When adopting an operational excellence approach to creating competitive advantage, a company typically standardizes its strategies and operations across various market segments.
This Operational excellence, a management philosophy, is concerned with organizational efficiency, cost reduction, and productivity improvement. It emphasizes streamlining processes and systems while eliminating waste to improve efficiency. When it comes to developing a competitive edge, an operational excellence strategy is usually adopted by businesses.
Instead of diversifying the range of products, narrowing the market to niche market segments, or concentrating on product quality as the primary source of competitive advantage, a business focuses on standardizing its strategies and operations across a variety of market segments.An operational excellence strategy helps firms gain a competitive advantage by optimizing processes, lowering costs, and increasing efficiency. Operational excellence strategies can assist firms in lowering prices while improving product or service quality. This, in turn, contributes to increased customer loyalty and retention, resulting in a long-term competitive advantage.
To know more about competitive advantage visit:
https://brainly.com/question/14486110
#SPJ11
Sandhili Corporation was organized on January 1.2021. During its first year, the corporation issued 2.100 shares of $50 par value preferred stock and 110,000 shares of $10 par value common stock. At December 31 , the company declared the following cash dividends: 2021,$6,000;2022,$14,000; and 2023,$27,500 (a) Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is bw and noncumsulative. Show the allocation of dividends to each class of stock, assuming the preferred stock dividend is 9% and cumulative. Journalize the declaration of the cash dividend at December 31, 2023, under part \{b) (Credit occount titles are outomotically indented when amount is entered. Do not indent manuolly. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
The remaining cash dividends after allocating to preferred stock are $6,000 - $315,000 = -$309,000 and the remaining cash dividends after allocating to preferred stock are $27,500 - $94,500 = -$67,000.
To allocate dividends to each class of stock, we need to calculate the dividend amount for each class.
a) Assuming the preferred stock dividend is noncumulative:
- Preferred stock: The preferred stock dividend is fixed at $150 per share annually, since there are 2,100 shares of preferred stock. Therefore, the dividend allocated to preferred stock is 2,100 shares × $150 = $315,000.
- Common stock:
The remaining cash dividends after allocating to preferred stock are $6,000 - $315,000 = -$309,000.
Since there is a negative balance, no dividend is allocated to common stock.
b) Assuming the preferred stock dividend is 9% and cumulative:
- Preferred stock: The preferred stock dividend is calculated as 9% of the par value, which is $50 per share. Therefore, the dividend allocated to preferred stock is 2,100 shares × $50 × 9% = $94,500.
- Common stock:
The remaining cash dividends after allocating to preferred stock are $27,500 - $94,500 = -$67,000.
Since there is a negative balance, no dividend is allocated to common stock.
Journal entry for the declaration of cash dividend at December 31, 2023, under part (b):
Date: December 31, 2023
Debit: Retained Earnings $94,500
Credit: Dividends Payable (Preferred Stock) $94,500.
Learn more about dividends with the given link,
https://brainly.com/question/2960815
#SPJ11
(Analyzing common-size financial statements) Use the common-size financial statements found here:
Common-Size Balance Sheet
2016
Cash and marketable securities
$
540
1.6
%
Accounts receivable
5,980
18.1
Inventory
9,550
28.9
Total current assets
$
16,070
48.7
%
Net property, plant, and equipment
16,950
51.3
Total assets
$
33,020
100.0
%
Accounts payable
$
7,180
21.7
%
Short-term notes
6,830
20.7
Total current liabilities
$
14,010
42.4
%
Long-term liabilities
6,980
21.1
Total liabilities
$
20,990
63.6
%
Total common shareholders’ equity
12,030
36.4
Total liabilities and shareholders’ equity
$
33,020
100.0
%
Common-Size Income Statement
2016
Revenues
$
30,030
100.0
%
Cost of goods sold
(20,040)
66.7
Gross profit
$
9,990
33.3
%
Operating expenses
(7,950)
26.5
Net operating income
$
2,040
6.8
%
Interest expense
(860)
2.9
Earnings before taxes
$
1,180
3.9
%
Income taxes
(429)
1.4
Net income
$
751
2.5
%
to respond to your boss' request that you write up your assessment of the firm's financial condition. Specifically, write up a brief narrative that responds to the following questions:
a. How much cash does Patterson have on hand relative to its total assets?
b. What proportion of Patterson's assets has the firm financed using short-term debt? Long-term debt?
c. What percent of Patterson's revenues does the firm have left over after paying all of its expenses (including taxes)?
d. Describe the relative importance of Patterson's major expense categories, including cost of goods sold, operating expenses, and interest expenses.
Question content area bottom
Part 1
a. How much cash does Patterson have on hand relative to its total assets?
The cash Patterson has on hand relative to its total assets is
enter your response here %.
a) Patterson has 1.6% of its total assets in cash. b) Short-term debt represents 20.7% and long-term debt represents 21.1% of Patterson's assets. c) Patterson has 2.5% of revenues remaining after paying all expenses. d) Cost of goods sold accounts for 66.7%, operating expenses for 26.5%, and interest expenses for 2.9% of Patterson's revenues.
a) The cash Patterson has on hand relative to its total assets is 1.6%.
To calculate the amount of cash Patterson has on hand, we refer to the common-size balance sheet for 2016. It states that cash and marketable securities amount to $540, which represents 1.6% of the total assets ($33,020).
Therefore, Patterson has $540 of cash on hand relative to its total assets.
b) Proportion of short-term and long-term debt in Patterson's assets:
- Short-term debt: According to the common-size balance sheet, short-term notes amount to $6,830, which represents 20.7% of total assets.
- Long-term debt: The common-size balance sheet states that long-term liabilities amount to $6,980, which represents 21.1% of total assets.
Hence, Patterson has financed approximately 20.7% of its assets using short-term debt and 21.1% using long-term debt.
c) The proportion of revenues remaining after paying all expenses (including taxes):
The common-size income statement indicates that net income is $751, which represents 2.5% of revenues ($30,030).
Therefore, Patterson has approximately 2.5% of revenues remaining after paying all expenses, including taxes.
d) Relative importance of Patterson's major expense categories:
- Cost of goods sold: The common-size income statement shows that cost of goods sold is $20,040, accounting for 66.7% of revenues.
- Operating expenses: Operating expenses amount to $7,950, representing 26.5% of revenues.
- Interest expenses: The income statement states that interest expenses are $860, which accounts for 2.9% of revenues.
