You are given the following series of one-year interest rates: 3%, 5%,13 %, 15% Assuming that the expectations theory is the correct theory of the term structure, calculate the interest rates in the term structure for maturities of one to four years, and plot the resulting yield curve. 1. Using the point drawing tool, plot the interest rate (calculated using the data above) for each of the four terms to maturity. Properly label each point according to its corresponding term. 2. Using the 4-point curved line drawing tool, connect these points. Label your curve 'yield curve'. Carefully follow the instructions above, and only draw the required objects.
Answers
Answer:
interest rate for year 1 = 3%
interest rate for year 2 = ( 3% + 5% )/2 = 4%
interest rate for year 3 = ( 3% + 5% + 13% )/ 3 = 7%
interest rate for year 4 = ( 3% + 5% + 13% + 15%) / 4 = 9%
Explanation:
Interest rates :
interest rate for year 1 = 3%
interest rate for year 2 = ( 3% + 5% )/2 = 4%
interest rate for year 3 = ( 3% + 5% + 13% )/ 3 = 7%
interest rate for year 4 = ( 3% + 5% + 13% + 15%) / 4 = 9%
Attached below is the plot
Related Questions
Gordon, an employee, is provided group term life insurance coverage equal to twice his annual salary of $125,000 per year. According to the IRS Uniform Premium Table (based on Gordon's age), the amount is $12 per year for $1,000 of protection. The cost of an individual policy would be $15 per year for $1,000 of protection. Since Gordon paid nothing towards the cost of the $250,000 protection, he must include in his 2019 gross income which of the following amounts?
Answers
Answer:
1
Explanation:
1+1=2
Computing Depreciation, Net Book Value, and Gain or Loss on Asset Sale
Lynch Company owns and operates a delivery van that originally cost $46,400. Lynch has recorded straight-line depreciation on the van for four years, calculated assuming a $5,000 expected salvage value at the end of its estimated six-year useful life. Depreciation was last recorded at the end of the fourth year, at which time Lynch disposes of this van.
A. Compute the net book value of the van on the disposal date.
B. Compute the gain or loss on sale of the van if the disposal proceeds are:
1. A cash amount equal to the van's net book value.
2. $22, 500 cash.
3. $18, 500 cash.
Answers
Answer and Explanation:
The computation is shown below:
A. The net book value is
Before that the depreciation expense is
Depreciation per year is
= (Purchase Cost - Residual value) ÷ (Useful life)
= ($46,400 - $5,000) ÷ (6)
= $6,900
Now
A. The Netbook value as on disposal date is
= $46,400 - ($6,900 × 4 years)
= $18,800
B. The gain or loss on the sale of the van is
1. The equivalent amount i.e. gain is $18,800
2. The gain is
= $22,500 - $18,800
= $3,700
3. The loss is
= $18,500 - $18,800
= -$300
In its initial S-1 filing, Groupon presented a non-GAAP performance metric called ACSOI. It was subsequently removed after the SEC objected. a. Why did the SEC question the inclusion of ACSOI in Groupon’s financial statements? Explain whether you think the use of ACSOI was appropriate or not. b. Non-GAAP metrics are common in some industries. For example, same-store-sales in retail, revenue-passenger-miles for airlines, etc. Are non-GAAP measures, such as these, ever of value for financial statement users?
Answers
Answer:
a. Groupon presented the Adjusted Consolidated Segment Operating Income (ACSOI) because it shows a higher amount than EBITDA. The reason is simple, Groupon wanted to show higher revenues and earnings, and the way they thought that they could do it was to use what I call "creative accounting". If the numbers do not match your expectations, play with them and change them until they do. That is exactly what Groupon did.
ACSOI increases EBITDA (which is a non-GAAP metric but it is accepted as valid by all companies) because it excludes certain expenses, e.g. marketing expenses, stock compensations, etc. It is irrational to believe that marketing expenses in a company like Groupon were irrelevant. Just a few years ago Groupon was the fastest-growing internet services company, and online marketing was essential for that type of growth rate.
b. We can just compare EBITDA and ACSOI, both are non-GAAP metrics, but one is properly designed, useful and actually shows how a company's cost structure works. But ACSOI is deliberately used to fool investors.
Some non-GAAP metrics are very useful, such as managerial accounting. Financial reports are tools and how helpful or useful they are depends on people. If you try to fool investors and trick them, eventually they will realize it.
