Answer with its Explanation:
High employee turnover means that the employee is dissatisfied with his job and wants to leave the company for a better opportunity. This dissatisfaction comes from a lot of factors which might include, poor work conditions, lower wages and salaries, no promotion prospect in the company, etc.
The major problem in the company was the employee attrition which forced John Radcliff to study how we can motivate employees and reduce employee turnover. This led to implementation of better plans which helped in significantly reducing the employee turnover and also was useful in increasing in the employee productivity.
The corrective measures taken are as under:
Enabling workers to work to adjust themselves in flexible schedules.Giving employees chance to form an opinion on the issues and appreciating better suggestions.Introduction of employ-ability programs (Training programs) which will not only help the employee future prospect in the company but also in the future company they would join.Meeting the basic needs and fulfilling the dreams of the employee to motivate them and increase productivity.The Herzberg Motivation Factors are similar to the above mention implementation of corrective actions. The inclusion of esteem satisfaction program, basic needs fulfillment, training programs are all the factors that Herzberg Motivation Theory says to implement in the organization and I think it is most appropriate theory to master.
How does scarcity affect the choices a business makes?
O A. If there are more economic resources, businesses will need to
lessen economic utility of their products.
O B. Scarcity will affect the number of entrepreneurs a business
decides to hire for a given year.
O C. Scarcity will affect the type of economic system the business will
choose to join
OD. If there are less economic resources, businesses may need to
revised their plans for developing a new product.
Answer:
d)If there are less economic resources,businesses may need to revise their plans for developing a new product
The correct option is D). If there are less economic resources, businesses may need to revised their plans for developing a new product.
What does scarcity mean?Scarcity is one of the major concept in the economics. It refers to the situation when the demand for a good or service is greater than the availability of the good or service.
Scarcity of the resources can affect the business in both negative and positive way. As when there is no availability of the resources such as raw material, labor etc. then the firm would face the problem of low production.
When there are scarcity of the goods and services, then in certain situation as firm can charge high price from the consumers that would be profitable move for it. It can be said that if there are less resources available then business must revise their plans for developing new product.
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SuperOil has a debt-to-value ratio of 15%. Its revenue is 100,000 per year and cost is 70,000 per year forever. Its cost of debt is 7% and its cost of equity is 25%. It has 10,000 shares outstanding. Corporate tax rate is 35%.
(a) What is the firm’s value?
(b) What is its stock price?
(c) SuperBuyout is a leveraged buyout firm. It believes that SuperOil’s leverage is too low. It thinks that SuperOil’s firm value can increase with higher debt-to-value ratio and believes SuperOil’s optimal debt-to-value ratio is 25%. SuperOil’s cost of debt at this 25% debt-to-value ratio is 9%. SuperBuyout is considering buying all of SuperOil’s shares and increase SuperOil’s leverage to the optimal 25% level. Proceed from debt issuance will be given out to equityholderes as special dividend. What is the maximum premium SuperBuyout is willing to pay for SuperOil’s shares?
Answer:
a. The firm’s value is $88,909
b. The stock price is $7.56
c. The maximum premium SuperBuyout is willing to pay for SuperOil’s shares is $3,200
Explanation:
a. In order to calculate the firm’s value we would have to calculate the following calculation:
firm’s value=EBIT*(1-Tax rate)/WACC
EBIT*(1-Tax rate)=($100,000-$70,000)*(1-0.35)
EBIT*(1-Tax rate)=$19,500
WACC=weight of debt*cost of debt(1-t)+weight of equity*cost of equity
WACC=0.15*7*(1-0.35)+0.85*25
WACC=21.9325%
Therefore, firm’s value=$19,500/21.9325%
firm’s value=$88,909
b. In order to calculate its stock price we would have to calculate the following calculation:
stock price=Equity value/number of shares
Equity value=0.85*$88,909
Equity value=$75,572
Therefore, stock price=$75,572/10,000
stock price=$7.56
c. In order to calculate the maximum premium SuperBuyout is willing to pay for SuperOil’s shares we would have to make the following calculation:
maximum premium SuperBuyout is willing to pay=(stock price-value per share)*number of shares
maximum premium SuperBuyout is willing to pay=($7.56-$7.24)*10,000
maximum premium SuperBuyout is willing to pay=$3,200
Mannisto, Inc., uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $244,087 and average assets of $1,550,550. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $44,110 more than under FIFO, and its average assets would have been $40,630 less than under FIFO.
