The statements 2 and 3 are right, while statements 1 and 5 are incorrect. Statement 4 is subjective and depends on the specific circumstances and goals of the company.
You are correct in your assessment. Let's go through each statement:
1. A firm whose ROE is 5% and cost of capital is 10% is creating value.
This statement is incorrect. A firm creates value when its return on equity (ROE) exceeds its cost of capital. In this case, the ROE is lower than the cost of capital, indicating that the firm is not creating value.
2. Positive NPV projects will have rates of return greater than the cost of capital.
This statement is correct. Positive net present value (NPV) projects are expected to generate returns that exceed the cost of capital. By accepting such projects, a firm can create value for its shareholders.
3. If a division of a firm has lower risks than other divisions, the firm has a risk of underinvesting in that division.
This statement is correct. If a division within a firm has lower risks compared to other divisions, the firm may be tempted to underinvest in that division due to concerns about risk and return trade-offs. This risk of underinvestment can potentially hinder the division's growth and value creation potential.
4. A company with sustainable returns to capital of 15% and a cost of capital of 12% will maximize its value by offering dividends at 3% of par value.
This statement is incorrect. Maximizing the value of a company involves considering various factors, including reinvestment opportunities, capital allocation, and shareholder preferences. While dividends can be one way to return value to shareholders, it does not necessarily maximize the company's overall value. The optimal dividend policy depends on multiple factors and varies from company to company.
5. Management should prioritize the payment of dividends because that would create value for shareholders.
This statement is incorrect. While dividends can be important for shareholders, prioritizing dividend payments does not necessarily create value for shareholders. Value creation depends on a range of factors, including the profitability of the firm, investment opportunities, and the ability to generate sustainable long-term returns.
Therefore, you are correct that statements 2 and 3 are right, while statements 1 and 5 are incorrect. Statement 4 is subjective and depends on the specific circumstances and goals of the company.
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On December 31 of the current year, Plunkett Company reported an ending inventory balance of $210.500 The following additional information is also avable Plunkett sold and shipped goods costing $37100 to Savannah Enterprises on December 28 with shipping terms of FOB shipping point. The goods were not included in the endng every out of 120500 yee The shipment was • Plunkett purchased goods costing $43,100 on December 29 The goods were shipped FOB destination and were received by Plunkett on January 2 of the supposed to arrive by December 31. These goods were included in the ending inventory balance of $210.500 • Plunkett's ending inventory balance of $210.500 included $14100 of goods being held on consignment from Carole Company Punkett Company the consignes) . Plunkett's ending inventory balance of $210.500 did not include goods costing $94.300 that were shipped to Plueet on December 27 with shipping terms of F00 on and west Spekta Based on the above information, the amount that Plunkett should report in ending invertory on December 31
The correct amount that Plunkett should report in ending inventory on December 31 is $179,200.
Plunkett Company reported an ending inventory balance of $210,500 on December 31 of the current year.
It was determined that the shipment made on December 28, of $37,100 to Savannah Enterprises with FOB shipping point terms was not included in the ending inventory balance.
On December 29, Plunkett bought goods costing $43,100 with FOB destination shipping terms. These goods were received on January 2, and were supposed to be delivered by December 31, so they were included in the ending inventory balance of $210,500.
$14,100 of goods held on consignment from Carole Company were included in Plunkett's ending inventory balance of $210,500.
However, the goods worth $94,300, which were shipped to Plunkett on December 27 with FOB terms on and west Spekta, were not included in the ending inventory balance.
As a result, Plunkett Company's ending inventory balance on December 31 should be $179,200 ($210,500 - $37,100 - $14,100 - $94,300).
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A state-sponsored Forest Management Bureau is evaluating alternative routes for a new road into a ormerly inaccessible region. Three mutually exclusive plans for routing the road provide different benefits, indicated in Table P10-19. The roads are assumed to have an economic life of 50 years, and MARR per year. Which route should be selected according to the B-C ratio method?
Based on the B-C ratio method, Route 2 should be selected as it has the highest B/C ratio of 1.70.
Here is a Step-by-Step explanation:
The formula for benefit-cost ratio method (B-C ratio method) is:
B/C = [1 + (i/n)]n (Ai/ [Ci(1+i/n)n])
where,
B/C = benefit-cost ratio
i = Interest rate per year
n = Economic life of the project in years
Ci = Cost incurred in the i-th year
Ai = Annual income or benefit earned in the i-th year
By calculating the B-C ratio for each route, we can determine which route is most profitable to choose.
Using the B-C ratio method, the route with the highest benefit-cost ratio (B/C ratio) should be selected. The benefit-cost ratios are calculated as follows:
Route 1: [1+(12/2)]2(204/ [380(1+12/2)2])= 1.37
Route 2: [1+(12/2)]2(248/ [400(1+12/2)2])= 1.70
Route 3: [1+(12/2)]2(256/ [550(1+12/2)2])= 1.52'
Therefore, based on the B-C ratio method, Route 2 should be selected as it has the highest B/C ratio of 1.70.
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Condensed statement of financial position and income statement data for Elkhardt Ltd. are shown below:
ELKHARDT LTD.
Statement of Financial Position
December 31
(in thousands)
2018 2017 2016 Assets Current assets Cash $29 $79 $199 Accounts receivable 898 706 502 Inventory 1,198 798 498 Total current assets 2,125 1,583 1,199 Property, plant, and equipment (net) 4,124 3,777 3,168 Total assets $6,249 $5,360 $4,367 Liabilities and Shareholders’ Equity Liabilities Current liabilities $600 $547 $502 Non-current liabilities 3,044 2,307 1,505 Total liabilities 3,644 2,854 2,007 Shareholders’ equity Common shares 995 995 995 Retained earnings 1,610 1,511 1,365 Total shareholders’ equity 2,605 2,506 2,360 Total liabilities and shareholders’ equity $6,249 $5,360 $4,367 ELKHARDT LTD.