The following production and average cost data for two levels of monthly production volume have been supplied by a company that produces a single product: Production Volume Component 950 units 750 units Direct materials $17.00 per unit $17.00 per unit Direct labor $39.61 per unit $50.17 per unit Manufacturing overhead $18.08 per unit $20.10 per unit Round your answers to the nearest dollar. Fill in the blank without $ sign or comma or period, e.g., 12345 The approximate total cost to manufacture 850 units is:
Answers
Answer:
68204
Explanation:
The computation of total cost is shown below:-
The Total cost of 950 units
= 950 units × (17 + 39.61 + 18.08)
= 950 units × 74.69
= 70955.50
now,
The total cost of 750 units
= 750 units × (17 + 50.17 + 20.10)
= 750 units × 87.27
= 65452.5
So,
Variable cost per unit
= (Total cost at highest activity - Total cost at lowest activity) ÷ (Highest activity - Lowest activity)
= (70955.5 - 65452.50) + (950 units - 750 units)
= 5503 ÷ 200 units
= 27.515 per unit
And
Fixed cost
= Total cost at 750 Units - Variable cost at 750 units
= 65452.5 - (750 × 27.515)
= 65452.5 - 20636.25
= 44816.25
Hence,
Total manufacture cost of 850 units
Total Manufacturing cost = Variable cost + Fixed cost
=(850 × 27.515) + 44816.25
= 23387.75 + 44816.2
= 68204
Dewey Corp. is expected to have an EBIT of $2.45 million next year. Depreciation, the increase in net working capital, and capital spending are expected to be $180,000, $85,000, and $185,000, respectively. All are expected to grow at 18 percent per year for four years. The company currently has $13 million in debt and 800,000 shares outstanding. The company’s WACC is 9.1 percent and the tax rate is 21 percent. You decide to calculate the terminal value of the company with the price-sales ratio. You believe that Year 5 sales will be $27.4 million and the appropriate price-sales ratio is 1.9. What is your estimate of the current share price?
Answers
Answer:
$41.13
Explanation:
The current share price can be calculated by first deducting the debt from the firm value then divide the equity value by the number of shares outstanding. To calculate the firm value first we need to calculate the free cash flows and after calculating free cashflows we will multiply them with the Compan's WACC to reach the present value of each free cash flow
DATA
EBIT = 2.45m
WACC = 9.1%
Tax rate = 21%
Debt = 13m
Outstanding shares = 800,000
NOTE: Calculations are attached in attachments
What ethical issues may arise during secondary data research?
Answers
Answer:
hope it helps..
Explanation:
For this to happen, use of secondary data must meet some key ethical conditions: Data must be de-identified before release to the researcher. Consent of study subjects can be reasonably presumed. Outcomes of the analysis must not allow re-identifying participants.
For each separate case below, follow the three-step process for adjusting the unearned revenue liability account at December 31
Step 1: Determine what the current account balance equals.
Step 2: Determine what the current account balance should equal
Step 3: Record the December 31 adjusting entry to get from step 1 to step 2.
Assume no other adjusting entries are made during the year a. Tao Co. recelves $10,000 cash in advance for four months of legal services on October 1, 2017, and records it by debiting Cash and crediting Unearned Revenue both for $10,000. It is now December 31, 2017, and Tao has provided legal services as planned. hat adjusting entry should Tao make to account for the work performed from October 1 through December 31, 2017? Unearned revenue
Step 1: Determine what the current account balance equals.
Step 2: Determine what the current account balance should equal
Step 3: Record the December 31 adjusting entry to get from step 1 to step 2 b.
A. Caden started a new publication called Contest News. Its sub subscriber, Caden debits Cash and credits Unearned Subscription Revenue for the amounts received. The company has 100 new subscribers as of July 1, 2017. It sends Contest News to each of these subscribers every month from July through December Assume no changes in subscribers, prepare the journal entry that Caden must make as of December 31, 2017, to adjust the Subscription Revenue account and the Unearned Subscription Revenue account pay $24 to receive 12 monthly issues.
Answers
Answer:
1. Assume no other adjusting entries are made during the year a. Tao Co. receives $10,000 cash in advance for four months of legal services on October 1, 2017, and records it by debiting Cash and crediting Unearned Revenue both for $10,000. It is now December 31, 2017, and Tao has provided legal services as planned. hat adjusting entry should Tao make to account for the work performed from October 1 through December 31, 2017?
Step 1: Unearned Revenue has a credit balance of $10,000
Step 2: Unearned Revenue should have a credit balance of $2,500 only.
Step 3: Adjusting Journal Entry:
Debit Unearned Revenue $7,500
Credit Service Revenue $7,500
To record revenue for services performed to December 31, 2017.
2. Caden started a new publication called Contest News. Its sub subscriber, Caden debits Cash and credits Unearned Subscription Revenue for the amounts received. The company has 100 new subscribers as of July 1, 2017. It sends Contest News to each of these subscribers every month from July through December Assume no changes in subscribers, prepare the journal entry that Caden must make as of December 31, 2017, to adjust the Subscription Revenue account and the Unearned Subscription Revenue account pay $24 to receive 12 monthly issues.
Step 1: Unearned Subscription Revenue has a credit balance of $2,400
Step 2: Unearned Subscription Revenue should have a credit balance of only $1,200.
Step 3: Adjusting Journal Entry:
Debit Unearned Subscription Revenue $1,200
Credit Subscription Revenue $1,200
To record subscription revenue for services performed to December 31, 2017.
Explanation:
Tao Co and Caden follow the three-step process of adjusting unearned revenue liability accounts at year-end. The purpose of the steps is to ensure that correct amounts remain as balances in the unearned revenue accounts. The steps also help to adjust the Earned Revenue account to its proper amount in recognition of goods or services provided in accordance with the accrual concept and the matching principle of generally accepted accounting principles.
