Answer:
B) $700,000 and $ 12,000
Explanation:
The note payable is recorded on the borrowing date of October 01 2017 at its face value $ 700,000. The amount due on the maturity of the note on March 01 2018 is 720,000, thus the interest on the note is $ 20,000 for the 5 month period of the borrowing. (October 1 to March 1).
The recognition of the interest for the 3 month period October to December is calculated as under:
Total interest for 5 months $ 20,000
Interest for 3 months $20,000/5*3 = $ 12,000
So the answer is $ 700,000 and $ 12,000
Answer:
B lol have a good day
Explanation:
You purchased a stock eight months ago for $36 a share. Today, you sold that stock for $41.50 a share. The stock pays no dividends. What was your annualized rate of return?
Answer:
23.77%
Explanation:
Given that,
Purchased a stock eight months ago for $36 a share
Today, you sold that stock for $41.50 a share
Return for 8 months:
= (selling price today ÷ Purchasing price)
= ($41.50 ÷ $36) - 1
= 15.28%
Annualized rate of return:
= (1 + Return for 8 months) ^(12 ÷ 8) - 1
= (1 + 15.28%)^(12 ÷ 8) - 1
= 23.77%
Hence, the annualized rate of return is 23.77%.
Answer:
Capital Gain on stock = Selling price of stock - Purchase price
= $ 41.5 - $ 36
= $ 5.5
% rate of return = (Capital gain on stock / Purchase price of stock) * 100
= ( $ 5.5 / $ 36 ) * 100
=0.1527 * 100 = 15.27%
Now, the holding period was 8 months. This implies that 15.27% is rate of return for 8 months.
Hence, annualized rate of return = ( 15.27 / 8 ) * 12
= 1.90875 * 12
= 22.905 %
Explanation:
Refer to the answer.
The income statement presents an explanation of the changes in the beginning and ending balances of stockholders’ equity.
a. a comparison of the benefits and the sacrifices a company experiences from its operations.
b. information in three categories including operating, investing, and financial activities.
c. a list of a company’s assets and the sources of those assets.
Answer:
a. a comparison of the benefits and the sacrifices a company experiences from its operations.
Explanation:
As we know that the income statement records only revenues earned and the expenses incurred.
If the total revenue exceeds total expenditure then the company earns net income And if the total income is below the total expenditure then the company has a net loss This net income or net loss would be expressed in the retained earnings account statement.
So, the benefits represents the revenues and sacrifice represents the expenditure
The rest options are related to the statement of stockholder equity, cash flow statement and the balance sheet
Suppose Russia produces only trucks and cars. The resources that are used in the production of these two goods are not specialized—that is, the same set of resources is equally useful in producing both cars and trucks.The shape of Russia's production possibilities frontier (PPF) should reflect the fact that as Russia produces more cars and fewer trucks, the opportunity cost of producing each additional car _______________-
Answer:
Remains constant
Explanation:
Since the same set of resources are useful in producing both cars and trucks, it shows that resources are not specialized hence Russia has a straight line PPC. A straight line (linear) PPC connotes constant returns to scale. In this case, resources are mobile and can easily be reallocated and redirected from the production of one good to another thus, opportunity cost is constant and so is the marginal rate of transformation (MRT). The MRT is the number of units or amount of a good that must be foregone in order to attain one unit of another. If Russia decides to produce more cars and fewer trucks, the resources deployed in producing more cars would be well suited as the resources already used in car production. The opportunity cost in producing each additional unit of car remains constant as more cars are produced.
The slope of a linear PPC determines the marginal rate of transformation; that is, a flatter slope would mean producing more cars requires trading-off fewer trucks while a steeper slope would mean that producing more cars requires trading-off more trucks.
the opportunity cost of producing each additional car is remains constant.
The following information should be considered;
Since the company produced two goods. Also, the country resources should be equally useful for the production of two goods Due to this, the trade off between the two goods productions should be the same.Learn more: https://brainly.com/question/18269454?referrer=searchResults
The more that lower-level personnel provide input or are actually given the discretion to make decisions, the more _______ there is within an organization.
A) centralization
B) disempowerment
C) work specialization
D) departmentalization
E) decentralization
Answer:
E) decentralization
Explanation:
Decentralization is when lower level employees are given more autonomy in carrying out their duties and in decision making.
