A mining company is evaluating when to open a gold mine. The mine has 100,000 ounces of gold left that can be mined and mining operations will produce 10,000 ounces per year. The price of gold from the mine will be guaranteed for the remaining life of the mine through the gold futures contracts. If the mine is opened today, each ounce of gold will generate an after-tax cash flow (= total or net cash flow) of $1,300 per ounce. If the company waits one year, there is a 70 percent probability that the contract price will generate an after-tax cash flow of $1,550 per ounce and a 30 percent probability that the after-tax cash flow will be $1,200 per ounce. The required return on the gold mine is 15 percent and it will cost $30,000,000 to open the mine regardless of whether the mine is open today or in one year. Compute the value of the option to wait today.

Answers

Answer 1

Answer:

The value of the option to wait today = $2,500,000

Explanation:

a) Data and Calculations:

Quantity of gold left in the mine = 100,000 ounces

Quantity of gold to be produced yearly = 10,000 ounces

Estimated life of mine = 10 years (100,000/10,000)

After-tax cash flow if mine is opened today = $1,300 per ounce

After-tax cash flow if mine is opened a year later:

Expected value = ($1,550 * 70%) + ($1,200 * 30%) = $1,325 per ounce

Comparison of the values of opening options:

                                                  Mine opened       Mine opened

                                                        today                 a year later

After-tax cash flow per ounce       $1,300                   $1,325

Quantity of gold in the mine       100,000                 100,000

Total after-tax cash flows  $130,000,000       $132,500,000

Cost of opening mine           30,000,000           30,000,000

Required return (15%)             4,500,000              4,500,000

Actual returns from mine $100,000,000        $102,500,000

Therefore, the value of option to wait:

Returns from mine opened next year = $102,500,000

Returns from mine opened today =          100,000,000

Value of the option to wait today =            $2,500,000


Related Questions

Crane Co. has the following transactions related to notes receivable during the last 2 months of the year. The company does not make entries to accrue interest except at December 31.

Nov. 1 Loaned $66,600 cash to C. Bohr on a 12-month, 6% note.
Dec. 11 Sold goods to K. R. Pine, Inc., receiving a $7,200, 90-day, 6% note.
Dec. 16 Received a $9,600, 180-day, 8% note to settle an open account from A. Murdock.
Dec. 31 Accrued interest revenue on all notes receivable.

Required:
Journalize the transactions for Crane Company

Answers

Answer:

Nov 1

Debit : Note Receivable - C. Bohr $66,600

Credit : Cash $66,600

Dec. 11

Debit : Note Receivable - K. R. Pine, Inc. $7,200

Credit : Sales $7,200

Dec. 16

Debit : Cash $9,600

Credit : Note Payable - A. Murdock $9,600

Dec. 31

Debit : Note Receivable - C. Bohr  $666

Debit : Note Receivable - K. R. Pine, Inc. $100.80

Credit : Interest Income $766.80

Dec 31

Debit : Interest expense   $64

Credit : Note Payable - A. Murdock  $64

Explanation:

Interest Income calculations :

Note Receivable - C. Bohr  = $66,600 x 2/12 x 6 % = $666

Note Receivable - K. R. Pine, Inc = $7,200  x 21/ 90  x 6 % = $100.80

Interest expense calculations :

Note Payable - A. Murdock $9,600 x 15 / 180 x 8 % = $64

how can a business deal with employees who have lack of focus and future goals ?​

Answers

Answer:

motivation

Explanation:

Encourage them,make them see vision .

Robert and Becca file jointly. They have taxable income of $60,000 in 2020 (before considering any capital gains or losses). They have a long-term capital gain of $28,000 and a long-term capital loss of $17,000 on sales of stock in the current year. What will their capital gains tax be in the current year

Answers

Answer: $0

Explanation:

We should note that based on the information given, Robert and Becca file jointly, therefore, their their capital gains tax be in the current year will be $0.

Assuming they filed separately, their capital gains tax be in the current year will be:

= 15% × ($28,000 - $17,000)

= 0.15 × $11000

= $1650.

But regarding the question, the answer is $0.

Which of the following would cause consumers to demand fewer slices of pizza?
A. an increase in the supply of pizza slices
B. a decrease in the supply of tacos
C. an increase in the price of pizza slices

Answers

Answer:

C.

