"Assume a bond with $1,000 par value and has an 7 percent coupon rate that pays interest annually, three years remaining to maturity, and a 9 percent yield to maturity. The duration of this bond is Effective Bond Duration.
Explanation:
"Assume a bond with $1,000 par value and has an 7 percent coupon rate that pays interest annu the duration of a bond or a bond fundally, three years remaining to maturity, and a 9 percent yield to maturity". The duration of this bond is Effective Bond Duration.The bond issuer borrows capital from the bondholder and makes the fixed payments to bondholder at a fixed or a a variable interest rate.Bond Duration is an approximate measure of a bond's price and sensitivity to the changes in interest rates.Normally, the higher the duration of a bond or a bond fund,the more its price will drop as when the interest rates rise..This measure of duration takes into consideration for the fact that expected cash flows will fluctuate as the interest rates changes.
The duration of the bond can be calculated using the formula Duration = (1 + Yield to Maturity) / Coupon Rate, which results in 2 years for the given bond with a 7% coupon rate, 3 years to maturity, and a 9% yield to maturity.
The **duration** of a bond measures its sensitivity to interest rate changes. For a bond with a 7% coupon rate, 3 years to maturity, and a 9% yield to maturity, we can calculate the duration using the formula:
Duration = (1 + Yield to Maturity) / Coupon Rate
Plugging in the values:
Yield to Maturity = 9% (0.09)
Coupon rate = 7% (0.07)
Duration = (1 + 0.09) / 0.07 = 2 years
It is now January 1, 2015; and you will need $1,000 on January 1, 2019, in 4 years. Your bank compounds interest at an 8% annual rate. How much must you deposit today to have a balance of $1,000 on January 1, 2019? The formula method for this questions is
Answer:
You need to deposit $735.03 today
Explanation:
Future Value (FV): $1,000
Rate: 8% pa
Tenor: 4 years
Present value is the amount of deposit today?
FV = PV * (1+ rate) ^ tenor
⇔ 1000 = PV *(1+8%)^4
⇒ PV = 1000/(1+8%)^4 = $735.03
Answer:
Pv = $1000 (1.08)^-4
Explanation:
Compounding is the computation of the future value of $1 invested today while discounting is the determination of the present worth of $1 in the future. Both are related by the equation
Fv = Pv ( 1 + r )^n
where Fv = Future amount
Pv = Present value
r = rate of return
n = time in years
Hence the formula required
$1000 = Pv (1 + 0.08)^4
Pv = $1000 (1.08)^-4
When ABC car wash opened its doors at 9 AM, there were already 10 cars waiting in line (first come first serve). New cars arrive at the average rate of 20 cars per hour. The car wash can wash the car at the average rate of 15 cars per hour. If a new car arrives at 10 AM, how many hours should this car expect to wait before it is washed
Answer:
The car that arrives at 10 AM will have to wait for at least 1 hour before it is washed.
Explanation:
First of all, let us lay out the important points:
at 9 AM; 10 cars were already waiting
arrival rate = 20 cars per hour
wash rate = 15 cars per hour.
New car arrives at 10 AM
From the statements above, if 20 cars arrive every hour, it can be inferred that between 9 AM to 10 AM, the number of new cars that arrive = 20 cars.
But remember that before the car was opened, 10 cars were already waiting in line, therefore the total number of cars that arrived between 9 AM and 10 AM = 20 + 10 = 30 cars.
We are also told that the rate of wash of the cars are; 15 cars every hour. Therefore between 9 AM and 10 AM which is 1 hour, 15 out of 30 cars were washed, leaving 15 more cars unwashed. To wash this 15 remaining cars, another hour will pass, so by 11 AM, the cars that arrived between 9 AM and 10 AM will be completely washed. hence the car that arrived at 10 AM, will wait till 11 AM in order to be washed, which is a wait time of 1 hour.
Final answer:
A new car arriving at the ABC car wash at 10 AM, given the existing backlog and the rates of arrival and servicing, should expect to wait about 4 hours before it is washed.
Explanation:
Calculating Waiting Time for a Car Wash
When ABC car wash opened at 9 AM, there were already 10 cars waiting. New cars arrive at an average rate of 20 cars per hour, and the car wash can handle an average rate of 15 cars per hour. For a new car arriving at 10 AM, to calculate its expected waiting time, we must consider both the initial backlog and the rate of incoming cars vs. the car wash rate.
By 10 AM, in one hour, the car wash would have serviced 15 of the initial 10 cars, clearing the initial queue and starting on cars that have arrived since opening. However, during that hour, 20 new cars have arrived, creating a backlog. This backlog continues to grow every hour since the arrival rate (20 cars/hour) is higher than the service rate (15 cars/hour).
The difference in arrival and service rates is 5 cars/hour. The car arriving at 10 AM is effectively the 20th car in line at that moment. We must calculate how long it will take to clear the queue ahead, considering the growing backlog. It requires solving the equation for when the service rate will catch up to the arriving car's position in the queue.
