Answer:
$210,000
Explanation:
Calculation for annual tax shield due to depreciation
Using this formula
Annual tax shield=Annual depreciation *Marginal tax rate
Let plug in the formula
Annual tax shield=$600,000*35%
Annual tax shield=$210,000
Therefore the annual tax shield due to depreciation is $210,000
Stock R has a beta of 1.7, Stock S has a beta of 0.95, the expected rate of return on an average stock is 10%, and the risk-free rate is 3%. By how much does the required return on the riskier stock exceed that on the less risky stock
Answer:
7.5%
Explanation:
according to CAPM -
Required rate of return = risk free rate + (beta x expected rate of return on the average stock)
Stock R = 3% + (10% X 1.7) = 20%
Stock S = 3% + (10% X 0.95) = 12.5%
20% - 12.5% = 7.5%
If changing market conditions cause a company earning $12,000,000 in 2015 to project a loss of 1% of its profit in each of the next 5 years, what profit does it project in 2020
Answer:
the profit expected in the year 2020 is $115,27,152.12
Explanation:
The computation of the profit in the project for the year 2020 is shown below:
Given that
Earnings = $12,000,000
Loss percentage = 1%
Time period = 5 years
Based on the above information
= $12,000,000 × (1 - 0.01)^ 5 - 1
= $12,000,000 × 0.99^4
= $115,27,152.12
Hence, the profit expected in the year 2020 is $115,27,152.12
The same is to be considered
Eve's Apples opened business on January 1, 2011, and paid for two insurance policies effective that date. The liability policy was $36,000 for eighteen months, and the crop damage policy was $12,000 for a two-year term. What was the balance in Eve's prepaid insurance as of December 31, 2011
Answer:
the balance in the prepaid insurance is $6,000
Explanation:
The computation of the balance in the prepaid insurance is shown below:
= Liability policy - crop damage policy
= ($36,000 ÷ 18 months × 6 months) - ($12,000 ÷ 24 months × 12 months)
= $12,000 - $6,000
= $6,000
Hence, the balance in the prepaid insurance is $6,000
We simply applied the above formula so that the correct value could come
And, the same is to be considered
On January 1, 2014, Red Company purchased Patriot Shop for $400,000 cash in a merger transaction. Red Company received the assets listed below and assumed accounts payable owed by Patriot to its suppliers in the amount of $30,000. What amount of goodwill will be recorded in the transaction
Answer:
The value of the assets is missing, so I looked for similar questions and found the attached image.
Goodwill = total consideration paid - fair market value of net assets
total consideration = $400,000fair market value of net assets = inventory + furniture + other assets - accounts payable = $280,000 + $73,000 + $32,000 - $30,000 = $355,000Goodwill = $400,000 - $355,000 = $45,000
Price escalation in international markets may result from differences in market conditions or ________.
Answer:
Selling strategies.
Explanation:
Price escalation in international markets may result from differences in market conditions or selling strategies.
When a business is using a selling strategy that is not friendly to the customers, they are likely to abandon the seller and go to another.
According to the textbook, ________ economic integration has progressed at a faster pace than ________ economic integration.
Answer:
C). regional; global
Explanation:
Regional economic integration is characterized as the consensus/cooperation between various groups of countries in a particular region(geographic) for the reduction and eventual withdrawal of tariff or non-tariff obstructions for ensuring the unrestrained flow of goods and services along with distinct factors of production among each other. While global economic integration is a similar arrangement between the nations for the reduction in the tariff barriers and the association of various policies. The former has advanced at a higher pace in comparison to the latter as it has assisted in centering upon the issue and helped the smaller economies to grow at a higher growth rate. Thus, option C is the correct answer.
true false capital structure refers to the relative proportion of monetary and real assets in the firm
Answer:
False.
Explanation:
Capital structure refers to the relative proportion of equity and debt that an organization uses to finance its assets.
An optimal capital structure can be defined as the best or optimum mix of equity and debt financing which typically maximizes or boost an organization's market value and reducing its capital costs.
Generally, capital structure can be achieved through a strategic technique of minimizing weighted average cost of capital (WACC) in an organization. The capital structure of a firm will vary over time as taxes and market conditions change.
