Answer:
2.0488%
Explanation:
Fisher Effect Equation = ( 1 + nominal rate ) = ( 1 + inflation rate ) x (1 + real rate)
= ( 1 + 0.046) = ( 1 + inflation rate ) x (1 + 0.025)
( 1 + inflation rate ) = ( 1 + 0.046) / (1 + 0.025)
( 1 + inflation rate ) = 1.020488
Inflation rate = 1.020488 - 1 = 0.020488 = 2.0488%
On Mar 3, Lyons Company paid dividends of $1,000. Use your knowledge of what a correct journal entry should look like to identify what would be included.
a. Dividends would be debited and listed first.
b. Dividends would be credited and listed second.
c. Cash would be credited and listed second.
d. Dividends expense would be debited and listed first.
e. Cash would be debited and listed first
Answer:
Cash would be credited and listed second.
Dividends would be debited and listed first.
Explanation:
The journal entry that must be passed as Cash would be credited and listed second, and Dividends would be debited and listed first. Thus, option A and C are correct.
What is Dividend?A dividend is a profit distribution made by a firm to its shareholders. When a business makes a profit or has a surplus, it can distribute a portion of the earnings to shareholders as a dividend. Any money that is not dispersed is re-invested in the company.
Dividends are typically paid out quarterly and might be either in cash or in the form of more stock reinvestment.
Cash would be credited and listed second in the journal entry, while dividends would be debited and listed first. As a result, options A and C are correct.
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A researcher who has no concern for issues of control or ability to generalize, instead choosing focus on providing rich descriptions would be following the _________ approach.
A. positivistic/empirical
B. interpretive
C. critical
D. scientific
Answer:
B. interpretive
Explanation:
A researcher who has no concern for issues of control or ability to generalize, instead choosing focus on providing rich descriptions would be following the interpretive approach.
In an interpretive approach to research, researchers are mainly focused on deciphering detailed meaning or rich descriptions so they can have a better understanding of the subject matter.
Under interpretive study, it is assumed that the meaning associated with matters are subjective and inter-subjective depending on their perception, thus researchers attempt to understand matters through the meanings attached by individuals in the sampling population.
Hence, interpretive researchers assume that issues are not singular or objective but depends on various human experiences.
Average costs _______initially due to the presence of fixed costs and then rise due to _________ a. rise; increasing fixed costs b. fall; decreasing marginal costs c. fall ; increasing marginal costs d. rise; decreasing fixed costs
Answer:
C. fall; increasing marginal costs.
Explanation:
Option C is the correct answer because initially, the average costs fall due to increasing return or production of more units. When output increases, the average fixed cost slopes downwards. Moreover, when the average cost falls, marginal cost also falls and it starts rising as the marginal cost cuts the average cost at its minimum point. However, after cutting at the minimum point, marginal cost increases, and due to which average cost also increases.
The benefits of comparing actual performance of the operations against planned goals include all of the following except:_______
a) providing prompt feedback to employees about their performance relative to the goal.
b) preventing unplanned expenditures.
c) helping to establish spending priorities.
d) determining how managers are performing against prior years' actual operating results.
Answer:
c. determining how managers are performing against prior year's operating results.
Explanation:
Management compare actual performance against planned goals to enable them evaluate deficiencies in the actual performance which can give directions to areas that should be improved upon. Moreover, comparing actual performance and planned goals expose deficiencies in the system which management would take into consideration when making future plan hence eliminate unplanned expenditures.
Again, there is also identification of priorities to accomplish objectives when actual performance are compared against planned goals.
Gerritt wants to buy a car that costs $31,000. The interest rate on his loan is 5.67 percent compounded monthly and the loan is for 5 years. What are his monthly payments?
Answer:
$594.57
Explanation:
For computing the monthly payment we need to apply the PMT formula i.e to be shown in the attachment below:
Given that,
Present value = $31,000
Future value or Face value = 0
Rate = 5.67% ÷ 12 months = 0.4725
NPER = 5 years × 12 = 60 years
The formula is shown below:
= PMT(RATE;NPER;-PV;FV;type)
The present value come in negative
So, after applying the formula, the monthly payment is $594.57
A new operating system for an existing maching is expected to cost $786000 and have a useful life of six years. The system yields an incremental after-tax income of $230000 each year after deducting its straight line depreciation. The predicted salvage value of the system is $90000. Assume the company requires a 10% rate of return on its investments. Compute the net present value of each potential investment.