To find the exact waiting time:
Service rate deficit: 5 cars/hour.
Queue position of new arrival: 20th.
Hours to service 20 cars at a deficit of 5 cars/hour = 20 / 5 = 4 hours.
Thus, a car arriving at 10 AM should expect to wait 4 hours before being serviced.
Compute the present value of the pension obligation to these three employees as of December 31, 2021. Assume an 11% interest rate. 2. The company wants to have enough cash invested at December 31, 2024, to provide for all three employees. To accumulate enough cash, they will make three equal annual contributions to a fund that will earn 11% interest compounded annually
Answer:
1.
Tinkers:
PVA = $20,000 × 7.19087* = $143,817
*Present value of an ordinary annuity of $1: n = 15, i = 11% (from PVA of $1)
PV = $143,817 × 0.81162* = $116,725
*Present value of $1: n = 2, i = 11% (from PV of $1)
Evers:
PVA = $25,000 × 7.19087* = $179,772
*Present value of an ordinary annuity of $1: n = 15, i = 11% (from PVA of $1)
PV = $179,772 × 0.73119* = $131,447
*Present value of $1: n = 3, i = 11% (from PV of $1)
Chance:
PVA = $30,000 × 7.19087* = $215,726
*Present value of an ordinary annuity of $1: n = 15, i = 11% (from PVA of $1)
PV = $215,726 × 0.65873* = $142,105
*Present value of $1: n = 4, i = 11% (from PV of $1)
Answer:
The question is not completed but the complete question is in the explanation section below and the solution is attached in the pictures.
Explanation:
Three employees of the Horizon Distributing Company will receive annual pension payments from the company when they retire. The employees will receive their annual payments for as long as they live. Life expectancy for each employee is 14 years beyond retirement. Their names, the amount of their annual pension payments, and the date they will receive their first payment are shown below: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
Employee Annual Payment Date of
First
Payment
Tinkers $ 27,000 12/31/24
Evers $ 32,000 12/31/25
Chance $ 37,000 12/31/26
The real risk-free rate is 2.25%. Inflation is expected to be 2.5% this year and 4.25% during the next 2 years. Assume that the maturity risk premium is zero. What is the yield on 2-year Treasury securities
Answer:
yield on 2 year treasury = 5.63 %
Explanation:
given data
real risk-free rate = 2.25 %
Inflation rate year 1 = 2.5 %
Inflation rate year 2 = 4.25 %
solution
we get here average inflation rate is
average inflation rate = [tex]\frac{2.5+4.25}{2}[/tex] ...........1
average inflation rate = 3.38 %
so here yield on 2 year treasury
yield on 2 year treasury = real risk-free rate + average inflation rate + MRP ...............2
yield on 2 year treasury = 2.25 % + 3.38 % + 0%
yield on 2 year treasury = 5.63 %
Which of the following funds has enormous growth potential, but also poses significant risks? (Select the best answer below.) A. Global fund B. International fund C. Emerging-market fund D. Country-specific fund
Answer:
C. Emerging market fund
Explanation:
Emerging market fund -
It refers to the amount of funds invested with its major assets in the economies of the emerging countries , is referred to as the emerging market fund .
These funds are in the range of the mutual funds to the exchange - traded funds .
These funds are in higher risk , as are invested in a developing country rather than the developed country .
Hence , from the given information of the question ,
The correct answer is emerging market funds .
Product focused processes: allow more customization, but are not very efficient. are desirable because resource needs increase slowly with the complexity of a process. are processes that are specialized for relatively few products or customer groups. apply only to service firms, not to manufacturers. are profitable because customers demand flexibility, not specialization.
Answer:
The correct answer is letter "C": are processes that are specialized for relatively few products or customer groups.
Explanation:
Product-focused processes are those that follow a market segmentation. Companies decide to what sector of the market they will drive their efforts towards and specializes in the manufacturing of a determined good.
Production tends to involve high volumes and low variety process but provides manufacturers relatively high facility utilization. Examples of product-focused processes are the production of light bulbs or bolts.
Product focused processes are operations tailored for relatively few products or clients, providing efficiency and specialization, but limited flexibility. These processes are applicable to both manufacturing and service companies. The profitability of these processes depends on the nature of the market demand.
Explanation:Product focused processes are specialized operations meant for producing relatively few products, or catering to a specific customer group. This method tends to be more efficient than process focused because individual processes are completed by specialized workers using dedicated machinery. However, such type of operations may not provide the same level of customization flexibility because changing the process for a new product or different version can be time-consuming and costly. These processes apply to both manufacturing and service firms.
The profitability of product focused processes depends on the demand of the market. If the market demands a specialized product not offered by many providers, a firm following a product focus strategy can command a higher price for its unique offering. On the other hand, if the market requires flexibility, a process-focused firm, which is generally capable of producing a wider array of products, might be more profitable.