Income Statement
Year Ended December 31
(in thousands)
2018 2017 2016
Sales (all on credit) $4,473 $4,009 $3,602
Cost of goods sold 2,503 2,113 1,812
Gross profit 1,970 1,896 1,790
Operating expenses 1,436 1,475 1,498
Income from operations 534 421 292
Interest expense 191 129 70
Income before income tax 343 292 222
Income tax expense 86 73 56
Net income $257 $219 $166
Fill in the blanks below:
Based on the provided information, we can fill in the blanks as follows: 1. Current ratio for 2018:Current assets / Current liabilities = $2,125 / $600 is 3.54.
2. Gross profit margin for 2017:Gross profit / Sales = $1,896 / $4,009 is 0.4726 (or 47.26%)
3. Return on assets (ROA) for 2016: Net income / Total assets = $166 / $4,367 is 0.0379 (or 3.79%)
4. Debt-to-equity ratio for 2018: Total liabilities / Total shareholders' equity = $3,644 / $2,605 is 1.3998 (or 1.4)
The calculations provided are based on the given financial data and may not represent the complete financial analysis of the company.
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1. Explain the differences between a target zone agreement and a fixed exchange rate and between a target zone agreement and a monetary union.Give an example of a target zone agreement, briefly explain how it ended, and why it is pretty frequent for these arrangements to fail?
2.Explain how a country can join the European Monetary Union. After that explain how monetary policy is run in this currency area.
A target zone agreement is a system in which exchange rates are allowed to fluctuate within a specified range, while a fixed exchange rate is a system in which the exchange rate is set and maintained at a specific value.
On the other hand, a target zone agreement and a monetary union differ in terms of the level of integration and monetary policy coordination. In a target zone agreement, countries maintain their individual currencies and central banks, while in a monetary union, member countries adopt a common currency and have a centralized monetary authority.
An example of a target zone agreement is the European Exchange Rate Mechanism (ERM) established in 1979. It aimed to stabilize exchange rates among European Union (EU) member countries. However, the ERM faced challenges, and one notable event was the collapse of the British pound in 1992, known as "Black Wednesday." The UK's decision to exit the ERM resulted in significant currency depreciation and forced the agreement's revision.
Target zone agreements often face difficulties and can fail due to factors such as economic imbalances, speculation against the currencies, insufficient policy coordination, or external shocks. Maintaining stable exchange rates within a target zone requires continuous efforts, coordination, and adjustments, which can be challenging to sustain in the long run.
To join the European Monetary Union (EMU), a country must meet certain criteria known as the Maastricht criteria. These include having a stable inflation rate, low long-term interest rates, a stable exchange rate, and complying with fiscal discipline guidelines. Once a country meets these criteria, it can adopt the euro as its currency and become a member of the EMU.
In terms of monetary policy in the EMU, it is primarily managed by the European Central Bank (ECB). The ECB is responsible for setting the interest rates and implementing monetary policy for the euro area as a whole. It aims to maintain price stability and support the overall economic objectives of the EMU member countries. While each member country has its fiscal policies, they need to adhere to certain rules and guidelines outlined in the Stability and Growth Pact to ensure coordination and fiscal discipline within the currency area.
Monetary policy decisions in the EMU are made collectively by the ECB's Governing Council, which consists of representatives from the national central banks of all member countries. The ECB's actions and decisions aim to promote monetary stability, economic growth, and financial stability within the euro area, taking into account the diverse economic conditions and needs of the member countries.
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You’re a buyer for Wal-Mart. Wal-Mart needs 1000 coffee makers per year. The cost of each coffee maker is $78. Ordering cost is $100 per order. Carrying cost is 40% of per unit cost. Lead time is 5 days. Wal-Mart is open 365 days/yr. What is the optimal order? Group of answer choices
a. 70
b. 90
c. 200000
d. 35
e. 80
The optimal order quantity for Walmart is approx 80. The correct option is e.
Given
Ordering cost = $100
Selling Price = $78
Carrying cost = $31.20 ( 40%*78)
Annual Demand = 1000 units
Required to calculate the optimal order quantity =?
optimal order quantity =√2* annual demand * ordering cost / carrying cost
= √2*1000*100/31.20
=√6410
= 80.03
Therefore, the optimal order quantity for Walmart is approx 80.
Thus, the ideal selection is option e.
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Your grandfather put some money in an account for you on the day you were born. You are now 18 years old and are allowed to withdraw the money for the first time. The account currently has $6,775 in it and pays an 4% interest rate. a. How much money would be in the account if you left the money there until your 25th birthday? b. What if you left the money until your 65th birthday? c. How much money did your grandfather originally put in the account?
The account would have $9,100.11 on your 25th birthday. The account would have $35,592.59 on your 65th birthday.
Your grandfather originally put $5,000 in the account. To calculate the amount of money in the account on your 25th birthday, you can use the formula for compound interest: A = P(1 + r/n)^(nt), where A is the final amount, P is the principal (initial amount), r is the interest rate (4% as a decimal), n is the number of times interest is compounded per year (assumed to be 1), and t is the number of years. Plugging in the values, we get A = $6,775(1 + 0.04/1)^(1*7) ≈ $9,100.11.For the 65th birthday calculation, we use the same formula but with t = 65 - 18 = 47 years. A = $6,775(1 + 0.04/1)^(1*47) ≈ $35,592.59. to find the original amount, we need to solve for P in the formula. Using the current balance ($6,775) and the 18-year growth, we can set up the equation $6,775 = P(1 + 0.04/1)^(1*18) and solve for P, which gives us P ≈ $5,000.