Answer:
NPV is $771,739
Explanation:
As we know that:
Net Present Value = Present Value of Cash inflow (STEP 1) - Present Value of Cash outflow
STEP 1. Present Value of Cash Inflow
Here
Present Value of Cash Inflow = Annuity of Annual Cash flow - PV of Scrap Value
Annual Cash flow is $346,000 ($230,000 + ($786,000 - $90,000)/6)
So
Annuity of annual cash inflow = $346,000 * Annuity Factor
Here
Annuity Factor for 6 years is 4.3553
Now this means that:
Annuity of annual cash Inflow = $346,000 * 4.3553 = $1,506,934
Present Value of Residual Value ($90,000 * 0.5645) = $50,805
Present Value of cash inflows $1,557,739
Now putting values in the above equation, we have:
Net Present Value = $1,557,739 - $786,000
Net Present Value = $771,739
ABC Company manufactures a contraption meant to enable a rider to fly behind a ski boat. After a few months, ABC begins to hear of injuries when riders crash into water or boats. In hopes of escaping liability, the president of ABC Company decides to discontinue business and sell all assets to XYZ Company. The president of XYZ Company is excited to purchase the assets at a bargain price and help ABC avoid liability based upon the assertion of the president of ABC that XYZ cannot legally be held liable for the flying accidents. Which of the following is true in a majority of states applying the traditional successor liability rule?
a. XYZ Company will not be held liable for the accidents so long as there is no contractual agreement by which it agrees to accept liability.
b. XYZ Company will only be held liable if it continues to manufacture the same product lines as ABC.
c. XYZ Company will only be held liable if it keeps the same tax number as ABC Company.
d. XYZ Company will likely be held liable for the accidents based upon the transaction being entered into wrongfully in order for ABC Company to escape successor liability.
Answer:
d. XYZ Company will likely be held liable for the accidents based upon the transaction being entered into wrongfully in order for ABC Company to escape successor liability.
Explanation:
Successor liability basically means that any creditor or plaintiff can recover from the company or individual that purchases an asset or a business (in this case ABC company) from any liabilities that may have been originated before the exchange transaction was finished, even if the firm or individual that purchases the asset or company did not assume or will not want to assume any liabilities as part of the exchange deal.
In other words, XYZ is liable for any lawsuits regarding the contraption device previously manufactured by ABC.
LSM subcontracted with Henry Isaacs Home Remodeling and Repair (Isaacs) to perform the roofing work on the project. Isaacs in turn subcontracted with Hal Brewster Home Improvements (Brewster), to conduct the roofing work on Isaacs' behalf. When Brewster performed work on the roof, he "botched the job" and caused extensive leaking inside the house. LSM and Issacs attempted to correct the problems, but eventually abandoned the project, leaving Logan-Baldwin to hire others to complete the renovations. Logan-Baldwin sued LSM, Isaacs, and Baldwin for breach of contract. Isaacs sought to dismiss Logan-Baldwin's claim against it, arguing no privity of contract existed between themselves and Logan-Baldwin, and therefore Isaacs should not be liable for any damages.
Required:
Does Logan-Baldwin have contract rights over Isaacs as an intended third-party beneficiary?
1. Because Henry Isaacs delegated its duty to repair the roof to Brewster, Henry Isaacs remains responsible for Brewster's failure to install the new roof on the residence properly.
a. True
b. False
2. Logan-Baldwin is entitled to compensatory damages (covering the cost of hiring other contractors to fix the roof) caused by the breach of contract by LSM and Henry Isaacs.
a. True
b. False
3. Logan-Baldwin qualified as a third party creditor beneficiary of the contract between LSM and Henry Isaacs and the contract between Henry Isaacs and Brewster, even if Logan-Baldwin is not named in those contracts.
a. True
b. False
4. Palisades Plaza is not entitled to damages for breach contract by LSM, Henry Isaacs, and Brewster unless Palisades Plaza has clean hands and has tendered performance under the contract.
a. True
b. False
5. If the agreement between Henry Isaacs and Brewster to install a new roof is a novation, Henry Isaacs is not liable for breach of contract for the failure to install the new roof properly.
a. True
b. False
Answer:
1. true
2. true
3. false
4. true
5. false
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a rate of 8%. The probability distribution of the risky funds is as follows: Expected Return Standard Deviation Stock fund (S) 20 % 30 % Bond fund (B) 12 15 The correlation between the fund returns is 0.10. a-1. What are the investment proportions in the minimum-variance portfolio of the two risky funds. (Do not round intermediate calculations. Enter your answers as decimals rounded to 4 places.) a-2. What is the expected value and standard deviation of the minimum variance portfolio rate of return? (Do not round intermediate calculations. Enter your answers as decimals rounded to 4 places.)
The expected value and standard deviation of the minimum variance portfolio rate of return are 16.20% and 42.61% respectively.