Learn more about Product Focused Processes here:https://brainly.com/question/32277238
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After graduation you face a choice. One option is to work for a highly regarded consulting firm and earn a starting salary (benefits included) of $55,000. The other option is to use $12,000 you have in savings to start your own consulting firm. Assume you are earning an annual return of 5 percent on your savings. You choose to start your own consulting firm. At the end of the first year, you add up all of your expenses and revenues. Your expenses include $18,000 in rent, $1,000 in office supplies, $50,000 for office staff, $20,000 for your own salary, and $4,000 in telephone expenses. Revenues totaled $147,600. Based on the information provided, what were your total explicit costs? Your implicit costs? What was your accounting and economic profit this first year?
Answer:
(a) $93,000
(b) $55,600
(c) $54,600
(d) -$1,000
Explanation:
An explicit cost refers to the costs that are incurred to run a business such as rent, wages and materials.
Explicit costs:
= Rent + supplies + Office staff + salary + Telephone expenses
= $18,000 + $1,000 + $50,000 + $20,000 + $4,000
= $93,000
Implicit cost is also known as opportunity costs.
Implicit cost:
= (Amount of saving × Rate) + Salary from consulting firm
= ($12,000 × 0.05) + $55,000
= $600 + $55,000
= $55,600
Accounting profit = Revenues - Explicit cost
= $147,600 - $93,000
= $54,600
Economic profit = Accounting profit - Implicit costs
= $54,600 - $55,600
= -$1,000
Answer:
Explicit Costs = $ 73000 ; Implicit Costs = $ 67600
Accounting Profit = $ 74600 ; Economic Profit = $ 13000 loss
Explanation:
Explicit Costs are real cash outflow expenses, paid for hiring productive factor inputs from outside. Implicit Costs are imputed costs of entrepreneur provided unpaid productive factor inputs and opportunity cost of money & time invested in business.
Accounting Profit is excess of Total Revenue over all Explicit Costs. Economic Profit is excess of Total Revenue over Total Explicit & Implicit costs.
Explicit Cost = Rent + Office Supply + Office Staff Expense + Telephone Expense + Self Salary = 18000 + 1000 + 50000 + 4000 + 20000 = 93000 Implicit Cost = Salary sacrifised while choosing to start business + Cash Capital amount & its interest sacrifised = 55000 + [12000 + 5% of 12000] = 55000 + 12600 = 67600Accounting Profit = TR - Explicit Costs = 147600 - 93000 = 54600Economic Profit = TR - Explicit Costs - Implicit Costs = 147600 -93000 - 67600 = (-)13000 i.e LossKaren Bates has owned several automobiles from her favorite brand. Therefore, when deciding to purchase a new car for her daughter, her brand loyalty made the decision easy. Consequently, she gifted her daughter the latest model of that brand. According to the functional theory of attitudes, this scenario relates to the _____.
Answer: Knowledge function of attitudes
Explanation:
Knowledge function of attitude helps with the decision making process. Knowledge helps customers make a buying decision based off of what they know about the products and brands they are buying. For example, as a consumer I am an exclusive apple product user. If apple comes out with a product, I trust their quality based off the other products I already own. Because I have the knowledge of my apple products, I can make a simple decision on any future apple products I would want
Answer:
The correct answer is letter "B": knowledge function of attitudes.
Explanation:
American psychologist Daniel Katz (1903-1998) proposed there are four (4) functions of attitudes: Adjustment Function, Ego-Defensive Function, Value-Expressive Function, and Knowledge Function.
The Knowledge Function of attitudes represents individuals' needs for having a consistent and stable source of information. It helps them perceive the world as "more understandable", therefore predictable. The absence of this type of function creates individuals to be reluctant over a certain matter.
Thus, Karen Bates's example relates the reluctant Knowledge Function of attitudes since she predictably gifted her daughter a vehicle from the brand she has always purchased from.
Management by walking around (MBWA) refers to an old strategy that results in ineffective upward communication. a practice in which executives get out of their offices and learn from others in the organization through casual face-to-face dialogue. the process used by new executives to get familiar with their new office design and layout. a communication process that should be used only when executives need to explain corporate decisions to the lower-level employees.
Answer: a practice in which executives get out of their offices and learn from others in the organization through casual face-to-face dialogue.
Explanation: Management by walking around (MBWA) refers to a practice in which executives get out of their offices and learn from others in the organization through casual face-to-face dialogue.
In this management style, executives pay casual, unplanned visits to staff in their work areas to understand their work environment, experience first hand their status reports instead of waiting for them to be delivered to their office. Management by walking around fosters a better work environment through better communication, a hands-on experience of the conditions of the workplace by managers as well as quick and effective problem solving.
