Suppose the following bond quotes for IOU Corporation appear in the financial page of today’s newspaper. Assume the bond has semiannual payments, a face value of $2,000 and the current date is April 19, 2018. Company (Ticker) Coupon Maturity Last Price Last Yield EST Vol (000s) IOU (IOU) 5.7 Apr 19, 2034 108.96 ?? 1,827 a. What is the yield to maturity of the bond? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the current yield?
Answers
Answer:
a. 4.89%
b. 5.23%
Explanation:
We use the rate formula which is shown in the attached spreadsheet
Given that,
Present value = $2,000 × 108.96% = $2,179.20
Future value or Face value = $2,000
PMT = $2,000 × 5.7% ÷ 2 = $57
NPER = 16 years × 2 = 32 years
The formula is shown below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after solving this,
a. The yield to maturity of the bond is 4.89%
b. The current yield would be
= 57 × 2 ÷ $2,179.20
= 5.23%
a) When The yield to maturity of the bond is= 4.89%
b) After that The current yield is = 5.23%
Calculation of Maturity of the bondNow We are using the rate formula are:
Given that as per question:
Now The Present value is = $2,000 × 108.96% = $2,179.20
Then The Future value or Face value is = $2,000
Then PMT is = $2,000 × 5.7% ÷ 2 = $57
Now NPER is = 16 years × 2 = 32 years
Then The formula is shown below:
That is, = Rate(NPER;PMT;-PV;FV;type)
Then The present value come in negative
a. Hence, The yield to maturity of the bond is 4.89%
b. Thus, The current yield would be
= 57 × 2 ÷ $2,179.20
= 5.23%
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Related Questions
George invested $1,000 in large U.S. stocks at the beginning of 2012. This investment earned 16.35 percent in 2012, 31.50 percent in 2013, 13.85 percent in 2014, and 2.90 percent in 2015. What return did he earn in the average year during the 2012–2015 period?
Answers
Answer:
$161.50
Explanation:
Amount Invested = $1,000
Number of years = 4
Return for each year = Amount Invested × Interest rate
= $1,000 × Interest rate
For 2012:
Interest rate = 16.35% = 0.1635
Therefore,
Return for 2012 = $1,000 × 0.1635
= $163.50
For 2013:
Interest rate = 31.50% = 0.3150
Therefore,
Return for 2013 = $1,000 × 0.3150
= $315.00
For 2014:
Interest rate = 13.85% = 0.1385
Therefore,
Return for 2014 = $1,000 × 0.1385
= $138.50
For 2015:
Interest rate = 2.90% = 0.029
Therefore,
Return for 2015 = $1,000 × 0.029
= $29.00
Average for 2012-2015
To get this, we add the returns for the 4 years, i.e. 2012-2015, and then divide it by the number of years which 4 as follows:
Average for 2012-2015 = ($163.50 + $315.00 + $138.50 + $29.00) ÷ 4
= $646.00 ÷ 4
= $161.50
Therefore, George's average return for the period is $161.50.
I wish you all the best.
2.5 If the nominal rate of interest is 4.25 percent and the expected rate of inflation is 1.75 percent, what is the real rate of interest?
Answers
Answer:
2.5
Explanation:
Real interest rate is the interest rate that has been adjusted for the effect inflation.
Nominal interest rate hasn't been adjusted for the effects of inflation. It is the one more popularly quoted .
Inflation is the rise in general price level.
Real interest rate = nominal interest rate - expected inflation rate
4.25 - 1.75 = 2.5
I hope my answer helps you
Social recognition, in which social media is used to recognize employee performance on a daily basis, has not yet been found to be as effective as the one-on-one performance review or 360-degree feedback. A) True B) False
Answers
Answer:
The correct answer is letter "A": True.
Explanation:
Social media can be useful for different purposes but is not the best platform through which executives should provide employee appraisal because of its informal character. There are some other dynamic approaches such as 360-degree feedback in which not employers but also coworkers can rate employees' performance in their work frame, being this one of the most effective methods to boost their efficiency.
Percentage change is calculated as Group of answer choices the change in elasticity divided by the quantity. quantity divided by the change in quantity. the change in quantity divided by the quantity. g
Answers
Answer:
the change in quantity divided by the quantity.