The same old deviation of a portfolio measures how a good deal of the funding returns deviate from the suggestion of the opportunity distribution of investments. placed certainly, it tells traders how a good deal the investment will deviate from its anticipated return.
The same old deviation of the portfolio is usually the same to the weighted average of the same old deviations of the property in the portfolio. A high fashionable deviation in a portfolio indicates a high hazard as it suggests that the profits are especially volatile and unstable.
calculation:-
Weight of Stock =( (17%-5.6%)*40%^2 - (8%-5.6%)*(46%*40%*0.16))/((17%-5.6%)*40%^2 + (8%-5.6%)*46%^2 - (17%-5.6%+8%-5.6% )*(46%*40%*0.16))
Weight of Stock = 0.9106
Weight of Bond = 1- 0.9106= 0.0894
Portfolio invested in the stock = 91.06%
Portfolio invested in the bond = 8.94%
The expected return of portfolio = Weight of Stock* E(rs) + Weight of Bond *E(rb)
Expected return of portfolio = 91.06%*17 +8.94%*8
Expected return of portfolio = 16.20%
The standard deviation of Portfolio = (Weight of Stock^2 * SD of Stock^2 + Weight of Bond^2 * SD of Bond^2 + 2* weight of Stock*Weight of Bond* COV(S, B))^(1/2)
Standard deviation of Portfolio = (0.9106^2*46%^2 + 0.0894^2*40%^2 + 2*0.9106*0.0894*(46%*40%*0.16))^(1/2)
Standard deviation of Portfolio = 42.61%
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On May 22, Jarrett Company borrows $7,500 from Fairmont Financing, signing a 90-day, 8%, $7,500 note. What is the journal entry needed to record the transaction by Jarrett Company
Answer:
Debit cash with $7,500
Credit notes payable with $7,500
Explanation:
The journal entry needed to record the transaction by Jarret company is
Cash account. Dr $7,500
Notes payable account $7,500
Since Jarret company borrowed $7,500, it means an increase in cash hence increase in asset will be debited. Cash will therefore be debited. Because the company signed a note payable against cash, it means note payable account will be credited.
On May 22, Jarrett Company borrowed $7,500 frog Fairmont Financing. signing a 90-day, 8%. $7,500 note. The journal entry is made to record the transaction by Jarrett Company. Debit cash with $7,50
Credit notes payable with $7,500
The journal entry needed to record the transaction by Jarret company is
Cash account. Dr $7,500
Notes payable account $7,500
Because Jarret Company borrowed $7,500, a rise in cash and thus an increase in asset will be debited. As a result, cash will be deducted. Because the corporation signed a note payable against cash, the account will be credited.
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Assume that Denis Savard Inc. has the following accounts at the end of the current year. 1.Common Stock14.Accumulated Depreciation-Buildings. 2.Discount on Bonds Payable.15.Cash Restricted for Plant Expansion. 3.Treasury Stock (at cost).16.Land Held for Future Plant Site. 4.Notes Payable (short-term).17.Allowance for Doubtful Accounts. 5.Raw Materials18.Retained Earnings. 6.Preferred Stock (Equity) Investments (long-term).19.Paid-in Capital in Excess of Par-Common Stock. 7.Unearned Rent Revenue.20.Unearned Subscriptions Revenue. 8.Work in Process.21.Receivables-Officers (due in one year). 9.Copyrights.22.Inventory (finished goods). 10.Buildings.23.Accounts Receivable. 11.Notes Receivable (short-term).24.Bonds Payable (due in 4 years). 12.Cash.25.Noncontrolling Interest. 13.Salaries and Wages Payable. Prepare a classified balance sheet in good form
Answer:
Denis Savard Inc
Classified Balance sheet
Amount$ Amount$ Amount$
Assets
Current Assets
Cash xxx
Less Cash Restricted for Plant xxx xxx
Expansion
Accounts Receivable xxx
Less Allowance for Doubtful debt xxx xxx
Notes Receivable xxx
Receivables-Officers xxx
Inventory
Finished goods xxx
Work in Process. xxx
Raw Materials xxx xxx
Total Current Assets xxx
Stockholders Equity
Common Stock xxx
Add Paid-in Capital in Excess of xxx
Par-Common Stock.