_________ integration is where a firm uses a mix of in-house and outsourced activities for the various stages of the vertical activity chain. a. Partial c. Backward e. Full b. Tapered d. Forward
Answer:
Tapered integration
Explanation:
Tapered integration is a term in organization theory that is a mix of market exchange and vertical integration. Advantages of vertical integration include risk protection, motivation tool for market and internal division, enlargement of input channels with little capital outlays,
the use of information on internal cost to discuss contracts with market.
Its disadvantages are monitoring issues, inefficiency and minimal production.
Music World produces student-grade violins for beginning violin students. The company produced 2,100 violins in its first month of operations. At month-end, 550 finished violins remained unsold. There was no inventory in work in process. Violins were sold for $122.50 each. Total costs from the month are as follows:
Direct materials used $87,200
Direct labour 60,000
Variable manufacturing overhead 25,000
Fixed manufacturing overhead 44,100
Variable selling and administrative expense 8,000
Fixed selling and administrative expens 13,900
The company prepares traditional (absorption costing) income statements for its bankers. Hannah would also like to prepare contribution margin income statements for her own management use. Compute the following amounts that would be shown on these income statements:
Requirements
1. Gross profit
2. Contribution margin
3. Total expenses are shown below the gross profit line.
4. Total expenses are shown below the contribution margin line.
5. The dollar value of ending inventory under absorption costing.
6. The dollar value of ending inventory under variable costing.
Which income statement has a higher operating income? By how much? Explain.
Answer:
Explanation:
1.
Gross profit is Net Sales - Cost of goods sold(COGS). So in order to calculate COGS:
Direct materials used $87,200
Direct labour 60,000
Variable manufacturing overhead 25,000
Fixed manufacturing overhead 44,100
Total cost $216,300
Violins produced 2,100
Cost per violin $103
Sales [(2100-550)*122.50] 189,875
Cost of goods sold [(2100-550)*103] 159,650
Gross profit 30,225
2. Contribution margin = Sales - Variable expenses
So to calculate variable expenses, cost per violins multiplied by violins sold and then variable selling and administrative expense of 8,000 is added.
Direct materials used $87,200
Direct labour 60,000
Variable manufacturing overhead 25,000
Total cost $172,200
Violins produced 2,100
Cost per violin $82
Variable expenses = (2100-550)*82 +8000 = $135,100
Contribution margin = 189,875 - 135,100 = $54,775
3.
Variable selling and administrative expense 8,000
Fixed selling and administrative expense 13,900
Total expenses shown below the gross profit line 21,900
4.
Fixed manufacturing overhead 44,100
Fixed selling and administrative expense 13,900
Total expenses shown below the contribution margin line 58,000
5. Ending inventory = unsold inventory*Cost per violins = 550*103 = $56,650
6. Ending inventory = unsold inventory*Cost per violins = 550*82 = $45,100
Based on your reading in the webtext, select one of the following thesis statements. Your response should be two to three paragraphs in length. Next, revise the statement you have chosen to reflect the complexity of the historical events surrounding this issue. Provide specific examples of how ANCSA and the Native corporation system have had a positive or negative impact—or perhaps both—on Alaska Natives. Further illustrate the complexity of this issue by showing how the passage of ANCSA was contingent on at least three historical events or forces.
1. The Alaska Native Regional Corporations (ANCSA) and the Native corporation system have been good for Alaska Natives.
Explanation:
1. The Alaska Native Regional Corporations (ANCSA) and the Native corporation system have been good for Alaska Natives.
First, rework your argument to demonstrate the significance of the historical events underlying this issue. Provide particular examples of the influence of ANCSA and the indigenous community structure on Alaska Natives, or probably both.
To further explain the significance of this problem, demonstrate how at least three historical events rely on ANCSA's passage
The ANCSA and the Native corporation system have brought about significant economic and social opportunities for Alaska Natives, exemplified by the creation of profitable businesses and the preservation of cultural heritage;
To illustrate the positive impacts, one can point to the economic development spurred by ANCSA.
The act granted Alaska Natives title to 44 million acres of land and paid out $962.5 million in compensation, which led to the formation of regional and village corporations. These corporations have since grown into powerful economic entities, with some engaging in oil and gas, mining, and other ventures that have generated wealth and employment for Native shareholders. Additionally, ANCSA has allowed for the protection of Native cultural practices and languages through the establishment of cultural centers and educational programs.Conversely, the passage of ANCSA has also had negative consequences.
The transfer of land titles to corporations meant that Natives no longer held land in common, as they had traditionally done. This has led to disputes over land use and the erosion of communal ties. Furthermore, the distribution of wealth and opportunities has not been even across all Native corporations, leading to inequalities and debates over the best use of ANCSA funds. The passage of ANCSA was contingent on a confluence of historical events and forces. Firstly, the discovery of oil at Prudhoe Bay in 1968 heightened the urgency for a settlement of Native land claims to allow for the development of the oil fields.Assume that Amazon has a stock-option plan for top management. Each stock option represents the right to purchase a share of Amazon $1 par value common stock in the future at a price equal to the fair value of the stock at the date of the grant. Amazon has 4,700 stock options outstanding, which were granted at the beginning of 2020. The following data relate to the option grant.
