Answer: Loss of $11,000
Explanation:
Total Capital balance is:
= 18,000 + 28,000
= $46,000
Gain on realization = Cash balance - Capital balance
= 35,000 - 46,000
= -$11,000
This is therefore a loss because the cash available cannot cover the capital amount.
how can technological innovation help a company become globalised
Answer: Technology is the vital force in the modern form of business globalization. ... Technology has helped us in overcoming the major hurdles of globalization and international trade such as trade barrier, lack of common ethical standard, transportation cost and delay in information exchange, thereby changing the market place.
Explanation:
A coal-fired power plant can produce electricity at a variable cost of $0.07 per kilowatt-hour when running at its full capacity of 30 megawatts per hour, $0.16 per kilowatt-hour when running at 20 megawatts per hour, and $0.24 per kilowatt-hour when running at 10 megawatts per hour. A gas-fired power plant can produce electricity at a variable cost of $0.12 per kilowatt-hour at any capacity from 1 megawatt per hour to its full capacity of 5 megawatts per hour. The cost of constructing a coal-fired plant is $70 million, but it costs only $14 million to build a gas-fired plant.
Required:
a. Consider a city that has a peak afternoon demand of 80 megawatts of electricity. If it wants all plants to operate at full capacity, what combination of coal-fired plants and gas-fired plants would minimize construction costs?
b. How much will the city spend on building that combination of plants?
c. What will the average cost per kilowatt-hour be if you average over all 80 megawatts that are produced by that combination of plants?
Answer:
a-The construction of 2 coal-fired plants and 4 gas-fired plants will have minimum construction costs.
b-Total construction cost is $196 Million.
c-The average cost is $0.0825 per killowatt-hour.
Explanation:
a
In order to estimate the best combination of the two, consider the following linear programming model
[tex]30X+5Y\leq80\\X\geq0\\Y\geq0[/tex]
with minimizing function as [tex]70X+14Y[/tex]
This yeilds in the optimum solution of 2 coal fired plants and 4 gas fired plants with minimum construction costs.
The construction of 2 coal-fired plants and 4 gas-fired plants will have minimum construction costs.
b
The construction cost is as follows
Number of coal-fired plants=2
Number of gas-fired plants=4
Total Cost=(Cost of 1 Coal-Fired Plant*Number of coal-fired plants)+(Cost of 1 Gas-Fired Plant*Number of gas-fired plants)
[tex]\text{Total Cost}=(70\times 2)+(14\times4)\\\text{Total Cost}=140+56\\\text{Total Cost}=\$196 \text{Million}[/tex]
Total construction cost is $196 Million.
c
Average Cost of Electrici[tex]\text{Average Cost}=\text{Fraction of Coal-Fired}\times\text{Cost of Coal-Fired}+\text{Fraction of Gas-Fired}\times\text{Cost of Gas-Fired}\\\text{Average Cost}=\text{0.75}\times\text{0.07}+\text{0.25}\times\text{0.12}\\\text{Average Cost}=\$0.0525+\$0.03\\\text{Average Cost}=\$0.0825[/tex]ty production is given by estimating the share of electricity produced by coal-fired plants and gas-fired plants
Total energy=80 MW
Energy produced by Coal-Fired Plants at full capacity=2*30=60 MW
Energy produced by Gas-Fired Plants at full capacity=4*5=20 MW
Fraction of Coal-Fired Plants is given as
[tex]\dfrac{\text{Coal-Fired Share}}{\text{Total Energy}}=\dfrac{60}{80}=0.75[/tex]
Fraction of Gas-Fired Plants is given as
[tex]\dfrac{\text{Gas-Fired Share}}{\text{Total Energy}}=\dfrac{20}{80}=0.25[/tex]
Cost of Producing KW-hr by Coal-Fired Plant is $0.07
Cost of Producing KW-hr by Gas-Fired Plant is $0.12
So
[tex]\text{Average Cost}=[\text{Fraction}_{Coal-Fired}\times\text{Cost per KW-hr}_{Coal-Fired}]+[\text{Fraction}_{Gas-Fired}\times\text{Cost per KW-hr}_{Gas-Fired}]\\\text{Average Cost}=(0.75\times0.07)+(0.25\times0.12)\\\text{Average Cost}=(0.0525)+(0.03)\\\text{Average Cost}=\$0.0825[/tex]The average cost is $0.0825 per killowatt-hour.