Explanation:

All the others make the supply of pizza larger, or high demand

Which of these provides a bank with collateral on a car loan?
A. A savings account
B. The car itself
o
C. The buyer's home
D. The driver's credit history
SUM

Answers

Answer:

B. The car itself.

Answer:

the car itself

Explanation:

Corona Industries purchased a stamping machine on January 2, 20X1, for $100,000. It made an initial payment of $20,000 and financed the balance over 5 years at State Bank. The loan terms were for annual payments of $16,000 plus 10% interest, payable on December 31 each year. The year 20X4 proves to be a difficult year and on December 1, 20X4 Corona negotiates a debt restructuring with State Bank. The settlement calls for cash payment of accrued interest plus $4,000 on December 1 and the transfer of 200 acres of land held by Corona that cost $15,000. The land has a current fair value of $22,000. Which one of the following entries will Corona make to adjust for the land just prior to transfer?

a. DR Loss on disposal of asset $7,000 CR Land $7,000
b. DR Land $7,000 CR Gain on disposal of asset $7,000
c. DR Note payable—State Bank $7,000 CR Gain on disposal of asset $7,000
d. DR Land $7,000 CR Note payable—State Bank $7,000

Answers

Answer:

(a) DR Loss on disposal of asset $7,000 CR Land $7,000

The correct option is A).  DR Loss on disposal of asset $7,000 and CR Land $7,000

What is journal entry? What are the debit and credit?

A journal entry is the process of recording a business transaction in the accounting records of a business.

Debits are always on the left side of the entry, which shows an increase in assets or decrease in liabilities.

Credits are always on the right side, which depicts that there is a decrease in assets or an increase in liabilities.

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Implying Bad News (L.O. 3) YOUR TASK Revise the following statements to imply the bad news. If possible, use passive-voice verbs and subordi-nate clauses to further de-emphasize the bad news. DIRECT REFUSAL: We cannot send you a price list, nor can we sell our lawn mowers directly to customers. We sell only through authorized dealers, and your dealer is HomeCo. IMPLIED REFUSAL: Our lawn mowers are sold only through authorized dealers, and your dealer is HomeCo.
a. We are sorry to tell you that we cannot ship our hand-dipped chocolate-covered fresh strawberries c.o.d. Your order was not accompanied by payment, so we are not shipping it. We have it ready, though, and will rush it to its destination as soon as you call us with your credit card number.
b. Unfortunately, we find it impossible to contribute to your excellent and worthwhile fund-raising campaign this year. At present all the funds of our organization are needed to lease equipment and offices for our new branch in Scottsdale. We hope to be able to support this commendable endeavor in the future.
c. Because of the holiday period, all our billboard space was used this month. Therefore, we are sorry to say that we could not give your charitable group free display space. However, next month, after the holidays, we hope to display your message as we promised.

Answers

Answer:

Implying Bad News

Direct Refusal     Implied Refusal

a.                         Our hand-dipped chocolate-covered fresh strawberries  

                           are prepaid before delivery.

b.                        Our contribution to your fundraising campaign will not be

                          forthcoming this year.

c.                        Our billboard space was used up this month.  We shall

                          display your message from next month.

Explanation:

Implied refusal or bad news is a manner of indirectly presenting information such that the refusal or bad news is not explicitly stated.  This implies that the message is coded by the sender to lessen the bad effect on the recipient.  It is only left for a discerning recipient to untangle the truth behind the message.

According to the video, what tasks do Helpers-Production Workers commonly perform? Check all that apply. fetching and holding materials o supervising other workers o moving materials between work areas o managing budgets training assembly workers keeping records o cleaning machinery​

Answers

Answer:

a,c,f,g

Explanation: its right!!!!

The tasks that Helpers-Production Workers commonly perform include:

Fetching and holding materialsMoving materials between work areasCleaning Machinery

The correct options are A, C, and E.

What is a production worker?

Work that requires manual labor is done by production workers in settings that involve manufacturing or production. Their everyday tasks in an assembly line could include packaging, inspecting, and assembling products. In addition, they might control tools or machinery used in manufacturing.

They may also assist in training assembly workers and keeping records, but supervising other workers and managing budgets are typically not part of their job duties. Production worker assistants perform duties on the factory floor by providing supplies, holding tools, and cleaning workspaces and machinery. Production worker assistants may run and load machinery as well as do small adjustments and repairs.

Thus, the ideal selections are options A, C, and E.