Additionally, the optimum capital structure used by a firm to maximize its market value;
1. Provides the lowest cost of capital.
2. Has the best mix of common equity, debt and preferred stock.
3. Changes over time as market and firm conditions change.
A firm does not pay a dividend. It is expected to pay its first dividend of $0.10 per share in two years. This dividend will grow at 11 percent indefinitely. Using a 13 percent discount rate, compute the value of this stock.
Answer:
$4.504
Explanation:
Dividends do grow at a constant rate in definitely. Hence, price for year 2 will be:
Price2 = D2 * (1 +g) / (r - g)
Price2 = 0.11 * (1+11%) / 0.13 - 0.11
Price2 = 0.11 * (1.11/ 0.13 - 0.11
Price2 = $5.55
Now, Price0 = Price2 / (1+r)^2
Price0 = $5.55 / (1.11)^2
Price0 = $4.504
Hence, the current value of this stock is $4.504
Sunland Company has the following items: common stock, $969000; treasury stock, $106000; deferred income taxes, $125000 and retained earnings, $453000. What total amount should Sunland Company report as stockholders’ equity?
Answer:
The Stockholder equity is $1,316,000
Explanation:
The computation of the total amount reported as a stockholder equity is shown below:
Stockholder equity is
= Common stock - treasury stock + retained earnings
= $969,000 - $106,000 + $453,000
= $1,316,000
hence, the Stockholder equity is $1,316,000
We simply applied the above formula
The same is to be considered
Murphy Company sublet a portion of its warehouse for five years at an annual rental of $75,000, beginning on May 1, 2020. The tenant, Sheri Charter, paid one year's rent in advance, which Murphy recorded as a credit to Unearned Rent Revenue. Murphy reports on a calendar-year basis. The adjustment on December 31, 2020 for Murphy should be:
Answer:
Dr Unearned Rent Revenue$50,000
Cr Rent Revenue $50,000
Explanation:
Preparation of the adjustment on December 31, 2020 for Murphy
Based on the information given The Journal entry adjustment on December 31, 2020 for Murphy should be:
31-Dec-20
Dr Unearned Rent Revenue$50,000
Cr Rent Revenue $50,000
(Being to record revenue earned)
Numbers of months that was passed by will be 8 months which is from May to December which means that the Amount of Rent revenue earned till 31 Dec 2020 will be calculated as :
Rent revenue= $ 75,000 x 8 months / 12 months
Rent revenue= $ 50,000
The objective of a(n) ________ system is to reduce costs by integrating all of the operations of a firm.
Answer:
Enterprise Resource Planning (ERP)
Explanation:
Enterprise Resource Planning (ERP) is a business strategy process where organizations manage and integrate the main parts of their day-to-day business activities by using software applications.
The ERP software system is used to integrate planning, accounting, finance, marketing and human resources.
For instance, when an organization is replacing a payroll program that it developed in house, with the relevant subsystem of a commercial Enterprise Resource Planning (ERP) system, It should be noted that a faulty migration of historical data from the old system to the new system represent the highest potential risk because you won't be able to measure and analyze performance.
The objective of an Enterprise Resource Planning (ERP) system is to reduce costs by integrating all of the operations of a firm.
In the long run, firms will expand as long as there are more ________, and new firms will enter the industry as long as they earn ________.
Answer:
Economies of scale; positive economic profits.
Explanation:
Economies of scale directly or imply increase or massive production by a company or group of firm. And in most cases this is not seen to be collective as it is unique and implies to a particular firm in their cause of business. This make shift can be caused or triggered by a lot of factors; example can be seen when things are been done manually with man power and at the long run a machine is been put to place, causing massive production.
Positive economic profit on the other hand is simply seen to be the effect of the economies of scale as it causes growth in the company, sometimes pushing to opening of many other branches of the same company. It is also seen to benefit the buyers as unit per capital of the said goods will have to reduce in cost too.
What is globalization?
Answer:
the process by which businesses or other organizations develop international influence or start operating on an international scale.
in other words
the process where businesses or organizations begin spreading internationally
Explanation:
Sheridan Company had accounts receivable of $116000 at 1/1. The only transactions affecting accounts receivable were sales of $937000 and cash collections of $889000. The accounts receivable turnover is
Answer:
6.7 times
Explanation:
The accounts receivable turnover is calculated below;
= $937,000 ÷ ( $116,000 + $164,000 )
/2
= $937,000 ÷ $140,000
= 6.7 times
Therefore, accounts receivable turnover is 6.7 times.
