and use of corporate assets. This may also question if proper accounting records were being kept at the Smith Services.
c. Therefore,
1. Given this new evidence, a court likely (would, would not) find that Laker Express was tricked or misled into dealing with the corporation rather than the individual.
2. The court likely (would, would not) find that the corporation was undercapitalized.
3. The court likely (would, would not) find that the corporation was created to evade an existing legal obligation.
4. The court likely (would, would not) find that the corporation failed to comply with the required corporate formalities and meetings.
5. The court likely (would, would not) find that the personal and corporate interests were commingled to such an extent that the corporation had no separate identity with regard to the relationship with Laker Express.
6. Because of these findings, the court likely (would, would not) pierce the corporate veil and hold Tony Smith personally responsible for the debt to Laker Express.
Explanation:
To protect the legal status of corporations like Smith Services Inc. as limited liability entities, State courts reluctantly pierce the corporate veil, unless the requirements, which vary from state to state, are met. If Tony Smith does not the court to pierce the corporate veil of Smith Services, Inc., his former company should have used corporate assets only for corporate purposes. Based on the unpaid fuel charges, Tony Smith did not maintain the separation of ownership from his Smith Services, Inc. since he, his wife, their kids, and apparently the employees fuelled their personal cars on fuel charge to Laker Express for Smith Services, Inc. to offset.
1. Given this new evidence, a court would likely find that Laker Express was tricked or misled into dealing with the corporation rather than the individual.
2. The court would not likely find that the corporation was undercapitalized.
3. The court would not likely find that the corporation was created to evade an existing legal obligation.
4. The court likely would not find that the corporation failed to comply with the required corporate formalities and meetings.
5. The court likely would find that the personal and corporate interests were commingled to such an extent that the corporation had no separate identity with regard to the relationship with Laker Express.
6. Because of these findings, the court likely would pierce the corporate veil and hold Tony Smith personally responsible for the debt to Laker Express.
According to the case in hand, Tony Smith, the sole owner of Smith Services, a trucking company was accused of misappropriation of fuel for several years, up to the tune of $35, 000 which may or may not be the reason why the company went bankrupt.
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Journalizing issuance of stock—at par and at a premium
Colorado Corporation has two classes of stock: common, $3 par value; and preferred $30 par value.
Requirements
Journalize Colorado’s issuance of 4,500 shares of common stock for $6 per share.
Journalize Colorado’s issuance of 4,500 shares of preferred stock for a total of $135,000.
Answer:
a.
Cash 27000 Dr
Common Stock 13500 Cr
Paid in capital in excess of par-Common stock 13500 Cr
b.
Cash 135000 Dr
Preferred Stock 135000 Cr
Explanation:
a.
When we issue stock at premium, we always record the amount received from such issuance of stock at full. So, the cash account will be debited for 4500 * 6 = 27000
However, we record the common stock issued at par value and the remaining is credited under the reserve account which is Paid in capital in excess of par.
Thus the common stock will be credited by its par value of 4500 * 3 = 13500 and the remaining 4500 * 3 will be credited to the Paid in Capital account.
b.
The par value of the preferred stock is 4500 * 30 = 135000
Thus the preferred stock is issued at par and we simply debit the cash received from the issue and credit the preferred stock.
From past records it is known that 10% of items from a production line are defective. If two items are selected at random, what is the probability that only one is defective?
Answer:
0.2
Explanation:
The Probability distribution is the function which describes the likelihood of possible values assuming a random variable. The 10% of the items from the production line are assumed to be defective. There is a sample selection of 2 items. The probability that one of the item among the selected sample of two items is found defective is 0.2 (2 items sample *10%)
Western Electric has 26,000 shares of common stock outstanding at a price per share of $67 and a rate of return of 13.60 percent. The firm has 6,700 shares of 6.60 percent preferred stock outstanding at a price of $89.00 per share. The preferred stock has a par value of $100. The outstanding debt has a total face value of $368,000 and currently sells for 105 percent of face. The yield to maturity on the debt is 7.72 percent. What is the firm's weighted average cost of capital if the tax rate is 35 percent?
Answer:
Weighted average cost of capital= 11.03%
Explanation:
The weighted average cost of capital (WACC) is the average cost of all the various sources of long-term finance used by a business weighted according to the proportion which each source of finance bears to the the entire pool of fund.
