Assuming a bond pays $1000 in one year and has an interest rate of 25% the bond's price must be - A) $800.00.
A bond paying $1000 in one year and with an interest rate of 25% indicates that the bond's price must be calculated by discounting the future cash flow to its present value.
Hence, the bond's price can be calculated using the present value formula, which is expressed as
P = FV / (1 + r)n
where: P = bond price
FV = future value of the bond, which is $1000
n = number of periods, which is 1
r = interest rate, which is 25% or 0.25
Substituting the values into the formula above:
P = $1000 / (1 + 0.25)1P
= $1000 / 1.25P
= $800
Therefore, the bond's price is $800.00.
To know more about Present visit:
brainly.com/question/28304447
#SPJ11
suppose that the price level in country a increases relative to the price level in other countries. in which of the following ways are country a's imports and exports most likely to change?
country a's imports - increase
country a's exports - no change
country a's imports - decrease
country a's exports - increase
country a's imports - no change
country a's exports - decrease
country a's imports - increase
country a's exports - decrease
The correct answer would be:
Country A's imports: decrease
Country A's exports: increase
If the price level in country A increases relative to the price level in other countries, it is likely that country A's imports will decrease and its exports will increase. This is because when the price level in country A is higher than in other countries, its goods and services become relatively more expensive compared to those of other nations. As a result, country A's consumers are likely to reduce their demand for imported goods, leading to a decrease in imports. Conversely, other countries' consumers may find country A's goods and services relatively cheaper, leading to an increase in exports from country A.
Therefore, the correct answer would be:
Country A's imports: decrease
Country A's exports: increase
Price impact refers to the effect or influence that a transaction has on the price of a particular asset or security. When a large order is executed in a financial market, it can cause the price of the asset to move in response to the increased demand or supply.
Price impact is particularly relevant in situations where the market for a particular asset is not highly liquid or when a large transaction represents a significant portion of the overall trading volume. In such cases, the execution of a sizable buy order may lead to a price increase, while a large sell order may result in a price decrease.
The magnitude of the price impact depends on various factors, including the size of the order, the liquidity of the market, and the trading activity surrounding the asset. Generally, the larger the order relative to the market volume, the greater the price impact.
Investors and traders consider price impact when determining their trading strategies and execution tactics. They may choose to split large orders into smaller transactions or employ algorithmic trading techniques to minimize the impact on prices. By understanding and managing price impact, market participants aim to achieve the best possible trade execution while minimizing their impact on market prices.
To know more about price impact visit:
https://brainly.com/question/341536
#SPJ11
andice never looks at her bank statements; she just throws them in a drawer, because she knows she has plenty of money in the bank to cover any checks she writes. One day, Candice receives a notice that she has bounced a check. Candice talks to the bank representative, and together, they discover that for the past seven months, someone has been forging checks on Candice's account. All together, the checks total $4,273. In the last month alone, there were three forged checks totaling $1,000. Because Candice has now reported these unauthorized checks to the bank, the bank will be responsible for reimbursing Candice:
a. nothing.
b. $1,000.00.
c. $50.
d. $4,273.00.
The bank will be responsible for reimbursing Candice: b. $1,000.00.
Candice, who never checked her bank statements, discovered that unauthorized checks had been forged on her account for the past seven months, totaling $4,273. However, because she promptly reported the unauthorized checks to the bank, they will be responsible for reimbursing her. In the last month alone, there were three forged checks amounting to $1,000. The bank is liable for the amount of the unauthorized checks, which in this case is $1,000. Candice's timely action in reporting the fraudulent activity ensures that she will be compensated for the unauthorized transactions.
The bank's responsibility for reimbursing Candice arises from their duty to protect their customers' accounts and prevent unauthorized transactions. By promptly notifying the bank of the forged checks, Candice acted responsibly and fulfilled her obligation as an account holder. As a result, she is entitled to be reimbursed for the amount of the unauthorized checks, which in this case is $1,000.
Learn more about reimbursing here:
https://brainly.com/question/29855192
#SPJ11
a company purchased inventory for $73,000 from a vendor on account, fob shipping point, with terms of 4/10, n/30. the company paid the shipper $1,500 cash for freight in. the company paid the vendor nine days after the sale. if there was no beginning inventory, the cost of inventory would be . (assume a perpetual inventory system.)
The cost of inventory would be $1,420 when there is no beginning inventory in the perpetual inventory system.
Given data:
Purchased inventory = $73,000
Terms = 4/10, n/30
Paid shipper = $1,500Paid vendor = Nine days after the sale
Inventory system = Perpetual
Inventory is a significant asset of a business. The value of inventory on hand is reported as the current asset in a company's balance sheet. This value is important for calculating the cost of goods sold and for identifying the amount of the company's total assets. To find the cost of inventory, it is important to consider the cost of goods sold (COGS).
Formula for Cost of Goods Sold (COGS)
COGS = Beginning Inventory + Purchases − Ending Inventory
Formula for calculating the cost of inventory
COI = Beginning Inventory + Purchases − COGS
Here, given that there is no beginning inventory.
COGS = Purchases − Purchase Discounts − Purchase Returns and Allowances + Freight In
COGS = $73,000 - $2,920 - 0 + $1,500COGS = $71,580
Cost of Inventory= Beginning Inventory + Purchases - COGSCOI= $0 + $73,000 - $71,580COI = $1,420
Therefore, the cost of inventory would be $1,420 when there is no beginning inventory in the perpetual inventory system.
learn more about perpetual inventory system here:
https://brainly.com/question/30766404
#SPJ11
You have the opportunity to purchase a 16-year, $1,000 par value bond that has an annual coupon rate of 9%. If you require a YTM of 7.1%, how much is the bond worth to you? The price of the bond is $. (Round to the nearest cent.)
The content loaded has been mentioned in your question. Here's the solution to your query: According to the solving The price of the bond is $1,310.08 (rounded to the nearest cent).
To find out the price of the bond, we have to use the formula for bond pricing.
The bond pricing formula is:
P[tex]= C * (1 - (1 + r)^{-n} / r + FV * (1 + r)^{-n}[/tex]
Where,
P = price of bond
C = coupon payment
r = required rate of return
n = number of periods
FV = face value of the bond
From the question,
Given,
C = $90 (Since, the annual coupon payment is $1,000 x 9% = $90)
FV = $1,000
n = 16 years
r = 7.1%
Using the above formula:
P = $90 * (1 - (1 + 0.071)⁻¹⁶) / 0.071 + $1,000 * (1 + 0.071)⁻¹⁶
= $1,310.08
The price of the bond is $1,310.08 (rounded to the nearest cent). Therefore, this is the required solution.