I hope my answer helps you
Income allocation in a partnershipKramer and Knox began a partnership by investing $60,000 and $80,000, respectively. During its first year, the partnershipearned $160,000. Prepare calculations showing how the $160,000 income should be allocated to the partners under eachof the following three separate plans for sharing income and loss:(1) the partners failed to agree on a method to share income; (2) the partners agreed to share income and loss inproportion to their initial investments (round amounts to the nearest dollar); and (3) the partners agreed to share incomeby granting a $50,000 per year salary allowance to Kramer, a $40,000 per year salary allowance to Knox, 10% interest ontheir initial capital investments, and the remaining balance shared equally.
Answer:
1. $68,571 on Kramer and $91,429 on Knox
2. $68,571 on Kramer and $91,429 on Knox
3. $84,000 on Kramer and $76,000 on Knox
Explanation:
1. In absence of the agreement on how the profit or loss will be allocated, we will use the ration based on the capital balances of the partners.
Kramer $60,000
Knox $80,000
Total $140,000
The allocation would be:
Kramer $160,000 x (60,000/140,000) = $68,571
Knox $160,000 x (80,000/140,000) = $91,429
2. The partners agreed to divide profit based on the initial investment of the partners.
Kramer $60,000
Knox $80,000
Total $140,000
The allocation would be:
Kramer $160,000 x (60,000/140,000) = $68,571
Knox $160,000 x (80,000/140,000) = $91,429
3. The partners agrred to allocate the profit based on the salaries given to the partners, 10% interest and divide the excess equally.
Kramer Knor Total
Salary 50,000 40,000 90,000
Interest 6,000 8,000 14,000
Excess 28,000 28,000 56,000
TOTAL 84,000 76,000 160,000
Interest
Kramer $60,000 x 10% = $6,000
Knox $80,000 x 10% = $8,000
On January 2, 2018, Miller Properties paid $19 million for 1 million shares of Marlon Company’s 6 million outstanding common shares. Miller’s CEO became a member of Marlon’s board of directors during the first quarter of 2018.
The carrying amount of Marlon’s net assets was $66 million. Miller estimated the fair value of those net assets to be the same except for a patent valued at $24 million above cost. The remaining amortization period for the patent is 10 years.
Marlon reported earnings of $12 million and paid dividends of $6 million during 2018. On December 31, 2018, Marlon’s common stock was trading on the NYSE at $18.50 per share.
Required:
When considering whether to account for its investment in Marlon under the equity method, what criteria should Miller’s management apply?
Assume Miller accounts for its investment in Marlon using the equity method. Ignoring income taxes, determine the amounts related to the investment to be reported in its 2018:
Income statement
Balance sheet
Statement of cash flows
Answer:
Cost Method
Explanation:
1. When considering whether to account for its investment in Marlon under the equity method, Miller’s management should apply 'Cost Method' because 'equity accounting method' is should only be used when the company has a significant interest in Marlon which is assumed to be 20% of its shareholding.
2. If we assume the use of equity method then.
investment to be reported in its 2018:
A. Income statement : This will be a single line to show the 'share of associate's profit' which is derived by multiplying the percentage ownweship by the investee's profit amount: 16.67%* 12 = $2million
B. Balance sheet : This will show the carrying value of the investment under long term assets, after fixed assets before current assets. The value will be:
1. The purchase consideration of $19m
(+)
2. The share of associate's profit of $2m
(-)
3. The amount of dividends received of $6m
Therefore the carrying value of the investment in the balance sheet will be $15 million
C. Statement of cash flows: The statement of cashflows will only show the receipt of cash for the dividend of $6million from Marlon, in the 'investing activities' section, as an inflow.
Which of the following situation would make transaction costs too high to negotiate and therefore the Coase Theorem would not apply? Print Multiple Choice
a.Only a few people are bothered by the pollution in the area
b.Orte Tirm is the cause of the poltution
c.Many people are bothered by pollution in the area
d.Many firms are working together to eliminate pollution
Answer: The correct answer is "c. Many people are bothered by pollution in the area".
Explanation: The Coase Theorem points out that if property rights are well defined and transaction costs are zero, the negotiation between the parties will lead us to an optimal point of allocation in the market.
Whoever keeps the right will depend on the value of what each party produces and the costs of losing the right to property.
However, Coase's theorem ceases to be valid when there are high negotiation costs, for example between a company and thousands of inhabitants of an area (like in this case) or when property rights are not well defined (all parties believe they have the right to do what they want).
