Answer:
Return n investment = 11.67%
Explanation:
Return on Investment is the proportion investment that is earned as operating income.
For the division, the return on investment would be the proportion of te investment in assets that is earned as net income.
This would be determined as follows;
Return n investment = (Net income÷ Operating assets) × 100
Return n investment = (175,000 ÷ 1,500,000) × 100= 11.67%
Return n investment = 11.67%
Nadia Company, a merchandising company, prepares its master budget on a quarterly basis. The following data has been assembled to assist in preparation of the master budget for the second quarter.
a. As of March 31 (the end of the prior quarter), the company’s balance sheet showed the following account balances:
Cash $9,000
Acct Receviable 48,000
Inventory 12,6000
Buildings & Equip. (net) 214,100
Acct. Payable 18,300
Common Stock 190,000
Retained Earnings 75,400
Totals 283,700 283,700
b. Sales for March total 10,000 units. Each month’s sales are expected to exceed the prior month’s results by 5%. The product selling price is $25.00 per unit.
c. Sales are 20% for the cash and 80% on credit. All payments on credit sales are collected in the month following the sale. The accounts receivable at March 31 are a result of March credit sales.
d. Company’s policy calls for a given month’s ending inventory to equal 80% of the next month’s expected unit sales. The March 31 inventory is 8,400 units, which complies with the policy. The purchase price is $15.
e. Monthly selling and administrative expenses are budgeted as follows: salaries and wages, $7500 per month; shipping 6% of sales; advertising, $6,000 per month; other expenses, 4% of sales. Depreciation including depreciation on new assets acquired during the quarter, will be $6,000 for the quarter. Sales representatives’ commissions are 12.5 % of sales and are paid in the month of the sales. The sales manager’s salary will be $3,500 in April and $4,000 per month thereafter.
f. Half a month’s inventory purchases are paid in the month of purchase and half in the following month.
g. Equipment purchases during the quarter will be as follows: April, $11,500; and May, $3,000.
h. Dividends totaling $3,500 will be declared and paid in June.
j. No cash payment for income taxes are to be made during the second calendar quarter. Income taxes will be assessed at 35% for the quarter.
k. Management wants to maintain a minimum cash balance of $8,000. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total balance of $20,000. The interest rate of these loans is 1% per month, and for simplicity, we will assume that the interest is not compounded. The company would as far as it is able, repay the loan plus accumulated interest at the end of the quarter.
Required: Using the above data, complete the following statements and schedules for the second quarter.
1. Expected cash receipts from customers
2. Expected cash payments for purchases
3. Cash budget
Answer:
Nadia Company
1. Schedule of expected cash receipts from customers :
April May June
Cash 20% $52,500 $55,125 $57,880
Credit 80% 48,000 210,000 220,500
Total receipts $100,500 $265,125 $278,380
2. Schedule of expected cash payments for purchases :
Payment for purchases: April May June
50% (month of purchase) $81,900 $85,995 $90,293
50% (following month) 18,300 81,900 85,995
Total cash payment $100,300 $167,895 $176,288
3. Statement of Cash budget for the second quarter ended June 30:
April May June Total
Beginning cash balance $9,000 ($58,363) ($23,649) $9,000
Cash receipts from customer 100,500 265,125 278,380 644,005
Total cash available $109,500 $206,762 $254,731 $653,005
Cash payments:
Purchases $100,300 $167,895 $176,288 $444,483
Selling & Administrative 76,063 79,516 82,615 238,194
Equipment purchase 11,500 3,000 14,500
Dividends 3,500 3,500
Total cash payments: $187,863 $250,411 $262,403 $700,677
Cash shortfall ($78,363) ($43,649) ($7,672)
Bank overdraft 20,000 20,000 16,000 56,000
Cash balance ($58,363) ($23,649) $8,328 $8,328
Explanation:
a) Data:
Nadia Balance Sheet as of March 31:
Cash $9,000
Acct Receivable 48,000
Inventory 12,6000
Buildings & Equip. (net) 214,100
Total $283,700
Acct. Payable $18,300
Common Stock 190,000
Retained Earnings 75,400
Total $283,700
b) Sales:
Month Quantity Unit Price Total
March 10,000 units $25.00 $250,000
April = 10,500 (10,000 x 1.05) " $262,500
