Answer:
Present value = $428571.4286 rounded off to $428571.43
Explanation:
To determine how much should be paid for the policy today, we must calculate the present value of perpetuity. The policy returns are in the form of a perpetuity as they are paid in a constant amount after equal intervals of time and for an indefinite time period. The formula for the present value of perpetuity is,
Present value = Cash flows / r
Where,
r is the required rate of returnPresent value = 27000 / 0.063
Present value = $428571.4286 rounded off to $428571.43
RetRyder Hand Trucks has a preferred share issue outstanding that pays a dividend of $1.30 per year. The current cost of preferred equity for RetRyder is 7.40 percent. If RetRyder issues additional preferred shares that pay exactly the same dividend and the investment banker retains 8.60 percent of the sale price, what is the cost of the new preferred shares for RetRyder?
What is the current price of preferred shares?
Answer:
Current price of preferred shares = P(ps)
= D/K(ps)
= $1.3 / 0.074
= 17.567568
= $17.56
Cost of preferred equity = Kps
= D / P(ps)*(1-f)
= $1.3 / $17.56(1 - 0.086)
= $1.3 / $16.04984
= 0.080998
= 8.09%
Tara purchased a machine for $40,000 to be used in her business. The cost recovery allowed and allowable for the three years the machine was used are as follows:
Cost Recovery Allowed Cost Recovery Allowable
Year 1 $16,000 $ 8,000
Year 2 9,600 12,800
Year 3 5,760 7,680
If Tara sells the machine after three years for $15,000, how much gain should she recognize?
Answer:
The answer is "$11,480".
Explanation:
Calculate the benefit as illustrated below:
Recovery of costs approved Recovery costs approved
Year-1 $16,000 $8,000
Year-2 $9,600 $12,800
Year-3 $5,760 $7,680
Total cost $40,000
Making a reference to: Cause great costs allowed or permitted
Year-1 $16,000
Year-2 $12,800
Year-3 $7,680 $36,480
Adjusted basis $3,520
Formula:
Recognized Gain = Residual value - Adjusted basis
[tex]= \$ \ 15,000 - \$ \ 3,520 \\\\ = \$ \ 11,480[/tex]
If a stock's P/E ratio is 13.5 at a time when earnings are $3 per year and the dividend payout ratio is 40%, what is the stock's current price?
A) $24.30
B) $18.00
C) $22.22
D) $40.50
Answer:
D) $40.50
Explanation:
The computation of the stock current price is as follows:
Stock price is
= Price earning ratio × Earning per share
= 13.5 × $3
= $40.50
Hence, the stock current price is $40.50
Therefore the correct option is d.
We simply applied the above formula so that the correct value could come
And, the same is to be considered
The beta of RicciCo.'s stock is 3.2, whereas the risk-free rate of return is 9 percent. If the expected return on the market is 18 percent, then what is the expected return on RicciCo.?a. 28.80%b. 48.60%c. 57.60%d. 37.80%
Answer:
d. 37.80%
Explanation:
Calculation for what is the expected return on RicciCo
Using this formula
Expected return = Risk free rate + Beta *(Market return - Risk free rate)
Let plug in the formula
Expected return = 9 + 3.2*(18-9)
Expected return = 9 + 3.2*9
Expected return= 37.80%
Therefore the expected return on RicciCo will be
37.80%
On May 1, Anders Company purchased merchandise in the amount of $5,800 from Shilling, with credit terms of 2/10, n/30. Anders uses the perpetual inventory system and the gross method. The journal entry or entries that Anders will make on May 1 is:________.Purchases 5800Accounts payable 5800
Answer:
Explained
Explanation:
On May 1, Anders Company will record the purchased merchandise in the amount of $5,800 from Shilling by debiting the inventory and crediting the accounts payable.
DEBIT CREDIT
Purchases (inventory) $5,800
Accounts Payable $5,800
Juan paid $1,750 in qualifying expenses for his daughter who attended a community college.How much is Juan's lifetime learning credit without regard to AGI limitations or other credits?
A) $825.
B) $250.
C) $1,750.
D) $350.
Answer: $350
Explanation:
From the question, we are informed that Juan paid $1,750 in qualifying expenses for his daughter who attended a community college.
