Answer:
a. Find the bond equivalent and effective annual yield to maturity of the bond if the bond price is $940.
the yield to maturity of the bond is:
YTM = {coupon + [(face value - market value)/n]} / [(face value + market value)/2] = {60 + [(1,000 - 940)/10]} / [(1,000 + 940)/2] = 66 / 970 = 0.06804 = 6.8%
the bond equivalent yield is:
BEY = 2 x [√(1 + YTM) - 1] = 2 x [(√1 + YTM) - 1] = 2 x [√1.068 - 1] = 2 x [(√1 + YTM) - 1] = 0.06688 = 6.69%
Rather than charging a single price to all customers, a firm charges a higher price to men and a lower price to women. This ______.
Answer:
D) is attempting to convert consumer surplus into producer surplus.
Explanation:
These are the options for the question
A) is trying to reduce its costs and therefore increase its profit.
B) is engaging in an illegal activity that is prohibited by the Sherman Antitrust Act.
C) is attempting to convert producer surplus into consumer surplus.
D) is attempting to convert consumer surplus into producer surplus.
E) Both A and C are correct.
From the question, we are told that Rather than charging a single price to all customers, a firm charges a higher price to men and a lower price to women. In this case, By engaging in the above practice, the firm is attempting to convert consumer surplus into producer surplus.
consumer surplus in finance is regarded as the difference in the amount paid by the consumer for a particular goods/service and the price they are willing to pay for the goods/services. producer surplus on the other hand is the difference between price the seller is willing to give out the goods/service and the price they can take for giving the product out at market price. Therefore as the firm charges a higher price to men and a lower price to women, they are trying to convert consumer surplus into producer surplus.
Selected accounts with a credit amount omitted are as follows Work in Process Apr. 1 Balance 7,500 Apr. 30 Goods finished X 30 Direct materials 69,400 30 Direct labor 191,600 30 Factory overhead 57,480 Finished Goods Apr. 1 Balance 15,900 30 Goods finished 306,800 What was the balance of Work in Process as of April 30
Answer:
$19,180
Explanation:
Calculation for the balance of Work in Process as of April 30
Balance of work in process as of April 30 = 7,500+69,400+191,600+57,480-306,800
Balance of work in process as of April 30 = =$19,180
Therefore the balance of Work in Process as of April 30 will be $19,180
Suppose the external benefit is $10 per extinguisher. True or False: The government could achieve the efficient outcome by giving out fire extinguishers for free using tax revenue. True
Answer:
false
Explanation:
A good has positive externality if the benefits to third parties not involved in production is greater than the cost. an example of an activity that generates positive externality is research and development. Due to the high cost of R & D, they are usually under-produced. Government can encourage the production of activities that generate positive externality by granting subsidies.
The efficient outcome can be achieved by subsiding the extinguisher for $10.
Have you ever had a crafting table on a first date?
obtains a $85,000, 6%, six-year loan for a new camp bus on January 1, 2020. If the monthly payment is $1,408.70 by how much will the carrying value decrease when the first payment is made on January 31, 2020
Answer:
the carrying value is $983.70
Explanation:
The computation of the carrying value is shown below:
= Monthly payment - interest
= $1,408.70 - ($85,000 × 6% × 1 month ÷ 12 month)
= $1,408.70 - $425
= $983.70
Hence, the carrying value is $983.70
We simply applied the above formula so that the correct value could come
And, the same is to be considered
A time standard was set as 0.20 hour per unit based on the 100th unit produced. Assume the task has a 70 percent learning curve. Refer to Exhibit 6.4. What would be the expected time of the 200th, 400th, and 800th units
Answer:
200th unit = 0.70028hrs
400th unit = 0.4902hr
800th unit = 0.343hr
Explanation:
Learning rate = 70% = 0.7 (r)
From the learning curve equation
T(n)= T₁(n)^b
b= ln(r)/ln(2)= ln(0.7)/ln(2)= -0.5146
T(100)= T₁(100)^-0.5146
But T(100)=1
1= T₁×(0.0935)
T₁= 1/(0.0935)
T₁= 10.7
For 200th
T(200)= 10.7(200)^-0.5146= 0.70028hr
For 400th
T(400)= 10.7(400)^-0.5146= 0.4902hrs
800th units
T(800)= 10.7(800)^-0.5146= 0.343hrs
net working capital for 2016 is $1,890 and Net Working Capital for 2017 is $3,597. What is the change in Net Working Capital
Answer:
$1,707 Increase
Explanation:
The change in Net Working Capital is $1,707 ($3,597 - $1,890). This is a positive change. A positive change is a cash inflow in the cash flow statement.
