Answer:
$10.8734
Explanation:
The computation of the current value of the stock is shown below:
D1 = $1.20
D2 = $1.35
D3 = 1.35 × 1.025 = 1.38375
g = 2.5% = 0.025
Now as we know that
P2 = D3 ÷ (r - g)
where,
Price in year 2 = P2 = $1.38375 ÷ (0.145 - 0.025)
= $11.53125
So Current Price is
= $1.20 ÷ 1.145 + $1.35 ÷ 1.145^2 + $11.53125 ÷ 1.145^2
= $10.8734
On January 1, 2010, Water Wonderland issues $20 million of 8% bonds, due in ten years, with interest payable semi-annually on June 30 and December 31 each year. 1. If the market rate is 7%, will the bonds issue at face amount, a discount, or a premium
Answer:
the bonds will trade at a Premium
Explanation:
When the Yield to Maturity (YTM) is less than the Coupon Rate, the price of the Bond will be greater than the par value and we say that the Bond is trading at a Premium.
The Yield to Maturity of 7% is less than the Coupon rate 8% hence the bond will trade at a Premium.
Calculation of the Price of Bond
Alternatively we can calculate the price of the Bond a see for ourselves as follows :
FV = $20,000,000
PMT = ($20,000,000 × 8%) ÷ 2 = $8,00,000
P/YR = 2
YTM = 7 %
N = 10 × 2 = 20
PV = ?
Using a Financial calculator to input the values as above we can calculate the Price of Bond (PV) as $21,421,240.
21. Mcclam, Inc., is considering the purchase of a machine that would cost $100,000 and would last for 9 years. At the end of 9 years, the machine would have a salvage value of $23,000. The machine would reduce labor and other costs by $19,000 per year. Additional working capital of $2,000 would be needed immediately. All of this working capital would be recovered at the end of the life of the machine. The company requires a minimum pretax return of 13% on all investment projects. The net present value of the proposed project is closest to:
Answer:
The correct option is A. $3,833
Explanation:
Note: This question is not complete has the options are omitted. The complete question is therefore provided before answering the question as follows:
Mcclam, Inc., is considering the purchase of a machine that would cost $100,000 and would last for 9 years. At the end of 9 years, the machine would have a salvage value of $23,000. The machine would reduce labor and other costs by $19,000 per year. Additional working capital of $2,000 would be needed immediately. All of this working capital would be recovered at the end of the life of the machine. The company requires a minimum pretax return of 13% on all investment projects. The net present value of the proposed project is closest to:
A. $3,833
B. $5,167
C. -$2,492
D. $11,514
The explanation of the answer is now given as follows:
Given:
Machine cost = $100,000
Additional working capital = $2,000
Salvage value = $23,000
A = Annual cost saving = $19,000
r = minimum pretax return = 13%, or 0.13
n = number of useful years of the machine = 9
The net present value of the proposed project is now calculated using the following steps:
Step 1: Calculation of the total cost
TC = Total cost = Machine cost + Additional working capital = $100,000 + $2,000 = $102,000
Step 2: Calculation of the present value of the annual cost saving
The present value of the annual cost saving can be calculated using the formula for calculating the present value of an ordinary annuity as follows:
PVACS = A * ((1 - (1 / (1 + r))^n) / r) …………………………………. (1)
Where;
PVACS = Present value of annual cost saving = ?
A = Annual cost saving = $19,000
r = Minimum pretax return = 13%, or 0.13
n = number of useful years of the machine = 9
Substituting the values into equation (1), we have:
PVACS = $19,000 * ((1 - (1 / (1 + 0.13))^9) / 0.13)
PVACS = $19,000 * 5.13165512782676
PVACS = $97,501.45
Step 3: Calculation of the present value of the salvage value and the recovered working capital
This can be calculated using the present value formula as follows:
PVSW = SW / (1 + r)^n ……………………….. (2)
Where;
PVSW = present value of the salvage value and the recovered working capital = ?