Final answer:
The Coase Theorem does not apply when many people are bothered by pollution, as transaction costs become too high due to the complex nature of negotiations, enforcement, and monitoring. Option C
Explanation:
The situation that would make transaction costs too high to negotiate, making the Coase Theorem inapplicable, is when many people are bothered by pollution in the area. The Coase theorem posits that if property rights are well-defined and transaction costs are low, two parties will be able to bargain to reach an efficient outcome in the presence of an externality.
However, when a large number of people are affected by an externality such as pollution, the cost of negotiating and reaching an agreement becomes too high. This is because enforcement becomes difficult, monitoring is challenging, and the sheer number of deals that need to be struck becomes unmanageable.
In cases like Mexico City's air pollution, with millions of people involved, it is impractical to expect all the individuals to come to an agreement to limit their collective driving behavior. Coase himself noted that the conditions necessary for an efficient market solution via private parties rarely exist in environmental situations. Therefore, alternative approaches are required beyond individual bargaining to effectively manage environmental problems like air pollution.
A sales representative sees the report and sends Mike a letter praising him on his ability to connect to vendors. He asks Jim, Mike's supervisor, if he could "borrow" Mike for several weeks for brainstorming sessions and vendor meetings in the Marketing department. He feels some fresh blood and a new perspective may help them solve some of TriState's vendor issues. What should Jim do?
Answer and explanation:
Mike represents a valuable employee for the company he works for. If he leaves his position for several weeks in the attempt to help the sales representative Marketing Department company, that could imply potential losses in Mike's organization. Thus, Jim should inform the sales representative that Mike cannot leave work for several weeks because it is too long but he could ask if there could be another way Mike can help without affecting Jim and Mike's company interests.
Grandma's Applesauce, Inc. has a 0.60 probability of a good year with operating cash flow of $50,000; and 0.40 probability of a bad year with operating cash flow of $30,000. The company has a debt of $35,000 with 8 percent interest due next year. Assuming the company has no means of servicing its debt other than operations, and a 0% tax rate, which of the following is true?O Shareholders expected claim is $12,200O Creditors expected claim is $37,800O Creditors expected claim is $34,680O None of the above
Answer:
Creditors expected claim is $37,800
Explanation:
If operation cash flows are enough to pay off the debt, then creditors are expected to claim the whole debt amount while shareholders will claim the residual value. The expected cash flow from operations is:
[tex]CF = 0.6*50,000+0.4*30,000\\CF=\$42,000[/tex]
The debt value next year at an 8% interest rate is:
[tex]D = 35,000*1.08\\D=\$37,800[/tex]
Since Cash flows exceed debt, creditors are expected to claim $37,800
While Shareholders are expected to claim:
[tex]S= 42,000 - 37,800\\S= \$4,200[/tex]
The correct answer is: Creditors expected claim is $37,800.
Financial intermediaries' ability to reduce the average cost of collecting information because of their efficient operations allows them to take advantage of:
a. asset transformation
b. economies of scale.
c. economies of scope
d. transformational trading.
e. standardization.
Answer:
economies of scale
Explanation:
Financial intermediaries' ability to reduce the average cost of collecting information because of their efficient operations allows them to take advantage of economies of scale. Let's look what the economies of scale is .
Economics of scale is the decrease in cost as production increases. The increase in production decreases the cost. Thanks to the economics of scale, a trade can be done in a mutually beneficial manner. In addition, economies of scale carry the logic that large economies can be superior. The biggest reason for this is that the more production the enterprise produces in such economies, the lower the cost will be.
Scale economy can be defined as taking advantage of the large scale's cost reduction. By establishing a large capacity for production, this capacity is used effectively and the cost per unit is minimized. Usually, the scale economy occurs when a company meets a significant part of the demand in the market.
Scale Economy Types:
1) In the external-external scale economy, the average cost of a firm decreases when the space it occupies in the industry it is in increases. In other words, in external economies, the cost per output depends on the size of the industry, and in the economies of internal scale, the cost per output depends on the size of the firm.
2) In the internal-internal scale economy, when a firm's own production scale increases, the average cost decreases.
Both external economies of economies and internal economies of scale are largely important for international trade.
Negative scale economy is the opposite of the system operating in scale economy. In short, for the negative scale economy, we can say that the factors included in the scale economy work in the opposite direction. For this reason, costs increase in these economies. The reason for this can be explained by the negative impact of excessive specialization, or the loss of management.
Ten Toes produces sports socks. The company has fixed expenses of $ 90 comma 000 and variable expenses of $ 0.90 per package. Each package sells for $ 1.80. Requirement 1. Compute the contribution margin per package and the contribution margin ratio. 2. Find the breakeven point in units and dollars3. Find the number of packages Trendy Toes needs to sell to earn a $26,000 operating income.