The amount of Juan lifetime learning credit without regard to AGI limitations or other credits will be calculated as:
= $1750 × 20%
= $1750 × 20/100
= $1750 × 1/5
= $350
Zeta Corporation is a manufacturer of sports caps, which require soft fabric. The standards for each cap allow 2.00 yards of soft at a cost of $2.00 per yard. During the month of January, the company purchased 25,000 yards of soft fabric at $2.10 per yard, to produce 12,000 caps. What is Zeta Corporation's materials price variance for the month of January? a. $2.000 F b. $2,000 U c. $2.500 F d. $2,500 U
Answer:
Direct material price variance= $2,500 favorable
Explanation:
Giving the following information:
The standards for each cap allow 2.00 yards of soft for $2.00 per yard. During January, the company purchased 25,000 yards of soft fabric at $2.10 per yard, to produce 12,000 caps.
To calculate the direct material price variance, we need to use the following formula:
Direct material price variance= (standard price - actual price)*actual quantity
Direct material price variance= (2 - 2.1)*25,000
Direct material price variance= $2,500 favorable
The next dividend payment by Hoffman, Inc., will be $2.85 per share. The dividends are anticipated to maintain a growth rate of 7.5% forever. Assume the stock currently sells for $49.30 per share. A. What is the dividend yield?B. What is the expected capital gains yield?
Answer:
A. Dividend yield;
= Next Dividend / Stock price
= 2.85/49.30
= 5.78%
B. Expected capital gains yield.
The stock price is going to increase by the amount that the dividend increases by so the capital gains yield will be the same as the growth rate which is;
= 7.5%
In which type of analysis are corporate goals and plans compared with the existing manpower inventory to determine the training needs?
a. Organization analysis
b. Operation analysis
c. Individual analysis
d. None of the above
Last month Peggy Company had a $30,310 profit on sales of $350,000. Fixed costs are $92,190 a month. What sales revenue is needed for Peggy to break even? (Round your answer to the nearest dollar amount.)
A. $122,500
B. $380,310
C. $30,310
D. $263,400
Answer:
D. $263,400
Explanation:
Calculation for the What sales revenue is needed for Peggy to break even
First step is to calculate the contribution ratio
Contribution ratio=(30,310 + 92,190)/350,000
Contribution ratio= 35%
Second Step will be to calculate the Sales Revenue
Sales Revenue=92,190/35%
Sales Revenue= $263,400
Therefore What sales revenue is needed for Peggy to break even is $263,400
The shoe department accounts for 2,700 square feet in a store and achieved sales per square foot of $800. Calculate the total sales for the shoe department.
Answer:
$2,160,000
Explanation:
if the sales per square foot are $800 and the area covered by the shoe department is 2,700 square feet, then total sales = $800 x 2,700 = $2,160,000
Sales per square foot are an important tool when measuring sales performance of brick and mortar stores, especially those located in malls. The malls with the highest sales per square foot are also expensive or premium malls, e.g. Bal Harbour in Miami Beach sells on average $3,185 per square foot.
List 5 Skills that demonstrate good professionalism:
Wolf Company is giving a net bonus check of $500 to all of its employees. If each of the payments are subject to FIT (22% supplemental rate) and FICA taxes, but no state taxes, the gross amount of each bonus check would be
a. $662.75
b. $710.73
c. $663.75
d. $656.00
e. None of these choices are correct.
Answer:
e. None of these choices are correct.
Explanation:
Calculation for the gross amount of each bonus check
Using this formula
Gross amount=Net bonus/(1-Supplemental rate-
FICA taxes)
Note that FICA taxes includes :
Social Security tax = 6.2%
Medicare tax on earnings=1.45%
Let plug in the formula
Gross amount=$500/(1-22%-6.2%-1.45%)
Gross amount=$500/(1-14.35%)
Gross amount=$500/0.1335
Gross amount= $3,745.32
Therefore the gross amount of each bonus check would be $3,745.32
Wolf Company is giving a net bonus check of $500 to all of its employees. If each of the payments are subject to FIT (22% supplemental rate) and FICA taxes, but no state taxes, the gross amount of each bonus check would be
Daniel acquires a 30 percent interest in the PPZ Partnership from Paolo, an existing partner, for $46,000 of cash. The PPZ Partnership has borrowed $17,000 of recourse liabilities as of the date Daniel bought the interest. What is Daniel's basis in his partnership interest?
