Red Bison Petroleum Producers Group is expected to generate $140,000,000 in net income over the next year. Red Bison Petroleum Producers Group has forecasted a capital budget of $86,000,000, and it wishes to maintain its current capital structure of 70% debt and 30% equity. t plans to spend $85,000,000 on capital projects over the next year and expects to finance this investment in the same proportion as its capital structure. the company makes distributions in the form of dividends.
What will Red Bison Petroleum Producers' dividend payout ratio be if it follows a residual dividend policy?
Answers
Answer:
Detailed solution is given below:
Red Bison expects to generate $140 million in net income and spend $25.8 million on capital projects. The expected dividend payout ratio is dividends paid ($114.2 million) divided by net income, which is 81.57%.
Calculating Red Bison Petroleum Producers' Dividend Payout Ratio
Red Bison Petroleum Producers Group plans to maintain a capital structure of 70% debt and 30% equity. According to a residual dividend policy, dividends are paid out from net income after all acceptable investment opportunities have been financed. The company expects to generate $140,000,000 in net income and has a capital budget of $86,000,000, which will be financed according to the capital structure. The equity portion of the capital budget is 30%, so Red Bison will use 30% of $86,000,000, which amounts to $25,800,000, from its net income for financing the capital projects. If the company uses only $25,800,000 from its $140,000,000 net income for capital investment, it will have $114,200,000 ($140,000,000 - $25,800,000) left to distribute as dividends. The dividend payout ratio is calculated as dividends paid divided by net income. Therefore, the expected dividend payout ratio for Red Bison Petroleum Producers would be $114,200,000 / $140,000,000, which simplifies to 81.57%.
Related Questions
Wally is employed as an executive with Pay More Incorporated. To entice Wally to work for Pay More, the corporation loaned him $20,000 at the beginning of the year at a simple interest rate of 1 percent. Wally would have paid interest of $2,400 this year if the interest rate on the loan had been set at the prevailing federal interest rate.
a. Wally used the funds as a down payment on a speedboat and repaid the $20,000 loan (including $200 of interest) at year-end. Does this loan result in any income to either party, and if so, how much?
b. Assume instead that Pay More forgave the loan and interest on December 31. What amount of gross income does Wally recognize this year?
Answers
Explanation:
a) The Company shall have an income of $200 as interest Revenues and $2200 as imputed revenues(i.e. difference between actual income and market value of interest on loans.
Nevertheless the corporation shall also have the right to compensation incurred by the federal tax law at $2200 for wally and shall not be eligible for deduction under Federal Taxation Law.
b) Amount of gross income does Wally recognize if Pay More forgave the loan and interest on December 31:
Loan Amount $ 20000
Interest Foregone $ 200
Imputed Interest $ 2200
Total Amount $22400
Explain how a firm decides how many workers to hire. If the wage was constant at $25 per day, howmany workers should be hired? Explain how you got your answer.
Answers
Answer:
This is based on the micro-economics concept,
MRP=MRC
The principle states that in order to maximize profit a firm should employ the quantity of a resource at which its marginal revenue product (MRP) is equal to its marginal resource cost (MRC)
MRC is the wage rate in pure competition and in this case.
As each worker will bring in at least as much revenue as their wages cost. If the wage was $25, you would hire 4 workers. The MRC is 25 and MRP is 30, thus if a 5th worker would be hired, the amount paid would exceed the MRC, or what is coming in, thus you cannot increase to a fifth worker.
Final answer:
A firm hires workers up to the point where the wage equals the marginal revenue product. With a constant wage of $25, workers are hired until their MRP is $25. Situations like minimum wage laws or non-wage job characteristics can affect hiring decisions and wages paid.
Explanation:
A firm decides how many workers to hire based on the principle of profit maximization, which occurs up to the point where the market wage equals the marginal revenue product of labor. If the wage was constant at $25 per day, the firm should hire workers up to the point their marginal revenue product (MRP) is equal to $25, ensuring that any additional worker would not contribute to profits since their MRP would be less than their wage. This decision also assumes that the firm is operating in a competitive market.
In situations where wages are not constant, such as described in Exercise 12.2, the firm needs to consider the increasing cost of adding each worker, due to the equal wage policy, which impacts the optimal number of workers to employ. On the other hand, if a minimum wage is introduced, as in the case of a $48 per day minimum wage scenario, it can lead to a shift in the quantity of labor demanded by the firm due to changes in the labor cost and subsequently affect the wage paid to the workers.
An example provided indicates that a job's non-wage characteristics, such as flexibility, also affect the implicit wage rate. When the government imposes an artificial wage rate higher than the equilibrium, it can lead to an excess of labor supply over demand, exemplified by an increase in workers seeking jobs to 120,000 and a decrease in the quantity demanded to 80,000, causing unemployment.
One problem with conflicts of interest is that they can reduce the ________ in financial markets, thereby increasing ________. Question 3 options: A) quality of information; asymmetric information B) quantity of information; financial institutions' profits C) quantity of information; asymmetric information D) quality of information; financial institutions' profits
Answers
Answer:
The answer is Quality of information and Asymmetric information
Explanation:
Information quality is a multi-attribute concept, it is said to define the quality of information are of good quality or of high value then the information is said to have good quality.