May = 11,025 (10,500 x 1.05) " $275,625
June = 11,576 (11,025 x 1.05) " $289,400
July = 12,155 (11,576 x 1.05) " $303,875
c) Sales Terms:
March April May June
Cash 20% $52,500 $55,125 $57,880
Credit 80% 48,000 210,000 220,500
d) Inventory:
March April May June
8,400 8,820 9,261 9,724
Ending $126,000 $132,300 $138,915 $145,860
Beginning $126,000 $132,000 $138,915
e) Selling & Administrative Expenses
April May June Total
Salaries and wages $7,500 $7,500 $7,500 $22,500
Shipping 15,750 16,538 17,364 49,652
Advertising 6,000 6,000 6,000 18,000
Others 10,500 11,025 11,576 33,101
Depreciation 6,000
Sales commissions 32,813 34,453 36,175 104,441
Sales Manager's Salary 3,500 4,000 4,000 11,500
Total $76,063 $79,516 $82,615
f) Purchases of Inventory
April May June Total
Ending Inventory 8,820 9,261 9,724
Units of Inventory sold 10,500 11,025 11,576
Inventory available for sale 19,320 20,286 21,300
less beginning inventory 8,400 8,820 9,261
Purchases 10,920 11,466 12,039
Cost of purchases x $15 $163,800 $171,990 $180,585
Payment for purchases: April May June
50% (month of purchase) $81,900 $85,995 $90,293
50% (following month) 18,300 81,900 85,995
Total cash payment $100,300 $167,895 $176,288
g) April May June
Equipment purchase $11,500 $3,000
h) Nadia Company's preparation of quarter budgets helps it to foresee cash shortages and make necessary arrangements to meet up with cash obligations. It focuses management efforts to achieve sales and deliver on other perimeters, including the control of expenses. It is important for the master budget to be prepared with inputs from other subsidiary budgets so that management plans ahead.
Jasper makes a $25,000, 90-day, 7% cash loan to Clayborn Co. Jasper's entry to record the collection of the note and interest at maturity should be: (Use 360 days a year.)
Answer: B) Debit Cash $25,437.50, credit Interest Revenue $437.50; credit Notes Receivable $25,000.
Explanation:
The interest revenue for the period of 90 days will be;
= 25,000 * 7% * [tex]\frac{90}{360}[/tex]
= $437.50
Total to be received
= 25,000 + 437.50
= $25,437.50
The entry to record will therefore be;
DR Cash $25,437.50
CR Interest Revenue $437.50
CR Notes Receivable $25,000
What type of unemployment occurs when people take time to find a job?
seasonal unemployment
C. cyclical unemployment
b. structural unemployment
d. frictional unemployment
a.
frictional unemployment
calculate the net present value of a business deal that cost $2500 today and will return $1500 at the end of this year. use interest rate of 13%
Answer:
NPV= -$1,172.57
Explanation:
Giving the following information:
Initial investment= $2,500
Cash flow= $1,500
Discount rate= 13%
To calculate the net present value (NPV), we need to use the following formula:
NPV= -Io + ∑[Cf/(1+i)^n]
NPV= -2,500 + (1,500/1.13)
NPV= -1,172.57
Classify the assumptions according to whether or not each item is an assumption made under perfect competition (also known as pure competition or competitive industry).
Assumed in perfect competition Not assumed in perfect competition
a. price-taking behavior
b. a small number of producers
c. firms selling a similar but differentiated good
d. significant barriers to entry
Answer:
Option “A” is the assumption of perfect competition while options B, C, and D are not the assumption of perfect competition.
Explanation:
Option A, is the assumption of perfect competition because, in the perfect competition, the industry decides the price with the help of market forces demand and supply. Moreover, this determined price is followed by firms in the industry. While the other options are not assumed in perfect competition because there are a large number of firms that can be seen in perfect competition and these firms sell homogeneous goods. Furthermore, the firms are free to enter and exit the market.
The following assumption are made under perfect competition:
price-taking behaviorThe following assumption are not made under perfect competition:
small number of producers firms selling a similar but differentiated good significant barriers to entryPerfect competition is a market where there are many buyers and sellers of homogenous goods and services. There are no barriers to the entry or exit of firms into the market. An example of perfect competition is the market for apples. All apples are identical and there are many farmers who sell apples.
