Answer:
12.4% ; 11%
Explanation:
The computation is shown below:
Cost of capital = (Weightage of debt × cost of debt) + (Weightage of common stock) × (cost of common stock)
= 0.40 × 0.10 + 0.60 × 0.14
= 0.04 + 0.084
= 12.4%
Now the After tax WACC is
= Weightage of debt × cost of debt × ( 1 - tax rate) + (Weightage of common stock) × (cost of common stock)
= {0.40 × 0.10 × (1 - 0.35)} + {0.60 × 0.14}
= 0.026 + 0.084
= 11%
The weightage of equity is
= 100 - 40%
= 0.60
Answer:
12.4%, 11%
Explanation:
Weighed average cost of capital (WACC) represents total cost of capital which is the summation of individual cost of capital of different sources, calculated as the proportion (weights) in total capital structure multiplied by the respective cost of capital.
Risk free rate of interest = 10%
Market risk premium = 8%
Cost of debt = [tex]I\ (1\ -\ t)[/tex] = 10 (1 - .35) = 6.5%
Cost of Equity = [tex]R_{f}\ +\ B\ (Risk\ Premium)[/tex]
where, [tex]R_{f} =[/tex] Risk Free Rate Of Interest
Risk Premium = [tex]R_{m}\ -\ R_{f}[/tex] = 8%
B = Beta or degree of sensitivity of security return with respect to market return
Cost Of Equity = 10 + 0.5 × 8 = 14%
Cost of capital before considering taxes = 10 × 0.4 + 14 × 0.6 = 4 + 8.4 = 12.4%
(1) (2)
Source Weights Cost of Capital (1) × (2)
Debt 0.4 6.5 2.6%
Equity 0.6 14 8.4%
Weighted Average Cost Of Capital 11 %
Suppose the September Eurodollar futures contract has a price of 96.4. You plan to borrow $50m for 3 months in September at LIBOR, and you intend to use the Eurodollar contract to hedge your borrowing rate.
a.What rate can you secure?
b.Will you be long or short the Eurodollar contract?
c.How many contracts will you enter into?
d.Assuming the true 3-month LIBOR is 1% in September, what is the settlement in dollars at expiration of the futures contract? (For purposes of this question, ignore daily marking-to-market on the futures contract.)
Answer:
Explanation:
Definition of simple terminologies ;
A contractual agreement is an agreement which is made on future exchanges in order to buy or sell goods at a fixed price at a specified time period. LIBOR stands for London interbank offered rate which is the rate at which banks borrow money from other banks in london market. this rate is a fixed term by the british bankers association.a) The implied LIBOR of the September Eurodollar futures of 96.4 is = 100 96.4 /400-=0.9%
(b) As we want to borrow money, it implies buying protection against high interest rates, which means low Eurodollar future prices. We will short the Eurodollar contract.
c) Number of contact to be entered into = One Eurodollar contract which is based on a $1 million 3-month deposit. As such, entering into hedge a loan of $50M, will automatically implies entering into 50 short contracts.
d) A true 3-month LIBOR of 1% means an annualized position (annualized by market conventions) of 1% x 4 = 4%. Therefore, our 50 short contracts will pay: [96.4 − (100 − 4) × 100 × $25] × 50 = $50,000.
The increased interest rate has made the loan more expensive as such, the loss to exposure will be compensated hence we have to pay the following amount ; ($50,000,000 x 0.01) - $50,000
= $450,000
The implied interest rate secured is 3.6%, and a short position in the Eurodollar futures contract is required. For a $50 million loan, this would equate to entering into 50 contracts. If the actual LIBOR is 1% come September, the settlement would be $1,300,000 in favor of the borrower.
Hedging with Eurodollar Futures Contract
If the September Eurodollar futures contract has a price of 96.4, the implied interest rate can be calculated by subtracting the contract price from 100, which would yield 3.6% (100 - 96.4).
This is the rate that can be secured via the hedge.
Since a plan is in place to borrow money, one would take a short position in the Eurodollar contract to hedge against rising interest rates.
To determine the number of contracts to enter into, the calculation would be the amount intended to borrow divided by the contract size. If the contract size is $1 million (standard for Eurodollar contracts), then for borrowing $50 million, one would require 50 contracts.
Assuming the true 3-month LIBOR is 1% in September, the calculation for the settlement would involve the difference between the hedged rate (3.6%) and the actual LIBOR rate (1%).
The payout would be this difference times the contract size times the number of contracts. If LIBOR is lower than the hedged rate, you profit from the short futures position.
In this scenario, for 50 contracts, the settlement in dollars at expiration would be (3.6% - 1%)× $1,000,000 × 50 = $1,300,000.
