Answer:
1. Cash flow from operations: F (financial).
2. Number of reports of mishandled or lost baggage: C (customer).
3. Percentage of on-time departures: C (customer).
4. On-time flight percentage: C (customer).
5. Percentage of ground crew trained: I (innovation and growth).
6. Return on investment: F (financial).
7. Market value: F (financial).
8. Accidents or safety incidents per mile flown: P (internal process).
9. Customer complaints: C (customer).
10. Flight attendant training sessions attended: I (innovation and growth).
11. Time airplane is on ground between flights: P (internal process).
12. Airplane miles per gallon of fuel: P (internal process).
13. Revenue per seat: F (financial).
14.Cost of leasing airplanes: F (financial).
Explanation:
The performance measures associated with an airline (USA) business are;
1. Customer (C): this includes all the passengers or clients who have done business with the airline company in the past or in the future. It gives full details about everything pertaining to the clients or customers.
2. Financial (F): this is a measure of all the revenues and expenses associated with the successful running of the airline business.
3. Innovation and growth (I): this is a measure of the manpower or labor, equipments, welfare and training used to ensure the business continues to run smoothly, effectively and efficiently.
4. Internal process (P): it involves all of the strategic decisions, policies, rules and regulations formulated by the executive management in order to enhance the smooth operations of the airline business.
On July 9, Mifflin Company receives a $10,400, 90-day, 8% note from customer Payton Summers as payment on account. What entry should be made on July 9 to record receipt of the note
Answer: Debit Notes Receivable $10,400; credit Accounts Receivable $10,400.
Explanation:
Mifflin Company is receiving the note back from Payton Summers which means that Payton Summers intends to settle their account. The correct entry to record therefore is one that closes off the Notes Receivable account by debiting it as it was on a credit balance.
The other account would be the Accounts Receivable account which would need to be credited by the amount owed to close off the account as it was on a debit balance as Accounts Receivables are when customers are still owing.
A $200 petty cash fund has cash of $20 and receipts of $177. The journal entry to replenish the account would include a credit to Group of answer choices Cash for $20 Cash Short and Over for $3 Petty Cash for $190 Cash for $180
Answer: Cash for $180
Explanation:
The Petty Cash balance should be at a certain level necessary to cover petty cash expenses of the company. In this case that amount is $200. $20 is already in cash in the account and so will need to be topped up to get to $200.
= 200 - 20
= $180
$180 will take the balance back to $200. The Cash account would be credited of this $200 and the Petty Cash would be debited.
a. Galaxy Sales has sales of $746,700, cost of goods sold of $603,200, and inventory of $94,300. How long on average does it take the firm to sell its inventory
Answer:
days of inventory on hand if 360 days is used = 360 / 6.396607 = 56.28 days
days of inventory on hand if 365 days is used = 365 / 6.396607 = 57.06 days
Explanation:
We are to determine the days of inventory on hand
days of inventory on hand = number of days in a period / inventory turnover
inventory turnover = cost of goods sold / inventory - $603,200 / $94,300 = 6.396607
days of inventory on hand if 360 days is used = 360 / 6.396607 = 56.28 days
days of inventory on hand if 365 days is used = 365 / 6.396607 = 57.06 days
Levine Company uses the perpetual Inventory system.
Apr. 8 Sold merchandise for $5,700 (that had cost $4,212) and accepted the customer's Suntrust Bank Card. Suntrust charges a 4% fee.
12 Sold merchandise for $5,600 (that had cost $3,629) and accepted the customer's Continental Card. Continental charges a 2.5% fee.
Prepare journal entries to record the above credit card transactions of Levine Company. (Round your answers to the nearest whole dollar amount.)
