Answer:
0.4110
Explanation:
The formula and computation of the correlation coefficient is shown below:
Correlation co-efficient = Covariance ÷ (Standard deviation of market × Standard deviation of Stock A)
where,
Covariance between the two = 0.0026
Variance of the stock A = 0.005
And, the variance of the market is 0.008
Now placing these values to the above formula
So, the correlation coefficient is
= 0.0026 ÷ (0.008 × 0.005)^0.50
= 0.0026 ÷ 0.006324555
= 0.411096096
= 0.4110
Hence, the correlation coefficient is 0.4110
Kayak Co. budgeted the following cash receipts (excluding cash receipts from loans received) and cash disbursements (excluding cash disbursements for loan principal and interest payments) for the first three months of next year. Cash Receipts Cash DisbursementsJanuary $525,000 $475,000 February 400,000 350,000 March 450,000 525,000
According to a credit agreement with the company’s bank, Kayak promises to have a minimum cash balance of $30,000 at each month-end. In return, the bank has agreed that the company can borrow up to $150,000 at an annual interest rate of 12%, paid on the last day of each month. The interest is computed. based on the beginning balance of the loan for the month. The company repays loan principal with available cash on the last day of each month. The company has a cash balance of $30,000 and a loan balance of $60,000 at January 1. Prepare monthly cash budgets for each of the first three months of next year
Answer:
Kayak Co.
Cash Budget
January February March
Cash inflows: $525,000 $400,000 $450,000
Cash outflows: ($475,000) ($350,000) ($525,000)
Monthly cash flow: $50,000 $50,000 ($75,000)
Monthly interests: ($600) ($106) $0
Initial cash balance: $30,000 $30,000 $69,294
Ending cash balance: $79,400 $79,894 ($5,706)
Required bank loan: $0 $0 $35,706
Payment of bank loan: ($49,400) ($10,600) $0
Total $30,000 $69,294 $30,000
Explanation:
Cash Receipts Cash Disbursements
January $525,000 $475,000
February $400,000 $350,000
March $450,000 $525,000
A cash budget is the estimation of the business's future cash flows including estimated revenues and expenses.
The following equity investment transactions were completed by Romero Company during a recent year:
Apr. 10 Purchased 3,600 shares of Dixon Company for a price of $51 per share plus a brokerage commission of $95.
July 8 Received a quarterly dividend of $0.95 per share on the Dixon Company investment.
Sept. 10 Sold 2,000 shares for a price of $41 per share less a brokerage commission of $75.
Journalize the entries for these transactions.
Answer:
The journal entries will look as follows:
Explanation:
Date Particulars Dr ($) Cr ($)
Apr 10 Investments - Dixon (w.1.) 183,695
Cash (w.1.) 183.695
(To record total value of investment in Dixon Company.)
July 8 Cash 3,420
Dividend revenue (w.2.) 3,420
(To record dividend revenue from Dixon Company shares.)
Sept. 10 Cash (w.3.) 81,925
Loss on investment sold (w.5.) 20,128
Investments - Dixon (w.4.) 102,053
(To record sales of investment in Dixon Company.)
Workings:
w.1. Total value of investment in Dixon Company = (3,600 * $51) + $95 = $183,695
w.2. Dividend revenue = 3,600 * $0.95 = $3,420
w.3. = Cash = (2,000 * 41) - $75 = $81,925
w.4. Value of investment in Dixon = ($183,695 / $3,600) * 2,000 = $102,053
w.5. Loss on sale of investment = w.3. - w.4. = $102,053 - $81,925 = $20,128
After observing the heavy snow that his town received the previous winter, Ajay Patel, an enterprising student, plans to offer a show-clearing service in his neighborhood this winter. If he invests in a new heavy-duty blower. Ajay forecasts a profit of $700 if snowfall this winter is heavy, a profit of $200 if it is moderate and a loss of $900 if it is light. As per the current weather forecasts, the probabilities of heavy, moderate and light snowfall this winter are 0.4, 0.3 and 0.3 respectively.