Starset Machine Shop is considering a 4-year project to improve its production efficiency. Buying a new machine press for $455,000 is estimated to result in $187,000 in annual pretax cost savings. The press falls in the 5-year MACRS class, and it will have a salvage value at the end of the project of $75,000. The press also requires an initial investment in spare parts inventory of $34,000, along with an additional $3,800 in inventory for each succeeding year of the project. The shop’s tax rate is 24 percent and its discount rate is 9 percent. (MACRS schedule)
NPV:
Calculate the NPV of this project. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Should the company buy and install the machine press?
a. Yes
b. No
Answer:
NPV: $11,238
a. Yes
Explanation:
Total Investment (PV) = a new machine press for $455,000 + initial investment in spare parts inventory of $34,000 = $489000
Pretax cost saving $187,000 -> After tax saving = $187,000 * (1- tax rate 24%)= $142,120
Cash flow of every year = After tax saving $142,120 - additional $3,800 in inventory for each succeeding year = $138,320
a salvage value at the end of the project of $75,000 is in year 5 => Cash flow of year 5 = $138,320 + $75,000 = $213,320
Discount rate: 9%Cash flow year 1: - 489,000Cash flow year 2: 138,320 Cash flow year 3: 138,320 Cash flow year 4: 138,320 Cash flow year 5: 213,320We use excel to calculate the Net Present Value of Project
= NPB(rate, cash flow of year 1 - year 5)
= NPV(9%, -489000,138320, 138,320, 138,320 , 213,320)
= $11,238
Yes, the company should buy and install the machine because NPV is positive
(Please see excel calculation attached)
Final answer:
The NPV calculation for the machine press includes considering the initial investment, annual savings, depreciation benefits, taxes, additional inventory costs, and the present value of the salvage value. These are all discounted at the shop's rate of 9 percent to determine if the investment is worthwhile.
Explanation:
To calculate the net present value (NPV) of the machine press for Starset Machine Shop, we need to consider the initial investment, the annual pretax cost savings, the salvage value, additional investments in inventory, depreciation from the MACRS schedule, taxes, and the discount rate. The key steps include:
Calculating the after-tax savings each year by subtracting taxes from the pretax cost savings.Adding the tax shield from depreciation by applying the MACRS depreciation rates to the cost of the machine press.Considering the increasing inventory costs each year.Discounting these cash flows at the company's discount rate of 9 percent.Adding the present value of the salvage value at the end of year 4.The calculation will result in the NPV of the investment. If the NPV is positive, it suggests that the investment would add value to the company, implying a recommendation to purchase the machine press. If the NPV is negative, the investment would not be financially beneficial, suggesting the machine press should not be purchased.
National Distributors has $1,000 face value bonds outstanding with a market price of $1,013. The bonds pay interest semiannually, mature in 11 years, and have a yield to maturity of 6.87 percent. What is the current yield
Answer:
Current Yield is 6.94%
Explanation:
Current yield is the ratio of coupon payment of a bond to its current market price.
First we need to calculate the coupon payment by using following formula
YTM = [ C + ( F - P ) / n ] / [ ( F + P ) / 2 ]
6.87% = [ C + ( $1,000 - $1,013 ) / 11 ] / [ ( $1,000 + $1,013 ) / 2 ]
6.87% = [ C + ( $1,000 - $1,013 ) / 11 ] / [ ( $1,000 + $1,013 ) / 2 ]
6.87% = [ C - $1.18 ] / 1006.5
1,006.5 x 6.87% = C - $1.18
69.15 = C - 1.18
C = 69.15 + 1.18 = $70.3 annually
Current Yield = Annual Coupon payment / Current market price
Current Yield = $70.3 / $1,013 = 0.0694 = 6.94%
An assembly line has 6 work stations with cycle time of 6 minutes.There are 10 tasks with total work content of 12 minutes. What is approximate efficiency of this line
Approximate efficinecy of line = 33 percent
Explanation:
Given Data:
number of work stations = 6, cycle time = 6 minutes, number of tasks = 10, total work content given = 12 minutes
In order to calculate the efficiency of work line, the following formula will be used
Efficiency of the lines = total work content divide by ( number of work station multiply with cycle time)
putting the figures in the given formula, we get,
efficiency of lines = [tex]12 /(6 * 6)[/tex] = 12 divide by 36
= 0.3333
= 33 percent
Which of the following includes managing the movement of raw materials and parts from their sources to production sites; managing the movement of materials, semi-finished, and finished products within and among plants, warehouses, and distribution centers; and the planning and coordinating of the physical distribution of finished goods to intermediaries and final buyers?
a. intermodal transportation
b. contract logistics
c. logistics
d. materials handling
Answer: c. Logistics
Explanation: management of the movement of raw materials and parts from their sources to production sites; the movement of materials, semi-finished, and finished products within and among plants, warehouses, and distribution centers; planning and coordinating of the physical distribution of finished goods to intermediaries and final buyers are all contained in logistics.
Logistics is a part of operations and is defined as the process of planning, implementing, and controlling the efficient, effective flow and storage of raw materials, goods (finished, semi-finished etc), services and related information from their point of origin to point of consumption for the purpose of satisfying customer requirements.
The logistics department is responsible for managing the movement of raw materials from their sources to production sites and other stated functions.
Logistics refers to the process of planning, implementing, and controlling the flow and storage of raw materials, goods and services.
The logistics department is responsible for
managing the movement of raw materials and parts from their sources to production sites.managing the movement of materials, semi-finished, and finished products within and among plants, warehouses, and distribution centers.planning and coordinating of the physical distribution of finished goods to intermediaries and final buyers.Hence, the Option C is correct.
Read more about Logistics:
brainly.com/question/14533552
Suppose that due to a poor economy, 1 million workers lost their jobs, causing the unemployment rate to increase to 10%. After a few months of searching, 300,000 of these unemployed workers give up looking for work. How would the decision by these 300,000 people affect the unemployment rate, all else equal
Answer:
The unemployment rate would decrease.