The market price of goods in a perfect competition is set by the market forces. So, buyers and sellers are price takers. They take the price as determined by the market forces. There is perfect information in a perfect competition.
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A large open economy has desired national saving of Sd = 1200 + 1000rw, and desired national investment of Id = 1000 - 500rw. The foreign economy has desired national saving of = 1300 + 1000rw, and desired national investment of = 1800 - 500rw. The equilibrium world real interest rate equal to:________.
Answer: 10%
Explanation:
The Equilibrium real interest rate would be the interest rate that equates the Desired savings to the desired investment for both the National and foreign economy.
Desired national saving + Foreign desired national saving = Desired national investment + Foreign desired national investment
1,200 + 1,000rw + 1,300 + 1,000rw = (1,000 - 500rw) + (1,800 - 500rw)
2,500 + 2,000rw = 2,800 - 1,000rw
2,000rw + 1,000rw = 2,800 - 2,500
3,000rw = 300
rw = 0.1
rw = 10%
Suppose that the quantity of apples sold increases by 30 percent after the price of pears increases by 15 percent. What is the coefficient of cross elasticity of demand
Rita Gonzales won the $53 million lottery. She is to receive $2.2 million a year for the next 20 years plus an additional lump sum payment of $9 million after 20 years. The discount rate is 12 percent. What is the current value of her winnings
Answer:
PV= $17,365,776.86
Explanation:
Giving the following information:
Cf= 2,200,000
Number of years= 20
Discount rate= 12%
Additional lump sum= 9,000,000
First, we need to calculate the future value using the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual cash flow
FV= {2,200,000*[(1.12^20) - 1]} / 0.12 + 9,000,000
FV= $167,515,373.4
Now, the present value:
PV= FV/(1+i)^n
PV= 167,515,373.4/1.12^20
PV= $17,365,776.86
On January 1, 2016, the Excel Delivery Company purchased a delivery van for $33,000. At the end of its five-year service life, it is estimated that the van will be worth $3,000. During the five-year period, the company expects to drive the van 100,000 miles.
Required:
Calculate annual depreciation for the five-year life of the van using each of the following methods. (Do not round intermediate calculations.)
1. Straight line
2. Sum of the years digits
3. Double declining balance
4, Units of production using miles driven as a measure of output and the following actual mileage:
Year Miles
2016 22,000
2017 24,000
2018 15,000
2019 20,000
2020 21,000
Answer:
1. Straight line
years 2016 to 2020 = $6,000
2. Sum of the years digits
2016 = $10,000
2017 = $8,000
2018 = $6,000
2019 = $4,000
2020 = $2,000
3. Double declining balance
2016 = $13,200
2017 = $7,920
2018 = $4,752
2019 = $2,852
2020 = $1,276
4, Units of production using miles driven
2016 = $6,600
2017 = $7,200
2018 = $4,500
2019 = $6,000
2020 = $5,700
Explanation:
purchase cost $33,000
useful life 5 years, salvage value $3,000
expected use 100,000 miles
1. Straight line
($33,000 - $3,000) / 5 = $6,000
2. Sum of the years digits
year 1 = 5/15 x $30,000 = $10,000
year 2 = 4/15 x $30,000 = $8,000
year 3 = 3/15 x $30,000 = $6,000
year 4 = 2/15 x $30,000 = $4,000
year 5 = 1/15 x $30,000 = $2,000
3. Double declining balance
year 1 = 2 x 1/5 x $33,000 = $13,200
year 2 = 2 x 1/5 x $19,800 = $7,920
year 3 = 2 x 1/5 x $11,880 = $4,752
year 4 = 2 x 1/5 x $7,128 = $2,851.20 ≈ $2,852
year 5 = $4,276 - $3,000 = $1,276
4, Units of production using miles driven
depreciation expense per mile = ($33,000 - $3,000) / 100,000 = $0.30
Year Miles
2016 22,000 x $0.30 = $6,600
2017 24,000 x $0.30 = $7,200
2018 15,000 x $0.30 = $4,500
2019 20,000 x $0.30 = $6,000
2020 (21,000 - 2,000) x $0.30 = $5,700
BBQ Corporation has a target capital structure that is 70 percent equity, 30 percent debt. The flotation costs for equity issues are 15 percent of the amount raised; the flotation costs for debt are 8 percent. If BBQ needs $150 million for a new manufacturing facility, what is the cost when flotation costs are considered