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During April, Cavy Company incurred factory overhead as follows:Indirect materials $10,500Factory supervision labor 4,000Utilities 500Depreciation (factory) 620Small tools 370Equipment rental 730Journalize the entry to record the factory overhead incurred during April. If an amount box does not require an entry, leave it blank.

Answers

Answer:

Date            Account Title                                       Debit          Credit

April             Factory Overhead                           $16,720

                    Indirect materials                                                    $10,500

                    Wages payable                                                       $4,000

                     Utilities payable                                                     $  500

                    Accumulated Depreciation                                    $  620

                    Small tools                                                               $ 370

                     Equipment rental                                                   $ 730

Remi Corp. reported total sales of $550,000, at a price of $40 and per unit variable expenses of $23, for the sales of their single product. Total Per Unit Sales $550,000 $40 Variable Expenses $316,250 $23 Contribution Margin $233,750 $17 Fixed Expenses $155,000 Net Operating Income $78,750 What is the operating leverage at Remi Corp. (Round off to nearest decimal)

Answers

Answer:

See

Explanation:

With regards to the above, operating leverage is calculated by dividing contribution margin with net operating income.

Contribution margin = $233,750

Net operating income = $78,750

Therefore,

Operating leverage = Contribution margin / Operating income

= $233,750 / $78,750

= 2.97

Consider a firm with an EBIT of $559,000. The firm finances its assets with $1,090,000 debt (costing 6.4 percent) and 209,000 shares of stock selling at $15.00 per share. The firm is considering increasing its debt by $900,000, using the proceeds to buy back 84,000 shares of stock. The firm is in the 35 percent tax bracket. The change in capital structure will have no effect on the operations of the firm. Thus, EBIT will remain at $559,000. Calculate the EPS before AND after the change in capital structure and indicate changes in EPS. (Round your answers to 4 decimal places.) EPS before $ EPS after $ Difference $

Answers

Answer:

EPS before change in capital structure = $2.34

EPS after change in capital structure       $3.45

Difference in EPS caused by the change ($1.11)

Explanation:

a) Data and Calculations:

EBIT = $559,000

6.4% Debts = $1,090,000

Common stock = 209,000 shares at $15 per share

EPS before increasing debt:

EBIT = $559,000

Interest  (69,760) (6.4% of $1,090,000)

Net income = $489,240

EPS = $489,240/209,000 = $2.34 per share

EPS after increasing debt:

New debt = $1,990,000 ($1,090,000 + $900,000)

New equity shares = 125,000 shares (209,000 - 84,000)

EBIT = $559,000

Interest (127,360) (6.4% of $1,990,000)

Net income = $431,640

EPS = $431,640/125,000 = $3.45 per share

EPS before change in capital structure = $2.34

EPS after change in capital structure       $3.45

Difference in EPS caused by the change ($1.11)

McNulty, Inc., produces desks and chairs. A new CFO has just been hired and announces a new policy that if a product cannot earn a margin on sales of at least 20 percent, it will be dropped. The margin is computed as product gross profit divided by reported product cost.Manufacturing overhead for year 1 totaled $800,000. Overhead is allocated to products based on direct labor cost. Data for year 1 show the following: Chairs DesksSales revenue $ 1,150,000 $ 2,105,000 Direct materials 584,000 800,000 Direct labor 160,000 340,000 Required:a-1. Based on the CFO's new policy, calculate the profit margin for both chairs and desks.Profit Margin (%)Chairs Desks a-2. Which of the two products should be dropped?b. Regardless of your answer in requirement a, the CFO decides at the beginning of year 2 to drop the chair product. The company cost analyst estimates that overhead without the chair line will be $650,000. The revenue and costs for desks are expected to be the same as last year. What is the estimated margin for desks in year 2?

Answers

Answer:

McNulty, Inc.

                                  Chairs         Desks

a) Profit margin (%)    6.33%        31.36%

b) The estimated margin for desks in year 2 is:

= 17.6%

Explanation:

a) Data and Calculations:

Expected gross profit margin on cost = 20%

Manufacturing overhead for year 1 = $800,000

                                Chairs         Desks         Total

Sales revenue $ 1,150,000 $ 2,105,000   $ 3,255,000

Direct materials    584,000      800,000       1,384,000

Direct labor           160,000      340,000         500,000

Overhead             337,572       462,428         800,000

Total costs        $1,081,572   $1,602,428   $2,684,000

Gross Profit         $68,428      $502,572       $571,000

Profit margin        6.33%            31.36%            21.27%

Margin (%) = Gross profit/Total costs * 100

Allocation of Manufacturing Overhead based on direct labor cost:

Chairs = $337,572 ($584,000/$1,384,000 * $800,000)  

Desks = $462,428 ($800,000/$1,384,000 * $800,000)

Year 2:

                                       Desks        

Sales revenue         $ 2,105,000

Direct materials            800,000

Direct labor                   340,000

Overhead                     650,000

Total costs              $ 1,790,000

Gross Profit                $315,000

Profit margin                17.6%

Select the correct answer.