Rather than purchase a new blower, Ajay could get his father's blower repaired and just accept smaller jobs. Under this option, Ajay estimates profit of $350 for a heavy snowfall, and a loss of $150 for a light snowfall. Ajay, of course has the option of choosing neither of these options.
The local weather Adams, is Ajay's good friend. For $50, she is willing to run sophisticated computer weather models on her computer and tell Ajay whether she expects this winter to be cold. For the sake of solving this problem, assume that the following information is available. There is a 45% chance that Samantha will predict this winter to be unseasonably cold. If she does say this, the probabilities of heavy, moderate, and light snowfall are revised to 0.7, 0.25, and 0.05, respectively. On the other hand, if she predicts that this winter will not be unseasonably cold, these probabilities aye revised to 0.15, 0.33, and 0.52, respectively.
Draw the decision tree for the situation faced by Ajay. Fold back the tree and determine the strategy you would recommend he follow. What is the efficiency of Samantha's information?
T-bills currently yield 5.0 percent. Stock in Danotos Manufacturing is currently selling for $87 per share. There is no possibility that the stock will be worth less than $80 per share in one year.
Required:
a. What is the value of a call option with a $76 exercise price?
b. What is the intrinsic value?
c. What is the value of a call option with a $68 exercise price?
d. What is the intrinsic value?
e. What is the value of a put option with a $76 exercise price?
f. What is the intrinsic value?
Answer:
a) Call option = Stock price - present value of the exercise price
= $87 – [$76 ÷ 1.05]
= $14.62
b) The intrinsic value is the amount by which the stock price exceeds the exercise price of the call, so the intrinsic value is
= $87 - $76
=$11
c) Call option = Stock price - present value of the exercise price
= $87 – [$68 ÷ 1.05]
= $22.24
d) The intrinsic value is the amount by which the stock price exceeds the exercise price of the call, so the intrinsic value is
= $87 - $68
=$ 19.
e) The value of the put option is $0 because there's no chance the put exhausts the money.
f) The intrinsic value is also $0
Explanation:
Frank Barlowe is retiring soon, so he is concerned about his investments providing him with a steady income every year. He is aware that if interest rates , the potential earnings power of the cash flow from his investments will increase. In particular, he is concerned that a decline in interest rates might lead to annual income from his investments. What kind of risk is Frank most concerned about protecting against? Reinvestment rate risk Interest rate risk
Answer:
Increase
less
A) Reinvestment rate risk.
Explanation:
Reinvestment rate risk is demonstrated as the type of financial risk in which the investor is concerned about his investment getting canceled or stopped in the future and the other party/place might not be able to provide a similar rate of return.
In the given situation, Frank Barlowe is concerned about reinvestment risk. He is aware that he will earn a steady income from his investments as he knows that when the interest rates increase, his potential returns would increase and vice versa. But since he is retiring, he has a potential concern that if the investment gets abandoned somehow, he might not be able to reinvest his amount at the same rate and will not be able to continue with steady returns. Thus, option A is the correct answer.
Vertical Analysis Two income statements for Cornea Company follow: Cornea Company Income Statements For Years Ended December 31 2019 2018 Fees earned $680,000 $576,000 Operating expenses 482,800 420,480 Operating income $197,200 $155,520 Prepare a vertical analysis of Cornea Company's income statements. Enter percents as whole numbers.
Answer:
Cornea Company
Income Statements For Years Ended December 31
2019 2018
Amount Percent Amount Percent
Fees earned $680,000 100% $576,000 100%
Operating expenses $482,800 71% $420,480 73%
Operating income $197,200 29% $155,520 27%
Operating expense working
2019= 482,800/680,000 * 100/1= 71% = 0.71
2018= 420,480/576,000 * 100/1= 73% = 0.73
Operating Income working
2019= 1 - 0.71 = 0.29 = 29%
2018= 1 - 0.73 = 0.27= 27%
Porter's Five Forces framework has been around since the 1980's and has been very effective in evaluating industry attractiveness. Changes in the dynamic nature of industries has not impacted the usefulness of the tool. The tool has no limitations. Group of answer choices
Answer:
False
Explanation:
Porter's Five Forces framework is a list of factors which provide an explanation to the forces affecting competition in industries. These five forces include;
1. Competition in the industry
2. Potential of new entrants into the industry
3. Power of suppliers
4. Power of customers
5. Threat of substitute products
Over the years, these five forces have been used in explaining the structure of certain industries. The framework however has limitations, some of which include,
1. It is not in terms with current realities, such as new advancements in technology which were not available as at the time the framework was formed.