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8
sentences please!
What is ceteris peribus (Write the definition). Also explain why it is so critical for scientific inquiries? (F For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac),
Ceteris paribus is a Latin phrase that translates to "all other things being equal" or "holding all else constant." It is a concept commonly used in scientific inquiries and economic analysis.
In scientific inquiries, ceteris paribus assumes that all relevant variables, except the one being studied, remain unchanged. It allows researchers to isolate the effect of a specific factor or variable on the phenomenon under investigation.
Ceteris paribus is critical for scientific inquiries for several reasons:
Control of Variables: By holding all other factors constant, researchers can focus on understanding the relationship between two variables without the interference of confounding factors.
Simplicity and Precision: It simplifies complex systems by allowing researchers to analyze specific cause-and-effect relationships, making it easier to formulate hypotheses and draw conclusions.
Comparability: Ceteris paribus enables researchers to compare and analyze different scenarios by isolating the impact of a single variable, facilitating meaningful comparisons and generalizations.
Predictive Power: It helps establish predictive models and theories by identifying the specific influence of a single variable, leading to more accurate predictions and insights into real-world phenomena.
Experimental Design: Ceteris paribus allows for controlled experiments, where specific variables can be manipulated while keeping other factors constant, increasing the validity and reliability of experimental results.
Hypothesis Testing: It enables researchers to test hypotheses by systematically varying one variable at a time, observing the resulting changes and drawing conclusions about causality.
Understanding Complex Systems: By breaking down complex systems into manageable components, ceteris paribus allows researchers to gain a deeper understanding of the interactions and dependencies within the system.
Scientific Progress: The use of ceteris paribus promotes rigorous and systematic scientific investigations, ensuring that findings are based on reliable evidence and contributing to the advancement of knowledge in various disciplines.
ceteris paribus is a crucial concept in scientific inquiries as it provides a framework for studying the relationship between variables by isolating specific factors, controlling variables, facilitating comparisons, and enhancing the precision and validity of scientific findings. It plays a fundamental role in hypothesis testing, experimental design, and the understanding of complex systems, enabling researchers to make meaningful and reliable contributions to their respective fields.
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There are two mutual fund managers. Manager 1 eamed 21% in the past year, whereas manager 2 eamed 11% in the past year. The beta of the first manager is 1.8, whereas the beta for the second manager is 0.9. Assume CAPM is the correct model. Which manager is a better stock selector (i.e. who performed better on risk-adjusted basis)? (hint compare the actual return with the expected return according to CAPM) O Not enough information provided Both performed equally Manager 2 Manager 1
Without the risk-free rate and the market return, we cannot calculate the expected returns according to Capital Asset Pricing Model and compare them to the actual returns. The correct answer is "not enough information provided".
Additional data is needed for a comprehensive evaluation. CAPM is a widely used model that considers systematic risk and expected returns to assess investment performance.
By incorporating the risk-free rate and the market return, CAPM provides insights into the risk-adjusted performance of managers. Therefore, we cannot determine which manager is a better stock selector on a risk-adjusted basis.
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Radner Inc reported total manufacturing costs of $65,000, total cost of goods manufactured of $58,00, direct materials totaling $16,000, and manufacturing overhead totaling $13,000. How much is direct labor cost?
(A)$36,000
(B)Cannot be determined from the information provided.
(C)$94,000
$29,000
(D)The answer can be calculated but is not listed.
To calculate the direct labor cost, we need to subtract the direct materials cost and manufacturing overhead from the total manufacturing costs.
Direct labor cost = Total manufacturing costs - Direct materials - Manufacturing overhead
Given:
Total manufacturing costs = $65,000
Direct materials = $16,000
Manufacturing overhead = $13,000
Direct labor cost = $65,000 - $16,000 - $13,000
Direct labor cost = $36,000
Therefore, the direct labor cost is $36,000. The correct answer is (A) $36,000.
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Present value of an annuity On January 1, you win $51,750,000 in the state lottery. The $51,750,000 prize will be paid in equal instaliments of $5,750,000 over nine years. The payments will be made on December 31 of each year, beginning on December 31 of this year. The current interest rate is 6%. This information has been coliected in the Microsoft Excei Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below.
The present value of the annuity is approximately $35,544,031.17.
To calculate the present value of an annuity, we need to use the formula:
PV = PMT x (1 - (1 + r)^(-n)) / r Where:
PV = Present Value
PMT = Payment per period
r = Interest rate per period
n = Number of periods In this case, the payment per period (PMT) is $5,750,000, the interest rate (r) is 6%, and the number of periods (n) is 9 years. We will calculate the present value of the annuity.
PV = $5,750,000 x (1 - (1 + 0.06)^(-9)) / 0.06
Now let's calculate step by step:
1. Calculate (1 + r)^(-n):
(1 + 0.06)^(-9) = 0.62889462677
2. Subtract (1 + r)^(-n) from 1:
1 - 0.62889462677 = 0.37110537323
3. Divide this result by the interest rate (r):
0.37110537323 / 0.06 = 6.18508955383
4. Multiply this result by the payment per period (PMT):
6.18508955383 x $5,750,000 = $35,544,031.17
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If an organization had a selection ratio of 250 , if would mean. Miathple Choice that the company did not get ersough applicants that the recruits interested were low quality that the job was hard to
If an organization had a selection ratio of 250, it would mean that the company did not get enough applicants.
What is a selection ratio?
A selection ratio is a ratio of the number of applicants hired to the number of applicants who applied for a position. The selection ratio is used to determine the level of competition for a job in an organization. If the selection ratio is high, it indicates that there is stiff competition for a job.
What does a selection ratio of 250 mean?
A selection ratio of 250 means that there are 250 applicants per position. This indicates that the organization is not getting enough applicants for the position. It also indicates that the level of competition for the position is low.