SW = salvage value and the recovered working capital = $23,000 + $2,000 = $25,000
r = Minimum pretax return = 13%, or 0.13
n = number of useful years of the machine = 9
Substituting the values into equation (2), we have:
PVSW = $25,000 / (1 + 0.13)^9
PVSW = $25,000 / 3.00404193798427
PVSW = $8,322.12
Step 4: Calculation of the net present value of the proposed project
This can be calculated as follows:
NPV = PVACS + PVSV - TC ……………………………. (3)
Where;
NPV = net present value of the proposed project = ?
PVACS = Present value of annual cost saving = $97,501.45
PVSW = present value of the salvage value and the recovered working capital = $8,322.12
TC = Total cost = Machine cost + Additional working capital = $100,000 + $2,000 = $102,000
Substituting the values into equation (3), we have:
NPV = $97,501.45 + $8,322.12 - $102,000
NPV = $3,824
From the options in the question, the calculated NPV of $3,823.57 is close to option A. $3,833. Therefore, the net present value of the proposed project is closest to $3,833.
The efficient market hypothesis has several forms. The weak form states that past price data is unrelated to future prices. prices reflect all public information. all information both public and private is immediately reflected in stock prices. none of these options are true.
Answer:
past price data is unrelated to future prices.
Explanation:
The efficient market hypothesis (EMH) is a theory of investment in which it proves that it is unattainable to strike the stock market.
Here there are 3 forms that is a weak one, semi-strong one and strong one
In the weak form it implies that there is an efficient market that represent the market information also the market rate of return is independent but the the rates that are in past have no impact on the future rates
therefore the first option is correct
Soar Incorporated is considering eliminating its mountain bike division, which reported an operating loss for the recent year of $3,000. The division sales for the year were $1,047,000 and the variable costs were $860,000. The fixed costs of the division were $190,000. If the mountain bike division is dropped, 30% of the fixed costs allocated to that division could be eliminated. The impact on operating income for eliminating this business segment would be:
Answer:
$130,000 decrease
Explanation:
Multiple Choice $57,000 decrease $130,000 decrease $54,000 decrease $187,000 increase $187,000 decrease
Calculation of Financial advantage / Disadvantage
Decrease in contribution margin $187,000
(1,047,000-860,000)
Decrease in fixed expenses $57,000
(190000*30%)
Decrease in Net Operating Income $130,000 (Financial disadvantage)
You have $15,000 to invest and would like to create a portfolio with an expected return of 10.1 percent. You can invest in Stock K with an expected return of 8.8 percent and Stock L with an expected return of 12.4 percent. How much will you invest in Stock K
Answer:
$9,583.33
Explanation:
The computation of the amount invested in the stock K is shown below
Let us assume the amount invested in stock K be Y
So according to this, following formula should be used
The Expected return of portfolio × Amount invested = Expected return of K × Amount invested in K + Expected return of L × Amount invested in L
0.101 × $ 15,000 = 0.088 × Y + 0.124 × ( $ 15,000 - Y )
$1,515 = 0.088Y + $ 1,860 - 0.124Y
0.036Y = $ 345
Y = $ 345 ÷ 0.036
= $9,583.33
Jim drops his car off at ABC Garage to have his exhaust system repaired and takes the train to work. When he returns, he finds that his car has been vandalized. Jim has comprehensive coverage, but feels the garage is responsible for the damage since Jim entrusted the car to ABC Garage. Which coverage type under ABC's garagekeepers policy would split the cost of the loss with Jim's own insurer without placing blame on ABC Garage
Answer: Direct Excess Coverage
Explanation:
The coverage type under ABC's garagekeepers policy that would split the cost of the loss with Jim's own insurer without placing blame on ABC Garage is the direct excess coverage.
This coverage is identical to the direct primary coverage and it basically protects the vehicle of a client without taking into consideration the person that is responsible. The direct excess coverage will be paid in excess of the primary policy.