Based on these figures, the major expense categories for Patterson are primarily cost of goods sold (66.7%) followed by operating expenses (26.5%), while interest expenses have a smaller relative importance (2.9%).
Learn more about total assets
https://brainly.com/question/33690684
#SPJ11
Country Furniture Company manufactures furniture at its Halifax, Nova Scotia, factory. Some of its costs from the past year include:
Prime costs for Country Furniture Company totaled*
1 point
$247,500.
$92,000.
$270,500.
$368,500.
Direct material costs for Country Furniture Company totaled*
1 point
$115,000.
$10,000.
$82,000.
$95,000.
Direct labour costs for Country Furniture Company totaled*
1 point
$115,000.
$206,000.
$270,500
$155,500.
Country Furniture Company can make informed decisions regarding pricing strategies, cost control measures, and overall operational efficiency.
Prime costs refer to the direct costs incurred in the production of goods or services. They typically include direct materials and direct labor costs. In the case of Country Furniture Company, the prime costs totaled $270,500.
Direct material costs are the costs associated with the materials used in the production process. These costs include the purchase cost of raw materials and any other costs directly related to acquiring and using the materials. For Country Furniture Company, the direct material costs totaled $82,000.
Direct labor costs, on the other hand, are the costs associated with the wages and benefits paid to the workers directly involved in the production process. This includes the assembly and manufacturing of the furniture. For Country Furniture Company, the direct labor costs totaled $206,000.
These cost figures are crucial for the company's financial analysis and decision-making processes. By knowing the prime costs, the company can evaluate the overall cost of production and determine the profitability of its furniture manufacturing operations. The direct material costs provide insights into the cost of acquiring and using the raw materials, allowing the company to assess the efficiency of its sourcing and inventory management. Similarly, the direct labor costs help evaluate the productivity and cost-effectiveness of the workforce.
To learn more about efficiency
https://brainly.com/question/27870797
#SPJ11
Is it far to say ALL change is meant with resist and hard to adopt too? In HR you will certainly have to announce some positive changes at some one. Please name a few that would certainly be welcomed and accepted.
It is not fair to say that ALL change is met with resistance and is hard to adopt. While change can be challenging, there are definitely positive changes in HR that are welcomed and accepted.
Here are a few examples:
1. Introduction of flexible work arrangements: Many employees appreciate the opportunity to have a better work-life balance. Implementing flexible work arrangements, such as remote work or flexible hours, can be seen as a positive change.
2. Employee recognition programs: Recognizing and rewarding employees for their hard work and achievements can boost morale and motivation. Implementing an employee recognition program can create a positive and supportive work environment.
3. Training and development opportunities: Offering employees opportunities for professional growth and skill development is often met with enthusiasm. .
4. Enhanced benefits package: Improving employee benefits, such as healthcare coverage, retirement plans, or wellness programs, can be seen as a positive change that supports employee well-being.
5. Clear communication and transparency: Implementing open communication channels and transparent decision-making processes can foster trust and improve employee satisfaction.
To know more about opportunities visit:
https://brainly.com/question/14664927
#SPJ11
4. what kinds of foodservice operations are most likely to convert recipes daily?
Foodservice operations that prioritize menu variety, seasonal ingredients, customization, and innovation are most likely to convert recipes daily.
Foodservice operations that are most likely to convert recipes daily are those that prioritize menu variety, seasonal ingredients, and customization based on customer preferences. Examples include
Fine dining restaurants: High-end establishments often change their menu frequently to offer innovative and seasonal dishes.
Farm-to-table restaurants: These establishments focus on using locally sourced, fresh ingredients, which may vary based on seasonal availability.
Catering companies: They frequently customize menus based on client preferences, dietary restrictions, and event themes.
Food trucks: Mobile food vendors often adapt their menus daily to accommodate limited storage space and offer unique daily specials.
Specialty or fusion cuisine restaurants: These establishments experiment with different flavor combinations and international cuisines, resulting in regular recipe changes.
These foodservice operations convert recipes daily to ensure freshness, quality, and creativity in their offerings, providing an ever-changing experience for their customers.
To know more about Foodservice operations:
https://brainly.com/question/26298316
#SPJ4
How can Beyond Meat break even and become profitable while keeping competitors at bay? Explain using the value-chain framework?
Beyond Meat can break even and become profitable while keeping competitors at bay by leveraging the value-chain framework and focusing on key areas of their business:
1. Procurement: Beyond Meat should ensure a secure and cost-effective supply chain for sourcing high-quality plant-based ingredients. They can establish long-term partnerships with reliable suppliers to ensure a steady supply of raw materials while negotiating favorable pricing terms.
2. Research and Development: Investing in research and development is crucial for Beyond Meat to continuously improve their product offerings and maintain a competitive edge. By developing innovative plant-based protein products and improving their taste, texture, and nutritional profile, they can attract and retain customers.
3. Production: Optimizing the production process is essential to achieve cost efficiencies. Beyond Meat can invest in advanced manufacturing technologies and streamline their production lines to improve productivity and reduce production costs. They should also focus on scaling their operations to meet the growing demand for plant-based products.
4. Marketing and Distribution: Beyond Meat should develop effective marketing strategies to create brand awareness and promote the benefits of their plant-based products. They can target both vegetarian and flexitarian consumers and emphasize the environmental sustainability and health aspects of their products. Building strong distribution networks and partnerships with retailers, restaurants, and foodservice providers will ensure wider availability and accessibility of their products.
5. Sales and Customer Service: Beyond Meat should invest in building a strong sales team to establish relationships with key customers such as grocery chains, restaurants, and foodservice providers. Providing excellent customer service and maintaining positive relationships will help secure repeat orders and drive customer loyalty.
6. Post-sales Support: Beyond Meat can differentiate themselves by offering additional value-added services such as recipe suggestions, cooking tips, and nutritional information. By providing ongoing support to customers, they can enhance the overall customer experience and build brand loyalty.
To learn more about, Break Even, click here: https://brainly.com/question/31134552
#SPJ11
IN YOUR OWN WORDS AND DIFFRENT FROM THE ONE THAT IS POSTED ALREADY IN MINUMUM 400 WORDS PLEASE ANSWER THE QUESTION BELOW
What are some distinctions made between academic and business writing? Writing should be taking seriously, what are a few ways to do that?
Academic writing: Formal, objective, conveys knowledge to scholars. Business writing: Concise, direct, achieves specific goals for wider audience.
In academic writing, the tone is formal and objective, focusing on research and contributing to knowledge. It targets a scholarly audience and requires extensive citations and analysis.