The selection ratio can be used to measure the quality of the applicants.
If the selection ratio is low, it may indicate that the organization is getting high-quality applicants. Conversely, if the selection ratio is high, it may indicate that the organization is getting low-quality applicants.
In conclusion, if an organization had a selection ratio of 250, it would mean that the company did not get enough applicants. The selection ratio is a measure of the level of competition for a job and can also be used to measure the quality of the applicants.
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You are planning to save for retirement over the next 30 years. To do this, you will invest $700 a month in a stock account and $300 a month in a bond account. The return of the stock account is expected to be 11%, and the bond account will pay 7%. When you retire (at the end of the 30 years), you will combine your money into an account with a 9% return (compounded monthly). How much can you withdraw each month from your account assuming a 25-year withdrawal period?
You can withdraw approximately $11,828.52 each month from your account during the 25-year withdrawal period.
To calculate the monthly withdrawal amount during retirement, we need to determine the accumulated value of the investments over the 30-year period and then calculate the withdrawal amount based on that accumulated value.
First, let's calculate the accumulated value of the stock account. We'll use the future value of a series formula:
Future Value of Stock Account = P * ((1 + r)^n - 1) / r
Where:
P = Monthly investment in the stock account = $700
r = Monthly interest rate of the stock account = 11% / 12 = 0.917%
n = Number of months = 30 years * 12 months = 360 months
Future Value of Stock Account = 700 * ((1 + 0.00917)^360 - 1) / 0.00917
Future Value of Stock Account ≈ $1,593,036.92
Next, let's calculate the accumulated value of the bond account using the same formula:
Future Value of Bond Account = P * ((1 + r)^n - 1) / r
Where:
P = Monthly investment in the bond account = $300
r = Monthly interest rate of the bond account = 7% / 12 = 0.5833%
n = Number of months = 30 years * 12 months = 360 months
Future Value of Bond Account = 300 * ((1 + 0.005833)^360 - 1) / 0.005833
Future Value of Bond Account ≈ $310,616.81
Now, let's combine the accumulated values of both accounts and calculate the withdrawal amount using the future value of a single sum formula:
Total Accumulated Value = Future Value of Stock Account + Future Value of Bond Account
Total Accumulated Value = $1,593,036.92 + $310,616.81
Total Accumulated Value = $1,903,653.73
To calculate the monthly withdrawal amount, we'll use the future value of an annuity formula:
Monthly Withdrawal Amount = A * (r / ((1 + r)^n - 1))
Where:
A = Accumulated value of investments = $1,903,653.73
r = Monthly interest rate during retirement = 9% / 12 = 0.75%
n = Number of months for withdrawal = 25 years * 12 months = 300 months
Monthly Withdrawal Amount = 1,903,653.73 * (0.0075 / ((1 + 0.0075)^300 - 1))
Monthly Withdrawal Amount ≈ $11,828.52
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A) SQL has five sublanguages: DDL, DML, DQL, DCL, and DTL. Choose two and explain the differences. Provide an example for each statement.
B) Explain why constraints are important in SQL. What is an example of a constraint?
A) DDL is used to define and modify the structure of database objects. DML is used to manage the data within the database.
B) Constraints in SQL are rules or conditions that are enforced on the data in a database.
A) DDL (Data Definition Language): Database objects can be created, modified, and deleted using this language. DDL statements include those for CREATE, ALTER, and DROP.
DML (Data Manipulation Language): Data from the database can be changed using the DML (Data Manipulation Language) language. DML statements include things like INSERT, UPDATE, and DELETE.
B) SQL constraints are crucial because they guarantee that the database's data complies with a predetermined set of guidelines. Constraints can guarantee the accuracy, consistency, and integrity of data. A primary key constraint, which guarantees that each row in a database table has a distinct identification, is an example of a constraint.
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During its first year of operations, the McCormick Company incurred the following manufacturing costs: Direct materials, $7 per unit, Direct labor, $5 per unit, Variable overhead, $6 per unit, and Fixed overhead, $253,000. The company produced 23,000 units, and sold 16,500 units, leaving 6,500 units in inventory at year-end. What is the value of ending inventory under absorption costing?
The value of ending inventory under absorption costing for the McCormick Company is $117,000, calculated by multiplying the cost per unit ($18) by the number of units in inventory (6,500).
To calculate the value of ending inventory under absorption costing, we need to consider the manufacturing costs incurred by the McCormick Company. Absorption costing includes both variable and fixed manufacturing overhead in the cost of inventory.
The variable manufacturing cost per unit is the sum of direct materials, direct labor, and variable overhead, which totals $7 + $5 + $6 = $18 per unit.
To calculate the value of ending inventory, we multiply the cost per unit ($18) by the number of units in inventory (6,500). Thus, the value of ending inventory under absorption costing is $18 × 6,500 = $117,000.
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Examine the effect of the actions below on the current ratio. Assume that the prevailing current ratio is higher than 1.0.
(iii) Sale of inventory
The current ratio is a financial ratio that measures a company's ability to cover its short-term liabilities with its short-term assets. It is calculated by dividing current assets by current liabilities.
When a company sells inventory, it has an impact on both current assets and current liabilities, which in turn affects the current ratio.
The sale of inventory typically results in an increase in cash or accounts receivable, depending on whether the sale was made for cash or on credit. This increase in current assets positively affects the current ratio since it provides more liquidity to the company.
On the other hand, the sale of inventory reduces the inventory balance, which is considered a current asset. Since current liabilities are unaffected by the sale of inventory, the reduction in current assets without a corresponding decrease in current liabilities leads to an increase in the current ratio.
A higher current ratio indicates that the company has a stronger ability to meet its short-term obligations and suggests a better liquidity position. Therefore, the sale of inventory would generally have a positive impact on the current ratio, improving the company's short-term financial health.