In terms of market research, which statement describes an advantage for businesses?

O Market research agencies always collect accurate market information, regardless of their client's guidance.

O Secondary sources are inexpensive and can meet any business's market research needs.

O Primary research methods, such as interviews, are highly reliable because respondents always give their honest opinions.

A business can explore new market opportunities with the help of accurate market research data.

Submit

Answers

Answer: A business can explore new market opportunities with the help of accurate market research data.

Explanation:

When market research data is accurate, a business is better able to know what consumers want and can therefore explore new opportunities to satisfy these needs and make healthy returns as a result.

If market research data is poor however, companies run the risk of either investing in a loss making venture or not investing in a potentially profitable venture because they did not know how profitable it would be.

GUYS PLEASE HELP AND DONT STEAL MY POINT!! I WILL GIVE U BRAINLIEST!!!

You just bought your first new (used) car for $15,000. The car is out of factory warranty but the salesman can offer you an extended warranty that is 5 years, 50,000 miles, and covers the same items as a factory warranty for $2,000. Will you purchase it? Why or why not?

Answers

Answer:

I would buy it, one, because it's a warranty that is covered for 5 years, and two, because it covers everything that the factory warranty covers as well as up to 50,000 miles

Explanation:

Dogs R Us has two product lines: collars and leashes. Income statement data forecasted for next year is as follows: COLLARS LEASHES TOTAL Sales revenue $210,000 $150,000 $360,000 Variable expenses $135,000 $120,000 $255,000 Contribution margin $75,000 $30,000 $105,000 Fixed expenses $56,000 $38,000 $94,000 Operating income (loss) $19,000 ($8,000) $11,000 If $27,435 in fixed costs will be eliminated by dropping the LEASHES line, how will TOTAL operating income be affected after the Leashes line is dropped? If income drops, use a negative sign in front of the number.

Answers

Answer: -$2,565

Explanation:

Operating Income with the Leashes line is $11,000.

If the Leashes line is dropped, the operating income would be:

= Sales of Collars - Variable expenses - Fixed expenses of Collars - Residual fixed expenses pf Leashes

= 210,000 - 135,000 - 56,000 - (38,000 - 27,435)

= $‭8,435

Change in Total income =  Income without Leashes - Income with LEASHES

= 8,435 - 11,000

= -$2,565

The total operating income will be affected up to the sum of ($2,565) after the Leashes line is dropped.

Given data

Operating Income with the Leashes line is $11,000.

Now, If the Leashes line is dropped:

Operating income = Sales of Collars - Variable expenses - Fixed expenses of Collars - Residual fixed expenses pf Leashes

Operating income = 210,000 - 135,000 - 56,000 - (38,000 - 27,435)

Operating income = $‭8,435

Change in Total income =  Income without Leashes - Income with Leashes

Change in Total income = $8,435 - $11,000

Change in Total income = -$2,565

Therefore, the total operating income will be affected up to the sum of ($2,565) after the Leashes line is dropped.

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On December 31, 2020, Heffner Company had 100,000 shares of common stock outstanding and 30,000 shares of 7%, $100 par, cumulative preferred stock outstanding. On February 28, 2021, Heffner purchased 24,000 shares of common stock on the open market as treasury stock paying $45 per share. Heffner sold 6,000 of the treasury shares on September 30, 2021, for $47 per share. Net income for 2021 was $540,000. The income tax rate is 25%. Also outstanding at December 31, 2020, were fully vested incentive stock options giving key employees the option to buy 50,000 common shares at $40. The market price of the common shares averaged $50 during 2021. Five thousand 6% bonds were issued at par on January 1, 2021. Each $1,000 bond is convertible into 125 shares of common stock. None of the bonds had been converted by December 31, 2021, and no stock options were exercised during the year. Required: Compute basic and diluted earnings per share for Heffner Company for 2021.

