Answer:
Corporate Culture Of Enron:
The culture at Enron was not promoting integrity and core values of business ethics. The corporate culture of the company has been supporting unethical behavior of employees prevailing in the workplace. There have been no importance given to business ethics. The company punished the employees who appeared to be weak resource for the organization and department were forced to fire low ranking employees creating Job security issues for them. The employees then engaged in such illegal activities to keep themselves at the top rank even at the cost of company. There was also miscommunication in the organization about its performance to the stakeholders.
Explanation:
Contribution of Banker's, Auditors and Attorneys:
Auditors were responsible for ensuring accuracy of financial statements. Anderson deceived many investors who relied on companies financial statements. Anderson certified financial statements of the company without questioning them about the relevancy and accuracy. Anderson was found guilty of obstructing justice by destroying Enron's related auditing documents. Attorneys helped to mold some of company's special purpose partnership. These deals lead to demise of the company. Merrill Lynch replaced research analyst after his coverage of the Enron company which dissatisfied the company executives. Merrill Lynch was subject to threats by Enron that it would loose $750 million from stock offerings.
Role Of CEO:
The CEO of the company contributed to the bankruptcy of the company by involving in unconsolidated partnerships and special purpose entities. He was involved in exploiting the market by using techniques that rapidly exploit deregulating markets. He tripled the staff of Enron for demeaning the Enron's Credit Rating.
The trial balance for Skysong, Inc. appears as follows: Skysong, Inc. Trial Balance December 31, 2022 Cash $280 Accounts Receivable 480 Prepaid Insurance 75 Supplies 166 Equipment 3680 Accumulated Depreciation, Equipment $550 Accounts Payable 353 Common Stock 1100 Retained Earnings 1290 Service Revenue 2768 Salaries and Wages Expense 920 Rent Expense 460 $6061 $6061 If, on December 31, 2022, the insurance still unexpired amounted to $18, the adjusting entry would contain a:
Answer:
Debit Insurance expenses for $57
Credit Prepaid insurance for $57
Explanation:
From the Trial Balance, Prepaid Insurance is $75. Since on December 31, 2022, the insurance still unexpired amounted to $18, the insurance expenses for the year can therefore be calculated as follows:
Insurance expenses = $75 - $18 = $57
The adjusting entries will therefore be as follows:
Particulars Dr ($) Cr ($)
Insurance expenses 57
Prepaid insurance 57
(To record insurance expenses for the year.)
Note that the amount of $18 unexpired insurance will now be the Prepaid insurance that will appear as an asset under the Current Asset in the balance sheet, while the $57 insurance expenses will be charged as an expense in the income statement.
Money can be many things, but it is NOT Group of answer choices a financial liability liguid illiguid a financial asset
Answer:
illiquid
Explanation:
Liquidity refers to how fast an asset can be converted to cash. Money is already cash, so it is the most liquid financial asset
If an investment center has a $90,000 controllable margin and $1,200,000 of sales, what average operating assets are needed to have a return on investment of 10%
Answer:
Average operating assets is $900,000
Explanation:
The formula for return on investment stated below is the starting for solving this question:
return on investment= Net operating income / Average operating assets
return on investment is 10%
net operating income is the same as controllable margin of $90,000
Average operating assets is the unknown
10%=90000/average operating assets
average operating assets=90000/10%
average operating assets=$900,000
"If a member firm routes a customer market order for an NYSE listed issue to the NYSE's automated trading system, the order will be sent to:"
Answer:
Super display book
Explanation:
Super display book is the NYSE's automated execution system for dealing listed issues. It is a programme installed in a computer, which display information like timing, record, quantity, price and execute orders for securities on the stock exchange market. Super display book ensures that orders are routed directly and correctly to a specialist for quick resolution.
Large and complex orders usually placed on the NYSE are handled by floor brokers hence does not execute most orders placed by individual investors. These order placed by individual investors are directed by super display book to a specialist for quick resolution.
