Answer:
9.27 %
Explanation:
weighted average cost of capital = Cost of equity x Weight of Equity + Cost of Debt x Weight of Debt + Cost of Preference Stock x Weight of Preference Stock
therefore,
weighted average cost of capital = 14,056 % x 44.92 %+ 4.65 % x 32.25% + 7.00 % x 20.86%
= 9.27 %
where,
cost of equity = risk free rate + beta x market premium
= 14.056%
A trial balance before adjustment included the following:
Debit Credit
Accounts receivable $133,000
Allowance for doubtful accounts $1,080
Sales 471,000
Sales returns and allowances 5,200
Required:
Prepare journal entries assuming that the estimate of uncollectible is determined by taking (1) 4% of gross accounts receivable.
What are competinves prionties, and how do
they help supply chain organizations gain
Competitive advantage?
Explanation:
Competitive priorities can be understood as the central objectives that organizations seek to remain competitive and positioned in the market, through the management of quality, cost, flexibility and delivery.
An organization's supply chain is responsible for the entire operational process of a product, from the purchase of the raw material to the delivery of the product to the end customer.
Therefore, supply chain management is essential so that all interconnected production systems for a good are aligned with the best practices that guarantee the continuous improvement of the entire supply chain, and this is where competitive priorities must be considered, because staying competitive in the market requires quality assurance at each stage of the process, with the greatest flexibility and lowest costs, in addition to delivery in the right quantity, at the right time to the right customer.
Green Corporation processes sugar beets that it purchases from farmers. Sugar beets are processed in batches. A batch of sugar beets costs $43 to buy from farmers and $14 to crush in the company's plant. Two intermediate products, beet fiber and beet juice, emerge from the crushing process. The beet fiber can be sold as is for $19 or processed further for $18 to make the end product industrial fiber that is sold for $51. The beet juice can be sold as is for $34 or processed further for $22 to make the end product refined sugar that is sold for $51.
Required:
What is the financial advantage (disadvantage) for the company from processing one batch of sugar beets into the end products industrial fiber and refined sugar?
Answer:
Financial advantage $5
Explanation:
The computation of the financial advantage (disadvantage) for the company is shown below:
Combined sales value ($51 + $51) $102
Less: further processing ($18 + $22) -$40
Sugar beets cost -$43
Cost to crush -$14
Financial advantage $5
We simply deduct all cost from the revenue so that the financial advantage or disadvantage could come
Which could argue that a programmer deserves to have his/her work protected by a copyright purely as a result of his/her inalienable right to try to reap the benefits from his/her labor?
Answer:
What
Explanation:
Glacier Bicycle Company manufactures commuter bicycles from recycled materials. The following data for October are available: Quantity of direct labor used 5,000 hrs. Actual rate for direct labor $22.75 per hr. Bicycles completed in October 800 bicycles Standard direct labor per bicycle 6.0 hrs. Standard rate for direct labor $24.00 per hr. a. Determine for October the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Direct Labor Rate Variance $fill in the blank 1 113,750 Direct Labor Time Variance $fill in the blank 3 4,800 Total Direct Labor Cost Variance $fill in the blank 5 b. How much direct labor should be debited to Work in Process
Answer:
A. Direct Labor Rate variance -$6250 Favorable
Direct labor time variance $4800 Unfavorable
Total Direct Labor Cost Variance $-1450 Favorable
B. Dr Work In Process $116,650
Explanation:
A.
Calculation to determine Direct Labor Rate variance using this formula
Direct Labor Rate variance= (actual hours* actual rate)- (actual hours * standard rate)
Let plug in the formula
Direct Labor Rate variance=( 5000 *22.75) - (5000*24)
Direct Labor Rate variance= $113750- 120,000= Direct Labor Rate variance-6250 Favorable
Calculation to determine Direct labor time variance using this formula
Direct labor time variance= (Actual hours* Standard rate)- (Standard hours * Standard rate)
Let plug in the formula
Direct labor time variance= (5000 * 24) -(4800 * 24)
Direct labor time variance= 120,000-115200
Direct labor time variance= 4800 Unfavorable
Calculation to determine Total Direct Labor Cost Variance using this formula
Total Direct Labor Cost Variance= Direct Labor Rate variance + Direct labor time variance
Let plug in the formula
Total Direct Labor Cost Variance= -6250 Favorable + 4800 Unfavorable
Total Direct Labor Cost Variance= -1450 Favorable
b. Preparation of the journal entry to determine How much direct labor should be debited to Work in Process
Dr Work In Process $116,650
Cr Direct Labor Cost Variance $ 1,450
Cr Payroll $ 115,200
Therefore the amount of Direct Labor to be Debited to Work In Process is $116,650
Which of the following types of promotion is usually the least expensive for a company?