Explanation:
The unemployment rate only takes into account economically active people, that is, people who are actively searching for a job. This means that if 300,000 people give up looking for work, they are not considered unemployed anymore and only 700,000 of the original 1 million workers who lost their job will be counted towards the unemployment rate. Consequently, the unemployment rate would decrease.
The principal of the time value of money is probably the single most important concept in financial management. One of the most frequently encountered applications involves the calculation of a future value.
The process for converting present values into future values is called_______ .This process requires knowledge of the values of three of four time-value-of-money variables. Which of the following is not one of these variables?
a. The interest rate (I) that could be earned by deposited funds
b. The duration of the deposit (N)
c. The trend between the present and future values of an investment
d. The present value (PV) of the amount deposited
Answer:
Compounding; Option C
Explanation:
Time value of money recognizes the fact that today's $100 receipts are better than $100 receipts one year hence. The concept points towards inflation due to which money gradually loses its worth and value.
Future value refers to present value of an amount deposited today at r% rate of compounded interest for n periods.
It is expressed as:
[tex]FV = PV (1\ +\ R)^{n}[/tex]
The above process of converting present value into future value is referred to as compounding.
The variables required for above computation of future value being,
Present Value of the amount deposited denoted as PV
The interest rate (I) that would be earned on deposited funds i.e r
The time period of deposit i.e n
In your initial post, discuss whether you think a contract existed in this situation. Make sure to include the contract elements that are present. Also, state whether Staley has any recourse in this case. Provide rationale for your answer.
In your initial post, discuss whether you think a contract existed in this situation. Make sure to include the contract elements that are present is given below
Explanation:
Most contracts only need to contain two elements to be legally valid: All parties must be in agreement (after an offer has been made by one party and accepted by the other). Something of value must be exchanged -- such as cash, services, or goods (or a promise to exchange such an item) -- for something else of value.
The requisite elements that must be established to demonstrate the formation of a legally binding contract are (1) offer; (2) acceptance; (3) consideration; (4) mutuality of obligation; (5) competency and capacity; and, in certain circumstances, (6) a written instrument.
A contract is much more than an agreement between two people. There must be an offer and acceptance, intention to create a legally binding agreement, a price paid (not necessarily money), a legal capacity to enter a contract of your own free will, and proper understanding and consent of what is involved.
Identify an offer, acceptance, and consideration.
For a contract to be valid, it must have these three basic elements: a specific offer, acceptance of the terms of the offer, and consideration, which is the agreed-upon exchange of goods or services. A valid offer must be sufficiently definite.
Identify an offer, acceptance, and consideration.
For a contract to be valid, it must have these three basic elements: a specific offer, acceptance of the terms of the offer, and consideration, which is the agreed-upon exchange of goods or services. A valid offer must be sufficiently definite.
Requirement 3. Explain the accuracy of the product costs calculated using the simple costing system and the ABC system. How might Milton's management use the cost hierarchy and ABC information to better manage its business? The accuracy of the product costs will be ▼ higher lower the same with the ABC system instead of the simple costing system. The ABC product costs will ▼ better reflect not accurately reflect the utilization of ▼ direct indirect resources by both products. Management can use the ABC costs to ▼ hide indirect costs in large cost pools more accurately determine if employees are productive more accurately determine product costs . The cost hierarchy enables management to more accurately determine the cost drivers of ▼ direct indirect labor shipping costs.
Answer:
Explanation:
DIFFERENCES BETWEEN ACTIVITY-BASED (ABC) AND SIMPLE COSTING SYSTEMS
The major differences relate to the two-stage allocation process. In the first stage, simple costing system allocates indirect costs to cost centers (normally departments), whereas activity-based systems allocate indirect costs to cost centres based o activities rather than departments. Since there are more activities than departments a distinguishing feature is that activity-based system will have a greater number of costs centres in the first stage of the allocation process. in the second stage, simple costing system uses a limited number of different types of second stage volume based and non-volume-based cause-and-effect second stage drivers.
SIMPLE COSTING SYSTEM CAN PROVIDE MISLEADING INFORMATION FOR DECISION MAKING DECISIONS
The system tends to rely on arbitrary allocations of indirect costs, they rely on volume-based allocations. If volume-based allocation is used, high volume products are likely to be assigned with greater proportion of indirect cost than they have consumed, whereas low volume products will be assigned will be assigned a lower proportion. in these circumstances simple costing system will over cost high volume products and under costs low volume products. In contrast ABC system recognize that many indirect costs vary in proportion to changes to changes other than production volume.by identifying the cost drivers that cause the costs to change and assigning cost to cost objects on the basis of cost driver usage, costs can be more accurately traced . it is believed the cause-and effect relationship provides a superior way of determining relevant costs.
FOUR STAGES INVOLVED IN DESIGNING ABC
• identify the major activities that take place in an organisation
• Create a cost centre/cost pool for each activity
• Determine the cost driver for each major activity
• Trace the cost of activity to the product according to a products demand (using cost drivers as a measure of demand) for activities
ABC COST HIERARCHY
ABC cost hierarchy classifies activities along a cost hierarchy consisting of unit-level, batch-level, product sustaining, and facility-sustaining product. Unit level activities are performed each time a unit other product or service is produced. Examples include direct labour costs. Batch level activities are performed each time a batch is produced. Examples include setting up a machine or processing a purchase order. product sustaining activities are performed to enable the production and sale of individual product. Examples include the technical support provided for individual products and the resources required for performing product enhancement. Facility sustaining activities are performed to support the facility’s process. They include general administrative staff.