What is the current yield for a Bond with a $1,000 par value bond, a 3% annual coupon rate that matures in 5 years, if the opportunity cost is 7%
Answer:
$836
Explanation:
market interest rate = 7%
in order to determine the current price of the bond we must add the present value of face value + coupon payments:
PV of face value = $1,000 / (1 + 7%)⁵ = $712.99
PV of coupon payments = $30 x 4.1002 (PV annuity factor, 7%, 5 periods) = $123.01
current market price = $712.99 + $123.01 = $836
Your company has assigned one of its vice presidents to function as your project sponsor. Unfortunately, your sponsor refuses to make any critical decisions, always "passing the buck" back to you. What should you do
Explanation:
In this case, the best thing to do is to try to see the challenge of dealing with the lack of critical decision making by the project sponsor, as an opportunity to make the project progress smoothly and reach its best potential.
For this, the ideal is to respect the costs and the deadlines, without exceeding the budgets and the time necessary to carry out the tasks.
The good relationship between the team is also essential for there to be the necessary fluidity for the project to take place organically and as planned. It is also necessary to be attentive to the project's indicators, since monitoring and control are essential to observe the progress of the achievement of goals and the overall performance of the project's progress.
he ability to hire, motivate, and retain human capital is an example of ________ capabilities in the resource-based view of the firm.
Answer:
Organizational capabilities
Explanation:
The ability to hire, motivate, and retain human capital is an example of organizational capabilities in the resource-based view of the firm.
An organizational capability is the ability of a firm to manage resources, such as it's employees, effectively which will give them an edge over competitors. Organizational capabilities differntiates a firm from competitors.
Oriole Company had $197,000 of net income in 2019 when the selling price per unit was $152, the variable costs per unit were $90, and the fixed costs were $571,800. Management expects per unit data and total fixed costs to remain the same in 2020. The president of Oriole Company is under pressure from stockholders to increase net income by $99,200 in 2020.
Required:
a. Compute the number of units sold in 2019.
b. Compute the number of units that would have to be sold in 2020 to reach the stockholders’ desired profit .
c. Assume that Oriole Company sells the same number of units in 2020 as it did in 2019. What would the selling price have to be in order to reach the stockholders’ desired profit level?
Answer:
Instructions are below.
Explanation:
Giving the following information:
Net income= $197,000
Selling price per unit= $152
Unitary variable cost= $90
Fixed costs= $571,800
Desired profit= 99,200 + 197,000= $296,200
First, we need to calculate the number of units sold:
Contribution margin per unit= 152 - 90= $62
Total contribution margin= net income + fixed costs
Total contribution margin= 197,000 + 571,800= $768,800
Units sold= total contribution margin / unitary contribution margin
Units sold= 768,800/62= 12,400 units
Now, to determine the number of units to be sold, we need to use the following formula:
Break-even point in units= (fixed costs + desired profir) / contribution margin per unit
Break-even point in units= (571,800 + 296,200) / 62
Break-even point in units= 14,000 units
Finally, we need to determine the selling price for 12,400 units and the desired profit of $296,200.
12,400= 868,000 / (selling price - 90)
-1,116,000 + 12,400selling price= 868,000
12,400 selling price = 1,984,000
selling price= $160
Great Lakes Packing has two bond issues outstanding. The first issue has a coupon rate of 3.82 percent, a par value of $1,000 per bond, matures in 6 years, has a total face value of $5.2 million, and is quoted at 103 percent of face value. The second issue has a coupon rate of 6.59 percent, a par value of $1,000 per bond, matures in 14 years, has a total face value of $9.5 million, and is quoted at 107 percent of face value. Both bonds pay interest semiannually. The company's tax rate is 35 percent. What is the firm's weighted average aftertax cost of debt
Answer:
3.22%
Explanation:
we must first determine the yield to maturity of both bonds in order to determine their before tax cost of debt:
YTM = {coupon + [(face value - market value)/n]} / [(face value + market value)/2]
YTM Bond₁ = {19.10 + [(1,000 - 1,030)/12]} / [(1,000 + 1,030)/2] = 16.6 / 1,015 = 0.01635 x 2 = 3.27%
YTM Bond₂ = {32.95 + [(1,000 - 1,070)/28]} / [(1,000 + 1,070)/2] = 0.0294 x 2 = 5.88%
firm's weighted after tax cost of debt = {[($5.2 / $14.7) x 3.27%] x (1 - 0.35)} + {[($9.5 / $14.7) x 5.88%] x (1 - 0.35)} = 0.75% + 2.47% = 3.22%
Intense rivalry involving actions and responses among similar competitors vying for the same customers in a marketplace is known as _____________.