Answer:
$51,100
Explanation:
Given:
Acquire interest = 30%
cash amount = $46,000
Borrowed amount = $17,000
Find:
Basis in partnership interest
Computation:
Basis in partnership interest = $46,000 + ($17,000 x 30%)
Basis in partnership interest = $51,100
Determine if these statements are true or false.
a. The Federal Reserve chooses how much banks lend.
b. The Federal Reserve serves as a lender of last resort.
c. The Federal Reserve loans money to banks.
d. The Federal Reserve sets a target for the federal funds rate.
e. The federal funds rate matters only to banks.
Answer:
a. The Federal Reserve chooses how much banks lend. FALSE.
Banks get the choose how much they lend out to people but the Fed can limit their loanable funds by imposing a required reserve. When it comes to the individual amounts the bank can loan out however, the Fed has no control.
b. The Federal Reserve serves as a lender of last resort. TRUE.
As the Central Bank system of the United States, the Fed acts as a lender of last resort for banks.
c. The Federal Reserve loans money to banks. TRUE.
The Fed can loan out money to banks and it does so at the Discount rate.
d. The Federal Reserve sets a target for the federal funds rate. TRUE
One of the duties of the Fed is to set a target for the Federal funds rate which is the rate that banks use to borrow money amongst themselves overnight.
e. The federal funds rate matters only to banks. FALSE.
The federal funds rate affect the entire financial system because it can affect the cost of borrowing which can either increase the amounts people borrow or decrease it.
You are considering quitting your job where you earn $3,300 per month and opening a new business. The cost of renting an office is $2,500 per month, hiring employees would cost $3,100 per month, and utilities would cost $200 per month. The new business will earn a total revenue of $6,300 per month.
Required:
What is your economic profit?
Answer:
Economic profit= -$2,800
Explanation:
Giving the following information:
Old job= $3,300
The cost of renting an office is $2,500 per month, hiring employees would cost $3,100 per month, and utilities would cost $200 per month.
The new business will earn a total revenue of $6,300 per month.
The economic profit incorporates the opportunity cost of the old job.
Economic profit= 6,300 - 2,500 - 3,100 - 200 - 3,300
Economic profit= -$2,800
Assume that the weekly payroll of Hunter Hardware, Inc., is $1,000. The end of the year, December 31, falls on Tuesday. Hunter Hardware will pay its employees on Friday for the full week. What adjusting entry will Hunter Hardware make on Tuesday, December 31? (Use five days as a full workweek.)Date Accounts and Explanations Debit CreditA. Salaries Expense 400 Salaries Payable 400B. Salaries Payable 400 Salaries Expense 400C. Salaries Expense 600 Cash 600D. Salaries Expense 600 Salaries Payable 600
Answer:
A. Dr Salaries Expense 400
Cr Salaries Payable 400
Explanation:
The adjusting Journal entry that Hunter Hardware make on Tuesday, December 31 will be: Dr Salaries Expense 400
Cr Salaries Payable 400
Calculated as:
First step is to calculate the Accrued salary
Using this formula
Accrued salary=Weekly payroll / 5 days*Number of days for which salary were not paid
Let plug in the formula
Accrued salary = $1,000/5 days*2days
Accrued salary= $200 x 2 days
Accrued salary= $400
Therefore the adjusting Journal entry that Hunter Hardware make on Tuesday, December 31 will be to Debit Salaries Expense 400 and
Credit Salaries Payable 400
Sandall and Schwartz describe six types of curriculum modifications that can help children with special needs participate fully; these include all EXCEPT:_______
a. Simplify activities.
b. Adaptive devices.
c. Specialized packaged and purchased curriculum.
d. Environmental support.
Answer:
Option C:specialized packaged and purchased curriculum.
Explanation:
It was a term from the building blocks curriculum (Sandall & Schwartz 2008). Specialized package are special programs for the children to aid their learning.