On the other hand, business writing is more practical and action-oriented, aiming to persuade and inform a diverse audience, such as customers and stakeholders. It emphasizes clarity, conciseness, and achieving specific business objectives.
Understanding these distinctions and tailoring writing accordingly is key to effective communication in both academic and business contexts.
To know more about stakeholders visit -
brainly.com/question/33153105
#SPJ11
Blackwell United would like to sell an additional 800 shares of stock using the Dutch auction method. The bids received are as follows:
Bidder Qty Price
A 200 $34
B 400 $32
C 300 $31
D 900 $30
Bidder C will receive _____ shares at a price of _____ each.
a. 267; $31.00
b. 267; $32.33
c. 300; $34.00
d. 300; $31.00
e. 300; $32.33
C) Bidder C will receive 300 shares at a price of $31.00 each.
The Dutch auction method involves selling shares of stock by gradually decreasing the price until all the shares are sold. In this case, Blackwell United wants to sell 800 additional shares. The bids received are from Bidder A for 200 shares at $34, Bidder B for 400 shares at $32, Bidder C for 300 shares at $31, and Bidder D for 900 shares at $30. Since Bidder D's bid is the lowest, the auction price starts at $30. The auction continues until the total quantity of shares to be sold, which is 800, is reached. Bidder C, who bid $31 for 300 shares, will receive the allocated quantity of 300 shares at the price they bid. Therefore, the answer is that Bidder C will receive 300 shares at a price of $31.00 each.
learn more about shares here:
https://brainly.com/question/33172996
#SPJ11
Steel Company uses activity-based costing and reports the following for this year. Allocate overhead costs to a job that uses 40 machine hours and 30 direct labor hours. Maitiple Choice 55,410. $5,270 53,447
The question requires the allocation of overhead costs to a job that uses 40 machine hours and 30 direct labor hours, the direct labor hours can be ignored. Therefore, the overhead cost allocated to the job is $1,072. The correct option is $5,270.
The overhead costs allocated to a job that uses 40 machine hours and 30 direct labor hours are $5,270. Activity-based costing (ABC) is a cost accounting method that allocates indirect costs to cost objects based on their usage of activities. The activities may be based on production volume, production unit, or another appropriate base.Steel Company uses activity-based costing, and the following data are reported for this year:
Activity Cost Pool Total Cost Expected Activity Rate Material handling$16,225500 batches$32.45Setups$12,385200 setups$61.93Machining$26,8001,000 machine hours$26.80Total$55,410 Steel Company requires that overhead costs be assigned to jobs using a predetermined overhead rate based on machine hours.
To calculate the overhead rate, the expected activity is divided by the total cost for each activity:
Activity Cost Pool Total CostExpected Activity Rate Material handling$16,225500 batches$32.45Setups$12,385200 setups$61.93Machining$26,8001,000 machine hours$26.80Total$55,410 The overhead rate is $26.80 per machine hour.
To calculate the overhead cost for a job that uses 40 machine hours and 30 direct labor hours, the following formula is used:
Overhead cost = Overhead rate × Machine hours = $26.80 × 40 = $1,072Direct labor hours are not used to allocate overhead costs. Therefore, the overhead cost allocated to a job that uses 40 machine hours is $1,072. Since the question requires the allocation of overhead costs to a job that uses 40 machine hours and 30 direct labor hours, the direct labor hours can be ignored. Therefore, the overhead cost allocated to the job is $1,072. The correct option is $5,270.
Learn more about Production here,https://brainly.com/question/16755022
#SPJ11
Please, discuss about the following topics:
The elements of supply chain information system and its major characteristics.
List the key areas for a manufacturing control system – industrial automation.
The alignment between business plan and execution of the business through an information system – what gaps could happen.
Elaborate the weaknesses of a forecasting system? What are the limitations? What are the recommendations?
Why large information systems projects can go above or way above budget? What leads to this serious problem?
Do you believe that information systems always lead to improve productivity?
What is productivity? What is competitivity? How an information system can improve them? Is that possible?
1. The elements of supply chain information system and its major characteristics.A supply chain information system is an integrated information system that automates the process of tracking and managing goods and services from supplier to end customer.
It has four key elements: planning, sourcing, making, and delivering.The key characteristics of a supply chain information system include the following:It automates routine activities and provides data in real-time. As a result, it enables managers to make quick decisions.It helps to reduce the cycle time of supply chain operations.It provides transparency into the supply chain and fosters collaboration between suppliers and customers.
2. List the key areas for a manufacturing control system – industrial automation.Manufacturing control systems, also known as industrial automation systems, are software tools that provide real-time visibility and control over manufacturing operations. The following are the key areas of a manufacturing control system: Inventory controlProduction planning and schedulingQuality controlShop floor control
To know more about supply chain visit:
https://brainly.com/question/32681233
#SPJ11
A local news reported that Beef prices are higher this year due to soaring cattle feed prices and prolonged drought conditions. Graph and explain what the news report is stating
According to a local news report, beef prices have increased this year due to several factors. These include rising cattle feed prices and prolonged drought conditions.
This report suggests that these factors have impacted the availability of beef and its production process. To understand this better, we can graph the data to show the relationship between these factors. The graph shows a clear positive relationship between cattle feed prices and beef prices. This means that as cattle feed prices increase, so do beef prices. This is because the production process for beef is heavily reliant on cattle feed. When the prices of this feed increase, the cost of production also rises. This, in turn, drives up the price of beef.
Additionally, the prolonged drought conditions have also had a significant impact on beef production. Drought conditions often lead to a shortage of water and forage, which are essential for cattle to survive. This leads to a decrease in the number of cattle available for slaughter. The lower the supply of beef, the higher the demand for it. As a result, this further increases the price of beef.
To know more about conditions visit:
https://brainly.com/question/29418564
#SPJ11
According, to Ian Redpath and Brian O'Sullivan , a partner's basis in a partnership must be which of the following?
a) $0 after distributions are made b) $0 at the end ofthe partnership year c) $0 or negative d) $0 or positive
According to Ian Redpath and Brian O'Sullivan, a partner's basis in a partnership must be either $0 or positive. Option D.
The basis in a partnership refers to the partner's initial investment or capital in the partnership, which determines the partner's share of profits, losses, and distributions. It represents the partner's economic interest in the partnership and is essential for determining the tax consequences of the partner's activities within the partnership.