Answers

Answer: Basic earnings per share = $4.05

Diluted earnings per share = $0.71

Explanation:

Based on the information given in the question, the basic earnings per share will be:

= [$540,000 - (7% x $100 x 30,000)] / [$100,000 - (24,000 x 10/12) + (6,000 x 3/12)]

= ($540,000 - $210,000) / ($100,000 - $20,000 + $1500)

= $330,000 / $81,500

= $4.05

The Diluted Earnings per share will be:

= [$540,000 - (7% x $100 x 30,000) + (5,000 x $1,000 x 6% x 60%)] / [$100,000 -(24,000 x 10/12) + (6,000 x 3/12) + (50,000 - ((50,000 x $40) / $50)) + (5,000 × 125)]

= [$540,000 - ($210,000) + ($180,000)] / [$100,000 -($20,000) + ($1500) + (50,000 - (($2,000,000) / $50)) + (5,000 × 125)]

= 510,000 / 716,500

=$0.71

Kenny is trying to sell his XBOX one; however, none of the potential buyers is willing to pay the price Kenny desires. Kenny's wife Zeynep, an economist, thinks this might be due to a lack of information on the part of buyers. Zeynep uses the concept of __________ to explain to Kenny why he cannot sell his XBOX one at the price he is asking

Answers

Answer: 2) Adverse selection

Explanation:

Adverse selection occurs when one party to the transaction has more information than the other and so can exploit this information to increase their benefit in the transaction.

Kenny has more information than the buyers in this situation as he knows what the Xbox One has and so is charging a certain price of it. The buyers do not know this information and so do not understand why that particular price is being charged and so refuse to pay it.

Air Tampa has just been incorporated, and its board of directors is grappling with the question of optimal capital structure. The company plans to offer commuter air services between Tampa and smaller surrounding cities. Air Tampa believes it would have the same business risk as Jaxair, which is an airline that has been around for a few years and that has had zero growth. Jaxair's market-determined beta is 1.8, and it has a current market value debt ratio (total debt to total assets) of 45% and a federal-plus-state tax rate of 25%. Air Tampa expects to have investment tax credits when it begins business, which reduces its federal-plus-state tax rate to 15%. Air Tampa's owners expect that the total book and market value of the firm's stock, if it uses zero debt, would be $14 million. Air Tampa's CFO believes that the MM and Hamada formulas for the value of a levered firm and the levered firm's cost of capital should be used because zero growth is expected.

Required:
a. Estimate the beta of an unlevered firm in the commuter airline business based on Jaxair's market-determined beta.
b. Now assume that rd= rRF= 10% and that the market risk premium RPM for an unlevered commuter airline. 5%. Find the required rate of return on equity
c. Air Tampa is considering three capital structures: (1) $2 million debt, (2) $4 million debt, and (3) $6 million debt. Estimate Air Tampa's rs for these debt levels.

Answers

Answer:

a. Unlevered beta = 1.12

b. Required rate of return on equity = 15.60%

c-1. rs = 16.37%

c-2. rs = 17.40%

c-2. rs = 18.81%

Explanation:

a. Estimate the beta of an unlevered firm in the commuter airline business based on Jaxair's market-determined beta.

Levered beta = Unlevered beta * (1 + (D/S)(1 - T))

Therefore, we have:

Unlevered beta = Levered beta / (1 + (D/S)(1 - T)) .............. (1)

Where:

Levered beta = Jaxair's market-determined beta = 1.8

D = Debt ratio = 45%, or 0.45

S = Equity ratio = 1 - D = 1 - 0.45 = 0.55

T = Federal-plus-state tax rate = 25%, or 0.25

Substituting the values into equation (1), we have:

Unlevered beta = 1.8 / (1 + (0.45/0.55)(1 - 0.25)) = 1.12

b. Now assume that rd= rRF= 10% and that the market risk premium RPM for an unlevered commuter airline. 5%. Find the required rate of return on equity

Required rate of return on equity = ro = Rf + beta(Rm - Rf) .............. (2)

Where;

rd = Rf = 10%, or 0.10

beta = Unlevered beta = 1.12

(Rm - Rf) = market risk premium = RPM for an unlevered commuter airline = 5%, or 0.05

Substituting the values into equation (2), we have:

Required rate of return on equity = ro = 10% + 1.12(5%) = 10% + (1.12 * 5%) = 15.60%

c. Air Tampa is considering three capital structures: (1) $2 million debt, (2) $4 million debt, and (3) $6 million debt. Estimate Air Tampa's rs for these debt levels.