A comparative balance sheet for Rocker Company appears below:ROCKER COMPANYComparative Balance SheetDec. 31, 2020 Dec. 31, 2019Assets Cash $34,000 $11,000Accounts receivable 18,000 13,000Inventory 25,000 17,000Prepaid expenses 6,000 9,000Long-term investments 0 17,000Equipment 60,000 33,000Accumulated depreciation-equipment (20,000) (15,000)Total assets $123,000 $85,000Liabilities and Stockholder's Equity Accounts payable $17,000 $7,000Bonds payable 36,000 45,000Common stock 40,000 23,000Retained earnings 30,000 10,000Total liabilities and stockholders' equity $123,000 $85,000Additional information:1. Net income for the year ending December 31, 2020 was $35,000.2. Cash dividends of $15,000 were declared and paid during the year.3. Long-term investments that had a cost of $17,000 were sold for $14,000.4. Sales for 2017 were $120,000.Prepare a statement of cash flows for the year ended December 31, 2020 using indirect method.
Answer and Explanation:
The preparation of the cash flow statement is presented below:
Rocker Company
Cash flow statement
Cash flow from operating activities
Net Income $35000
Adjustments made
Depreciation $5,000
Loss on sale of investments $3,000
Change in operating assets & liabilities
Less: Increase in accounts receivable -$5,000
Less: Increase in inventory -$8,000
Add: Decrease in prepaid expenses $3,000
Add: Increase in accounts payable $10,000
Net cash flow from operating activities (a) $43,000
Cash Flow from Investing activities
Sale of long term investments $14,000
Less: Purchase of equipment -$27000
Net cash Flow from Investing activities (b)-$13,000
Cash Flow from Financing activities
Dividends paid -$15,000
Less: Bonds payable paid -$9,000
Add: Common stock issued $17,000
Net cash Flow from Financing activities (c) -$7,000
Net Change in cash c = a + b + c $23,000
Add: Beginning cash balance $11,000
Closing cash balance $34,000
Company A decided to expand its office space and purchased 20 new desks and chairs from a supplier on July 1st. The desks and chairs were purchased on credit, and the company had 60 days to pay for them. Company A paid for the desks and chairs on August 15th. How would the transaction on August 15th impact the accounting equation of Company A
Answer:
The July 1st purchase increased assets (furniture) and liabilities (accounts payable).
The August 15th payment decreases assets (cash) and decreases liabilities (accounts payable is gone)
Explanation:
The important thing about a balance sheet or the accounting equation is that they must balance. If the total numbers on both sides are not the same, then you did something wrong. If assets increase, liabilities or equity must increase also, and vice versa.
An asset group is being evaluated for an impairment loss. The following financial information is available for the asset group: Carrying value $100,000,000 Sum of the undiscounted cash flows $95,000,000 Fair value $80,000,000 What amount of impairment loss, if any, should be recognized
Answer:
The amount of the impairment loss that should be recognized is:
$20,000.
Explanation:
a) Data and Calculations:
Undiscounted cash flows = $95,000
Carrying value = $100,000
Fair value = 80,000
Impairment loss = $20,000
b) Impairment loss for the asset group is the difference between the fair value and the carrying value. It is recognized when the fair value declines from the carrying value. This implies that the calculation to determine the impairment loss is achieved by deducting the fair value from the carrying value.
Objectives of AllocationSamantha and Rashida are planning a trip to Padre Island, Texas, during spring break. Members of the varsity volleyball team, they are looking forward to four days of beach volleyball and parasailing. They will drive Samantha's car and estimate that they will pay the following costs during the trip:Motel (4 nights at $145) $ 580Food (each) 150Gas in total 120Parasailing and equipment rental (each) 125They have reservations at the SeaScape Motel, which charges $115 per night for a single, $145 per night for a double, and an additional $10 per night if a rollaway $580 155 132 added to a double room. but thinks that four days of partying and relaxing on the beach would be a great way to unwind from the Samantha's little sister, Kallie, wants to go along. S rigors of school. She figures he isn't into sports that she could ride with Samantha and Rashida and share their room Required: 1. Using incremental costs only, what would it cost Kallie to accompany Samantha and Rashida? 2. Using the benefits-received method, what would it cost Kallie to go on the trip? If required, round your intermediate calculations and final answer to the nearest cent.