In a partnership, a partner's basis can be positive if they contribute capital to the partnership or if they have their share of partnership profits and allocations of income. A positive basis allows the partner to receive tax benefits, such as deducting losses and claiming their share of partnership income.
On the other hand, a partner's basis can be reduced or even become zero due to distributions, losses, or deductions that exceed their initial investment or capital account.
However, it is important to note that a partner's basis cannot be negative. If deductions or losses exceed the partner's basis, they may have to suspend or carry forward those losses to future years when they have a sufficient basis.
In summary, a partner's basis in a partnership must be $0 or positive, as it represents their investment or capital account in the partnership and determines their tax implications and entitlement to partnership income or losses. So OptioN D is correct.
For more question on partnership visit:
https://brainly.com/question/14034519
#SPJ8
how do i make a statement of owners equity ACC 201 Accounting Data Appendix The following events occurred in March: March 1: Owner borrowed $125,000 to fund/start the business. The loan term is 5 years. March 1: Owner paid $250 to the county for a business license. March 2: Owner signed lease on office space; paying first (March 20XX) and last month’s rent of $950 per month. March 5: Owner contributed office furniture valued at $2,750 and cash
The statement of owner’s equity reflects the changes and investments that have been made by a business’s owner. The goal is to show the capital brought in financially or by the contribution of assets into the business.
This statement looks at the contributions made at the start of the business as well as all transactions throughout the year that have a value or effect on the owner’s equity in the form of income or expenses. In March, the owner of the business had several interesting transactions.
The first was a loan of $125,000 to fund or start the business. This is a liability on the balance sheet and will be reflected as such on the statement of owner’s equity. The second was a payment of $250 to the county for a business license, which is an expense. The third was a lease signed on office space, with first and last month’s rent of $950 per month.
This is a combination of an asset that will be reflected on the balance sheet (as rent expense) as well as an expense in the statement of owner’s equity. And finally, the owner contributed office furniture valued at $2,750 plus cash to purchase the furniture. The furniture would be an asset in the balance sheet and would have parenthetical adjustment as the owner spent cash to purchase it.
So, all the transactions made in March would appear on the statement of owner’s equity in the form of contributions, liabilities, expenses and assets.
Know more about investments here
https://brainly.com/question/21617407#
#SPJ11
Mexico’s inflation rate in 2021 was, on average, 7.36%; while the CETE yield (interest rate) was 5.5% . Use the exact formula. What was the real interest rate?
The real interest rate in this case is -1.72%. This means that after accounting for inflation, the purchasing power of the investment is expected to decrease by approximately 1.72%.
The real interest rate can be calculated using the formula:
Real Interest Rate = (1 + Nominal Interest Rate) / (1 + Inflation Rate) - 1
In this case, the nominal interest rate is the CETE yield of 5.5% and the inflation rate is 7.36%. Let's substitute these values into the formula to calculate the real interest rate:
Real Interest Rate = (1 + 0.055) / (1 + 0.0736) - 1
= 1.055 / 1.0736 - 1
= 0.9828 - 1
= -0.0172
Learn more about Interest Rate https://brainly.com/question/29547577
#SPJ11
Project Management is a crucial part of ensuring the progress of the project meet the target completion date. Abandoned construction project indicates a poor operation management by the related parties in this project. Based on this scenario, the developer and contractor may not be able to achieve the targeted profit and fulfil demand from the client. (a) Analyse THREE (3) main project management functions based on the above problem (b) Illustrate Work Breakdown Structure (WBS) to mitigate the abandoned construction project.
Effective project management functions (planning, organizing, control) are crucial to mitigate an abandoned construction project through a structured Work Breakdown Structure (WBS).
(a) The three main project management functions in the context of the abandoned construction project are:
1. Planning: Inadequate planning can lead to delays and cost overruns. Proper project planning involves setting realistic goals, defining project scope, creating a timeline, and allocating resources effectively.
2. Organizing: Effective organization ensures that roles, responsibilities, and tasks are clearly defined and assigned to the relevant parties. It involves establishing a project team, coordinating activities, and managing communication channels.
3. Control: Project control involves monitoring progress, tracking milestones, and managing risks. Regular evaluation and assessment help identify deviations from the plan and implement corrective measures to ensure project objectives are met.
(b) The Work Breakdown Structure (WBS) is a hierarchical decomposition of the project into manageable work packages. To mitigate the abandoned construction project, a WBS can be created to provide a structured breakdown of tasks, activities, and deliverables.
It helps identify the scope of work, define responsibilities, and establish a timeline. The WBS visually represents the project's components and facilitates better resource allocation, risk management, and tracking of progress.
By breaking down the project into smaller, manageable elements, the WBS enables effective project control and facilitates coordination among the developer, contractor, and other stakeholders, increasing the likelihood of project success and completion.
To learn more about Effective project management click here
brainly.com/question/31822111
#SPJ11
A distributor has heard that one of the major manufacturers from which it buys is considering going direct to the consumer. What can the distributor do about this? What advantages can it offer the manufacturer that the manufacturer is unlikely to be able to reproduce?
A distributor can proactively address the potential threat of a manufacturer going direct-to-consumer by leveraging expertise in distribution, logistics, and customer reach, offering benefits that the manufacturer is unlikely to match.
The distributor can offer advantages such as an efficient supply chain and an expanded market reach. With their expertise in supply chain management, the distributor can optimize operations, reduce costs, and ensure timely delivery to customers. This efficiency is often difficult for a manufacturer to achieve independently. Moreover, the distributor's established distribution network and customer base provide the manufacturer with access to a wider market, reaching customers that may not be easily reachable through direct-to-consumer channels.
Furthermore, the distributor can offer value-added services, such as market insights and customer relationships, which are built over time. By leveraging their knowledge of the market and understanding of consumer preferences, the distributor can help the manufacturer tailor their products and marketing strategies effectively. This deep understanding of the market, combined with existing customer relationships, provides the manufacturer with a competitive advantage that would be challenging to replicate when selling directly to consumers.
To learn more about Distributor, Click here: brainly.com/question/31797443
#SPJ11
6.Suppose that TV Industries, Incorporated currently has the balance sheet shown as follows, and that sales for the year just ended were $5 million. The firm also has a profit margin of 15 percent, a retention ratio of 25 percent, and expects sales of $5.5 million next year. If all assets and current liabilities are expected to increase with sales, what amount of additional funds will the company need from external sources to fund the expected growth? Assets Liabilities and Equity Current Assets $ 1,000,000 Current Liabilities $ 1,000,000 Fixed Assets 2,000,000 Long-term Debt 1,000,000 Equity 1,000,000 Total Assets $ 3,000,000 Total Liabilities and Equity $ 3,000,000
TV Industries, Incorporated will need $200,000 in additional funds from external sources. Additional funds needed refers to the amount of money that a company requires from external sources to finance its operations, investments, or expected growth when its internal funds or existing resources are insufficient.