The Poseidon Swim Company produces swim trunks. The average selling price for one of their swim trunks is $88.71. The variable cost per unit is $18.36, Poseidon Swim has average fixed costs per year of $22,898. What would be the operating profit or loss associated with the production and sale of 485 swim trunks?
Peyton sells an office building and the associated land on May 1 of the current year. Under the terms of the sales contract, Peyton is to receive $2,408,400 in cash. The purchaser is to assume Peyton's mortgage of $1,445,040 on the property. To enable the purchaser to obtain adequate financing, Peyton is to pay the $28,901 in points charged by the lender. The broker's commission on the sale is $96,336. What is Peyton's amount realized
Answer:
$3,728,203
Explanation:
Particulars Amount
Cash Received $2,408,400
Add: Mortgage assume by purchaser $1,445,040
Less: Broker's commission ($96,336)
Less: Points paid by Peyton ($28,901)
Amount realized $3,728,203
One day, Barry the Barber, Inc., collects $400 for haircuts. Over this day, his equipment depreciates in value by $50. Of the remaining $350, Barry sends $30 to the government in sales taxes, takes home $220 in wages, and retains $100 in his business to add new equipment in the future. From the $220 that Barry takes home, he pays $70 in income taxes.
a. gross domestic product
b. net national product
c. national income
d. personal income
e. disposable personal income
Answer: See explanation
Explanation:
a. gross domestic product
The GDP is $400 which is the money that Barry collects for haircut.
b. net national product
Net National Product:
= GDP – Depriciation
= $400 - $50
= $350
c. national income
The national income is the total income that the residents of the country earns and this will be same as Net National Product which is $350
d. personal income
Personal income:
= National income – Retained earnings
= $350 - $100 - $30
= $220
e. disposable personal income
Disposable personal income:
= Personal income – Personal tax
= $220 - $70
= $150
In 1999, the Federal Trade Commission allowed Exxon and Mobil to merge. At the time, Exxon and Mobil were the top two firms in their industry, and their merger created the largest corporation in the world. To allow the merger, Exxon and Mobil agreed to sell 2,431 gas stations. Of these, 1,740 were in the mid-Atlantic states, 360 were in California, 319 were in Texas, and 12 were in Guam.
Why would the U.S. government require Exxon and Mobil to divest themselves of so many gas stations in localized parts of the country to be willing to allow the merger to occur?
a. Because these geographic regions had too many gas stations.
b. To protect consumers from inappropriate price decreases.
c. To ensure competition in these regions and protect consumers from unwarranted price increases.
d. To ensure that Exxon-Mobil would earn fair profits in these geographic areas.
Answer:
1999 Merger of Exxon and Mobil
The reason that made the U.S. government to require Exxon and Mobil to divest themselves of so many gas stations in localized parts of the country to be willing to allow the merger to occur is:
c. To ensure competition in these regions and protect consumers from unwarranted price increases.
Explanation:
The agreement to sell so many gas stations in localized parts of the country was to forestall antitrust lawsuits. It was also made to protect consumers from unwarranted price increases, allowing more competition in the affected areas, where ExxonMobil owed too many gas stations.
The reason why the US would require these two companies to divest themselves is because to ensure competition in these regions and protect consumers from unwarranted price increases.
The answer to this question is option c. Sometimes when two companies merge into one, they could become too powerful. When this is the case, they may end up driving out all their competitors from the market.
At this point, a monopoly may arise from the companies. When a monopoly arises, they would be able to set the price to any amount that they want. This divest option by the government was to ensure the protection of consumers from a situation of price hikes.
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You have just been elected to public office and you have been informed that the government does not have money to pay all of its bills.
You have been told that if you were to cut the marginal tax rate, tax revenue would actually increase. Is this true and if so, what would
be the reason for this?
Choose one
Answer:
Yes. But I actually don't know the reason
please if you get the answer, pleasetext me. sorry for bothering you
You are analyzing two assets: collectible LEGO sets, and stock of Apple. In the last 5 years, LEGOs have had an annual volatility of 5%, annual return of 6%, and a CAPM beta (the correlation coefficient between the asset and the market risk-premium) of 1.6. Apple has had an annual volatility of 10%, an annual return of 8%, and a CAPM beta of 1.2. Is the following statement true or false?
According to CAPM, Apple has a higher expected return than LEGO.