Asymmetric information also regarded as "information failure" occurs in a business environment in which some agent in a trade possesses information while other agents involved in the same trade do not.
Ramona manages a team of 10 designers at Purple Inc. She encourages all her subordinates to directly approach her and speak with her at any time of the day regarding issues they may be facing at work. Given this information, it can be said that _____.
Answers
Final answer:
Ramona's management approach is described as having an open-door policy that fosters open communication and employee empowerment within her team.
Explanation:
Ramona exhibits an open-door policy within her management approach, as is evident through her encouragement for subordinates to approach her directly about any work-related issues. This management style is conducive to creating an environment of open communication and trust, which can lead to better problem resolution and increased team cohesion. Ramona's approach aligns with principles of employee empowerment and participatory management, underpinning the value she places on her team's input and the proactive addressing of concerns.
The investment banking process When a firm needs to raise funds in the financial markets, it usually uses the services of an investment banker. Last year Nowitzki Inc. entered into an agreement with Duncan Partners, an investment bank. At the time of issue, Duncan Partners has agreed to purchase all offered shares from Nowitzki and then try to sell all shares in the primary market. What kind of arrangement is this? An underwritten agreement A best efforts arrangement In the event that an issuer elects to use an underwritten arrangement, who bears all the risk that the stock issue might be undersubscribed? In other words, who is at risk if the investment bank cannot sell all shares to investors at the time of issue? Because of the magnitude of the potential losses that may be incurred by an investment bank participating in the sale of a large underwritten security issue, it is customary for a group of banks to create an underwriting syndicate to reduce the risk exposure of each participating bank. The investment bank that organizes and leads the syndicate is called the .
Answers
Solution:
Answer 1: Shelf Registration
Shelf registration or shelf prospectus is a sort of open offer contribution where the backer can decide to offer and offer protections to the general population without a different outline for each demonstration of offering and without the issue of further outline. The issuer can sell the shares within a 2 year period, without seperate permission for each time they go public.
Answer 2: Floatation Costs
The cost inccured to raise the capital by the firm is known as floatation cost. This includes underwriting fees, legal fees and all other fees that the company needs to pay in its run up to raising capital from various sources.
Answer 3: Managing Underwriter
Managing underwriter is the primary or the lead underwriter of the syndicate. The firm takes a shot at benefit of a syndicate of guarantors to perform works as managing the registrant, sorting out street appears, and so forth.
If the Communication Department and the Sociology Department are battling over which department gets to hire additional graduate assistants, they are experiencing which of the following levels of conflict?a. interpersonalb. intrapersonalc. intergroupd. interorganizationalstatus
Answers
Answer:
A. interpersonal conflict
Explanation:
The interpersonal conflicts which in order parlance called the social conflicts are conflicts that occurs between people which
are involved in the project or between different groups of interest.
The interpersonal conflict may also be seen as the process through which a person or a department frustrates another from obtaining the wanted or desired result.
Answer:
Intergroup.
Explanation:
This is a conflict between two differing groups within an organization, in this case between two different departments within an organization. Both departments competing about who gets additional graduate assistants.
two days at busch gardens willamsburg & 3 days at Universal Stuids Orlando cost $420, while 4 days at Busch gardens & 2 days at Universal cost $472. What is the cost per day at each park
Answers
Answer:
The cost of each park per day are:
Busch gardens: $80.45 per day
Universal Studios: $81.86 per day
Explanation:
To solve this, first, we have to use the ratio of days given to calculate the specific amounts for each park. this is calculated thus;
a. 2 days at Busch gardens and 3 days at Universal = $420
Cost ratio of Busch gardens to Universal = 2:3. meaning that out of the cost in 5 parts, Busch gardens takes 2 parts, while Universal takes 3 parts
Therefore actual prices are;
Busch gardens; 2/5 × 420 = $168 (2 days)
Universal studios; 3/5 × 420 = $252 (3 days)
The same calculation is done for the second statement
Busch gardens; 4/6 × 427 = $314.7 (4 days)
Universal studios; 2/6 × 472 = $157.3(2 days)
Next, let us add the total number of days and amount for each park;
Busch gardens; 2 days = $168; 4 days; $314.7
∴ 2 days + 4 days = 6 days = 168 + 314.7 = $482.7
Universal studios; 3 days = $252; 2 days = $157.3
∴ 3 days + 2 days = 5 days = 252 + 157.3 = $409.3
Finally to find the cost per day, let us divide the total cost by the total number of days;
Busch gardens;
6 days = $482.7
∴ 1 day = 482.7 ÷ 6 = $80.45
Universal studio;
5 days = $ 409.3
∴ 1 day = 409.3 ÷ 5 = $81.86.
Answer:
$72 per day at Busch garden
$92 per day at universal
Explanation:
let a = cost per day at Busch garden
b = cost per day at Universal
The cost for 2 days at Busch garden and 3 days at universal is $420. The statement can be expressed as follows:
The sum can be expressed as
2a + 3b = 420........................(i)
The cost for 4 days at Busch garden and 2 days at universal is $472. It can be expressed as
4a + 2b = 472......................(ii)
The equation forms a simultaneous equation.