To know more about required rate of return visit:
https://brainly.com/question/32539722
#SPJ11
In 2022, Noam spent $52,786 starting a new business that manufactures anti-viral face masks. This is a new business venture for Noam. All costs were ordinary and necessary, and the business began operations on Nov. 1, 2022. What amount of the startup expenses can Noam deduct in 2022 if Noam chooses to accelerate his deductions as much as possible? X 586 Correct Answer: 2,776 Machine Inc. purchased a 100% business-use asset for $1,786,021 in 2020. The asset has a 5-year MACRS GDS recovery period and is depreciated under MACRS GDS (no SL election). The asset was placed in service on Dec. 1, 2020, and it was the only asset placed in service during 2020. Machine Inc. did not elect Section 179 expensing and elected out of Section 168(k) bonus depreciation in 2020. Machine Inc. sold the 5-year asset on April 10, 2022. What is Machine Inc.'s 2022 depreciation deduction for the 5-year asset? хо Correct Answer: 152,705
Startup expenses are the cost of starting a business, such as advertising, wages, and consultants. These are the costs of creating an active trade or business or investigating the creation or acquisition of an active trade or business, either before doing so or as a going concern.
The amount of the startup expenses that Noam can deduct in 2022 if he chooses to accelerate his deductions as much as possible is $5,000. LONG ANSWER:If Noam wishes to accelerate his startup costs, he must use the IRC Section 195 deduction. Noam can write off $5,000 of startup expenses in 2022, with the remainder amortized over 15 years.Noam can use the IRC Section 195 deduction since he started a new business. Noam is not eligible to use the election provided by IRC Section 164 because he is starting a new business.
In the case of Machine Inc. EXPLANATION:Machine Inc. has a 5-year MACRS GDS recovery period asset worth $1,786,021 and placed it in service on December 1, 2020. The asset is depreciated over five years, so the annual depreciation expense is $357,204 ($1,786,021 divided by 5 years).In 2022, Machine Inc. sells the 5-year asset. In 2022, Machine Inc. has used the asset for just two years since it was placed in service on December 1, 2020. The half-year convention is used to calculate the depreciation expense.In 2022, Machine Inc.'s depreciation deduction for the 5-year asset is $152,705. (Two-year depreciation expense multiplied by the 0.4 MACRS GDS table.)Therefore, the correct option is хо.
To know more about business visit:
https://brainly.com/question/15826604
#SPJ11
Which marketing philosophy focuses more on the manufacturer and not the customer? a) Production orientation b) Demand Orientation c) Market Orientation d) Societal Marketing Orientation
The correct option is (a). The production orientation marketing philosophy focuses more on the manufacturer and not the customer.
Production orientation marketing philosophy focuses more on the manufacturer and not the customer. In this marketing philosophy, the manufacturer believes that the customers prefer products that are widely available and inexpensive. This means that the manufacturer focuses on achieving high production efficiency at a low cost. This can sometimes lead to a lack of variety, as the manufacturer is focused on producing a few popular products in large quantities rather than offering a wide range of products.
The other marketing philosophies such as demand orientation, market orientation, and societal marketing orientation put more emphasis on the customer's needs and preferences. Demand orientation focuses on creating products that meet the specific demands of the customer, while market orientation focuses on identifying the needs and wants of the customer and delivering products that satisfy them. Societal marketing orientation, on the other hand, focuses on creating products that not only meet the customer's needs but also benefit the society and environment.
To know more about the Production orientation visit:
https://brainly.com/question/28498939
#SPJ11
(a) On 8 November Prime Minister Narendra Modi gave the nation just four hours’ notice that 500 ($7.30; £6) and 1,000-rupee notes would no longer be legal tender. In your views, could you please explain the advantages and disadvantages of such drastic changes?
The sudden demonetization of 500 and 1,000-rupee notes in India had both advantages and disadvantages. On the positive side, it aimed to tackle issues like corruption, black money, and counterfeit currency. However, it also had negative consequences such as disruptions to daily life, inconvenience to citizens, and adverse effects on small businesses and the informal sector.
The sudden demonetization of high-value currency notes in India had several advantages. One of the main goals was to combat corruption and black money. By invalidating the 500 and 1,000-rupee notes, the government aimed to curb illicit activities and promote transparency in financial transactions.
It also targeted counterfeit currency, as the sudden withdrawal of these notes made it harder for counterfeiters to circulate fake money.
However, this move also had significant disadvantages. The abrupt nature of the announcement led to disruptions in daily life, especially for those who heavily relied on cash for their transactions.
The sudden shortage of legal tender caused inconvenience to citizens, particularly those who faced difficulties in exchanging their old notes for new ones within the given timeframe.
Small businesses, especially in the informal sector, were disproportionately affected, as they often relied on cash transactions and faced challenges in transitioning to digital or alternative payment methods.
In summary, while demonetization aimed to address important issues such as corruption and counterfeit currency, its implementation had adverse effects on various aspects of the economy and society, leading to both advantages and disadvantages.
Learn more about transactions here :
https://brainly.com/question/24730931
#SPJ11
Discuss the benefits of using ROI/ROA and residual income as performance measures. Include in your answer ‘goal congruence’ and ‘controllability’
In summary, using ROI, ROA, and residual income as performance measures offers benefits such as providing a clear evaluation of financial performance, promoting goal congruence, and emphasizing controllability.
Using ROI (Return on Investment) and ROA (Return on Assets) as performance measures offer several benefits for evaluating the financial performance of a business. Additionally, incorporating residual income can provide further insights. Let's explore these benefits and how they relate to goal congruence and controllability.
ROI and ROA: ROI and ROA provide a clear and straightforward measure of financial performance. They allow businesses to assess the efficiency and profitability of their investments and asset utilization. Both ratios indicate the return generated in relation to the investment or assets employed. Higher ROI and ROA values generally indicate better performance and efficient resource allocation.
Goal Congruence: ROI and ROA help align the goals of different stakeholders within an organization. These performance measures provide a common metric that can be understood and compared across different divisions or projects. This promotes goal congruence by ensuring that decision-makers at various levels focus on maximizing returns and making investment decisions that align with the organization's overall objectives.
Learn more about financial here
https://brainly.com/question/32292990
#SPJ11
QUESTION 2 Azri Trading is a stationery store and owned by Azrin. Below are the transactions of Azri Trading for the month of November 2019. November 2019 Transactions 1 Started the business with RM20,000 cash. 3 Purchased Fujixerox printer RM700 by cheque for office use. Sold goods on credit to Rachel RM500. 13 14 Banked in cash RM3,000. 17 Paid rental of premises amounting to RM400 by cash. 21 Azrin took RM800 from the bank and RM200 goods for personal use. Sales returned by Rachel amounted to RM200. 26 The business bought a motor vehicle for RM4,500 cash. 28 Paid utility bills and wages of RM100 and RM500 cash respectively. Required: Identify the effects (increase or decrease) on assets, liabilities, owner's equity, revenues or expenses for the transactions dated from 1 November 2019 to 24 November 2019 and show the accounts to be debited and credited for each of the transactions given below. (Use the format given below to answer the above questions) Example: November 30 Paid RM2,000 for driver's salary by cash. Effects Journal entry Date Increase Decrease Debit Nov 30 Expenses Asset Salary 24 Credit Cash (15 marks)
Effects Journal entry Date Increase Decrease Debit Credit 1 November 2019 Cash Capital 20,000 20,000 3 November 2019 Equipment Cash 700 700 3 November 2019 Accounts receivable Sales 500 500 13 November 2019 Cash Accounts receivable 3,000 3,000 17 November 2019 Rent expense Cash 400 400 21 November 2019 Drawings Cash Inventory 1,000 800 200 200 26 November 2019 Motor vehicle Cash 4,500 4,500 28 November 2019 Utility expense Wages expense Cash 100 500 600 600 This is the solution to your question in accordance with the format given in the question and with the required terms.