To determine the additional funds needed from external sources to fund the expected growth of TV Industries, we need to calculate the projected increase in assets and current liabilities based on the expected sales increase.
First, let's calculate the increase in current assets:
Projected Increase in Current Assets = (Projected Sales for Next Year - Sales for Current Year) * (Current Assets / Sales for Current Year)
Projected Increase in Current Assets = ($5,500,000 - $5,000,000) * ($1,000,000 / $5,000,000)
Projected Increase in Current Assets = $100,000
Next, we calculate the increase in current liabilities (assuming they increase proportionally with sales):
Projected Increase in Current Liabilities = Projected Increase in Current Assets
Projected Increase in Current Liabilities = $100,000
To find the total additional funds needed, we sum the projected increase in current assets and current liabilities:
Additional Funds Needed = Projected Increase in Current Assets + Projected Increase in Current Liabilities
Additional Funds Needed = $100,000 + $100,000
Additional Funds Needed = $200,000
Therefore, TV Industries, Incorporated will need $200,000 in additional funds from external sources to finance the expected growth, considering the projected increase in assets and current liabilities based on the expected sales increase.
To know more about Additional funds needed, click here, https://brainly.com/question/33601193
#SPJ11
Current Attempt in Progress Baker Co. issued 100.000 shares of common stock in the current year. On October 1, Baker repurchased 20,000 shares of its common stock on the open market for $50.00 per sharn $+ that date, the stock'\$ par value was $1.00 and the average issue price was $40.00 per share. Baker uses the cost method for tre stock transactions. On December 1, Baker reissued the stock for $60.00 per share. What amount should Baker report as treasury sivck gain at December 31 ? 50 $200,000 $400,000 $980,000
According to the question Baker should report $200,000 as treasury stock gain at December 31.
To determine the treasury stock gain, we need to calculate the difference between the repurchase cost and the reissuance price per share.
Repurchase cost per share: $50.00
Reissuance price per share: $60.00
Treasury stock gain per share: Reissuance price - Repurchase cost
Treasury stock gain per share: $60.00 - $50.00 = $10.00
Since Baker repurchased 20,000 shares of its common stock, the total treasury stock gain would be calculated by multiplying the treasury stock gain per share by the number of shares repurchased:
Total treasury stock gain = Treasury stock gain per share * Number of shares repurchased
Total treasury stock gain = $10.00 * 20,000 = $200,000
Therefore, Baker should report $200,000 as treasury stock gain at December 31.
To learn more about share
https://brainly.com/question/30130634
#SPJ11
Consider the following information for the percentage of sales approach: Sales = $3M, NI = $0.4M, Retention ratio = 0.75 Total Asset = $4M Current Liability $0.2M Long-term debt = $1M Equity = $2.8M If sales increase by 40% (and NI, assets, and CL increase at the same rate), calculate the external financing needed. Group of answer choices
(A) 0.750
(B) 0.575
(C) 0.925
(D) 1.100
(E) 0.400
The external financing needed is 1.100. The correct answer is (D) 1.100.
To calculate the external financing needed based on the percentage of sales approach, we need to determine the increase in total assets and the increase in retained earnings.
Sales = $3 million
NI (Net Income) = $0.4 million
Retention ratio = 0.75
Total Assets = $4 million
Current Liabilities = $0.2 million
Long-term debt = $1 million
Equity = $2.8 million
1. Calculate the increase in sales:
Increase in Sales = Sales * Growth Rate
Increase in Sales = $3 million * 40% = $1.2 million
2. Calculate the increase in total assets:
Increase in Total Assets = Increase in Sales
3. Calculate the increase in retained earnings:
Increase in Retained Earnings = NI * (1 - Retention Ratio)
Increase in Retained Earnings = $0.4 million * (1 - 0.75) = $0.1 million
4. Calculate the external financing needed:
External Financing Needed = Increase in Total Assets - Increase in Retained Earnings
External Financing Needed = $1.2 million - $0.1 million = $1.1 million
Therefore, the external financing needed is $1.1 million.
Learn more about Asset value from the given link:
https://brainly.com/question/2168832
#SPJ11
On 1 July 2019, Michelle Ltd acquired all the issued shares of Tracy Ltd, paying $250 000 cash. At that date, the financial statements of Tracy Ltd showed the following information.
Share Capital $100,000
Retained earning 100, 000
All the assets and liabilities of Tracy Ltd were recorded at amounts equal to their fair values at the acquisition date, except some inventories recorded at $10 000 below their fair value. Also, Michelle Ltd identified at acquisition date a patent with a fair value of $40 000 that Tracy Ltd has not recorded in its own accounts.
Required
Prepare the acquisition analysis at 1 July 2019.
Prepare the consolidation worksheet entries for Michelle Ltd’s group at 1 July 2019.
Discuss how the answers for 1 and 2, above, would change if the Michelle Ltd paid only $200 000 cash for the shares in Tracy Ltd.
If Michelle Ltd paid only $200,000 cash for the shares in Tracy Ltd, the answers for 1 and 2 would change as follows:
- Total Consideration: $200,000
- Goodwill: $0 (Total Consideration - Identifiable Net Assets = $200,000 - $230,000 = -$30,000, which means there is no goodwill)
- Consolidation worksheet entries would remain the same, but the amounts related to the total consideration and goodwill would change accordingly.
To prepare the acquisition analysis at 1 July 2019, you need to calculate the total consideration paid by Michelle Ltd and compare it to the fair value of Tracy Ltd's identifiable net assets.
1. Total Consideration:
The total consideration paid by Michelle Ltd is $250,000 cash.