2a + 3b = 420........................(i)
4a + 2b = 472......................(ii)
from equation (i) make a subject of the formula
2a = 420 - 3b
divide both sides by 2
a = 420/2 - 3b/2
a = 210 - 3b/2
insert a in equation (ii)
4(210 - 3b/2) + 2b = 472
840 - 6b + 2b = 472
840 - 4b = 472
-4b = 472 - 840
-4b = -368
divide both sides by -4
b = -368/-4
b = 92
Insert b in equation (i)
2a + 3b = 420
2a + 3(92) = 420
2a + 276 = 420
2a = 420 - 276
2a = 144
divide both side by 2
a = 144/2
a = 72
IRS regulations govern the computation of gross profit for GAAP. computation of net income for GAAP. computation of net income for the SEC. computation of net income for tax purposes.
Answers
Answer:
The correct answer is letter "D": computation of net income for tax purposes.
Explanation:
The Internal Revenue Service (IRS) is the federal agency in charge of collecting citizens' and companies' taxes in the U.S. The IRS was founded in 1862 and since then it has been in charge of setting and enforcing the regulations on paying taxes. Those rules are calculated based on individuals' and organizations' net income but deductions are offered to promote them meet their liabilities.
Final answer:
IRS regulations oversee the computation of net income for tax purposes, which is used to determine a corporation's tax liabilities. Taxable income is calculated by subtracting deductions and exemptions from the adjusted gross income, and then corporate tax brackets apply to the resulting figure.
Explanation:
The IRS regulations primarily govern the computation of net income for tax purposes. When it comes to corporate taxes, companies must compute their taxable income, which is generally their financial statement income adjusted for tax purposes. The taxable income formula for both individuals and corporations is: taxable income = adjusted gross income - (deductions and exemptions). Companies face various corporate tax brackets, and the amount of tax they pay is based on this formula, taking into account any differences that may exist between book income and taxable income due to temporary and permanent differences as dictated by tax laws. While the SEC regulates the reporting of net income for publicly traded companies, the computation of taxable income is influenced by tax laws and IRS regulations rather than GAAP or SEC rules.
A project costs $91,000 today and is expected to generate cash flows of $11,000 per year for the next 20years. The firm has a cost of capital of 8 percent. Should this project be accepted, and why?
A. Yes, the project should be accepted since it has a NPV = $15,391.23.
B. Yes, the project should be accepted since it has a NPV = $13,610.89.
C. Yes, the project should be accepted since it has a NPV = $16,999.62.
D. None of these answers is correct.
Answers
Answer:
C. Yes, the project should be accepted since it has a NPV = $16,999.62.
Explanation:
Net present value is the sum of present value of all future cash inflows and outflows of a project using discounting method by a required rate of return. It measure the net value of the project's cash flows in present value term.
Initial Cost = $91,000
Cash flow per yea = P = $11,000
Number of years = n = 20 years
Cost of capital = 8%
PV of annuity = P [ ( 1 - ( 1 + r )^-n ) / r ]
PV of annuity = $11,000 [ ( 1 - ( 1 + 0.08 )^-20 ) / 0.08 ]
PV of annuity = $11,000 [ ( 1 - ( 1.08 )^-20 ) / 0.08 ]
PV of annuity = $108,000
Net Present value = ( $91,000 ) + $107,999.62 = $16,999.62
Final answer:
The project should be accepted since it has an NPV = $15,391.23.
Explanation:
To determine whether the project should be accepted, we need to calculate the net present value (NPV) of the project. The NPV is calculated by finding the present value of each cash flow and subtracting the initial cost of the project. In this case, the initial cost is $91,000 and the cash flows are $11,000 per year for 20 years. Using a discount rate of 8%, the NPV is:
NPV = -$91,000 + ($11,000 / 1.08)1 + ($11,000 / 1.08)2 + ... + ($11,000 / 1.08)20
After calculating the NPV, we find that it is approximately $15,391.23. Therefore, the correct answer is:
A. Yes, the project should be accepted since it has an NPV = $15,391.23.
Moerdyk Corporation's bonds have a 15-year maturity, a 7.25% semiannual coupon, and a par value of $1,000. The going interest rate (rd) is 6.20%, based on semiannual compounding. What is the bond’s price? $1,047.19 $1,074.05 $1,101.58 $1,129.12 $1,157.35
Answers
Answer:
$1,101.58
Explanation:
Tenor: 30 times (15-year maturity * 2 for semiannual)
Coupon rate: 7.25% semiannual -> coupon received semiannual (PMT) = $1,000 * 7.25%/2 = $36.25
Face value (FV): $1,000
Yield To Date (YTD): 6.20% semiannual -> YTD per semiannual = 3.1% (=6.20%/2)
Bond’s price = present value of bond + present value of total coupon received semiannual
Present value of bond = FV/(1+ YTD) ^tenor = 1000/(1+3.1%)^30 = $400.1659
present value of total coupon received semiannual = 36.25/(1+3.1%)^30 + 36.25/(1+3.1%)^29+ ….. + 36.25/(1+3.1%)^1 = $701.4189
(we can use excel to calculate the PV of coupon received = PV(rate,tenor,-PMT) = PV(3.1%,30,-36.25) = 701.42)
⇒ Bond’s price = $400.1659+ $701.4189= $1,101.58
Final answer:
To calculate the price of Moerdyk Corporation's bonds, we use the present value formulas for annuities and lump sums based on the bond's semiannual coupon rate, the par value, and the given market interest rate.