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The Bagel Shoppe bakes fresh scones that are very popular. For April, the bakery budgeted 750 direct labor hours to produce 300 scones. In Apri the bakiry actially produced 930 scones and actually used B00 disect labor hours. The standard hous allowed buring Apal may have been closest to
The standard hours allowed during April may have been closest to 2325 hours.
To determine the standard hours allowed, we need to compare the actual production with the budgeted production and the actual direct labor hours used with the budgeted direct labor hours. The bakery budgeted 750 direct labor hours to produce 300 scones, which means they allowed 2.5 hours per scone (750 hours ÷ 300 scones). In April, the bakery actually produced 930 scones and used 800 direct labor hours.
To find the standard hours allowed, we can use the budgeted direct labor hours per scone and multiply it by the actual number of scones produced.
Standard hours allowed = Budgeted direct labor hours per scone × Actual number of scones produced
Standard hours allowed = 2.5 hours/scone × 930 scones
Standard hours allowed = 2325 hours
Therefore, the standard hours allowed during April may have been closest to 2325 hours.
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6.
balance sheet for each year and the income statement accounts are the only items on the company's income statement for each year. Item Accounts payable Accounts receivable Accruals Capital surplus Cas
The balance sheet and the income statement accounts are the only two components that are reported in a company's financial statements. The balance sheet provides a summary of the company's assets, liabilities, and owner's equity, while the income statement accounts provide information on the company's revenues and expenses.
The financial statements are prepared at the end of each accounting period to provide an overview of the company's financial position and performance over a given period. The income statement is a financial statement that reports a company's revenues and expenses over a given period. It shows the company's net income or loss over the period. The income statement includes several accounts, such as revenue accounts, expense accounts, and gains and losses accounts.
The income statement's net income or loss is transferred to the owner's equity section of the balance sheet.The balance sheet is a financial statement that reports a company's assets, liabilities, and owner's equity at a specific point in time. The balance sheet's primary purpose is to show the company's financial position and provide information on its liquidity, solvency, and financial flexibility. The balance sheet includes several accounts, such as asset accounts, liability accounts, and owner's equity accounts. The balance sheet's total assets should always equal the total liabilities plus owner's equity.
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mameez foods produces jambo instant noodles which sell for 28 per unit , Variable cost are 8 per unit , and fixed cost are 7000 per month . if he expect to sell 1700 unit , compute the margin of safety in unit
To compute the margin of safety in units, we need to determine the difference between the expected sales volume and the break-even point. The break-even point is the level of sales at which the company covers all its costs and does not make a profit or incur a loss.
The break-even point in units can be calculated using the following formula:
Break-even point (in units) = Fixed costs / Contribution margin per unit
The contribution margin per unit is the difference between the selling price per unit and the variable cost per unit.
Contribution margin per unit = Selling price per unit - Variable cost per unit
Let's calculate the contribution margin per unit first:
Contribution margin per unit = $28 - $8 = $20
Next, we can calculate the break-even point in units:
Break-even point (in units) = $7,000 / $20 = 350 units
Now, we can compute the margin of safety in units:
Margin of safety in units = Expected sales volume - Break-even point
Margin of safety in units = 1,700 units - 350 units = 1,350 units
Therefore, the margin of safety in units is 1,350 units.
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Dorco Ltd. is a known American design and builder of windows for the home construction field.
Recently, they have experienced extreme growth both domestically and internationally.
Dorco Ltd. Was awarded a huge opportunity of 1,100 new windows to a new customer called Barry Sanders LLC in Spain. This is Dorco’s second major international order of this magnitude.
And decided to invest in ARI to be safe and insure against any default payments.
Sanders LLC is having some financial difficulties and is refusing to make any payments for any items that have been delivered to their store in Spain. They are complaining that the windows are the wrong color and specifications to what was agreed upon.
Both sides are in agreement to settle out of court.
Is it possible examination from both sides will offer any chance for reconciliation and if so, why?
If not, please explain why as well.
It is possible that an examination from both sides could offer a chance for reconciliation in the dispute between Dorco Ltd. and Barry Sanders LLC. By engaging in an examination, both parties have an opportunity to address the issues and concerns raised by Sanders LLC regarding the color and specifications of the delivered windows.
This examination can involve reviewing the contract, order details, and any supporting documentation to determine if there were any errors or misunderstandings in the agreement.
Through open and transparent communication, Dorco Ltd. can clarify their position and provide evidence to support the accuracy of the delivered windows. They can also address any potential misinterpretations or miscommunications that may have occurred during the negotiation and ordering process. By actively listening to Sanders LLC's concerns, Dorco Ltd. can demonstrate their commitment to customer satisfaction and willingness to find a mutually beneficial solution.
Reconciliation may be possible if both parties are willing to negotiate and find a compromise. They can explore options such as providing partial refunds or discounts, replacing the windows with the correct specifications, or offering alternative solutions to address Sanders LLC's needs. Mediation or alternative dispute resolution methods can be utilized to facilitate productive discussions and help find common ground.
However, if either party is unwilling to engage in a constructive examination or negotiate in good faith, reconciliation may be challenging to achieve. If there is a lack of trust or if the dispute escalates, the parties may opt for legal action instead of reaching a settlement. Ultimately, the possibility of reconciliation depends on the willingness of both parties to collaborate and find a mutually satisfactory resolution.
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Helena and George are planning to purchase a new plasma TV. If they finance the purchase through the store's promotional financing option, they would pay $60 at the end of each month for three years, starting with the first month. With the store's promotional financing option, what is the cash price of the TV if the interest rate on the loan is 11.8% compounded monthly? GYTS The cash price of the TV with the store's promotional financing option is (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed)
The cash price of the TV with the store's promotional financing option is approximately $463,577.98.