Suppose Chris starts saving in 3 years from today. He will save $20,000 each year for 6 years (until the end of year 8). Then he leaves that money in the same account until the end of year 10. How much will he have saved at the end of year 10 if he earns 4.3% interest.
Answer:
FV= $145,406.11
Explanation:
Giving the following information:
Annual deposit= $20,000
Interest rate= 4.3%
First, we need to calculate the value of the investment at the end of year 8. We will use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {20,000*[(1.043^6) - 1]} / 0.043
FV= $133,663.87
Now, the value at the end of the 10th year:
FV= PV*(1+i)^n
FV= 133,663.87*(1.043^2)
FV= $145,406.11
What is the present value of a benefit of $1,000, to be obtained 20 years from now, with a discount rate of 3%
Answer:
The present value is $553.68
Explanation:
Giving the following information:
Future Value (FV)= $1,000
Number of periods= 20 years
Interest rate= 3%
To calculate the Present Value (PV), we need to use the following formula:
PV= FV/(1+i)^n
PV= 1,000 / (1.03^20)
PV= $553.68
The present value is $553.68
Footsteps Co. has a bond outstanding with a coupon rate of 6.4 percent and annual payments. The bond currently sells for $964.14, matures in 22 years, and has a par value of $1,000. What is the YTM of the bond
Answer:
YTM of the bond = 6.72%
Explanation:
Coupon rate =6.4%
Par value = $1,000
Annual coupon = 6.4%*1000 = $64
Current price = $964.14
Nper = 22 years
YTM of the bond = RATE(nper,pmt,pv,fv) (Using MS Excel)
YTM of the bond = RATE(22,-64,964.14,1000)
YTM of the bond = 6.72%
Quantitative Problem: You need $13,000 to purchase a used car. Your wealthy uncle is willing to lend you the money as an amortized loan. He would like you to make annual payments for 4 years, with the first payment to be made one year from today. He requires a 7% annual return. What will be your annual loan payments
Answer:
$3,837.97
Explanation:
The formula for computing the annual loan payments is provided and explained below:
PMT=P(r/n)/1-(1+r/n)^(-nt)
P=loan amount=$13,000
r=interest rate=7%
n=number of payments in a year=1
t= duration of loan=4 years
PMT= 13,000*(7%/1)/(1-(1+7%/1)^(-1*4)
PMT=13000*0.07/(1-(1.07)^-4
PMT=910 /(1-0.762895212 )
PMT=910 /0.237104788
PMT=$3,837.97
What unique challenges need to be addressed in designing the training program, given the wide range of ages of the employees and the cultural differences in different parts of the United States and abroad
Answer: See explanation
Explanation:
Training programs for employees are vital in order to improve employees skills, improve employees blindness and also help in the accomplishment and achievement of the goals of the company.
The blended learning approach i.e using online educational materials to train the employees. The blended learning approach gives room for interaction and can help in improving the productive capacity of employees.
This can also allow the workers learn about diversity since the employees learn and interact together. Lastly, there should be coaching or mentoring program for employees as the mentors can help in motivating the employees. A motivated and happy worker will help the company to achieve its goals.
In both Gamma and Delta average labor productivity is $40,000 per worker per year. The population of Gamma is 200,000 and the population of Delta is 400,000. Fifty percent of the population in each country is employed. Total output in Gamma is _____ and total output in Delta is _____.
Answer: Gamma = $4,00,000,000
Delta = $8,000,000,000
Explanation:
Average labor productivity for each country = $40,000 per worker per year.
Population of Gamma = 200,000
Population of Delta = 400,000.
Percentage employed = 50%
Number of employees in Gamma = % employed × population
= 50% × 200,000
= 0.5 × 200,000
= 100,000 employees
Number of employees in Delta = %employed × population
= 50% × 400,000
= 0.5 × 400,000
= 200,000 employees
Total output will be calculated as:
= Average labor productivity x Number of employees
Total output in Gamma = $40,000 x 100,000 = $4,00,000,000
Total output in Delta = $40,000 x 200,000 = $8,000,000,000
Which statement is an objection of using the Consumer Price Index (CPI) to measure changes in the cost of living
Complete Question:
Which of the following is an objection of using the Consumer Price Index (CPI) to measure changes in the cost of living?