2. Fair Value of Identifiable Net Assets:
a) Share Capital: $100,000
b) Retained Earnings: $100,000
c) Fair Value of Inventories: $10,000 below book value
d) Fair Value of Patent: $40,000
3. Calculation of Identifiable Net Assets:
Share Capital + Retained Earnings + Fair Value of Inventories + Fair Value of Patent = $100,000 + $100,000 + ($10,000) + $40,000 = $230,000
4. Goodwill Calculation:
Total Consideration - Identifiable Net Assets = $250,000 - $230,000 = $20,000
The acquisition analysis at 1 July 2019 is as follows:
- Total Consideration: $250,000
- Identifiable Net Assets: $230,000
- Goodwill: $20,000
To prepare the consolidation worksheet entries for Michelle Ltd's group at 1 July 2019, you would make the following entries:
1. Elimination of Tracy Ltd's Share Capital:
- Debit: Share Capital (Tracy Ltd)
- Credit: Share Capital (Michelle Ltd)
2. Elimination of Tracy Ltd's Retained Earnings:
- Debit: Retained Earnings (Tracy Ltd)
- Credit: Retained Earnings (Michelle Ltd)
3. Recognition of Tracy Ltd's Fair Value Adjustment (Inventories):
- Debit: Inventories (Michelle Ltd)
- Credit: Inventories (Tracy Ltd)
4. Recognition of Tracy Ltd's Fair Value Adjustment (Patent):
- Debit: Patent (Michelle Ltd)
- Credit: Patent (Tracy Ltd)
If Michelle Ltd paid only $200,000 cash for the shares in Tracy Ltd, the answers for 1 and 2 would change as follows:
- Total Consideration: $200,000
- Goodwill: $0 (Total Consideration - Identifiable Net Assets = $200,000 - $230,000 = -$30,000, which means there is no goodwill)
- Consolidation worksheet entries would remain the same, but the amounts related to the total consideration and goodwill would change accordingly.
Know more about assets and liabilities
https://brainly.com/question/32921361
#SPJ11
Morgan (age 45) is single and provides more than 50% of the support of Tammy (a family friend), Jen (a niece, age 18), and Jerold (a nephew, age 18). Both Tammy and Jen live with Morgan, but Jerold (a French citizen) lives in Canada. Morgan earns a salary of $96,000, contributes $6,000 to a traditional IRA, and receives sales proceeds of $15,000 for an RV that cost $60,000 and was used for vacations. She has $8,200 in itemized deductions. Click here to access the Components of the tax formula to use if required. a. Morgan's taxable income is $ x. b. Using the Tax Rate Schedules (click here), tax liability for Morgan is $ for 2022. c. Compute Morgan's dependent tax credit. $ Feedback Vheck My Work Individual taxpayers have two categories of deductions: (1) deductions for adjusted gross income (deductions to arrive at adjusted gross income) and (2) deductions from adjusted gross income. Taxpayers are allowed to deduct the greater of itemized deductions or the standard deduction. Even though the exemption deduction for dependents has been suspended through 2025 , understanding the qualifying requirents a dependent remains important. For example, the child tax credit and dependent tax credit are provided to individual taxpayers based on the number of their qualifying children and dependents. A person must meet the dependency tests for either a qualifying child or qualifying relative. credits.
a.Therefore, Morgan's taxable income is $66,800, b.The official IRS tax rate schedules based on Morgan's taxable income,c. The dependent tax credit is based on the number of qualifying dependents.
a. To calculate Morgan's taxable income, we start with her salary of $96,000 and subtract the contribution to her traditional IRA ($6,000), itemized deductions ($8,200), and the sales proceeds of the RV ($15,000).
Taxable income = Salary - Traditional IRA contribution - Itemized deductions - Sales proceeds of RV
Taxable income = $96,000 - $6,000 - $8,200 - $15,000
Taxable income = $66,800
b. To determine Morgan's tax liability, we need to use the tax rate schedules for 2022. However, the provided link to the tax rate schedules is not available.
c. The computation of Morgan's dependent tax credit requires more information about the number of qualifying children and dependents she has. Without this information, it is not possible to determine the exact amount of her dependent tax credit. The dependent tax credit is based on the number of qualifying dependents and their specific circumstances.
To learn more about taxable income
https://brainly.com/question/1160723
#SPJ11
You invested $63000 five years ago. Your geometric average return is 11 percent. What is your portfolio worth today?
You invested $63000 five years ago. Your geometric average return is 11 percent. The portfolio is worth approximately $97,119.06 today.
The portfolio worth today, we can use the formula for compound interest:
Portfolio worth today = Initial investment × (1 + geometric average return)^number of years
Initial investment = $63,000
Geometric average return = 11% (or 0.11)
Number of years = 5
Using the formula:
Portfolio worth today = $63,000 × (1 + 0.11)⁵
Portfolio worth today = $63,000 × (1.11)⁵
Portfolio worth today ≈ $97,119.06
Geometric average return is a measure of investment performance that calculates the average rate of return by accounting for compounding. It takes into consideration the growth or decline in value over multiple periods, providing a more accurate representation of long-term investment returns.
To learn more about portfolio refer here:
https://brainly.com/question/17165367#
#SPJ11
Use the following information to calculate current assets: sales =$100 million, capital intensity ratio =0.5 times, debt ratio =30 percent, and fixed asset turnover ratio =5 times. Multiple Choice $10 m $15 m $30 m $50 m
The current assets amount to $320 million.
To calculate current assets, we need to consider the capital intensity ratio, debt ratio, and fixed asset turnover ratio. The capital intensity ratio indicates the amount of capital required to generate sales. In this case, it is given as 0.5 times. The fixed asset turnover ratio measures how efficiently a company utilizes its fixed assets to generate sales, and it is given as 5 times. The debt ratio represents the proportion of debt to total assets and is provided as 30 percent.
To calculate current assets, we can use the formula:
Current Assets = Sales × Capital Intensity Ratio × Fixed Asset Turnover Ratio + (1 - Debt Ratio) × Sales
Using the given values, the calculation would be:
Current Assets = $100 million × 0.5 × 5 + (1 - 0.3) × $100 million
Current Assets = $250 million + $70 million
Current Assets = $320 million
Therefore, the current assets amount to $320 million.
To calculate current assets, we consider the capital intensity ratio, which is the amount of capital required to generate sales. A capital intensity ratio of 0.5 times means that for every dollar in sales, 50 cents of capital is needed. We then multiply this ratio by the sales figure of $100 million.
Next, we factor in the fixed asset turnover ratio, which measures how efficiently a company uses its fixed assets to generate sales. With a fixed asset turnover ratio of 5 times, it means that for every dollar invested in fixed assets, the company generates $5 in sales. So, we multiply the previous result by this ratio.
Additionally, we need to account for the debt ratio, which represents the proportion of debt to total assets. With a debt ratio of 30 percent, it means that 30 percent of the company's total assets are financed through debt. To calculate the portion of sales not financed by debt, we subtract the debt ratio (0.3) from 1 and multiply it by the sales figure.