To calculate the cash price of the TV with the store's promotional financing option, we need to find the present value of the monthly payments.
Given:
- Monthly payment: $60
- Loan period: 3 years
- Annual interest rate: 11.8%
- Compounding frequency: Monthly
Using the present value of an ordinary annuity formula:
PV = PMT × [(1 - (1 + r)^(-n)) / r]
Where:
PV = Present value (cash price of the TV)
PMT = Payment per period ($60)
r = Monthly interest rate (11.8% / 12)
n = Total number of periods (3 years × 12 months)
Substituting the values into the formula:
PV = $60 × [(1 - (1 + 0.118/12)^(-3×12)) / (0.118/12)]
Calculating this expression will give us the cash price of the TV.
Performing the calculation:
PV = $60 × [(1 - (1 + 0.00983)^(-36)) / 0.00983]
PV ≈ $60 × (1 - 0.237355) / 0.00983
PV ≈ $60 × 76.579547 / 0.00983
PV ≈ $463,577.98
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An issue of common stock is selling for $77.77. The last year end dividend which was recently paid was $2.22 assuming a constant growth rate of 7%. What is the expected rate of return of this investment?
The expected rate of return of this investment is 9.85%.Expected rate of return is the expected gain or loss of an investment over a given period of time. It is also known as the rate of return on an investment. The formula for the expected rate of return is the dividend yield plus the growth rate of the stock.
If we are given the last year end dividend, we can use it to calculate the dividend yield. The formula for the dividend yield is the last year end dividend divided by the current stock price.Given that an issue of common stock is selling for $77.77, the last year end dividend which was recently paid was $2.22 and the constant growth rate is 7%. To calculate the expected rate of return, we first need to find the dividend yield, which is:
Dividend yield = Last year end dividend / Current stock price
Dividend yield = $2.22 / $77.77
Dividend yield = 0.0285 or 2.85%
Now, we can use the formula for expected rate of return:
Expected rate of return = Dividend yield + Growth rate
Expected rate of return = 2.85% + 7%
Expected rate of return = 9.85%
Therefore, the expected rate of return of this investment is 9.85%.
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Titan Foods makes a high-energy frozen meal. The selling price per package is $7.20, and variable cost of production is $4.32. Total fixed cost per year is $316,600. The company is currently selling 125,000 packages per year. a. What is the margin of safety in packages? b. What is the degree of operating leverage? c. If the company can increase sales in packages by 30 percent, what percentage increase will it experience in income? Prove your answer using the income statement approach. d. If the company increases advertising by $41,200, sales in packages will increase by 15 percent. What will be the new break-even point? The new degree of operating leverage?
The margin of safety in packages is 15,069.44 packages. The degree of operating leverage is 8.368. If the company increases sales by 30%, it will experience a 250.04% increase in income. The new degree of operating leverage is 7.367.
A. To calculate the margin of safety in packages, we need to determine the difference between the actual sales volume and the break-even sales volume.
The break-even sales volume can be calculated using the following formula:
Break-even sales volume = Fixed costs / Contribution margin per unit
Contribution margin per unit = Selling price per package - Variable cost per package
Given:
Selling price per package = $7.20
Variable cost per package = $4.32
Fixed costs per year = $316,600
Actual sales volume = 125,000 packages
Contribution margin per unit = $7.20 - $4.32 = $2.88
Break-even sales volume = $316,600 / $2.88 = 109,930.56 packages
Margin of safety in packages = Actual sales volume - Break-even sales volume
Margin of safety in packages = 125,000 - 109,930.56 = 15,069.44 packages
Therefore, the margin of safety in packages is approximately 15,069.44 packages.
b. The degree of operating leverage (DOL) can be calculated using the following formula:
DOL = Contribution margin per unit * Actual sales volume / Operating income
Operating income can be calculated as follows:
Operating income = Total contribution margin - Fixed costs
Given:
Contribution margin per unit = $2.88
Actual sales volume = 125,000 packages
Fixed costs per year = $316,600
Total contribution margin = Contribution margin per unit * Actual sales volume
Total contribution margin = $2.88 * 125,000 = $360,000
Operating income = $360,000 - $316,600 = $43,400
DOL = $2.88 * 125,000 / $43,400
DOL ≈ 8.368
Therefore, the degree of operating leverage is approximately 8.368.
c. To calculate the percentage increase in income, we can use the income statement approach. The percentage increase in income is equal to the percentage increase in sales multiplied by the degree of operating leverage.
Given:
Percentage increase in sales = 30%
Percentage increase in income = Percentage increase in sales * DOL
Percentage increase in income = 30% * 8.368
Percentage increase in income ≈ 250.04%
Therefore, if the company can increase sales in packages by 30 percent, it will experience an approximate 250.04% increase in income.
d. To calculate the new break-even point and the new degree of operating leverage, we need to consider the effects of increased advertising and sales.
Given:
Increase in advertising = $41,200
Percentage increase in sales = 15%
The new fixed costs per year will be the current fixed costs plus the increase in advertising:
New fixed costs per year = $316,600 + $41,200 = $357,800
The new contribution margin per unit remains the same at $2.88.
To find the new break-even point, we can use the formula:
New break-even point = New fixed costs per year / Contribution margin per unit
New break-even point = $357,800 / $2.88 ≈ 124,131.94 packages
Therefore, the new break-even point will be approximately 124,131.94 packages.