2. Some companies operate different structures, whereas, the framework classifies each industry under one structure.
3. There is the possibility of industries to give equal consideration to all five factors, whereas in reality only some of the factors might be applicable to them.
4. Individual companies instead of industries now use the framework to make their business analysis which is not the real reason for the development of the framework. It was meant for industries as a whole.
Between 2015 and 2016, the country of North Grogolia experienced a growth rate of -1.4%. If nominal GDP had increased by 3.1% and the population growth was recorded at 0.7%, then calculate the annual inflation rate in North Grogolia. Give your answer to one decimal.
Answer: 3.8%
Explanation:
To calculate this you can use the Economic Growth Formula because price change is one of the components of the equation and as you may know, inflation is the change in Prices from one period to the next.
The Equation is,
Economic Growth = % Δ Nominal GDP – % Δ Prices – % Δ Population.
Making % Δ Prices the subject gives,
% Δ Prices = - Economic growth + % Δ Nominal GDP - % Δ Population
= - (- 1.4%) + 3.1% - 0.7%
= 1.4% + 3.1% - 0.7%
= 3.8%
The inflation rate is therefore 3.8%
Fleet Delivery Corporation is a public company with a market capitalization of less than $75 million. Fleet is poised to issue securities in a transaction that, under the Securities Act of 1933, is "exempt." This enables Fleet to ______________.
Answer:
This enables Fleet to reduce costs of regulatory compliance in relation to the security issue
Explanation:
When a company is exempt under the Securities Act of 1993,this implies that when issuing securities in the market place,the stock exchange ,the company is not required to produce audited financial statements.
Auditing financial statements sometimes cost fortunes especially when it is also required that one of the Big-4 professional firms is to be consulted.
By not requiring audited financials,the costs of audit is saved,hence cost of compliance with exchange rules is reduced overall
On June 30, 2010, Microsoft Corporation was holding $4.8 billion of cash that it had collected from customers in advance for future software licenses and the future delivery of other products and services. In its financial statements, Microsoft classified and recorded this amount as
Answer: O the liability Unearned Revenue on its balance sheet.
Explanation:
Unearned Revenue is a liability that goes into the balance sheet to record the cash received for goods and/or services that the company have not delivered yet.
This is so that the company is not in violation of the Accrual Accounting concept known as the Revenue Recognition Principle that states that revenue should be recognised only in the period that they have been earned.
Microsoft in this scenario will record this cash as an Unearned Revenue and then consider it revenue when it has delivered the said goods and services.
A company's beginning Work in Process inventory consisted of 21,500 units that were 20% complete with respect to direct labor. These beginning units were completed and another 92,400 units were started during the current period. Of those started, 61,500 were finished and the remaining 30,900 were 40% complete at the end of the period. Using the weighted-average method, the equivalent units of production with regard to direct labor were:
Answer:95,360 units.
Explanation:The equivalent unit of production shows the quantity of work done by a manufacturing company on units of output partially completed at the end of a period.
Equivalent units of production =Units completed(work n progress at beginning + finished goods)+Ending work in progess
=(21,500+61, 500)+(30,900×40%)
=83,000 + 12,360
=95,360 units.
The equivalent units of production for conversion is 95,000 units.
client becomes dissatisfied with the progress that Engineer A is making on his project. As a result, he terminates the services of Engineer A and hires Engineer B to complete the work. Engineer B: Must be able to document his or her effort of reworking the entire design process. Must take complete responsibility for the documents.s Must notify Engineer A, by certified mail, of his intentions to reuse already sealed documents. All of the ab
Answer:
The correct answer is all of the above.
Explanation:
Solution
When a client is not happy with the work of the former Engineer A on his project, if he hires Engineer B to finish the work, the new Engineer must take into consideration the past work of his predecessor.