Answer:
No, Apple has lower rate of return than LEGOs.
Explanation:
Risk free rate is 2% and Market risk is 9%
Expected return can be calculated by :
E(r) = Rf + beta * (Rm - Rf)
E(r) LEGOs = 2 + 1.6 * (9 - 2)
E(r) LEGOs = 13.2%
E(r) Apple = 2 + 1.2 * (9 - 2)
E(r) Apple = 10.4%
What are some tasks commonly performed in Facility and Mobile Equipment Maintenance jobs? Check all that apply.
testing vehicles to identify problems
cleaning vehicles and equipment
analyzing the flow of traffic
communicating with customers
steering and navigating vehicles
documenting information
Answer:
A,B,D,F
is correct
Explanation:
assess the way in which a business would benefit from a low interest rate 6 mark
Answer:
one way that a business would benefit from a low intrest rate is that there will be more customer because the borrowing rate is low
Explanation:
A construction company is considering investing $80,000 in a dump truck. The truck will last 5 years, at which time it will be sold for $15,000. The maintenance cost at the end of the first year is estimated to be $9,000. Maintenance costs for the truck are estimated to increase by $1000 per year over its life. As an alternative, the company may lease the truck from a dealership for $X per year, including maintenance.
Required:
a. Draw a cash flow diagram of both alternatives.
b. For what value of X should the company lease the truck if the company does business with a MARR of 7%. Assume end-of-year lease payments.
Answer:
a) attached below
b) X < 2.7767.8
Explanation:
Working with the information available
a) Diagram of the cash flow of both alternatives ( Buying and leasing alternatives )
attached below
b) Determine the value of X if the company leases the truck
Given that : MARR = 7%
assuming end-of-year lease payments
Note : The company will only lease the truck if the cost of buying the truck is higher than the cost of leasing in the long term
∴ we will calculate for The cost of buying ( equivalent annual cost )
= -8000( A/P, 7%, 5 ) - 9000 - 1000 (A/G, 7%, 5 ) + 15000 (A/F, 7%, 5 )
= - 27767.8
Hence the value of X that the company should lease instead of buying will be : X < 2.7767.8
Describe how each of the following will affect the demand for personal computers: (a) A rise in incomes (assuming computers are a normal good); (b) A lower expected price for computers; (c) Cheaper software; (d) Simpler-to-operate computers.
Answer and Explanation:
The impact of the demand in the following situations are
1. Since there is a rise in the income and we assume it is a normal good. So in the case of the normal goods it shows a direct relationship between the income and the demand that means if the income is increased so the demand also increased & vice versa
2. For The lower expected computer price, the demand would decrease as the people predict that the price could decline in future
3. For cheaper software, the demand is increased as the price is very less
4. In the case when the computer are simple to operate so it would increase the demand
A rise in income would lead to an increase in the demand for personal computers.
A lower than expected price for personal computers would lead to a rise in the quantity demanded for personal computers.
A cheaper software would lead to an increase in the demand for personal computers.
Simpler-to-operate computers would lead to an increase in the demand for personal computers.
A normal good is a good whose demand increases when income increases and decreases when income declines.
Only a change in the price of a good leads to a change in the quantity demanded. Other factors lead to a change in demand.
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Dixie Chicken is about to close one of its fast food franchises. As part of the closing, the firm will sell a refrigeration unit and its cooking units. The book value of the refrigeration unit is currently $18,203.00, while the book value of the cooking unit is $3,713.00. A buyer has offered $12,454.00 for the refrigerator and $6,116.00 for the cooking unit. The tax rate facing the firm is 35.00%. What is the cash flow from selling these assets
Answer:
$19741.10
Explanation:
Cash flow from the sale = salvage value - tax(salvage value - book value)
Salvage value is the price at which the asset is sold
The refrigerator : $12,454.00 -0.35($12,454.00 - $18,203.00) = $14,466.15
$6,116.00 - 0.35($6,116.00 - $3,713.00) = $5274.95
Total cash flow = $5274.95 + $14,466.15 = $19741.10
A company acquired a copyright that now has a remaining legal life of 30 years. In the hands of the previous owner, the copyright had a 38-year useful life assigned to it. An analysis of market trends and consumer habits indicated that the copyrighted material will generate positive cash flows for approximately 25 years. What is the remaining useful life, if any, over which the company can amortize the copyright for accounting purposes
Answer:
25 years
Explanation:
the useful life that would be used for accounting proposes is the number of years a positive cash flow can be earned from the copyright
can anyone share important questions on Managerial Information Systems??
i need it for preparing
for my exams
Explanation:
(1) designing systems that are competitive and efficient; (2) understanding the system requirements of a global business environment; (3) creating an information architecture that supports the organization's goals; (4) determining the ...