Answer:
Increase in Motel cost = $10 per night for additional bed * 4 day = $10 * 4 = $40
Additional food cost = $150
Therefore, total cost of including Kallie for the trip is $40 + $150 = $190
1. Incremental Analysis
Without K With K Incremental cost
Motel cost $580 $620 $40
Food $300 $450 $150
Gas in total $120 $120 -
Total Incremental cost $1,000 $1,190 $190
It would cost $190 for Kallie to accompany along
2. Cost to Kallie using benefits received method
Particulars Amount
Motel ($580 + 40)/3 $206.67
Food $150
Gas ($120/3) $40
Total $396.67
Thus, cost to Kallie using benefits received method would be $396.67.
You need to turn $13,593 dollars into $18,359 dollars in 8 years. Assuming you make no extra deposits, what interest rate would you need from a bank in order to accomplish this
Answer: 3.83%
Explanation:
$13,593 has to accrue to $18,359.
13,593 * ( 1 + r)⁸ = 18,359
( 1 + r)⁸ = 18,359/ 13,593
(1 + r)⁸ = 1.35062
1 + r = ⁸√1.35062
1 + r = 1.0383
r = 1.0383 - 1
r = 3.83%
Write an equation to solve and find the answer to the following rate problem. Show all of your work. A gardening store sells 6 plants per hour. How many plants they will sell in 5 hours?
Answer:
30 plants
Explanation:
The store sells six plants per hour; in 5 hours, the store will sell
i.e., 1 hr = 6 plants,
if 5 hr = 6 plants x 5
=30 plants
Answer:
21
Explanation:
Ridiculousness, Inc., has sales of $48,000, costs of $21,200, depreciation expense of $1,900, and interest expense of $1,200. If the tax rate is 35 percent, what is the operating cash flow, or OCF
Answer:
OCF = $18,505
Explanation:
To calculate OCF, we first need the income statement:
Income Statement
Sales $ 48,000
Costs 21,200
Depreciation 1,900
EBIT $ 24,900
Interest 1,200
Taxable income $ 23,700
Taxes (35%) 8295
Net income $ 15,405
OCF = EBIT + Depreciation - Taxes
OCF = $24,900 + 1,900 - 8,295
OCF = $18,505
please help me answer this...
What are the three main categories of a tax return?
A.
allowances, deductions, and income
B.
credits, allowances, and withholding
C.
income, deductions, and credits
D.
allowances, deductions, and credits
Answer:C.
Explanation:
Explanation:
C.
income, deductions, and credits
g 2018: US Bond A is issued at par with annual coupon of 2% and maturity of 5 years with face value of $1,000. 2019: Interest rates increase in the market 2020: US Bond B is issued at par today with annual coupon of 5% and a maturity of 3 years with face value of $1,000.What should the price of Bond A be today, 2020, with 3 years left to maturity, so that its yield to maturity is equal to the yield to maturity on Bond B
Answer:
$918.48
Explanation:
price of bond A after the interest rate increased to 5% and the time to maturity is 3 years:
PV of face value = $1,000 / (1 + 5%)³ = $863.84
PV of coupon payments = $20 x 2.7232 (PV annuity factor, 5%, 3 periods) = $54.46
Market value of bond A = $863.84 + $54.46 = $918.48
Since the market rate is higher than the coupon rate, the bond will sell at a discount.
The vice president of operations of Free Ride Bike Company is evaluating the performance of two divisions organized as investment centers.Invested assets and condensed income statement data for the past year for each division are as follows: Road bike division Mountain bike divisionSales $1,728,000 $1,760,000Cost of goods sold $1,380,000 $1,400,000Operating expenses $175,200 $236,800Invested assets $1,440,000 $800,0001) Prepare condensed divisional income statements for the year ended December 31, 2014, assuming that there were no service department charges.2) Using the DuPont formula for rate of return on investment, determine the profit margin, investment turnover, and rate of return on investment for each division.3) If management's minimum acceptable rate of return is 10%, determine the residual income for each division.4) Discuss the evaluation of the two divisions, using the performance measures determined in parts (1), (2), and (3).