a) Calculate the firm's ROA under each cost flow assumption.
b) Suppose that two years later costs and prices were falling. Under FIFO, net income and average assets were $288,567 and $1,880,970, respectively. If LIFO had been used through the years, inventory values would have been $45,690 less than under FIFO, and current year cost of goods sold would have been $22,660 less than under FIFO. Calculate the firm's ROA under each cost flow assumption.
Answer and Explanation:
a. The solution of return on assets under each cost flow is described below:-
Return on assets under FIFO = Net income ÷ Average total assets
= $244,087 ÷ $1,550,550
= 15.7%
Return on assets under LIFO = Net income ÷ Average total assets
= ($244,087 - $44,110) ÷ ($1,550,550 - $40,630)
= $199,977 ÷ $1,509,920
= 13.2%
b. The computation of return on assets under each cost flow is shown below:-
Return on assets under FIFO = Net income ÷ Average total assets
= $288,567 ÷ $1,880,970
= 15.3%
Return on assets under LIFO = Net income ÷ Average total assets
= ($288,567 + $22,660) ÷ ($1,880,970 - $45,690)
= $311,227 ÷ $1,835,280
= 17%
Determine the market price that Firm A receives for its product. Assume the price is constant because the firm is a price taker in a perfectly competitive market.
Answer: $28
Explanation:
In a Perfectly Competitive Market, firms are price takers in that the price is set by the market. As a result, the Price is equal to the Average Revenue as well as the Marginal Revenue. P = AR = MR
In the table, the Marginal Revenue (increase in revenue when an additional unit is sold) is $28 for all quantities and the Average Revenue at the fifth (and all units) is;
= 140/5
= $28
With both the Average and Marginal Revenues being $28, the price that Firm A receives is $28 as well.
In some cases, analysts notice that groups of similar investors tend to flock to stocks that have dividend policies consistent with their financial needs. This circumstance is an illustration of:
Answer:
the clientele effect
Explanation:
This scenario best illustrates the concept/idea known as the clientele effect. This is the idea that a set of investors that are attracted to specific security/asset will affect the price of it when policies or circumstances change. This is mainly due to the fact that as a group with lots of buying power, purchasing those assets removes circulating supply from that asset which causes the price to go up, meaning if things change they can also sell which will cause prices to drop.
In years fair, you want to emphasize preventive health care. You found that a few employees take advantage of preventive health care options provided by the company. Which of the following statements is most likely to encourage employees to take action?
Answer: C. Feel better in less than 30 days and focus on your long-term wellness. This presentation will show you the many cost-free preventative health care options available to you that make a difference now and in the future.
Explanation:
Here are the options for the question:
A. Most people don't take action until it's too late. This presentation will show you the many preventative health care options available to you that have lasting and positive impacts now and in the future.
B. Most people don't take action until it's too late. This presentation will show you the many preventative health care options that help you avoid health crises now and in the future.
C. Feel better in less than 30 days and focus on your long-term wellness. This presentation will show you the many cost-free preventative health care options available to you that make a difference now and in the future.
From the question, we are informed that for a fair, emphasis want to be placed on preventive health care as it is found that only few employees take advantage of preventive health care that the company provides.
The most likely option that will encourage the workers to take action is option C "Feel better in less than 30 days and focus on your long-term wellness. This presentation will show you the many cost-free preventative health care options available to you that make a difference now and in the future".
The message conveyed in option C is simple and focus on different cost-free preventative health care options available and also on the short term impact and long term impact on one's health.
A product line is a group of products that are physically similar or are intended for a similar market. Which of the following is the best example of a product line?
a. Sony offers DVD players, televisions, computers and video games.
b. Hyundai produces ocean-going vessels, plants and machinery, automobiles, steel and electronic products.
c. Coca-Cola produces Coca-Cola, Diet Coke, Sprite and Fanta.
d. United Technologies produces elevators, furnaces and helicopters.