Answer:
competitive dynamics
Explanation:
The term that is being described in this question is known as competitive dynamics. Like mentioned, this is the study of the rivalry between various firms that is made up of their competitive actions/responses, their micro/macro level context, and even their antecedents and consequences. Which all-in-all add up to their effort on acquiring the same customers as their client.
The Revenue Reconciliation Act of 1993 modified the 1986 passive loss restrictions by allowing individuals who materially participate in rental real estate to deduct rental losses from other income. To qualify, how much time must a person devote to personal services to real property trades or business during a tax year
Answer:
The answer is "50%"
Explanation:
Modify the state budget Act of 1974 to boost the FY in 1994 and 1995. It is the maximum federal debt quantity and also to set these other quantities for FY 1996 to 1998. Repudiates in the 1994 and 1995 boundaries on consumption spending.
In the Act of 1993, it modifies the 1986 active losses restrictions so, that it allowed rental damages from other revenues to also be deducted from persons who significantly participated such rental properties.
The person may allocate 50% to his time towards services rendered throughout a tax year from the business.
On April 1, 2021, Shoemaker Corporation realizes that one of its main suppliers is having difficulty meeting delivery schedules, which is hurting Shoemaker's business. The supplier explains that it has a temporary lack of funds that is slowing its production cycle. Shoemaker agrees to lend $420,000 to its supplier using a 12-month, 12% note.
Required:
1. The loan of $420,000 and acceptance of the note receivable on April 1, 2021
2. The adjustment for accrued interest on December 31, 2021
3. Cash collection of the note and interest on April 1, 2022.
Answer:
1. April 01, 2021
Dr Notes receivable 420,000
Cr Cash 420,000
2. December 31,2021
Dr Interest receivable 37,800
Cr Interest revenue 37,800
3. April 01, 2022
Dr Cash 470,400
Cr Notes receivable 420,000
Cr Interest receivable 37,800
Cr Interest revenue 12,600
Explanation:
Preparation of the Journal entries Shoemaker Corporation
1. Preparation of the Journal entry for loan o amount of $420,000 as well as the acceptance of the note receivable on April 1, 2021
April 01, 2021
Dr Notes receivable 420,000
Cr Cash 420,000
2. Preparation of the Journal entry for the adjustment for accrued interest on December 31, 2021
December 31,2021
Dr Interest receivable 37,800
Cr Interest revenue 37,800
($420,000 × 12% × 9/12=$37,800)
3. Preparation of the Journal entry for the Cash collection of the note and interest on April 1, 2022
April 01, 2022
Dr Cash 470,400
Cr Notes receivable 420,000
Cr Interest receivable 37,800
Cr Interest revenue 12,600
($420,000 × 12% × 3/12=$12,600)
Assume that your roommate is very messy. According to campus policy, you have a right to live in an uncluttered apartment. Suppose she gets a $200 benefit from being messy but imposes a $100 cost on you. The Coase theorem would suggest that an efficient solution would be for your roommate to
Answer: b. pay you at least $100 but less than $200 to live with the clutter.
Explanation:
The options are:
a. stop her messy habits or else move out.
b. pay you at least $100 but less than $200 to live with the clutter.
c. continue to be messy and force you to move out.
d. demand payment of at least $100 but no more than $200 to clean up after herself.
According to the Coase theorem, if a party has the rights to a property, then an efficient output level will be achieved when there is some sort of bargaining between the parties that are involved.
Since the roommate gets a $200 benefit from being messy but imposes a $100 cost on me, an efficient solution would be for my roommate to pay me at least $100 but less than $200 to live with the clutter.
The following data were reported by a corporation: Authorized shares 20,000 Issued shares 15,000 Treasury shares 3,000 The number of outstanding shares is:
Answer:
12,000
Explanation:
The following data was reported for an organisation
Authorized shares is 20,000
Issued shares is 15,000
Treasury shares is 3,000
Therefore, the number of outstanding shares can be calculated as follows
Number of outstanding shares= Issued stock-Treasury stock
= 15,000-3,000
= 12,000
Hence the number of outstanding shares is 12,000
Individual Retirement Accounts (IRAs) allow people to shelter some of their income from taxation. Suppose the maximum annual contribution to such accounts is $5,000 per person. Now suppose there is an increase in the maximum contribution, from $5,000 to $8,000 per year.
a. This change in the tax treatment of saving causes the equilibrium interest rate in the market for loanable funds to _ and the level of investment spending to _.
b. An investment tax credit effectively lowers the tax bill of any firm that purchases new capital in the relevant time period. Suppose the government repeals a previously existing investment tax credit.