A. The calculated inflation rate is only accurate for an individual who purchases all the goods and services in the basket.
B. The inflation rate is always understated due to substitution bias.
Answer:
Consumer Price Index (CPI)
A. The calculated inflation rate is only accurate for an individual who purchases all the goods and services in the basket.
Explanation:
To obtain the Consumer Price Index (CPI), a predetermined basket of consumer goods and services is obtained. Weights are assigned to the goods according to their relative values in the basket. The price changes are calculated. The resulting figures are averaged to determine the CPI.
Answer:
The calculated inflation rate is only accurate for an individual who purchases all the goods and services in the basket.
Explanation:
Assume you are managing an assembly line with 7 stations/workers and you know the following: 7 people working ... 20 pieces per hour, 71% efficiency 5 people working ... 15 pieces per hour, 75% efficiency 4 people working ... 13 pieces per hour, 87% efficiency Your boss calls to tell you that operating costs per product are too high. What do you do
Answer:
Utilize 4 people on the line
Explanation:
Here you want to utilize the four people who are on the line as the efficiency could be increased by having minimum 10-15 points also at the same time the number of workers would be decreased by a significant margin
Therefore the option fourth is correct
And, the same is to be considered
All other options are wrong
If the company allocates all of its overhead based on direct labor-hours using its traditional costing method, the overhead assigned to each unit of Product U4 would be closest to: (Round your intermediate calculations to 2 decimal places.)
Answer:
$178.56 per unit
Explanation:
Note: The full question is attached and can be seen below
Total overhead cost = $214,270
Total labor hours = 2400
Allocated overhead per hour based on direct labor-hours = $214,270/2400 hours = $89.28
Hours required for one unit of product U4 = 2 hours
Overhead assigned to each unit of Product U4 will be = 2 hours * $89.28 = $178.56 per unit
Tan, Inc., sold a forklift on April 12, 2020, for $8,000 (its FMV) to its 100% shareholder, Ashley. Tan's adjusted basis for the forklift was $12,000. Ashley's holding period for the forklift:
Answer:
c. Begins on April 13, 2019
Explanation:
Options include "a. Includes Tan's holding period for the forklift. b. Begins on April 12, 2019. c. Begins on April 13, 2019. d. Does not begin until Ashley sells the forklift e. None of these. "
- Whenever a loss is being disallowed in party transaction, the norms is that there is no carryover of holding period.
- Tan has a $4,000 ($12,000 - $8,000) realized loss on the sale of the forklift to Ashley and the loss is disallowed because Ashley is a related taxpayer.
- Ashley’s holding period begins on the day after the property is acquired which is on April 13, 2019
10 pts) DoorRed Pharmacy replenishes one of its best-selling drugs using a continuous review policy. Daily demand for the drug is normally distributed, with a mean of 300 and a standard deviation of 100. The wholesaler can process a replenishment request in two days. The current replenishment policy is to order 1,500 units when there are 750 units on hand. a) What is the cycle service level and fill rate that DoorRed achieves with its policy
Solution :
In the context, it is stated that the DoorRed Pharmacy reloads or replenishes its best selling drug by a policy of continuous review.
Mean daily demand = 300
Standard deviation of daily demand = 100
Replenishment lead time = 2
Reorder point = 750
Order quantity = 1500
Therefore, Safety inventory = 150
Standard deviation of demand during lead time = 141. 42%
Cycle service level = 85.56 %
The cycle service level and fill rate that door red achieves with its policy is :
Cycle service level = 85.56 %
DoorRed PharmacyWhat all information we have ?
Mean daily demand = 300
Standard deviation of daily demand = 100
Replenishment lead time = 2
Reorder point = 750
Order quantity = 1500
Safety inventory = Reorder point -Mean daily demand - Order quantity
Safety inventory = 750 - 300-1500 - 100
Safety inventory = 150
Standard deviation of demand during lead time = 141. 42%
Cycle service level = 85.56 %
Learn more about "cycle service level":
https://brainly.com/question/24086122?referrer=searchResults
Sales during December were 500 units. The cost of inventory at December 31, Year 1 under the FIFO method would be closest to:
Answer:
b. $104,000
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question as follows:
The Loyd Company had 150 units of product Omega on hand at December 1, Year 1, costing $400 each. Purchases of product Omega during December were as follows:
Date Units Unit Cost
December 7 100 $440
December 14 200 $460
December 29 300 $500
Sales during December were 500 units on December 30. Assume that a perpetual inventory system is used. The cost of inventory at December 31, Year 1, under the LIFO method would be:
a. $100,000
b. $104,000
c. $75,000
d. $125,000
The explanation to the answer is now provided as follows:
The Last In First Out (LIFO) refers to an inventory accounting method in which inventory items purchased last are sold first while the ones purchased first are sold last.