Answer:
$172,215,844 is the cost when flotation costs are considered
Explanation:
flotation
Weighted average flotation cost = {(Flotation cost debt * Weight debt) + (Flotation cost equity * Weight equity)
= (8% * 0.30) + (15% * 0.70)
=0.024 + 0.105
= 0.129
= 12.9%
Calculation of the cost of funds
Cost of funds = Amount raised / (1 - Weighted average floatation cost)
= $150,000,000 / (1-0.129)
= $150,000,000 / (0.871)
=$172,215,844
Therefore, the cost of raising fund is $172,215,844
Blackwelder Factory produces two similar products-small lamps and desk lamps. The total plant overhead budget is $667,000 with 465,000 estimated direct labor hours. It is further estimated that small lamp production will require 299,000 direct labor hours and desk lamp production will need 166,000 direct labor hours. Using the single plantwide factory overhead rate with an allocation base of direct labor hours, how much factory overhead will Blackwelder Factory allocate to desk lamp production if actual direct hours for the period is 249,000. a.$356,070 b.$800,936 c.$1,000,500 d.$310,930
Answer:
Allocated MOH= $356,070
Explanation:
Giving the following information:
Estimated overhead= $667,000
Estimated direct labor hours= 465,000
Actual direct labor hours for lamp desk= 249,000
First, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 667,000/465,000
Predetermined manufacturing overhead rate= $1.43 per direct labor hour
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 1.43*249,000
Allocated MOH= $356,070
g The Fed makes an open market operation purchase of $200,000. The currency drain ratio is 33.33 percent and the desired reserve ratio is 10 percent. By how much does the quantity of money increase?
Answer: $618,000
Explanation:
From the question, we are informed that the Fed makes an open market operation purchase of $200,000 and that the currency drain ratio is 33.33 percent and the desired reserve ratio is 10 percent.
We first have to calculate the money multiplier which will be:
= (1 + the currency drain ratio)/( the currency drain ratio + the reserve ratio)
= (1 + 33.33%)/(33.33% + 10%)
= ( 1 + 0.33)/(0.33 + 0.1)
= 1.33/0.43
= 3.09
The quantity of money increase will be:
= 3.09 × $200,000
= $618,000
A metal fabricator produces connecting rods with an outer diameter that has a 1 ± .01 inch specification. A machine operator takes several sample measurements over time and determines the sample mean outer diameter to be 1.002 inches with a standard deviation of .003 inch.
a. Calculate the Cp of the process. (Round your answer to 3 decimal places.)
Cp =
b. Calculate the Cpk of the process. (Round your answer to 3 decimal places.)
Cpk =
Answer:
A) 1.111
B) 0.889
Explanation:
given data :
outer diameter of connecting rods = 1 ± 0.01 inch
sample mean outer diameter = 1.002 inches
standard deviation = 0.003 inches
A) Calculating the Cp of the process
mean = 1.002
Standard deviation = 0.003
LSL = 1 - 0.01 = 0.99
USL = 1 + 0.01 = 1.01
[tex]Cp = \frac{USL - LSL}{6 * STANDARD DEVIATION}[/tex] = [tex]\frac{1.01-0.99}{6*0.003}[/tex] = 1.111
B) calculate Cpk
mean = 1.002, LSL = 0.99, USL = 1.01 , deviation = 0.003
[tex]Cpk = min[\frac{mean-LSL}{3* deviation} , \frac{USL- mean}{3*deviation} ][/tex]
= min [(0.012/0.009) , (0.008/0.009) ]
= min [ 1.333, 0.889 ]
hence Cpk = 0.889
WinterDreams operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski season. Investors would like to earn a 16 % return on the company's $ 115 million of assets. The company incurs primarily fixed costs to groom the runs and operate the lifts. WinterDreams projects fixed costs to be $ 35 comma 600 comma 000 for the ski season. The resort serves 800 comma 000 skiers and snowboarders each season. Variable costs are $ 8 per guest. Currently, the resort has such a favorable reputation among skiers and snowboarders that it has some control over the lift ticket prices.