He has to check the overall work manual of the previous engineer, so as to input his own idea to make the work much better and satisfactory for the client.
He (Engineer B) should be able to keep track in documenting his or her effort while redoing the entire design process stage.
He can also asked questions from the previous Engineer in case he his not understanding dome things or facing some issues towards the project work.
The four option here, are correct
Which of the following statements is incorrect? Group of answer choices Cost of goods available for sale will always be equal to or greater than cost of goods sold. Ending inventory exceeds beginning inventory when purchases are greater than cost of goods sold. Cost of goods sold exceeds purchases when ending inventory is less than beginning inventory. Ending inventory is greater than beginning inventory when purchases are less than cost of goods sold.
Answer:
Ending inventory is greater than beginning inventory when purchases are less than cost of goods sold.
Explanation:
Ending inventory is greater than beginning inventory when purchases are less than cost of goods sold is the wrong answer option
Ending inventory is the amount of inventory a company has in stock at the end of it's fiscal year. It is the beginning inventory plus net purchases minus cost of goods sold.
When the beginning inventory is greater than the ending inventory, then has been sold in the period than you bought.
Maxwell and Smart are forming a partnership. Maxwell is investing a building that has a market value of $100,000. However, the building carries a $36,000 mortgage that will be assumed by the partnership. Smart is investing $61,000 cash. The balance of Maxwell's Capital account will be:
Answer:
=$64,000
Explanation:
Max and Smart are forming partnership
Market Value of building = 100,000
The building carried mortgage by the partnership= 36,000
Smart is investing= 61,000
Balance of Maxwell capital Account will be Building value - Mortgage on building
=$100,000 - $36,000
=$64,000
Balance of Maxwell capital Account is equals to =$64,000
Capital account is the account that show the net worth of an enterprise or business in accounting.
According to this case study, what is an upcoming key technology that will be used in retail stores to improve customer service? And how it is currently being used? What will be the role of smartphones in the future of shopping? Support your claim with a reference.
Answer:
1. According to the case study (copy attached) "the upcoming technology that will be used in retail stores to improve customer service is the Scan As You Go Mobile Devices".
2. It is currently being used by sales officers in some shopping malls to scan items on the spot and let customers pay without going through the cash registers.
It is also being used to help customers take advantage of discounts and coupons on items being purchased. The effect is that customers spend 10% when they shop using this technology.
3. In the future, the customers will be able to check out using their smartphones.
4. According to the case study, the technology referred to in 3 above is already pioneered by Apple Stores.
Cheers!
Mr. Grove's argument is to provide additional incentives to U.S. firms for domestic investment in more mass production. If implemented, this would have the largest impact on firms using which of the four integration-responsiveness strategies?A) Transnational strategy because such incentives help differentiation.B) Multi-domestic strategy because incentives would increase global responsiveness.C) Global-standardization strategy because incentives would lower domestic costs.D) International strategy because these incentives would reduce pressure for responsiveness globally.E) Global-standardization strategy because incentives align with the death-of-distance.
Answer:
The correct answer is the option C: Global-standarization strategy because incentives would lower domestic costs.
Explanation:
To begin with, the term of ''global-standarization strategy'' in the field of business is known because of being part of the group of the four integration-responsiveness strategies and is the one that focus in the standarization of the product in a globally way. Therefore that this type of strategy is the one that would be used in the case of looking for an investment in the mass production locally due to the fact that the firms will be producing goods in a standard way and therefore that they would use universal supplies in every production in order to increase the amount of the production to achieve a mass number.
New Age Makeup produces face cream. Each bottle of face cream costs $10 to produce and can be sold for $13. The bottles can be sold as is, or processed further into sunscreen at a cost of $14 each. New Age Makeup could sell the sunscreen bottles for $23 each.
A) Face cream must be processed further because its profit is $9 each.
B) Face cream must not be processed further because costs increase more than revenue.
C) Face cream must not be processed further because it decreases profit by $1 each.
D) Face cream must be processed further because it increases profit by $3 each.
Answer:
Face cream must not be processed further because costs increase more than revenue.