A state imposes a minimum wage of $10 per hour when the equilibrium price is $7. The resulting labor surplus is greater in the long run than in the short run: long-run unemployment (LR) is greater than short-run unemployment (SR). Why does this occur
Answer:
With a minimum wage that is higher than the equilibrium price, firms, in the short-run, would still have to hire many workers in order to meet their production obligations and customer demand.
However, because hiring has now become more expensive than it should be, firms will start to invest more in capital, and to look for ways to replace workers with capital investments, for example, machinery.
This will in turn reduce the demand for labor even more in the long-run, leading to a higher labor supply surplus in the long-run than in the short-run.
Sunk costs are: a. Larger than variable costs. b. Equivalent to fixed costs. c. Irrelevant for decision-making purposes because, by definition, decisions do not influence these costs. d. Influenced by economies of scale.
Answer:
c. Irrelevant for decision-making purposes because, by definition, decisions do not influence these costs.
Explanation:
Sunk cost can be defined as a cost or an amount of money that has been spent on something in the past and as such cannot be recovered. Thus, because a sunk cost has been incurred by an individual or organization it can't be recovered and as such it is irrelevant in the decision-making process such as investments, projects etc.
Basically, sunk costs are referred to as fixed costs.
Hence, sunk costs are irrelevant for decision-making purposes because, by definition, decisions do not influence these costs.
oriole corporation has two products in its ending inventory, each accounted for at the lower of cost or market. a profit margin of 30% on selling price is considered normal for each product. specific data with respect to each product follows:In pricing its ending inventory using the lower-of-cost-or-market, what unit values, rounded to the nearest dollar, should Oriole use for products
Answer:
Product 1 = $20Product 2 = $32.50Explanation:
Using the lower-of-cost-or market means that the market value or the historical cost is used to record the inventory depending on which is lower.
Product 1Market Value = Net realizable value - Profit margin
= (Estimated selling price - Estimated cost to dispose) - ( Estimated selling price * Profit margin)
= (40 - 5) - (40 * 30%)
= 35 - 12
= $23
Historical cost = $20
Lower value is Historical cost so $20 would be used by Oriole
Product 2= (Estimated selling price - Estimated cost to dispose) - ( Estimated selling price * Profit margin)
= (65 - 13) - (65 * 30%)
= 52 - 19.5
= $32.50
Historical Cost = $35
Lower cost is Market value so ending inventory is $32.50
Assume ABC Corp. pays the dividend of $4.55 this year. For the next 30 years, the firm's dividend will grow by 5.4%, then will grow by 4.7% each year afterwards. The required rate of return for the firm's industry is 10.8%. What is the present value of the firm's stock under the Dividend Discount Model?
Answer:
$86.42
Explanation:
Div₀ = $4.55
using an excel spreadsheet I determined the next 29 dividends:
Div₁ = $4.80
Div₂ = $5.05
Div₃ = $5.33
Div₄ = $5.62
Div₅ = $5.92
Div₆ = $6.24
Div₇ = $6.57
Div₈ = $6.93
Div₉ = $7.30
Div₁₀ = $7.70
Div₁₁ = $8.11
Div₁₂ = $8.55
Div₁₃ = $9.01
Div₁₄ = $9.50
Div₁₅ = $10.01
Div₁₆ = $10.56
Div₁₇ = $11.13
Div₁₈ = $11.73
Div₁₉ = $12.36
Div₂₀ = $13.03
Div₂₁ = $13.73
Div₂₂ = $14.47
Div₂₃ = $15.25
Div₂₄ = $16.08
Div₂₅ = $16.94
Div₂₆ = $17.86
Div₂₇ = $18.82
Div₂₈ = $19.84
Div₂₉ = $20.91
Div₃₀ = $4.55 x (1 + 5.4%)³⁰ = $22.0409
Div₃₁ = $22.0409 x 1.047 = $23.08
first we must determine the terminal value at year 30 = $23.08 / (10.8% - 4.7%) = $378.36
again I used an excel spreadsheet to discount the 30 future dividends using a 10.8% discount rate = $68.97 + $378.36/1.108³⁰ = $86.42
Calculate the cost of goods available for sale, cost of goods sold, and ending inventory under the FIFO. Assume perpetual inventory system and sold 600 units between January 9 and January 28. (Round your intermediate calculations to 2 decimal places.)