The repeal of the previously existing tax credit causes the interest rate to _______ and the level of investment to ________.
c. Initially, the government's budget is balanced, then the government responds to the conclusion of a war by significantly reducing defense spending without changing taxes.
This change in spending causes the government to run a budget __________ which ________ national saving. This causes the interest rate to ________ and the level of investment spending to _______
Answer:
a. Individual Retirement Accounts (IRAs) allow people to shelter some of their income from taxation. Suppose the maximum annual contribution to such accounts is $5,000 per person. Now suppose there is an increase in the maximum contribution, from $5,000 to $8,000 per year.
This change in the tax treatment of saving causes the equilibrium interest rate in the market for loanable funds to _decrease and the level of investment spending to increase_.
b. An investment tax credit effectively lowers the tax bill of any firm that purchases new capital in the relevant time period. Suppose the government repeals a previously existing investment tax credit.
The repeal of the previously existing tax credit causes the interest rate to ___increase____ and the level of investment to ___decrease_____.
c. Initially, the government's budget is balanced, then the government responds to the conclusion of a war by significantly reducing defense spending without changing taxes.
This change in spending causes the government to run a budget ___surplus_______ which ___increases_____ national saving. This causes the interest rate to ___decrease_____ and the level of investment spending to __increase_____
Explanation:
Interest rate decreases with increased savings and this results to increased investment as funds are available at affordable costs. The situation is reversed when the savings are decreased, since the interest rate will increase as there are less savings for investment purposes.
There is a continuous interaction between taxation, savings, government spending, inflation, and investment versus interest rates. This means that interest rates also reflect these factors put together. This why in both fiscal and monetary policies, governments try to strike some balance in order to direct the economy towards desired targets. For example, when the government wants to stimulate the economy, it works to reduce interest rates in order to encourage investments, but this also lowers the propensity to save and encourages the propensity to spend, which trigger inflation and increases interest rate as an aftermath. And this seems to be an endless vicious or virtuous circle, depending on what is achieved by the monetary and fiscal measures in operation.
Assume the MPC is 0.8. Assuming only the multiplier effect matters, a decrease in government purchases of $100 billion will shift the aggregate demand curve to the:__________
a. left by $180 billion.
b. left by $500 billion.
c. right by $180 billion.
d. right by $400 billion.
Answer:
b. left by $500 billion.
Explanation:
Given marginal propensity to consume, MPC = 0.8
Marginal propensity to consume + Marginal propensity to save = 1
MPC + MPS = 1
0.8 + MPS = 1
MPS = 1-0.8
MPS = 0.2
Now, the government multiplier = 1/MPS
The government multiplier = 1 / 0.2 = 5
Total fall in aggregate demand = Government multiplier × Government purchases
= 5 ×100
= $500
Since there is a fall in spending so the aggregate demand curve will shift leftwards.
Therefore, the correct option is b. left by $500 billion.
A company that makes shopping carts for supermarkets and other stores recently purchased some new equipment that reduces the labor content of the jobs needed to produce the shopping carts. Prior to buying the new equipment, the company used five workers, who produced an average of 77 carts per hour. Workers receive $11/hour and machine cost was $47 per hour. With the new equipment, it was possible to transfer one of the workers to another department, and equipment cost increased by $14 per hour while output increased by four carts per hour.
a. Compute the multifactor productivity(MFP) (labor plus equipment) under the Prior to buying the new equipment. (Round to 4 decimal places)
b. Compute the % growth in productivity between the Prior and after buying the new equipment. (Round to 2 decimal places
Answer:
Multifactor productivity MFP before buying new equipment = 0.7549 carts/dollar cost
Growth in productivity between the Prior and after buying the new equipment. = 31.49%
Explanation:
Given that:
the number of workers before buying new equipment = 5
average cart production per hour = 77
worker's wage = $11
Cost of the machine = $47
After buying the new equipment;
number of worker is now = 4 since it is possible to transfer one of their worker to another department
average cart production per hour = $(77 +4) = $81
worker's wage = $11
Cost of the machine = $(47+14) = $61
The objective of this question is to "
a. Compute the multifactor productivity(MFP) (labor plus equipment) under the Prior to buying the new equipment.