Answer:
c. Coca-Cola produces Coca-Cola, Diet Coke, Sprite and Fanta.
Explanation:
Suppose two countries initially start off at the same GDP per capita in 1940. After 70 years the countries have large differences in GDP per capita in the year 2010, with one country having $30,000 more than the other country. What is the most likely reason for this large disparity in GDP per capita between the two countries
Answer:
The contrast in GDP per capital growth relative to productivity growth between the two countries and the effect of compounding decrease
Explanation:
Solution
The GDP growth rate relative productive growth was one of the prime factors of total growth during the late 20th century.
The more technological investment, the higher was the productivity together with compounding could have played a vital role.
By compounding it refers to the reinvestment with the aid of established generated revenue. this implies that capital is used to its fullest thus increasing productivity. thus maybe the country with Low GDP per capital might have experienced a decrease, then compounding further abetting a downturn in the GDP growth rate.
A labor contract provides for a first-year wage of $15 per hour, and specifies that the real wage will rise by 2 percent in the second year of the contract and by another 2 percent in the third year. The CPI is 1.00 in the first year, 1.09 in the second year, and 1.15 in the third year. What dollar wage must be paid in the third year
Answer:
$17.9469
Explanation:
Calculation for what dollar wage must be paid in the third year
Since the first year is tend to be the base year in which the real wage and nominal wage are both $15 per hour in that year.
The real wage is suppose to increase by 2 percent in the second year which means that the real wage in year two will be $15.30 ($15 * 1.02) per hour.
In a situation where the real wage was supposed to also increase by 2 percent in the third year, this means that the real wage in year three will be $15.606 ($15.3 * 1.02) per hour.
Therefore In order for us to find the nominal wage in third year , we have to index the real wage in order for it to adjust for inflation. Thus the nominal wage in third year will be $17.9469($15.606 * 1.15).
Therefore what dollar wage must be paid in the third year will be $17.9469
The dollar wage to be paid in the third year based on the labor contract is $17.95 per hour.
Data and Calculations:First-year wage per hour = $15
Increase in real wage in the second year = 2%
Increase in real wage in the third year = 2%
First year's CPI = 1.00
Second year's CPI = 1.09
Third year's CPI = 1.15
What is CPI?The Consumer Price Index (CPI) measures the weighted average prices of a basket of consumer goods and services in the United States, considering its general economic inflation. The labor contract raises the real wage by 2% in the second and third years. The CPI of year three is applied in computing the real wage to account for the effect of inflation.
Thus, the dollar wage that must be paid in the third year based on the labor contract is $17.95 per hour ($15 x 1.02 x 1.02 x 1.15).
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What's the term for the illegal practice of nudging buyers away from or toward a specific area based on the presence or absence of protected class members
Answer: steering
Explanation:
Steering is an illegal practice whereby people that are looking for homes are channeled towards particular areas based on their social status or race.
In such scenarios, the choice of the person looking for a home is being influenced by the person's gender, color, race, status, religion, disability, or national origin.
A customer opens a margin account by purchasing 100 shares of ABC at $60 per share, depositing the 50% Regulation T requirement. The stock rises to $80 per share on the next day and then falls to $60 per share on the day after. The account will now show:
Answer:
Account Balance in margin account:
Investment = $6,000 (100 x $60)
The customer's account will first increase with an unrealized gain of $2,000 ($80 - 60 x 100) on the next day. It will then decrease with an unrealized loss of $2,000 ($80 - 60 x 100) on the day after. This cancels the earlier unrealized gain.
Explanation:
The customer's investment will now show a balance of $6,000 with a contra account showing a debt of $3,000 for the balance of the Regulation T margin account. According to investopedia, "A margin account is a brokerage account in which the broker lends the customer cash to purchase stocks or other financial products. The loan in the account is collateralized by the securities purchased and cash, and comes with a periodic interest rate."