Answer:
1. $0.9; 50%
2. 100,000; 180,000
3. 128,889
Explanation:
(1)
Contribution Margin per Unit :
= Selling Price per Unit - Variable Cost per Unit
= 1.80 - $0.90
= $0.90
Contribution Margin Ratio :
= Contribution Margin per Unit ÷ Selling Price per Unit
= $0.90 ÷ $1.80
= 0.5 or 50%
(2) Break Even Point in Units :
Break even Sales in Units :
= Fixed Expenses ÷ contribution margin per unit
= $90,000 ÷ 0.90
= 100,000
Break-even Sales in dollars :
= Fixed Expenses ÷ Contribution Margin Ratio
= $90,000 ÷ 0.5
= $180,000
(3) Number of packages required to be sold to earn $26,000 Operating Income:
Contribution required = Income + Fixed Expenses
= $26,000 + $90,000
= $116,000
Contribution per unit = 0.9
No. of units required to be sold = $116,000 ÷ 0.9
= 128,889
The number of packages to achieve an operating income of $26000 is 128,889.
Final answer:
The margin is 50%, the breakeven point is at $180,000 and the number of packages are 128,889.
Explanation:
The question involves the computation of the contribution margin, the contribution margin ratio, and the determination of the breakeven point in both units and dollars for Ten Toes company which produces sports socks. Furthermore, it requires calculating the number of packages that need to be sold to achieve a specific operating income.
Ten Toes Sports Socks Analysis:
Contribution Margin per package: $1.80 - $0.90 = $0.90
Order: 20,000 units heparin IV in 250 mL to infuse at 25 units/kg/hr. Client weighs 184 lb. How many units per hour will the client receive?
Answer:
The client will receive 2086.5 units per hour.
Explanation:
This question can be solved by rules of three:
Order
20,000 units heparin IV in 250 mL to infuse at 25 units/kg/hr.
So the number of units per hour that the client will receive is 25 multiplied by his weight, in kilograms.
Client weighs 184 lb.
We have to make the conversion of lb to kg.
Each lb is 0.4536 kg.
So the client weight 184*0.4536 = 83.46kg.
How many units per hour will the client receive?
83.46*25 = 2086.5.
The client will receive 2086.5 units per hour.
If sixty $1,000 convertible bonds with a carrying value of $70,000 are converted into 9,000 shares of $5 par value common stock, the journal entry to record the conversion is
Account Titles and Explanation Debit Credit
Bonds Payable (60 x $1000) 60,000
Premium on Bonds Payable (70,000 - 60,000) 10,000
Common Stock (9000 shares x 5) 45,000
Paid-in Capital in Excess of Par (70000 - 45000) 25,000
Please explain where does that bonds payable (60x 1000) comes from?
Answer:
Explanation:
The journal entry is shown below:
Bonds payable A/c Dr $60,000
Premium on bonds payable A/c Dr $10,000
To Common stock A/c $45,000
To Paid in capital in excess of par A/c $25,000
(Being the conversion of bonds is recorded)
The computation is shown below:
For bonds payable
= sixty $1,000 convertible bonds
That means
= 60 × $1,000
= $60,000
For Premium on bonds payable:
= $70,000 - $60,000
= $10,000
For Common stock:
= 9,000 shares × $5
= $45,000
And, the remaining balance is credited to paid in capital in excess of par
What is the term for the "process of hiring external HR professionals to do the HR work that was previously done internally"?
Answer:
HR Outsourcing
Explanation:
Human Resources (HR) outsourcing is a popular business practice where firms in order to allow its HR employees concentrate on the core HR functions of the organization, engages consultants who are experts in HR matters to manage some of the HR tasks of the organization.
The need to sub-contract human resources functions always become necessary when HR tasks arise that may be considered complex, time consuming and capable of shifting management focus from the core HR functions
The Enron debacle created what one public official reported was a "crisis of confidence" on the part of the public in the accounting profession. List the parties who you believe were most responsible for that crisis. Briefly justify each of your choices.
Answer:
Following parties were responsible for the Enron crisis:
1) Management of Enron
2) Management of Arthur Enderson (Auditors)
3) Regulators
4) Bankers to the Issue
5) Accounting Professionals
Explanation:
1) Management of Enron Corporation
The front runners of the scam, the top management of the Enron Corporation hide billions of dollars in debt from failed deals and projects. They also influenced the auditors with their scheme. Chief Financial Officer Andrew Fastow and other executives not only misled Enron's Board of Directors and Audit Committee on high-risk accounting practices, but also pressured Arthur Andersen to ignore the issues.