Explanation:
The question is about calculating the price of Moerdyk Corporation's bonds which have a 15-year maturity, a 7.25% semiannual coupon, and a par value of $1,000, given a market interest rate of 6.20% based on semiannual compounding. To find the bond's price, we apply the formula for calculating the present value of the bond's future cash flows, which include semiannual interest payments and the repayment of the par value at maturity. The bond's cash flows would be $36.25 (7.25% of $1000 divided by 2 for semiannual) every six months for 30 periods (15 years * 2), plus the $1000 par value at the end of the 15th year. Using the market interest rate of 6.20% also divided by 2 for semiannual compounding over 30 periods, we can calculate the present value of these cash flows to determine the bond's price.
The calculation requires us to discount each of the bond's future cash flows back to the present value using the given interest rate. The equation for the present value of an annuity (for the interest payments) and the present value of a lump sum (for the par value repayment) are used. As this is a mathematical problem involving finance formulas, which include the present value of annuity formula and the present value of a lump sum formula, exact calculation steps are needed to arrive at the correct answer among the provided options.
You are scheduled to receive $17,000 in two years. When you receive it, you will invest it for six more years at 9.75 percent per year. How much will you have in eight years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answers
Answer:
The investment would likely be $29,708.18 in six years' time
Explanation:
The $17000 receivable in two years would be invested for eight years less two years,in other words, it would be invested for only 6 years at the rate of 9.75 per year.
The formula applicable here is FV=PV*(1+r)^n
FV represents future value of the investment which is unknown
PV is the amount invested ,that is $17000
r is the rate at 9.75%
n is the number year is 6 years
FV=$17000*(1+0.0975)^6
FV=$29708.18
Six years is the applicable time horizon for the investment as the funds are receivable in two years' time
An advantage of magazine advertising is that:
A. it is less expensive than other promotional tools such as word-of-mouth and flyers.
B. there is a short lead time for placing ads, allowing companies to make last-minute decisions.
C. the ads can target a specific market segment, making them more effective.
D. it is flexible and can be personalized for individual consumers.
Answers
Answer:
A suitable advantage of magazine advertisement is option C.
Explanation:
The magazine may be meant only for men or only for women or for both. Thus a suitable magazine maybe selected to make an appeal to a particular section of the community.
By using magazines as a medium for advertising, an appeal can be made to a large body of persons with similar tastes or covering a large area.
In the 21st century, promoting in print or in computerized magazines may appear to be silly. TV arrives at millions additional customers. Publicizing on your site costs not exactly on television. Furthermore, aren't magazines collapsing left and right?
In actuality, the magazine business, even in printed copy, is progressing nicely. New magazines are continually showing up, and various them succeed and flourish. Purchasing promotion space may not be modest, however it tends to be compelling.
Slender Focal point of Interests
Satellite television has some specialty stations, however magazines take practicing to the following level. Promoting in a magazine that takes into account a specialty crowd of devotees or experts focuses on that crowd absolutely.
Stogie Enthusiast provides food solely to stogie smoking perusers. Author's Review perusers are keen on whatever helps their composing professions. Crossties is the authoritative manual for the railroad crosstie industry. In the event that a magazine serves your fantasy segment, it could be a match made in heaven.
Answer:
The correct answer is letter "C": the ads can target a specific market segment, making them more effective.
Explanation:
Magazine advertising is a form of promoting goods and services through magazines, journals, and newspapers. The target population, in this case, will be people who read physical mediums of information on a regular basis who tend to be middle-aged adults. It is believed this is more effective but with the spread of social media and different online-based news feeds, marketing advertising is losing its appeal.
If we assume that there is no fixed manufacturing overhead and the variable manufacturing overhead is $10 per direct labor-hour, what is the estimated finished goods inventory balance at the end of July? \
Answers
Answer:
Explanation:
Unit Cost = (4×2.50+15×2+10×2) = 60 per unit
Cost of goods sold = 28000×60 = $1680000
Gross margin = (70-60)×28000 = $280000
Suppose that you were born in 1999. Also, suppose that your mother received a $100 baby shower gift at your birth. How much would it cost to buy a similar amount of goods and services in 2017, given that the CPI was 166.6 in 1999 and 245.1 in 2017?
Answers
Answer:
= $147.12
Explanation:
First, we determine the amount received by Mother in 199 9= $100
Based on this,
The Consumer Price Index in 1999 = 166.6
The Consumer Price Index in 2017 = 245.1
We then calculate the amount it would cost in 2017 to buy similar goods bought by mother in 1999
= Value in 2017 = Amount received in 1999 x (2017 CPI / 1999 CPI)
= $100 x (245.1/166.6)
= $100 x 1.471
= $147.12
This means that the baby shower gift received at $100 in 1999 will cost $147.12 to buy in 2017.
Margin of Safety Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. Unit variable cost is $45 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $49,500 (includes fixed factory overhead and fixed selling and administrative expense). Break-even units equal 1,650. Required: 1. Calculate the margin of safety in terms of the number of units. units 2. Calculate the margin of safety in terms of sales revenue. $
Answers
Answer:
Margin of safety - Units =3350
Margin of safety - Sales Revenue = $251250
Explanation:
Margin of Safety indicates how much sales may decrease before a loss can be made.