Answer:
Journal entries are given below
Explanation:
April 8
Sales
DEBIT CREDIT
Cash $5,472
Credit Expense (5700x4%) $228
Sales Revenue $5,700
Cost of Sales
DEBIT CREDIT
Cost of goods sold $4,212
Inventory $4,212
April 12
Sales
DEBIT CREDIT
Cash $5,460
Credit card expense (5600x2.5%) $140
Sales Revenue $5,600
Cost of sales
DEBIT CREDIT
Cost of goods sold $3,629
Inventory $3,629
Suppose a ten firm industry has total sales of $35 million per year. The largest firm have sales of $10 million, the third largest firm has sales of $4 million, and the fourth largest firm has sales of $2 million. If fifth through tenth largest firms combined have annual sales of $12 million, the fourfirm concentration ratio for this industry is
Answer:
0.66
Explanation:
the fourfirm concentration ratio is the sum of the concentration ratio of the four largest firms in the industry.
The sales of the second largest firm = $35 million - ( $10 million + $4 million+ $2 million + $12 million ) = $7 million
concentration ratio of firm 1 = $10 million / $35 million = 0.29
concentration ratio of firm 2 = $7 million / $35 million = 0.2
concentration ratio of firm 3 = $4 million / $35 million = 0.11
concentration ratio of firm 4 = $2 million / $35 million = 0.06
Adding the ratios together = 0.66
Which of the following is NOT an option for remedying a cost disadvantage associated with activities performed by forward channel allies (wholesale distributors and retail dealers)?
a. Change to a more economical distribution strategy such as putting more emphasis on cheaper distribution channels (perhaps direct sales via the Internet) or perhaps integrating forward into company-owned retail outlets
b. Enhance differentiation through activities such as cooperative advertising) at the forward end of the value chain
c. Pressure distributors/dealers and other forward-channel allies to reduce their costs and markups
d. Insisting on across-the-board cost cuts in all value chain activities—those performed by suppliers, those performed in- house, and those performed by distributors/dealers
e. Collaborate with forward channel allies to identify win-win opportunities to reduce costs
Answer: d. Insisting on across-the-board cost cuts in all value chain activities—those performed by suppliers, those performed in- house, and those performed by distributors/dealers
Explanation:
The cost disadvantage is from the forward channel allies and not an across the board problem which involves all value chain activities. As such, the solution should be garnered towards the forward channel allies.
Insisting on cuts in areas that could be already functioning efficiently could lead to a loss of that efficiency.
Insisting on across-the-board cost cuts in all value chain activities is therefore not an option for remedying a cost disadvantage associated with activities performed by forward channel allies.
Which of the following stages in a buying sequence will result in a specific option or set of options from which price, delivery, system compatibility, and other characteristics can be determined?
a. Determine the characteristics
b. Establish specifications
c. Search for and qualify potential suppliers
d. Request proposals
Answer:
C.
Explanation:
Since determine of characteristics has already been established the next would be to search.
One of your customers is delinquent on his accounts payable balance. You’ve mutually agreed to a repayment schedule of $500 per month. You will charge 1.2 percent per month interest on the overdue balance.
If the current balance is $11,000, how long will it take for the account to be paid off? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
It will take approximately 25.70 months for the the account to be paid off.
Explanation:
Assuming the customer pays at the end of every month, the relevant formula to use is therefore 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 current balance = $11,000
P = Monthly repayment = $500
r = interest rate = 1.2%, or 0.012
n = number of months = ?
Substitute the values into equation (1) and solve for n, we have:
11,000 = 500 * [{1 - [1 / (1 + 0.012)]^n} / 0.012]
11,000 / 500 = {1 - [1 / (1 + 0.012)]^n} / 0.012
22 * 0.012 = 1 - 0.988142292490119^n
0.264 = 1 - 0.988142292490119^n
0.988142292490119^n = 1 - 0.264
0.988142292490119^n = 0.736
Loglinearizing both sides, we have:
n * log (0.988142292490119) = log (0.736)
n = log (0.736) / log (0.988142292490119)
n = -0.133122185662501 / -0.00518051250378013
n = 25.70
Therefore, it will take approximately 25.70 months for the the account to be paid off.
Swing Co. has 9% annual coupon bonds that are callable and have 18 years left until maturity. The bonds have a par value of $1,000, and their current market price is $1,130.35. However, Swing Co. may call the bonds in eight years at a call price of $1,060. What are the YTM and the yield to call (YTC) on Swing Co.’s bonds?