c-1. $2 million debt

D = Debt = $2 million

Value of unlevered firm = $14 million

T = Tax rate at start-up = 15%, or 0.15

Value of lerevered firm = Value of unlevered firm + (Debt * T) = $14 + ($2 * 15%) = $14.30 million

S = Value of equity = Value of lerevered firm - Debt = $14.30 - $2 = $12.30 million

rs = ro + ((ro - rd) * (D / S) * (1 - T)) ................... (3)

Where;

ro = 15.60%

rd = Rf = 10%, or 0.10

D = Debt = $2 million

S = Value of equity = $12.30 million

T = Tax rate at start-up = 15%, or 0.15

Substituting the values into equation (3), we have:

rs = 15.60% + ((15.60% - 10%) * (2 / 12.30) * (1 - 0.15)) = 16.37%

c-2. $4 million debt

D = Debt = $4 million

Value of unlevered firm = $14 million

T = Tax rate at start-up = 15%, or 0.15

Value of lerevered firm = Value of unlevered firm + (Debt * T) = $14 + ($4 * 15%) = $14.60 million

S = Value of equity = Value of lerevered firm - Debt = $14.60 - $4 = $10.60 million

Substituting all the relevant values into equation (3), we have:

rs = 15.60% + ((15.60% - 10%) * (4 / 10.60) * (1 - 0.15)) = 17.40%

c-3. $6 million debt

D = Debt = $6 million

Value of unlevered firm = $14 million

T = Tax rate at start-up = 15%, or 0.15

Value of lerevered firm = Value of unlevered firm + (Debt * T) = $14 + ($6 * 15%) = $14.90 million

S = Value of equity = Value of lerevered firm - Debt = $14.90 - $6 = $8.90 million

Substituting all the relevant values into equation (3), we have:

rs = 15.60% + ((15.60% - 10%) * (6 / 8.90) * (1 - 0.15)) = 18.81%

Cost of goods sold for a manufacturer equals cost of goods manufactured plus a. beginning finished goods inventory less ending finished goods inventory b. beginning work in process inventory less ending work in process inventory c. ending work in process inventory less beginning work in process inventory d. ending finished goods inventory less beginning finished goods inventory

Answers

Answer:

a. beginning finished goods inventory less ending finished goods inventory

Explanation:

Cost of goods sold for a manufacturer equals cost of goods manufactured plus beginning finished goods inventory less ending finished goods inventory.

Javonte Co. set standards of 2 hours of direct labor per unit of product and $16.10 per hour for the labor rate. During October, the company uses 13,000 hours of direct labor at a $211,900 total cost to produce 6,700 units of product. In November, the company uses 17,000 hours of direct labor at a $277,950 total cost to produce 7,100 units of product.

AH= Actual Hours
SH =Standard Hours
AR =Actual Rate
SR =Standard Rate

Required:
a. Compute the direct labor rate variance, the direct labor efficiency variance, and the total direct labor cost variance for each of these two months. Classify each variance as favorable or unfavorable.
b. Javonte investigates variances of more than 5% of actual direct labor cost. Which direct labor variances will the company investigate further?

Answers

Answer:

Part a.

October Labor Rate Variance   (2600) unfavorable

October Labor Efficiency Variance   6440 favorable

Labor Cost Variance  For October  3840 favorable

November Labor Rate Variance  (4250) unfavorable

November Labor Efficiency Variance (45080) unfavorable

Labor Cost Variance  For November 49330 unfavorable

Part b.

Direct labor Efficiency variance for November will be investigated further as it varies more than 5 % 0f actual direct labor cost.

Explanation:

Direct Labor Rate Variance For October

                                           Time *        Rate    =        Amount

Actual Hours Worked       13000 *      16.3 actual              = 211900

Actual Hours Worked      13000 * 16.10 standard         =  209300      

Labor Rate Variance                         0.2                           (2600) unfavorable

When actual rate is greater than the standard rate the variance is unfavorable.

Direct Labor Rate Variance For November

                                           Time *        Rate    =        Amount

Actual Hours Worked       17000 *      16.35 actual              = 277950

Actual Hours Worked      17000 * 16.10 standard         =  273700      

Labor Rate Variance                         0.25                           (4250) unfavorable

When actual rate is greater than the standard rate the variance is unfavorable.