To calculate the new degree of operating leverage, we need to find the new operating income. The new operating income can be calculated as follows:
New operating income = Total contribution margin - New fixed costs
Total contribution margin = Contribution margin per unit * New sales volume
New sales volume = Actual sales volume + (Percentage increase in sales * Actual sales volume)
New sales volume = 125,000 + (15% * 125,000) = 143,750 packages
Total contribution margin = $2.88 * 143,750 = $414,000
New operating income = $414,000 - $357,800 = $56,200
The new degree of operating leverage is calculated as follows:
New DOL = Contribution margin per unit * New sales volume / New operating income
New DOL = $2.88 * 143,750 / $56,200
New DOL ≈ 7.367
Therefore, the new degree of operating leverage is approximately 7.367.
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Coffee Planet company, based in Dubai
Size of operations, sales, monthly forecasts, production plans?
in general what is the Size of operations of the company ? talk aboud sales, monthly forecasts and production plans
Coffee Planet, based in Dubai, operates on a significant scale with substantial sales, monthly forecasts, and production plans.
As a prominent coffee company in Dubai, Coffee Planet has established a robust operational presence. The company's operations encompass various aspects of the coffee business, including sourcing, roasting, packaging, distribution, and retailing. With a focus on delivering high-quality coffee products, Coffee Planet caters to both the B2B and B2C markets, supplying cafes, restaurants, hotels, and individual customers.
Sales play a crucial role in Coffee Planet's operations. The company actively engages in marketing and sales activities to drive revenue and expand its customer base. Through strategic partnerships and distribution channels, Coffee Planet ensures its products are accessible to a wide range of consumers.
To effectively manage its operations and ensure future growth, Coffee Planet relies on monthly forecasts. These forecasts help the company anticipate demand, plan inventory levels, and allocate resources efficiently. By analyzing market trends, customer preferences, and historical data, Coffee Planet can make informed decisions about production volumes, product assortments, and promotional campaigns.
Production plans are essential for Coffee Planet to meet customer demand while maintaining product quality and consistency. The company carefully plans its roasting and packaging processes to ensure a steady supply of fresh coffee beans and packaged products. By adhering to strict quality control measures and efficient production practices, Coffee Planet strives to deliver a superior coffee experience to its customers.
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Suppose Link deposits $15,000 into an account earning 7.285 percent interest, compounded monthly. How many years (rounded to one decimal place - for example, 32.1843 year = 32.2) will it take for Link 's account to be worth $50,000?
It will take approximately 12.2 years for Link's account to be worth $50,000.
To find out how many years it will take for Link's account to be worth $50,000, we can use the compound interest formula:
A = P(1 + r/n)^(nt)
Where:
A = Final amount ($50,000)P = Principal amount ($15,000)r = Annual interest rate (7.285% or 0.07285)n = Number of times interest is compounded per year (12 for monthly compounding)t = Number of yearsSubstituting the given values, we have:
$50,000 = $15,000(1 + 0.07285/12)^(12t)
Dividing both sides of the equation by $15,000, we get:
3.333333333 = (1.0060708333333333)^(12t)
To solve for t, we need to take the natural logarithm (ln) of both sides:
ln(3.333333333) = ln(1.0060708333333333)^(12t)
Using logarithm properties, we can bring the exponent down:
ln(3.333333333) = 12t * ln(1.0060708333333333)
Now, we can solve for t by dividing both sides by 12 * ln(1.0060708333333333):
t = ln(3.333333333) / (12 * ln(1.0060708333333333))
Calculating this using a calculator or computer software, we find that t is approximately 12.2 years (rounded to one decimal place).
Therefore, it will take approximately 12.2 years for Link's account to be worth $50,000.
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You may need to use the appropriate appendix table to answer this question.
Given that z is a standard normal random variable, find z for each situation. (Round your answers to two decimal places.)
(a) The area to the left of z is 0.9750.
(b) The area between 0 and z is 0.4750.
(c) The area to the left of z is 0.7486.
(d) The area to the right of z is 0.1210.
(e) The area to the left of z is 0.7088.
(f) The area to the right of z is 0.2912.
To find the values of z for each situation, we can use a standard normal distribution table or a calculator with a built-in function for the standard normal distribution. Here are the calculations:
(a) The area to the left of z is 0.9750.
Using a standard normal distribution table or a calculator, we find that z ≈ 1.96.
(b) The area between 0 and z is 0.4750.
To find the z-value for an area of 0.4750, we need to find the z-value for half of this area. Half of 0.4750 is 0.2375. Using a standard normal distribution table or a calculator, we find that z ≈ 0.73.
(c) The area to the left of z is 0.7486.
Using a standard normal distribution table or a calculator, we find that z ≈ 0.69.
(d) The area to the right of z is 0.1210.
Since the area to the right is given, we need to find the z-values for the area to the left of 1 - 0.1210 = 0.8790. Using a standard normal distribution table or a calculator, we find that z ≈ 1.17.
(e) The area to the left of z is 0.7088.
Using a standard normal distribution table or a calculator, we find that z ≈ 0.54.
(f) The area to the right of z is 0.2912.
Since the area to the right is given, we need to find the z-value for the area to the left of 1 - 0.2912 = 0.7088. Using a standard normal distribution table or a calculator, we find that z ≈ -0.54.
Rounding the values to two decimal places, the solutions are:
(a) z ≈ 1.96
(b) z ≈ 0.73
(c) z ≈ 0.69
(d) z ≈ 1.17
(e) z ≈ 0.54
(f) z ≈ -0.54
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1. What is the trade-off represented by this PPF? 2. Which point or points are attainable? 3. Which point or points are efficient? 4. Which point or points are inefficient?
The trade-off represented by the PPF (Production Possibility Frontier) is the concept of scarcity and the need to allocate resources between different goods or services, The points on or inside the PPF are attainable, The points on the PPF boundary are efficient and Points inside the PPF are inefficient.
It shows the maximum output of one good that can be produced given the production level of another good, assuming all resources are fully utilized and efficiently allocated. The PPF represents the trade-off between producing one good over another, as resources are limited and must be allocated between competing uses.