To calculate the weighted average cost of capital, follow the steps below:
Step 1: Calculate cost of individual source of finance:
Cost of Equity= 13.6%
After-tax cost of debt:
= (1- T) × before-tax cost of debt
= 7.72%× (1-0.35)= 5.018 %
Cost of preferred stock costs
= Div/Price × 100 = (6.60%× 100)/89× 100 =7.42%
Step 2 : Market value of all the sources of funds
Equity = $67×26,000 =1,742,000
Preferred stock = 89.00 × 6,700 = $596,300
Debt- 105/100 × 368,000 = $386,400
Step 3; Work out weighted average cost of capital (WACC)
Source Cost Market value Cost × Market value a b c b× c
Equity 13.6% $1,742,000 236,912
Preferred stock 7.42% $596,300 = 44,245.46
Debt 5.018 % 386400 = 19,389.55
Total 2,724,700 300,547.01
WACC = (300,547.01/ 2,724,700) × 100 = 11.03%
Weighted average cost of capital= 11.03%
Steve Madison needs $353,100 in 10 years.How much must he invest at the end of each year, at 9% interest, to meet his needs?
Answer:
$23,241.07
Explanation:
To determine the annual annuity, this formula would be used
PV = FV / annuity factor
Annuity factor = {[(1+r)^n] - 1} / r = (1.09^10 - 1 ) / 0.09 = 15.192930
$353,100 / 15.192930 = $23,241.07
Massena Corporation reported the following data for the month of February:
Inventories: Beginning Ending
Raw materials (Direct and Indirect) $40000 $24000
Work in process $23000 $17000
Finished goods $50000 $72000
Additional information:
Raw materials purchases $63000
Direct labor cost $73700
Manufacturing overhead $55000
cost actually incurred
Raw materials included in
manufacturing overhead costs
incurred as indirect materials $5000
Manufacturing overhead cost
applied to Work in Process $48000
The adjusted cost of goods sold that appears on the income statement for February is:____
$=
Answer:
$186,700
Explanation:
The computation of adjusted cost of goods sold is shown below:-
Before that we need to do the following calculations
Raw material consumed = Beginning raw material + Raw material purchases - Ending raw materials - Raw materials included in manufacturing overhead costs as indirect materials
= $40,000 + $63,000 - $24,000 - $5,000
= $74,000
Total manufacturing cost = Beginning work in progress + Raw material consumed + Direct labor cost + Manufacturing overhead cost - Ending work in progress
= $23,000 + $74,000 + $73,700 + $48,000 - $17,000
= $201,700
Unadjusted Cost of goods sold = Raw materials + Total manufacturing cost - Ending finished goods
= $50,000 + $201,700 - $72,000
= $179,700
Adjusted COGS = Unadjusted Cost of goods sold + Underapplied overhead
= $179,700 + ($55,000 - $48,000)
= $179,700 + $7,000
= $186,700
What must be the price of a $ 2 comma 000 bond with a 5.8% coupon rate, annual coupons, and 30 years to maturity if YTM is 10.1 % APR?
Answer:
Price of bond= $1,196
Explanation:
The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV).
Value of Bond = PV of interest + PV of RV
The value of bond would be worked out as follows:
Step 1
Calculate the PV of interest payments
Annual interest payment
= 5.8% × 2,000× = 116
PV of interest payment
A ×(1- (1+r)^(-n))/r
A- 116
r- annual yield 5.8%
n = 30
= 116 × (1-(1.101)^(-30)/0.101
= 1084.465
Step 2
PV of redemption Value
PV = $2000 × (1.101)^(-30)
= 111.53
Step 3
Price of bond
= 111.53 + 1084.465159 = 1195.99
Price of bond= $1,196
According to the adaptive expectations theory, you are likely to underestimate inflation when the price level is increasing at a_____________ rate and to overestimate inflation when price level is increasing at a___________rate.
a. Increasing
b. Decreasing
c. Constant
Answer: increasing
Explanation:
Adaptive expectations hypothesis is a theory which states that economic agents such as the individuals, firms and the government will look at past events and experiences to make adjustments on future expectations.
According to the theory, one is likely to underestimate inflation when the price level is increasing at an increasing rate and to overestimate inflation when price level is increasing at an increasing rate.
Q
In the Metropolis forecast example, we are using cash as a plug number. To keep the examis
simple, we assume that the cash is not sitting in an interest-bearing bank account. Imagine the
cash were in an interest-bearing account, meaning the company would earn interest revenue
based on the cash balance. How would this affect your forecast and forecasting process?