Exercise price for options $40
Market price at grant date (January 1, 2020) $40
Fair value of options at grant date (January 1, 2020) $7
Service period 5 years
Required:
1. Prepare the journal entries for the first year of the stock-option plan.
Explanation:
The Journal entry is given below:-
1 January 2020 No Entry
31 December 2020 Compensation Expense Dr, 6,580
To, Paid-In-Capital 6,580
(Being the compensation expense stock-option plan is recorded)
Working Note:-
Compensation Expense
= $7 × 4,700 ÷ 5
= $7 × 940
= $6,580
A municipal bond has a YTM of 4.11 percent while the YTM of a comparable taxable bond is 6.16 percent. What is the tax rate that will make an investor indifferent between the municipal bond and the taxable bond
Answer:
tax-rate 32.73%
Explanation:
The municipal bonds are tax-free thus, the private corporate bond is a pre-tax yield. We should solve for thetax rate which makes the 6.16% private bond yield 4.11% after tax:
0.0611 x ( 1 - t ) = 0.0411
t = 1 - 0.0411/0.0611 = 0,32733224
Being taxed at 32.73% will make the investor indifferent between these two options.
Lohn Corporation is expected to pay the following dividends over the next four years: $12, $10, $9, and $4. Afterward, the company pledges to maintain a constant 6 percent growth rate in dividends forever. If the required return on the stock is 15 percent, what is the current share price
Answer:
Price of the stock today = $53.14
Explanation:
given data
dividends year D1 = $12
dividends year D2 = $10
dividends year D3 = $9
dividends year D4 = $4
constant growth rate = 6 percent
required return stock Kk = 15 percent
solution
we get here Price of the stock today that is
Price of the stock = [tex]\frac{D1}{(1+ke)^1}+\frac{D2}{(1+ke)^2}+\frac{D3}{(1+ke)^3}+\frac{D4}{(1+ke)^4}+\frac{P4}{(1+ke)^4}[/tex] .................1
here P4 = [tex]\frac{D5}{ke-g}[/tex] .............2
and where D5 = D4(1+g) .............3
so here put value in equation 1
Price of the stock today = [tex]\frac{12}{(1+0.15)^1}+\frac{10}{(1+0.15)^2}+\frac{9}{(1+0.15)^3}+\frac{4}{(1+0.15)^4}+\frac{4(1.06)}{(0.15-0.06)(1+0.15)^4}[/tex]
Price of the stock today = 53.1368
Price of the stock today = $53.14
Caro estimates that the variable costs in the Maintenance Department total $11,000, and in the Cafeteria variable costs total $17,000. Avoidable fixed costs in the Maintenance Department are $5,000. Required: If Caro outsources the Maintenance Department, what is the maximum it can pay an outside vendor without increasing total costs
Answer:
If Caro outsources only the Maintenance department, she should pay not more than $11,000, the avoidable Fixed Costs is incidental to her operations and not that of the outsource partner thus the $5,000 shouldn't be included as a payment due the Outsource Partner.
Caro decision case
Maintenance department total costs:
Variable - $11,000
Avoidable fixed costs - $5,000
Total costs (if not outsourced) = $16,000
Explanation:
Final answer:
The maximum amount Caro can pay to outsource the Maintenance Department without increasing total costs is the sum of avoidable fixed costs and variable costs, which is $16,000.
Explanation:
The question asks for the maximum amount Caro can pay an outside vendor to outsource the Maintenance Department without increasing total costs. Caro's current costs for the Maintenance Department consist of variable costs totaling $11,000 and avoidable fixed costs of $5,000. To determine the maximum amount for outsourcing, we add these costs, giving us a total of $16,000. This is the maximum that Caro can pay to an external vendor without incurring additional costs beyond what is currently being spent internally.
A trader buys two March futures contracts on frozen orange juice. Each contract is for the delivery of 15,000 pounds. The current futures price is 136 cents per pound, the initial margin is $1,960 per contract, and the maintenance margin is $1,400 per contract. What price change would lead to a margin call
Answer:
3.73 cents
Explanation:
Margin call occurs when the account loses more than $ 560 ($ 1960 - $ 1400).
The change in price that will lead to a margin call = Y cent × 15000 pounds = $ 560
Y cents = $ 560 / 15000 = 3.73 cents
the future price must drop more than 3.73 cents from 136 cents to below 132.3 cents
A clothing retail company is deciding whether to use a traditional marketing research project approach or dive into a CRM system approach to guide their new year’s marketing strategy. Why should it use a CRM system approach?