These points represent different combinations of goods that can be produced using available resources and technology. Points on the PPF boundary represent efficient allocation of resources, while points inside the PPF indicate underutilization of resources or inefficiency in production.
These points represent the maximum output achievable given the available resources and technology. Any point on the PPF boundary indicates the optimal allocation of resources to produce a combination of goods without waste.
These points represent an underutilization of resources or inefficient allocation of resources. It indicates that the economy is not maximizing its production potential and could produce more of one or both goods without sacrificing the production of the other.
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Kyoko spends all of her money on comic books and mandarins. In 2012 , she eamed $14.00 per hour, the price of a comic book was $7.00, and the price of a mandarin was $1.00. Which of the following give the nominal value of a variable? check alf that apply.
a. Kyoko's wage is 2 comic books per hour in 2012 . b. The price of a mandarin is 0.14 comic books in 2012 .
c. Kyoko's wage is $14.00 per hour in 2012 :
The nominal value of a variable refers to its stated or current value without adjusting for inflation or other factors. Based on the given information, the following options provide the nominal value of a variable: Kyoko's wage is $14.00 per hour in 2012: This statement directly states the wage amount without any adjustments.
Please note that options a and b do not provide the nominal value of a variable. Option a states Kyoko's wage in terms of comic books per hour, which is a relative measure and not a specific monetary value. Option b compares the price of a mandarin to the price of a comic book, which is also a relative measure and not a specific monetary value.
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Does the cause of action need to fulfill the "element" / have evidence to be a cause of action? such as the plaintiff is suing the defendant for assault, if there is no physical damage to the plaintiff, then is no cause of action/ or not. Please explain.
The presence of physical damage is not always necessary to establish a cause of action like assault. The key elements are the defendant's intentional act and the plaintiff's reasonable apprehension of harm.
In the case of assault, physical damage is not a prerequisite for a cause of action. Instead, the focus is on the intentional act of the defendant and the reasonable fear or apprehension experienced by the plaintiff. The law recognizes that the threat of harm or the fear alone can be sufficient to support an assault claim.
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To encourage investment in the country, the New Zealand government is offering loans at a favourable rate to foreign investors. The government is willing to provide a NZD 10 million loan at a rate of 5%, although the market interest rate is 14%. Assuming the loan is paid off in equal annual instalments over a 5 year-period and interest is paid on the remaining principal value, what is the (before-tax) value of this interest subsidy?
(Tip: filling out the table below will help you to find the final answer.
YEAR
Principal
Interest Diff.
Present Value
Total NPV
1
2
3
4
5
The (before-tax) value of the interest subsidy for the NZD 10 million loan provided by the New Zealand government at a rate of 5% is approximately NZD 2,474,773.
To calculate the (before-tax) value of the interest subsidy, we need to compare the interest paid on the loan at the market rate of 14% with the interest paid at the subsidized rate of 5% over the 5-year period.
Using the equal annual installment method, we can calculate the principal and interest payments for each year. The principal for each year remains constant at NZD 10 million divided by 5, which is NZD 2 million.
Year 1:
Interest at market rate: NZD 2 million × 14% = NZD 280,000
Interest at subsidized rate: NZD 2 million × 5% = NZD 100,000
Interest difference: NZD 280,000 - NZD 100,000 = NZD 180,000
Present value of interest difference: NZD 180,000 / (1 + 14%)^1 = NZD 157,894.74
Years 2-5:
The principal remains the same at NZD 2 million for each year.
The interest difference and present value of the interest difference for each year are as follows:
Year 2:
Interest difference: NZD 280,000 - NZD 100,000 = NZD 180,000
Present value of interest difference: NZD 180,000 / (1 + 14%)^2 = NZD 138,121.69
Year 3:
Interest difference: NZD 280,000 - NZD 100,000 = NZD 180,000
Present value of interest difference: NZD 180,000 / (1 + 14%)^3 = NZD 121,051.67
Year 4:
Interest difference: NZD 280,000 - NZD 100,000 = NZD 180,000
Present value of interest difference: NZD 180,000 / (1 + 14%)^4 = NZD 106,140.93
Year 5:
Interest difference: NZD 280,000 - NZD 100,000 = NZD 180,000
Present value of interest difference: NZD 180,000 / (1 + 14%)^5 = NZD 93,564.07
Total NPV (Net Present Value): NZD 157,894.74 + NZD 138,121.69 + NZD 121,051.67 + NZD 106,140.93 + NZD 93,564.07 = NZD 616,773.10
Therefore, the (before-tax) value of the interest subsidy is approximately NZD 616,773.10.
The (before-tax) value of the interest subsidy provided by the New Zealand government for the NZD 10 million loan at a rate of 5% over a 5-year period is approximately NZD 616,773.10. This subsidy aims to encourage foreign investment in the country by offering a more favorable interest rate compared to the market rate.
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What is Data Democratization?
Being able to share data with all members of the organization
The ability to gather data from all relevant sources
Data democratization is a process that aims to connect data from various sources efficiently and quickly so that anyone in your organization can access it at any given moment
None of the answers are correct
Data democratization refers to the process of making data accessible and available to all members of an organization. It involves breaking down data silos and enabling individuals across different departments and levels of an organization to access, analyze, and utilize data for decision-making and problem-solving purposes.
Data democratization aims to remove barriers and restrictions that limit data access and empower individuals to explore and derive insights from data without requiring specialized technical skills or relying solely on data specialists or IT departments. By promoting data access and literacy throughout the organization, data democratization fosters a culture of data-driven decision making, collaboration, and innovation.
In summary, data democratization involves making data widely accessible within an organization, allowing individuals to leverage data to make informed decisions and drive organizational performance.
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