Total paid in capital xxx
Add Retained Earnings. xxx
Total paid in capital and retained earnings xxx
Less Treasury Stock (at cost) xxx
Total Stockholders Equity xxx
Total Liability and Stockholders Equity xxx
Liability and Stockholders Equity
Current Liability
Salaries and Wages Payable. xxx
Unearned Subscriptions Revenue. xxx
Unearned Rent Revenue. xxx
Total Current Liability. xxx
Long term liabilities
Bonds Payable (due in 4 years) xxx
Less Discount on Bonds Payable xxx xxx
Total Long term liabilities. . xxx
Long term Investment
Preferred Stock (Equity) Investments. xxx
Land Held for Future Plant Site.. xxx
Cash Restricted for Plant Expansion. xxx
Total Long term Investment. xxx
Property, Plants and Equipment
Building. xxx
Less Accumulated Depreciation xxx xxx
- Buildings
Total Property, Plants and . xxx
Equipment
Intangible Assets
Copyrights. . xxx
Total Intangible Assets. . xxx
Total Assets. . xxx
You short 200 contracts of a call option on Stock XYZ. The contract multiplier is 100, i.e. each contract is on 100 shares of the stock.
In addition, you hold the following positions as of the end of previous trading day: 15,559 shares of the underlying stock; and $809,608 in debt.
The XYZ stock price is $51 right now. The risk-free interest rate is 4% per year. There are 252 trading days in a year.
Using the Black-Scholes model, you establish that the total delta of your option position is
-13,495
You adjust your hedge to bring your shareholding to match the new option delta. Which of the following is correct for your DEBT account, after you make the necessary adjustments?
a. $809,608 - (15,559 – 13,495)*51 = 704,344
b. $809,608e(0.04*1/252) + (15,559 – 13,495)*51 = 915,000
c. $809,608e(0.04*1/252) – (15,559 – 13,495)*51 = 703,932
d. $809,608 + (15,559 – 13,495)*51 = 914,872
Answer:
c. $809,608e(0.01*1/252) - (15,559 - 13,495) *51 = 703,932
Explanation:
Black Scholes Model is a mathematical model for pricing a contract of an option. It is best suited for dynamic financial market. The model determines the price of an option contract after incorporating the effects of volatility. In the given scenario there are 200 contracts of a call option. The trading days are 252 in the year and risk free interest rate is 4% prevailing in the market.
a) While excavating, the Contractor hits a rock layer. Since the plans and soil report did not mention such rock, the contractor files a claim under: i. Force majeure. ii. Differing site conditions. iii. Design errors/omissions. iv. Unusual weather conditions. v. Changes in owner’s requirements.
Answer:
Differing site conditions
Explanation:
A differing site condition is a condition that has been changed. Since the plan did not mention this rock, the contractor can file a claim under this.
It is a hidden physical condition that is discovered at a site which is actually different from what was expected. It can also be regarded as unforeseen site condition.
Tony, a hateful, disgruntled, business law teacher notices that a student, Peter, who is past the age of majority, has a nice motorcycle that is for sale. Peter has struggled through school, is in his last semester, and needs to pass business law in order to graduate. Tony tells Peter that he would like to see Peter pass and, in the next sentence, says that he wants to buy the motorcycle for $100, a price far below the value of the motorcycle. Peter asks if Tony is serious about the price, and Tony replies, "I have the power here! Take it or leave it!" Tony proceeds to draw up a contract for the sale of the motorcycle for $100 which Peter signs. Peter does some research and finds that Tony has had several arrests for driving under the influence in a nearby town. As an act of revenge, Peter tells Tony that unless Tony sells Peter his new Mustang convertible for $50, he is publishing the facts about the arrests in the school newspaper. Tony reluctantly agreed to the deal. Which of the following is true if Tony seeks to rescind the contract for the sale of the Mustang?
A. Tony may rescind the contract on grounds of duress.
B. Tony may rescind the contract on grounds of misappropriation of name or likeness.
C. Tony may rescind the contract on grounds of fraud.
D. Tony may not rescind the contract because truth is involved.
E. Tony may rescind the contract on grounds of defamation.
Answer: A. Tony may rescind the contract on grounds of duress.
Explanation:
For contracts to be considered enforceable, a key factor is that the parties involved must have entered into the agreement of their own accord and free will. Therefore Duress, which denies a person of that free will, becomes a reason why a contract can be voided.
Tony sold Peter the Mustang convertible because Peter had threatened to release details that Tony would rather were kept private so Tony capitulated and sold the Mustang. Had Peter not threatened him, Tony would not have sold the car. This shows that Tony only sold the car under duress and as such can void the contract.
On January 2, 2015, Roth, Inc. purchased a laser cutting machine to be used in the fabrication of a part for one of its key products. The machine cost $120,000, and its estimated useful life was four years or 1,150,000 cuttings, after which it could be sold for $5,000.