A.
Personal selling
B.
Publicity
C.
Direct marketing
D.
Advertising
Answer:
B. Publicity.
Explanation:
A company can publicize its names, products, and services by organizing an event or by organizing a seminar. The aim of publicity is to make consumbers aware about the products and services that a company deals in.
A company issues the following bonds on June 1, 2002. Series A (counts as two) Series B $50 million BBB June 1, 2030 June 1, 2008 100 Par Value Rating Maturity Call date Call price $50 million BBB June 1, 2030 Non-callable -- If both bonds have the same market liquidity, the yield-to-maturity on the Series A bond should be [ ] than yield-to-maturity on Series B bond. a) higher b) lower c) the same d) either higher or lower(depending notherfactors)
Answer: a. Higher
Explanation:
Series A is a callable bond which means that the company will be able to buy it back after a certain period of time at a price dictated in the contract.
This provision is an advantage to the Issuer but not the investors so the Issuer will have to pay the investors more to get them to buy the bond even with the presence of this provision.
This additional payment will come in the form of a higher yield. This is why callable bonds have higher yields than non-callable comparable bonds.
Consider a market with two firms, Kellogg and Post, that sell breakfast cereals. Both companies must choose whether to charge a high price ($) or a low price ($) for their cereals. These price strategies, with corresponding profits, are depicted in the payoff matrix to the right. Kellogg's profits are in red and Post's are in blue. What is the cooperative equilibrium for this game?
Answer:
Both the two companies to choose a price of $4.50
Explanation:
Based on the information given we were told that the two companies have to choose whether they will charge either a price that is high or a price that is low for their cereals which means that the two companies COOPERATIVE EQUILILBRIUM for this game is that both the two companies have to choose a price of the amount of $4.50 which represent the high price.
On April 1, Dallow, Inc. factored $160,000 of its accounts receivable without recourse. The factor retained 10% of the accounts receivable as an allowance for sales returns and charged a 5% commission on the gross amount of the factored receivables. What amount of cash did Dallow receive from the factored receivables
Answer:
$136,000
Explanation:
According to the scenario, computation of the given data are as follows,
Amount receivable = $160,000
Allowance for sales return = 10% × $160,000 = $16,000
Commission = 5% × $160,000 = $8,000
So, amount of cash from factored receivables can be calculated by using following formula,
Cash from factored receivables = Amount receivable - Allowance for sales return - Commission
= $160,000 - $16,000 - $8,000
= $136,000
Coronado Industries is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $6370000 on March 1, $5280000 on June 1, and $8650000 on December 31. Coronado Industries borrowed $3170000 on January 1 on a 5-year, 13% note to help finance construction of the building. In addition, the company had outstanding all year a 11%, 3-year, $6350000 note payable and an 12%, 4-year, $12350000 note payable. What are the weighted-average accumulated expenditures
Answer:
Coronado Industries
The weighted-average accumulated expenditures are:
= $8,388,333.
Explanation:
a) Data and Calculations:
Amount borrowed on June 1 = $3,170,000
Interest rate = 13%
Outstanding 11% 3-year note payable = $6,350,000
Outstanding 12% 4-year note payable = $12,350,000
Date Expenditure Weight Weighted-Average
Expenditure
March 1 $6,370,000 10/12 $5,308,333
June 1 $5,280,000 7/12 3,080,000
December 31 $8,650,000 0/12 0
Weighted-average accumulated expenditure $8,388,333
An aircraft manufacturer with a strong presence in the United States, is looking to expand its market overseas. The firm currently sells its aircraft to several airlines in the United Kingdom but now wants to establish manufacturing units there as well in order to acquire a bigger share in the European market. Hence, it plans to merge with QueenAir, a British aircraft manufacturer.