Required:
a. Would Mountain Point emphasize target pricing or cost-plus pricing? Why?
b. If other resorts in the area charge $66 per day, what price should Mount Snow charge?
Answer:
a. Would Mountain Point emphasize target pricing or cost-plus pricing? Why?
They emphasize cost plus pricing because the investors are seeking a desired rate of return on their investment and they do it by adding the desired profit margin to their costs.b. If other resorts in the area charge $66 per day, what price should Mount Snow charge?
$75.50 in order for them to generate the required ROI. Since the resort has a very good reputation, it can charge a higher price than its competitors.Explanation:
company's assets = $115,000,000
expected return on investment = 16%
fixed costs = $35,600,000
number of customers = 800,000
variable costs = $8 per customer x 800,000 = $6,400,000
total costs = $42,000,000
total cost per client = $42,000,000 / 800,000 = $52.50
desired profit = $115,000,000 x 16% = $18,400,000
desired profit per client = $18,400,000 / 800,000 = $23
price per ticket = $75.50
Indicate whether the following changes would cause a shift in the demand curve for Product A and, if so, the direction of the shift.
Change Demand curve shift? Direction of shift?
Increase in price of complementary product Yes or No Increase, decrease or N/A
Increase in the price of the Product A Yes or No Increase, decrease or N/A
Launch of effective advertising campaign for Product Yes or No Increase, decrease or N/A
Answer:
yes decrease
No N/A
Yes, Increase
Explanation:
A complementary good is a good that is consumed together. If the price of the complementary good increases, the quantity demanded of the good would decrease. this would lead to a decrease in demand for product A.
an increase in the price of product A, would increase the quantity demanded. an increase in quantity demanded leads to a movement along the demand curve and not a shift of the demand curve
An effective advertising campaign would increase the visibility of the product and increase the demand for the product. an increase in demand leads to an outward shift of the demand curve.
A monopoly's cost function is CQ and its the demand for its product is pQ where Q is output, p is price, and C is the total cost of production. Determine the profit-maximizingLOADING... price and output for a monopoly.
Answer:
The answer is "70 units".
Explanation:
In the given question some equation is missing which can be defined as follows:
[tex]C = 1.5Q^2+40Q\\\\P=320-0.5Q[/tex]
Monopolistic functions are used where Marginal Profit = Marginal Cost where marginal revenue and marginal cost stand for the MR and MC.
Finding the value of MR :
[tex]\ MR = \frac{\partial TR}{\partial Q} \\\\[/tex]
[tex]= \frac{\partial PQ}{\partial Q} \\\\= \frac{\partial (320-0.5Q)Q}{\partial Q}[/tex]
[tex]= \frac{\partial (320Q -0.5Q^2)}{\partial Q}\\\\ = \frac{\partial Q (320 -0.5Q)}{\partial Q}\\\\ \ by \ solving \ we \ get \\\\ = 320 - Q...(1)[/tex]
Calculating the value of the MC:
[tex]MC = \frac{\partial TC}{\partial Q} \\[/tex]
[tex]=\frac{\partial (1.5Q^2 + 40Q)}{\partial Q} \\\\=\frac{\partial Q (1.5Q + 40)}{\partial Q}\\\\ \ by \ solve \ value \\\\ = 3Q + 40....(2)[/tex]
compare the above equation (i) and (ii):
[tex]\to 320 -Q = 3Q+40\\\\\to 320 -40 = 3Q+ Q\\\\\to 280 = 4Q\\\\\to 4Q =280 \\\\\to Q= \frac{280}{4}\\\\\to Q= 70 \\[/tex]
When a manager uses relationships and formal authority to cause other people in the organization to change their behavior, the manager is _____________.
Answer:
answer choices?
Explanation:
what are the answer choices
Suppose the rate of return on short-term government securities (perceived to be risk-free) is about 5%. Suppose also that the expected rate of return required by the market for a portfolio with a beta of 1 is 12%. According to the capital asset pricing model: a. What is the expected rate of return on the market portfolio?
Answer: 12%
Explanation:
The Capital Asset Pricing Model can be used to calculate the expected return of the portfolio using the formula;
Expected Return = Risk-free rate + beta ( market return - risk-free rate)
Expected Return = 5% + 1(12% - 5%)
Expected Return= 5% + 7%
Expected Return = 12%
g Profit maximazation for a monopolist and a perfect competitor occurs where marginal revenue equals marginal cost. At this profit-maximizing output, the monopolist will charge a price ________ marginal revenue and a perfect competitor will charge a price ________ marginal revenue.