ABC PROFITABILITY ANALYSIS HIERARCHY
Categorizes costs according to their variability at different hierarchical levels to report different hierarchical contribution level. At the final level,
Facility or business-sustaining costs are deducted from the sum of product contributions to derive a profit at a business level unit.
The aim is to assign all organizational expenses to a hierarchical or organizational level where cause-and-effect cost assignment can be established so that arbitrary apportionments are non-existent.
The ABC system increases product cost calculation accuracy by better reflecting indirect resource utilization. This detailed information aids Milton's management in accurately determining product costs and managing business activities strategically.
When considering the accuracy of product costs calculated using different costing systems, the Activity-Based Costing (ABC) system typically provides higher accuracy compared to a simple costing system.
The ABC system allows costs to better reflect the utilization of indirect resources by different products.
This is because ABC takes into account the varying costs associated with different activities and assigns costs more precisely based on the actual consumption of resources.
Milton's management can use ABC information along with the cost hierarchy to more accurately determine product costs and to identify cost drivers, especially for indirect costs such as administrative overheads, which are not directly connected to the production volume but are still crucial to understand for strategic decision-making and cost management.
Jose purchased a delivery van for his business through an online auction. His winning bid for the van was $24,500. In addition, Jose incurred the following expenses before using the van: shipping costs of $650; paint to match the other fleet vehicles at a cost of $1,000; registration costs of $3,200, which included $3,000 of sales tax and an annual registration fee of $200; wash and detailing for $50; and routine maintenance for $250.What is Jose�s cost basis for the delivery van?
Answer:
Cost basis= $29,150
Explanation:
Cost basis refers to the initial purchase price of an asset that is used for tax purposes. It is the initial amount invested in an asset in addition to any commission's or fees.
Capital gains is the difference between the sale price and the the cost basis of an asset.
Tracking cost basis is necessary for determining the success of an investment and also for tax purposes.
We will sum the following to get the cost basis
Purchase price= $24,500
Shipping cost= $650
Paint= $1,000
Sales tax= $3,000
Cost basis= 24,500+ 650+ 1,000+ 3,000
Cost basis= $29,150
"A cross-hedging strategy is most effective with currencies that are _____; currency diversification is most effective with currencies that are ______."
"A cross-hedging strategy is most effective with currencies that are highly positively correlated; currency diversification is most effective with currencies that are not highly correlated."
Explanation:
Cross hedging is a idea that is used to mange risk. This is done by investing in two securities. Those two securities are correlated and that too positively. Which means their prices goes in the identical direction. It helps in minimizing the risks associated.
So,A cross hedging strategy is most efficient when currencies are positively correlated,
Currency diversification is a strategy where more than one currency is used in investment. It leads to less exchange rate risk. This strategy is most effective with currencies that are not highly correlated. Which means increase in one currency causes no increase in other currency.
At one point, certain U.S. Treasury bonds were callable. Consider the prices in the following three Treasury issues as of May 15, 2017: 05/15/2020 6.50 108.71875 108.78125 − .31250 3.400 05/15/2020 7.55 109.25000 109.31250 − .09375 4.210 05/15/2020 8.05 114.31250 114.50000 − .46875 2.960 The bond in the middle is callable in February 2018. What is the implied value of the call feature? Assume a par value of $1,000. (Hint: Is there a way to combine the two noncallable issues to create an issue that has the same coupon as the callable bond?) (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
The implied value of called feature is $111.49 approx
Explanation:
Detailed step wise solution is given below:
The implied value of the call feature on a callable bond can be estimated by creating a synthetic bond from non-callable issues that mimics the callable bond's cash flows. The value is determined by the price difference between the synthetic bond and the callable bond. However, the calculation requires detailed information not fully provided in the question.
To calculate the implied value of the call feature on a callable bond, we can use the information from non-callable bonds to create a synthetic bond that matches the coupon rate of the callable bond.
The key is to find the correct combination of the two non-callable issues that would replicate the coupon payments of the callable bond. Each non-callable bond has different coupon rates and prices. By creating a portfolio of these bonds that mimics the cash flows of the callable bond, we can infer the value of the call feature by comparing the price of this synthetic bond to the price of the actual callable bond.
However, since the detailed question does not provide the full necessary data and information, such as market interest rates and the exact cash flows of each bond, a definitive calculation cannot be performed. To generally approach such a problem, the following steps are required:
Determine the coupon payments and final par value payment of the callable bond.Create a portfolio of the other two bonds that reproduces these cash flows.Calculate the cost of this portfolio.The difference between the callable bond price and the synthetic bond portfolio price represents the value of the call feature.In practice, the problem requires complex calculations, including interpolation between the prices and cash flows of the non-callable bonds to match the coupon rate of the callable bond.