Answer: Effects Journal entry Date Increase Decrease Debit Credit 1 November 2019 Cash Capital 20,000 20,000 3 November 2019 Equipment Cash 700 700 3 November 2019 Accounts receivable Sales 500 500 13 November 2019 Cash Accounts receivable 3,000 3,000 17 November 2019 Rent expense Cash 400 400 21 November 2019 Drawings Cash Inventory 1,000 800 200 200 26 November 2019 Motor vehicle Cash 4,500 4,500 28 November 2019 Utility expense Wages expense Cash 100 500 600 600 This is the solution to your question in accordance with the format given in the question and with the required terms. In November 2019, Azrin, the owner of Azri Trading started the business with cash worth RM20,000. Cash is an asset account that increases. The same is the case with capital, an owner's equity account, which also increases in this case. On 3 November, Azri Trading purchased a Fujixerox printer for RM700 by a cheque for office use. Equipment is an asset account that increases while cash is an asset account that decreases. Hence, the journal entry to record this transaction would be:Equipment RM700Cash RM700On 3 November, Azri Trading sold goods on credit to Rachel for RM500. Rachel's purchase is recorded in accounts receivable, an asset account, which increases. Simultaneously, this transaction creates sales revenue, which is a revenue account that increases. Hence, the journal entry to record this transaction would be:Accounts receivable RM500Sales RM500On 13 November, Azri Trading banked in cash worth RM3,000, which increased the cash account and decreased the accounts receivable account. Hence, the journal entry to record this transaction would be:Cash RM3,000Accounts receivable RM3,000On 17 November, Azri Trading paid the rental of premises amounting to RM400 by cash. Rent expense is an expense account that increases and is debited, while cash decreases and is credited. Hence, the journal entry to record this transaction would be:Rent expense RM400Cash RM400On 21 November, Azrin took RM800 from the bank and RM200 worth of goods for personal use. This transaction affects two accounts: cash and inventory. Cash is an asset account that decreases, while inventory is also an asset account that decreases. The reduction of inventory also results in a decrease in owner's equity as the owner is utilizing the goods personally, which is a withdrawal from the business. Hence, the journal entry to record this transaction would be:Drawings RM1,000Cash RM800Inventory RM200On 26 November, Azri Trading bought a motor vehicle for RM4,500 in cash. Motor vehicle is an asset account that increases, while cash is an asset account that decreases. Hence, the journal entry to record this transaction would be:Motor vehicle RM4,500Cash RM4,500On 28 November, Azri Trading paid utility bills and wages of RM100 and RM500 in cash, respectively. Utility expense and wages expense are expense accounts that increase and are debited, while cash decreases and is credited. Hence, the journal entry to record this transaction would be:Utility expense RM100Wages expense RM500Cash RM600
To know more about Accounts visit:
https://brainly.com/question/14138124
#SPJ11
Which of the following costs is best classified as fixed costs with respect to volume? O a. Salaries of quality inspectors in a production facility O b. Parts used in manufacturing digital cameras OC Electricity used to heat, light, and cool a hospital Od. Depreciation of a copy machine in the Human Resource Department
The cost that is best classified as fixed costs with respect to volume is the depreciation of a copy machine in the Human Resource Department. Option d.
Fixed costs are the expenses that remain constant regardless of the volume of production or sales. Fixed costs are expenditures that do not fluctuate with changes in sales volume or other measures of business activity. Rent, mortgage, salaries, and insurance are examples of fixed costs, which are constant regardless of production levels. Depreciation is one of the primary fixed expenses that an organization experiences. It's a fixed cost, which is why the cost of depreciation is classified as fixed in nature.
A copy machine is an example of a fixed asset that has a finite useful life. The machine's cost is spread over its useful life as a fixed expense. In accounting, the cost of depreciation is a fixed expense that remains the same regardless of the number of copies the machine produces or the frequency with which the copy machine is used. In this manner, the cost of depreciation of a copy machine in the Human Resource Department is a fixed cost that does not change based on the volume of production or sales. Consequently, the option (d) is the correct response: Depreciation of a copy machine in the Human Resource Department.
More on fixed costs: https://brainly.com/question/30057573
#SPJ11
A company with a high earnings per share but a low dividend yield likely indicates a company that
a. distributes most earnings as dividends.
b. has no preferred stock.
c. is high in debt.
d. is focused on maintaining earnings for growth.
A company with high earnings per share but a low dividend yield likely indicates a company that is focused on maintaining earnings for growth. Option d is correct.
A high earnings per share but a low dividend yield likely indicates a company that is focused on maintaining earnings for growth. Instead of distributing most earnings as dividends, the company is retaining its earnings to reinvest in the business in order to generate future growth and increase shareholder value. A high dividend yield, on the other hand, would indicate that the company is distributing a larger portion of its earnings as dividends to shareholders.
This may be an indication that the company is more mature and doesn't have as many growth opportunities, so it is returning profits to shareholders instead. A company with no preferred stock is not related to its earnings per share or dividend yield. Similarly, a company being high in debt may affect its financial health, but it doesn't necessarily relate to its earnings per share or dividend yield.
Option d is correct.
Learn more about Dividend yield: https://brainly.com/question/30898160
#SPJ11
Using only the concepts we learned in class, explain how herd immunity of vaccinations creates a market inefficiency and how the government could intervene to achieve a socially efficient outcome. Use a fully labelled graph and verbal explanation in your answer and assume that the market for vaccines is perfect competition
Herd immunity refers to the indirect protection of individuals who are not immune to a particular disease when a significant portion of the population is immunized.
In the context of vaccinations, it means that a large percentage of people are vaccinated, reducing the transmission of the disease and protecting vulnerable individuals.
In a market for vaccines characterized by perfect competition, individual consumers and suppliers make independent decisions based on their own costs and benefits. The equilibrium quantity and price are determined where the demand curve (reflecting consumers' willingness to pay for vaccinations) intersects with the supply curve (representing the costs of producing vaccines).
However, herd immunity creates a market inefficiency due to positive externalities. When individuals get vaccinated, they not only protect themselves but also contribute to the overall reduction in disease transmission, benefiting the entire community. These positive externalities are not captured in the market price of vaccines, leading to an underallocation of resources to vaccination.
To achieve a socially efficient outcome, government intervention is necessary. One approach is for the government to subsidize vaccinations, effectively reducing the cost for consumers. The subsidy can shift the demand curve upward, reflecting the additional benefits of vaccinations to society beyond individual protection. This leads to a new equilibrium with a higher quantity of vaccinations and a lower price.
for vaccine suppliers, and D represents the private demand curve of individual consumers. The equilibrium is at the intersection of S and D, resulting in a lower quantity of vaccinations than the socially optimal level.
By providing a subsidy, the government effectively shifts the demand curve upward to reflect the external benefits (represented by the combined D and the external benefit curve). The new equilibrium occurs at a higher quantity, closer to the socially optimal level, and a lower price.
Through this intervention, the government s the market inefficiency caused by herd immunity. It ensures that the benefits of vaccinations to society are properly accounted for, leading to a more socially efficient outcome.