Answer: Higher than; Equal to
Explanation:
Profit maximazation for a monopolist and a perfect competitor occurs where marginal revenue equals marginal cost.
The Marginal Revenue curves are different for either of them though and this impacts what price they sell at. This is because the price the good will be sold at depends on where the maximising output touches the demand curve.
The Monopolist has a Marginal Revenue curve that is lower than the Demand Curve. Therefore the point where Marginal Revenue and Marginal Cost intersect, will not be on the demand curve but lower than it. The price charged will therefore be the point where the maximising output touches the Demand Curve.
The Perfectly Competitive Firm however is in a market where Price is equal to the Demand curve and equal to the Marginal Revenue curve as well. The point where the Marginal Cost intersects with Marginal Revenue will also be the point where the maximising output touches the Demand curve so the price will be the same as the Marginal Revenue.
A clothing manufacturer produces clothing in five locations in the U. S. In a move to vertical integration, the company is planning a new fabric production plant that will supply fabric to all five clothing plants. The clothing plants have been located on a coordinate system as follows:
Location (X,Y)
A 7,2
B 4,7
C 5,5
D 2,2
E 9,4
Shipments of fabric to each plant vary per week as follows: plant A, 200 units; plant B, 400 units; plant C, 300 units; plant D, 300 units; and plant E, 200 units. What is the optimal location of X for the fabric plant?
Answer:
The optimal location of X for the fabric plant is 4.9
Explanation:
X Y W X.W Y.W
A 7 2 200 1400 400
B 4 7 400 1600 2800
C 5 5 300 1500 1500
D 2 2 300 600 600
E 9 4 200 1800 800
Total = 1,400 6,900 6,100
X= 6,900 / 1,400 = 4.9
Y= 6,100 / 1,400 = 4.4
Development normally stops at about age:
A. 40
B. 25.
C. Development never stops.
D. 5.
Answer:
B. 25.
Explanation:
Normally the life of a human breaks into various stages like infancy, childhood, adolescence, old age ,and adulthood which depends upon the level of age.
Like we can say that in the age of 18 the person is an adult but at the age of 25 he has reached to the level of maturity in term of mental, physical, strength, emotional, etc
And at this level, the development normally stops i.e brain not with the person body
Hence, option b is correct
Answer:
development never stops
Explanation:
our bodies are always changing and always growing to be something different. This includes every 7 years our cells are completely changed so we are practically all new people. option c is also the right answer on apex.
3. Individual Problems 20-3 Lightweight personal locator beacons are now available to hikers, making it easier for the Forest Service's rescue teams to locate those lost or in trouble in the wilderness. True or False: Forest Service costs will likely fall due to moral hazard. True False
Answer: False
Explanation:
Moral Hazard refers to the tendency of people or entities to take on more risk if they know they will be saved from it.
With the Forest Service now making locator beacons available for hikers, the result will be that more hikers will be emboldened to hike further in the wilderness or into more dangerous areas knowing that should they get in trouble, the rescue teams will locate them faster. It will also mean that more hikers will start coming to the forest because they feel they can hike and be found easily if they get into trouble.
These 2 things will mean that the Forest Service will both have to conduct more rescue missions and maybe hire more personnel as a result of the increased number both of which will increase their costs not reduce them.
What is the forecasted value of property, plan and equipment (PP&E) based on the following information: Capital asset turnover ratio: 2.5 Forecasted revenues: $120 Forecasted costs of goods sold: $80
Answer:
Forecasted value of property, plan and equipment (PP&E) is $48.
Explanation:
First note that Capital asset is the same thing as property, plan and equipment (PP&E).
In order to calculate this, we therefore use the formula for calculating the Capital asset turnover ratio which is the ratio of forecasted revenues to forecasted value of property, plan and equipment (PP&E) as follows:
Capital asset turnover = Forecasted revenues / Forecasted value of PP&E
Substituting for the values in the question into the equation above and solve for Forecasted value of PP&E, we have:
2.5 = 120 / Forecasted value of PP&E
Forecasted value of PP&E = 120 / 2.5 = $48
Therefore, the forecasted value of property, plan and equipment (PP&E) is $48.