Muhammad, a 21-year old computer engineer, is opening an individual retirement account (IRA) at a bank. His goal is to accumulate $2.5 million in the IRA by the time he retires in 46 years. Muhammad expects his IRA to receive 8% nominal annual interest, compounded semiannually, throughout the 46 years. As a computer engineer, Muhammad believes his salary will increase at a constant 4% annual rate during his career. Muhammad wishes to make annual deposits into his IRA account over the 46 years. He wishes to start his IRA with the lowest possible deposit and then increase his deposit amount at a constant 4% rate each year.
Assuming end-of-year deposits, how much should she deposit the first year?
Answer:
The first annual depoisit will be of 3,373.49 dollars
Explanation:
Given the formula for future growing annuity
we need to solve for the yearly payment:
grow rate: 0.04
annual effective rate: 8% compounding semiannually:
[tex](/1+0.08/2)^2-1 = r_e\\[/tex]
r= 0.0816
FV 2,500,000
n 46
Formula for future value fo an ordinary annuity:
[tex]C_0 \times \frac{(1+r)^n-(1+g)^n}{r-g} = FV[/tex]
[tex]C_0 \times \frac{(1+0.0816)^{46}-(1+0.04)^{46}}{0.0816-0.04} = 2,500,000\\C_0 = $3,373.4855[/tex]
The first annual depoisit will be of 3,373.49 dollars
Deana, a light-complexioned African American is the manager of the cosmetics department at a large retail store. She does not promote Indigo, a brown-complexioned African American who is otherwise eligible for the promotion because she believes that customers prefer lighter skinned cosmetic consultants. Thus, Indigo:
a. Does not have a color discrimination claim under Title VII of the Civil Rights Act of 1964 because Deana was only trying to improve sales of the retail store.
b. Has a discrimination claim under Title VII of the Civil Rights Act of 1964 because color discriminate can occur between members of the same race
c. Does not have a color discrimination claim under Title VII of the Civil Rights Act of 1964 because Deana did not show any pervasive racial discrimination against Indigo
d. Has a discrimination claim under the Title VII of the Civil Rights Act of 1964 because of the BFOQ defense
Answer:
b. Has a discrimination claim under Title VII of the Civil Rights Act of 1964 because color discriminate can occur between members of the same race.
Explanation:
Discrimination is prohibited under the Civil Rights Act of 1964 which states that it is illegal to discriminate against a party based on the color of their skin, country of origin, or racial composition.
Same race discrimination is when the perpetrator is also from the Sam race as the victim.
For example on September 11, 2000, Zeke Wilson a black boxing promoter brought racism charges against a chairman of the state sports commission who was also black. For failing to provide promoter protection when William Pender a white boxing commisioner performed discriminatory acts against Zeke.
Dena is performing same race discrimination by passing over Indigo because of her skin colour.
Final answer:
Color discrimination can occur b. between members of the same race, making Indigo eligible to file a claim under Title VII.
Explanation:
The answer to this question is has a discrimination claim under Title VII of the Civil Rights Act of 1964 because color discrimination can occur between members of the same race. Title VII of the Civil Rights Act of 1964 prohibits employment discrimination based on race, including color discrimination. Even though Deana is also African American, her preference for lighter-skinned cosmetic consultants can still be considered color discrimination.
Thus, the Civil Rights Act of 1964 forbids discrimination, stating that it is unlawful to treat a person unfairly on the basis of their race, national origin, or skin colour. Same-race discrimination occurs when the victim and the offender are members of the same racial group.
While the examples in this chapter have focused on a single-employer plan, many states operate statewide plans, referred to as Public Employee Retirement Systems (PERS), to which multiple employers contribute. One of the largest PERS plans in the nation is operated in the State of California. Required To answer the following questions, use the website found at www.calpers.ca.gov . The answers to the questions can be found in CalPERS's annual report and by using the "about," "organization." and "facts at a glance" sections Page 348 provided on the site. a. When was CalPERS established? b. How many employers contribute to CalPERS? c. How many members are served by CalPERS? d. What types of programs are administered by CalPERS? e. For the most recent reporting period, what is the value of total net position as listed in the statement of net position? f For the most recent reporting period, what was the total change in pension fund net position as reported in the statement of changes in net position? &.For the most recent reporting period, what was the funded status of pension programs PERF B and PERF C?
Answer:
a. 1932
b. 2,945 employers
c. Over 1.9 million members
d. They include Health Program, Long Term Care Plan, Deferred Compensation Plan and California Employers' Retiree Benefits Trust Fund for Post Retirement Program.
e. Value of total net position as of 30th June 2017 is $588.868 million
f. The total change in pension fund net position for most recent reporting period 30 June, 2017 is $27,984,457 thousands
g. PERF B is Schools and PERF C is Public Agency
Explanation:
a. CalPERS was established in 1932 as the "State Employees' Retirement System" and this name was changed as California Public Employees' Retirement System" (CalPERS) in the year 1992.
B) 2,945 Employers contribute to CalPERS. It includes 1,578 public agencies, 1,366 school districts and 1 the state of california.
C) 1.9 million members are served by CalPERS.
D) Two types of programs are administered by CalPERS:
1) Health Program
2) Other Programs: It includes-Long terms care plan,Deferred Compensation plan and California Employers' Retiree Benefits Trust Fund for post retirement program.
E) Value of total net position as on 30 June 2017 is $588.868 million (588,868,000) and as of June 30 June 2016 it is USD 572.292 million.