Requied:
What would weaken the company's decision to merge with QueenAir?
Coronado Industries received proceeds of $122200 on 10-year, 6% bonds issued on January 1, 2020. The bonds had a face value of $130000, pay interest annually on December 31, and have a call price of 101. Coronado uses the straight-line method of amortization. What is the amount of interest Coronado must pay the bondholders in 2020
Answer:
$7,800
Explanation:
Calculation to determine the amount of interest Coronado must pay the bondholders in 2020
Using this formula
Interest=Bonds issued percentage*Bonds face value
Let plug in the formula
Interest=6%*$130,000
Interest=$7,800
Therefore the amount of interest Coronado must pay the bondholders in 2020 is $7,800
Minors are liable for the reasonable value of the necessary:______.
a. actually furnished.
b. that they agreed to purchase.
c. that their parents agreed to pay for.
d. all of these.
Answer:
b. that they agreed to purchase.
Explanation:
A minor is a person who is under the age of 18 and unable to make decision on his own such as mentally impaired or incompetent persons .
A minor cannot enter a contract like adults but if under any circumstance they enter into a contract of sale purchase of daily goods like clothing etc, they are liable to pay the price which they agreed to pay.
Their parents are liable only if the contract was made according to the parent's will etc.
If the minor is unable to pay the agreed amount then the minor should return the goods or fulfill any other liability as imposed by the court of law.
After graduating from UCF, you plan to purchase a small condominium for $100,000. You will be required by the bank to put a down payment of 10% of the purchase price. You plan to finance the loan for 30 years. Assume monthly payments and a nominal rate (monthly compounding) of 3%. What percentage of the first 25 payments goes toward paying principal
Answer:
Percentage of the first 25 payments goes toward paying principal is 41.95%.
Explanation:
Note: See the attached excel file for the amortization schedule for the first 25 months.
In the attached excel file, the monthly is calculated using the formula for calculating the present value of an ordinary annuity as follows:
PV = P * ((1 - (1 / (1 + r))^n) / r) …………………………………. (1)
Where;
PV = Present value or the balance to pay = Cost * (100% - Percentage of down payment) = $100,000 * (100% - 10%) = $90,000
P = Monthly payment = ?
r = Monthly interest rate = Nominal rate / 12 = 3% / 12 = 0.25%, or 0.0025
n = number of months to repay = 30 years * 12 months = 360
Substitute the values into equation (1) and solve for P, we have:
$90,000 = P * ((1 - (1 / (1 + 0.0025))^360) / 0.0025)
$90,000 = P * 237.189381504283
P = $90,000 / 237.189381504283
P = $379.44
From the attached excel file, we have:
Total payment for the first 25 months = $9,486.09
Total repayment of principal for the first 25 months = $3,979.17
Therefore, we have:
Percentage of the first 25 payments goes toward paying principal = (Total repayment of principal for the first 25 months / Total payment for the first 25 months) * 100 = ($3,979.17 / $9,486.09) * 100 = 41.95%
Partial balance sheets and additional iformation are listed below for Sowell Company.
SOWELL COMPANY
Partial Balance Sheets
as of December 31
Assets 2011 2010
Cash $40,000 $20,000
Accounts Receivable 70,000 85,000
Inventory 40,000 35,000
Liabilities
Accounts Payable $54,000 $62,000
Additional Information:
Net income was $88,000.
Depreciation expense was $19,000.
REQUIRED: Prepare the operating activities section of the statement of cash flows for 2011 using the indirect method.
Answer and Explanation:
The preparation of the operating activities section is presented below
Cash Flows from operating activities
Net Income $88,000
Adjustment made for non cash items:
Depreciation Expense $19,000
Add: Decrease in Account Receivable $15000 ($70,000 - $85,000)
Less: Increase in Inventory $(5000) ($40,000 - $35,000)
Less: Decrease in accounts payable $(8000) ($54,000 - $62,000)
Net cash flows from operating activities $109,000
Boenisch Corporation produces and sells a single product with the following characteristics: The company is currently selling 8,000 units per month. Fixed expenses are $406,000 per month. Management is considering using a new component that would increase the unit variable cost by $3. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 400 units. What should be the overall effect on the company's monthly net operating income of this change
Answer: Increase by $2,000
Explanation:
Current net operating income is:
= Contribution margin - Fixed costs
= (68 * 8,000) - 406,000
= $138,000
If component is added, Variable cost increases by $3 to $105. New contribution margin is:
= 170 - 105
= $65
Units sold increases by 400 to 8,400.