Based on the explanation above, the 300 units of inventory purchased on December 29 is sold first followed by the 200 units of inventory purchased on December 14. This gives 500 units of inventory that were sold. That is,
Units of inventory sold = Units of inventory purchased on December 29 + Units of inventory purchased on December 14 = 300 + 200 = 500 units
Inventory remaining unsold at December 31, Year 1 are the 150 units of product Omega on hand at December 1 and the 100 units purchased on December 7. The addition of the costs of these items give the cost of inventory at December 31, Year 1 under LIFO as follows:
Cost of inventory at December 31 = (Units of product Omega on hand at December 1 * Cost per unit of units of product Omega on hand at December 1) + (Units purchased on December 7 * Cost per unit of units purchased on December 7)
Cost of inventory at December 31 = (150 * $400) + (100 * $440)
Cost of inventory at December 31 = $60,000 + $44,000
Cost of inventory at December 31 = $104,000
Therefore, the correct option is b. $104,000.
when using the economic order quantity modelmultiple choiceordering costs increase as the level of inventory increases.carrying costs decrease as the level of inventory increases.costs are minimized when total carrying costs and total ordering costs are equal.none of the options are true.
Answer:
costs are minimized when total carrying costs and total ordering costs are equal.
Explanation:
An economic order quantity model can be defined as an ideal order quantity that typically minimizes or reduces the overall ordering cost, shortage cost and holding cost of an asset.
When using the economic order quantity model costs are minimized when total carrying costs and total ordering costs are equal.
Using job order costing in a service companyRoth accounting pays jack smtih 90,000 per yearRequirements1. What is the hourly cost to roth accounting of employing smith? Assume a 30-hour week and a 50-week year.2. What direct labor cost would be assigned to Client 507 if smith works 15 hours to prepare client 507's financial statements?
Answer:
1. What is the hourly cost to Roth accounting of employing smith? Assume a 30-hour week and a 50-week year.
total number of labor hours per year = 30 per week x 50 weeks = 1,500 labor hours
cost per labor hour = $90,000 / 1,500 = $60
2. What direct labor cost would be assigned to Client 507 if smith works 15 hours to prepare client 507's financial statements?
total direct labor costs assigned to client 507 = 15 direct labor hours billed x $60 per direct labor hour = $900
A firm requires an investment of $30,000 and borrows $10,000 at 8%. If the return on equity is 14% and the tax rate is 21%, what is the firm's WACC
Answer:
11.466%
Explanation:
WACC = cost of equity x percentage of equity + cost of debt x percentage of debt x (1 - tax rate)
percentage of debt = 10,000 / 30,000 = 0.33
percentage of equity = 1 - 0.33 = 0.67
0.67 x 14% + 0.33 x 8% x (1 - 0.21) = 2.086% + 9.38% = 11.466%
Two​ economies, Hare and​ Tortoise, each start with a real GDP per person of ​$1000 in 1950. Real GDP per person grows4 ​% per year in Hare and 3​% per year in Tortoise. After 70​ years, in year​ 2020, what will be real GDP per person in each​ economy?
Answer:
2020 GDP per person for Hare
2020GDP = 1950GDP*(1+growthrate)^70
2020GDP = 1,000*(1+0.04)^70
2020GDP = 1,000*(1.04)^70
2020GDP = 1,000*15.5716183502
2020GDP = 15571.6183502
2020GDP = 15571.62
Hence, the 2020 GDP per person for Hare is predicted to be 15571.62
2020 GDP per person for Tortoise
2020GDP = 1950GDP(1+growthrate)^70
2020GDP = 1,000*(1+0.03)^70
2020GDP = 1,000*(1.03)^70
2020GDP = 1,000*7.91782191212
2020GDP = 7917.82191212
2020GDP = 7917.82
Hence, the 2020 GDP per person for Tortoise is predicted to be 7917.82.