Answer:
Consider average cash balance that was at the end of previous month and estimate the current month average cash balance and add or less any major increment that makes the forecasting realistic.Use excel or other softwares for forecasting purposes as it automatically adjusts the worksheet if corrections or additions are included in the computation.Explanation:
The interest earned would be calculated at the end of every day on the cash balance that the company holds in the interest-bearing bank account.
The cash balance would be adjusted to reflect realistic assumptions were made because unrealistic assumptions makes the forecasting unreasonable and meaningless. The first step is to take the previous month end average cash balance and add in it the current month average balance. This will give us the current month cash balance that will be based on realistic assumptions. Use the excel sheets to take affects of estimated cash and other factors that will change due to the change in the cash balances. Excel will take account of all the factors adjusted in the forecasting sheet and adjust these factor's effects within seconds.
You are thinking of building a new machine that will save you $ 4 comma 000$4,000 in the first year. The machine will then begin to wear out so that the savings decline at a rate of 1 %1% per year forever. What is the present value of the savings if the interest rate is 9 %9% per year?
Answer:
The present value of the savings=$37,064.22
Explanation:
The present value of the savings is the amount that it worths today, this would be done in two stages;
The first stage is to determined the present of the first cash savings as follows:
PV of the first payment = 4,000 × (1.09)^(-1)=3,669.72
Second step is to determine the present value of the declining perpetuity
PV of declining perpetuity. A perpetuity is the series of cash flow occurring for the foreseeable future of years.
A- 4,000, g-negative growth rate = 1%,
interest rate = 9%
PV in year 1 = 4,000× (1-0.09)/(0.09+0.01)
= 36,400
PV in year 0 = 36,400 × (1.09)^(-1) = 33,394.49
The present value of the savings = 33,394.49 + 3,669.72= 37,064.22
The present value of the savings=$37,064.22
"Which of the following statements are TRUE regarding the rights agent? I The rights agent usually handles the mechanics of a rights offering II The rights agent is usually the existing transfer agent of the issuer III The rights agent issues the additional shares upon presentation of the rights certificates with payment"
Answer:
I, II, and III
I The rights agent usually handles the mechanics of a rights offering
II The rights agent is usually the existing transfer agent of the issuer
III The rights agent issues the additional shares upon presentation of the rights certificates with payment
Explanation:
Aright is defined as an offering to existing shareholders to purchase more shares. Usually there is a proportion of original shares the shareholder can now purchase. For example 1 to 5 shares means the shareholder can buy one share for every 5 old shares owned.
A rights agent is a person or entity that is responsible for maintaining records on behalf of rights holders.
When rights are issued, a rights agent is handles sales to shareholders, he is usually the initial transfer agent for the issuing company, and he issues the additional shares when payment and rights certificates are presented.
Per Chevron’s 3Q 2013 filing, what was the percentage change in the cost of purchased oil products when comparing nine months ended September 30, 2013 versus the same period in 2012?
Answer:
Per Chevron 3Q 2013 Filling:
The percentage change in the cost of purchased oil products nine months to September 30, 2013 when compared to nine months in 2012 was:
2.47%
Explanation:
a) Data and Calculations:
Cost of purchased oil products:
2013 $34,822,000,000
2012 $33,982,000,000
Change $840,000,000
Percentage Change = $840/$33,982 x 100
= 2.47%
b) The implication is that Chevron's cost of purchased oil products in third quarter of 2013 increased by 2.47% when compared with the same period in 2012. This percentage change is calculated by subtracting the Q3 2012 cost of purchased oil products from the Q3 2013 cost of purchased oil products and then dividing the difference by the Q3 2012, and multiplying by 100. The change could be caused by increases in the price of oil products or other variables.
Both Bond Sam and Bond Dave have 7 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has six years to maturity, whereas Bond Dave has 19 years to maturity.
a) If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Sam and Bond Dave? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
b) If rates were to suddenly fall by 2 percent instead, what would be the percentage change in the price of Bond Sam and Bond Dave? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer:
a. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Sam and Bond Dave?
Bond Sam's price will change by -9.12%Bond Dave's price will change by -18.05%b. If rates were to suddenly fall by 2 percent instead, what would be the percentage change in the price of Bond Sam and Bond Dave?