Explanation:
Profit = Total revenue - Total cost
If sold as face cream, total profit = $13 - $10 = $3
If processed into sunscreen , total cost = $10 + $14 = $24
Profit = $24 - $23 = $1
The profit from selling the product as a face cream is greater than the profit of developing it to a face cream. So the product shouldn't be developed further.
I hope my answer helps you
Calculate the times interest earned ratio using the financial statement data shown below. Current liabilities $185 Income before interest and taxes $170 10% Bonds, long-term 360 Interest expense 36 Total liabilities 545 Income before tax 134 Stockholders' equity Income tax 29 Common stock 222 Net income $105 Retained earnings 289 Total stockholders' equity 511 Total liabilities and equity $1,056HHF's times interest earned ratio is:______.a. 10.00.b. 3.14.c. 1.54.d. 2.14.Current liabilities $180 Income before interest and taxes $11810% Bonds, long-term 360 Interest expense 36Total liabilities 540 Income before tax 82Shareholders' equity Income tax 20Capital stock 201 Net income $62Retained earnings 283Total shareholders'equity 484Total liabilities and equity $1,024HHF's debt to equity ratio is:________.a. 0.74.b. 0.56.c. 1.12.d. 1.90.
Answer:
1. Times interest earned ratio is 4.72
2. Debt to equity ratio is 1.12. Option C
Explanation:
Current liabilities = $185
Income before interest and taxes = $170
10% Bonds, long-term = $360
Interest expense = $36
Total liabilities = $545
Income before tax = $134
Stockholders' equity Income tax = $29
Common stock = $222
Net income = $105
Retained earnings = $289
Total stockholders' equity = $511
Total liabilities and equity = $1,056
1. Times interest earned ratio = Earnings before interest and taxes/Interest expenses
= $170 ÷ $36
= 4.72
Current liabilities = $180
Income before interest and taxes = $118
10% Bonds, long-term = $360
Interest expense = $36
Total liabilities = $540
Income before tax = $82
Shareholders' equity Income tax = $20
Capital stock 201 Net income = $62
Retained earnings = $283
Total shareholders'equity = $484
Total liabilities and equity = $1,024
2. Debt to equity ratio = Total debt ÷ Total equity
= 540 ÷ 484
= 1.12
Changes in reserve requirements to conduct monetary policy is generally not a good idea for the United States because:
A)it requires approval of Congress and this can take too long.
B)it takes a long time to work whereas other tools are much quicker.
C)this tool is powerful and makes it difficult for bank managers to plan for the future and manage funds as they like.
D)the United States is too large of a country to use this tool.
Answer: this tool is powerful and makes it difficult for bank managers to plan for the future and manage funds as they like.
Explanation:
Reserve requirements are the amount of money that a bank holds in its reserve to ensure that it can meet liabilities in the case of sudden withdrawals. The reserve requirement is a tool that is used by the central bank of a country to either increase or decrease the money supply in the economy and also influence interest rates.
The changes in reserve requirements to conduct monetary policy is not a good idea for the United States because it is a powerful tool which makes it hard for bank managers to make future plans and manage funds as they want. In a situation whereby small variation in the reserve ratio brings about huge changes in an economy, the changes are positive and okay but in a situation whereby they bring about negative effect, it will be hard to face such scenarios.
Ivanna, who has three children under age 13, worked full-time while her spouse, Sergio, was attending college for nine months during the year. Ivanna earned $28,000 and incurred $9,100 of child care expenses. Ivanna and Sergio's credit for child and dependent care expenses is?
Answer:
$1,260
Explanation:
Remember, we are dealing with a case of a married couple. Therefore, we apply the tax credit rule patterning to legally married couples.
Note that the rule is restricted to the lesser of
- real expenses,
- $6,000 (in this case they have three children which implies they have more than two qualifying children),
- the total earned income of the lowest taxpayer in the family.
Since the rule gives an exception for students. We could assumed that Sergio earned $500 for each month he was attending college. That is 9 * $500 = $4,500; the Credit = $4,500 * 28%= 1,260
Based on the period Sergio attended college and the relevant tax laws, Sergio's credit is $1,260.