Explanation:
Percentage Change in any variable is calculated by :
(Change in Variable / Variable old value ) x 100 ; where
Change in Variable = Variable New Value - Variable Old Value
Example : If Price change from 10 to 15
Percentage change in price = (Change in Price / Old Price) x 100
= [(15-10) / 10] x 100
= [ 5/10 ] x 100
= 50%
Bramble Gravity Grips produces spike sets for track shoes. CEO Brittany Bramble has gathered the following information about the company’s sales volume and marketing cost for the past six months: Sales Volume Total Marketing Costs January 550,836 $82,736 February 390,836 $74,527 March 561,496 $83,060 April 543,000 $82,320 May 546,928 $82,520 June 552,808 $82,888Compute the total fixed marketing cost. (For computation puposes round variable cost to 2 decimal places, e.g. 52.75 and final answer to 0 decmial places, e.g. 5,275.)
Answers
Final answer:
To calculate the total fixed marketing cost, sum up the marketing costs for each month which equals $488,051.
Explanation:
To calculate the total fixed marketing cost, you need to sum up the marketing costs for each month. In this case, the marketing costs for the past six months are:
January: $82,736February: $74,527March: $83,060April: $82,320May: $82,520June: $82,888Add the above values together to get the total fixed marketing cost:
Total fixed marketing cost = $82,736 + $74,527 + $83,060 + $82,320 + $82,520 + $82,888 = $488,051.
Blake eats two bags of potato chips each day. Blake's hourly wage increases from $9 to $15, and he decides to stop eating generic chips and instead eats a name brand potato chip. Use the midpoint method to calculate Blake's income elasticity of demand for generic potato chips.
Answers
The income elasticity of demand describes how demand for a good changes with income, using positive values for normal goods (demand rises as income rises). As Blake consumes more name-brand chips after a salary bump, those can be classified as normal goods. The midpoint method used for calculations require two sets of quantities and incomes, rendering a specific numerical answer impossible in this case.
Explanation:The student's question is about calculating the income elasticity of demand using the midpoint method. Elasticity of demand is a measure of how much the quantity demanded of a good changes when the income changes. In the case of Blake, he stops eating generic chips and starts eating name-brand chips when his wage increases. This is an example of a normal good, as consumption increases with an increase in income.
However, when calculating the income elasticity of demand using the midpoint method, we need two sets of quantities and two sets of incomes. As only one set is provided in the question (Blake's switch to name-brand chips), it's impossible to provide a numerical answer.
However, what we can say is that if the income elasticity of demand is positive, then the good is a normal good: demand for it increases as income increases. Therefore, we could describe name-brand chips as a normal good for Blake.
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Blake's income elasticity of demand for generic potato chips is calculated as -4, indicating that these chips are an inferior good for him.
Income Elasticity of Demand for Generic Potato Chips
To determine Blake's income elasticity of demand for generic potato chips, we need to use the midpoint method. The formula for income elasticity of demand (E) is:
[tex]E = \frac{Delta Q }{Q_{avg} } * \frac{Delta I}{I_{avg}}[/tex]
Here, Delta Q is the change in quantity demanded, Q_avg is the average quantity demanded, ΔI is the change in income, and I_avg is the average income.
Initial quantity of generic chips (Q1): 2 bags per dayFinal quantity of generic chips (Q2): 0 bags per day (since Blake switched to name brand)Initial income (I1): $9/hourFinal income (I2): $15/hourCalculate the changes and averages:
Change in Q = Q₂ - Q₁ = 0 - 2 = -2
Q_avg = (Q₁ + Q₂) / 2
Q_avg = (2 + 0) / 2 = 1
Change in I = I₂ - I₁ = 15 - 9 = 6
I_avg = (I₁ + I₂) / 2
I_avg = (9 + 15) / 2 = 12
Plug these values into the formula:
[tex]E = \frac{-2}{1} * \frac{6}{12}[/tex]
E = -2 / 0.5 = -4
Since the elasticity is negative, generic potato chips are an inferior good for Blake, meaning that as his income increases, his demand for generic potato chips decreases.
Companies A and B each have the same level of total assets, the same tax rate, and the same earnings before interest and taxes (EBIT). Company A, however, has a higher debt ratio. Which of the following statements is most correct?a.Company A has a lower return on assets (ROA).b.Company A has a lower basic earning power (BEP).c.Company A has a lower times interest earned (TIE) ratio.d.Answers a and c are correct.e.All of the answers above are correct
Answers
Answer:
a.Company A has a lower return on assets (ROA).
c.Company A has a lower times interest earned (TIE) ratio.