EcoFabrics has budgeted overhead costs of $1,039,500. It has allocated overhead on a plantwide basis to its two products (wool and cotton) using direct labor hours which are estimated to be 495,000 for the current year. The company has decided to experiment with activity-based costing and has created two activity cost pools and related activity cost drivers. These two cost pools are cutting (cost driver is machine hours) and design (cost driver is number of setups). Overhead allocated to the cutting cost pool is $396,000 and $643,500 is allocated to the design cost pool. Additional information related to these pools is as follows.
Wool Cotton Total
Machine hours 110,000 110,000 220,000
Number of setups 1,100 550 1,650
1. Calculate the overhead rate using activity based costing.
2. Determine the amount of overhead allocated to the wool product line and the cotton product line using activity-based costing.
3. Calculate the overhead rate using traditional approach.
4. What amount of overhead would be allocated to the wool and cotton product lines using the traditional approach, assuming direct labor hours were incurred evenly between the wool and cotton?
Answer:
1. Cutting $1.80 per machine hour
Design $390 per setup
2. Wool product line $627,000
Cotton Product line $412,500
3. Overhead rate $2.10
4. Wool Product line $519,750
Cotton Product line $519,750
Explanation:
1. Calculation to determine the overhead rate using activity based costing.
Overhead rate using the activity based costing
Cutting = Overhead / Total Machine hours
= $396,000 / 220,000
= $1.80 per machine hour
Design = Overhead / Number of setups
= $643,500 / 1,650
= $390 per setup
2. Calculation to determine the amount of overhead allocated to the wool product line and the cotton product line using activity-based costing
Overhead allocated to the wool product line and the cotton product line
Wool product line = (110,000 * $1.80) + (1,100 * $390)
Wool product line= $198,000 + $429,000
Wool product line= $627,000
Cotton Product line = (110,000 * $1.80) + (550 * $390)
Cotton Product line= $198,000 + $214,500
Cotton Product line= $412,500
3.Calculation to determine the overhead rate using traditional approach.
Overhead rate using traditional approach
Overhead rate = Total Overhead / Direct labor hours
Overhead rate= $1,039,500 / 495,000
Overhead rate= $2.10
4. Calculation to determine What amount of overhead would be allocated to the wool and cotton product lines using the traditional approach
Overhead allocated using the traditional method
Wool Product line = $1,039,500 / 2
Wool Product line= $519,750
Cotton Product line = $1,039,500 / 2
Cotton Product line= $519,750
The Laramie Factory produces expensive boots. It has two departments, tanning and finishing departments, that process all the items. During January, the beginning work in process in the tanning department was 40% complete as to conversion and 100% complete as to direct materials. The beginning inventory included $6,000 for materials and $18,000 for conversion costs. Ending work-in-process inventory in the tanning department was 40% complete. Direct materials are added at the beginning of the process. Beginning work in process in the finishing department was 60% complete as to conversion. Beginning inventories included $7,000 for transferred-in costs and $11,000 for conversion costs. Ending inventory was 30% complete. Additional information about the two departments follows: Tanning Finishing Beginning work-in-process units 5,000 4,000 Units started this period 14,000 Units transferred out this period 16,000 18,000 Ending work-in-process units 2,000 Material costs added $18,000 Conversion costs $32,000 $18,630 Transferred-out cost $50,400 Required: Complete the production cost worksheet below using FIFO costing for the finishing department.