Kyle is a seventeen-years-old minor who has just graduated from high school. He is attending a university two hundred miles from home and has contracted to rent an apartment near the university for one year at $500 per month. He is working at a convenience store to earn enough income to be self-supporting. After living in the apartment and paying monthly rent for four months, he becomes involved in a dispute with is landlord. Kyle, still a minor, moves out and returns the key to the landlord. The landlord wants to hold Kyle liable for the balance of the payments due under the lease. Discuss fully Kyle’s liability in this situation.
Answers
Answer:
kyle does not owe the landlord any liability since the contract is void.
Explanation:
To answer this question i would first explain what disaffirmance means. the term means that to express oneself in a way which shows that they are no longer liable to certain bindings to a contract. A minor is someone who is considered to be younger than 18 years of age. Minors do not have certain rights and obligations and these includes certain civil and political obligations. As a minor kylie has no legal rights to enter a contract with the landlord. The law is protective of people of his age from certain ntypes of responsibilities due to their young age which makes them incapable of handling such. Apart from sports a minor cannot enter into a contract. also we have in this scenario that kyle returned the keys to the landlord and by this action he has shown that he is not bound by any contract with the landlord. since he paid his rent for the period of 4 months, the contract was disaffirmed when he took the keys back to the landlord.
Explain the following statement and answer to corresponding question. It is worth 15 points. "In a competitive model without consideration of space (distance) we would expect competition to lead to identical prices but when we include spatial elements we expect competition to lead to different delivered prices." If individuals have to pay a different price for products because they live a different distance from the factory do you think this is an example of discrimination of prices? Why or why not?
Answers
Answer:
In marketing, price discrimination refers to selling the same product to different buyers at different prices depending on each buyer's purchasing power or preferences which result in them being able and willing to pay different prices. E.g. a movie theater that charges different prices depending on the age of the movie goers.
In this case, the fact that a factory is located far away from your house might result in a higher price due to delivery costs, but that doesn't meant that it is using price discrimination. E.g. I just purchased a new refrigerator online and I had to pay a delivery fee that increased its price because the seller is from another state. I purchased the refrigerator from that retailer because it lower prices including delivery costs, but someone that purchased it from the same city will probably pay even less than me. But it is just logistics, since I live far away I have to wait 3 days for delivery and pay for it.
Refer to the following items on the balance sheets of a firm for the years ending December 31, 2018 and 2019.
Item 2018 2019
Accounts Payable $729,500 $917,300
Long Term Debt $1,267,700 $1,093,400
Common Stock ($1 par) $2,184,000 $2,471,300
Retained Earnings $3,227,100 $3,419,800
If the firm's interest expense on its 2019 income statement was $312,920, calculate the net cash flow to the firm's creditors in 2019.
a) $312,920
b) $138,620
c) $425,920
d) $487,220
Answers
Answer: d) $487,220
Explanation:
The net cash flow to creditors in 2019 is calculated by the formula;
= Long term debt in 2018 - Long term debt in 2019 + Interest expense in 2019
= 1,267,700 - 1,093,400 + 312,920
= $487,220
Crater HVAC Systems is preparing its statement of cash flows (indirect method) for the year ended March 31, 2018. To follow, in no particular order, is a list of items that will be used in preparing the company's statement of cash flows. Identify each item as an operating activity addition to net income; an operating activity subtraction from net income; an investing activity; a financing activity; or an activity that is not used to prepare the cash flows statement. a. Increase in inventory b. Issuance of common stock c. Decrease in accrued liabilities d. Net income e. Decrease in prepaid expense
Answers
Answer:
a. Increase in inventory - an operating activity subtraction from net income
This is an operating activity as it has to do with the day to day business of the company and its operations. It is a subtraction from Net income because an increase in inventory means that more cash was spent to buy the inventory.
b. Issuance of common stock - a financing activity
Financing activities are those that have to do with raising capital for the business so when stock is issued and Equity is raised, it is a financing activity.
c. Decrease in accrued liabilities - an operating activity subtraction from net income
Liabilities are also in relation to the firm's operations so they are operating activities. This will be a subtraction from Net income because cash was used to pay off liabilities which is what reduced them.
d. Net income - operating activity addition to net income
Net income is derived from the operations of the business so is an Operating activity. It will increase net income evidently.
e. Decrease in prepaid expense - operating activity addition to net income
Prepaid expense is in relation to expenses which is an operating activity. It will be an addition to net income because as an asset, it reducing means that cash was not paid to acquire it.
The following information pertains to Bridgeport Co.:
Preferred stock, cumulative:
Par value per share $100
Dividend rate 6%
Shares outstanding 10,000
Dividends in arrears none
Common stock:
Par value per share $10
Shares issued 140,000
Dividends paid per share $1.80
Market price per share $52
Additional paid-in capital $500,000
Unappropriated retained
earnings (after closing) $280,000
Retained earnings
appropriated for
contingencies $300,000
Common treasury stock:
Number of shares 10,000
Total cost $250,000
Net income $580,000
Compute (assume no changes in balances during the past year):
A) Total amount of stockholders' equity in the balance sheet.
B) Earnings per share of common stock.
C) Book value per share of common stock.
D) Payout ratio of common stock.
E) Return on common stock equity per share per share.