That is options a and c
Explanation:
For company A to have high debt ratio means it has a higher debt which will reduce earnings. Company A's earnings will be less than Company B's.
ROA= Net income/Total assets
Since Company A's income is less than Company B's ROA for Company A will be less than that for Company B.
TIE = Earnings before Interest and Tax/Interest
Due to higher debt of company A it's interest will be higher resulting in low TIE.
Final answer:
The correct statement is that Company A, with a higher debt ratio than Company B, has a lower times interest earned (TIE) ratio since they have the same EBIT and total assets, but Company A has higher interest obligations.
Explanation:
When considering companies with the same level of total assets, tax rates, and earnings before interest and taxes (EBIT), the company with a higher debt ratio is Company A. The debt ratio is a measure of financial leverage. The effect of a higher debt ratio on Company A might result in a lower times interest earned (TIE) ratio compared to Company B, due to the higher interest obligations inherent in a higher level of debt. Since the return on assets (ROA) formula does not include interest expenses and both have the same EBIT and total assets, ROA would not be different between Company A and B. Similarly, basic earning power (BEP) would not be impacted since it factors in EBIT relative to total assets, and these are the same for both companies. Therefore, the most correct statement is that Company A has a lower TIE ratio.
The TIE ratio is crucial for assessing a company's ability to meet its interest obligations and indicates how many times a company can cover its interest charges with its pre-tax earnings. A lower TIE ratio implies decreased financial stability and increased risk of default.
Assume that the company produces and sells 92,000 units during the year at a selling price of $7.37 per unit. Prepare a contribution format income statement for the year.
Answers
Answer:
1. MS Excel File is attached for the solution. Please find that.
2. Contribution income statement for the year
$
Sales (45000 x 16 ) 720,000
Less: Variable Cost (45,000 x 6) 270,000
Contribution Margin 450,000
Less: Fixed Cost 300,000
Net Income 150,000
In a given amount of time John can produce either 40 pounds of vegetables or 10 pounds of chicken. In the same amount of time George can produce either 25 pounds of vegetables or 5 pounds of chicken. In this simple economy if John and George decide to specialize and exchange with each other then we can expect ten pounds of chicken to trade for at least ___ pounds of vegetables but not more than ___ pounds of vegetables. Enter numerical values in each blank, rounded to two decimal places as necessary.
Answers
Answer:
Ten pounds of chicken to trade for at least 40 pounds of vegetables but not more than 50 pounds of vegetables
Explanation:
Vegetables Chicken Trade Off Ratio
John 40 10 4:1 (40/10) or 1:0.25 (10/40)
George 25 5 5:1 (25/5) or 1:0.20 (5/25)
John has comparative advantage in Chicken and George has comparative advantage in Veggies because :
John's chicken opportunity cost, in veggies < George (4<5). George's veggies opportunity cost, in chicken < John (0.20<0.25). George is more (5X) productive in veggies than chicken, than John (4X). John is less unproductive in chicken than veggies (1/4th), compared to George (1/5th).So, John will sell Chicken to George & George will sell veggies to John. Gains from trade are when each get trade ratio better than their their own trade off ratio.
It implies: John gets >' 4 pounds veggies per chicken pound' and George gets > '0.20 pound chicken per veggie pound'. Unitary method:- '1chicken : 4veggies' = '10chickens : 40veggies' and '0.20chicken : 1veggie' = '10chickens : 50 veggies' .You found that you should stock and sell 50 or 400 cans of beans per week in order to break even. In part (g) you are asked what price(s) you should set to break even. To answer this question, you should plug 50 and 400 into which of the following formulas? Question 3 options: A) R(q) = -0.005q2 + 2.5q B) p(q) = -0.005q + 2.5 C) P(q) = -0.005q2 + 2.25q - 100 D) C(q) = 100 + 0.25q
Answers
Answer:
Option C is correct P(q) = -0.005q^{2} + 2.25q - 100
Explanation:
Profit P(q) = R(q) – C(q)
Profit = Revenue – Cost
So,
P(q) = -0.005q^{2} + 2.5q - 100 – 0.25q
P(q) = -0.005q^{2} + 2.25q - 100
In order to find break even, you should plug 50 and 400 into the formula P(q) = -0.005q^{2} + 2.25q - 100
Wes acquired a mineral interest during the year for $10,000,000. A geological survey estimated that 250,000 tons of the mineral remained in the deposit. During the year, 80,000 tons were mined, and 45,000 tons were sold for $12,000,000. Other related expenses amounted to $5,000,000. Assume the mineral depletion rate is 22%. a. What is the taxable income before the deduction for depletion? $ b. Under cost depletion, what is the amount of the deduction? $ c. Under percentage depletion, what is the amount of the deduction? $ d. Wes's lowest taxable income after the depletion deduction is $
Answers
Answer:
a. $7,000,000
b. $1,800,000
c. $2,640,000
d. $4,360,000
Explanation:
Given:
Total investment = $10,000,000
Total Units = 250,000
Unit sold = 45,000
Sale value = $12,000,000
Expenses = $5,000,000
Depletion rate = 22%
The Taxable Income before the deduction for depletion = Gross Total Income - Related Expenses.The Taxable Income before the deduction for depletion
= $12,000,000 - $5,000,000
= $7,000,000
Under Cost Depletion
Amount of the deduction = (Total Investment in Asset/Total Unit )* Actual unit sold.