Programs that are good and help children grow Developmentally are based on What is known about how children develop and learn, individual differences between children, and qualities of their families and culture.
Developmentally good curriculum helps the various aspects of child development, individual differences, and the families and culture of the children in the program.
Symbols such as Traveler's Financial Services umbrella are designed to help customers over come the _____ of services.
Answer:
D) intangibility
Explanation:
Intangibility is a term that means it is not seen or even not touched. It only feels. Like in the case of intellectual properties like goodwill, copyrights, patents, etc we cant see them we only work on it.
So here in the given situation, the symbols like umbrella of traveler financial services would be designed for helping the customers so that it would be overcome the services intangibility
Therefore the correct option is D.
How long do financial records remain on your credit report?
A 7.05 percent coupon bond with 25 years left to maturity can be called in eight years. The call premium is one year of coupon payments. It is offered for sale at $1,075.85. What is the yield to call of the bond? (Assume interest payments are semiannual.)
Answer:
Yield to call is 5.88% annually
Explanation:
The rate of return bondholders receives on a callable bond until the call date is called Yield to call.
Yield to Call = [ C + ( F - P ) / n ] / [ (F + P ) / 2 ]
It is assumed that face value of Bond is $1,000
C = Coupon Payment = $1,000 x 7.05% x 6/12 = $35.25
F = Face value = $1,000
P = Call price = $1,075.85
n -= number of periods to call = 8 x 2 = 16 periods
Yield to Call = [ $35.25 + ( $1,000 - $1075.85 ) / 16 ] / [ ( $1,000 + $1075.85 ) / 2 ]
Yield to Call = [ $35.25 - 4.74 ] / $1,037.925
Yield to Call = $30.51 / $1,037.925
Yield to Call = 0.0294
Yield to Call = 2.94% semiannually
YTC = 2.94% x 12/6 = 5.88% annually
Snap On Inc has a beta of 2.67 and the expected market return is 0.19. In addition, Treasury bills (risk-free asset) are currently yielding 0.02. Find the expected return for Snap On Inc.
Answer: Expected Return = 0.47
Explanation:
Using the CAPM, The Capital Asset Pricing Model formulae , we have that
Expected Return = Risk Free Rate + Beta(Market Return - Risk Free Rate)
Where
market return is 0.19
Beta =2.67
risk-free asset= 0.02
Expected Return=0.02 +2.67 X (0.19 - 0.02)
=0.02 +2.67 X (0.17)
0.02 +0.4539
Required Return=0.47
Therefore Expected Return for Snap On Inc is 0.47
Sarah and Jane formed a partnership with capital contributions of $210,000 and $123,000, respectively. Peter contributed $86,000 to acquire an ownership interest of 12% in the new partnership. How much is the total bonus for the existing partners?
Answer:
$35,720
Explanation:
The computation of the total bonus for the existing partners is shown below;
Total capital is
= $210,000 + $123,000 +$86,000
= $419,000
Now
Share of new partner
= $419,000 × 12%
= $50,280
But the actual amount that needs to pay is $86,000
So, the bonus would be
= $86,000 - $50,280
= $35,720
Hence, the total bonus for the existing partners is $35,720
A large life insurance company has decided to switch from using a strong fear appeal to a humorous approach. What are the strengths and weaknesses of such a change in message strategy?
Answer:
Explanation:
A fear approach is meant to scare people and make them aware that they are only human and that bad things can happen. This would push them towards buying the insurance package. A humorous approach would focus more and a funny message of why it is important. This change would be targetting the same audience but with a completely opposite message which may not reach people the same way, especially if those individuals do not like the humor aspect of it and are not longer scared from the previous fear strategy that the company would have had.
A July sales forecast projects that 9,000 units are going to be sold at a price of $11.00 per unit. Management forecasts 2% growth in sales each month. Total August sales are anticipated to be:_______
a. $76,950.
b. $71,250.
c. $68,400.
d. $67,500.
e. $74,100.