F) The total change in pension fund net position for most recent reporting period 30 June, 2017 is $27,984,457 thousands as added $(20,171,011+ 5,085,422 + 2,538,563 + 8,481+183,146 - 2,166).
G) For Most recent reporting period 30 June, 2017 the funded status of pension programs PERF B is Schools and PERF C is Public agency.
Which of the following is NOT true about an ATM? A. ATM stands for "Access or Transfer Money". B. An ATM is available virtually 24 hours a day. C. You can make a deposit at your bank's ATM. D. You can transfer money between your own accounts.
Answer: A. ATM stands for "Access or Transfer Money"
Explanation:
An ATM stands does not stand for Access or Transfer Money, even though it offers those services.
Nay, it stands for Automated Teller Machine which is to say that it can do the job of a bank Teller, only it can do more and can do it Automatically and outside a bank.
Option A is therefore correct.
Answer:
A. ATM stands for "Access or Transfer Money".
Explanation:
ATM stands for Automated Teller Machine, not "Access or Transfer Money".
ATM is a specialized computer that ease the process of managing money by an individual that an account with a bank.
It is always available 24 hours daily to allow withdrawal of money, transfer of money between different accounts, and many ATMs allow deposits of money.
Which of the following is a nonmanufacturing business where process costing would most likely be used? An auto body shop. A furniture repair shop. A laboratory that tests water samples for lead A tailoring shop. A beauty shop.
All of them are the non-manufacturing business where process costing would most likely be used.
Explanation:
All are non-manufacturing business which are as follows, An auto body shop. A furniture repair shop. A laboratory that tests water samples for lead A tailoring shop. A beauty shop.Non-manufacturing business costs refers to those business where it is incurred outside the factory or production unitNon-manufacturing costs includes,selling expenses general expenses Selling Expenses It is also called as selling and distribution expenses.Non-manufacturing expenses have no impact on the production cost of the company due to their period costs.
Final answer:
Among the nonmanufacturing businesses listed, a laboratory that tests water samples for lead would be the most likely to use process costing because it produces homogeneous outputs in a continuous flow, similar to chemical plants.
Explanation:
Process costing is a method used in manufacturing and nonmanufacturing businesses where products or services are homogeneous and produced in a continuous flow. This makes it suitable for industries like chemical production or water treatment where many units of a similar product are created. Amongst the nonmanufacturing businesses listed such as an auto body shop, a furniture repair shop, a laboratory that tests water samples for lead, a tailoring shop, and a beauty shop, a laboratory that tests water samples for lead is the most likely to use process costing. This is because, similar to the examples of chemical plants and chemistry labs, the laboratory conducts standardized processing experiments and runs, which result in homogeneous outputs allowing for a more accurate product cost determination.
Process costing enables the calculation of the costs per unit of the product by tracking and averaging the direct and indirect costs involved in the production process. This includes both fixed operating costs, such as the cost of maintaining the facility, and variable costs that change with the level of production - all of which are key to understanding and managing costs effectively in businesses with a significant degree of operating leverage or those pursuing economies of scale.
Williams & Sons last year reported sales of $20 million, cost of goods sold (COGS) of $16 million, and an inventory turnover ratio of 4. The company is now adopting a new inventory system. If the new system is able to reduce the firm's inventory level and increase the firm's inventory turnover ratio to 8 while maintaining the same level of sales and COGS, how much cash will be freed up? Do not round intermediate calculations. Enter your answer in dollars. For example, an answer of $1.23 million should be entered as 1,230,000,000. Round your answer to the nearest dollar.
Answer:
Cash will be freed up: $2,000,000
Explanation:
Inventory turnover ratio is calculated by using following formula:
Inventory turnover ratio = Cost of Goods Sold/Average Inventory
Average Inventory = Cost of Goods Sold/Inventory turnover ratio
Last year, Williams & Sons had sales of $20 million, cost of goods sold (COGS) of $16 million, and an inventory turnover ratio of 4.
Average Inventory = $16,000,000/4 = $4,000,000
For the new inventory system, inventory turnover ratio is 8 while maintaining the same level of sales and COGS.
Average Inventory = $16,000,000/8 = $2,000,000
Cash will be freed up = $4,000,000 - $2,000,000 = $2,000,000
Final answer:
The amount of cash freed up can be calculated by finding the difference in the inventory turnover ratios, and multiplying it by the cost of goods sold. In this case, there would be a decrease of $64,000,000 in cash freed up.
Explanation:
The amount of cash freed up can be calculated by finding the difference in the inventory turnover ratios. the old inventory turnover ratio was 4 and the new ratio is 8, which means the new system is able to sell inventory twice as fast. Since the sales and COGS remain the same, the decrease in inventory is equal to the increase in inventory turnover ratio. Therefore, the amount of cash freed up would be the decrease in inventory multiplied by the COGS.
Formula: Cash Freed Up = (Decrease in Inventory) x COGS
Amount of Cash Freed Up = (4 - 8) x $16,000,000 = $-64,000,000
Therefore, there would be a decrease of $64,000,000 in cash freed up.
The BEST approach to network representation of a large and hugely complex project is to: Use AOA. Represent all activities and relationships. Use AON. Simplify network logic and reduce it to the most meaningful relationships.