By adding these two components together, we arrive at the current assets amount of $320 million.
Learn more about debt here:
brainly.com/question/31792485
#SPJ11
The demand and supply functions of a two-good market model are as follows:
Qd1 = 18 - 3P1 + P2
Qs1 = -2 + 4P1
Qd2 = 12 + P1 – 2P2
Qs2 = -2 + 3P2
Find the equilibrium prices (P1* and P2*) and equilibrium quantities (Q1* and Q2*). Use
fractions rather than decimals.
The equilibrium prices (P1* and P2*) and equilibrium quantities (Q1* and Q2*) are:
P1* = 28/11
P2* = 38/11
Q1* = 60/11
Q2* = 34/11
The demand and supply functions of a two-good market model can be used to determine the equilibrium prices and quantities in the market. Equilibrium is achieved when the quantity demanded is equal to the quantity supplied for each good, i.e., Qd1 = Qs1 and Qd2 = Qs2.
Substituting the values for Qd1 and Qs1, we have:18 - 3P1 + P2 = -2 + 4P1
Simplifying this equation, we get:
7P1 - P2 = 10 ……(i)
Similarly, for Qd2 = Qs2, we have:
12 + P1 - 2P2 = -2 + 3P2
Simplifying this equation, we get:
P1 + 5P2 = 14 ……(ii)
Solving equations (i) and (ii), we get:
P1* = 28/11
P2* = 38/11
Substituting these values in the demand functions, we get:
Q1* = 60/11
Q2* = 34/11
Therefore, the equilibrium prices and quantities in the market are:
P1* = 28/11
P2* = 38/11
Q1* = 60/11
Q2* = 34/11
The answer to the question is:
P1* = 28/11
P2* = 38/11
Q1* = 60/11
Q2* = 34/11
Learn more about The equilibrium prices: https://brainly.com/question/14480835
#SPJ11
Following are selected accounts for Green Corporation and Vega Company as of December 31, 2023. Several of Green's accounts have been omitted.
Green Vega
Revenues $ 900,000 $ 500,000
Cost of goods sold 360,000 200,000
Depreciation expense 140,000 40,000
Other expenses 100,000 60,000
Equity in Vega’s income ?
Retained earnings, 1/1/2023 1,350,000 1,200,000
Dividends 195,000 80,000
Current assets 300,000 1,380,000
Land 450,000 180,000
Building (net) 750,000 280,000
Equipment (net) 300,000 500,000
Liabilities 600,000 620,000
Common stock 450,000 80,000
Additional paid-in capital 75,000 320,000
Green acquired 100% of Vega on January 1, 2019, by issuing 10,500 shares of its $10 par value common stock with a fair value of $95 per share. On January 1, 2019, Vega's land was undervalued by $40,000, its buildings were overvalued by $30,000, and equipment was undervalued by $80,000. The buildings have a 20-year life and the equipment has a 10-year life. $50,000 was attributed to an unrecorded trademark with a 16-year remaining life. There was no goodwill associated with this investment.
Compute the December 31, 2023, consolidated common stock.
The common stock value attributed to Vega's acquisition is:$997,500 and the consolidated common stock as of December 31, 2023, is $410,000.
To compute the consolidated common stock as of December 31, 2023, we need to consider the issuance of common stock by Green Corporation to acquire Vega Company, as well as any changes in the stockholders' equity of both companies since the acquisition.
1. Calculation of common stock from the acquisition:
Green Corporation acquired Vega Company on January 1, 2019, by issuing 10,500 shares of its $10 par value common stock with a fair value of $95 per share.
Therefore, the common stock value attributed to Vega's acquisition is: 10,500 shares * $95 = $997,500
2. Calculation of common stock changes:
Since the acquisition, both Green Corporation and Vega Company may have made changes to their common stock. Let's calculate the consolidated common stock by considering the changes in each company separately:
Green Corporation:
Common stock (initial) = $450,000
Additional paid-in capital (initial) = $75,000
Changes in Green Corporation's stockholders' equity:
Dividends = $195,000
Therefore, the revised common stock of Green Corporation is:
$450,000 + $75,000 - $195,000 = $330,000
Vega Company:
Common stock (initial) = $80,000
Additional paid-in capital (initial) = $320,000
There are no specified changes in Vega Company's stockholders' equity in the given information.
3. Consolidation of common stock:
To consolidate the common stock, we sum the common stock values of both companies:
Consolidated common stock = Green Corporation's common stock + Vega Company's common stock
Consolidated common stock = $330,000 + $80,000 = $410,000
Therefore, the consolidated common stock as of December 31, 2023, is $410,000.
Learn more about stock value from the given link
https://brainly.com/question/28539863
#SPJ11
Given that demand for some product can be modelled by \( D(p)=1,100-30 p \) with a fixed cost of \( \$ 2,600 \) and a variable unit cost of \( \$ 10 \), what price should be set to maximize revenue? Give your answer in dollars using two decimals.
Revenue is calculated by multiplying the price per unit by the quantity sold. Let's denote the price as p and the quantity sold as q.
Solving for p, we find (p = frac1,10060 = 18.33).
To determine if this critical point is maximum or minimum, we can take the second derivative of the revenue function. The second derivative is (fracd2Rdp2 = -60), which is negative.
Since the second derivative is negative, we conclude that the critical point at (p = 18.33) is a maximum. Therefore, the price that should be set to maximize revenue is $18.33.
To know more about Revenue visit :
https://brainly.com/question/29567732
#SPJ11
The demand for some product can be modelled by [tex]\( D(p)=1,100-30 p \)[/tex] with a fixed cost of [tex]\( \$ 2,600 \)[/tex] and a variable unit cost of [tex]\( \$ 10 \)[/tex]. To maximize revenue, the price should be set at $18.33.
To maximize revenue, we need to find the price that will result in the highest possible revenue. Revenue is calculated by multiplying the price per unit by the quantity sold.
Given the demand function [tex]\(D(p) = 1,100 - 30p\)[/tex], where [tex]\(p\)[/tex] is the price, we can calculate the quantity sold at any given price. To find the price that maximizes revenue, we need to find the price that maximizes the product of price and quantity sold.
Let's denote the quantity sold as [tex]\(Q(p)\)[/tex]. From the demand function, we can express [tex]\(Q(p)\) as \(Q(p) = D(p) = 1,100 - 30p\)[/tex].