Question Completion:
1. In its first month of operations, Literacy for the Illiterate opened a new bookstore and bought merchandise in the following order: (1) 400 units at $7 on January 1, (2) 600 units at $10 on January 8, and (3) 930 units at $11 on January 29.
Answer:
Literacy for the Illiterate
The cost of goods available for sale = $19,030
The cost of goods sold = $4,800
The cost of ending inventory = $14,230
Explanation:
a) Data and Calculations:
January 1, Purchases 400 units at $7 $2,800
January 8, Purchases 600 units at $10 6,000
January 29, Purchases 930 units at $11 10,230
Cost of goods available for sale (1,930) = $19,030
January 30, Ending inventory 1,330 = $14,230 (930 * $11 + 400 * $10)
Cost of goods sold = 600 $4,800 ($19,030 - $14,230)
Costs to rent a vehicle for a short period of time after an auto dealer fails to deliver a purchased vehicle would be
Answer:
Incidental damages.
Explanation:
Incidental damages can be defined as any charges that an individual may charge another for a breach of a contractual arrangement between the two parties or for defaulting in remittance.
In this scenario, costs to rent a vehicle for a short period of time after an auto dealer fails to deliver a purchased vehicle would be incidental damages.
Suppose this information is available for PepsiCo, Inc. for 2020, 2021, and 2022. (in millions) 2020 2021 2022 Beginning inventory $1,700 $2,200 $2,500 Ending inventory 2,200 2,500 2,600 Cost of goods sold 14,235 16,920 16,575 Sales revenue 40,100 45,000 44,920 Calculate the inventory turnover for 2020, 2021, and 2022. (Round inventory turnover to 1 decimal place, e.g. 5.1.) 2020 2021 2022 Inventory turnover enter an inventory turnover times enter an inventory turnover times enter an inventory turnover times LINK TO TEXT Calculate the days in inventory for 2020, 2021, and 2022. (Round days in inventory to 1 decimal place, e.g. 5.1.) 2020 2021 2022 Days in inventory enter a number of days days enter a number of days days enter a number of days days LINK TO TEXT Calculate the gross profit rate for 2020, 2021, and 2022. (Round gross profit rate to 1 decimal place, e.g. 5.1%.) 2020 2021 2022 Gross profit rate enter percentages % enter percentages % enter percentages %
Answer:
a. The inventory turnover are as follows:
Inventory turnover for 2020 = 7.3
Inventory turnover for 2021 = 7.2
Inventory turnover for 2022 = 6.5
b. The days in inventory are as follows:
Days in inventory for 2020 = 50.0
Days in inventory for 2021 = 50.7
Days in inventory for 2020 = 56.2
c. The gross profit rates are as follows
Gross profit rate for 2020 = 64.5%
Gross profit rate for 2021 = 62.4%
Gross profit rate for 2022 = 63.1%
Explanation:
Note: The merged data given in the question are first sorted as follows:
(in millions) 2020 2021 2022
Beginning inventory $1,700 $2,200 $2,500
Ending inventory 2,200 2,500 2,600
Cost of goods sold 14,235 16,920 16,575
Sales revenue 40,100 45,000 44,920
The explanation to the answers is now given as follows:
a. Calculate the inventory turnover for 2020, 2021, and 2022. (Round inventory turnover to 1 decimal place, e.g. 5.1.)