Multifactor productivity MFP= Carts produced / (Labor cost + Equipment cost)
where;
Labor Cost = (Number of workers × Worker wage)
Multifactor productivity MFP = Carts produced / ((Number of workers × Worker wage) + Equipment cost)
We are to find just only the multifactor productivity(MFP) (labor plus equipment) under the Prior to buying the new equipment.
i.e before buying the new equipment.
Multifactor productivity MFP = 77/ (5 × 11) + 47)
Multifactor productivity MFP = 77/ (55+ 47)
Multifactor productivity MFP = 77/ (102)
Multifactor productivity MFP = 77/ (102)
Multifactor productivity MFP = 0.7549 carts/dollar cost
b. Compute the % growth in productivity between the Prior and after buying the new equipment. (Round to 2 decimal places
Growth in productivity = (Labor New productivity - Labor Old productivity) / Labor Old productivity] × 100
where;
Labor Productivity = Number of carts produced per hour / Number of workers
Labor Productivity (before buying new equipment) = 77/5
Labor Productivity (before buying new equipment) = 15.4 carts/worker/hour
Labor Productivity ( after buying the new equipment) = 81/4
Labor Productivity ( after buying the new equipment) = 20.25 carts/worker/hour
Growth in productivity = (20.25 - 15.40 /15.40) × 100
Growth in productivity = (4.85 / 15.40 )× 100
Growth in productivity = 0.3149 × 100
Growth in productivity = 31.49%
Consider the following $1,000 par value zero-coupon bonds: Bond Years to Maturity Yield to Maturity A 1 6.00 % B 2 7.00 % C 3 7.99 % D 4 9.41 % E 5 10.70 % The expected 1-year interest rate 4 years from now should be _________.
Answer:
16.01%
Explanation:
The expected 1-year interest rate 4 years from now is determined using the below formula:
The expected 1-year interest rate 4 years=(1+YTM5)^5/(1+YTM4)^4-1
YTM5 is the yield to maturity in year 5 i.e 10.70%
YTM4 is the yield to maturity in year 4 i.e 9.41%
The expected 1-year interest rate 4 years=(1+10.70%)^5/(1+9.41%)^4-1
The expected 1-year interest rate 4 years=16.01%
Planning, implementing and controlling the physical flow of materials, final goods and related information from points of origin to points of consumption to meet customer requirements at a profit is called
Answer:
Marketing Logistics
Explanation:
The term that is being described in the question is known as Marketing Logistics. Like mentioned, this is various aspects/processes that need to take place when moving products from producer to market all in order to meet customer demands while making a satisfactory profit at the same time. This is a big part of every business since a business with a good marketing logistics department can easily keep track of product shipments and move products or information quickly to the correct locations thus making everything much more efficient.
Sheridan Company had a 40 percent tax rate. Given the following pre-tax amounts, what would be the income tax expense reported on the face of the income statement?
Sales revenue $ 500,000
Cost of goods sold 300,000
Salaries and wages expense 40,000
Depreciation expense 55,000
Dividend revenue 45,000
Utilities expense 5,000
Extraordinary loss 50,000
Interest expense 10,000
a. $54,000
b. $34,000
c. $36,000
d. $16,000
Answer:
a. $54,000
Explanation:
The computation of income tax expense reported on the face of the income statement is shown below:-
Income before tax = Sales revenue + Dividend revenue - Cost of goods sold - Salaries and wages expenses - Depreciation expenses - Utilities expenses - Interest expenses
= $500,000 + $45,000 - $300,000 - $40,000 - $55,000 - $5,000 - $10,000
= $135,000
Income tax expenses = Before Income tax × Income tax rate
= $135,000 × 40%
= $54,000
Stellar Company uses a periodic inventory system. For April, when the company sold 600 units, the following information is available. Units Unit Cost Total Cost April 1 inventory280$31$ 8,680 April 15 purchase4503716,650 April 23 purchase 270 40 10,800 1,000 $36,130 Compute the April 30 inventory and the April cost of goods sold using the LIFO method.