The forecasted value of property, plan and equipment for the period for the statement quoted above is $48. The calculations can be implied by using the values given in the formula.
The value of the property, plan and equipment is important for estimating the current, short run and long run capital requirements of the firm for a given period using the ratios.
The values given to us are as the capital assets turnover ratio is 2.5 and the forecasted costs of goods sold is $80 whereas the forecasted revenues of the firm is $120.The calculation of estimated property, plan and equipment of a firm can be calculated by using the formula as given below by putting the available values.[tex]\rm Forecasted\ PP\&E= \dfrac {Forecasted\ Revenues}{Capital\ Assets\ Turnover\ Ratio}\\\\\\\\\rm Forecasted\ PP\&E= \dfrac {\$120}{2.5}[/tex]We get the forecasted PP&E of the firm as below, [tex]\rm Forecasted\ PP\&E= \$48[/tex]Therefore the value obtained for the forecasted PP&E of the firm is $48.Hence, the correct statement of the forecasted PP&E of the firm is $48 when the forecasted revenues are $120 and the assets turnover ratio stands at 2.5.
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Sarah, the controller of a large beverage supplier, supervises two employees. Her boss, Vladimir, instructs her to increase the company's inventory balance for an amount that is material to the financial statements by crediting several small "miscellaneous" expense accounts. She does not understand why he wants her to make these entries but immediately directs one of her staff to make them because she has been instructed to do so. Which of the following statements best describes Sarah's actions?
Answer:
Sarah failed to evaluate a potential ethical issue
Explanation:
According to the given scenario, Ethical concerns occur as workers face pressure from their employers to inflate profits or expenditures that include manipulating financial statements. Workers should be morally responsible and not participate in any dishonest behavior that modify the financial statements.
So, the correct answer is Sarah failed to evaluate a potential ethical issue .
Your Competitive Intelligence team is predicting that the Chester Company will invest in adding capacity to their Cute product this year. Assume Chester's product Cute invests in increasing its capacity by 10% this year. Because of this new information, your company anticipates all other products in the Core segment will increase their capacity by the same amount. How much can the industry produce in the Core segment the next year? Consider only products primarily in the Core segment last year. Ignore current inventories. Figures in thousands (000).
Answer:
HELLO SOME PARTS OF THE QUESTION IS MISSING ATTACHED BELOW IS THE MISSING PARTS
answer : 13156
Explanation:
Considering only products primarily in the core segment last year.
they are : Ant, cone, cute,Drat and Daze
From the question it is assumed that Chester's product Cute and other products in its Core segment will be increased by 10% this year hence we will calculate the 10% increase of each core product and add it to its initial value
For ANT (1550)
will become = 1550 + ( 10% * 1550 ) = 1705
For CONE ( 1050 )
will become = 1050 + ( 10% * 1050 ) = 1155
For Cute ( 1300 )
will become = 1300 + (10% * 1300 ) = 1430
For Drat ( 1040 )
will become = 1040 + ( 10% * 1040 ) = 1144
For DAZE ( 1040 )
will become = 1040 + ( 10% * 1040 ) = 1144
The total capacity of the current year = 1705 + 1155 + 1430 + 1144 + 1144 = 6578
Hence the Total capacity the Industry will produce in the core next year still applying the 10% increment will be = 2 * 6578 = 13156
The crowding-out effect refers to the possibility that:
a. a deficit, financed by borrowing in the capital markets, will increase the interest rate and reduce investment in the private sector.
b. an increase in the supply of money will induce a decline in real spending.
c. when used simultaneously, expansionary fiscal and monetary policies are counter-productive.
d. the speculative demand for money varies inversely with the interest rate.
Answer:
a. a deficit, financed by borrowing in the capital markets, will increase the interest rate and reduce investment in the private sector.
Explanation:
Crowding out effect is when government borrowing from the capital markets leads to an increase in interest rate. this makes it more expensive for private sector to borrow and this reduces investment by private sector
ABG Corporation has the following dividend forecasts for the next three years: Year Expected Dividend 1 $ .25 2 $ .50 3 $ 1.25 After the third year, the dividend will grow at a constant rate of 5% per year. The required return is 10%. What is the price of the stock today?