Explain how you would determine the company’s contribution margin and contribution margin percent. In your initial post include the following:
a. Identify which specific variables should be included in the calculation.
b. Illustrate your explanation by calculating the contribution margin and contribution margin percent using hypothetical values.
c. Explain what your calculated results tell you about the company’s sales and cost structure
Answer:
a. Identify which specific variables should be included in the calculation.
In order to calculate contribution margin and contribution margin percentage we need the following:
total net sales revenue = total sales - sales discounts - sales returns and allowancestotal variable costsb. Illustrate your explanation by calculating the contribution margin and contribution margin percent using hypothetical values.
total net sales = $1,000,000
total variable costs = $750,000
contribution margin = $1,000,000 - $750,000 = $250,000
contribution margin % = $250,000 / $1,000,000 = 25%
c. Explain what your calculated results tell you about the company’s sales and cost structure
The higher the contribution margin, the more money the company has to cover fixed costs and generate profit. Generally the higher the contribution margin, the better.
In this case, a 25% contribution margin would be considered low, but it all depends on the fixed costs of the company. The larger the fixed costs, the more a company needs to have high contribution margins.
Live It Cruiseline offers nightly dinner cruises departing from several cities on the eastern coast of the United States including Charleston, Baltimore, and Alexandria. Dinner cruise tickets sell for $ 60 per passenger. Live It Cruiseline's variable cost of providing the dinner is $ 30 per passenger, and the fixed cost of operating the vessels (depreciation, salaries, docking fees, and other expenses) is $ 270 comma 000 per month. The company's relevant range extends to 20 comma 000 monthly passengers. If Live It Cruiseline sells an additional 700 tickets, by what amount will its operating income increase (or operating loss decrease)? First, identify the formula, then compute the operating income increase (or operating loss decrease). Fixed cost per passenger x ▼ = Operating
Answer:
Live It Cruiseline
The operating income will increase by $11,550 from the sale of additional 700 tickets.
Explanation:
a) Data and Calculations:
Selling price of Dinner Cruise = $60
Variable cost = $30
Fixed costs = $270,000 per month
Relevant range quantity = 20,000
Fixed costs per passenger = $270,000/20,000 = $13.50
b) Income Statements
Relevant Range Additional 700 Tickets
Sales $1,200,000 $1,242,000
Variable cost 600,000 6,21,000
Contribution $600,000 $621,000
Fixed costs 270,000 279,450
Net operating income $330,000 $341,550
c) The preparation of two income statements differentiates the net operating income under the two scenarios: relevant capacity and the additional sale of ticket, clearly identifying the differences. The results show that Live It Cruiseline would add $11,550 to the net operating income by selling additional 700 tickets, even though, these additional tickets will cause an increase in the fixed costs.
Fallen Company commonly issues long-term notes payable to its various lenders. Fallen has had a pretty good credit rating such that its effective borrowing rate is quite low (less than 8% on an annual basis). Fallen has elected to use the fair value option for the long-term notes issued to Barclay's Bank and has the following data related to the carrying and fair value for these notes.
Carrying Value Fair Value
December 31,2014 54,000 54,000
December 31,2015 44,000 42,500
December 31,2016 36,000 38,000
A. Prepare the journal entry at December 31 (Fallen's year end) for 2014, 2015, and 2016 to record the fair value option for these notes.B. At what amount will the note be reported on Fallen's 2015 balance sheet?C. What is the effect of recording the fair value option on these notes on Fallen's 2016 income?D. Assuming that general market interest rates have been stable ove the period, does the fair value data for the notes indicate that Fallen's credit-worthiness has improved or declined in 2016? Explain.
Answer:
A) Journal entries
Date Account Titles Debit Credit
Dec 31, 2014 No Journal Entry
Dec 31,2015 Notes Payable $1,500
(44,000 – 42,500)
Unrealized Holding Gain/Loss $1,500
(Net Income)
Dec 31,2016 Unrealized Holding Gain/Loss $3,500
(Net Income)
Notes Payable $3,500
(38,000 – 36,000 + 1,500)
B) The note will be reported at the fair value of notes payable as on 31 December 2015. Therefore, the note will get reported at $42,500 in the Fallen's 2015 balance sheet.