Margin of safety - Units
Margin of safety - Units = 5000-1650 =3350
Margin of Safety as a % = 3350/5000 ×100 = 67%
Margin of safety - Sales Revenue
Expected Sales = (5000 × $75) =$375000
Margin of Safety = $375000 × 67% = $251250
Journalize the following transactions:
January 3:
1. Employees are paid monthly on the first business day of the month for work done in the previous month. The total payroll for the previous month is $110,000. (Ignore payroll taxes for this assignment.) Accounting wrote and distributed the paychecks.
2. GBI received $55,692 in safety product inventory and $37,128 in raw materials from Dallas Bike Basics. This inventory was ordered on December 28. The payment terms for the invoice total of $92,820 are net 10 days. GBI paid the CWX shipping company $550 with a manual check for the shipment of the goods. The bill of lading showed that the safety product inventory arrived in 6 boxes with a total weight of 120 lbs and the raw materials came on a pallet and weighed 100 lbs.
3. Windy City Bikes in Chicago, IL ordered $22,000 of bicycle accessories from GBI. The cost of the accessories (to GBI) is $15,180. The goods were shipped to Windy City immediately via UPS using Windy City’s UPS shipping number. The terms of payment for Windy City’s order are 2/10 net 30 days.
4. GBI received payment of $16,850 from Northwest Bikes in Seattle, WA for the balance due on their account.
Answers
Answer:
The Journal entries are as follows:
(i) On January 3,
Salaries expenses A/c Dr. $110,000
To salaries payable $110,000
(To record the salaries expenses)
(ii) On January 3,
Merchandise inventory A/c Dr. $55,692
Raw material inventory A/c Dr. $37,128
To accounts payable A/c $92,820
(To record the merchandise and raw material)
Shipping cost A/c Dr. $550
To bank A/c $550
(To record the shipping cost)
(iii) On January 3,
Accounts receivables A/c Dr. $22,000
To sales $22,000
(To record the sales on account)
cost of goods sold A/c Dr. $15,180
To Merchandise inventory $15,180
(To record the cost of goods sold)
(iv) Cash A/c Dr. $16,850
To accounts receivables $16,850
(To record the cash received)
The journal entries for the given transactions on January 3rd are provided below.
Explanation:January 3:
Journal Entry: Debit: Payroll Expense $110,000 Credit: Cash $110,000Journal Entry: Debit: Safety Product Inventory $55,692 Debit: Raw Materials $37,128 Credit: Accounts Payable $92,820Journal Entry: Debit: Delivery Expense $550 Credit: Cash $550Journal Entry: Debit: Accounts Receivable $22,000 Credit: Sales Revenue $22,000 Debit: Cost of Goods Sold $15,180 Credit: Inventory $15,180Journal Entry: Debit: Cash $16,850 Credit: Accounts Receivable $16,850Journal entries are the primary way of recording financial transactions in accounting. They provide a chronological record of all financial activities within a business. Each entry includes specific information about the accounts affected, the amounts involved, and a brief description of the transaction.
Learn more about Journalizing Transactions here:https://brainly.com/question/30273292
#SPJ11
On October 1, 2018, Renfro Company purchased to hold to maturity, 4,000, $1,000, 9% bonds for $3,960,000 which includes $60,000 accrued interest. The bonds, which mature on February 1, 2027, pay interest semiannually on February 1 and August 1. Renfro uses the straight-line method of amortization. The bonds should be reported in the December 31, 2018 balance sheet at a carrying value of
Answers
Answer:
Carrying Value=$3,903,000
Explanation:
First we will calculate the face value:
Face value=4000*$1000
Face value=$4,000,000
Purchase Price= Bond Purchased price- Accrued Interest
Purchase Price=$3,960,000-$60,000
Purchase Price=$3,900,000
Total months=100 months
Straight line Discount amortization= (Face Value-Purchase Price)/Total Months
Straight line Discount amortization=($4,000,000-$3,900,000)/100
Straight line Discount amortization=$1,000
Discount Amortization=Straight line Discount amortization*Discount months
Discount Amortization=$1,000*3
Discount Amortization=$3,000.
Carrying Value=Purchase Price+Discount Amortization
Carrying Value=$3,900,000+$3,000
Carrying Value=$3,903,000
The break-even point is the sales level at which a company_______________.a. incurs a loss. b. contribution margin equals fixed costs. c. has a profit equal to fixed costs.d. contribution margin equals variable costs.e. has a profit of $0.
Answers
Answer:
b. contribution margin equals fixed costs
e. has a profit of $0.
Explanation:
The break even point is the point in which the firm has no profit and no loss situation. When it meets we called as break even point.
So, the break even point is the point at which the profit is zero plus the contribution margin equals to the fixed cost i.e means
Contribution margin = Fixed cost
Sales - variable cost = Fixed cost
If both are equal so it seems the profit is zero
The break-even point is the sales level at which a company's profit is $0, as it is the point where total revenue equals total expenses.