When a person is going to college, they are assumed to make $500 per month. Sergio's earnings are therefore:
= 500 x 9 months
= $4,500
With a joint Adjusted Gross Income of $28,000 for the both of them, they can get a tax credit of 28% of their earnings.
As Sergio is assumed to have made $4,500, the tax credit is:
= 28% x 4,500
= $1,260
In conclusion, Sergio's credit is $1,260.
Find out more at https://brainly.com/question/18801773.
A decrease in operating expenses would have which of the following effects on a company's profit margin? Multiple Choice There is not enough information given to determine the effect. Net profit margin would increase. Net profit margin would decrease. Net profit margin would remain unchanged.
Answer: Net profit margin would increase.
Explanation:
A company's net profit margin is the Net Profit divided by Revenue. Net Profit is derived by subtracting some expenses and liabilities from the Revenue such as Cost of Goods as well as operating expenses.
If operating expenses were to reduce therefore, there would be less subtractions from the revenue. The would translate to a higher Net Profit and when that is then divided by the Revenue, it will give a higher Net Profit Margin.
Compute ending merchandise inventory, cost of goodssold, and gross profit using the (1) FIFO inventory costingmethod, (2) LIFO inventory costing method, and (3) weighted-average inventory costing method. (Round weighted-average cost per unit to the nearest cent and all other amounts to the nearest dollar.)
Begin by determining ending merchandise inventory and cost of goods sold under each of the three methods.
Requirement 1.
FIFO
Plus:
Less:
Cost of goods sold
Requirement 2.
LIFO
Requirement 3.
Weighted-Average
Additional Information:
June.1 Beginning merchandise inventory 17 units at $15each
12 Purchase 5 units at $19each
20 Sale 14 units at $37each
24 Purchase 11 units at $23each
29 Sale 13 units at $37each
Answer:
a) Ending Merchandise Inventory and Cost of Goods Sold under FIFO:
Beginning Inventory, 17 units at $15each $255
Plus Purchases:
June 12 Purchase, 5 units at $19each 95
June 24 Purchase, 11 units at $23each 253
Cost of Goods Available for Sale $603
Less Ending Inventory 138
Cost of Goods Sold $465
b) Ending Merchandise Inventory and Cost of Goods Sold under LIFO:
Beginning Inventory, 17 units at $15each $255
Plus Purchases:
June 12 Purchase, 5 units at $19each 95
June 24 Purchase, 11 units at $23each 253
Cost of Goods Available for Sale $603
Less Ending Inventory 90
Cost of Goods Sold $513
c) Ending Merchandise Inventory and Cost of Goods Sold under Weighted Average:
Beginning Inventory, 17 units at $15each $255
Plus Purchases:
June 12 Purchase, 5 units at $19each 95
June 24 Purchase, 11 units at $23each 253
Cost of Goods Available for Sale $603
Less Ending Inventory 109.62
Cost of Goods Sold $493.38
2. Ending Inventory = 6 units (17 units + 5 - 14 + 11 - 13)
FIFO LIFO Weighted Average
Ending Inventory value = $23 *6 = $138; $15 *6 = $90; $18.27 *6 = $109.62
Weighted Average = Cost of Goods Available for Sale / Quantity Available for Sale = $603/33 = $18.27 per unit
Explanation:
FIFO: First In, First Out: This is a method of costing inventory which assumes that goods remaining in stock are those that were brought in last. This means that goods are sold out according to the time they are bought, with earlier bought goods being sold before later bought goods.
LIFO: Last In, First Out: This costing method assumes that goods that are sold are those that were bought later leaving those bought earlier to remain in stock. The entity using this method exhausts the last quantity bought before selling the earlier quantities.
Weighted Average: This is another technique which weighs the averages of the cost of inventory before determining the value of inventory. The weighted average method divides the cost of the goods available for sale by the number of those units still on the shelf. The result is the weighted average cost per unit, which can be used to assign a cost to both the ending inventory and the cost of goods sold.