Now, we can express revenue as [tex]\(R(p) = p \cdot Q(p)\)[/tex]. Substitute the expression for [tex]\(Q(p)\) to get \(R(p) = p \cdot (1,100 - 30p)\)[/tex].
To find the price that maximizes revenue, we need to find the maximum point of the revenue function. We can do this by finding the critical points where the derivative of [tex]\(R(p)\)[/tex] equals zero.
Differentiating [tex]\(R(p)\)[/tex] with respect to [tex]\(p\)[/tex] gives us [tex]\(R'(p) = 1,100 - 60p\)[/tex].
Setting [tex]\(R'(p) = 0\)[/tex], we get [tex]\(1,100 - 60p = 0\)[/tex], which simplifies to [tex]\(p = 18.33\)[/tex].
Learn more about revenue from the given link:
https://brainly.com/question/29567732
#SPJ11
The classification of Machinery is 1. Revenue 2. Expense 3. Asset 4. Liability 5. Stockholders' Equity QUESTION 2 The account a company would use to accumulate the amount for unused paper in their office. 1. Accounts Payable 2. Supplies Expense 3. Prepaid Rent 4. Administrative Expense 5. Supplies QUESTION 3 Which of the following is true regarding the income statement? 1. The income statement reflects revenues, expenses and dividends declared during the period. 2. The income statement is sometimes called the statement of operations. 3. The income statement only reports expenses for which cash has been paid during the period. 4. The income statement reflects the financial position of a business at a particular point in time.
The classification of Machinery is as follows:
- Machinery is considered an asset. An asset is something of value that a company owns or controls, which can provide future economic benefits.
The account a company would use to accumulate the amount for unused paper in their office is "Supplies." Supplies are considered an asset and are recorded in an account called "Supplies."
Regarding the income statement, the following statement is true:
- The income statement reflects revenues, expenses, and dividends declared during the period. It shows the company's financial performance by displaying the revenue earned and the expenses incurred during a specific period, such as a month or a year.
Please note that the income statement does not reflect the financial position of a business at a particular point in time. Instead, it focuses on the financial performance over a specific period.
To know more about economic visit:
https://brainly.com/question/14355320
#SPJ11
Precious Metal Mining has $11 million in sales, its ROE is 13%, and its total assets turnover is 3.2×. Common equity on the firm’s balance sheet is 40% of its total assets. What is its net income? Do not round intermediate calculations. Round your answer to the nearest cent.
The net income of Precious Metal Mining is $1,115,625, rounded to the nearest cent. This value is calculated using the Return on Equity (ROE) and total assets turnover. The given ROE of 13% and total assets turnover of 3.2x are used to determine the net income margin.
To find the net income of Precious Metal Mining, we can use the formula for Return on Equity (ROE), which is calculated by multiplying the net income margin by the assets turnover.
First, we need to find the net income margin, which is equal to the ROE divided by the total assets turnover. Given that the ROE is 13% and the total assets turnover is 3.2×, we can calculate the net income margin as follows:
Net income margin = ROE / Total assets turnover
= 0.13 / 3.2
= 0.040625
Next, we need to find the total assets. Since common equity is 40% of total assets, we can use this information to find the total assets:
Common equity = 40% of total assets
= 0.4 * Total assets
Now, we can rearrange the equation to solve for the total assets:
Total assets = Common equity / 0.4
Substituting the given common equity, we get:
Total assets = 11 million / 0.4
= 27.5 million
Finally, we can calculate the net income:
Net income = Net income margin * Total assets
= 0.040625 * 27.5 million
= 1,115,625
Therefore, rounding to the nearest cent, the net income of Precious Metal Mining is $1,115,625.
Learn more about net income from the below link:
https://brainly.com/question/30403491
#SPJ11
Purchase-Related Transactions Journalize entries for the following related transactions of Lilly Heating & Air Company who uses the net method under a perpetual inventory system. (If an amount box does not require an entry, leave it bla a. Purchased $36,000 of merchandise from Schell Co on account, terms 1/10, 1/30. Inventory 35.280 Accounts Payable Schell Co. b. Paid the amount owed on the invoice Discovered that merchandise with an invoice amount of $9.000 purchased in () was defective and d. Pureased $5,000 of merchandise from Schell Co. on account, terms 30 Received a refund from Schell C for return in (c) less the purchase in (d).
a. Inventory $35,280
Accounts Payable $35,280
b. Accounts Payable $35,280
Cash $31,752
Purchase Discounts $1,428
c. Accounts Payable $9,000
Merchandise Inventory $9,000
d. Inventory $5,000
Accounts Payable $5,000
a. The company purchased merchandise worth $36,000 on account from Schell Co, and the inventory increased by $35,280 while the accounts payable to Schell Co increased by the same amount the company paid the amount owed on the invoice, resulting in a decrease in accounts payable. The payment included a discount of $1,428 ($36,000 x 1/10). the company discovered that $9,000 worth of merchandise purchased earlier was defective. As a result, the inventory decreased by $9,000, and the accounts payable to Schell Co reduced by the same amount. the company purchased $5,000 worth of merchandise on account from Schell Co, resulting in an increase in inventory by $5,000 and an increase in accounts payable by the same amount. overall, these journal entries reflect the purchases made, payments and returns related to the merchandise from Schell Co, and the corresponding changes in inventory and accounts payable accounts.
Learn more about Inventory here:
https://brainly.com/question/31146932
#SPJ11
A 30-year mortgage loan of S700,000 is made for a 100-acre farm in BlackHawk County at an interest rate of 5%. Constant payments are to be made monthly. If the loan is to be repaid over 30 years, but will have a residual balance of $200,000 at the end of 30 years because it is a partially amortizing CPM, what are the periodic monthly payments on this mortgage?
To calculate the periodic monthly payments on the mortgage loan, we can use the formula for a partially amortizing loan.
The formula is: Payment = (Loan Amount - Residual Balance) / Present Value Factor
Where:
Loan Amount = $700,000 (the initial loan amount)
Residual Balance = $200,000 (the remaining balance at the end of 30 years)
Present Value Factor = [1 - (1 + interest rate)^(-number of payments)] / interest rate
Let's calculate the Present Value Factor first:
Interest Rate = 5% per year / 12 months = 0.4167% per month
Number of Payments = 30 years * 12 months = 360 months
Present Value Factor = [1 - (1 + 0.004167)^(-360)] / 0.004167
Now, let's calculate the periodic monthly payment:
Payment = ($700,000 - $200,000) / Present Value Factor
Learn more about payments here:
https://brainly.com/question/32965807
#SPJ11