Answer:
the expected august sales is $100,980
Explanation:
The computation of the expected august sale is shown below:
July Sales (9,000 units × $11 per unit) $99,000
Add: Growth ($99,000 × 2%) $1,980
Total August Sales $100,980
This is the answer but the same is not provided in the given options
Hence, the expected august sales is $100,980
The same is to be considered
Huxley Building Supplies' last free cash flow was $1.75 per share . Its free cash flow growth rate is expected to be constant at 25% for 2 years, after which free cash flows are expected to grow at a rate of 6% forever. WACC is 12%. Huxley has $5 in short-term investments per share and $7 debt per share. What is the best estimate of the current intrinsic stock price?
Answer:
$40.6344 per share
Explanation:2.
Complete question "Huxley has $5 million in short-term investments and $7 million in debt and has 1 million shares outstanding. What is the best estimate of the current intrinsic stock price?"
Calculation of the value of firm is as below
Yr Cash flow Growth rate New c.flow Pv at 12% Pv of cash flows
1 1.75 25% 2.1875 0.893 1.9534
2 2.1875 25% 2.7344 0.797 2.1793
TCM 48.3083 0.797 38.5017
Value of firm 42.6344
Note: TCM = Terminal cash floe = 2.7344*(1.06) / 12% - 6% = 48.3083 million
Now, Market value of firm = 42.6344 + 5 - 7 = 40.6344 million
Market price per share = $40.6344 million/1 million = $40.6344 per share
Utopia has a national debt. If they have a budget deficit this year, and continue to operate with budget deficits year after year, what will happen to their national debt?A. Their national debt will decrease.
B. Their national debt will increase.
C. Their national debt will remain the same.
D. They will now have a budget surplus.
Answer: B. Their national debt will increase.
Explanation:
A country has a budget deficit when it spends more than it receives from its revenue sources i.e taxes.
If a country has a budget deficit, it will have to borrow money in order to pay for this shortfall so that it may be able to carry out the expenditure it is supposed to.
If therefore, a country keeps operating in deficit, it will have to keep borrowing to keep spending which means that the national debt will keep increasing.
following types of businesses are devoted to carrying out marketing activities
Answer:
i think lawyers
Explanation:
There are 200 units in inventory at the start of week 1. What are the net requirements in week 4 if there is a scheduled receipt of 100 units every other week and a two week production lead time?
1 2 3 4 5
Gross Requirements 550 450 400 400 500
Scheduled receipts 100 0 100 0 100
Projected ending Inventory
Net Requirements
Planned Receipts 350 450
Planned Orders 350 300
a. 250
b. 300
c. 350
d. 400
Answer:
a. 250
Explanation:
______________________ 1 _____ 2 _____ 3 _____ 4
Gross Requirements _____ 550 ___450 ____400 ___400
Scheduled receipts ______ 100 ____ 0 _____ 100 ___ 0
Beginning Inventory _____ 200 ____100 ____ 100____150
Net Requirements _______ 250____350____ 200____250
Planned Receipts ________350 ____450_____350 ___ 300
Projected Ending Inventory _100____ 100_____ 150____ 50
Planned Orders __________350 ___ 300_____300____ 0
The net requirement in week 4 is 250 units
Working
Formulas or calculations
Net Requirements = Gross requirements - Schedule receipts - Beginning Inventory
Projected Ending Inventory = PLanned receipt - Net requirements
Week 4
Net Requirements = Gross requirements - Schedule receipts - Beginning Inventory
PLacing values in the formula
Net Requirements = 400 - 0 - 150 = 250
Explain the difference between fixed and variable costs and give two examples of each. Can a company budget for variable costs? Explain
Answer:
Fixed cost in an organization does not change and is fixed while the variable cost keep changing if the production is increased.
Explanation:
Fixed cost are said to be that cost which does not change with production level for a certain limit. Let us suppose there is no change in the rent amount if we have only factory for the production of goods.
But the variable cost are those cost which increases as production increases. More will be the variable cost when the production will be more. Also for per unit basis, the variable cost remains the same.
Fixed cost are not important in decision making if there is an excess of capacity available.
For example,
Direct labor, direct material -- variable cost
Salary of supervisor, rent of factory -- fixed cost
Even though there is not much change in the variable cost, like for suppose material price increases, a company can still make a budget that is based on the past experience and predicting the market prices. Similarly, if there is a machine that uses three units of direct material for a piece if finished product, which is not going to change in the future. Thus the company can make a budget.