You have a portfolio that is invested 17 percent in Stock A, 38 percent in Stock B, and 45 percent in Stock C. The betas of the stocks are .62, 1.17, and 1.46, respectively. What is the beta of the portfolio
Answer:
The portfolio beta is 1.207
Explanation:
The portfolio beta is the weighted average of the individual stock betas that form up the portfolio. The weightage of each stock in the portfolio is calculated on the basis of investment in that stock as a proportion of total investment in the portfolio. The portfolio beta is calculated as follows,
Portfolio beta = Weight of Stock A * Beta of Stock A + Weight of Stock B * Beta of Stock B + ... + Weight of Stock N * Beta of Stock N
Portfolio beta = 0.17 * 0.62 + 0.38 * 1.17 + 0.45 * 1.46
Portfolio beta = 1.207
The following comparative income statement (in thousands of dollars) for the two recent fiscal years was adapted from the annual report of Speedway Motorsports, Inc., owner and operator of several major motor speedways, such as the Atlanta, Texas, and Las Vegas Motor Speedways.
1 Current Year Previous Year
2 Revenues:
3 Admissions $116,034.00 $130,239.00
4 Event-related revenue 151,562.00 163,621.00
5 NASCAR broadcasting revenue 192,662.00 185,394.00
6 Other operating revenue 29,902.00 26,951.00
7 Total revenue $490,160.00 $506,205.00
8 Expenses and other:
9 Direct expense of events $101,402.00 $106,204.00
10 NASCAR purse and sanction fees 122,950.00 120,146.00
11Other direct expenses 18,908.00 20,352.00
12 General and administrative 183,215.00 241,223.00
13 Total expenses and other $426,475.00 $487,925.00
14 Income from continuing operations $63,685.00 $18,280.00
Required:
A. Prepare a comparative income statement for these two years in vertical form, stating each item as a percent of revenues. Enter all amounts as positive numbers. Rounding instructions
B. Comment on the significant changes.
Prepare a comparative income statement for these two years in vertical form, stating each item as a percent of revenues. Enter all amounts as positive numbers. Rounding instructions
Answer:
A)
Speedway Motorsports, Inc.
Comparative Income statement
For the Years 202x and 202x₋₁
202x 202x₋₁
Total revenue $490,160 $506,205
Admissions 23.67% 25.73%Event related 30.92% 32.32%NASCAR broadcasting 39.31% 36.63%Other operating revenue 6.1% 5.32%Direct expenses: 49.63% 48.74%
Direct expense of events 20.69% 20.98% NASCAR purse & sanction fees 25.08% 23.73%Other direct expenses 3.86% 4.03%General and administrative 37.38% 47.65%
Income from continuing operations 12.99% 3.61%
B) The most significant changes are that total revenues actually decreased, but net income from operating activities actually creased both in $ amounts and as % of total revenue. Direct expenses remained at similar levels during both years, even 202x₋₁ direct expenses were lower. But the most significant cost reduction was made on general and administrative expenses which were lowered by almost 10% (compared to total revenues). Only NASCAR broadcasting related revenues increased, while all the other revenues decreased in % and absolute amounts.
Larry Company makes and sells 2 models of dishwashers, Model ABC and Model XYZ. For every 2 Model ABC sold, 3 Model XYZ are sold. The following information is also provided: Model ABC Model XYZ Sales per unit $ 490 $ 730 Variable Cost per unit $250 $300 CM per unit $ 240 $ 430 What is the weighted average contribution margin?
Answer:
$354
Explanation:
The computation of the weighted average contribution margin is shown below:
= (Contribution margin per unit for Model ABC × Sales mix for model ABC) + (Contribution margin per unit for Model XYZ × Sales mix for model XYZ) ÷ (Sales mix for model ABC + Sales mix for model XYZ)
= ($240 × 2 models + $430 × 3 models) ÷ (2 models + 3 models)
= ($480 + $1,290) ÷ (5 models)
= $354
We simply applied the above formula
The amount of increase or decrease in revenue that is expected from a particular course of action as compared with an alternative is termed: Group of answer choices manufacturing margin contribution margin differential cost differential revenue Flag this Question Question 21 pts Partridge Co. can further process Product J to produce Product D. Product J is currently selling for $21 per pound and costs $15.75 per pound to produce. Product D would sell for $37 per pound and would require an additional cost of $9.25 per pound to produce. What is the differential cost of producing Product D
Answer:
a) The amount of increase or decrease in revenue that is expected from a particular course of action as compared with an alternative is termed:
Differential Revenue
b) The Differential cost of producing Product D is the additional cost of $9.25 per pound.