Answers
Answer:
A. Total amount of stockholders' equity in the balance sheet.
= Preferred stock + Common Stock + Additional Paid-In Capital + Unappropriated retained earnings + Retained earnings appropriated for contingencies - Treasury stock
= (100 * 10,000) + (10 * 140,000) + 500,000 + 280,000 + 300,000 - 250,000
= $3,230,000
B. Earnings per share of common stock.
= (Net Income - Preferred Dividends ) / (Common stock - treasury stock)
= (580,000 - (10,000 * 6% * 100) ) / (140,000 - 10,000)
= $4
C. Book value per share of common stock.
= (Stockholder's equity - Preferred stock) / ( Common stock - Treasury)
= (3,230,000 - (100 * 10,000) ) / (140,000 - 10,000)
= $17.15
D. Payout ratio of common stock
= Dividend per share/ Earnings per share
= 1.8/4
= 45%
E. Return on common stock equity
= (Net Income - Preferred Dividends ) / (Stockholder's equity - Preferred stock)
= (580,000 - (10,000 * 6% * 100) / (3,230,000 - (100 * 10,000) )
= 0.233
= 23.3%
Your annual sales are $240,000. The sales are spread evenly over four quarters. What are your sales in each quarter?
Answers
Answer:
60000
Explanation:
240,000/4
Answer:
60000
Explanation:
During the next two months, General Cars must meet (on time) the following demands for trucks and cars:
month 1—400 trucks, 800 cars;
month 2—300 trucks, 300 cars.
During each month, at most 1,000 vehicles can be produced.
Each truck uses 2 tons of steel, and each car uses 1 ton of steel.
During month 1, steel costs $400 per ton; during month 2, steel costs $600 per ton.
At most, 1,500 tons of steel may be purchased each month (steel may only be used during the month in which it is purchased).
At the beginning of month 1, 100 trucks and 200 cars are in inventory. At the end of each month, a holding cost of $150 per vehicle is assessed. Each car gets 20 mpg, and each truck gets 10 mpg. During each month, the vehicles produced by the company must average at least 16 mpg.
Formulate an LP to meet the demand and mileage requirements at minimum cost (include steel costs and holding costs).
Answers
Answer:
the formulation of the given linear program is,
Minimize
z = 400S1 + 600S2 + 150 ( LT1 + LT2 + LC1 + LC2)
Subject to the constraints
T1 + C1 ≤ I000
T2 + C2 ≤ 1000
2T1 + C1 = S1
2T2 + C2 = S2
100 + T1 = 400 + LT1
LT1 + LT2 = 300 + LT2
200 + C1 = 800 + LC1
LC1 + C2 = 300 + LC2
S1,S2 ≤ 1 500
4C1 - 6T1 ≥ 0
4C2 - 6T2 ≥ 0
All variables ≥ 0
Explanation:
Firstly;
Let T1 be number of trucks to be produced in month 1 and T2 be number of trucks to be produced in month 2.
Let C1 be number of cars to be produced in month 1 and C2 be number of cars to be produced In month 2.
Let S1 be tons of steel used in month 1 and S2 be tons of steel used in month 2.
Let LT1 be number of trucks in inventory at the end of month 1 and LT2 be number of trucks In inventory at the end of month 2.
Let LC1 be number of cars in inventory at the end of month 1 and LC2 be number of cars in inventory at the end of month 2.
Now the objective is to minimize the cost, so
z = [(cost of steel during month 1)(tons of steel used in month 1)] + [(cost of steel during month 2)( tons of steel used in month 2)] + [(holding cost at the end of each month )(trucks and cars in inventory at the end of each month)]
= 400S1 + 600S2 + 150 ( LT1 + LT2 + LC1 + LC2)
Thus, the objective function Is, Minimize
z = 400S1 + 600S2 + 150 ( LT1 + LT2 + LC1 + LC2)
Constraint1 Each month, the production capacity of the vehicle is 1000 vehicles.
Number of trucks produced in month 1 + number of cant produced in month 1 ≤ 1000
T1 + C1 ≤ 1000
Number of trucks produced in month 2 + number of cars produced in month 2 ≤ 1000
T2 + C2 ≤ 1000
Constraint2 Each month. each truck uses 2 tons of steel and each car uses 1 ton of steel.
[(Tons of steel used to produce truck in month 1) + (tons of steel used to produced cars in month 1)] = S1
2T1 + C1 = S1
[(Tons of steel used to produce truck in month 2) + (tons of steel used to produced cars in month 2)] = S2
2T2 + C2 = S2
Constraint3 At the beginning of month 1, 100 trucks are in inventory.
[100 trucks at the beginning are in inventory +
number of trucks produced in month 1] = [400 trucks are demanded in month 1 + number of trucks in inventory at the end of the month 1]
100 + T1 = 400 + LT1
[trucks at the beginning of month 2 in inventory + number of trucks produced in month 2 ] = [300 trucks are demanded in month 2 + number of trucks in inventory at the end of the month 2]
LT1 + T2 = 300 + LT1
Constraint 4 At the beginning of month 1, 200 cars are in Inventory
[200 cars at the beginning are in inventory + number of cars produced in month 1] = [800 cars are demanded in month 1 + number of cars in inventory at the end of the month 1]
200 + C1 = 800 + LC1
[cars at the beginning of month 2 in inventory + number of cars produced in month 2 ] = [300 cars are demanded in month 2 + number of cars in inventory at the end of the month 2]
LC1 + C2 = 300 + LC2
Constraint 5 At most, 1,500 tons of steel can be purchased each month.