A clothing retail company should opt for a CRM system over a traditional marketing research approach as it provides real-time data analytics, enables effective customer segmentation, and offers scalability and flexibility to adapt to market changes.
Explanation:A clothing retail company considering whether to use a traditional marketing research project approach or implement a CRM system should lean towards the latter for several reasons. Firstly, a CRM (Customer Relationship Management) system provides real-time data and analytics which can guide more informed decisions. This system can track customer behavior, preferences, and interactions with the brand across multiple channels, providing a holistic view of the customer journey. Secondly, a CRM system enhances the ability to segment customers based on varied criteria, facilitating more targeted and personalized marketing strategies. Using detailed customer profiles, the company can tailor their communications and promotions to meet specific customer needs. Lastly, CRM systems are designed for scalability and flexibility, enabling the company to easily adapt to changes in the market or in customer behavior without the need for starting new research projects from scratch. This adaptability is crucial in today's fast-paced retail environment in which trends and consumer preferences can shift rapidly. Overall, a CRM system can offer a dynamic and comprehensive approach to crafting a marketing strategy that is responsive to customers' evolving demands.
Zephron Music purchased inventory for $4,400 and also paid a $260 freight bill. Zephron Music returned 25% of the goods to the seller and later took a 1% purchase discount. Assume Zephron Music uses a perpetual inventory system. What is Zephron Music's final cost of the inventory that it kept? (Round your answer to the nearest whole number.)
Answer:
Cost of the inventory kept by Zephron Music is $3495
Explanation:
Zephron Music purchased inventory for $4,400 and also paid a $260 freight bill
Inventory $4660 (debit)
Trade Payable $ 4400 (credit)
Bank $260 (credit)
Recognise an Asset - Inventory and De-recognise asset - Bank
Zephron Music returned 25% of the goods to the seller, took a 1% purchase discount
Trade Payable $1212
Inventory $1165 (credit)
Discount Received $47 (credit)
Therefore Inventory Balance = $4660-1165 = $3495
Final answer:
Zephron Music’s final cost of the inventory that it kept is calculated by adding freight charges to the initial purchase cost, subtracting the cost of returned goods, and applying a purchase discount before rounding to the nearest whole number, resulting in $3,524.
Explanation:
To calculate Zephron Music’s final cost of the inventory kept after purchasing, returning a portion, and receiving a purchase discount, we follow these steps:
Start with the initial inventory cost which is $4,400.Add the freight charges of $260 to the initial cost to get the total cost before returns and discounts.Calculate 25% of the initial inventory cost to find out the cost of goods returned and subtract it from the total cost.Lastly, calculate a 1% purchase discount on the remaining cost after returns and subtract it to get the final cost of kept inventory.Performing these calculations we have:
Total cost before returns and discounts: $4,400 + $260 = $4,660.Value of returned goods: 25% of $4,400 = $1,100.Cost after returns: $4,660 - $1,100 = $3,560.1% discount on $3,560: $35.60.Final cost of inventory kept: $3,560 - $35.60 = $3,524.40 which is rounded to $3,524.utomobiles sold an automobile for $ 30 comma 000 on account. The cost of the automobile was $ 16 comma 660 . The sale of the automobile came with one year of free oil changes valued at $ 340 . What would be the journal entry to record the sale?
Answer:
Explanation:
Dr Accounts Receivable 30,000
Cr Sales Revenue 46,320
Cr Service revenue 340
Dr Cost of goods sold 16,660
How much would you pay today for an asset that pays $1,000 per month, for 12 months, starting today if the interest rate is 4% APR (compounded monthly)
Answer:
Explanation:
Present value of Annuity will be used for this as the future payments are given after equal intervals.
PV of an Annuity = C x [ (1 – (1+i)^-n) / i ]
Where,
C is the cash flow per period
i is the rate of interest
n is the frequency of payments
add given Values in the formula:
$1,000 x [ (1 – (1+4%)^-12) / 0.04 ]= $9387.5 is the Answer
St. Claire Manufacturing expects to produce and sell 6,000 units of Big, its only product, for $20 each. Direct material cost is $2 per unit, direct labor cost is $8 per unit, and variable manufacturing overhead is $3 per unit. Fixed manufacturing overhead is $24,000 in total. Variable selling and administrative expenses are $1 per unit, and fixed selling and administrative costs are $3,000 in total. According to generally accepted accounting principles, inventoriable cost per unit of Big would be: Group of answer choices $18.50 per unit $17.00 per unit $13.00 per unit $14.00 per unit
Answer:
According to generally accepted accounting principles, inventoriable cost per unit of Big would be $17.00
Explanation:
Absorption Costing method is suitable for external reporting purposes and thus preferred in reporting According to the generally accepted accounting principles (GAAP)
Absorption Costing Includes Both Fixed and Variable Manufacturing Overheads in Product Costings Calculations
Calculation of Inventory Cost per Unit According to Absorption Costing:
Direct material 2.00
Direct labor 8.00
Variable Manufacturing Overhead 3.00
Fixed Manufacturing Overhead ($24,000/6,000) 4.00
Inventory Cost per Unit 17.00
Cindy's Car Wash has average variable costs of $2 and average total costs of $3 when it produces 100 units of output (car washes). The firm's total variable cost is A. $300. B. $200. C. $500. D. $100.