Answer:
YTM = 7.77%
YTC = 7.62%
Explanation:
YTM = {coupon + [(face value - market value)/n]} / [(face value + market value)/2]
YTM = {90 + [(1,000 - 1,130.35)/18]} / [(1,000 + 1,130.35)/2]
YTM = 82.758333 / 1,065.175 = 0.07769 = 7.77%
YTC = {coupon + [(call value - market value)/n]} / [(call value + market value)/2]
YTC = {90 + [(1,060 - 1,130.35)/8]} / [(1,000 + 1,130.35)/2]
YTC = 81.20625 / 1,065.175 = 0.07623 = 7.62%
Use the information provided below to answer the following question (same for set of 5 questions). Nash began April with accounts receivable of $49,000 and a credit balance in Allowance for Uncollectible Accounts of $1,000. They made $500,000 in credit sales (sales on account) during April. Collections from customers totaled $493,003. One customer, frank Jones, could not pay his $1, 200 account receivable. On April 7, he negotiated to exchange his past-due account for a $1, 200, 4%, 90-day note receivable. Historically, 1% of credit sales have prove uncollectible. During April, 3375 of old accounts receivable were written off as uncollectible.
The necessary adjusting entry at April 30 would include:
a) Debit to Interest Receivable, $11, 84
b) Credit to Interest Payable, $48.00
c) Debit to Note Receivable, $3.02
d) Credit to Interest Revenue, $3.02
e) Both C and D.
Answer:
d) Credit to Interest Revenue, $3.02
Explanation:
beginning balance of accounts receivable $49,000
allowance for doubtful accounts $1,000
net credit sales $500,000
collections on accounts receivable $493,003
$6,997
Frank Jones:
Dr Notes receivable 1,200
Cr Accounts receivable 1,200
Write offs:
Dr Allowance for doubtful accounts 3,375
Cr Accounts receivable 3,375
the adjusting entry in this question refers to the notes payable from frank Jones:
we must determine the interest revenue for the month of April = $1,200 x 0.04 x (23 days/365 days) = $3.02
the journal entry should be:
April 30, accrued interest from notes receivable
Dr Interest receivable 3.02
Cr Interest revenue 3.02 ⇒ OPTION D
The Juarez family is looking for a new cable company. After conducting research, they decide on a new cable provider. They call the new cable provider and mention they are going to switch from another provider. The salesperson at the new cable provider congratulates the Juarez family and lets them know that the new provider has been rated the highest in customer satisfaction in the industry. The salesperson tells them that if they sign up today for cable service, he will offer them a great monthly rate plus a free three-month trial of ten premium channels that they can cancel at any time. The Juarez family likes what they hear, and they sign up for the service. The salesperson has used which type of IMC marketing materials to close the sale?
The correct answer to this open question is the following.
Although there are no options provided, we can say the following.
The IMC marketing material to close the sale was the personal selling tool, using persuasion, and highlighting the benefits of the service to close the sale.
We are talking about Integrated Marketing Communications that include different disciplines such as Public Relations, Promotions, Sales, or Advertising. These resources are used by companies to plan and implement programs aimed to offer their products and services and closing the sale, relying on good customer service. Most of the modern campaigns include IMC to support the marketing effort.
Bookmark question for later Cross-training workers does the following for your workers a. creates a sense of achievement and job satisfaction b. workers take pride as they help their companies compete through higher productivity c. helps reduce turnover d. all of the above e. only a and b
Answer:
d. all of the above
Explanation:
Cross-training applies to workers, who are trained for different spectrum other than their job responsibilities.
Cross-training workers are multitasking and do the following tasks:
They helps other employees to appreciate each other’s jobs.They help companies through higher efficiency & productivity and are proud of that. Cross-training forces also helps in reducing the turnover to gain more profit.So, Cross-training workers helps to train other employees to perform new tasks in addition to their usual duties and the correct option is "d".
The Pennington Corporation issued a new series of bonds on January 1, 1985. The bonds were sold at par ($1,000); had a 12% coupon; and mature in 30 years, on December 31, 2014. Coupon payments are made semiannually (on June 30 and December 31). a. What was the YTM on January 1, 1985?