C) Fallen's 2016 net income will get reduced by $3,500 (refer to journal entry 3) as any change in fair value will be reported as an adjustment to the net income for the respective year.
D) Since, the general market interest rates have been stable over the period and similar risk investment in the year 2016, the changes in fair value indicate that Fallen's creditworthiness has improved.
What is the IRS method of allocating expenses between rental use and personal use?
Answer:
Schedule E- Allocation of Rental and Personal Expenses.
Explanation:
Hello so I am gonna assume your talking about what I said above if you use your dwelling unit for both rental and personal purposes, divide your expensive between the rental use and the personal use based on the number of days used for each purpose.
Hope this helps :)
why should you always double check the citation generated using a citation generator
Per Chevron’s 3Q 2013 filing, what was the percentage change in diluted EPS when comparing nine months ended September 30, 2013 versus the same period in 2012?
Answer:
-11.43%.
Explanation:
According to the 10Q which is filling by third quarter Chevron Corporation
Net Income Allocate to Chevron corporation diluted per share for 9-months earnings in Q32013 is $8.52
Net Income Allocate to Chevron corporation diluted per share for 9-months earnings in Q32012 is $9.62
So, the change in percentage is
= {(8.52 - 9.62) ÷ 9.62} × 100
= -11.43%
Therefore, the change in percentage for 9-months of diluted EPS from Q32013 to Q32012 is -11.43%.
The financial information Source depicts the Chevron 10Q report on its website.
Metlock Inc. manufactures cycling equipment. Recently, the vice president of operations of the company has requested construction of a new plant to meet the increasing demand for the company’s bikes. After a careful evaluation of the request, the board of directors has decided to raise funds for the new plant by issuing $3,086,500 of 12% term corporate bonds on March 1, 2020, due on March 1, 2035, with interest payable each March 1 and September 1, with the first interest payment on September 1st, 2020. At the time of issuance, the market interest rate for similar financial instruments is 10%.
As the controller of the company, determine the selling price of the bonds
Answer:
market price of the bonds = $3,560,887.18
Explanation:
In order to determine the market price of the bonds we must add the present value of the bonds' face value + present value of the coupon payments:
PV of face value = $3,086,500 / (1 + 5%)³⁰ = $714,146.50
PV of coupon payments = $185,190 x 15.372 (PV annuity factor, 5%, 30 periods) = $2,846,740.68
market price of the bonds = $3,560,887.18
The journal entry to record the issuance of the bonds:
March 1, 2020, bonds are issued at a premium
Dr Cash 3,560,887.18
Cr Bonds payable 3,086,500
Cr Premium on bonds payable 474,387.18
High Step Shoes had annual revenues of $185,000, expenses of $103,700, and dividends of $18,000 during the current year. The retained earnings account before closing had a balance of $297,000. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is:
Answer and Explanation:
The closing entry after closing the revenue and the expenses account are as follows
Income Summary Dr $81,300
To retained earning $81,300
(Being the closing of income summary is recorded)
The computation is shown below:
= Annual revenues earned - expenses incurred
= $185,000 - $103,700
= $81,300
All other items which are given is not relevant. Hence ignored it
A firm has total debt of $1,480 and a debt–equity ratio of .33. What is the value of the total assets?
Answer:
The Value of the Total assets is $5964.85
Explanation:
The formulae for deriving Debt-equity ratio = debt / equity
Then, Equity = Debt / Debt-equity ratio
Hence Equity= (1480 / 0.33) = $4484.85
Whereas, Total assets = Total liabilities (Debt) + Total equity
Value of the Total assets = 1,480 + 4,484.85
Value of the Total assets = $5964.85
In 2009, U.S. exports of goods and services are $1 comma 587 billion and imports of goods and services are $1 comma 976 billion. What is the value of net exports?
Answer: -$389 billion
Explanation:
Net Exports refers to how much a country exported to other countries over how much it imported.
As such the formula is;
= Exports - Imports
= 1,587 - 1,976
= -$389 billion
This means that the US imported more than it exported in 2009. This is called a Trade Deficit.