Answer:
$200
Explanation:
Total variable cost = average variable cost × quantity
$2 × 100 = $200
Variable cost is cost that varies with production.
If production increases, variable cost increases and if production reduces, variable cost falls. E.g. cost of Labour
Fixed cost is cost thay does not vary with production e.g. rent
I hope my answer helps you
Based on the per unit variable costs of Cindy's Car Wash, the firm's total variable costs are B. $200.
What are the total variable costs?Cindy's Car Wash incurs a variable cost of $2 per car wash.
If there are a 100 car washes, the total variable costs would be:
= Variable cost per wash x Number of washes
Solving gives:
= 2 x 100
= $200
Find out more on variable costs at https://brainly.com/question/5965421.
Puget Sound Divers is a company that provides diving services such as underwater ship repairs to clients in the Puget Sound area. The company’s planning budget for May appears below:
Puget Sound Divers
Planning Budget
For the Month Ended May 31
Budgeted diving-hours (q) 250
Revenue ($440.00q) $ 110,000
Expenses:
Wages and salaries ($11,800 + $128.00q) 43,800
Supplies ($3.00q) 750
Equipment rental ($2,100 + $22.00q) 7,600
Insurance ($4,000) 4,000
Miscellaneous ($530 + $1.48q) 900
Total expense 57,050
Net operating income $ 52,950
Required:
During May, the company’s activity was actually 240 diving-hours. Complete the following flexible budget for that level of activity. (Round your answers to nearest whole dollar.)
Answer:
Explanation:
Calculation of items needed for construction of budget:
During May, the company’s activity was actually 240 diving-hours. So all items should be calculated with 240 diving-hours instead of 250.
Revenue = Revenue per diving hour* Diving hours = 440*240 = $105,600
Wages and salaries = $11,800+$128*240 = $42,520
Supplies = $3*240 = $720
Equipment rental = $2100 + $22*240 = $7380
Miscellaneous = $530 + $1.48*240 = $885
Flexible budget
For the month ended May 31
Revenue 105,600
Less: Expenses
Wages and salaries (42,520)
Supplies (720)
Equipment rental (7380)
Miscellaneous (885)
Insurance (4000)
Total expenses 55,505
Net income 50,095
Cedric, a brand manager, transferred from the united States to japan He dscovered that athough people in the Unted States highly vale ind to conform to group expectations. Cedric conclded that japan places more of an emphasis on
A.collectivism
B.self-control
C.ubral relativium
D.political differences
Answer: collectivism
Complete Question:
Cedric, a brand manager, transferred from the united States to japan He discovered that although people in the United States highly valued individualism, people in Japan expect individuals to conform to group expectations. Cedric concluded that Japan places more of an emphasis on:
Explanation: Collectivism values the group over individuals belonging to the group. In cultures where collectivism is the norm, individuals tend to want to conform to the group expectations. Also, it is common for individuals in collectivist societies to define themselves as belonging to a group than as individuals so groups are a way of identifying themselves.
While individualism values individuals's right and uniqueness, collectivism does not but sees value in maintaining the cohesion in a group, which in turn promotes conformity.
The writer of a put option _______________. agrees to sell shares at a set price if the option holder desires agrees to buy shares at a set price if the option holder desires has the right to buy shares at a set price has the right to sell shares at a set price
Answer:
agrees to buy shares at a set price if the option holder desires.
Explanation:
In the stock market a put option is the right of a buyer to buy an options contract on an underlying asset at a set price before or on a particular date.
A person will buy a put option if they forecast that the price of an underlying asset will go down. A put owner will only make profit when he sells below the purchase price.
The call option is when a person agree to sell options at a set price where the holder is willing to buy.
Moira Company has just finished its first year of operations and must decide which method to use for adjusting inventory accounts. Because the company used a budgeted indirect-cost rate for its manufacturing operations, the amount that was allocated ($435,000) to cost of goods sold was different from the actual amount incurred ($425,000). Ending balances in the affected accounts were:
Answer:
The Cost of good sold will decrease by 10,000
The other accounts balance will be the same.
Missing Information:
Ending balances in the relevant accounts were:
Work-in-Process 40,000
Finished Goods 80,000
Cost of Goods Sold 680,000
Explanation:
The company applied overhead for the amount of 435,000
This was charged into finished good which latter become cost of goods sold.
Then, as the actual overhead was 425,000 we have to adjust for the over-applied overehad. We applied more than it cost so we have to reduce it.
435,000 - 425,000 = 10,000
We will decrease our COGS against the factory overhead account.