S1 ≤ 1,500
S2 ≤ 1,500
Constraint 6 Each month, vehicle produced by company must average at least 16mpg.
[{{(mpg of trucks)(number of trucks produced in month 1)} + {(mpg of cars)(number of cars produced in month 1)}} / {(number of trucks produced in month 1 ) + ( number of Cars produced in month 1)}] ≥ 16
(10T1 + 20C1 / T1 + C1) ≥ 16
4C1 - 6T1 ≥ 0
[{{(mpg of trucks)(number of trucks produced in month 2)} + {(mpg of cars)(number of cars produced in month 2)}} / {(number of trucks produced in month 2 ) + ( number of Cars produced in month 2)}] ≥ 16
(10T2 + 20C2 / T2 + C2) ≥ 16
4C2 - 6T2 ≥ 0
Therefore, the formulation of the given linear program is,
Minimize
z = 400S1 + 600S2 + 150 ( LT1 + LT2 + LC1 + LC2)
Subject to the constraints
T1 + C1 ≤ I000
T2 + C2 ≤ 1000
2T1 + C1 = S1
2T2 + C2 = S2
100 + T1 = 400 + LT1
LT1 + LT2 = 300 + LT2
200 + C1 = 800 + LC1
LC1 + C2 = 300 + LC2
S1,S2 ≤ 1 500
4C1 - 6T1 ≥ 0
4C2 - 6T2 ≥ 0
All variables ≥ 0
Hey guys i dont know who to vote for plz give me suggestions and reasons why
Answers
Answer:
me ig im just trying to get more points and brainliest
Explanation:
also im nice :) when people are not rude to me
which adjective best describes you at work? a.unique b.orderly
Answers
Answer:
B
Explanation:
being unique can be good at work but making sure you're organized doing your job is vital.
Revise the following to make the tone conversational yet professional.1. As per your recent request, the undersigned is happy to inform you that we are sending you forthwith the procedure manuals you requested.2. Kindly be informed that it is necessary for you to designate the model number of the appliance before we can submit your order.3. BTW, Angela went ballistic when the manager accused her of ripping off office supplies.4. Pursuant to your e-mail of the 12th, please be advised that your shipment was sent April 15.5. R Head honcho wz like totally raggety kuz I wz sick n stuff n mist the team meet. Geez!6. The undersigned respectfully reminds affected individuals that employees desirous of changing their health plans must do so before December 30.
Answers
Answer:
Revision of Sentences for Conversational and Professional Tone:
1. We're happy to send to you the procedure manuals that you have requested.
2. Please indicate the model number of the appliance to enable us submit your order.
3. BTW Angela didn't take kindly to the accusation that she was pilfering office supplies.
4. Your goods were dispatched on April 15 in line with your email of April 12th.
5. The Manager said the team couldn't meet because of my illness.
6. All employees who desire to change their health plans should do so before December 30.
Explanation:
The combination of conversational and professional style of writing enables the reader to relate with the author. For the reader it is more credible, natural, and easier to understand when the author uses her natural voice, without too much formality.
You sell $4,000 per week in bags of dog food at 30% margin. You sell $3,000 per week in dog toys at 45% margin. Which generates more margin for you?
Answers
Ohio Limestone plans to market its product in a new territory. Management estimates that an advertising and promotion program costing $61,500 annually would be needed for the next two or three years. In addition, a $25 per ton sales commission to the sales force in the new territory, over and above the current commission, would be required. How many tons would have to be sold in the new territory to maintain the firm’s current net income? Assume that sales and costs will continue as in 20x1 in the firm’s established territories.
Answers
Answer: 307.5 tons
Explanation:
To maintain the current Net Income, the company would have to be making a zero profit (breakeven) in the new territory.
Breakeven = Fixed Cost/ Contribution margin
Fixed cost for the new territory = $61,500
Contribution Margin = Sales - Variable cost
Assuming that sales and costs will continue as in 20x1 in the firm’s established territories.
Sales price per unit = 900,000/1,800 tons
= $500 per unit
Variable Cost = 495,000/1,800 tons
= $275 per unit
Variable cost will increase due to sales commission in new territory.