Note: See the attached excel file for the calculation of the inventory turnover for 2020, 2021, and 2022.
In the attached excel file, the following formula is used to calculate the inventory turnover for 2020, 2021, and 2022:
Inventory turnover = Cost of goods sold / ((Beginning inventory + Ending inventory) / 2)
Note that under financial ratio analysis; (Beginning inventory + Ending inventory) / 2 = Average inventory
b. Calculate the days in inventory for 2020, 2021, and 2022. (Round days in inventory to 1 decimal place, e.g. 5.1.)
Note: See the attached excel file for the calculation of days in inventory for 2020, 2021, and 2022.
In the attached excel file, the following formula is used to calculate the days in inventory for 2020, 2021, and 2022:
Days in inventory = 365 / Inventory turnover
c. Calculate the gross profit rate for 2020, 2021, and 2022. (Round gross profit rate to 1 decimal place, e.g. 5.1%.).
Note: See the attached excel file for the calculation of gross profit rate for 2020, 2021, and 2022.
In the attached excel file, the following formula is used to calculate the gross profit rate for 2020, 2021, and 2022:
Gross profit rate = (Sales revenue - Cost of goods sold) / Sales revenue
Note that under financial ratio analysis; Sales revenue - Cost of goods sold = Gross profit
If an economy is in a recessionary gap, then it
Answer:
i got choo
Explanation:
If the economy is in a recessionary gap, wages fall and the economy soon moves itself toward producing Natural Real GDP (at a lower price level than in the recessionary gap). ... wages rise and the economy soon moves itself toward producing Natural Real GDP (at higher price level than in the inflationary gap).
You are promised $1,000 every year for the rest of your life. If your required return is 2.5%. What is the value of this perpetuity?
Answer:
$40,000
Explanation:
Present value = payment / interest rate = 1000 / 0.025 = $40,000
plans to issue $300,000 of 10-year bonds paying a 5% interest rate, with interest payable annually. The discount rate for such securities is 4%. How much can the company expect to receive from the sale of the bonds?
Answer:
$324,333
Explanation:
the market price per bond:
PV of face value = $1,000 / (1 + 4%)¹⁰ = $675.56
PV of coupon payments = $50 x 8.1109 (PV annuity factor, 4%, 10 periods) = $405.55
market price per bond = $1,081.11
total issuance of the bonds = $1,081.11 x 300 = $324,333
the journal entry to record issuance of bonds:
Dr Cash 324,333
Cr Bonds payable 300,000
Cr Premium on bonds payable 24,333
Raymond Co. has $1.4 million of debt, $3 million of preferred stock, and $1.2 million of common equity. What would be its weight on common equity
Answer:
the Weight of common Equity is 0.21
Explanation:
The computation of the weight on common equity is shown below:
But before that first we have to determine the total firm value
= Debt + Preferred stock + common Equity
= $1.4 million + $3 million + $1.2 million
= $5.6 million
Now the weight on common stock is
Weight of common Equity = Common Equity ÷Total Shareholders Fund
= $1.2 million ÷ $5.6 million
= 0.21
hence, the Weight of common Equity is 0.21
1. Choose a type of company that would have sales people, and then answer the following questions about it. TIP: Choose a type of company that you would be interested in working for or starting up yourself. a. Describe the product the company sells. (1-3 sentences. 2.0 points) b. Which needs in Maslow's hierarchy does this product appeal to
Answer:
The company is a company that would sell products made of quinua, since this is one of the most nutritionally-rich foods in the world.
Explanation:
Quinua is a cereal, originally cultivated in the South American Andes by the Incas and other Native American tribes of the area. Quinua is characterized by having more protein, and more micronutrients (vitamins and minerals) than other cereals like wheat and corn.
The needs that the product would appeal to are: physiological needs, because quinua is a type of food, and humans need food to stay alive, but also safety needs, because it is a type of food that is particularly healthy, and that people consume not only to satisfy their hunger, but also, to stay healthy or fit.
The company that I would be interested in starting is a clothing company for children.
Maslow's hierarchy of needs simply mean that people are motivated based on love, esteem, physiological, safety, and self-actualization.