Required
a. Calculate each year’s depreciation expense for the machine's useful life under each of the following depreciation methods (round all answers to the nearest dollar):
1. Straight-line.
2. Double-declining balance.
3. Units-of-production. (Assume annual production in cuttings of 280,000; 430,000; 360,000; and 80,000.)
1. Straight-Line
Year Depreciation
Expense
2015 $Answer
2016 Answer
2017 Answer
2018 Answer
2. Double-declining balance
Year Depreciation
Expense
2015 $Answer
2016 Answer
2017 Answer
2018 Answer
2019 Answer
3. Units of Production
Year Depreciation
Expense
2015 $Answer
2016 Answer
2017 Answer
2018 Answer
b. Assume that the machine was purchased on July 1, 2015. Calculate each year’s depreciation expense for the machine's useful life under each of the following depreciation methods:
1. Straight-line.
2. Double-declining balance.
1. Straight-Line
Year Depreciation
Expense
2015 $Answer
2016 Answer
2017 Answer
2018 Answer
2019 Answer
2. Double-declining balance (Round answers to the nearest whole number, when appropriate.)
Year Depreciation
Expense
2015 $Answer
2016 Answer
2017 Answer
2018 Answer
2019 Answer
Answer:
Explanation:
Depreciation is the systematic allocation of the cost of a machine over its useful lifetime.
There are different types of depreciation like the straight line , double declining and the units of production method.
Workings
Depreciable amount = 120,000-5000 = 115,000
Useful life = 4 years
Depreciation rate = 115000/4 = 25% = 28,750
2015 2016 2017 2018
Straight line depreciation 28,750 28,750 28,750 28,750
Double declining
Double declining rate = 25%*2 = 50%
2015 = 50% * 115,000= 57,500
2016
Opening book value = 115,000-57,500 = 57500
Depreciation = 57,500*50% = 28,750
2017
Opening book value = 57500-28,750 =28750
Depreciation = 50%*28,750 =14,375
2018
Opening book value 28750-14375 = 14375
Depreciation = 14375*50% = 7188
Units of production
2015 = 280000/1150,000*115,000 = 28,000
2016 =430,000/1150000*115000 = 43,000
2017= 360000/1150000*115000 = 36,000
2018 = 80,000/1150000*115000 = 8000
B
IF the machine was bought on July 1, 2015
Straight line depreciation
2015 = (25%*115000 ) /2 = 14,375
2016 =25%* 115,000 = 28,750
2017 = 25%*115000 = 28750
2018 = 25%*115,000 =28750
2019 =(25%*115000)/2 = 14,375
Double declining method
2015
(115,000*50,000)/2 =28750
2016
Opening book value =115,000-28750 =86250
Depreciation = 50%*86250 = 43,125
2017
Opening book value =86250-43125 =43125
Depreciation = 43,125*50% = 21,563
2018
Opening book value
43125-21563 =21562
Depreciation = 21562*50% =10,781
2019
Opening book value = 21562-10781 =10781
Depreciation = 50%*10781 = 5391
Answer:
um... im actually finna work this out its interesting
Explanation:
One implication of the bird-in-the-hand theory of dividends is that a given reduction in dividend yield must be offset by a more than proportionate increase in growth in order to keep a firm's required return constant, other things held constant.
a. True
b. False
Answer:
False ANSWER: True o One implication of the bird-in-the-hand theory of dividends is that a given reduction in dividend yield must be ...
Explanation:
follow mw
What is the difference in operating income between processing the cat bowls further versus selling them off at the split-off point?
Answer: -$1,920
Explanation:
Operating Income if processed further would be;
= (Sales * Price) - Incremental Cost
= (1,000 * $14) - 4,920
= 14,000 - 4,920
= $9,080
Operating Income if sold off at split-off point;
= Sales * Price
= 1,000 * $11
= $11,000
Difference
= Processed Further - Sold at split-off
= 9,080 - 11,000
= -$1,920
Difference would be an Operating (loss) of $1,920.
Ariel T. 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 cost actually incurred: $55000
Raw materials included in manufacturing overhead costs incurred as indirect materials $5000. Manufacturing overhead cost applied to Work in Process $48000.
Required:
The adjusted cost of goods sold that appears on the income statement for February is:________
Answer:
Cost of goods sold = $191,700
Explanation:
a) Cost of production:
Beginning Inventory: Raw Materials $40,000
Purchase of Raw materials $63,000
Ending inventory: Raw materials ($24,000)
Cost of raw materials used $79,000
Beginning Work in process $23,000
Cost of raw materials used $79,000
Direct labor cost $73,700
Manufacturing overhead $55,000
less Ending Work in process ($17,000)
Cost of production $213,700
Beginning Finished goods $50,000
Cost of production $213,700
Ending Finished goods ($72,000)
Cost of goods sold $191,700
b) The adjusted cost of goods sold takes into consideration the cost of raw materials used, the direct labor costs, and the manufacturing overhead, before adjusting for the beginning inventory and ending inventory.