COGS 10,000 debit
factory overhead 10,000 credit
Final answer:
Moira Company needs to adjust its inventory accounts by recognizing an over-applied manufacturing overhead of $10,000, due to a discrepancy between the budgeted indirect-cost rate and the actual cost incurred, to ensure accurate financial statements.
Explanation:
Moira Company should adjust its inventory accounts after discovering a discrepancy between the budgeted indirect-cost rate and the actual amount incurred. The company used a budgeted indirect-cost rate for manufacturing operations, which led to an allocation of $435,000 to the cost of goods sold. However, the actual amount incurred was $425,000. To reconcile this discrepancy, the company should adjust its inventory account by recognizing the over-allocated amount of $10,000 as an over-applied manufacturing overhead and adjust the cost of goods sold accordingly. This adjustment will ensure that the financial statements reflect the actual costs and improve the accuracy of the profit calculation.
If a firm decides to stop its sales agents from pricing too aggressively to make sales by requiring the agent to obtain permission to reduce price below a specific threshold, and the manager only has one source of information, the sales agent, the solution would
a..Not work
b. Work in all circumstances
c. None of the above
Answer:
The correct answer is letter "A": Not work.
Explanation:
The case proposes having sales agents request managers for discount thresholds every time a salesperson is trying to give customers promotions since there is only one source of information. It will be a better idea to have a set threshold for every product offered in the store so sales agents would know the limits of prices they can offer as discounts.
Thus, the idea of requesting managers for discounts in every sale is unlikely to work.
Assume the following: (1) Desired target operating income $20,000; unit price for sales $500; variable costs per unit $300; total fixed cost $10,000. (2) We have applied the formula to calculate the contribution margin method of determining target operating income, and have arrived at a numerator amount of $30,000 (20,000 plus 10,000) and a denominator amount of $200 (500 minus 300). (3) These figures yield an answer of 150 units (30,000 divided by 200). What is the required revenue to achieve the target operating income of $20,000?
Answer:
$75,000
Explanation:
The targeted operating income is the difference between the targeted total sales and the budgeted total cost. The total cost is the sum of the fixed and variable cost. The sales and variable cost are dependent on the level of activities or number of units produced and sold.
The difference between the sales and variable cost gives the contribution margin.
Let the number of units sold be c
500c - 300c - 10,000 = 20,000
200c = 30,000
c = 150 units
Required revenue to earn target income is the product of the unit sales with the number of units sold
= $500 × 150
= $75,000
Answer:
$75,000 sales revenue
Explanation:
We solve using the target profit formula:
[tex]\frac{Fixed\:Cost + Target Profit }{Contribution \:Margin} = Units for Profit[/tex]
Where:
[tex]Sales \: Revenue - Variable \: Cost = Contribution \: Margin[/tex]
We divide the fixed cost and the target profit over the amount of contribution generate for each unit:
500 sales price - 300 variable cost = 200
Now:
[tex]\frac{10,000 + 20,000 }{200} = Units for Profit[/tex]
150 units
Last, we multiply by the sales revenue per unit:
150 units x $500 = $75,000
Deciding to Buy. Dave and Diane Starr of New Orleans, Louisiana, both of whom are in their late 20s, currently are renting an unfurnished two-bedroom apartment for $1,200 per month, plus $230 for utilities and $34 for insurance. They have found a condominium they can buy for $170,000 with a 20 percent down payment and a 30-year, 6.5 percent mortgage. Principal and interest payments are estimated at $860 per month, with property taxes amounting to $150 per month and a homeowner's insurance premium of $900 per year. Closing costs are estimated at $4,200. The monthly homeowners association fee is $275, and utility costs are estimated at $240 per month. The Starrs have a combined income of $90,000 per year, with take-home pay of $5,800 per month. They are in the 25 percent tax bracket, pay $225 per month on an installment loan (ten payments left), and have $39,000 in savings and investments outside of their retirement accounts. (d) Available financial information suggests that mortgage rates might increase over the next several months. If the Starrs wait until the rates increase 1/2 of 1 percent, how much more will they spend on their monthly mortgage payment
Answer:
Total cost of house is $170,000
Total loan to be taken = 170,000 x (1 - 0.20) = $136,000
Current annual Interest rates = 6.5%, current monthly interest rate = 6.5% / 12= 0.5417%
number of monthly periods = 30 * 12 = 360
Monthly installment (payment) on loan = $860 (859.6)
If interest rate increases by 0.5% to 7%, Monthly interest rate = 7%/12 = 0.583%
using excel formula,
Monthly installment for new monthly interest rate of 0.583% =PMT(0.583%,360,-136000,0)
New Monthly payment = $904.8
Increase in monthly mortgage payment = 904.8 - 859.6
Increase in monthly mortgage payment = $45.2
They will have around $45 additionally on monthly mortgage payment if interest increase by 0.5% to 7%