Based on the information given, the company that I would be interested in starting is a clothing company for children. This will help me in actualizing my dream of having a product for children.
Therefore, it satisfies the self-actualization needs.
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osina purchased a 15-year bond at par value when it was initially issued. The bond has a coupon rate of 7 percent and matures 13 years from now. If the current market rate for this type and quality of bond is 7.5 percent, then Rosina should expect:
Answer:
the current market price of the bond is:
PV of face value = $1,000 / (1 + 7.5%)¹³ = $390.56
PV of coupon payments = $70 x 8.12584 (PV annuity factor, 7.5%, 13 periods) = $568.81
market value = $959.37
Since the coupon rate is lower than the market rate, the bond will sell at a discount. Therefore, Osina should expect to lose money if she decides to sell her bond, it would classify as a long term capital loss.
, Inc. retires a $15 million (face value) bond issue when the carrying value of the bonds is $13 million, but the market value of the bonds is $16 million. The entry to record the retirement will include: Select one: a. A gain of $2 million b. A loss of $2 million c. A loss of $4 million d. A gain of $4 million e. A loss of $3 million
Answer:
Loss on bond redemption = $3 million
Explanation:
Given:
Face value = $15 million
Carrying value = $13 million
Cash paid = $16 million
Find:
Profit / loss
Computation:
Loss on bond redemption = Carrying value - Cash paid
Loss on bond redemption = $13 million - $16 million
Loss on bond redemption = $3 million
The entry to record the retirement will include option E. A loss of $3 million. To understand the calculation see below.
Bond RedemptionWe are provided with the information about :
Face value = $15 million
Carrying value = $13 million
Cash paid = $16 million
We need to find profit or loss. The difference between Carrying value and Cash paid is the profit or loss.
Carrying Value - Cash paid
$13 million - $16 million
-$3 million, the answer is negative hence there is loss.
Therefore, the correct option is E. A loss of $3 million.
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The historical returns for the past three years for Stock B and the stock market portfolio are Stock B: 24 percent, 0 percent, 24 percent; market portfolio: 10 percent, 12 percent, 20 percent. Calculate the beta for Stock B.
Answer:
stock B's beta = 0.125
Explanation:
a stock's beta = covariance / variance
covariance = how the stock performs relative to the portfolio
variance = how the stock performs relative to its mean
using an excel spreadsheet, the covariance between stock B and the market portfolio = 0.0016 (=COVARIANCE.P function)
again using excel, the variance of stock B = 0.0128 (=VAR.P function)
stock B's beta = 0.0016 / 0.0128 = 0.125
a. Computer stocks currently provide an expected rate of return of 12%. MBI, a large computer company, will pay a year-end dividend of $3 per share. If the stock is selling at $50 per share, what must be the market's expectation of the growth rate of MBI dividends? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Answer:
6%
Explanation:
Computer stocks currently provide an expected rate of return of 12%
A larger company MBI will pay a year end dividend of $3
The stock is selling at $50 per share
Therefore the market expectation of the growth rate can be calculated as follows
g= 12/100 - $3/$50
g= 0.12 - 0.06
g= 0.06 × 100
g= 6 %
In 2020, Swifty Corporation reported net income of $5.6 billion, net sales of $190 billion, and average total assets of $80 billion. What is Swifty Corporation's asset turnover?
Answer:
Asset turnover = 2.4
Explanation:
The formula for asset turnover is denoted by;
Asset turnover = Net sales / Average total assets
Given that;
Net sales = $190 billion
Average total assets = $80 billion
Then,
Asset turnover = $190 billion / $80 billion
Asset turnover = 2.375
Asset turnover = 2.4 approximated.