Answer:
Free Ride Bike Company
1. Condensed Divisional Income Statements for the year ended December 31, 2014:
1. Road bike division Mountain bike division Total
Sales $1,728,000 $1,760,000 $3,488,000
Cost of goods sold $1,380,000 $1,400,000 $2,780,000
Operating expenses $175,200 $236,800 $412,000
Net Income $172,800 $123,200 $296,000
2. Du Pont ROI = Return on sales * Asset Turnover
Road bike division Mountain bike division
= 1.2 * 10% = 12% 2.2 * 7% = 15.4%
3. Residual income
Road bike division Mountain bike division Residual income $28,800 $43,200
4. Evaluation of the two divisions, using the performance measures determined in parts (1), (2), and (3):
The Road bike division outperformed the Mountain bike division when we evaluate their performances based on the Return on Sales or Net Income margin. However, using the DuPont formula on the return on investment and residual income parameters, one understands that the Mountain bike division outperformed the Road bike division. These show that performance evaluation should not be based on one measure. Using the different performance evaluation measures yield clearer pictures of divisional performance.
Explanation:
a) Data and Calculations:
Road bike division Mountain bike division Total
Sales $1,728,000 $1,760,000 $3,488,000
Cost of goods sold $1,380,000 $1,400,000 $2,780,000
Operating expenses $175,200 $236,800 $412,000
Net Income $172,800 $123,200 $296,000
Return on sales 10% 7% 8.5%
Invested assets $1,440,000 $800,000 $2,240,000
Asset Turnover 1.2($1,728,000/$1,440,00) 2.2($1,760,000/$800,000)
Du Pont ROI = Return on sales * Asset Turnover
= 1.2 * 10% = 12% 2.2 * 7% = 15.4%
b) Residual income
Road bike division Mountain bike division Total
Net Income $172,800 $123,200 $296,000
Minimum rate of return 10% 10% 10%
Dollar minimum return 144,000 $80,000 224,000
Residual income $28,800 $43,200 $72,000
Some customer support call center let incoming callers know how long they would be on hold before talking to a service agent. This improves customer experience because: Group of answer choices it lessens the perception of unfairness in waiting in-process waits seem shorter than pre-process waits uncertain waits seem longer than certain waits unoccupied time seems longer than occupied
Incoming callers' perceptions of unfairness are diminished and a clear expectation is set by communicating the length of their wait time in advance. This enhances the overall customer experience.
What are the abilities in customer service?Client retention and acquisition are highly dependent on customer service. Companies can increase sales by utilising good customer service. Being empathetic, communicating effectively, and addressing problems are essential components of providing exceptional customer service.
A call centre interview is what?For businesses, call centres serve clients who have queries, grievances, or suggestions on goods or services. A call centre interview is a chance for you to highlight your problem-solving abilities and show off your capacity to win over clients' trust.
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Kim's Bridal Shoppe has 11,400 shares of common stock outstanding at a price of $48 per share. It also has 275 shares of preferred stock outstanding at a price of $90 per share. There are 300 bonds outstanding that have a coupon rate of 6.7 percent paid semiannually. The bonds mature in 29 years, have a face value of $2,000, and sell at 108 percent of par. What is the capital structure weight of the common stock
Answer:
0.0203
Explanation:
Calculation for the capital structure weight of the common stock
First step is to calculate the Value of Common Stock
Value of Common Stock = 11,400(48)
Value of Common Stock= $547,200
Second step is to calculate the Value of Preferred Stock
Value of Preferred Stock = 275(90)
Value of Preferred Stock = $24,750
Third step is to calculate the Value of Debt
Value of Debt = 1.08(2,000)(300)
Value of Debt= $648,000
Last step is to calculate the Weight of Preferred Stock
Weight of Preferred Stock = 24,750/(547,200 + 24,750 + 648,000)
Weight of Preferred Stock = 0.0203
Therefore the capital structure weight of the common stock will be 0.0203
Exercise 183 Wayne Company reported net income of $265,000 for 2020. Wayne also reported depreciation expense of $45,000 and a loss of $8,000 on the sale of equipment. The comparative balance sheet shows a decrease in accounts receivable of $15,000 for the year, a $17,000 increase in accounts payable, and a $6,000 decrease in prepaid expenses.Prepare the operating activities section of the statement of cash flows for 2020. Use the indirect method.