Explanation:The break-even point is the sales level at which a company has a profit of $0. At the break-even point, the total revenue generated from sales is exactly equal to the total expenses, which include both fixed and variable costs. This critical financial concept is used to determine when a business will be able to cover all its expenses and start to generate profit.
According to the given references, the break-even point can be assessed through an understanding of cost behaviors. When a company's market price is higher than the break-even point, the firm is earning profits as the price is greater than the average cost. When the price is exactly at the break-even point, the firm makes no profit because it is only covering its total costs—hence, the profit is $0. If the price is below this point but above the shutdown point, the firm is making losses but may continue to operate to cover its variable costs.
The break-even point is the sales level at which a company has a profit of $0. at the break-even point, a company's contribution margin (price minus variable cost) equals fixed costs. This means that all of the revenue generated from sales is used to cover the fixed costs, resulting in zero profit. It is an important concept in business and financial management as it helps companies determine how much sales they need to cover their costs and start making a profit.
Learn more about break-even point here:https://brainly.com/question/35967655
#SPJ12
Abbott Landscaping purchased a tractor at a cost of $39,000 and sold it three years later for $19,800. Abbott recorded depreciation using the straight-line method, a five-year service life, and a $2,500 residual value. Tractors are included in the Equipment account. 2. Assume the tractor was sold for $12,400 instead of $19,800. Record the sale.
Answers
Answer:
The journal entry is as follows:
Cash A/c Dr. $12,400
Accumulated Depreciation - Equipment A/c Dr. $21,900
Loss on sale of equipment A/c Dr. $4,700
To Equipment $39,000
(To record the sale)
Working notes:
Accumulated Depreciation - Equipment:
= [(Cost of tractor - Residual value) ÷ Service life] × No. of years
= [(39,000 - 2,500) ÷ 5] × 3
= $21,900
To record the sale of the tractor for $12,400, the following journal entry would be made:
[tex]\[ \text{Debit} \: Cash \: \$12,400 \][/tex]
[tex]\[ \text{Debit} \: Loss \: on \: Sale \: \$4,700 \][/tex]
[tex]\[ \text{Credit} \: Equipment \: \$39,000 \][/tex]
To record the sale of the tractor for $12,400, we need to account for the loss on the sale. Here's how to record the transaction:
1. Calculate the book value of the tractor:
[tex]\[ \text{Book value} = \text{Cost} - \text{Accumulated depreciation} \][/tex]
[tex]\[ \text{Book value} = \$39,000 - \text{Depreciation per year} \times \text{Number of years} \][/tex]
[tex]\[ \text{Book value} = \$39,000 - (\frac{\$39,000 - \$2,500}{5} \times 3) \][/tex]
[tex]\[ \text{Book value} = \$39,000 - (\frac{\$36,500}{5} \times 3) \][/tex]
[tex]\[ \text{Book value} = \$39,000 - (\$7,300 \times 3) \][/tex]
[tex]\[ \text{Book value} = \$39,000 - \$21,900 \][/tex]
[tex]\[ \text{Book value} = \$17,100 \][/tex]
2. Calculate the loss on the sale:
[tex]\[ \text{Loss on sale} = \text{Book value} - \text{Selling price} \][/tex]
[tex]\[ \text{Loss on sale} = \$17,100 - \$12,400 \][/tex]
[tex]\[ \text{Loss on sale} = \$4,700 \][/tex]
3. Record the sale:
[tex]\[ \text{Debit} \: Cash \: \$12,400 \][/tex]
[tex]\[ \text{Debit} \: Loss \: on \: sale \: \$4,700 \][/tex]
[tex]\[ \text{Credit} \: Equipment \: \$39,000 \][/tex]
This transaction reduces the Equipment account by its original cost and records the cash received and the loss on the sale.
Does the production of flowers experience the effects of the law of diminishing returnsLOADING...? The effects of the law of diminishing returns A. are experienced when the fourth worker is hired. B. are experienced when the second worker is hired. C. are experienced when the third worker is hired. D. are never experienced. E. are experienced when the fifth worker is hired.
Answers
Answer:
B. After the 5th worker, diminishing returns sets in, as the MP declines. As extra workers produce less, the MC increases.
The rational-ignorance effect refers to the a. lack of incentive voters have to become well-informed about candidates and issues because their vote is unlikely to affect the outcome of an election. b. fact that most people choose to become just as well-informed when making choices as consumers as they do when making choices as voters. c. lack of rational analysis on the part of voters when they choose not to become informed about candidates and issues even though this knowledge would produce great personal benefit to them. d. problem of not enough information being supplied to voters because politicians are not spending enough on campaign adds to inform voters of their positions on issues.
Answers
Answer:A. The lack of incentive voters have to become well-informed about candidates and issues because their vote is unlikely to affect the outcome of an election.
Explanation: Rational ignorance is a term used to describe the intentional decline or refusal by a person or group of persons to gain certain knowledge,mainly after considering the cost and benefits attached to gaining that knowledge.
When people choose not to learn a particular trade,subject etc after comparing the costs to the potential gains.
RATIONAL IGNORANCE IS ALSO CONCERNED WITH THE DECISION OF VOTERS WHEN MAKING CHOICE OF NOT PARTAKING IN AN ELECTION BECAUSE THEY BELIEVE THAT THEIR VOTES DO NOT COUNT OR HAVE EFFECTS ON THE FINAL OUTCOMES ETC.