Bond Sam's price will change by 10.26%Bond Dave's price will change by 24.35%Explanation:
Bond Sam
9% / 2 = 4.5% semiannual payments
6 years to maturity = 12 payments
present value = future value = 1000
PV of face value = 1,000 / (1 + 4.5%)¹² = $589.66PV of coupon payments = 35 x 9.11858 (PV annuity factor, 4.5%, 12 periods) = $319.15new market price = $589.66 + $319.15 = $908.81
if interest increases by 2%, present value (market value) will decrease by $91.19 ⇒ 9.12% decrease
if market interest rates decrease by 2%:
5% / 2 = 2.5% semiannual payments
6 years to maturity = 12 payments
present value = future value = 1000
PV of face value = 1,000 / (1 + 2.5%)¹² = $743.56PV of coupon payments = 35 x 10.25776 (PV annuity factor, 2.5%, 12 periods) = $359.02new market price = $743.56 + $359.02 = $1,102.58
if interest decrease by 2%, present value (market value) will increase by $102.58 ⇒ 10.26% increase
Bond Dave
9% / 2 = 4.5% semiannual payments
19 years to maturity = 38 payments
present value = future value = 1000
PV of face value = 1,000 / (1 + 4.5%)³⁸ = $187.75PV of coupon payments = 35 x 18.04999 (PV annuity factor, 4.5%, 38 periods) = $631.75new market price = $187.75 + $631.75 = $819.50
if interest increases by 2%, present value (market value) will decrease by $180.50 ⇒ 18.05% decrease
if market interest rates decrease by 2%:
5% / 2 = 2.5% semiannual payments
6 years to maturity = 12 payments
present value = future value = 1000
PV of face value = 1,000 / (1 + 2.5%)³⁸ = $391.28PV of coupon payments = 35 x 24.3486 (PV annuity factor, 2.5%, 38 periods) = $852.20new market price = $391.28 + $852.20 = $1,243.48
if interest decrease by 2%, present value (market value) will increase by $243.48 ⇒ 24.35% increase
Jewel Service anticipates the following sales revenue over a five-month period: The company's sales are 40% cash and 60% credit. Its collection history indicates that credit sales are collected as follows: How much cash will be collected in January? In February? In March? For the quarter in total? Complete the cash budget to determine how much cash will be collected in January, February, March and for the quarter in total. (Round your answers to the nearest whole dollar.)
Answer:
I looked up the missing information, hopefully it's the same as your question. If not you can adjust the answer.
Its collection history indicates that credit sales are collected as follows:
25% in the month of the sale 50% in the month after the sale 15% two months after the sale 10% are never collectedsales revenue:
November $16,100 December $10,400 January $15,600 February $12,400 March $14,400Jewel Services
Cash Collections budget
For the months of January, February, and March
cash collected from sales January February March Quarter
from November sales $2,415 $2,415
from December sales $5,200 $1,560 $6,760
from January sales $3,900 $7,800 $2,340 $14,040
from February sales $3,100 $6,200 $9,300
from March sales $3,600 $3,600
Total $11,515 $12,460 $12,140 $36,115
The Donut Stop acquired equipment for $11,000. The company uses straight-line depreciation and estimates a residual value of $2,200 and a four-year service life. At the end of the second year, the company estimates that the equipment will be useful for four additional years, for a total service life of six years rather than the original four. At the same time, the company also changed the estimated residual value to $1,200 from the original estimate of $2,200.
Required:
Calculate how much the donut stop should record each year for depreciation in years 3 to 6?
Answer:
$1350
Explanation:
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
depreciation expense under the initial assumptions
($11,000 - $2,200) / 4 = $2200
Accumulated depreciation at the end of year 2 = $2200 x 2 = $4400
Book value at the beginning of year 3 = $11,000 - $4400 = $6600
Depreciation expense using the new assumptions
($6600 - $1200) / 4 = $1350
The Western Capital Growth mutual fund has: Total assets$812,000,000Total liabilities$12,000,000Total number of shares 40,000,000 What is the fund's net asset value (NAV) per share?
Answer:
The fund's net asset value (NAV) per share is $20.
Explanation:
Net Asset Value (NAV) = (Assets - Liabilities) ÷ Number of Shares
= ($812,000,000 - $12,000,000) ÷ 40,000,000
= $20
Conclusion :
The fund's net asset value (NAV) per share is $20.
If actual overhead incurred during a period exceeds applied overhead, the difference will be a credit balance in the Factory Overhead account at the end of the period.
True or False
Answer:
faslee
Explanation:
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