Answer:
inventory - $13,120
cost of goods sold - $23,010
Explanation:
LIFO means last in first out. It means that it is the last purchased inventory that is the first to be sold.
the cost of goods sold would be taken from the cost of the newest purchases.
April 23 purchase 270 x 40 = $ 10,800
600 - 270 = 330
April 15 purchase ; 330 x $37 = $12,210
cost of goods sold = $12,210 + $ 10,800 = $23,010
Inventory = the remaining part of the April 15 purchase and beginning inventory
450 - 330 = 120 x $37 = $4440
$4440 + 8,680 = $13,120
Rediger Inc., a manufacturing Corporation, has provided the following data for the month of June. The balance in the Work in Process inventory account was $40,000 at the beginning of the month and $26,000 at the end of the month. During the month, the Corporation incurred direct materials cost of $58,600 and direct labor cost of $33,400. The actual manufacturing overhead cost incurred was $54,800. The manufacturing overhead cost applied to Work in Process was $54,600. The cost of goods manufactured for June was:
Answer:
$160,600
Explanation:
The computation of the cost of goods manufactured is shown below:
= Direct material cost + direct labor cost + manufacturing cost applied + beginning work in process - ending work in process
= $58,600 + $33,400 + $54,600 + $40,000 - $26,000
= $160,600
Hence, the cost of goods manufactured for June is $160,600
You want to have $12,500 in 10 years for a dream vacation. If you can earn an interest rate of .3 percent per month, how much will you have to deposit today?
Answer:
$8,778
Explanation:
To find the amount of money that you will have to deposit today, you have to use the formula to calculate the present value:
PV=FV/(1+i)^n
PV= present value
FV= future value= 12,500
i= interest rate= 0.003*12(to calculate the rate per year)= 0.036
n= number of periods of time= 10
PV=12,500/(1+0.036)^10
PV=12,500/1.424
PV=8,778
According to this, you will have to deposit today $8,778.
A corporation has 50,000 shares of $25 par stock outstanding. If the corporation issues a 3-for-1 stock split, the number of shares outstanding after the split will be a.50,000 shares b.100,000 shares c.150,000 shares d.16,666 shares
Answer:
Option C
Number of shares outstanding after split = 150,000 units
Explanation:
A stock split occurs where a company creates additional shares in units such the total nominal value of the outstanding shares remains the same. With a stock split, the total outstanding shares increases without a change in the total nominal value while the nominal value per share reduces.
Total shares before the split = 50,000
Total outstanding shares after split
= 50,000 × 3 = 150,000
Number of shares outstanding after split = 150,000 units
Following is a partial process cost summary for Mitchell Manufacturing's Canning Department. Equivalent Units of Production Direct Materials Conversion Units Completed and transferred out 52,000 52,000 Units in Ending Work in Process: Direct Materials (18,000 * 100%) 18,000 Conversion (18,000 * 80%) 14,400 Equivalent Units of Production 70,000 66,400 Cost per Equivalent Unit Costs of beginning work in process $ 43,600 $ 63,900 Costs incurred this period 145,500 195,700 Total costs $ 189,100 $ 259,600 Cost per equivalent unit $ 2.70 per EUP $ 3.91 per EUP If the units completed were transferred to the Labeling Department, what is the appropriate journal entry to transfer the conversion costs
Answer:
DR Work in Process—Labeling................ $203,320
CR Work in Process—Canning......................................... $203,320
(To record transfer of conversion costs to Labelling Department.)
Units completed in the Canning department are 52,000 and costs per equivalent units of production for conversion is $3.91.
Total costs of conversion is therefore;
= 52,000 * 3.91
= $203,320
Fernando Designs is considering a project that has the following cash flows and WACC data. What is the project's discounted payback period? (6 points) What is the project’s modified internal rate of return?
Answer:
Discounted Payback period 3 years
Modified Internal rate of return 4.833%
Explanation:
Fernando Designs has following cash flows ,
year 1 : -$900
Year 2 : $500
Year 3 : $500
Year 4 : $500
Using 10% discount factor the cashflows will be,
discounted values
Year 1 : -900
Year 2 : 454.54
Year 3 : 445.45
Year 4 : 4132231
Payback period is -900 + 454.54 +445.45 = 3 years.