Final answer:
The rational-ignorance effect explains low voter turnout due to the belief that one's vote has minimal impact on election outcomes, leading to a lack of incentive to become informed or participate.
Explanation:
The rational-ignorance effect refers to the lack of incentive voters have to become well-informed about candidates and issues because their vote is unlikely to affect the outcome of an election. This theory explains why voter turnout is often low, as individuals calculate that the cost of becoming informed and voting exceeds the likely benefit, especially since a single vote rarely decides an election. Consequently, many voters choose to remain uninformed and do not vote, believing it will not significantly impact their lives or change the election's result.
6. A project to build a new taxiway at Culpepper Airport is 5 days behind at day 65. It had a planned cost of $735,000 for this point in time, but the actual cost is only $550,000. Estimate the variances
Answers
Answer:
Schedule Variance is - $223,500
Cost Variance = - $38,500
Explanation:
Difference between the two values are variance it could be positive and negative variance.
As per gicen data
Planned Value = PV = $735,000
Actual Cost = AC = $550,000
Completion ratio = Days spent / Total days = 65 / ( 65 + 5 ) = 0.93
Earned value = EV = Actual cost x completion ratio = $550,000 x 0.93 = $511,500
Schedule Variance (SV) = EV–PV = $511,500 - $735,000 = - $223,500
Cost Variance (CV) = EV–AC = $511,500 - 550,000 = - $38,500
Final answer:
The question seeks to estimate Schedule Variance and Cost Variance in a project management context. While we cannot calculate the Schedule Variance due to lack of information on Earned Value, we see that the Actual Cost is $185,000 less than the Planned Cost, indicating a potential Cost Variance.
Explanation:
In project management, the performance of a project is often measured using variances, which compare planned performance with actual performance. Specifically, Schedule Variance (SV) and Cost Variance (CV) are two of the most common variances calculated.
The Schedule Variance (SV) is the difference between the work planned and the work actually accomplished. To calculate SV, we use the formula SV = EV - PV, where EV is the Earned Value and PV is the Planned Value. However, since we don't have the Earned Value provided in the question, we cannot calculate SV in this case.
The Cost Variance (CV) is the difference between the budgeted cost of work performed and the actual cost of work performed. To calculate CV, we use the formula CV = EV - AC, where AC is the Actual Cost. Again, without the Earned Value, we cannot give a precise number for the Cost Variance in this instance. Therefore, we can comment that the project has spent less than planned by $735,000 - $550,000 = $185,000 but without the context of work accomplished (EV), we cannot ascertain if this is favorable or unfavorable.
The total utility from consuming five donuts is 9, 19, 30, 38, and 45 utils, respectively. Marginal utility begins to diminish after consuming the ____ don
Answers
Answer:
third
Explanation:
The utility for consuming the first donut is 9 utils.
The utility for consuming the second donut is the difference from the total utility for the first two and just the first donut.
[tex]U_2 = 19-9 = 10\ utils[/tex]
The utility for consuming the third donut is the difference from the total utility for the first three and just the first two donuts.
[tex]U_3 = 30-19 =11\ utils[/tex]
The utility for consuming the fourth donut is the difference from the total utility for the first four and just the first three donuts.
[tex]U_4 = 38-30 =8\ utils[/tex]
Since the utility for the 4th donut is less than the utility for the 3rd donut, utility begins to diminish after consuming the third donut.
Western Company allocates $10.00 overhead to each unit produced. The company uses a plantwide overhead rate with machine hours as the allocation base. Given the amounts below, how many machine hours does the company expect in department 2? Estimated: Department 1 Department 2 Manufacturing overhead costs $250,000 $150,000 Direct labor hours 8,000 DLH 12,000 DLH Machine hours 15,000 MH ? a. MH 33,000b. MH 137,500 c. MH 82,500 d. MH 25,000 MH
Answers
Answer:
The correct option is D,25000 machine hours
Explanation:
Department 2 machine hours can be computed using the formula for plant-wide overhead rate, which is given below:
Plantwide overhead rate = Total Manufacturing Overhead /Total Machine hours
Plantwide overhead rate is given as $10
Total manufacturing overhead=$250000+$150000
=$400000
$10=$400000/Total Machine Hours
by cross-multiplication
Total machine hours=$400000/$10
Total machine hours is 40000 hrs
Total machine hours=machine hrs in Dept 1+machine hrs in dept 2
40000=15000+machine hrs in dept 2
Machine hrs in dept 2=40000-15000
Machine hrs in dept =25000 hrs
Delilah makes a written offer to Samson to sell her mountain bike for $1000. In her offer Delilah states, that ‘this offer will remain open for seven days’. Two days later Delilah tells Samson that she has changed her mind.Discuss whether under common law Samson can still accept the offer and hold Delilah to the sale of her mountain bike to him for $1000.
Answers
Answer:
As per the common law of offer and acceptance, once the offeror makes an offer which us accepted by another party (the offeree) a binding contract is created.
Yes, Samson can still accept the offer and hold Delilah to the sale of her mountain bike to him for $1000.
Explanation:
Answer:
is this a story of a question?