Answer:
Simplify network logic and reduce it to the most meaningful relationships
Explanation:
The above refers to a Logic Network which describes the sequencial activities in a project over a period of time. Here we are able to see which activity logically precedes/comes before or follows the other. The network logic can be used to identify the targets/achievements or the milestones reached in a project. It aids understanding of project workflow, timescale and relationships/dependencies.
Which strategy uses subsidiaries, franchises, or joint ventures with substantial independence? (a) multidomestic strategy (b) international strategy (c) transnational strategy (d) maquiladora system in Europe (e) global strategy
Answer:
The correct answer is letter "A": multidomestic strategy.
Explanation:
A multidomestic strategy is developed by a country with an international presence when the commercial and marketing focus is based on domestic trends. Under this approach, the firm's goods are shaped differently in every region to meet local needs and cultures. This practice demands more investment in professionals with vast knowledge in each market.
Final answer:
The correct answer is (a) multidomestic strategy. This strategy is used by companies that allow their subsidiaries or franchises to operate with a high degree of local autonomy, adapting their operations to the specific needs of each market they serve.
Explanation:
The strategy that uses subsidiaries, franchises, or joint ventures with substantial independence is known as a multidomestic strategy. This approach allows individual subsidiaries in different countries to operate independently, tailoring their operations, products, and services to fit local market conditions. This contrasts with global strategies where standardization across all markets is the norm, or international strategies which involve exporting products for global markets, but without significant local customization.
Franchises like McDonald's, which offers similar products or services in many locations, have also adopted aspects of the multidomestic strategy by allowing for some degree of local adaptation to cater to the tastes and preferences of different cultures. The multidomestic strategy allows multinational corporations (MNCs) to take full advantage of economies of scale and to benefit from competition, while specializing in certain services or industries and achieving comparative advantages.
If your pharmacy department used the First-In First-Out (FIFO) inventory method at the beginning of your fiscal year, should the Chief Financial Officer use the Last-In First-Out (LIFO) inventory method at the end of the year?a. yesb. noc. not applicable
Answer:
No, the Chief Financial Officer should not use the Last-In First-Out (LIFO) inventory method at the end of the year
Explanation:
If a different method is always used, then it would not be accurate. With the use of a different method, a different amount is obtained in the end.
It just would not be accurate, so it is very important to use the same method each time.
Thus, the Chief Financial Officer should use the same inventory method First-In First-Out (FIFO) inventory method (used at the beginning of your fiscal year), at the end of the year.
Final answer:
The CFO should not switch from FIFO to LIFO at the end of the fiscal year because consistency in inventory valuation methods is crucial for accurate financial reporting.
Explanation:
The inventory method used by a pharmacy department, whether it is First-In First-Out (FIFO) or Last-In First-Out (LIFO), should generally remain consistent throughout the fiscal year. If a pharmacy department began the fiscal year using FIFO, the Chief Financial Officer should not switch to LIFO at the end of the year. This consistency is necessary to maintain reliable financial statements and accurate tracking of inventory costs over time. Switching methods could lead to fluctuations in cost of goods sold and profitability which might mislead stakeholders.
Find at least three implicit modelling assumptions or other qualitative factors which are relevant but not covered by the model. (e.g., all workers are assumed to have the same efficiency – Do not reuse this!)
Home Improvement Store (ACME)
Employee
Scheduling Problem
(
Answer and Explanation:
For Home Improvement Store (Acme) following are the implicit modelling assumptions or other qualitative factors which are relevant but not covered by the model:
1)Average customer footfall is considered at all times.
2)Seasonal effects are not considered. For example, boost in sales during festival times.
3)Employee absenteeism is not considered. i.e. all employees are expected to be present always.
4)Location is not considered to affect the change in scheduling activity.
5)Wages are considered to be uniform throughout and not affect employee performance.
Discounting refers directly to a. calculations that ignore the phenomenon of compounding for the sake of ease and simplicity. b. decreases in interest rates over time, while compounding refers to increases in interest rates over time. c. finding the future value of a present sum of money. d. finding the present value of a future sum of money.
Answer:
The correct answer is letter "D": finding the present value of a future sum of money.
Explanation:
The Discount Rate is the interest rate that you need to earn on a given amount of money today to eventually end up with a given amount of money in a certain period in the future. The concept is associated with the present value of money that estates having a dollar today will be worth more than having a dollar tomorrow.
In investing, typically the higher the interest rate, the higher the risk involved with the investment and its future cash flows.
Final answer:
Discounting refers to the computation of the present value of a future sum of money, which is option d. It plays a vital role in financial and investment decisions, reflecting the preference of current consumption over future benefits.
Explanation:
The concept of discounting pertains to the technique of determining the present value of a future sum of money. The option that correctly defines discounting is d. finding the present value of a future sum of money. In financial decision-making, the discount rate is a crucial factor because it reflects how much value is placed on future benefits today. The higher the discount rate, the smaller the present value of future amounts, indicating a preference for immediate consumption over future benefits. This notion underpins various economic decisions, including investment in stocks and bonds, where future earnings and interest payments are factored into their present valuation. Two aspects to remember about discounting include the following: First, a high-interest rate results in a lower present value for future sums compared to a lower interest rate. Second, amounts to be received in the distant future are significantly discounted and thus have a much lower present value than amounts to be received sooner.