Net operating income becomes:
= (65 * 8,400) - 406,000
= $140,000
Net operating income increased by:
= 140,000 - 138,000
= $2,000
Indicate what components of GDP (if any) each of the following transactions would affect.
Transaction Consumption Investment Government Net
Purchases Exports
a. Dell sells a desktop computer from its
inventory to the Johnson family.
b. Your parents buy a bottle of French wine.
c. Honda expands its factory in Ohio.
d. California hires workers to repave Highway 101.
e. The federal government sends your grandmother
a Social Security check.
f. You pay a hairdresser for a haircut.
g. Your parents buy a new house from a local builder.
h. Uncle Henry buys a new refrigerator from a domestic
manufacturer.
Answer:
a. Dell sells a desktop computer from its inventory to the Johnson family.
Component of GDP to be affected: Consumption
b. Your parents buy a bottle of French wine.
Component of GDP to be affected: Consumption
c. Honda expands its factory in Ohio.
Component of GDP to be affected: Investment
d. California hires workers to repave Highway 101.
Component of GDP to be affected: Government Purchases
e. The federal government sends your grandmother a Social Security check.
Component of GDP to be affected: No impact
f. You pay a hairdresser for a haircut.
Component of GDP to be affected:
g. Your parents buy a new house from a local builder.
Component of GDP to be affected: Consumption
h. Uncle Henry buys a new refrigerator from a domestic manufacturer.
Component of GDP to be affected: Consumption
When production is greater than sales ______ affected. Multiple choice question. only the fixed production cost variance is only the variable production cost variance is both the fixed production cost and variable production cost variances are neither the fixed production cost or variable production cost variances are
variable costing will show higher net income than the absorption costing
Absorption and Variable Costing Comparisons: Production Equals Sales Assume that Smuckers manufactures and sells 30,000 cases of peanut butter each quarter.
The following data are available for the third quarter of 2017.
Total fixed manufacturing overhead.......................................................90,000
Fixed selling and administrative expenses........... .. . .. . .. . . . . .. . . . . . 20,000
Sale price per case..................................................................................32
Direct materials per case .......................................................................15
Direct labor per case ........................................................................6
Variable manufacturing overhead per case ..........................................3
a. Compute the cost per case under both absorption costing and variable costing.
b. Reconcile any differences in income. Explain.
c. Compute te net income under both absorption costing and variable costing.
Answer:
a. Cost per case under Absorption costing:
= Direct materials per case + Direct labor per case + Variable manufacturing overhead per case + Fixed manufacturing overhead per case
= 15 + 6 + 3 + 90,000/ 30,000 cases
= $27
Cost per case under Variable costing:
= Direct materials per case + Direct labor per case + Variable manufacturing overhead per case
= 15 + 6 + 3
= $24
b. First we need to calculate income under both methods:
Under Absorption costing:
= Sales - Cost of goods sold - Selling and Admin expenses
= (30,000 cases * 32) - (30,000 * 27) - 20,000
= $130,000
Under Variable Costing:
= Sales - Cost of Goods sold - Fixed manufacturing overhead - Selling and Admin expenses
= (30,000 * 32) - (30,000 * 24) - 90,000 - 20,000
= $130,000
There is no difference in income because the cases manufactured equals the cases sold.
You are considering attending college for one term. Your costs for one term include: tuition: $21,000 food and apartment rent: $6,000 books and college supplies: $2,000. Also, college attendance implies that when you switch work hours to study hours your income will fall from $10,000 to $3,000 (for the full term). What is the opportunity cost of going to college for this term, assuming that your food and apartment rent are the same with college as without it
Answer:
Opportunity cost of going to college $7,000
Explanation:
Opportunity cost is the value of the next best alternative forgone in favour of a decision. In this scenario, opportunity cost would mean any income sacrificed by the college students because he wanted to take a college education.