Explanation:
Assume Ford Motor Company is discussing new ways to recapitalize the firm and raise additional capital. Its current capital structure has a 25% weight in equity, 10% in preferred stock, and 65% in debt. The cost of equity capital is 13%, the cost of preferred stock is 9%, and the pretax cost of debt is 8%. What is the weighted average cost of capital for Ford if its marginal tax rate is 40%
Answers
Answer:
The WACC is 7.27%.
Explanation:
Debt is a tax-allowable expense. The use of Debt in capital structure reduces Taxable Profit and hence the Tax Paid to Revenue Authorities. In this case, the Lenders ask for 8% of return. The company will surely pay them 8% of amount borrowed. But the same Interest Expense will be deducted to calculate Taxable Profit and hence will provide a Tax Shield. This tax shield must be removed from the Cost of Debt. So, it is to remember that the cost of debt in WACC is always the cost of debt after tax and the formula for it is;
Cost of Debt After Tax = Cost of Debt Before Tax * (1 - Tax Rate)
The above explained point is the only trick in this question, rest you have to simply make putting in the WACC formula which is;
WACC = (Cost of Equity * Weightage of Equity) + (Cost of Preferred Stock * Weightage of Preffered) + (Cost of Debt After Tax * Weightage of Debt)
If you have any further queries, feel free to contact me.
Thanks!
Debits to the Manufacturing Overhead account record:
The actual amounts of overhead costs incurred during a period.
The amount of overhead applied to production during a period.
The amount of overhead incurred on a specific job.
All conversion costs of a period.
Which of the following costing systems would always use job cost sheets?
a. Job order costing.
b. Process costing.
c. Activity-based costing.
d. All three systems.
Answers
Answer: Option C : ACTIVITY-BASED COSTING
Explanation:
ACTIVITY-BASED COSTING is a type of costing that assigns indirect cost and overhead cost to related products and services. It shows the relationship between manufactured products and overhead tasks.
Other options like job order costing is only used when costs and production specification are not identical for product or customer but the direct cost of labour can be traced to the final product. Also
Process costing is deployed when a process is used to manufacture identical products and the direct material, direct labor, and manufacturing overhead cannot be easily or economically traced to a specific unit.
From the above it shows that the ACTIVITY-BASED COSTING is best used in this case from definition
Kim wants to buy a car. Help Kim compute the monthly payment on a loan, given the loan amount, the annual percentage rate of interest, and the number of monthly payments. The program should allow Kim to input the loan amount, interest rate, and how many payments she wants to make. It should then compute and display the monthly payment. You will need the following variables:
Payment Loan
Amt InterestRate
MonthlyRate
NumberMonths
Answers
Answer:
This can be achieve using Microsoft Excel Spreadsheet. Please find attached the Excel file
Explanation:
we will need the following variables:
Payment (Down payment) LoanAmt InterestRate MonthlyRate NumberMonths
For clarity of will assume the following
Price of Car = $30,000
No. of Payment (Down Payment)= $10,000
Loan Amount =$20,000
Interest Rate = 15%
Number of Months =12
Repayment =12
We will need the following formulas:
Interest Rate =15/100 =0.15
Monthly Rate = Interest Rate/12 = 0.0125
Payment =[ LoanAmt * MonthlyRate * (1 + MonthlyRate)^NumberMonths]÷ [((1 + MonthlyRate)^NumberMonths) – 1]
Let LA= Loan Amount
MR= Monthly Rate
n=Number of Months
Payment = LA*MR*(1+MR)^n/(( 1+MR)^n-1)
Now (1+MR)n = (1+0.0125)^12 = 1.1608
Payment = (20,000*0.0125*1.1608)/(1.1608-1)
Payment = 290.2/0.1608 =1,804.7
This can be implement using a Microsoft Excel spreadsheet. Please find attached the Excel spreadsheet.
The INPUTS are the column whose heading is in green. The Variable is the column whose heading is in blue color.
PAYMENT is the last column in the Excel spreadsheet.
Complete each statement below.
1. The supply of dried blueberries is ______ than it is for fresh blueberries.
2. The supply of Porsche automobiles is ______ than it is for baseball caps.
3. The supply of beef today is ______ than it is for beef in a year.
Answers
Answer:
1. More elastic
2. Less elastic
3. Less elastic
Explanation:
Elastic is the term in economies which is defined as the product which is to be considered to be elastic when the quantity of the product demanded changes or varies drastically, when the price of the product decreases or increases.
So, the supply of the dried blueberries will be more elastic rather than the fresh blueberries as the customer prefer to have dried berries.
Supply of the automobiles like Porsche, will be less elastic rather than the baseball caps, as the automobile is very expensive as well as luxurious so, every person cannot afford.
The supply of the beef at present will be less elastic rather than the beef in the year as the beef supply would not be that much in a day, which it should be in a year.
A product is considered to be elastic if the quantity demand of the product changes drastically when its price increases or decreases.
An annuity with an infinite life is called a(n) ________. A. perpetuity B. deep discount C. primia D. option
Answers
Answer:
The correct answer is letter "A": perpetuity.
Explanation:
Annuities are regularly-provided income hired through insurance. Those payments can be provided within a short or long period of time until an undetermined date. That is the reason why annuities are also called perpetuities. Annuities are taxed at regular income tax rates.