Answer:
The YTM on January 1, 1985 was 6.00%.
Explanation:
The YTM is the interest rate used to determine the Present Value of Coupons and Principle and can be found as follows :
PV = $1,000
Pmt = ($1,000 × 12 %) / 2 = - $60
P/yr = 1
n = 30 × 2 = 60
Fv = - $1,000
YTM = ?
Using a Financial Calculator, the YTM is 6.00%
Therefore, the YTM on January 1, 1985 was 6.00%.
g If the Fed is concerned about a possible recession, it ________ the federal funds rate and, in response, longterm interest rates ________ by a ________ amount than the change in shortterm rates. A. lowers; increase; smaller B. lowers; decrease; smaller C. raises; decrease; larger D. raises; increase; smaller E. raises; increase; larger
Answer:
The Fed
Concern about possible recession:
E. raises; increase; larger
Explanation:
The federal funds rate is a short-term monetary policy tool that the Federal Reserve deploys to control expansionary or recessionary economic conditions. It is the interest rate that Federal Reserve allows banks with excess to charge other banks that need to borrow to shore up their deficits. This interest rate is a short-term rate when compared to the long-term interest rates that banks charge consumers of its products and services. The long-term interest rates are affected by the inflation rates.
The city of New Orleans has 200 advertising companies, 199 of which employ designers of normal ability at a salary of $100,000 a year. The companies that employ normal designers each collect $500,000 in revenue a year, which is just enough to ensure that each earns exactly a normal profit. The 200th company, however, employs Janus Jacobs, an unusually talented designer. Because of Jacobs's talent, this company collects $1,000,000 in revenue a year.
Required:
a. How much will Jacobs earn?
b. What proportion of his annual salary will be economic rent?
c. Will the advertising company for which Jacobs works be able to earn an economic profit?
Answer:
a. Jacob should earn= $100,000 + ($1,000,000 - $500,000)
= $100,000 + $500,000
=$600,000
Hence, Jacob earns $600,000
b. The economic rent is the amount by which payment of Jacob(600,000) exceed the reservation price of the supplier(100,000)
Thus, the economic rent = 600,000 - 100,000 = $500,000
Proportion of Economic rent = Economy rent / Salary of jacob
= $500,000 / $600,000
= 5/6
Hence, the proportion of the economic rent of Jacob is salary is 5/6
c. The advertising company will not be able to make an economic profit because if they withhold some additional revenue made because of hiring Jacob, then he will switch to another advertising company at a higher salary and that company keep on making profit. The company should bid for Jacob until firm are indifferent on paying $600,000 or hiring someone else for $100,000 . Thus, the bidding of Jacob will continue until the salary of Jacob has bid up to a level where no company can make economic profits
DIP LLC reports ordinary income (before guaranteed payments) of $120,000, rent expense of $40,000, and interest income of $4,000 for the year. In addition, DIP paid guaranteed payments to partner Percy of $20,000. If Percy owns a 40% capital and profits interest, how much income will he report for the year and what is its character?
Answer:
$24,000 ordinary income
$1,600 interest income
$20,000 guaranteed payment.
Explanation:
Calculation for what how much income will Percy report for the year and what is its character
Calculation for Percy Ordinary income: 120,000 - 40,000 - 20,000
= 60,000 x 40%
= 24,000.
Calculation for Percy Interest income:
4,000 x 40%
= 1,600
Guaranteed Payment: 20,000
Therefore what Percy will report will be: $24,000 ordinary income
$1,600 interest income
$20,000 guaranteed payment.
Toyota will bring hybrid electric automobiles to market next year priced at $27 comma 000 (this includes a $6 comma 750 federal tax credit). At $1.89 per gallon of gasoline, it will take 11 years to recoup the difference in price between a base model Toyota Camry and its four-cylinder gasoline-only counterpart. The price difference is $4 comma 180. If the hybrid vehicle is driven for 15 years, what is the internal rate of return on the extra investment in the hybrid?