Learn more about society here:
https://brainly.com/question/12006768
#SPJ11
The innovation dilemma known as building capabilities versus collaborating refers to O building innovative products in-house versus outsourcing O building credibility by launching products ahead of potential collaboration partners o developing innovation skills internally versus partnering with qualified outsiders O launching a product incrementally
The correct option is "developing innovation skills internally versus partnering with qualified outsiders". The innovation dilemma known as building capabilities versus collaborating refers to developing innovation skills internally versus partnering with qualified outsiders.
The innovation dilemma between building capabilities versus collaborating is an ongoing decision that firms have to make. Companies have to decide whether they should develop innovation skills internally or partner with qualified outsiders.
Both collaboration and building capabilities are essential in the development of innovation. In-house development of innovation capabilities provides organizations with greater control over the process and output of innovation. Collaboration, on the other hand, enables firms to pool resources, knowledge, and skills with other firms to develop innovation.
Organizations need to find a balance between collaboration and building capabilities. This requires them to understand the strengths and weaknesses of each approach, as well as how to effectively integrate the two.
They also need to consider other factors such as time, cost, and risk.In conclusion, the innovation dilemma known as building capabilities versus collaborating refers to developing innovation skills internally versus partnering with qualified outsiders.
To know more about innovation visit:
https://brainly.com/question/30929075
#SPJ11
Company Overview. Provide a short description of the company: The Cheesecake Factory, and its environment: the nature of its business; when established; industry type; its market segment; customer demographics that it serves; the strategic role of the facility within the company; major suppliers, major customers, etc.
Company: Cheesecake Factory
The Cheesecake Factory is a renowned restaurant chain known for its extensive menu of delicious cheesecakes and diverse American cuisine. Established in 1978, it operates in the casual dining segment of the restaurant industry. The company has positioned itself as a destination for special occasions and family gatherings, catering to a wide range of customer demographics.
The Cheesecake Factory is a well-established restaurant chain with over 200 locations across the United States. It offers a diverse menu that includes not only a variety of cheesecakes but also appetizers, salads, pasta, sandwiches, and entrees. The company aims to provide an upscale casual dining experience, combining a relaxed ambiance with upscale decor and attentive service.
The Cheesecake Factory caters to a broad market segment, serving customers of various ages and backgrounds. Its menu options cater to different dietary preferences and offer a wide range of flavors to appeal to diverse tastes. The company has become known for its large portion sizes, which often result in leftovers for customers to enjoy later.
Within the company, each Cheesecake Factory facility plays a strategic role in maintaining the brand's reputation for quality and consistency. The facilities are designed to create a welcoming atmosphere that encourages customers to linger and enjoy their dining experience. Major suppliers for the company include food distributors and manufacturers that provide the ingredients and products needed to prepare the menu items.
The Cheesecake Factory's major customers are individuals and families seeking a dining experience that combines indulgence with comfort. The company has built a loyal customer base through its commitment to high-quality food, generous portions, and attentive service.
Learn more about customer demographics here:
https://brainly.com/question/31782837
#SPJ11
Crane Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased on January 1, 2022, at a cost of $131,000. Over its 4-year useful life, the bus is expected to be driven 240,000 miles. Salvage value is expected to be $7,400. (a) Compute the depreciation cost per unit. (Round answer to 3 decimal places, e.g. 6.251) Depreciation cost per unit TA $ Crane Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased on January 1, 2022, at a cost of $119,000. Over its 4-year useful life, the bus is expected to be driven 210,000 miles. Salvage value is expected to be $7,700. Compute the depreciation cost per unit. (Round answer to 3 decimal places, e.g. 6.251) Depreciation cost per unit $ e Textbook and Media Prepare a depreciation schedule assuming actual mileage was: 2022, 47,600: 2023, 61,000:2024, 49,000; and 2025,52,400. (Round depreciation cost per unit to 3 decimal places, e.g. 0.125 and other answers to 0 decimal places, e.g. 125) Computation End of Year Years Units of Activity X Depreciation Cost/Unit = Annual Depreciation Expense Accumulated Depreciation Book Value 2022 $ $ $ 2023 2024 2025
(a) The depreciation cost per unit can be calculated using the formula given below: Depreciation cost per unit = (Cost of asset - Salvage value) / Total units of activity Depreciation cost per unit = ($131,000 - $7,400) / 240,000= $0.546
(b) The depreciation cost per unit can be calculated using the formula given below:
Depreciation cost per unit = (Cost of asset - Salvage value) / Total units of activity Depreciation cost per unit = ($119,000 - $7,700) / 210,000= $0.538Prepare a depreciation schedule assuming actual mileage was: 2022, 47,600: 2023, 61,000: 2024, 49,000; and 2025,52,400.
The depreciation schedule can be prepared as follows: End of Year Years Units of Activity Depreciation Cost/Unit Annual Depreciation Expense Accumulated Depreciation Book Value 20222000240,000$0. 546$65,520$65,520$65,480202347,400192,600$0. 546$105,034$170,554$50,946202461,400178,600$0. 546$97,431$268,985$30,515202549,400155,600$0. 546$84,837$353,822$14,678.
To know more about Depreciation visit:
https://brainly.com/question/30531944
#SPJ11
Which type of contract would be best suited for a CM/GC building project?
A. Lump Sum B. Unit Prices C. Cost Plus
For a CM/GC building project, a type of contract that would be best suited would be a Cost Plus contract.
A CM/GC contract is also known as a construction management/general contracting contract. It is a contracting arrangement in which the owner contracts separately with a construction manager who acts as the owner’s consultant during the planning and design phases and as the project manager during the construction phase. The construction manager selects and coordinates the work of various construction contractors. Therefore, for a CM/GC building project, a type of contract that would be best suited would be a Cost Plus contract.
Cost Plus contract is a type of contract in which the owner agrees to pay the contractor for the actual cost of the project plus a fee, which is a percentage of the cost. This percentage is known as the contractor's fee. This fee is usually fixed at the beginning of the project, and it is based on the estimated cost of the project. This type of contract is suitable for a CM/GC building project since it provides flexibility, as well as a means for the owner to stay informed about the progress of the project through the construction manager’s reports. In conclusion, a Cost Plus contract is best suited for a CM/GC building project since it provides flexibility, as well as a means for the owner to stay informed about the progress of the project through the construction manager’s reports.
Learn more about cost plus contract
https://brainly.com/question/13581931?
#SPJ11
QUESTION 1 For the following demand function, calculate the inverse demand function: Q(P)=54,000-100P OP(Q)=54,000- Q OP(Q)=540-0.010 P(Q)=540-0.01P OP(Q)=54,000 -0.010 None of the above
The demand function is given by Q(P) = 54,000 - 100P.
To find the inverse demand function, we need to solve for P in terms of Q.Let us start by setting the demand function equal to Q: Q = 54,000 - 100P
Next, we will solve for P by rearranging the equation:
Q - 54,000 = -100P- (Q - 54,000)/(-100) = P
Finally, we can write the inverse demand function as a function of Q:
P(Q) = (Q - 54,000)/(-100) + 540
The demand function is an equation that relates the quantity demanded of a product to the price of that product. In this question, we are given a demand function:
Q(P) = 54,000 - 100P and we are asked to find the inverse demand function.