Amount of the deduction = ($10,000,000/250,000) * 45,000
Amount of the deduction = $1,800,000
Under Percentage DepletionAmount of the deduction = lesser of (Gross income's 50%) or (depletion rate% of total sale)
Amount of the deduction = lesser of (7,000,000 50%) or (12,000,000 22%)
= $2,640,000
Wes's lowest taxable income after the depletion deduction = The Taxable Income before the deduction for depletion - amount of the deduction
Wes's lowest taxable income after the depletion deduction = $7,000,000
- $2,640,000
= $4,360,000
Flounder Company had the following stockholders’ equity as of January 1, 2020. Common stock, $5 par value, 20,700 shares issued $103,500 Paid-in capital in excess of par—common stock 299,000 Retained earnings 323,000 Total stockholders’ equity $725,500 During 2020, the following transactions occurred. Feb. 1 Flounder repurchased 2,000 shares of treasury stock at a price of $19 per share. Mar. 1 870 shares of treasury stock repurchased above were reissued at $17 per share. Mar. 18 530 shares of treasury stock repurchased above were reissued at $13 per share. Apr. 22 510 shares of treasury stock repurchased above were reissued at $21 per share.
Prepare the journal entries to record the treasury stock transactions in 2020, assuming Flounder uses the cost method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Answers
Answer and Explanation:
Date Account Title and Explanation Debit Credit
Feb 1 Treasury Stock (2000*$19) $38,000
Cash (2000*$19) $38,000
(Repurchased 2,000 treasury stock @ $19 per)
Mar 1 Cash (870*$17) $14,790
Retained Earning {870*($19-$17)} $1,740
Treasury Stock(870*$19) $16,530
(Reissued 870 out of 2000 treasury stock @ $17 per)
Mar 18 Cash (530*$13) $6,890
Retained Earning {530*($19-$13)} $3,180
Treasury Stock(530*$19) $10,070
(Reissued 530 out of 2000 treasury stock @ $13 per)
Apr 22 Cash (510*$21) $10,710
Treasury Stock(510*$19) $9,690
Paid in Capital from Treasury Stock{510*($21-$19)} $1,020
(Reissued 510 out of 2000 treasury stock @ $17 per)
NOTE : loss of sale should be charges from Retained Earning.
Refer to Exhibit 2-2. If PPF2 is the relevant production possibilities frontier, then point __________ illustrates inefficiency.
Answers
Answer: F
Explanation:
Production possibility frontier checks the alternative combination of products that is possible based on available resources and useful technology.
NOTE: Exhibit 2-2 is curved.
Although, in reality most PPF2 are curved, which means that there is an increase in opportunity costs due to the commensurate increase in the number of goods produced. And this is so in most cases.
Therefore, with reference to Exhibit 2-2, if PPF2 is the relevant Production Possibilities Frontier, then point F illustrates inefficiency.
Consider the information about the economy of Pakistan. Note that the currency of Pakistan is the rupee. The government purchases: 2.60 trillions of rupees. Individuals consume: 9.30 trillions of rupees. Individuals save: 5.18 trillions of rupees. Businesses invest: 1.80 trillions of rupees. Foreigners spend: 0.61 trillions of rupees to purchase Pakistani firms. Pakistan imports: 2.08 trillions of rupees. Pakistan exports: 1.29 trillions of rupees. Calculate Pakistan's GDP. Assume that the values are all current and no conversions need to be made. Give your answer in terms of trillions of rupees, and round to two decimals. g
Answers
Answer:
= 12.91 trillion rupees.