Answer:
4.15%
Explanation:
In order to determine the annual saving we must divide the extra cost of the hybrid by the amount of years it takes to recoup our investment.
annual savings = $4,180 / 11 years = $380 per year
our initial investment = -$4,180
since we are going to use the car during 15 years, then we have 15 positive cash flows of $380
using a financial calculator or excel spreadsheet, the internal rate of return (IRR) on our investment = 4.15%
A company discarded a computer system originally purchased for $18,000. The accumulated depreciation was $17,200. The company should recognize a(an):
Answer:
The company should recognize a $800 loss.
Explanation:
Depreciation is the loss of value of an asset over its useful life, and because of the accrual principle, this depreciation is matched, as an expense, with the revenues that the asset produces in a specific period of time.
In this case, the company has expensed $17,200 over the computer system useful life. When the computer system was finally discarded, $800, representing the difference between the accumulated depreciation and the original cost of the system, where not expensed. For this reason, this $800 have to be recognized as a loss.
Don Wyatt is unable to reconcile the bank balance at January 31. Don?s reconciliation is as follows.
Cash balance per bank $3,800.20
Add: NSF check 570.00
Less: Bank service charge 35.00
Adjusted balance per bank $4,335.20
Cash balance per books $4,115.20
Less: Deposits in transit 650.00
Add: Outstanding checks 940.00
Adjusted balance per books $4,405.20
Prepare a correct bank reconciliation.
Answer and Explanation:
The preparation of the correct bank reconciliation is presented below:
Don Wyatt
Bank reconciliation statement
January 31
Particulars Amount Particulars Amount
Bank cash balance $3,800.20 Company cash balance $4,115.20
Deposits in transit $650 Less: NSF check -$570
Less: Outstanding Less: service fee -$35
Check -$940
Bank balance Company balance
After reconciliation $3,510.20 After reconciliation $3,510.20
We adjust the transactions according to the bank balance and book balance so that the both balance could be matched accordingly
"A municipality has a tax rate of 18 mills. A piece of real property in the municipality is assessed at $180,000 and has a fair market value of $165,000. The annual tax liability on the property is:"
Answer:
$3,240
Explanation:
Calculation for the annual tax liability on the property
Using this formula
Annual tax liability= (Tax rate× Real property )
Where= Tax rate =18 million
Real property=180,000
Let plug in the formula
Annual tax liability=( .018x180000)
Annual tax liability=$3,240
Therefore the annual tax liability on the property is $3,240
Blossom Company issued 3,000 shares of common stock. Prepare the entry for the issuance under the following assumptions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,675. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) (a) The stock had a par value of $9.25 per share and was issued for a total of $51,500. (b) The stock had a stated value of $9.25 per share and was issued for a total of $51,500. (c) The stock had no par or stated value and was issued for a total of $51,500. (d) The stock had a par value of $9.25 per share and was issued to attorneys for services during incorporation valued at $51,500. (e) The stock had a par value of $9.25 per share and was issued for land worth $51,500.
Answer:
Blossom Company
Issue of 3,000 Common Stock Shares on the following assumptions:
(a) The stock had a par value of $9.25 per share and was issued for a total of $51,500:
Debit Cash Account $51,500
Credit Common Stock $27,750
Credit Paid-in In Excess of Par $23,750
To record the issue of 3,000 shares of $9.25 par value.
(b) The stock had a stated value of $9.25 per share and was issued for a total of $51,500:
Debit Cash Account $51,500
Credit Common Stock $27,750
Credit Additional Paid-in Capital $23,750
To record the issue of 3,000 shares of $9.25 stated value.
(c) The stock had no par or stated value and was issued for a total of $51,500:
Debit Cash Account $51,500
Credit Common Stock $51,500
To record the issue of 3,000 shares.
(d) The stock had a par value of $9.25 per share and was issued to attorneys for services during incorporation valued at $51,500:
Debit Incorporation Cost (Attorneys Fees) $51,500
Credit Common Stock $51,500
To record the issue of 3,000 shares for attorneys' services
(e) The stock had a par value of $9.25 per share and was issued for land worth $51,500.
Debit Land $51,500
Credit Common Stock $51,500
To record the issue of 3,000 shares for land.