To find the inverse demand function, we need to solve for P in terms of Q. This can be done by setting the demand function equal to Q and then rearranging the equation to solve for P. Once we have P in terms of Q, we can write the inverse demand function as a function of Q. The steps to find the inverse demand function are as follows:
1. Start with the demand function Q(P) = 54,000 - 100P.
2. Set the demand function equal to Q:
Q = 54,000 - 100P.
3. Solve for P by rearranging the equation: Q - 54,000 = -100P.
4. Divide both sides of the equation by -100 to get P by itself:
(Q - 54,000)/(-100) = P.
5. Finally, write the inverse demand function as a function of Q:
P(Q) = (Q - 54,000)/(-100) + 540.
Hence the inverse demand function for the given demand function Q(P) = 54,000 - 100P is P(Q) = (Q - 54,000)/(-100) + 540.
To know more about demand function visit:
brainly.com/question/28198225
#SPJ11
suppose the Chester company expands to other markets with good designs, high awareness and easy accessibility, what strategy would they be implementing?
Broad differentiation
Braod cost ledership
Niche differenciation
Nich cost leadership
The strategy that the Chester company would be implementing by expanding to other markets with good designs, high awareness, and easy accessibility is "Broad differentiation."
A broad differentiation strategy involves identifying industry-wide competitive advantages that set an offering apart from competitors. For this type of strategy to succeed, the customer market must be vast, unsaturated, and have numerous unresolved pain points.
Broad differentiation strategy focuses on offering unique and superior products or services that are perceived as valuable by customers across a wide range of markets. By emphasizing good designs, high awareness, and easy accessibility, Chester aims to differentiate its offerings from competitors and create a competitive advantage based on product or service uniqueness. This strategy aims to attract a broader customer base and command a premium price for the differentiated features or benefits provided.
Know more about Broad differentiation here:
https://brainly.com/question/30224913
#SPJ11
5 Look at the following ratios: • 90/10 ratio = the ratio of Decile 10 = income to Decile 1 income = • 90/50 ratio the ratio of Decile 10 income to Decile 5 income (the median) • 50/10 ratio = the ratio of Decile 5 5 income (the median) to Decile 1 income. = (a) For each of these ratios, explain why policymakers might want to compare the two deciles in the income distribution. (b) What kinds of policies or events could affect these ratios?
a. Policymakers might want to compare the ratios of different deciles in the income distribution to understand the level of income inequality and the distribution of wealth within a society. b. Various policies and events can influence these ratios. For example, changes in tax policies that impact income redistribution, minimum wage laws, and social welfare programs can potentially affect income disparities and subsequently impact the ratios.
a. Policymakers might want to compare the ratios of different deciles in the income distribution to understand the level of income inequality and the distribution of wealth within a society. By comparing the income of Decile 10 (the highest income group) to Decile 1 (the lowest income group), policymakers can assess the extent of income disparity and evaluate the potential challenges faced by individuals at the lower end of the income spectrum. Similarly, comparing the income of Decile 10 to Decile 5 (the median income) provides insights into the concentration of wealth and the gap between the highest earners and the middle-income earners.
b. Various policies and events can influence these ratios. For example, changes in tax policies that impact income redistribution, minimum wage laws, and social welfare programs can potentially affect income disparities and subsequently impact the ratios. Economic events such as recessions or economic downturns can also influence these ratios by affecting employment levels, wage growth, and income distribution patterns. Additionally, factors like technological advancements, globalization, and changes in the labor market structure can have long-term effects on income inequality and alter the income ratios between different deciles.
Learn more about income distribution
https://brainly.com/question/24182601
#SPJ11
Metatrend's stock will generate earnings of $5 per share this year. The discount rate for the stock is 10%, and the rate of return on reinvested earnings also is 10%.
a. Find both the growth rate of dividends and the price of the stock if the company reinvests the following fraction of its earnings in the firm: (i) 0%; (ii) 30%; (iii) 40%.
b. Redo part (a) now assuming that the rate of return on reinvested earnings is 15%, what is the present value of growth opportunities (PVGO) for each reinvestment rate?
a. The growth rate of dividends and the price of Metatrend's stock can be calculated using the Gordon Growth Model. The Gordon Growth Model formula is: Dividends per share = Earnings per share × Dividend Payout Ratio.
(i) If the reinvestment rate is 0%, the dividend payout ratio is 1, and the growth rate of dividends will be 0%. The price of the stock can be calculated by dividing the earnings per share by the discount rate: Stock price = Earnings per share / Discount rate.
(ii) If the reinvestment rate is 30%, the dividend payout ratio is 0.7, and the growth rate of dividends will be 3% (calculated as 0.7 × 10%). The stock price can be calculated using the Gordon Growth Model.
(iii) If the reinvestment rate is 40%, the dividend payout ratio is 0.6, and the growth rate of dividends will be 4% (calculated as 0.6 × 10%). The stock price can be calculated using the Gordon Growth Model.
b. Assuming a rate of return on reinvested earnings of 15%, the present value of growth opportunities (PVGO) can be calculated as the difference between the stock price with reinvestment and the stock price without reinvestment.
Learn more about metatrends stock here:
https://brainly.com/question/32328957
#SPJ11
Consumer behaviour studies all the activities that influence people to behave in particular ways when obtaining, consuming and disposing of products and services. Understanding the way people think, what motivates them, their decision-making processes, and post-purchase behaviour are key factors in ensuring successful marketing.
With regards to the above information identify and discuss in detail each of the factors that influence consumer behaviour.
Consumer behavior is influenced by psychological factors (perception, motivation, learning), social factors (culture, family), personal factors (age, lifestyle, personality), and situational factors (time, location, mood).
Consumer behavior is a complex process influenced by multiple factors. Understanding these factors is crucial for marketers to effectively target and influence consumers. The first set of factors are psychological factors, which include perception, motivation, and learning. Perception refers to how individuals interpret and make sense of stimuli, such as product features or advertising messages.
Motivation is the internal drive that pushes individuals towards certain behaviors or goals, and it can be influenced by needs, desires, and emotions. Learning, through experiences and interactions, shapes consumer behavior by establishing associations between stimuli and responses.
Social factors play a significant role in consumer behavior. Culture, including values, beliefs, and customs, shapes individuals' preferences and consumption patterns. Family dynamics, such as family structure, roles, and decision-making processes, influence consumer choices. Reference groups, comprising individuals or organizations that consumers compare themselves to or seek approval from, can impact purchase decisions and brand preferences.
Personal factors also influence consumer behavior. These factors include demographic characteristics (such as age, gender, income, and education), lifestyle choices, personality traits, and self-concept. Individuals' age, for example, may influence their product preferences and adoption of new technologies, while lifestyle choices reflect their interests, activities, and opinions.
Situational factors refer to the immediate circumstances surrounding a consumer's decision-making process. Time constraints, location, mood, and physical surroundings can all impact consumer behavior. For instance, a consumer may make impulsive purchases due to time pressure or be influenced by the store's atmosphere.