Answer:
The Laramie Factory
Cost Worksheet for the Finishing Department, using FIFO Costing
Finishing Department
Cost assigned to: Materials Conversion Total
Units transferred out $45,360 $18,000 $63,360
Ending work in process 5,040 600 5,640
Total cost accounted for $50,400 $18,600 $69,000
Explanation:
a) Data and Calculations:
Materials Conversion
Tanning Finishing Tanning Finishing
Beginning work in process 100% 100% 40% 60%
Cost of beginning WIP $6,000 $7,000 $18,000 $11,000
Ending work in process 100% 100% 40% 30%
Additional information:
Tanning Finishing
Beginning work-in-process units 5,000 4,000
Units started this period 14,000 16,000
Units transferred out this period 16,000 18,000
Ending work-in-process units 3,000 2,000
Materials Conversion
Tanning Finishing Tanning Finishing
Beginning work in process 100% 100% 40% 60%
Beginning work in process done this period 60% 40%
Ending work in process 100% 100% 40% 30%
Cost of beginning WIP $6,000 $7,000 $18,000 $11,000
Costs added 18,000 $54,255 32,000 18,630
Total costs of production $24,000 $61,255 $50,000 $29,630
Transferred-out cost $50,400
Equivalent units
Materials Conversion
Tanning Finishing Tanning Finishing
Beginning work-in-process units 0 0 3,000 1,600
Units started and completed 16,000 18,000 13,000 16,400
Ending work-in-process units 3,000 2,000 1,200 600
Equivalent units of production 19,000 20,000 17,200 18,600
Cost per equivalent units Materials Conversion
Tanning Finishing Tanning Finishing
Costs added/transferred in $18,000 $50,400 $32,000 $18,630
Equivalent units of production 19,000 20,000 17,200 18,600
Cost per equivalent unit $0.95 $2.52 $1.86 $1.00
Tanning Department
Cost assigned to: Materials Conversion Total
Units transferred out $15,200 $29,760 $44,960
Ending work in process 2,850 2,232 5,082
Total costs $18,050 $31,992 $50,042
Finishing Department
Cost assigned to: Materials Conversion Total
Units transferred out $45,360 $18,000 $63,360
Ending work in process 5,040 600 5,640
Total cost accounted for $50,400 $18,600 $69,000
Explanation:
50,400
18,600
69,000
BRAINILIEST PLEASEOne thousand adults live in Milltown. Every day, they all leave work at 4:30 p.m., arrive home at exactly 5:00 p.m., and go to bed at 9:00 p.m. Three fundraisers, Alpha, Beta, and Charlie, have targeted Milltown's population. To get a donation, they must call Milltown's residents after they get home from work but before they go to bed. Because the charities raising the funds are identical, the first to call a willing donor will get the donation. Beta's manager has decided that the best time to call is 7:00 p.m. because it is exactly halfway between 5:00 p.m. and bedtime. Which of the following is true?
a. Alpha and Charlie will also make calls at 7:00 p.m.
b. Beta's manager did not choose wisely.
c. Alpha and Charlie will divide up the rest of the market, with one choosing to call at 6:00 p.m. and the other at 8:00 p.m.
d. Beta is certain to generate the most donations.
Answer:
b. Beta's manager did not choose wisely.
Explanation:
If you know that you are competing with identical charities, calling later will only result in fewer donations. The calls should start at 5 PM, and probably the three fundraisers will start calling at the same time. The only advantage that they can have depends on reaching the adults first, so the time of the calls is important.
Sara is about to graduate high school. She has saved money the last few years while working a part-time job. Her parents bought her a car when she turned 16, but her younger brother is about to turn 16 and her parents have promised him the car when he turns 16. This means Sara must buy a car on her own. She has about $6,000 saved, and she received another $1,000 in graduation gifts. She wants to buy a reliable car that will last her throughout college. She has spotted a Honda Accord with low miles, but the asking price is $15,000.
Required:
Which banking service is Sara most interested in?
Answer:
Loan services
Explanation:
Based on the information given in a situation where She has the saved amount of $6,000 as well as the amount of $1,000 she received in graduation gifts which means that she will have $7,000 ($6,000+$1,000), Now if She wants to buy a car that is reliable in which the asking price of the car is the amount of $15,000 which means that Sara still need the amount of $8,000 ($15,000-$7,000) to balance the already saved amount of $7,000. Based on this the banking service that she most interested in is LOAN SERVICE reason been that this banking service will enable her to acquire the loan amount of $8,000 ($15,000-$7,000) in order for her to buy the Honda Accord she spotted.
Therefore the banking service that Sara is most interested in is LOAN SERVICES
Suppose two types of consumers buy suits. Consumers of type A will pay $100 for a coat and $50 for pants. Consumers of type B will pay $75 for a coat and $75 for pants. The firm selling suits faces no competition and has a marginal cost of zero. The optimal commodity bundling strategy is:
Answer:
Charge $150 for a suit
Explanation:
Bundling strategy is the pricing of goods by a business despite different customers having different preferential prices they are willing to pay for the good.