= 275 + 25
= $300 per unit
Contribution Margin for new territory = 500 - 300 = $200
Breakeven point = 61,500/200
= 307.5 tons will need to be sold to maintain net income
Dorcan Corporation manufactures and sells T-shirts imprinted with college names and slogans. Last year, the shirts sold for $8.40 each, and the variable cost to manufacture them was $2.25 per unit. The company needed to sell 20,600 shirts to break-even. The after tax net income last year was $5,220. Donnelly's expectations for the coming year include the following: (CMA adapted) The sales price of the T-shirts will be $12. Variable cost to manufacture will increase by one-third. Fixed costs will increase by 10%. The income tax rate of 40% will be unchanged. The selling price that would maintain the same contribution margin ratio as last year is:
Answers
Answer:
$11.23
Explanation:
Calculation for the selling price that would maintain the same contribution margin ratio as last year
Selling price per unit = $8.40
Variable cost per unit = $2.25
First step is to the Contribution margin per unit using this formula
Contribution margin per unit = Selling price per unit-Variable cost per unit
Contribution margin per unit= $8.40-$2.25
Contribution margin per unit = $6.15
Second step is to find the Contribution margin ratio using this formula
Contribution margin ratio= Contribution margin / Selling price per unit
Contribution margin ratio= $6.15/$8.40
Contribution margin ratio= 0.73*100
Contribution margin ratio=73%
Third step is to calculate for the Increase in variable cost per unit For coming year
Variable cost per unit will increase by 1/3
Increase in variable cost per unit = 6.15 x 1/3
Increase in variable cost per unit= $2.05
Variable cost per unit = 6.15+2.05
Variable cost per unit = $8.2
Last step is to find the selling price per unit using this formula
Selling price per unit =Variable cost per unit /Contribution margin ratio
Let plug in the formula
Selling price per unit = $8.2/0.73
Selling price per unit= $11.23
Therefore the selling price that would maintain the same contribution margin ratio as last year is $11.23
Write a SQL statement to display all the information of all salesmen.
Sample table:
salesman salesman_id | name | city | commission -------------+------------+----------+------------
5001 | James Hoog | New York | 0.15 5002 |
Nail Knite | Paris | 0.13 5005 |
Pit Alex | London | 0.11 5006 |
Mc Lyon | Paris | 0.14 5007 |
Paul Adam | Rome | 0.13 5003 |
Lauson Hen | San Jose | 0.12
Answers
Answer:
SELECT *
FROM salesman;
Explanation:
SQL is a structured query language used for database management, creation and manipulation.
The above statement is an SQL statement that can be used to display the information of all salesmen in the table.
"SELECT" is often times the start of every SQL query syntax which is used to indicate the information to be displayed.
" * " is a wildcard which indicates that you want all rows present in the table to be displayed.
"FROM" usually comes before the table name. It indicates the table from which you want your data to be selected.
"salesman" is the table name
" ; " indicates the end of an SQL statement and it is also an indication that you want your query to be executed.
Therefore, the statement is interpreted as "Select all rows(every individual) from the table salesman
Rhonda owns 50% of the stock of Peach Corporation. She and the other 50% shareholder, Rachel, have decided that additional contributions of capital are needed if Peach is to remain successful in its competitive industry. The two shareholders have agreed that Rhonda will contribute assets having a value of $200,000 (adjusted basis of $15,000) in exchange for additional shares of stock. After the transaction, Rhonda will hold 75% of Peach Corporation and Rachel's interest will fall to 25%. a. What gain is realized on the transaction
Answers
Answer:
$185,000
Explanation:
According to the given situation, the computation of gain is shown below:-
Recognized gain = Amount realized—stock - Adjusted basis of property transferred
= $200,000 - $15,000
= $185,000
Therefore, for computing the recognized gain we simply applied the above formula.
Hence, the gain realized on the transaction is $185,000
The city of Ashkelon, on the eastern end of the Mediterranean Sea, is one of the major cities of the Philistines. A powerful merchant family (known henceforth as The Family) of this city has to decide how to allocate its vast but finite resources to further their own wealth and the glory and influence of their state. Some trade routes use camel caravans and go to the southern deserts, where they may trade in salt and gold with the great inland African nations; others may go north and west, oversea by galley, toward the Greeks; others may push their foul-mouthed, humped mounts east, overland toward Sumeria, to trade in spices and the crafted goods specific to that region. Some of the routes are over more arduous terrain than others, so make take longer to pay off (no revenue is realized by The Family until the caravan returns to Ashkelon). The financial costs and returns of each route are as follows (in Phils, the currency of the Philistines:
Route Costs,Period 0 Revenue, Period1 Revenue, Period 2 Revenue, Period 3
African Route - 75,000 215,000
Greek Route - 50,000 140,000
Sumerian Route -125,000 385,000
Costs are incurred at the end of year zero, and revenues accrue at the end of Periods 1, 2, and 3, for each respective route (for instance, the African caravan returns at the end of period two, at which time its revenue is realized). The discount rate for the shipping company is 5%.
a. Calculate the NPV, B/C ratio, Payback period, and IRR for each route option
b. Rank the route options according to NPV, B/C ratio, Payback period, and IRR
c. If the company had unlimited funds, which trade routes would you recommend the family pursue? Why? Be sure to consider all combinations of routes, including multiple caravans on the same trade route
d. Given that the family can only invest 150,000 Phils, which combination of trade routes would you recommend pursuing? Why?
Answers
Answer:
African Route costs = -75,000, period 1 revenues = 215,000
Greek Route costs = -50,000, period 2 revenues = 140,000
Sumerian Route costs = -125,000, period 3 revenues = 385,000
discount rate = 5%
a) African route:
NPV = -75,000 + 215,000/1.05 = 129,762
B/C ratio = 215/75 = 2.87
Payback = 1 period
IRR = 187%
Greek route:
NPV = -50,000 + 140,000/1.05² = 76,984
B/C ratio = 140/50 = 2.8
Payback = 2 periods
IRR = 67%
Sumerian route
NPV = -125,000 + 385,000/1.05³ = 332,577
B/C ratio = 385/125 = 3.08
Payback = 3 periods
IRR = 45%
b) rank according to:
NPV = Sumerian route, African route, Greek route
B/C ratio = Sumerian route, African route, Greek route
Payback = African route, Greek route, Sumerian route
IRR = African route, Greek route, Sumerian route
c) if the family had unlimited resources, they should invest in the 3 routes since all their NPVs are positive.
d) African and Greek routes since they yield the highest gains (IRR).