Direct Labor Efficiency Variance for October

                                           Time *        Rate    =        Amount

Actual Hours Worked       13000 *      16.1 standard             = 209300

Standard Hours Allowed      13400 * 16.10 standard         =  215740  

                                            ( 2* 6700)                                                        

Labor Efficiency Variance              400                               6440 favorable

When actual hours are less than the standard hours allowed the variance is favorable.

Direct Labor Efficiency Variance for November

                                           Time *        Rate    =        Amount

Actual Hours Worked       17000 *      16.1 standard             = 273700

Standard Hours Allowed      14200 * 16.10 standard         =  228620

                                            ( 2* 7100)                                                        

Labor Efficiency Variance            2800                           (45080) unfavorable

When actual hours are more than the standard hours allowed the variance is unfavorable.

Labor Cost Variance  For October

Standard hours * standard rate- Actual hours * actual rate

13400 * 16.10-  13000 *      16.3

= 215740  -211900

=3840 favorable

Labor Cost Variance  For November

Standard hours * standard rate- Actual hours * actual rate

14200 * 16.1 -  17000 * 16.35

= 228620  - 277950

=49330 unfavorable

Direct labor Efficiency variance for November will be investigated further as it varies more than 5 % 0f actual direct labor cost.

45080> 5% of 277950

5% of 277950 = 13897.5

13897.5 > 45080

Monty loaned his friend Ned $24,000 three years ago. Ned signed a note and made payments on the loan. Last year, when the remaining balance was $18,000, Ned filed for bankruptcy and notified Monty that he would be unable to pay the balance on the loan. Monty treated the $18,000 as a nonbusiness bad debt. Last year, before considering the tax implications of the nonbusiness bad debt, Monty had capital gains of $7,200 and taxable income of $42,000. During the current year, Ned paid Monty $16,200 in satisfaction of the debt.
Determine Monty's tax treatment for the $16,200 received in the current year.
The nonbusiness bad debt of $18,000 would have been reported as a ________ , and $________ would be included in Monty's gross income.

Answers

Answer:

Short term capital loss and $10,800

Explanation:

Remaining balance - Capital gains

$18,000 - $7,200 = $10,800

Monty can report the bad debt of $18,000 as short term capital loss since it is expense for the business and receivables are not recoverable. This amount can be reported as loss of the business.

Assume that a three-year Treasury note (T-note) has no maturity premium, and that the real risk-free rate of interest is 3 percent. If the T-note carries a nominal risk-free rate of return of 13 percent and if the expected average inflation rate over the next two years is 9 percent, what is the implied expected inflation rate during Year 3

Answers

Answer: 12%

Explanation:

First find the Inflation premium:

= Nominal risk free rate - Real risk free rate

= 13% - 3%

= 10%

Plug it into the following equation:

Inflation premium = { (2 * expected average inflation rate over the next two years) + Inflation rate for third year) } / 3

10% = { (2 * 9%) + 1₃} / 3

3 * 10% =  { (2 * 9%) + 1₃}

30% = 18% + I₃

I₃ = 30% - 18%

I₃ = 12%

Economics

What would likely happen to the supply of electricians if their wages suddenly doubled?

HURRY

Answers

Answer:

it would be harder to get electricinans because it costs more

Explanation:

If the wages of electricians should double then the supply of electrician is also going to double.

What is Supply?

This is an increase in the quantity of a good or service that is available at a given price.

There would be more electricians that would be willing to provide more of their labor at an increase in wage. They would like to work more.

Read more on supply here:

https://brainly.com/question/4803223

why employment laws might increase easyjet plc costs

Answers

Answer: rapid amount of turn around flights

Explanation: because it’s a low cost air line, it emphasises the rapid turn around flights and a lot of the customers now use mobile boarding passes. This gives them more customers

Cornerstone Exercise 7-21 (Algorithmic) Units-of-Production Depreciation Irons Delivery Inc. purchased a new delivery truck for $42,000 on January 1, 2019. The truck is expected to have a $2,000 residual value at the end of its 5-year useful life. Irons uses the units-of-production method of depreciation. Irons expects the truck to run for 150,000 miles. The actual miles driven in 2019 and 2020 were 41,000 and 36,000, respectively. Required: Prepare the journal entry to record depreciation expense for 2019 and 2020. Round your answers to the nearest dollar. Do not round intermediate calculations.