Show your work. Suppose rRF = 6%; rM = 10%; and rA = 14% Calculate Stocks A’s beta. If Stock A’s beta were 2.0, then what would be A’s new required rate of return?
Answer:
Stock A's beta= 2
The new required rate of return = 14%
Explanation:
The risk free return is 6%
The return of market portfolio is 10%
The return of security A is 14%
(A) The beta of stock A can be calculated as follows
Return of security A= Risk free return+ beta(return of market portfolio-risk free return)
14%= 6% + beta(10%-6%)
14%=6% + 4%beta
14%-6%= 4%beta
8%= 4%beta
beta= 8%/4%
beta= 2
(B) Stock A's required rate of return can be calculated as follows
Required rate of return= 6% + 2(10%-6%)
= 6% + 2(4%)
= 6% + 8%
= 14%
Hence the Stock A's beta is 2 and the required rate of return for A is 14%
g The Federal Reserve can lower short-run output by Group of answer choices lowering the real interest rate. increasing the money supply. decreasing the money supply. lowering the nominal interest rate. None of these answers is correct
Answer: Decreasing the money supply
Explanation:
When the Fed reduces money supply, it will remove the amount of excess money that people have to spend in the economy. This will lead to prices reducing because people no longer have a lot of money to spend on products therefore they will demand less goods. This will lead to the Aggregate demand curve shifting to the left. The new intersection with the Aggregate Supply curve will be at a point where prices will be lower and less quantity will be demanded which will signify a drop in the short-run output of the economy.
"A market maker enters a quote of $20.50 Bid; $21.00 Ask; with a size of "5 x 5" into the NASDAQ System. If a market order to buy is entered into the system for 1,500 shares, and this dealer's quote is matched, the market maker will be obligated to sell:"
Answer: 500 shares at $21.00
Explanation:
A market maker is one who buys and then sells security from which the stated market is made into, and using the account of the the firm. It should be noted that a market order to buy will have to be matched in sequence.
Therefore, if a market order to buy is entered into the system for 1,500 shares, and this dealer's quote is matched, the market maker will be obligated to sell 500 shares at $21.00.
Goodwin Technologies has been wildly successful but has yet to pay a dividend.
An analyst forecasts that Goodwin is likely to pay its first dividend three years from now.
She expects Goodwin to pay a $2.2500 dividend at that time and believes that the dividend will grow by 11.70% for the following two years. However, after the fifth year, she expects Goodwin's dividend to grow at a constant rate of 3.60% per year. Good win's required return is 12.00%.
To determine Goodwin's horizon value at the horizon date-when constant growth begins-and the current intrinsic value. To increase the accuracy of your calculations, carry the dividend value to four decimal places.
Horizon value:
Current Intrinsic value:
Assuming that the markets are in equilibrium, Goodwin's current expected dividend yield is _, and Goodwin's capital gains yield is _.
Goodwin has been very successful, but it hasn't paid a dividend yet. It circulates a report to its key investors containing the following statement:
Goodwin's investment opportunities are poor. Is this statement a possible explanation for why the firm hasn't paid a dividend yet?
No or yes
Answer and Explanation:
The computation is shown below:
Year Cash flow PVF at 12% PV at 12%
D0 0 0 1 0
D1 0 0 0.89286 0
D2 0 0 0.79719 0
D3 2.25 2.25 0.71178 1.601505 (A)
D4 2.25 × 1.117^1 = 2.51325 0.63552 1.597221 (B)
D5 2.25 × 1.117^2 = 2.80730 0.56743 1.592946 (C)
Now
Horizon Value at D5 is
= Next Year Dividend ÷ (Required Rate -Growth rate)
= (2.25 × 1.117^2 × 1.036) ÷ (0.12 - 0.036)
34.6234 34.6234 0.56743 19.64634 (D)
Current Value 24.43801 (A + B + C + D)
Horizon Value = 34.62
Intrinsic Value = 24.43
Now
Current expected dividend yield is
= Dividend ÷ Market Price
= 0 ÷ 24 ÷ 43
= 0 %
And, the minimum expected capital yield should be equivalent to the required rate of return i.e 12%
The company should not paying the dividend because it involves various reasons lime expansion plans, seasonal & cyclical sales, buy back shares
Determine the incremental rate of return (ROR) value of the two alternatives below. Hint: Convert RoR value to a percentage. If the answer is 10%, enter 10. Do not enter 0.01. A B First Cost, $ 135,000 185,000 Operating Cost, $/year 9,000 5,200 Salvage value, $ 9,000 10,000 Life, n [infinity] [infinity]
Answer:m Incremental rate of return (ROR) = 0.076 ≈7.6%
Explanation:
Given that;
A B
First Cost $ 135,000 185,000
Operating Cost $/year 9,000 5,200
Salvage value $ 9,000 10,000
Life, n [infinity ∞] [infinity ∞]
As alternatives have infinite life, salvage value will have no effect on calculations
Therefore;
Incremental initial cost (B-A) = 185000 - 135000 = 50000
Incremental annual cost (B-A) = 5200 - 9000 = -3800 (Annual savings)
Present worth of infinite annuity = A / i
Incremental rate of return ROR = 3800 / 50000 = 0.076 ≈7.6%
Consider the production department of a manufacturer of laptop computers. Classify the cost of the factory maintenance manager's salary.