Answer:
Price of share today = $21.302
Explanation:
The price of a share can be calculated using the dividend valuation model
According to this model the value of share is equal to the sum of the present values of its future cash dividends discounted at the required rate of return.
If dividend is expected to grow at a given rate , the value of a share is calculated using the formula below:
Price=Do (1+g)/(k-g)
Do - dividend in the following year, K- requited rate of return , g- growth rate
Step 1 : PV of dividend from year 1 to 3
Year PV of Dividend
1 0.25 × 1.1^(-1) = 0.227
2 0.50 × 1.1^(-2) = 0.413
3 1.25 × 1.1^(-3) = 0.939
Strep 2 : PV of dividend from year 4 to infinity
PV (in year 3 terms) of dividend= 1.25 × 1.05/(0.1-0.05) = 26.25
PV in year 0 terms = 26.25 × 1.1^(-3) = 19.72
Present Value = 0.227 + 0.413 + 0.939 + 19.72 = 21.302
Price of share today = $21.302
Talbot Industries is considering launching a new product. The new manufacturing equipment will cost $17 million, and production and sales will require an initial $3 million investment in net operating working capital. The company's tax rate is 35%. What is the initial investment outlay? Write out your answer completely. For example, 2 million should be entered as 2,000,000. $ The company spent and expensed $150,000 on research related to the new project last year. Would this change your answer? -Select- Rather than build a new manufacturing facility, the company plans to install the equipment in a building it owns but is not now using. The building could be sold for $1.5 million after taxes and real estate commissions. How would this affect your answer? The project's cost will -Select- .
Answer:
What is the initial investment outlay?
initial investment = $17 million (manufacturing equipment) + $3 (increase in net working capital) = $20,000,000The company spent and expensed $150,000 on research related to the new project last year. Would this change your answer?
No, this will not change the answer because that was a sunk cost that doesn't affect the project's initial outlay.Rather than build a new manufacturing facility, the company plans to install the equipment in a building it owns but is not now using. The building could be sold for $1.5 million after taxes and real estate commissions. How would this affect your answer?
If the company decides to do this, it will increase the project's initial outlay by $1,500,000 which is the opportunity cost of selling the building.While examining cash receipts information, the accounting department determined the following information: opening cash balance $180, cash on hand $1,350.89, and cash sales per register tape $1,186.34. Prepare the required journal entry based upon the cash count sheet.
Answer:
Cash $1,170.89
Cash Over/Short $15.45
To Sales Revenue $1,186.34
(Beingthe cash is recorded)
Explanation:
Before passing the journal entry first we have to determine the ending cash balance which is shown below:
Ending Cash Balance is
= Opening Cash Balance + Sales
= $180 + $1,186.34
= $1,366.34
Short cash is
= Ending cash balance - cash on hand
= $1,366.34 - $1,350.89
= $15.45
And, the actual cash is
= Cash on hand - opening cash balance
= $1,350.89 - $180
= $1,170.89
Now the journal entry is
Cash $1,170.89
Cash Over/Short $15.45
To Sales Revenue $1,186.34
(Being the cash is recorded)
Organic Food Co.'s cash account shows a $7,000 debit balance and its bank statement shows $6,210 on deposit at the close of business on August 31.
a. August 31 cash receipts of $2,740 were placed in the bank’s night depository after banking hours and were not recorded on the August 31 bank statement.
b. The bank statement shows a $270 NSF check from a customer; the company has not yet recorded this NSF check.
c. Outstanding checks as of August 31 total $2,620.
d. In reviewing the bank statement, an $230 check written by Organic Fruits was mistakenly drawn against Organic Food’s account.
e. The August 31 bank statement lists $170 in bank service charges; the company has not yet recorded the cost of these services.
Required:
Prepare a bank reconciliation using the above information.
Answer:
Organic Foods Co.
Bank Reconciliation
August 31
Bank Statement
Bank Statement Balance $6,210
Add:
Deposit in transit $2,740
Correction of bank error $230
Deduct;
Outstanding Checks $2,620
Adjusted Bank Balance $6,560
Cash Book
Book Balance $7,000
No Additions;
Deduct;
NSF Check $270
Bank Service Charges $170
Adjusted Book Balance $6,560