In this scenario Consumers of type A will pay $100 for a coat and $50 for pants. Consumers of type B will pay $75 for a coat and $75 for pants.
The two customers are willing to pay $150 for both the jacket and the pants.
So the best decision for the company is to sell a suit made up of the jacket and pants for $150.
This way bother customers will get their preferred price.
Charging $150 for the suit is the optimal commodity bundling strategy in this scenario. Thus, Option (C) is correct.
Consumers of type A are willing to pay $100 for a coat and $50 for pants, totaling $150. By offering a bundled price of $150, the firm ensures that consumers of type A are willing to purchase the suit at their maximum willingness to pay.
Consumers of type B, who are willing to pay $75 for both the coat and pants individually, also find the bundled price of $150 attractive because it allows them to acquire both items at their maximum willingness to pay.
Thus, Option (C) i.e. charging $150 for a suit would maximize the firm's revenue by catering to both types of consumers and capturing their respective willingness to pay.
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Suppose two types of consumers buy suits. Consumers of type A will pay $100 for a coat and $50 for pants. Consumers of type B will pay $75 for a coat and $75 for pants. The firm selling suits face no competition and has a marginal cost of zero. The optimal commodity bundling strategy is: Multiple Choice
a)Charge $100 for a suit.
b)Charge $75 for a suit.
c)Charge $150 for a suit.
d)Charge $125 for a suit.
Think about a financial decision you made regarding the purchase of a big-ticket item or investment within the last five years. Provide a summary on the discussion thread, answering the following questions:What decision did you make?How prepared were you to make the decision?What was your thought process as you were making the decision?What financial information did you need to make the decision and why?What lessons have you learned that you will apply to future financial decisions?
Super Clinics offers one service that has the following annual cost and utilization estimates: Variable cost per visit $ 10 Annual direct fixed costs $50,000 Allocation of overhead costs $20,000 Expected utilization 1,000 visits What price per visit must be set if the clinic wants to make an annual profit of $10,000 on the service? A. $ 70 B. $ 80 C. $ 90 D. $100 E. $110
Answer:
C. $ 90
Explanation:
Number of visits = 1,000
Variable cost = $10 × 1,000 = $10,000
Fixed cost = $50,000
Overhead cost = $20,000
Required profit = $10,000
So,Total Cost = Variable Cost+ Fixed Cost+ Overhead Cost
= $10,000 + $50,000 + $20,000
= $80,000
Now, Price per Visit = (Total Cost+ Required Profit) ÷ Number of visits
= ($80,000 + $10,000) ÷ 1,000
= $90,000 ÷ 1,000
= $90
Dividends on CCN corporation are expected to grow at a 9% per year. Assume that the discount rate on CCN is 12% and that the expected dividend per share in one year is $0.50. CCN has just paid a dividend, so the next dividend is the $0.50 to be paid one year from now. Calculate the expected price per share 14 years from now. Assume that a dividend has just been paid.
Answer:
P14 = $55.69545045394 rounded off to $55.70
Explanation:
The constant growth model of dividend discount model (DDM) can be used to calculate the price of the stock today. DDM calculates the price of a stock based on the present value of the expected future dividends from the stock. The formula for price today under constant growth DDM is,
P0 = D1 / (r - g)
Where,
D1 is the dividend expected in Year 1 or next year g is the constant growth rate in dividends r is the discount rate or required rate of return
To calculate the price of the share today, we use the dividend that is expected next year or in Year 1. Thus, to calculate the price of the share 14 years from now, we use use D15. The D15 can be calculated as follows,
D15 = D1 * (1+g)^14
D15 = 0.50 * (1+0.09)^14
D15 = $1.67086351362 rounded off to $1.67
Now using the equation for Price as provided by the DDM model,
P14 = 1.67086351362 / (0.12 - 0.09)
P14 = $55.69545045394 rounded off to $55.70
Placid Lake Corporation acquired 90 percent of the outstanding voting stock of Scenic, Inc., on January 1, 2020, when Scenic had a net book value of $640,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $7,000 per year. Placid Lake's 2021 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was $540,000. Scenic reported net income of $350,000. Placid Lake declared $170,000 in dividends during this period; Scenic paid $64,000. At the end of 2021, selected figures from the two companies' balance sheets were as follows:
Placid Lake Corporation Scenic, Inc.