Compute two cash flow ratios. (Round ratios to 2 decimal places, e.g. 0.62.) Current cash debt coverage ratio 0.67 :1 Cash debt coverage ratio 0.38 :1
Answer:
0.66 : 10.25 : 1Explanation:
1. Current Cash Debt Coverage ratio;
[tex]= \frac{Net Cash from operating activities}{\frac{Opeing current liabilities + Closing current liabilities}{2} } \\[/tex]
Net Cash from operating activities = Net Income + Depreciation - Gain on sale of investments - Increase in Accounts receivable
= 33,840 + 11,331 - 3,731 - (43,440 - 23,040)
= $21,040
Current Cash debt coverage
[tex]= \frac{21,040}{\frac{31,840 + 31,840}{2} } \\[/tex]
= 0.66 : 1
2. Cash Debt Coverage ratio;
[tex]= \frac{Net Cash from operating activities}{\frac{Opeing total liabilities + Closing total liabilities}{2} } \\[/tex]
Opening liabilities = 31,840 + 42,840 = $74,680
Closing Liabilities = Accounts payable + Net notes + Bond
= 31,840 + (42,840 - 16,331) + 36,840
= $95,189
Cash debt coverage
[tex]= \frac{21,040}{\frac{ 74,680 + 95,189}{2} } \\[/tex]
= 0.24772
= 0.25 : 1
Sheffield Corp. had revenues of $344000, expenses of $184000, and dividends of $45000. When Income Summary is closed to Retained Earnings, the amount of the debit or credit to Retained Earnings is a
Answer: CREDIT of $160,000.
Explanation:
Income summary being closed to the Retained earnings account means that the income for the year is sent to the Retained earnings account.
Inventory is paid from the Retained earnings so will not feature in the amount sent from the Income statement.
Income = Revenues - expenses
= 344,000 - 184,000
= $160,000
As the Retained earnings will increase, this is a CREDIT of $160,000.
Question 16 of 20
The supply of a good available in a market is likely to decrease when:
A companies believe that the product's selling price will go up.
B. new regulations increase the cost of making the product.
оооо
C. the number of workers able to make the product increases.
D. new technology makes producing the product cheaper.
SUBMIT
When there is a decrease in the supply of a good, the cause is that B. new regulations ...
A decrease in supply does not occur when:
Companies are sure of increased prices.There is an increase in the number of workers.The product becomes cheaper as a result of new technology.Thus, a decrease in supply occurs when B. new regulations ...
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On October 1, 2021, Chief Corporation declared and issued a 14% stock dividend. Before this date, Chief had 86,000 shares of $5 par common stock outstanding. The market price of Chief Corporation on the date of declaration was $10 per share. As a result of this dividend, Chief's retained earnings will:
Answer:
Decreased by $120,400
Explanation:
Calculation for the Chief's retained earnings
RETAINED EARNING
Share issued 86,000 shares
Stock dividend 14% $12,040
(14%*86,000)
*Market price of stock $10
=Amount to be transferred from retained earning $120,400
(12,040*10)
Therefore As a result of this dividend, Chief's retained earnings will:Decreased by $120,400
3) Suppose the household earns 40% of their income by selling a cash crop, spends nothing on inputs, and consumes none of the cash crop. Rest of the 60% of their income received by selling their family labor. If the price of the cash crop rises by 20 percent and wage rate increases by 15%, calculate: a. Net rice sales as fraction of total consumption expenditure
Answer:
8 / 69
Explanation:
Fraction = Net rice sales / Total consumption expenditure
Fraction = 8 / 69
Working
Total Income = 100 ( In which he saves 40 % and spend 60 % which is left )
Net Rice sales = New - Old
Net Rice sales = (40*1120%) - 40
Net Rice sales = 48 - 40
Net rice sales = 8
Total consumption expenditure = New + Old
Total consumption expenditure = (60 x 15%) + 60
Total consumption expenditure = 9 + 60
Total consumption expenditure = 69
If a good or service is scarce, consumers will usually be?
Answer:
B) willing to pay money to get it.
Multiple-choice options for the question
A) unwilling to buy it.
B) willing to pay money to get it.
C) uninterested in owning it.
D) able to get as much of as they want.
B) willing to pay money to get it.
Explanation:
A good or service is said to be scarce if its demand outweighs the supply. Consequently, not every customer willing to buy the product will find it in the market. Scarcity will lead to a 'scramble' for the products every time buyers locate it. The 'scramble' will make customers who greatly desire the products offer higher prices to the sellers. Scarcity makes prices go up as suppliers take advantage of making higher profits.