a. variable.
b. direct.
c. period.
d. fixed.
Answer:
d. fixed.
Explanation:
The Maintenance Managers`s work can not be directly traced during the production process and this does not meet the definition of a direct cost.
However the Maintainace Managers`s work is key in every production thus, it is an indirect manufacturing cost that in most cases is fixed.
Fixed in the sense that the salary (cost) does not vary with the level of production.
Kenneth Washington's weekly gross earnings for the week ending December 18 were $3,460, and his federal income tax withholding was $726.6. Assuming the social security rate is 6% and Medicare is 1.5% of all earnings, what is Washington's net pay? If required, round your answer to two decimal places.
Answer:
$2,473.9
Explanation:
The computation of net pay is shown below:-
Net pay = Gross pay - Federal income tax withholding - Social security tax - Medicare tax
= $3,460 - $726.6 - ($3,460 × 6%) - ($3,460 - 1.5%)
= $3,460 - $726.6 - $207.6 - $51.9
= $2,473.9
Therefore for computing the net pay we simply applied the above formula i.e the three above taxes are subtracted from the gross pay to arrive net pay
5.The real risk-free rate of interest is 2%. Inflation is expected to be 3.5% the next 2 years and 6% during the next 3 years after that. Assume that the maturity risk premium is zero. What is the yield on 3-year Treasury securities
Answer:
17.50%
Explanation:
The computation of the yield on 3 year treasury securities is shown below:
The Yield on 3 year is
= Risk free rate of return + Inflation premium + Market risk premium
= 2% + (3.5% + 6% + 6%) ÷ 3 years + 0
= 2% + 15.5% + 0
= 17.50%
Hence, the yield on 3 years is 17.50% by applying the above formulas by considering the given information
Ms. White lost her puppy. She advertises a reward of $50 for the return of her puppy. What is the contractual nature of Ms. White's advertisement? g
Answer:
unilateral contract
Explanation:
In this scenario, it seems that Ms. White's advertisement is for a unilateral contract. This is a contract agreement in which an individual (the offeror) promises to pay after the occurrence of a specific action or behavior. Which is what Ms. White is doing by offering money if someone brings her dog back safe and sound. Thus benefiting both parties.
On January 1, 20X9, Gulliver Corporation acquired 80 percent of Sea-Gull Company's common stock for $160,000 cash. The fair value of the noncontrolling interest at that date was determined to be $40,000. Data from the balance sheets of the two companies included the following amounts as of the date of acquisition:
Gulliver Corp. Sea-Gull Corp.
Cash $ 60,000 $ 20,000
Accounts Receivable 80,000 30,000
Inventory 90,000 40,000
Land 100,000 40,000
Buildings and Equipment 200,000 150,000
Less: Accumulated Depreciation (80,000) (50,000)
Investment in Sea-Gull Corp. 160,000
Total Assets $ 610,000 $ 230,000
Accounts Payable $ 110,000 $ 30,000
Bonds Payable 95,000 40,000
Common Stock 200,000 40,000
Retained Earnings 205,000 120,000
Total Liabilities and Equity $ 610,000 $ 230,000
At the date of the business combination, the book values of Sea-Gull's net assets and liabilities approximated fair value except for inventory, which had a fair value of $45,000, and land, which had a fair value of $60,000.
1. Based on the preceding information, what amount of total inventory will be reported in the consolidated balance sheet prepared immediately after the business combination?
A. $130,000
B. $135,000
C. $90,000
D. $45,000
2. Based on the preceding information, what amount of goodwill will be reported in the consolidated balance sheet prepared immediately after the business combination?
A. $0
B. $40,000
C. $20,000
D. $15,000
3. Based on the preceding information, what amount of total assets will be reported in the consolidated balance sheet prepared immediately after the business combination?
A. $720,000
B. $840,000
C. $825,000
D. $865,000
4. Based on the preceding information, what amount of total liabilities will be reported in the consolidated balance sheet prepared immediately after the business combination?