Inventory $350,000 $111,000
Land 810,000 410,000
Equipment (net) 610,000 510,000
During 2019, intra-entity sales of $180,000 (original cost of $84,000) were made. Only 30 percent of this inventory was still held within the consolidated entity at the end of 2019. In 2020, $300,000 in intra-entity sales were made with an original cost of $80,000. Of this merchandise, 40 percent had not been resold to outside parties by the end of the year.
Required:
a. What is consolidated net income for Placid Lake and its subsidiary?
b. If the intra-entity sales were upstream, how would consolidated net income be allocated to the controlling and noncontrolling interest?
c. If the intra-entity sales were downstream, how would consolidated net income be allocated to the controlling and noncontrolling interest?
d. What is the consolidated balance in the ending Inventory account?
Answer:
a. Consolidated net income for Placid Lake and its subsidiary is $823,800.
b-1. Noncontrolling interest share of consolidated net income is $28,380.
b-2. Placid Lakes or controlling interest share of consolidated net income is $795,420. .
c-1. Noncontrolling interest share of consolidated net income is $34,300.
c-2. Placid Lakes or controlling interest share of consolidated net income is $789,500.
d. Consolidated balance in the ending Inventory account is $373,000.
Explanation:
Note: There is a minor error in the question where 2019 is used instead of 2020. This is therefore corrected to avoid confusion before answering the question. The complete question with the correction is therefore presented as follows:
Placid Lake Corporation acquired 90 percent of the outstanding voting stock of Scenic, Inc., on January 1, 2020, when Scenic had a net book value of $640,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $7,000 per year. Placid Lake's 2021 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was $540,000. Scenic reported net income of $350,000. Placid Lake declared $170,000 in dividends during this period; Scenic paid $64,000. At the end of 2021, selected figures from the two companies' balance sheets were as follows:
Placid Lake Corporation Scenic, Inc.
Inventory $350,000 $111,000
Land 810,000 410,000
Equipment (net) 610,000 510,000
During 2020, intra-entity sales of $180,000 (original cost of $84,000) were made. Only 30 percent of this inventory was still held within the consolidated entity at the end of 2020. In 2020, $300,000 in intra-entity sales were made with an original cost of $80,000. Of this merchandise, 40 percent had not been resold to outside parties by the end of the year.
Required:
a. What is consolidated net income for Placid Lake and its subsidiary?
b. If the intra-entity sales were upstream, how would consolidated net income be allocated to the controlling and noncontrolling interest?
c. If the intra-entity sales were downstream, how would consolidated net income be allocated to the controlling and noncontrolling interest?
d. What is the consolidated balance in the ending Inventory account?
Explanation of the answers is now given as follows:
Note: See the attached excel file for all the calculation related parts a, b, and c.
d. What is the consolidated balance in the ending Inventory account?
Unrealized gross profit, 12/31/21 (w.2. in the attached excel file) = $88,000
Consolidated balance in the ending Inventory account = Book value of Placid Lake Corporation Inventory + Book value of Scenic, Inc. Inventory - Unrealized gross profit, 12/31/21 = $350,000 + $111,000 - $88,000 = $373,000
For a business owner, insurance is a cost just like any other expenses. How does buying business
insurance and offering insurance to employees affect the business's profit and success?
Answer:
It adds an additional expense which means a percentage of profits are depleted. However, it contributes to the wellbeing of the employees showing that they are cherished and have the opportunity to earn benefits which can play a role in motivating them. Due to this it is more likely the workforce would be more comfortable working for the organisation thus leading to a higher chance at success.
Present Value of Ordinary Annuity Period/Rate 5% 6% 7% 8% 9% 10 7.7217 7.3601 7.0236 6.7101 6.4177 11 8.3064 7.8869 7.4987 7.1390 6.8052 12 8.8633 8.3838 7.9427 7.5361 7.1607 13 9.3936 8.8527 8.3577 7.9038 7.4869 Knowledge Check 01 Clean Tel, Inc. is considering investing in an 11-year project with annual cash inflows of $1,000,000. These cash inflows have an initial investment of $7,139,000. At what discount rate would this present value be the same as the initial investment
Answer:
The discount rate of 8% for 11 year period provides the present value of annual cash flows to be equal to the initial investment.
Explanation:
Using the table of present value of annuity provided, we can check the rate and time period which is return the present value of cash flows from the project to be equal to initial Investment.