Jim wants to start his own business and needs $10,000 for working capital. He applies for a business loan at FirstBank. The banker tells Jim that the Bank will make the loan if Jim's father will personally guarantee repayment of the loan. Jim assures the banker that his father will do this. The banker calls Jim's father to confirm that he will guarantee Jim's $10,000 loan. Jim's father says: "Sure thing, I'd do anything for that boy." The bank makes the loan to Jim. Jim's new business is not successful and Jim is unable to repay the loan. Jim has no money. Jim's father has buckets of money. The bank sues Jim's father to recover the unpaid amount of the loan plus interest plus attorneys' fees and costs of collecting the debt.
Which of the following is true?
A. Jim's father can make a strong argument that he is not liable to pay his son's debt because the Bank did not have him sign a written guaranty agreement.
B.The oral agreement to guaranty the loan is not enforceable because it is contrary to public policy.
C.Jim’s father is liable to pay his son’s debt because the Bank partially performed under the loan agreement.
D.If it can be proven in a court of law that Jim's father orally agreed to guarantee the loan, Jim's father will be held liable for the repayment of the loanbecause 'a deal is a deal'.
Answers
Answer:
D. If it can be proven in a court of law that Jim's father orally agreed to guarantee the loan, Jim's father will be held liable for the repayment of the loan because 'a deal is a deal'.
Explanation:
In this case, an offer was made by the bank to Jim with his father as a third party, of which his father agreed to the terms and conditions of the loan through an oral channel. An oral channel is an acceptable means of communication of agreement. It could be through a phone call or fax. So, a contract has been consented to by Jim's father.
Jim's father is thus liable for the repayment of the loan.
what do you think are the adverse effects when sustainable economic development practices in country are not implemented?
Answers
Answer:
Ignoring the issues of sustainable development has many possible consequences, such as rising sea levels, extreme droughts, erosion and loss of forests, increases in slum populations, species extinctions and collapsing fisheries.
The correct statement is that when the sustainable economic developments in the country are not met, a direct impact is seen in its growth and financial position of the country is weakened.
When there is no sustainable development the people of the country would ultimately suffer due to the bad policies being implemented regarding the allocation of funds.
A country should look after the developments of a country by allocation of required funds in the right fields and achieve such financial goals. Citizens must disclose their earnings and pay taxes on the true and fair amounts of such incomes. This will help in collection of taxes making the country less deficit in funds.A direct effect will be seen in country's GDP whenever there is no development. As a result of this there will be inflation in the country which will reduce the consumer's purchasing power.Hence, a country's GDP is affected when there is no proper sustainable economic development practice and also leads to inflation situations.
To know more about economic developments, click the link below.
https://brainly.com/question/19632298
why is the GDP become the important factors in decision making in the economic policy?
Answers
Answer:
see below
Explanation:
GDP is the value of all commodities and services produced within a country's border, in a particular period. Only finished consumer products and services are considered in calculating GDP.
The GDP value is important because
1. GDP reports the state of a country's economy
An increase in GDP indicates growth in the economy. Growth in real GDP value signifies a health economy that creates adequate job opportunities, increasing incomes, and a wealthier nation. A decline in GDP communicates a recession that requires government
intervention.
2. For investment decisions
Investors use GDP as a reference point when making investment decisions. Declining GDP value indicates bad economic conditions, which will result in lower earnings and reduced stock prices. Increasing GDP value is associated with good returns and higher stock prices.
The Karns Oil Company is deciding whether to drill for oil on a tract of land that the company owns. The company estimates the project would cost $4 million today. Karns estimates that, once drilled, the oil will generate positive net cash flows of $2 million a year at the end of each of the next 4 years. Although the company is fairly confident about its cash flow forecast, in 2 years it will have more information about the local geology and about the price of oil. Karns estimates that if it waits 2 years then the project would cost $5 million. Moreover, if it waits 2 years, then there is a 90% chance that the net cash flows would be $2.1 million a year for 4 years and a 10% chance that they would be $1.1 million a year for 4 years. Assume all cash flows are discounted at 10%.
Use the Black-Scholes model to estimate the value of the option. Assume the variance of the project's rate of return is 5.12% and that the risk-free rate is 7%.