From your own work experience, discuss a time you have seen measurements used to manage a process. Examples might include allowing a certain amount of time for a phone call or a project deadline. Do you believe the results were optimal, based on the measurement used?
Explanation:
Companies that work with measures used to manage work processes based on time, generally achieve good end results and have their expectations met, as this is a way to motivate employees to plan the best method and work planning, but that satisfies what is required by the company, the delivery of results within the stipulated time.
It is necessary that the time determined for the fulfillment of tasks be allocated in such a way that there is a possibility of carrying out the work effectively. This is a strategy that can motivate and encourage employees to work with more willingness, innovation and flexibility.
Global Corp expects sales to grow by 9% next year. Assume that Global pays out 50% of its net income. Using the percent of sales method and the data provided forecast the stockholders equity. Income Statement ($million) Balance Sheet ($million) Net Sales 186.2 Assets Cost Except Depreciation -175.2 Cash 22.9 EBITDA 11 Accounts Receivable 18.1 Depreciation and Amortization -1.1 Inventories 15.1 EBIT 9.9 Total Current Assets 56.1 Interest Income (expense) -7.7 Net Property, Plant, and Equipment 113.6 Pre tax Income 2.2 Total Assets 169.7 Taxes -0.6 Net Income 1.6 Liabilities and Equity Accounts Payable 34.4 Long term Debt 113.6 Total Liabilities 148.0 Total Stockholders' Equity 21.7 Total Liabilities and Equity 169.7 Please work through problem explaining it.
Answer:
Global Corporation
Forecasted sales = Current Net Sales x (1 + growth rate)
= $186,200,000 x (1 + 0.09) = $186,200,000 x 1.09 = $202,958,000
Forecasted Net Income = $1,745,438.80 (202,958,000 x 0.86%)
Forecasted Dividend payout = $872,719.40 ($1,745,438.80 x 50%)
Forecasted Retained Earnings = $872,719.40 = $0.87 million
Therefore Forecasted equity = Current Equity + Forecasted Retained Earnings = $22.6 ($21.7 + $0.87)
Explanation:
a) Data and Percentage Calculations:
Income Statement ($million) Percentage
Net Sales 186.2 100%
Assets Cost Except Depreciation -175.2 94.09%
EBITDA 11.0 5.9%
Depreciation and Amortization -1.1
EBIT 9.9
Interest Income (expense) -7.7
Pre tax Income 2.2
Taxes -0.6
Net Income 1.6 0.86%
Dividends paid 50% -0.8
Retained Earnings 50% 0.8
Balance Sheet ($million)
Cash 22.9
Accounts Receivable 18.1
Inventories 15.1
Total Current Assets 56.1
Net Property, Plant, and Equipment 113.6
Total Assets 169.7
Liabilities and Equity
Accounts Payable 34.4
Long term Debt 113.6
Total Liabilities 148.0
Total Stockholders' Equity 21.7
Total Liabilities and Equity 169.7
b) The percent of sales method enables the calculation of the relationship between sales and the line figures in the income statement. Our interest for this question, is the Retained Earnings which we use to calculate the Stockholders' Equity forecasted balance. The retained earnings percentage to sales = Retained Earnings as given divided by the net sales figure, and then multiplied by 100.
c) To forecast the sales, we use the growth rate of 9%. This is equal to the current sales x 1.09. Based on this sales, it becomes possible to forecast the Retained Earnings, having established the percentage of Retained Earnings to Sales, using the percent of sales method. We apply the established percentage of Retained Earnings to the Sales figure, to get the Retained Earnings for the forecasted period. This is then added to the Stockholders' Equity to get the forecasted stockholders' equity.
A firm sells peanuts in a perfectly competitive market. Upon increasing production output from 60 packages to 75 packages, the total revenue increased from $300 to $375. What was the marginal revenue of this increase in production?
Answer:
$75
Explanation:
A perfect competition is characterised by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.
In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.
Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.