Learn more about Consumer behavior here:
https://brainly.com/question/30714493
#SPJ11
The environmental analysis process consists of : a)Scanning and monitoring environmental regulations , scanning and monitoring a immigration trends and regulations , scanning and monitoring indicators of economic trends b ) Scanning and monitoring the role of government and law , scanning and monitoring the international community , scanning and monitoring the impact of unionization c) Scanning and monitoring emerging technology , scanning and monitoring demands of regulatory bodies , scanning and monitoring interest rates and cost of living d)Scanning and monitoring the general environment , scanning and monitoring the business environment , forecasting and assessing HR needs and roles
The environmental analysis process involves scanning and monitoring various factors that impact the business environment.
These include regulatory trends, economic indicators, government and law, international influences, emerging technology, regulatory demands, interest rates, and the general business environment. Additionally, forecasting and assessing HR needs and roles play a crucial role in the analysis.
a) Scanning and monitoring environmental regulations, immigration trends, and economic indicators are important aspects of the environmental analysis process. Environmental regulations can impact business operations, while immigration trends and economic indicators provide insights into demographic shifts and economic conditions that can affect business strategies.
b) Scanning and monitoring the role of government and law, the international community, and the impact of unionization are also critical in understanding the business environment. Government policies and regulations, global influences, and labor union dynamics can significantly impact business operations and decision-making.
c) Scanning and monitoring emerging technology, regulatory demands, and interest rates/cost of living are key factors in assessing the business landscape. Technological advancements can create opportunities or disrupt industries, regulatory demands affect compliance requirements, and interest rates/cost of living impact consumer behavior and economic conditions.
d) The general environment, business environment, and forecasting and assessing HR needs and roles are crucial components of the environmental analysis process. Understanding the overall context and industry-specific dynamics helps businesses identify opportunities and challenges, while forecasting HR needs ensures the organization has the right talent and resources to achieve its objectives.
By comprehensively scanning and monitoring these factors, organizations can gain valuable insights to inform strategic decision-making and adapt to the changing business landscape.
Learn more about environmental analysis in business here: brainly.com/question/32737507
#SPJ11
Students will select a business organization and write a research paper: 10-12 pages, double-spaced, size 12-point Times New Roman font, with 1" margins. Students must reference all of their research the text of the paper. The papers must be APA style and be proof read before final submission. The paper must be free of spelling and grammar mistakes, logically written, and coherent. It should includ least 10 references. The objective of the paper is for you to use learned theories and concepts to analyz your chosen organization. As such, your paper must have in-depth analysis and discussion in each of t 10 below areas. Finally, in your recommendation section you will use your analysis throughout the pap and learned theories throughout the course, to make sound and realistic recommendations, with in-text citations. (Suggestion: Select an organization that has a lot of information available and/or where you have acce to the management personnel). The students are required to research the selected organization and address the following areas: 1. Organizational Context include the history, organizational image, size, locations of operation, type of products, and/or services offered 2. Environment in which the Organization Operates (Chapter 3) Task Environment General Environment economic environment • social/cultural environment political environment legal environment technological environment Organizational Form (Chapter 9) identify organizational form (mechanistic or organic), and analyzes its appropriateness for the environment of the organization. 3. customers suppliers competitors regulatory group
As per the question, the students are required to write a research paper on a business organization. The paper should be 10-12 pages, double-spaced, size 12-point Times New Roman font, with 1" margins.
What should they do?Students must reference all of their research in the text of the paper. The papers must be APA style and be proofread before final submission.
The paper must be free of spelling and grammar mistakes, logically written, and coherent. It should include at least 10 references.
Finally, in the recommendation section, the analysis throughout the paper and learned theories throughout the course are used to make sound and realistic recommendations, with in-text citations.
The areas that the students are required to research the selected organization and address are as follows:
Organizational Context- This section should include the history, organizational image, size, locations of operation, type of products, and/or services offered.
Environment in which the Organization Operates- This section should include:
Suppliers- This section should include information on suppliers of the chosen organization.
Competitors- This section should include information on competitors of the chosen organization.
Regulatory Group- This section should include information on the regulatory group of the chosen organization.
To know more on business organization visit:
https://brainly.com/question/28097781
#SPJ11
PURPOSE
This assignment is designed to develop learners' ability to discuss the business networking of successful entrepreneurs in Malaysia.
REQUIREMENT
Select any TWO business companies in Malaysia that you are familiar with and discuss the companies networking and how these companies are able to develop their organisation's business to a level of success and pride in the business
Company A: AirAsia
Company B: Grab
AirAsia, a leading low-cost airline in Malaysia, has successfully developed its business through extensive networking
. The company has established strategic partnerships with other airlines, travel agencies, and online booking platforms to expand its reach and offer seamless travel experiences to customers. AirAsia has also collaborated with tourism boards and hotels to promote travel destinations, enhancing its brand image and attracting more customers. The company's strong networking has enabled it to tap into new markets, negotiate favorable agreements for fuel and aircraft leasing, and create innovative ancillary revenue streams.
Grab, a prominent ride-hailing and food delivery service in Malaysia, has built a robust networking ecosystem to propel its success. The company has formed strategic partnerships with various stakeholders, including banks, e-commerce platforms, and local businesses. Through these partnerships, Grab has expanded its services to offer digital payment solutions, online shopping, and loyalty programs, providing added value to its customers. Grab has also collaborated with governments and regulatory bodies to ensure compliance and foster trust among users. This extensive networking has allowed Grab to diversify its offerings, increase market share, and gain a competitive edge in the industry.
In summary, both AirAsia and Grab have leveraged their networking capabilities to drive business success. Their strategic partnerships, collaborations, and alliances have enabled them to expand their customer base, access new markets, and diversify their services. By building strong relationships with various stakeholders, these companies have strengthened their positions in the market and achieved growth, ultimately becoming successful and respected entities in the business landscape of Malaysia.
Learn more about markets here:
https://brainly.com/question/32106392
#SPJ11
Which budgets should be finished before the Cash Budget process ? When preparing cash budget, how to calculate Excess (or deficiency) of Cash over Disbursement? How do you decide how much to borrow? If borrowing is necessary, should borrowing be arranged at the beginning or the ending of the budgeting period? Why?
Before the Cash Budget process, the budgets that should be finished include the Sales Budget, Production Budget, Purchases Budget, and Operating Expenses Budget.
To calculate the Excess or Deficiency of Cash over Disbursement, you subtract the total disbursements from the beginning cash balance plus receipts.
The decision on how much to borrow depends on the cash deficiency identified in the Cash Budget. Borrowing should cover the shortfall while considering interest rates and repayment terms.
If borrowing is necessary, it is generally more appropriate to arrange it at the beginning of the budgeting period. This ensures that sufficient funds are available from the start to meet cash requirements, avoids delays, and allows for efficient planning and allocation of resources.
The Cash Budget is a crucial financial planning tool that helps businesses manage their cash flows effectively. Before preparing the Cash Budget, several other budgets must be completed. These include the Sales Budget, which estimates expected sales revenue, the Production Budget, which determines the production requirements based on sales projections, the Purchases Budget, which outlines the expected purchases of raw materials, and the Operating Expenses Budget, which identifies the anticipated operating expenses.