Modified Internal rate of return; [tex]\sqrt[n]{\frac{FV of cash inflows}{PV of cash outflow} }[/tex]
[tex]\sqrt[4]{\frac{1314}{900} }[/tex] = 4.833%
A stock has a beta of 1.28, the expected return on the market is 12%, and the risk-free rate is 4.5%. Using the CAPM, what is the expected return on this stock
Answer:
14.10%
Explanation:
The calculation of expected return on this stock is shown below:-
Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)
= 4.5% + 1.28 × (12% - 4.5%)
= 4.5% + 1.28 × 7.5%
= 4.5% + 9.6%
= 14.10%
The Market rate of return - Risk-free rate of return) is also called as the market risk premium
hence, the expected rate of return is 14.10%
produces sports socks. The company has fixed expenses of $ 80 comma 000 and variable expenses of $ 0.80 per package. Each package sells for $ 1.60. Read the requirementsLOADING.... Requirement 1. Compute the contribution margin per package and the contribution margin ratio. Begin by identifying the formula to compute the contribution margin per package. Then compute the contribution margin per package. (Enter the amount to the nearest cent.)
Answer:
Instructions are below.
Explanation:
Giving the following information:
Unitary variable expenses= $ 0.80
Selling price per unit= $ 1.60
First, we need to calculate the unitary contribution margin:
Unitary contribution margin= selling price - unitary variable cost
Unitary contribution margin= 1.6 - 0.8
Unitary contribution margin= $0.8
Now, the contribution margin ratio:
contribution margin ratio= contribution margin / sellig price
contribution margin ratio= 0.8/1.6
contribution margin ratio= 0.5
Consider a potential merger between two hypothetical beer companies. Prior to the merger, the first, Ann Hy, is worth $150 billion and the second, Czar Bosch, is worth $100 billion. If they merge, they will gain $30 billion in increased value from reduced costs and additional sales (in present discounted value). Thus the combined value of the new entity (called Ann Hy-Czar Bosch) would be $280 billion. How much more could Czar Bosch hope to get by using the theory of the pie instead of proportional division
Answer:
$3 billion more
Explanation:
Calculation of the amount that Czar Bosch could hope to get by using the theory of the pie instead of proportional division
If we are to use the theory of the pie instead of the proportional division this means that when using the proportional division, their would be likelihood that Czar Bosch would get an amount that is proportional to their market cap, 40% of the $30 billion, or $12 billion and in a situation where the they decide to split the pie this means that Czar Bosch would either get$15 billion or $3 billion more
.
The Sunflower, Inc makes and sells tasty hamburgers for $8 per unit with a unit variable cost of $6. All sales are for cash and the variable costs are paid immediately. The company has budgeted the following data for November:
Sales 20000 units
Cash,Beginning Balance $34,000
Selling and administratie(of which depreciation $5,000) $53,000
If necessary, the company will borrow cash from a bank on the first day of November. Assume that the borrowing can be made in any (exact) amount, but bears interest at 2% per month. The November interest will be paid in cash during November. What is the closest amount of cash that must be borrowed on November 1 to cover all cash disbursements and to obtain the desired November 30 cash balance?
Answer:
Amount to be borrowed is around $7,140
Explanation:
All the sales are cash sales
Total number of units produced and sold 20,000 units
Selling price is $8
Cash receipt on account on sales is 20,000 * $8 = $160,000
Variable cost per unit is $6
Total number of units produced and sold = 20,000 unit
Cash to be paid is $20,000 * $8 = $120,000
Calculation of Ending cash balance without considering Loan amount
Particulars Amount$ Amount$
Beginning Cash 34,000
Cash receipts on sales 160,000
Total cash available 194,000
Less: Cash disbursement 120,000
Variable cost
Selling and administrative 53,000
Less: Depreciation -5,000 48,000
Ending cash balance 26,000
Ending cash balance without considering loan amount is $26,000
Required cash balance is $33,000
Rate of interest of 2% per month
Amount to be taken as loan is: (Required cash balance - Available cash balance)* 102%
= ($33,000 - $26,000) * 102%
= $7,140
Amount to be borrowed is around $7,140