2) Management of Arthur Enderson
Arthur Andersen was Enron's auditors and also providing them consultancy services, they were responsible for the negligence in their audit procedures because of the significant consulting fees generated by Enron. Their methods were questioned as either being completed solely to receive its annual fees or for its lack of expertise in properly reviewing Enron's revenue recognition, special entities, derivatives, and other accounting practices.
3) Regulators
The role of SEC is also questionable as they could have played a stronger role and took serious stance to stop them in manipulating the accounting records and influencing the auditors
4) Bankers to the Issue
In the midst of the financial crisis and the post 9/11 scenario where securities were facing the turmoil, investors, bankers i.e. the underwriters should have placed stronger due diligence procedures.
5) Accounting Professionals / Industry Unions
The technical group responsible to regulate auditing and accounting standards should have understand the gravity of the situation and help out the auditors with their ethical responsibilities and in understanding of the issue whether it was about the disclosure requirements or the special purpose entities.
Suppose the growth of production in Country A follows Harrod-Domar Model. Country A has 100 people(labors) in Year 1. The capital K in Year 1 is 60. The incremental capital-output ratio v = 5 and the constant savings rate s = 0.1. There is no depreciation in capital. What is the growth rate of aggregate productions in Year 1?
Answer:
2%
Explanation:
Given that,
Number of people in year 1 = 100 labors
Capital K in year 1 = 60
According to Harrod-Domar model,
Growth rate in total output:
= savings rate ÷ capital output ratio
So, g = s ÷ v
g = 0.1 ÷ 5
= 0.02 or 2%
Thus, growth rate of aggregate productions (or total output) in year 1 is 2%.
Raul Fletes borrowed $10000 on a 270-day note that required ordinary interest at 14.42%. Raul paid $5000 on the note on the 90th day. How much interest did he save by making the partial payment?
Answer:
The interest expenses Raul saves by making the partial repayment on the 90th day of the note is: $360.5.
Explanation:
Assume the interest calculation is based on a 360-day-per-year basis.
By making partially repayment of $5,000 at the 90th day of the note, Raul has saved the interest expenses incurred for the $5,000 principal for the remaining 180 days of the note ( calculated as 270 days - 90 days).
So, the interest expenses saving is calculated as:
5,000 x 14.42% * 180/360 = $360.5.
So, the answer is $360.5.
Ken Company purchased $7,000 of merchandise from Marilyn Company with terms of 4/10, n/45. What percent discount will Ken Company get if it pays within the allowed discount period? Answer % If Ken Company fails to pay within the discount period, how many days does Ken Company have from the date of purchase before the payment is considered to be late?
Answer:
4% and 45 days
Explanation:
Given that
Purchase value of merchandise = $7,000
Discount made within 10 days = 4%
Number of given days for payment = 45 days
So
In the first case, for eligible to discount, the discount rate is 4%
And, the prescribed time limit for paying the amount is 45 days which is already mentioned in the question
After 45 days, the payment is late.
Joker stock has a sustainable growth rate of 7 percent, ROE of 10 percent, and dividends per share of $1.20. If the P/E ratio is 15.0, what is the value of a share of stock?
Answer:
P/E ratio = Market price per share
Earnings per share
15 = Market price per share
$4
Market price per share = 15 x $4 = $60
Growth rate = Retention rate x ROE
0.07 = Retention rate x 0.10
0.07 = Retention rate
0.10
Retention rate = 0.7 = 70%
Dividend pay-out ratio = 100% - 70%
Dividend pay-out ratio = 30%
Earnings per share = 100/30 x $1.20 = $4
Explanation:
In this case, we will apply the formula of price-earnings ratio, which is market price per share divided by earnings per share. The P/E ratio was given while the earnings per share is derived. The market price per share becomes the subject of the formula.
In order to determine the earnings per share, we need to obtain the retention ratio by applying the formula of growth rate. In this case, growth rate and ROE were provided in the question with the exception of retention rate. Thus, the retention rate is made the subject of the formula. Having obtained the retention rate, we will now obtain the dividend payout ratio which is 100% minus retention rate.
Then, we will obtain the earnings per share by dividing 100 by the pay-out ratio multiplied by the dividend per share.