$
Before the college he could make 10,000
Switching work hours for study, he will now make 3,000
Opportunity cost 7,000
Opportunity cost of going to college $7,000
The opportunity cost of going to college for this term, assuming that my food and apartment rent are the same with college as without it is $7,000
Opportunity cost is an economic term for expressing cost in terms of foregone alternative. It is what has to be given up in order to have an alternative.
With regards to the above, opportunity cost would mean any income sacrificed by the college students because he wanted to take a college education.
Opportunity cost
= Before the college, he could make - Switching work hours for study, he will now make
= $10,000 - $3,000
= $7,000
Hence, the opportunity cost of going to college would be $7,000
Learn more at : https://brainly.com/question/8846809
The following information relates to Osceola Corporation for the past accounting period. Direct costs Service Department A$80,000 Service Department B 60,000 Producing Department C 15,000 Producing Department D 20,000 Proportion of service by A to: B10% C60% D30% Proportion of service by B to: A30% C20% D50% Using the reciprocal (simultaneous solution) method, Department B's cost allocated to Department C (rounded to the nearest whole dollar) is: Multiple Choice
Answer:
Department B's cost allocated to Department C = $14,021
Explanation:
Let A and B represents the total costs of Departments A and B repectively. We therefore have:
A = 80,000 + 0.3B ……………………. (1)
B = 60,000 + 0.1A ………………...... (2)
Substituting equation (1) into (2) and solve for B, we have:
B = 60,000 + 0.1(80,000 + B0.3)
B = 60,000 + 8,000 + 0.03B
B - 0.03B = 68,000
0.97B = 68,000
B = 68,000 / 0.97
B = 70,103
This implies that the total cost of B is $70,103.
Therefore, we have:
Department B's cost allocated to Department C = B * Proportion of service by B to C = $70,103 * 20% = $14,021
Behavioral finance is the study of:_________.
a. how investors react to accounting-based profit fluctuations.
b. how investors react to interest rates and foreign currency fluctuations.
c. how investors react to certain ways to diversify a portfolio.
d. how investors react to the amount of risk versus the amount of return in securities.
Answer:
D). how investors react to the amount of risk versus the amount of return in securities.
Explanation:
Behavioral finance can be regarded as study involving influence of psychology on investors behavior as well as financial analysts. encompass effects that comes after this on the markets. It explains that investors cannot always described as rational. It should be noted that the Behavioral finance is the study of how investors react to the amount of risk versus the amount of return in securities.
Julie is purchasing a home for $169,000.00. Her loan has been approved for a 30-year fixed-
rate loan at 5 percent annual interest. She will pay 20 percent of the purchase price as a down
payment. What is the total interest she will pay on her loan?
$135,200.87
$142,613.78
$126,168.64
$122,877.92
Answer:
Julie
The total interest she will pay on her loan is nearly:
= $126,168.64
Explanation:
a) Data and Calculations:
Cost of purchasing a home = $169,000
Downpayment (20% * $169,000) = $33,800
Amount of loan = $135,200 ($169,000 - $33,800)
Interest rate per annum = 5%
From an online financial calculator:
Loan Amount 135200
Loan Term 30 years
0 months
Interest Rate 5
Compound
Annually (APY)
Pay Back Every Year
Results:
House Price $169,000.00
Loan Amount $135,200.00
Down Payment $33,800.00
Total of 360 Mortgage Payments $261,281.82
Total Interest $126,081.82 on a monthly basis
Mortgage Payoff Date Jun. 2051
Payment Every Year $8,794.95
Total of 30 Payments $263,848.62
Total Interest $128,648.62 on a yearly basis
The Heating Division of Kobe International produces a heating element that it sells to its customers for $39 per unit. Its variable cost per unit is $21, and its fixed cost per unit is $7. Top management of Kobe International would like the Heating Division to transfer 14,900 heating units to another division within the company at a price of $32. The Heating Division is operating at full capacity. What is the minimum transfer price that the Heating Division should accept
Answer:
$21
Explanation:
The computation of the minimum transfer price is shown below
Here the minimum transfer price should be equivalent to the marginal price i.e. variable cost and the fixed cost would not considered as it remains fixed
So according to the given situation, the minimum transfer price that the heating division should accept is $21
The same would be considered and relevant
Kennedy Inc. has the following data for its operation in August: Increase in direct materials inventory 100 Sets Direct materials purchased (AQ) 1,600 Sets Finished goods manufactured 700 units Direct materials purchase-price variance $ 400 Favorable Budgeted Finished goods to manufacture 800 Units Direct materials purchases 2,000 Sets Direct materials per unit of finished goods 2 Sets Direct materials price per set (SP) $ 3.60 What was the actual purchase price (AP) per set of direct materials purchased (to two decimal places)
Answer:
Actual price= $1.6 per unit
Actual price= $3.2 per set
Explanation:
To calculate the actual price, we need to use the following formula:
Direct material price variance= (standard price - actual price)*actual quantity
400= (1.8 - actual price)*2,000
400= 3,600 - 2,000actual price
2,000actual price = 3,200
actual price= $1.6 per unit
Which of the following is incorrect?