We are told that the Project's life is expected to be 11 Years. Thus using the 11 year period from the table we can see the following rates,
11 Year Period
Rate = 5% , Annuity Factor = 8.3064
Rate = 6% , Annuity Factor = 7.8869
Rate = 7% , Annuity Factor = 7.4987
Rate = 8% , Annuity Factor = 7.1390
Rate = 9% , Annuity Factor = 6.8052
We know that the annual cash flows from the project is $1,000,000 and we know the Initial Outlay is $7,139,000.
Multiplying the annual cash flow from the above annuity factors for each rate we can see which rate provides the present value of annual cash flows to be equal to initial outlay.
Rate = 5% , Present value = 8.3064 * 1000000 = $8,306,400
Rate = 6% , Annuity Factor = 7.8869 * 1000000 = $7,886,900
Rate = 7% , Annuity Factor = 7.4987 * 1000000 = $7,498,700
Rate = 8% , Annuity Factor = 7.1390 * 1000000 = $7,139,000
Rate = 9% , Annuity Factor = 6.8052 * 1000000 = $6,805,200
From the above calculation we can see that the rate of 8% provides the present value of annual cash flows to be equal to the initial investment.
BenjaminCompanyproducesproductsC,J,andRfromajointproductionprocess.Eachproductmaybesold at the split-off point or processed further. Joint production costs of $95,000 per year are allocated to the productsbasedontherelativenumberofunitsproduced.DataforBenjamin'soperationsforlastyearfollow:
Answer:
Product C and J only should processed further.
Explanation:
A project from a joint process should be processed further if additional sales revenue from further processing exceeds further processing cost.
So we will compare the net income i.e additional sales revenue minus sales further processing cost less for the three products as follows:
Net income
Product C : (100,000-75,000)-20,000 = $5,000
Product J: (115,000-70,000)-36,000= $9,000
Product R: (55,000-46,500) - 10,000=$(1,500)
Product C and J only should processed further.
Charise is considering how much to charge for her small business’s products. Charise is involved in
Group of answer choices
Answer:
charity
Explanation:
The management accountant for Giada's Book Store has prepared the following income statement for the most current year: Cookbook Travel Book Classics Total Sales $63,000 $179,000 $60,000 $302,000 Cost of goods sold 37,000 70,000 23,000 130,000 Contribution margin 26,000 109,000 37,000 172,000 Order and delivery processing 19,000 26,000 9,000 54,000 Rent (per sq. foot used) 3,000 3,000 3,000 9,000 Allocated corporate costs 10,000 10,000 10,000 30,000 Corporate profit $ (6,000) $70,000 $15,000 $79,000 If the cookbook product line had been discontinued prior to this year, the company would have reported ________. the same amount of corporate profits less corporate profits greater corporate profits resulting profits cannot be determined
Answer:
the company would have reported loss
Vaughn Manufacturing purchased land as a factory site for $1345000. Vaughn paid $116000 to tear down two buildings on the land. Salvage was sold for $8100. Legal fees of $5500 were paid for title investigation and making the purchase. Architect's fees were $46900. Title insurance cost $3900, and liability insurance during construction cost $4200. Excavation cost $15860. The contractor was paid $4300000. An assessment made by the city for pavement was $9500. Interest costs during construction were $260000.
1. The cost of the land that should be recorded by Wilson Co. is:_____.
a. $989,880.
b. $980,480.
c $996,280.
d. $986,880.
2. The cost of the building should be recorded by Wilson Co. is:_____.
a. 2,804,840.
b. 2,813,200.
c. 2,803,800.
d. 3,014,240.
Answer:
Cost of Land = $1,471,800
Cost of Building = $4,626,960
Explanation:
Note: "The options attached to the question are incorrect because its belongs to another question entirely and this can be seen as attached as picture below"
1. Cost of Land = Purchase Value + Cost Incurred to Tear Down two Buildings - Salvage + Legal Fees + Title Insurance Cost + Assessment Cost
Cost of Land = $1345000 + $116000 - $8100 + $5500 + $3900 + $9500
Cost of Land = $1,471,800
2. Cost of Building = Architect's Fees + Liability Insurance Cost + Excavation Cost + Contractor's Payment + Interest Cost
Cost of Building = $46900 + $4200 + $15860 + $4300000 + 260000
Cost of Building = $4,626,960