When calculating the Excess or Deficiency of Cash over Disbursement, you add the beginning cash balance to the total receipts and subtract the total disbursements. If the result is positive, it indicates an excess of cash, while a negative result indicates a cash deficiency.
The decision on how much to borrow depends on the cash deficiency identified in the Cash Budget. If there is a shortfall, borrowing can help cover the gap. The amount to borrow should be sufficient to meet the cash requirements while considering factors such as interest rates and repayment terms.
Arranging borrowing at the beginning of the budgeting period is generally preferable. This ensures that the necessary funds are available right from the start to meet cash obligations. It helps avoid potential delays in securing funds and allows for efficient planning and allocation of resources throughout the budgeting period.
Learn more about Purchases Budget here:
https://brainly.com/question/31962232
#SPJ11
The trend analysis report of Doppler, Inc. is given below (in millions): 2018 2017 2016 2015 2014 Net income $700 $403 $401 $607 $456 151% 114% 100% 100% Trend percentages 175% Which of the following is a correct conclusion from the above analysis? (A) Net income for 2018 is 175% of that for 2014. (B) Net income for 2017 is 151% of the previous year. Net income for 2017 decreased by 151% from 2016. (D) Net income for 2018 increased by 175% from 2017.
Therefore, the correct conclusion from the above analysis is that net income for 2018 is 175% of that for 2014. Option (A) is correct.
Given the following trend analysis report of Doppler, Inc. (in millions): 2018 2017 2016 2015 2014Net income $700 $403 $401 $607 $456151% 114% 100% 100% Trend percentages 175%The correct conclusion from the above analysis is that (A) Net income for 2018 is 175% of that for 2014. Trend analysis is an analytical technique that is used to determine the trend or pattern in the performance of a company over time.
Trend analysis provides insights into the company's historical performance and helps in identifying trends that can help in making future predictions and decisions. The trend analysis report of Doppler, Inc. provided above shows the trend percentages of the net income of the company over the past five years. From the trend percentages, we can see that the net income for 2018 is 175% of the net income for 2014.
This means that the net income of the company has increased by 75% over the past four years, which is a significant improvement. Therefore, the correct conclusion from the above analysis is that net income for 2018 is 175% of that for 2014. Option (A) is correct.
Learn more about income Visit: brainly.com/question/28390284
#SPJ11
Melinda worked for 240 hours during the month of Jan 2010. Her normal working month consists of 200 hours (Monday - Friday), of which 10% of the hours were non-productive idle time. Out of 40 hours overtime worked, 24 were worked for housekeeping purpose (of which 10 hours were worked on a Saturday) and 16 hours were worked to complete the production requirement to fulfil the customer's request. The human resource department has the following scheme for overtime worked: 25 % premium if overtime worked on any weekdays 50% premium if overtime worked on any weekend. Melinda's normal wage rate is RM 50 per hour. Required: calculate the total wages, the amount to be treated as manufacturing overhead, direct labor cost and the records.
To calculate the total wages, amount to be treated as manufacturing overhead, direct labor cost, and the records for Melinda, let's break down the information given:
Regular Working Hours:
Normal working month: 200 hours
10% of regular working hours are non-productive idle time: 200 hours * 10% = 20 hours
Productive regular working hours = Regular working hours - Non-productive idle time
Productive regular working hours = 200 hours - 20 hours = 180 hours
Overtime Hours:
Housekeeping overtime hours: 24 hours (10 hours on Saturday, 14 hours on weekdays)
Production fulfillment overtime hours: 16 hours
Wage Rates and Premiums:
Normal wage rate: RM 50 per hour
Overtime premium for weekdays: 25% additional wage
Overtime premium for weekends: 50% additional wage
Now, let's calculate the various components:
Regular Wages:
Regular wages = Productive regular working hours * Normal wage rate
Regular wages = 180 hours * RM 50/hour = RM 9,000
Overtime Wages:
Housekeeping overtime wages = Housekeeping overtime hours * Normal wage rate * Overtime premium for weekdays
Housekeeping overtime wages = (24 hours - 10 hours on Saturday) * RM 50/hour * 25%
Housekeeping overtime wages = 14 hours * RM 50/hour * 0.25 = RM 175
Production fulfillment overtime wages = Production fulfillment overtime hours * Normal wage rate * Overtime premium for weekdays
Production fulfillment overtime wages = 16 hours * RM 50/hour * 25% = RM 200
Total Overtime Wages:
Total overtime wages = Housekeeping overtime wages + Production fulfillment overtime wages
Total overtime wages = RM 175 + RM 200 = RM 375
Total Wages:
Total wages = Regular wages + Total overtime wages
Total wages = RM 9,000 + RM 375 = RM 9,375
Amount Treated as Manufacturing Overhead:
Amount treated as manufacturing overhead = Housekeeping overtime wages
Amount treated as manufacturing overhead = RM 175
Direct Labor Cost:
Direct labor cost = Regular wages + Production fulfillment overtime wages
Direct labor cost = RM 9,000 + RM 200 = RM 9,200
Records:
Regular working hours: 200 hours
Non-productive idle time: 20 hours
Productive regular working hours: 180 hours
Housekeeping overtime hours: 24 hours (10 hours on Saturday, 14 hours on weekdays)
Production fulfillment overtime hours: 16 hours
Regular wage rate: RM 50 per hour
Overtime premium for weekdays: 25%
Overtime premium for weekends: 50%
Regular wages: RM 9,000
Housekeeping overtime wages: RM 175
Production fulfillment overtime wages: RM 200
Total overtime wages: RM 375
Total wages: RM 9,375
Amount treated as manufacturing overhead: RM 175
Direct labor cost: RM 9,200
These calculations and records reflect the wages, overhead, and direct labor costs for Melinda based on the provided information.
To know more about premium here
https://brainly.com/question/16845751
#SPJ4
Question 12 of 19 Using Supply and Demand to Analyze Markets -- End of Chapter Problem Black markets are exchanges that occur in violation of the law and government regulations. For the following scenarios, select the answer that best describes how a black market could potenially improve society's well-being a. The government imposes a binding S1 per loaf price ceiling on bread. Producers and consumers would not have to pay taxes on bread bought and sold in the black market since it cannot be traced. In a black market, people willing to pay more than I would still be able to acquire bread, resulting in allocating bread to customers who value it the most In a black market, people may pay more than $1 a loaf, resulting in a loss to consumers since they are paying more than the price ceiling dictates. 1). The government establishes a binding $20 per bushel price floor in the market for com.
Black markets can potentially improve society's well-being in certain scenarios. In the case of a binding price ceiling on bread, a black market could allocate bread to consumers who value it the most and bypass taxes. However, in the case of a binding price floor on corn, a black market would result in a loss to consumers who would end up paying more than the price floor dictates.
In the scenario of a binding price ceiling on bread, a black market can potentially improve society's well-being. Since the black market operates outside the legal framework, producers and consumers would not have to pay taxes on bread bought and sold in this market.
Additionally, the black market allows people who are willing to pay more than the price ceiling to acquire bread. This ensures that bread is allocated to customers who value it the most, which can enhance overall satisfaction and utility.
However, it is important to note that this may lead to income disparities and unequal access to bread, as those who can afford to pay more would have an advantage in acquiring the product.