a. Future value means earning interest on interest.
b. External equity and dividends can be used as plug variables in a financial plan.
c. A financial plug variable is the designated source of external financing needed to deal with any shortfall or surplus in financing and thereby bring the balance sheet into balance.
d. There are two primary mechanisms for electing directors: cumulative voting and straight voting.
e. The rate required in the market on a bond is the yield to maturity.
Answer:
b. External equity and dividends can be used as plug variables in a financial plan.
Explanation:
When the external equity and dividend is applied like the plus variables in the financial plan so as a plug variable it represent the external financing source i.e. dividend that required to deal with any deficit or surplus in the financing and the external equity is not a source of the external financing
Therefore the option b is considered
A company had total liabilities of $275,000 and the owner’s equity was $1,722,000. According to the fundamental accounting equation, total assets must be:
Answer:
1,997,000
Explanation:
Assets = Liabilities + Owners Equity
Assets=275,0000 + 1,722,000
Assets = 1,997,000
Desert Company issued $3,158,061 of 12% bonds on January 1, 2021. The market rate of interest at that time was 9%. The bonds pay interest quarterly each March 31, June 30, September 30, and December 31. What is the amount of the cash payment Desert is legally obligated to pay its creditor each quarter?
Answer:
Quarterly Interest Payment = $94741.83
Explanation:
The amount of interest payment made by coupon bonds depends on the coupon rate they carry regardless of what the interest rate in market is. Thus Desert will have to pay annual coupon rate of 12% of the face value of the bond. However, as the coupon payments are made quarterly, the quarterly interest that will be paid by Desert will be,
Quarterly Interest Payment = 3158061 * 12% * 1/4
Quarterly Interest Payment = $94741.83
A firm has to choose between two technologies; both produce same output with one being labor intensive and other being capital intensive. The firm will use labor intensive technology when _________________. Select the correct answer below: wages are less than the interest rate total cost of labor is less than total cost of capital average variable cost is less than average fixed cost labor is more productive than capital
Answer:
total cost of labor is less than total cost
Explanation:
In the case when the firm would use the labor intensive technology at the time when the marginal product from labor intensive would be more than the marginal product of capital intensive this is due to the rise in the firm benefit as the firm would produce and sell more
The other thing is that the cost of labor intensive would be less than the capital intensive cost. This cost would benefit the organization with respect to the decision making
A railroad company is required to pay 79,860, which is due three years from now. The company invests 15,000 in a bond with modified duration 1.80, and 45,000 in a bond with modified duration Dmod, to Redington immunize its position against small changes in the yield rate. The annual effective yield rate for each of the bonds is 10%. Calculate Dmod.
Answer:
3.04
Explanation:
Calculation to determine Dmod.
First step is to calculate the present value of the assets which also represent the present value of the liability
Present value of the assets =$15,000+$45,000
Present value of the assets = $60,000
Second step is to calculate the modified duration of the assets which is the weighted average
Modified duration of the assets=($15,000/$60,000)/1.80+$45,000/$60,000Dmod
Modified duration of the assets=0.25(1.80) + 0.75Dmod
Third step is to calculate the Modified duration of the liability
Modified duration of the liability =3/(1+0.1)
Modified duration of the liability =3/1.1
Now let calculate Dmod
Dmod = (3/1.1 – 0.45)/0.75
Dmod=(2.7272-0.45)/0.75
Dmod=2.2772/0.75
Dmod=3.036
Dmod=3.04 (Approximately)
Therefore Dmod is 3.04