3. Andria, an attorney, has a personal injury case which is set for trial next week. She needs a good doctor to testify on behalf of her client, so she contacts Dr. Wood who agrees to testify on behalf of Andria’s client at the trial. In return for Dr. Wood's testimony, Andria agrees to pay Dr. Wood $10,000 if they win the case, and $5,000 if they lose. Dr. Wood agrees. The agreement between Andria and Dr. Wood is unenforceable.
Answer
The agreement is contingent agreement and not the unenforceable.
Explanation:
Under a contingent agreement, certain actions are taken resulting from occurring or non-occurring of certain conditions. Here outcomes are dependent upon happening of events.
Generally, the taxpayer may deduct the cost of medical expenses on Schedule A for which of the following? a. Doctor prescribed birth control pillsb. Controlled substances like marijuana that are in violation of federal lawc. Trips for general health improvementd. Marriage counseling
Answer:
a. Doctor prescribed birth control pills
Explanation:
Generally, the taxpayer may deduct the cost of medical expenses on Schedule A for doctor prescribed birth control pills
An employee scans his badge to open a door, but the door does not open. The employee does not have access to the room as part of the job. This is an example of a:
This is an example of a Negative
Explanation:
A negative situation may arise into your personal and professional life such as not being able to get a job or in a relationship. Will may also not be able to receive discounts or increasing your product sales during your professional life. These negative situations arise from our negative feelings and are our life's greatest enemy.
Give yourself a moment to relax before doing anything. You can be stressed very easily and do the wrong thing if you are in a negative situation. Take a moment, take a few deep breaths, relax, and think clearly. If you're still emotional, you're likely to make matters worse.
NPV Valuation. The Yurdone Corporation wants to set up a private cemetery business. According to the CFO, Barry M. Deep, business is "looking up." As a result, the cemetery project will provide a net cash inflow of S109,OOO for the firm during the first year, and the cash flows are projected to grow at a rate of 5.1% per year forever. The project requires an initial investment of $1,425,000. a. If Yurdone requires a return of 12 percent on such undertakings, should the cemetery business be started? b. The company is somewhat unsure about the assumption of a 5.1 percent growth rate in its cash flows. At what constant growth rate would the company just break even if it still required a return of 12 percent on its investment?
Answer:
a. The cemetery business be started
b. The company will just break even at a constant growth rate of 4.4%
Explanation:
A. To know whether to start the cemetery business or not, we need to subtract the present value of the initial outlay to generate the NPV and if the result is positive, it will be advisable to start the business and if otherwise, it won't be advisable to start the cemetery business.
This is a question on perpetuity growth. let us extract the information in the question
Initial investment = $1,425,000
Cash inflow in year 1 (C) = $109,000
Cost of capital (r) = 12%
Growth Rate (g) = 5.1%
Net Present Value (NPV) = PV of Growing Perpetuity - Initial
investment
NPV = {C/(r-g)} - Initial Investment
NPV = {109,000 /(12% - 5.1%)} - 1,425,000
NPV = {109,000 /(0.12 - 0.5.1)} - 1,425,000
NPV = {109,000 /(0.69)} - 1,425,000
NPV = 1,579,710.15 - 1,425,000
NPV = $154,710.15
Since the net present value (NPV) of the project is positive, the cemetery business should be started.
b. At break even, PV of Growing Perpetuity = Initial investment
C/(r-g) = Initial investment
Initial investment = 1,425,000
C = $109,000
r = 12%
g = Unknown
109,000 /(12% - g) = 1,425,000
109,000 /(0.12 - g) = 1,425,000
1,425,000 (0.12 - g) = 109,000
171,000 - 1,425,000g = 109,000
- 1,425,000g = 109,000 - 171,000
- 1,425,000g = -62,000
- 1,425,000g/ - 1,425,000 = -62,000/- 1,425,000
g = 0.04351
Convert the answer to percentage 0.04351 * 100% = 4.4%
That is, the company will just break even at a constant growth rate of 4.4%
By applying the NPV valuation and Gordon Growth Model, it was found that the cemetery business should not be started as the NPV is -$325,000. Additionally, the assumed growth rate must be approximately 7.64%, rather than 5.1%, for the company to break even on its investment.