Jupiter Satellite Corporation earned $18 million for the fiscal year ending yesterday. The firm also paid out 30 percent of its earnings as dividends yesterday. The firm will continue to pay out 30 percent of its earnings as annual, end-of-year dividends. The remaining 70 percent of earnings is retained by the company for use in projects. The company has 2 million shares of common stock outstanding. The current stock price is $91. The historical return on equity (ROE) of 16 percent is expected to continue in the future.
What is the required rate of return on the stock?
Answer:
Rate of Reeturn is 14.5%
Explanation:T
The question is to calculate the required rate of return on the stock and this will be done as follows
Formula for rate = Ke = (D1 + P0) + g
In this formula, We need to first determine what our g or Growth rate is as follows:
Growth rate= Return on Equity x The Retention Ration
= 16% x 70% = 0.112 or 11.2%
D1 in the formula is the Expected Dividend per share
=Current dividend x (1+g)
= $18 million x 30% /2 million) x (1+0.112)
= 2.7 x 1.112 = 3.0024
P0 in the formula represents the current price of the stock = $91
Therefore based on the formula above
Ke = (D1 + P0) + g
= (3.004 /91) + 0.112
= 0.1450 x 100
= 14.5%
In the process of reconciling its bank statement for January, Maxi's Clothing's accountant compiles the following information:
Cash balance per company books on January 30 $ 6,125
Deposits in transit at month-end $ 2,080
Outstanding checks at month-end $ 660
Bank service charges $ 39
EFT automatically deducted monthly, not yet recorded by Maxi $ 660
An NSF check returned on a customer account $ 405
Required:
1. The adjusted cash balance per the books on January 31 is _______________.
Answer:
$5,021
Explanation:
The computation of the adjusted cash balance is shown below:
= Cash balance as per company books - bank service charges - EFT automatically deducted monthly, not yet recorded - NSF check returned on a customer account
= $6,125 - $39 - $660 - $405
= $5,021
All the above items should be deducted from the company books cash balance so that the adjusted cash balance could come
An incentive compensation scheme includes a. a performance evaluation system b. a disciplinary action committee c. a reward system linked to performance d. Both A&C
Answer:
The correct answer is letter "D": Both A&C.
Explanation:
Incentive compensation schemes are established provided by employers based on the performance of employees. Employers set a reward system that could take the form of bonuses, prizes or recognition, and goals workers should reach or pass so those rewards can be provided.
Incentives are given at work aiming to motivate employees to work efficiently and effectively.
Fast Rocket, Inc. generated a net loss of $5,000 in its first year (2018) and taxable income of $15,000 in its second (2019). Assuming a tax rate of 21%, what is Fast Rocket's total tax for both years
Answer:
$2100
Explanation:
Net loss = $5000
Taxable income = $15000
Tax rate = 21%
Fast Rocket's total tax for both years is determined by
Taxable income minus net loss multiplied by tax rate
= $(15000-5000) × 21%
= $10000 × 0.21
= $2,100
Fast Rocket's total tax for both years = $2100
To overcome this problem when selling to less-affluent consumers in developing countries, many companies make simpler or smaller versions of their products that can be sold at lower prices. Others have introduced new, more affordable brands for global markets. This is known as a(n) ________ problem. Group of answer choices skimming price price escalation inflation deflation demand escalation
This kind of problem is known as price escalation.
Explanation:
A divergence in estimating where merchandise have greater expenses in a remote market than in the local market because of transportation and sending out expenses is known as price escalation.
Price escalation can likewise allude to the total of cost factors in the circulation channels which mean a higher last expense for an item in a remote market.
Find the principal needed now to get the given amount; that is, find the present value.To get $ 90 after 2 and three fourths years at 6% compounded continuouslyThe present value of $ 90 is $ nothing .(Round to the nearest cent as needed.)
Explanation:
For continuous compounding, we use the following formula
[tex]FV_{N} = PVe^{i N}[/tex]
Scenario 1 :
FV = $ 90
N = 2 years
I = 6%
PV= ?
[tex]FV_{N} = PVe^{i N}[/tex]
[tex]90 = PVe^{(0.06) (2)}[/tex]
[tex]\frac{90}{e^{(0.06) (2)}} = PV[/tex]
[tex]PV = 79.8228[/tex]
PV = $ 79.82
Scenario 2:
[tex]FV_{N} = PVe^{i N}[/tex]
[tex]90 = PVe^{(0.06) (3)}[/tex]
PV = $ 75.17
Scenario 3:
[tex]FV_{N} = PVe^{i N}[/tex]
[tex]90 = PVe^{(0.06) (4)}[/tex]
PV = $ 70.80
On October 1, 2019, Priscilla purchased a business. Of the purchase price, $92,000 is allocated to a patent and $552,000 to goodwill. If required, round your intermediate values to nearest dollar and use in subsequent computations. Calculate Priscilla’s 2019 § 197 amortization deduction. $
Answer:
$10,730
Explanation:
1. Patent: $92,000/15 years = $6,133
$6,133 × 3/12 = $1,533
2.Goodwill: $552,000/15 years= $36,800
$36,800 × 3/12 = $9,200
Total: $1,533 + $9,200= $10,733
Approximately $10,730