Answers

Answer:

2019

Debit : Depreciation Expense $11,070

Credit : Accumulated Depreciation $11,070

2020

Debit : Depreciation Expense $9,720

Credit : Accumulated Depreciation $9,720

Explanation:

Step 1 : Determine the rate of depreciation

Rate of Depreciation = (Cost - Residual Value) ÷ Estimated Production

                                   = ($42,000 - $2,000) ÷ 150,000 miles

                                   = $0.26666 or $0.27

Step 2 : Determine the Depreciation Expense

Depreciation Expense = Units for the period x Rate of Depreciation

therefore.

Depreciation Expense - 2019 = $0.27 x 41,000

                                                 = $11,070

Depreciation Expense - 2020 = $0.27 x 36,000

                                                 = $9,720

Step 3 : Journal entries

2019

Debit : Depreciation Expense $11,070

Credit : Accumulated Depreciation $11,070

2020

Debit : Depreciation Expense $9,720

Credit : Accumulated Depreciation $9,720

Explain the use of NBT​

Answers

The National Benchmark Tests (NBTs) are assessments for first-year applicants into higher education institutions. The NBTs were designed to measure a writer's ability to transfer understanding of Academic Literacy, Quantitative Literacy and Mathematics to the demands of tertiary coursework
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Which of the following situations illustrate the problem of unmeasured quality change in the construction of the CPI? Check all that apply. Increased personal computer purchases in response to a decline in their price More scoops of raisins in each package of Raisin Bran The invention of cell phones The introduction of air bags in cars Greater use of fuel-efficient cars after gasoline prices increase

Answers

Answer:

The introduction of air bags in cars

More scoops of raisins in each package of Raisin Bran

Explanation:

In the case when the quality of the prodcut would reduce from one year to the next year but the price would remains same so the dollar value would decline as the same amount would be charged but the quality would be worse in the other case the quality would rise so the price would also rised

Therefore the above represent the situations

Emil borrowed money so he would be able to afford to add a screened-in porch to the back of his house. When he applied for the loan, the rate on the loan was very low based given the current market trends. Over the following months, however, the market fluctuated a great deal, and suddenly he was faced with higher rates for the same loan. Which type of financial risk did Emil face?
a. income risk
b. interest rate risk
c. personal risk
d. inflation risk

Answers

Answer:

since i chose inflation risk and that was incorrect the only other logical option for me would be option B. Interest rate risk

Explanation:

The financial risk that Emil faced when he borrowed money at a low rate but due to market fluctuations, he faced higher rates later was b. interest rate risk.

What is interest rate risk?

Interest rate risk is a financial risk that results from changes in the interest rate of an investment or loan.

Increasing credit risk gives rise to increased debt exposure.  This can force a lending institution to increase the interest rate if the contract recognized a fluctuating rate (not fixed) at the initiation stage.

Thus, the type of financial risk that Emil faced when he borrowed money at a low rate but due to market fluctuations, he faced higher rates later was b. interest rate risk.

Learn more about interest rate risks at https://brainly.com/question/13163076

On January 1, 2022, the Hermann Company ledger shows Equipment $36,000 and Accumulated Depreciation $13,600. The depreciation resulted from using the straight-line method with a useful life of 10 years and a salvage value of $2,000. On this date, the company concludes that the equipment has a remaining useful life of only 2 years with the same salvage value. Compute the revised annual depreciation. The revised annual depreciation $enter the revised annual depreciation in dollars

Answers

Answer:

Annual depreciation= $10,200

Explanation:

Giving the following information:

Purchase price= $36,000

Accumulated depreciation= $13,600

Salvage value= $2,000

Useful life: 2 years

To calculate the revised annual depreciation, we need to use the following formula:

Annual depreciation= [(book value - salvage value)/estimated life (years)]

Book value= purchase price - accumulated depreciation

Book value= 36,000 - 13,600= $22,400

Annual depreciation= (22,400 - 2,000) / 2

Annual depreciation= $10,200

The following information is available for the first year of operations of Creston Inc., a manufacturer of fabricating equipment:

Sales $1,378,600
Gross profit 372,200
Indirect labor 124,100
Indirect materials 51,000
Other factory overhead 23,400
Materials purchased 703,100
Total manufacturing costs for the period 1,522,000
Materials inventory, end of period 51,000

Using the above information, determine the following amounts:

a. Cost of goods sold________$
b. Direct materials cost ______$
c. Direct labor cost ________$

Answers

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