Explanation:This problem is a classic case of evaluating an investment decision using the net present value (NPV) method. The NPV model is a financial model that computes the present value of cash inflow and outflow of a project or business venture.
a. We first need to calculate the present value of the cash inflows with a growth rate and then subtract the initial investment. Using the Gordon Growth Model (a variant of the Dividend Discount Model) to find the present value of perpetual cash flows with a growth rate, we get: NPV = CF / (r - g) where CF= Cash flows of the first year, r = Required rate of return, g = Growth rate. So, NPV = 109,000 / (0.12 - 0.051) - 1,425,000 = -$325,000
Since the NPV is negative, the cemetery business should not be started as the present value of the cash inflows is less than the initial investment.
b. To break even, the NPV must be 0. So, 0 = 109,000 / (0.12 - g) - 1,425,000. Solving for g, we find the growth rate that would make the company break even is approximately 7.64%.
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Your tuition for the coming year is due today. You borrow $8,000 from your uncle and agree to repay in the three years an amount of $9,250. What is the interest rate on this loan
Answer:
Interest rate on the loan is approximately 5%
Explanation:
The interest rate on the loan can be found by using the compound interest formula.
FV = P(1 + r)^t
Where: FV = Future value
P = Principal amount
r = Interest rate
t = Time period in years.
FV = $9,250
P = $8,000
t = 3 years
r = unknown
Substitute the values above into the formula
9,250 = 8,000 (1+r)^3
Divide both sides by 8000
9,250/8000 = (8,000 (1+r)^3)/8000
1.15625 = (1+r)^3
Find the cube root of both sides
[tex]\sqrt[3]{ 1.15625}[/tex] = [tex]\sqrt[3]{(1+r)^3}[/tex]
1.049584113 = 1+r
Subtract 1 from both sides
1.049584113 - 1 = 1+r - 1
0.049584113 = r
r = 0.049584113
r ≈ 0.05 = 5%
That is, the interest rate on the loan is approximately 5%
Final answer:
The interest rate on the $8,000 loan that is repaid with $9,250 after three years is calculated to be 5.208%.
Explanation:
To calculate the interest rate on the loan from your uncle, we use the formula for simple interest: I = PRT, where I is the interest, P is the principal amount, R is the rate of interest per year, and T is the time in years. Since we know the total interest paid (which is the difference between the amount repaid and the original loan) and the time, we need to rearrange the formula to solve for R.
First, let's find the total interest paid: $9,250 (final amount) - $8,000 (principal loan) = $1,250 (total interest).
Now we rearrange the simple interest formula to solve for R: R = I / (PT).
Plugging the values in, we get: R = $1,250 / ($8,000 * 3 years) = R
= $1,250 / $24,000 = R = 0.05208.
To express R as a percentage, we multiply by 100: interest rate = 0.05208 * 100 = 5.208%.
What key stage involves defining your project? a. Representing your data in a trustworthy manner b. Working with data c. Developing your design solution d. Formulating your brief
Answer:
The correct answer is letter "C": Developing your design solution.
Explanation:
Every project borns with the idea of finding a solution to a problematic situation. While designing a project coming up with what the solution is for the problem that you would like to attempt solving is vital because from there part all the steps on what and how it is going to be done.
Mr. Sizemore learns details about a large potential job Obtain information that is about to go out for bids.
Answer:
The best thing is to gather information and conduct predictions about the future.
Explanation:
If there is a significant amount of job going out for bids, it is advisable to conduct extensive research and market survey on the type and specifications of the job. This will enable the bidder the gather enough information about the job and also make necessary plans in form of predictions and other necessary arrangement for the future.
Assume that X-Men has an unadjusted Accounts Receivable balance of $10,000 and Allowance for Sales Discounts balance of $0. $1,000 of accounts receivable are within the 2% discount period and X-Men expects that buyers will take $20 in future-period discounts arising from this period's sales. The adjusting entry for sales discounts is:
Answer:
For X-Men, the Sales Discount should be recorded at the estimated discount amount that will be taken by the X-Men's customers, which is calculated as: $1,000 * 2% = $20.
The adjusting for sales discount X-Men should be recorded as followed:
Dr Sales Discount 20
Cr Allowance for Sales Discount 20
( to record the estimated sales discount taken)
in which, Sales Discount is a contra-revenue account which helps to record the Net Sales amount from the Gross Sales amount.
Explanation:
Answer: Debit sales discount and credit allowance for sales discounts for $20
Explanation: look at attached image
Topic: Performance Management When it comes to performance management and measurement, it is said that "you get what you measure" or "you get what you set." When studying issues in this area, it is very useful to see cases where management motivated the unintended behavior from employees. For this Discussion, research and summarize an article that discusses a situation in which the performance management and measurement systems put into place either failed to promote the desired behavior, or outright backfired. Include the following details: Brief description of the situation. The desired outcome. The actual outcome. Reasons why the effort failed.