Explanation:
Shares of Blossom Company can be issued to settle debts or expenses or in exchange for other assets than cash. They can also be issued at par value, above par value, or below par value, depending on prevailing circumstances. Some shares have a par value, which is the nominal value of the shares as authorized. Some are issued at a stated value without par. Others have no par or stated values. Their different accounting treatments are indicated above for Blossom Company.
Target ROI is 19% Invested Capital is $569,512 Full Cost per unit $1,124 Expected sales volume is 959 units. If the company prices each unit to earn the target ROI, what amount of profit would be added to the cost of each unit?
Answer:
The amount of profit to be added to the cost of each unit = $112.83
Explanation:
Profit is the difference between the selling price per unit and full cost per unit. To determine the the amount of profit to be added , we will divide the total return on invested capital by the number of units to be produced and sold. This is given below as follows:
Target return = ROI (%) × Invested capital
= 19% × 569,512 = 108,207.28
Profit per unit = Total return/Number of units
= $108,207.28 /959 units
= $112.83 per unit
Selling price per unit = Full cost per unit + profit per unit
= 1,124 + 112.83 = 1,237.66 (this is not required anyway)
The amount of profit to be added to the cost of each unit = $112.83
The amount of profit that would be added to the cost of each unit is $112.83 that should be come after calculating the target return.
Calculation of the amount of profit:Before that the following calculations need to be done
Target return = ROI (%) × Invested capital
= 19% × 569,512
= 108,207.28
Now
Profit per unit = Total return/Number of units
= $108,207.28 /959 units
= $112.83 per unit
hence, The amount of profit that would be added to the cost of each unit is $112.83.
Learn more about sales here: https://brainly.com/question/24343063
Q 10.25: Admire County Bank agrees to lend Givens Brick Company $600,000 on January 1st. Givens Brick Company signs a $600,000, 8%, 9-month note. Assuming that interest has already been accrued to September 30th, what entry will Givens Brick Company make to pay off the note and interest at maturity
Answer:
Entry is given below
Explanation:
As Givens brick company is paying off the liability of note payable and the interest amount therefore, it will be debited as it is a decrease in liability. Cash will be credited as it is our asset and its decreasing.
Entry DEBIT CREDIT
Notes payable $600,000
Interest $36,000(w)
Cash $636,000
Working
Interest = $600,000 x 8% x9/12
Interest = $36,000
A consumer values a car at $30,000 and a producer values the same car at $20,000. What amount of tax will result in unconsummated transaction
The question is incomplete:
A consumer values a car at $30,000 and a producer values the same car at $20,000. If the transaction is completed at $24,000, what level of sales tax will result in unconsummated transaction?
a. 0%
b. 25%
c. 20%
d. 40%
Answer:
d. 40%
Explanation:
The unconsummated transaction would occur when the price that the customer has to pay is higher than the value that he gave to the car. According to that, the answer would be the tax that would increase the final price to more than $30,000:
0%: $24,000
25%: 24,000*1.25= $30,000
20%: 24,000*1.20= $28,800
40%: 24,000*1.40= $33,600
The answer is that the amount of tax will result in an unconsummated transaction is 40%.
Buhao Construction currently is all-equity-financed. It has 17,000 shares of equity outstanding, selling at $100 a share. The firm is considering a capital restructuring. The low-debt plan calls for a debt issue of $270,000 with the proceeds used to buy back stock. The debt will pay an interest rate of 11%. The firm pays no taxes.
a. What will be the debt-to-equity ratio if it borrows $220,000? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Debt-to-equity ratio
b. If earnings before interest and tax (EBIT) are $130,000, what will be earnings per share (EPS) if Reliable borrows $220,000? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
EPS $
c. What will EPS be if it borrows $420,000? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
EPS $
Answer:
Buhao Construction
a) Debt-to-Equity Ratio if it borrows $220,000
= Debit/Equity
= $220,000/$1,700,000
= 12.94%
b. EPS = $195,800/17,000
= $11.52
c. EPS = $173,800/17,000
= $10.22
Explanation:
a) Data and Calculations:
Outstanding Equity = 17,000 shares x $100 = $1,700,000
Interest rate = 11%
It is assumed that Buhao Construction pays no taxes
EBIT = $130,000
Debit = $220,000
Interest Expense = $24,200
Net Income = $195,800 ($220,000 - 24,200)
Debit = $420,000
Interest Expense = $46,200
Net Income = $173,800 ($220,000 - 46,200)
b) Debt-to-Equity Ratio of Buhao Construction is the relationship in ratio terms between debts and equity of the company. It shows the percentage of debts over the stockholders' equity.