A. $395,000
B. $280,000
C. $275,000
D. $195,000
5. Based on the preceding information, what amount will be reported as noncontrolling interest in the consolidated balance sheet prepared immediately after the business combination?
A. $0
B. $15,000
C. $40,000
D. $46,000
6. Based on the preceding information, what amount of consolidated retained earnings will be reported immediately after the business combination?
A. $205,000
B. $120,000
C. $325,000
D. $310,000
7. Based on the preceding information, what amount will be reported as total stockholders' equity in the consolidated balance sheet prepared immediately after the business combination?
A. $445,000
B. $205,000
C. $565,000
D. $550,000
Answer:
1. Amount of inventory:
D. $45,000
2. Amount of Goodwill:
A. $0
3. Total assets:
A. $720,000
4. Total liabilities:
C. $275,000
5. Non-controlling interest:
C. $40,000
6. Consolidated Retained Earnings
A. $205,000
7. Stockholders' Equity:
$405,000
Explanation:
a) Data:
1. Balance Sheets
Gulliver Corp. Sea-Gull Corp.
Book value Fair value
Cash $ 60,000 $ 20,000 $20,000
Accounts Receivable 80,000 30,000 30,000
Inventory 90,000 40,000 45,000
Land 100,000 40,000 60,000
Buildings and Equipment 200,000 150,000 150,000
Less: Acc. Depreciation (80,000) (50,000) (50,000)
Investment in Sea-Gull Corp.160,000
Total Assets $ 610,000 $ 230,000 $255,000
Accounts Payable $ 110,000 $ 30,000 $30,000
Bonds Payable 95,000 40,000 40,000
Unrealized gain on fair value 25,000
Common Stock 200,000 40,000 0
Retained Earnings 205,000 120,000 0
Total Liabilities & Equity $ 610,000 $ 230,000
Laurasia has identified the following goods as its market basket. Here are the prices of those goods over three years.
Compute the cost of that market basket in all three years.
Answer:
2015 = $942016 = $128.502017 = $115Explanation:
A Market Basket is used to calculate inflation overtime by tracking the change in prices of a specific and permanent number of goods and services.
The formula for calculating the market basket is;
Cost of Market Basket[tex]_{year}[/tex] = ∑(Price of good * Basket Quantity of good)
2015
Cost of Market Basket = (25 * 0.4) + (2 * 18) + ( 4 * 12)
Cost of Market Basket = 10 + 36 + 48
Cost of Market Basket = $94
2016
Cost of Market Basket = (25 * 0.5) + (2 * 22) + ( 4 * 18)
Cost of Market Basket = 12.5 + 44 + 72
Cost of Market Basket = $128.50
2017
Cost of Market Basket = (25 * 0.6) + (2 * 20) + ( 4 * 15)
Cost of Market Basket = 15 + 40 + 60
Cost of Market Basket = $115
The cost of that market basket in all three years. is :
In 2015 = $94 In 2016 = $128.50 In 2017 = $115"Market Basket"A selected gather of buyer merchandise and administrations whose costs are followed for calculating a customer cost file and measuring the taken a toll of living.
2015
Cost of Market Basket = ∑(Price of good * Basket Quantity of good)
Oranges Baseball caps Wrenches
Cost of Market Basket = (25 * 0.4) + (2 * 18) + ( 4 * 12)
Cost of Market Basket = 10 + 36 + 48
Cost of Market Basket = $94
2016
Cost of Market Basket =∑(Price of good * Basket Quantity of good)
Oranges Baseball caps Wrenches
Cost of Market Basket = (25 * 0.5) + (2 * 22) + ( 4 * 18)
Cost of Market Basket = 12.5 + 44 + 72
Cost of Market Basket = $128.50
2017
Cost of Market Basket = ∑(Price of good * Basket Quantity of good)
Oranges Baseball caps Wrenches
Cost of Market Basket = (25 * 0.6) + (2 * 20) + ( 4 * 15)
Cost of Market Basket = 15 + 40 + 60
Cost of Market Basket = $115
Learn more about "Market Basket" :
https://brainly.com/question/8166337?referrer=searchResults
On a CVP chart, on either side of the break-even point, the vertical distance between the total sales line and the total cost line represents:
Answer:
The answer is:
Total loss to the left of the intersection
Total profit to the right of the intersection
Explanation:
Cost-volume-profit (CVP) analysis is a method that looks into the impact of how varying levels of costs and volume will affect the operating profit of a firm. This gives companies good understanding of the profitability of their products or services.
To answer the question above;
Total loss to the left of the intersection
Total profit to the right of the intersection
While the intersection is the break-even