Answer:
Performance management and measure is a tricky tool. It's success and failure depends upon few factors
1) Company's Culture
2) Training programs for employees related to performance management tool.
What actually makes performance management fail is to ignore company's culture while implementing performance management system. If your system is traditional in vibrant or democratic cultured company then it may fail and vise versa. We call it need assessment, in this process HR assess the need and factors that affect the performance system and then suggest and implement appropriate system that is aligned with the company's culture.
Second factor is training for employees, if management implements a system or tool for performance measure and failed to train their employees on that system and measure then it will fail.
For performance management system to work, management may needs to change their policies too.
Actual situation:
Well, i have been working in HR department for 6 years now. We implemented 360 degree system in which not only manager but peer, subordinate and client also evaluate the employee's performance. We also did training sessions for employees to better cope up with the new system.
Desired Outcome:
Real picture of an employee performance.
Actual Outcome:
Fake picture of employees performance and buttering culture.
Reason for failure:
We failed to incorporate the culture of the organization. We didn't made any effort to understand and transform the culture according to the evaluation system that we are going to use. That actually creates the problem. Employees started to evaluate their peers and managers good, only because in return they will be graded good. So, it creates a buttering culture in the company. Which was far from actual measure of performance for an employee.
Solution:
To solve this problem, we actually transformed company's culture by valuing the truth and changing company's policy.
Final answer:
In a business scenario, focusing solely on sales targets can lead to unintended consequences such as neglecting customer service and long-term client relationships.
Explanation:
Brief description of the situation: In a business setting, a situation arose where employees were incentivized solely based on achieving sales targets.
The desired outcome: The desired outcome was to increase sales performance and revenue for the company.
The actual outcome: However, the unintended consequence was that employees focused solely on making sales, neglecting customer service and long-term client relationships.
Reasons why the effort failed: The effort failed because the measurement system did not consider other important factors beyond sales, leading to a decline in overall customer satisfaction and potential long-term business growth.
Assume Vandell, a individual taxpayer, is in a 25 percent tax bracket. He invests in Otay Mesa Water District Bonds that pay 4.5 percent interest. What interest on a taxable bond would provide the same after-tax return to Vandell?
Answer:
Explanation:
Otay Mesa Water District Bonds are tax free bonds.
They are giving 4.5% interest and Vandell's after tax return is 4.5%.
So we have to calculate a pre-tax return that would be providing the same after tax-return as of Otay Mesa Water District Bonds. Let's assume this return to be x%
Vandell is in the 25% tax bracket, so Vandell's interest will be taxed at 25%.
So,
x ( 100 % - 25 % ) = 4.5
x = 4.5/0.75
x = 6
Final answer:
To find the interest on a taxable bond that provides the same after-tax return to Vandell as a tax-free municipal bond, apply the formula Taxable interest = Tax-free interest / (1 - Tax rate) with Vandell being in a 25% tax bracket and the tax-free bond paying 4.5% interest to calculate the taxable interest as 6%.
Explanation:
To find the interest on a taxable bond that provides the same after-tax return to Vandell as the tax-free municipal bond, you can use this formula: Taxable interest = Tax-free interest / (1 - Tax rate)
Given that Vandell is in a 25% tax bracket and the tax-free municipal bond pays 4.5% interest, the taxable interest that would provide the same after-tax return would be 6%.
Therefore, the interest on a taxable bond that would provide the same after-tax return to Vandell is 6%.
According to the author of the textbook, offshore oil production presents _____ challenges. Select one or more:
a. atmospheric
b. logistics
c. human resources
d. geological
Answer:
(b). and (c).
Explanation:
Offshore oil production involves drilling below the sea bed level and involves exploration and extraction of petroleum.
The production also applies to drilling beneath lakes or inshore waters.
The major challenges which it presents are in the form of difficulty of assembling human resources at such a site and movement of supplies and transportation i.e logistics.
Off shore oil production thereby involves huge cost and immense efforts.
Thus, off shore oil production presents both human resources and logistics challenges.
Answer:
a. atmospheric
Explanation:
According to the author of the textbook, offshore oil production presents atmospheric challenges.
The harsh offshore atmospheres which pose technical challenges for offshore drilling machinery are the reason for the risk. Extreme weather, snow and winds carry risks to the usability of the rigs, and their gap from the ground makes it more difficult for increased rescue workers to attain the areas quickly in emergencies.