The price per unit = $300 / 60 = $5
The marginal revenue for one unit is $5
Production increased by 15 units, so marginal revenue increased by $5 × 15 = $75
I hope my answer helps you
g Last year, Adventure Enterprises reported revenues of $24 million while its total expenses were $10 million. Based on this information, Adventure reported:
Answer:
The answer is ' a profit of $14 million
Explanation:
Revenue = $24 million
Total expenses = $10 million
Profit(loss) = Revenue minus total expenses
$24 million - $10 million
Profit = $14 million.
It is a profit because revenue is greater than total expenses. Adventure Enterprises will report a loss if reported total expenses was greater than reported revenue
Kohl Co. provides warranties for many of its products. The January 1, 2013, balance of the Estimated Warranty Liability account was $46,663. Based on an analysis of warranty claims during the past several years, this year's warranty provision was established at 0.82% of sales. During 2013, the actual cost of servicing products under warranty was $39,914, and sales were $4,401,300. Required: a. What amount of Warranty Expense will appear on Kohl Co.'s income statement for the year ended December 31, 2013?
Answer:
Warranty Expense that will appear on Kohl Co.'s income statement for the year ended December 31, 2013 is $36,091.
Explanation:
Income statement is prepared on the accrual or matching principle of accounting.
According to the matching principle expenses and revenues are recognized when they are incurred or occur not when received or paid.
The Estimated Warranty Liability of $46,663 was already included as expense in the previous years and no expense on this is to be recognized in 2013.
We only recognize the warranty expense of 2013 as follows
Warranty Expense (debit)
Estimated Warranty Liability (credit)
Warranty Expense = $4,401,300 × 0.82%
= $36,090.66
Conclusion :
Warranty Expense that will appear on Kohl Co.'s income statement for the year ended December 31, 2013 is $36,091.
Scampini Technologies is expected to generate $125 million in free cash flow next year, and FCF is expected to grow at a constant rate of 3% per year indefinitely. Scampini has no debt or preferred stock, and its WACC is 12%. If Scampini has 65 million shares of stock outstanding, what is the stock's value per share
Answer:
$21.37
Explanation:
Firm value = FCF1 / (WACC – g)
Firm value = $125,000,000/(0.12 – 0.03)
Firm value = $1,388,888,888.89
Equity value per share = Equity value / Shares outstanding
Equity value per share = $1,388,888,888.89 / 65,000,000
Equity value per share = $21.37
You would like to combine a risky stock with a beta of 1.5 with U.S. Treasury bills in such a way that the risk level of the portfolio is equivalent to the risk level of the overall market. What percentage of the portfolio should be invested in Treasury bills
Answer:
66.67 %
Explanation:
The computation of the percentage of the portfolio should be invested in Treasury bills is shown below:-
Let us assume beta be x
So the equation would be
Percentage of portfolio = x × (Beta of stock) + (1 - x) × (Beta of T - Bills) - 1
= x × (1.5) + (1 - x) × (Beta of T - Bills) - 1
1.5x + (1 - x) × (Beta of T - Bills) - 1
1.5x + 0 = 1
x = 1 ÷ 1.5
= 0.67
or
= 66.67%
When Steve is talking about his communications with employees, he says, "I constantly check in." The information Steve gets from employees during these check-ins is an example of
Answer:
Upward communication
Explanation:
Based on this information it can be said that this is an example of Upward communication. This is a form of communication that encourages employees to communicate directly with their upper management in order to create a sense of importance in employees as they begin to realize that the upper management cares about their thoughts and input. Which is what Steve is cultivating by having regular check-ins
You currently have a one-year-old loan outstanding on your car. You make monthly payments of $ 500. You have just made a payment. The loan has four years to go (i.e., it had an original term of five years). Show the timeline from your perspective. How would the timeline differ if you created it from the bank's perspective?
Answer:
Since there is not enough room here, I prepared an amortization schedule on an excel spreadsheet. The amortization schedule starts on year 1 (red color) and ends on year 5.
I also assumed a $23,500 initial loan (principal) and a 10% annual rate. I did this just to show how much principal is reduced every month and how much interest is paid. Your liability (loan's principal) decreases month by month.
If you are a bank, instead of interest expense, you would consider this an interest payment, and as the principal decreases, your asset (loan) decreases.