Answer:
Net cash flow of the operating activities is $356,000
Explanation:
Wayne Company
Partial statement of Cash flow
For the year Ended December 31, 2021
Cash flow from operating activities:
Net Income $265,000
Adjustment to reconcile net income to net
cash provided by operating activities
Depreciation expenses $45,000
Loss on sale of equipment $8,000
Decrease in accounts receivable $15,000
Decrease in prepaid expenses $6,000
Increase in accounts payable $17,000 $91,000
Net cash provided by operating activities $356,000
Lucy's Music Emporium opened its doors on January 1, 2015, and it was granted permission to use the same depreciation calculations for shareholder reporting and income tax purposes. The company planned to depreciate its fixed assets over 20 years, but in December 2015 management realized that the assets would last for only 15 years. The firm's accountants plan to report the 2015 financial statements based on this new information. How would the new depreciation assumption affect the company's financial statements? a. The firm's reported 2015 earnings per share would increase. b. The firm's EBIT would increase. c. The firm's net liabilities would increase. d. The firm's reported net fixed assets would increase.
Answer:
The firm's cash position in 2015 and 2016 would increase.
Explanation:
In the case when the life of an asset would decrease that represents the depreciation would rise and if the depreciation rise so the EBIT and EPS would reduced and in the case when the EBIT reduced, so automatically the tax expense is also reduce
So, the cash position of the firm woud increase
Hence, the above represents the answer
Shelton, Inc., has sales of $20 million, total assets of $18.2 million, and total debt of $9.1 million. Assume the profit margin is 9 percent. What is the company's net income
Answer:
$1,800,000
Explanation:
Shelton incorporation has sales of $20,000,000
Total assets is $18.2 million
Total debt is $9.1 million
Profit margin is 9%
Therefore the company net income can be calculated as follows.
= sales × profit margin
= 20,000,000 × 9/100
= 20,000,000 × 0.09
= 1,800,000
Hence the company net income us $1,800,000
A well-known fashion brand in Pakistan recently faced a scandal. The owner's husband got arrested for allegedly sending their employee away upon diagnosis of Corona virus. The Police claimed the designer and her husband should have notified the authorities and admitted the sick employee to a hospital. However, the couple claimed their duty was to just send the employee away after guiding him. The husband got released the very next day for which they thanked Prime Minister.
Answer:
ok
Explanation:
is this real ?? when did this happen ?
The price of Good B increases by 4%, causing the quantity demanded of Good A to decrease by 6%. The cross-price elasticity of demand is ________, and the goods are ________.
Answer:
The answer is -1.5 and complementary goods
Explanation:
Cross price elasticity is the percentage decrease in quantity demanded divided percentage increase in price.
= -6/4
= - 1.5.
Because the sign is negative, the goods are complements. Complementary goods are directly related. As in they move in the same direction.
For example, car and fuel are complements. The increase in quantity demanded for car will increase the quantity demanded for fuel. Or if the price of car goes up, all things being equal, the quantity demanded of car will reduce and for fuel too.
Supervisor: "He is going to rue missing today's training session." Why would he need to make up for missing today's training session? Why would he be mad about missing today's training session? Why would he regret missing today's training session? Why would he love missing today's training session? Why would he try missing today's training session?
Answer:
He would need to make up for missing today's training session because it is going to be a very important session that will help him a lot to improve his skills.
He would be mad about missing it because he would lose that valuable opportunity to improve his skills, as well as because he would have to make up for missing it.
He would regret missing the session for the same reason.
He tried missing today's session because he had other things on mind, more pressing tasks, the session is valuable but boring, etc.
The reason he would regret missing today's training session since it will be a crucial session that will greatly assist him in improving his talents.
What are training sessions?Training programs are seen as an important aspect of human resource development. It's a well-organized instrument for bringing certain abilities up to the target level using knowledge, training, coaching, and practice.
Thus, The reason he regret missing today's training session is the right as the training program is significant for him.
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Franklin is designing an advertisement. What is a good practice for him to follow? A. make the headline long and complicated B. use simple images in the advertisement C. show the product in use in the advertisement D. use a lot of text in the advertisement
Answer:
I would say C. Show the product in use in the advertisement.
Explanation The point of advertisement is that people immediately know if they want to have/buy the products advertised. With showing the product in use, you achieve exactly this. If person likes, what he sees, he buys the product.