c) EPS or Earnings per share shows the net income of Buhao Construction that can be attributed to each share. Stockholders use this measure to learn the profits that are generated for each share by the company during the period. A high EPS indicates that the business is profitable for stockholders.
Wolfpack Construction has the following account balances at the end of the year. Accounts Balances Equipment $ 19,000 Accounts payable 1,600 Salaries expense 26,000 Common stock 12,000 Land 11,000 Notes payable 13,000 Service revenue 32,000 Cash 4,600 Retained earnings ?
Answer:
$6,000
Explanation:
Net income for the year = Service revenue - Salaries
= $32,000 - $26,000
= $6,000
Since Net income = retained earnings,
Therefore, retained earnings = $6,000
Stock Y has a beta of .9 and an expected return of 11.2 percent. Stock Z has a beta of .5 and an expected return of 7.2 percent. What would the risk-free rate have to be for the two stocks to be correctly priced
Answer:
Required risk free rate for two stocks to be correctly priced would be 2.20%.
Explanation:
In order to determine this, the Capital Asset Pricing Model (CAPM) formula is used as follows:
Rs = Rf + (Beta * MR) .................................... (1)
Where;
For Stock Y:
Rs = Expected return on stock = 11.2%, or 0.112
Rf = Risk free return = ?
Beta = 0.9
MR = Market risk premium = ?
Substituting the values into equation (1), we have:
0.112 = Rf + (0.9 * MR) ................................. (2)
For Stock Z:
Rs = Expected return on stock = 7.2%, or 0.072
Rf = Risk free return = ?
Beta = 0.5
MR = Market risk premium = ?
Substituting the values into equation (1), we have:
0.072 = Rf + (0.5 * MR) ................................. (3)
If we deduct equation (3) from equation (2) and solve for MR, we have:
(0.112 - 0.072) = (Rf - Rf) + (0.9MR - 0.5MR)
0.04 = 0 + 0.4MR
MR = 0.04 / 0.4
MR = 0.10, or 10%
Substituting MR = 0.01 into equation (2) and solve for Rf, we have:
0.112 = Rf + (0.9 * 0.10)
0.112 = Rf + 0.09
Rf = 0.112 - 0.09
Rf = 0.022, or 2.20%
Therefore, required risk free rate for two stocks to be correctly priced would be 2.20%.
The production manager of Rordan Corporation has submitted the following quarterly production forecast for the upcoming fiscal year: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced 10,600 8,500 7,000 11,100 Each unit requires 0.35 direct labor-hours, and direct laborers are paid $20.00 per hour. Required: 1. Prepare the company’s direct labor budget for the upcoming fiscal year.
Answer and Explanation:
The preparation of the direct labor budget is presented below:
Particulars Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total
Required
Production 10,600 8,500 7,000 11,100 37,200
Multiply with
Direct labor
hours 0.35 0.35 0.35 0.35
Total
direct labors 3,710 2,975 2,450 3,885 13,020
Multiply with
Direct labor
cost $20 $20 $20 $20 $20
Total
direct labor
cost $74,200 $59,500 $49,000 $77,700 $260,400
The perceived demand for a monopolistic competitor
Jenny promises National Bank that she will repay the loan that National Bank makes to Garrett if Garrett fails to pay it. In this instance, Jenny is the:
Answer: b. guarantor.
Explanation:
Guarantors who can also be called Sureties, are people who promise to pay the debt of another person if that person fails to honor the debt obligation. To be a Guarantor, you must have assets that will be able to cover the debt and you will probably have to pledge the assets to be collateral for the debt. Having a Guarantor increases the trust that the lender has in the lendee.
Jenny is a Guarantor as she has promised to repay the loan should Garrett default on it.