Explanation:
a) Differential Revenue is the difference in sales revenue that results from two different courses of action.
b) The corporate finance institute defines Differential cost as "the difference between the cost of two alternative decisions."
Suppose that the government spending multiplier is 3.2 and the tax multiplier is 2.9. This means that, if prices are constant, a $200 billion rise in government spending will __________________, and a $200 billion cut in taxes will _____________________.
Answer:
At constant prices, a $200 billion rise in government spending will increase Real GDP by 640 billion
and;
A $200 billion cut in taxes will increase real GDP by 580 billion
Explanation:
Government spending multiplier = 3.2
Tax multiplier = 2.9
Mathematically;
ΔY/ΔG = 3.2
ΔY/200 = 3.2
ΔY = 200 * 3.2
ΔY = 640 billion
Cut in taxes;
Tax multiplier = 2.9
ΔY/ΔT = 2.9
ΔY/200 = 2.9
ΔY = 2.9 * 200
ΔY = 580 billion
Suppose Sharon earns $575 per week working as a programmer for PC Pros. She uses $9 to get her car washed at Spotless Car Wash. Spotless Car Wash pays Paolo $300 per week to wash cars. Paolo uses $200 to purchase software from PC Pros.
and
1. Paolo spends $200 to purchase software from PC Pros.
- A. Resource Market? B. Product Market market?
2. Paolo earns $300 per week working for Spotless Car Wash
- A. Resource Market? B. Product Market market?
3. Sharon spends $9 to get her car washed.
- A. Resource Market? B. Product Market market?
Which of the elements of this scenario represent a flow from a household to a firm? This could be a flow of dollars, inputs, or outputs.
1. The $300 per week Paolo earns working for Spotless Car Wash
2. The $200 Paolo spends to purchase software from PC Pros
3. Sharon's labor
Answer:
First Question
1. B
2. A
3. B
Second Question
The $200 Paolo spends to purchase software from PC Pros.
Explanation:
1. Paolo's transaction falls under the product market cash flow because he wittingly spends on a product–the software.
2. Paolo's earnings comes to the resource market, since he is been paid for his human resourcefulness in the organization.
3. Sharon's payment for washing her car is best placed on the Product market flow since she is spending on a personal product–the car.
The $200 Paolo spends to purchase software from PC Pros in this scenario represent a flow from a household to a firm because he (an individual belonging to a household) transfers his money to the firm.
You own a portfolio that has a total value of $210,000 and it is invested in Stock D with a beta of .87 and Stock E with a beta of 1.38. The beta of your portfolio is equal to the market beta. What is the dollar amount of your investment in Stock D
Answer:
The dollar amount of the investment in Stock D is (x=$156470.59)
Explanation:
Let assume investment in Stock D = $x
Hence investment in Stock E = (210,000-x)
Portfolio beta=Respective betas * Respective investment weights
1= (x/210,000*0.87) + (210,000-x) /210,000*1.38[Beta of market=1]
(1*210,000) = 0.87x + 289800 -1.38x
290,000=0.87x+289800-1.38x
Hence x=(289800-210,000)/(1.38-0.87)
x= 79,800 / 0.51
x=156470.5882
x=$156470.59
Genzyme, the maker of Cerdelga, a drug that treats a genetic illness called Gaucher's disease that affects 10,000 people worldwide, has been criticized for charging up to $300,000 for a year's worth of Cerdelga. This is an example of the manufacturer adhering to its
Answer:
Profit responsibility
Explanation:
The manufacturer is adhering to its profit responsibility. profit responsibility gives us the insight that a company or companies have a primary duty of profit maximization for its owners or stockholders.
Some facts to be considered are:
1. How do these companies recover the costs of doing business. That is how do they make gain from research and development if they give away their discoveries
2. How do stakeholders gain if Cerdelga is being sold at a loss.