On the other hand, in the case of a binding price floor on corn, a black market would result in a loss to consumers. A price floor sets a minimum price that producers must receive, which can lead to a surplus of the product if the equilibrium price is lower. In a black market, consumers may be forced to pay more than the price floor dictates in order to acquire corn.
This would result in higher costs for consumers, leading to decreased well-being as they are paying more than they would in a competitive market. Furthermore, a black market in this situation would undermine the purpose of the price floor, which is to support producers' incomes.
Learn more about equilibrium here :
https://brainly.com/question/31534615
#SPJ11
Erna Manufacturing has 8 million shares of common stock outstanding. The current share price is $73, and the book value per share is $7. Erna Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $85 million, has a 7 percent coupon, and sells for 97 percent of par. The second issue has a face value of $50 million, has an 8 percent coupon, and sells for 108 percent of par. The first issues matures in 21 years, the second in 6 years. Suppose the most recent dividend was $4.10 and the dividend growth rate is 6 percent. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 35 percent. What is the company's WACC?
WACC: WACC is the weighted average cost of capital, which represents the average cost of capital of the company's debt and equity. WACC is computed by multiplying the cost of each capital component by its proportional weight and then adding the products.
Erna Manufacturing's WACC is calculated as follows:WACC = (E/V x Re) + ((D/V x Rd) x (1 - Tc))Where,V = Total value of the companyD = Total debtE = Total equityRe = Cost of equityRd = Cost of debtTc = Tax rateE = 8,000,000 x $73 = $584,000,000D = ($85,000,000 x 0.97) + ($50,000,000 x 1.08) = $115,950,000V = E + D = $699,950,000
First, we must calculate the cost of equity using the dividend discount model and then use the CAPM to double-check that we are correct:Re = ($4.10 x (1 + 0.06)) / $73 + 0.06 = 0.1125 or 11.25%Expected return on the market is 12%, while the risk-free rate is 3%.Using the CAPM, we get:Re = 0.03 + (1.2 x 0.12 - 0.03) x 0.5 = 0.096 or 9.6%Wd = ($85,000,000 / $115,950,000) x 100% = 73.31%Wd2 = ($50,000,000 / $115,950,000) x 100% = 43.06%Rd = 7% x 0.73 + 8% x 0.4306 = 7.4474 or 7.45%.
To know more about WACC visit:-
https://brainly.com/question/13740954
#SPJ11
[The following information applies to the questions displayed below.] The following events apply to Gulf Seafood for the Year 1 fiscal year Required a. Record the above transactions in a horizontal statements model (In the Statement of Cash Flows column, use the initials (OA), an Investing activity (IA), a financing activity (FA) and net change in cash (NC). Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require input.) Event 1 2 1. The company started when it acquired $18,000 cash by issuing common stock 2. Purchased a new cooktop that cost $16,500 cash 3. Earned $23,900 in cash revenue. 4. Paid $12,200 cash for salaries expense. 5. Adjusted the records to reflect the use of the cooktop. Purchased on January 1. Year 1, the cooktop has an expected useful life of four years and an estimated salvage value of $2.500. Use straight-line depreciation. The adjustment was made as of December 31, Year 1 3 4 5 Bal Cash Assets . 1.1 4 + ++ 0. Balance Sheet Equipment (BV) 0 W # GULF SEAFOOD Horizontal Statements Model Stockholder's Equity Common Stock + + + Retained Earnings Revenue 8 Income Statement Expense 0 Net Income Statement of Cash Flows Required information [The following information applies to the questions displayed below] The following events apply to Gulf Seafood for the Year 1 fiscal year: 1. The company started when it acquired $18,000 cash by issuing common stock. 2. Purchased a new cooktop that cost $16.500 cash. 3. Earned $23,900 in cash revenue. 4. Paid $12.200 cash for salaries expense. 5. Adjusted the records to reflect the use of the cooktop. Purchased on January 1, Year 1, the cooktop has an expected useful life of four years and an estimated salvage value of $2.500. Use straight-line depreciation. The adjustment was made as of December 31, Year 1. b. What amount of depreciation expense would Gulf Seafood report on the Year 1 Income statement? Depreciation expense 0 Required information [The following information applies to the questions displayed below] The following events apply to Gulf Seafood for the Year 1 fiscal year 1. The company started when it acquired $18,000 cash by issuing common stock. 2. Purchased a new cooktop that cost $16,500 cash. 3. Earned $23,900 in cash revenue. 4. Paid $12,200 cash for salaries expense. 5. Adjusted the records to reflect the use of the cooktop. Purchased on January 1, Year 1, the cooktop has an expected useful life of four years and an estimated salvage value of $2,500. Use straight-line depreciation. The adjustment was made as of December 31, Year 1. c. What amount of accumulated depreciation would Gulf Seafood report on the December 31, Year 2, balance sheet? Accumulated depreciation Required information [The following information applies to the questions displayed below] The following events apply to Gulf Seafood for the Year 1 fiscal year Saved 1. The company started when it acquired $18,000 cash by issuing common stock. 2. Purchased a new cooktop that cost $16,500 cash. 3. Earned $23,900 in cash revenue. 4. Paid $12,200 cash for salaries expense. 5. Adjusted the records to reflect the use of the cooktop. Purchased on January 1, Year 1, the cooktop has an expected useful life of four years and an estimated salvage value of $2,500. Use straight-line depreciation. The adjustment was made as of December 31, Year 1 d. Would the cash flow from operating activities be affected by depreciation in Year 1? O Yes O No
The transactions can be recorded using the following table format: Bal Cash Assets. 1.1 4 +18,000 +16,500 +23,900 -12,200 0 Balance Sheet Equipment (BV) 0 -16,500 OA -16,500 W # GULF SEAFOOD .
What are the rest?Horizontal Statements Model Stockholder's Equity Common Stock +18,000 - + + Retained Earnings +7,700 - +23,900 -12,200 0 Revenue 8 Income Statement Expense Salaries - -12,200 +12,200 - Depreciation - -4,125 +4,125 - Net Income +7,700 +8,975 Statement of Cash Flows OA 18,000 -16,500 +23,900 -12,200 +13,200b) .
In Year 1, Gulf Seafood would report $4,125 of depreciation expense on its income statement. This can be calculated using straight-line depreciation as follows:Depreciation expense = (Cost – Salvage value) / Useful life= ($16,500 – $2,500) / 4= $4,000 / year, Depreciation expense for Year 1 = $4,000 x 1 year = $4,000c)
On the December 31, Year 2, balance sheet, Gulf Seafood would report an accumulated depreciation of $4,125. This is because the company uses straight-line depreciation, which means it would depreciate the cooktop by $4,000 each year for four years.
Since the cooktop was purchased on January 1, Year 1, the accumulated depreciation at December 31, Year 2, would be $4,125 ($4,000 x 1 year + $125).d) Yes, the cash flow from operating activities would be affected by depreciation in Year 1. Depreciation is a non-cash expense that reduces net income but does not involve an outflow of cash.
This would increase the cash flow from operating activities, which is calculated by adding back non-cash expenses like depreciation to net income.
To know more on depreciation visit:
https://brainly.com/question/30531944
#SPJ11