On the other hand, if a person only sees random simple images, he may see pictures of not the product itself or the purpose for what it can be used. So he doesn't know, if he needs or wants the product.
Answer:
C. show the product in use in the advertisement
Explanation:
Try to show the product in use in your photograph rather than a static picture of the product. Showing the product in use more effectively demonstrates its usability.
A manager must decide how many machines of a certain type to buy. The machines will be used to manufacture a new gear for which there is increased demand. The manager has narrowed the decision to two alternatives: buy one machine or buy two. If only one machine is purchased and demand is more than it can handle, a second machine can be purchased at a later time. However, the cost per machine would be lower if the two machines were purchased at the same time. The estimated probability of low demand is .30, and the estimated probability of high demand is .70. The net present value associated with the purchase of two machines initially is $75,000 if demand is low and $130,000 if demand is high. The net present value for one machine and low demand is $90,000. If demand is high, there are three options. One option is to do nothing, which would have a net present value of $90,000. A second option is to subcontract; that would have a net present value of $110,000. The third option is to purchase a second machine. This option would have a net present value of $100,000. How many machines should the manager purchase initially
Answer:
BUY TWO MACHINES
Explanation:
Calculation for how many machines should the manager purchase initially
BUY ONE MACHINE =(High demand 0.7*100,000)+(Low demand 0.3*90,000)
BUY ONE MACHINE =70,000+27,000
BUY ONE MACHINE=97,000
Note :High demand 100,000 is the Average of Do nothing ,Tomorrow Sub-contract and Buy second machine
High demand=90,000+110,000+100,000
High demand=300,000/3
High demand=100,000
BUY TWO MACHINES
High demand =(0.7 x 130000)
High demand= 91,000
Low demand= (0.3 x 75000)
Low demand=22,500
Hence,
BUY TWO MACHINES= (91,000 + 22,500)
BUY TWO MACHINES=113,500
Based on the above calculation we can see that
the expected payoff from BUY ONE MACHINE is 97,000 while that of BUY TWO MACHINES is 113,500 which means that BUY TWO MACHINES is higher hence, the manager should BUY TWO MACHINES today.
The following information was taken from the 2021 financial statements of Waterway Industries: Bonds payable, January 1, 2021 $ 809000 Bonds payable, December 31, 2021 4830000 During 2021 • A $725000 payment was made to retire bonds payable with a face amount of $807000. • Bonds payable with a face amount of $319000 were issued in exchange for equipment. In its statement of cash flows for the year ended December 31, 2021, what amount should Waterway report as proceeds from issuance of bonds payable?
Answer:
the amount reported as proceeds from bond issuance is $4,509,000
Explanation:
The computation of the amount reported as proceeds from bond issuance is as follows
Total Bond Issued during 2021
= Bonds payable, December 31, 2021 - Bonds payable, January 1, 2021 + Bond Payable retired
= $4,830,000 - $809,000 + $807,000
= $4,828,000
Now
Bond issued for cash is
= Total bond issued - Bonds issued in exchange for Equipment
= $4,828,000 - $319,000
= $4,509,000
Hence, the amount reported as proceeds from bond issuance is $4,509,000
After a company chooses the modules they want to implement, they must decide on _______options, which allow the customer to customize the modules to fit their business to some extent
Answer:
The correct option is (b) Configuration
Explanation:
The configuration is an arrangement of the parts to make it as a whole. Also it is used to customize the modules. It could be used so that proper working could be done
As in the question it is given that after selecting the modules for implementation they have to decide the configuration so that it permits the customer to do the customization with related to the modules that fit into their business
Therefore the correct option is (b) Configuration
discuss briefly what you understanding engineering
Answer:
Engineering is the application of science and math to solve problems. Engineers figure out how things work and find practical uses for scientific discoveries. Scientists and inventors often get the credit for innovations that advance the human condition, but it is engineers who are instrumental in making those innovations available to the world. Engineers design, evaluate, develop, test, modify, install, inspect and maintain a wide variety of products and systems. They also recommend and specify materials and processes, supervise manufacturing and construction, conduct failure analysis, provide consulting services and teach engineering courses in colleges and universities.