Answers
Answer:
Investing today is a better option because it has a better NPV of $2.3398 million
Explanation:
Given data :
For Today's Investment
Initial capital investment = $4 million
positive cash flow = $2 million
period of cash flow = 4 years
project cost of capital = 10%
To get the value of This option we have to determine the NPV of this option
NPV = PMT * [tex][\frac{1-(1+r)^-4}{r} ] - initial cash flow[/tex] ----------- (1)
PMT = $2 million
r = 10%
initial cash flow = $4 million
Equation 1 becomes
NPV = (2 * 3.1699 ) - 4
= $6.3398 - $4 = $2.3398 million
For later investment ( 2 years )
initial capital investment = $5 million
90% chance of positive cash flow = $2.1 million
10% chance of positive cash flow = $1.1 million
project cost of capital = 10%
NPV value for a cash flow of $1.1 million
NPV = PMT * [tex][\frac{1-(1+r)^-4}{r} ] - initial cash flow[/tex]
PMT = $1.1 million
initial cash flow = $5 million
r = 10%
Hence NPV = ($1.1 * 3.1699 ) - $5 million
= $3.48689 - $5 million
= - $1.51311
therefore the present NPV = - $1.51311 / 1.21 = -$1.25 million ( therefore no investment will be made )
NPV value for a cash flow of $2.1 million
NPV = PMT * [tex][\frac{1-(1+r)^-4}{r} ] - initial cash flow[/tex]
PMT = $2.1 million
initial cash flow = $5 million
r = 10%
hence NPV = ($2.1 * 3.1699 ) - $5 million
= $6.65679 - $5
= $1.65679
therefore the present NPV = $ 1.65679 / 1.21 = $1.369 million
The Expected NPV value of later investment ( after 2 years )
= $0 * 10% + $1.369 * 90%
= $1.2321 million
The 2017 Annual Report of Tootsie Roll Industries contains the following information. (in millions) December 31, 2017 December 31, 2016 Total assets $930.9 $920.1 Total liabilities 197.1 208.6 Net sales 515.7 517.4 Net income 80.7 67.2 Compute the following ratios for Tootsie Roll for 2017. (a) Asset turnover (Round answer to 3 decimal places, e.g. 0.851 times.) enter the asset turnover rounded to 4 decimal places times (b) Return on assets (Round answer to 2 decimal places, e.g. 4.87%.) enter the return on assets in percentages rounded to 2 decimal places % (c) Profit margin on sales (Round answer to 2 decimal place
Answers
Answer:
a. 0.557 times
b. 8.72%
c. 0.16
Explanation:
a. Asset turnover = Net sales ÷ Average total assets
We will calculate the average total asset first
Average total asset = [Beginning total assets - ending total assets)] / 2
= [(930.9 + 920.1)] / 2
= 925.5
Asset turnover = 515.7/925.5
= 0.557 times
b. Return on assets = Net income/Average total assets
= 80.7/925.5
= 0.087196
= 0.087196 × 100
= 8.72%
c. Profit margin on sales = Net income/Net sales
= 80.7/515.7
= 0.16
Linden, Inc. uses a 6,900 square foot factory space that it rents for $3,500 a month for all its manufacturing activities. Linden has decided to switch to an activity-based costing system, and has identified its activities as follows: Preparation and Setup, Machining, Finishing, and Quality Control. 3,100 square feet of the factory are used for machining, while 1,400 square feet (each) are used for Preparation and Setup and Quality Control. Finishing uses 1,000 square feet. When assigning indirect costs to each activity, how much factory rent should be assigned to the Preparation and Setup cost pool
Answers
Answer: $710.14
Explanation:
Out of the total space of 6,900 square foot, Preparation and Setup uses 1,400 out of this.
Rent is $3,500
The total rent to be apportioned to it will therefore be;
= 1,400/6,900 * 3,500
= $710.14
Decision Point: How Can You Help the Sales Team Better Understand the Commission Plan? You remember from your discussion with Sean that, "Many members of the sales team don’t seem to understand the commission system, and many see it as unfair." You study the existing commission plan and don’t see anything as inherently unfair, but you have your suspicions as to who might think it unfair. You speak to a number of sales personnel and discover that it is the newer salespeople who see the commission plan as unfair. Commission rates for sales personnel who have been employed by Swazzi for less than two years are lower than for employees who have been at Swazzi for longer than two years. Newer employees believe they put as much effort into each sale as longer-tenured employees and should be rewarded the same. Using expectancy theory, what would you do to address this problem? Select an option from the choices below and click Submit.
Answers
Question Completion with Options:
*Re-evaluate the existing commission plan to determine whether you can eliminate the perception of unfairness. Re-evaluate the base salaries by comparing them to other upscale clothing stores.
*Put all salespeople on the same commission plan regardless of tenure. This will clearly establish a strong relationship between performance and reward for all sales personnel. Increase the base salaries of longer-tenured salespeople who have worked for Swazzi more than two years to reinforce the relationship between their experience/loyalty and their rewards.
*Travel to the stores and explain the system in detail to the sales teams. Tell them you will try to clear up any perceived unfairness once you see whether they are serious about selling
Answer:
*Put all salespeople on the same commission plan regardless of tenure. This will clearly establish a strong relationship between performance and reward for all sales personnel. Increase the base salaries of longer-tenured salespeople who have worked for Swazzi more than two years to reinforce the relationship between their experience/loyalty and their rewards.
Explanation:
Longer-term sales personnel should be rewarded differently from newer personnel. But, this differential reward should not be based on the sales commission. The base salary will be more ideal for this tenure reward. This will be in line with the Expectancy Theory which states that employees base their individual levels of effort on what is necessary to perform well and earn rewards within the workplace. The theory also requires that the reward structure is clear with well-defined goals and routine evaluations. The Expectancy Theory helps workers to put in their best because they are looking forward to some well-defined and clear rewards.