Explanation:
The question is to Calculate Pakistan's GDP based on the provided information
First, the formula to calculate the Gross Domestic Product is as follows:
GDP= C + I +G+ (X - M)
Where C= Individual Consumption= 9.30 trillion rupees
I = The investment = Business Investment = 1.80 trillion rupees
G= Government Purchases = 2.60 trillion rupees
X= Exports= 1.29 trillion rupees
M= Imports = 2.08 trillion rupees
Using the formula therefore,
Pakistan's GDP
= 9.30 trillion rupees + 1.8 trillion rupees + 2.6 trillion rupees + (1.29 trillion rupees - 2.08 trillion rupees)
= 12.91 trillion rupees.
To calculate Pakistan's GDP, we add up the government purchases, individuals' consumption, individuals' savings, businesses' investments, foreigners' spending on Pakistani firms, and Pakistan's exports, and subtract the imports. The GDP of Pakistan is 18.70 trillion rupees.
Explanation:To calculate Pakistan's GDP, we need to sum up the government purchases, individuals' consumption, individuals' savings, businesses' investments, foreigners' spending on Pakistani firms, and Pakistan's exports. We then subtract Pakistan's imports. The GDP can be calculated as follows:
GDP = Government purchases + Individuals' consumption + Individuals' savings + Businesses' investments + Foreigners' spending on Pakistani firms + Pakistan's exports - Pakistan's imports
Using the given values, we can calculate the GDP as:
GDP = 2.60 + 9.30 + 5.18 + 1.80 + 0.61 + 1.29 - 2.08 = 18.70 trillion rupees
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Art is in the 24% marginal tax bracket for 2019. He owes a $10,000 bill for business expenses. Because he reports taxable income on a cash basis, he can deduct the $10,000 in either 2019 or 2020, depending on when he makes the payment. He can pay the bill at any time before January 31, 2020, without incurring the normal 8% interest charge. If he expects to be in a 32% marginal tax bracket for 2020, he should pay the bill and claim the deduction in 2020 . How much tax saving will Art realize by claiming the deduction in the year you answered above if the present value factor for 1 period at 8% equals 0.926?
Answers
Answer:
$740.8
Explanation:
To answer this question the following steps are undertaken
1) We consider the Marginal tax bracket Art falls within. And it becomes obvious that his bracket in 2020 is higher than that of 2019. The implication of this discovery is that claiming expenses in 2020 will save more taxes for Art than in 2019.
2) What is his tax savings in 2020 = $10,000 x (0.32-0.24) = $800
Finally, since the present value of tax savings is 0.926
Then the tax savings to realize for 2020 is
$800 x 0.926 = $740.8
England and Scotland both produce scones and sweaters. Suppose that an English worker can produce 50 scones per hour or 1 sweater per hour. Suppose that a Scottish worker can produce 40 scones per hour or 2 sweaters per hour. a. Which country has the absolute advantage in the production of each good? Which country has the comparative advantage? b. If England and Scotland decide to trade, which commodity will Scotland trade to England? Explain. c. If a Scottish worker could produce only 1 sweater per hour, would Scotland still gain from trade? Would England still gain from trade? Explain.
Answers
Answer:
200 water
Explanation:
the water must be 200 degrees celecus
On college campuses, hiking and biking groups, service organizations, and intramural sports teams are prime examples of ______________ organizations. Select one: a. utilitarian b. mortification c. coercive d. voluntary
Answers
Answer:
The correct answer is letter "D": voluntary.
Explanation:
Voluntary organizations are non-profit associations with a mission and vision. On colleges, it is very common to find these groups of students who usually get together to share their experiences with activities of interest such as sports, dance, community service or cultural exchange.
Crandall Oil has total sales of $1,349,800 and costs of $903,500. Depreciation is $42,700 and the tax rate is 34 percent. The firm does not have any interest expense. What is the operating cash flow?
Answers
Answer:
Operating Cash flow = $309,076
Explanation:
Operating Cash flow
Sales = $1,349,800
-Costs = $903,500
-Depreciation = $42,700
Operating Income = $403,600
-Tax = $137,224
Net Income = $266,376
Operating Cash Flow = Net Income + Non-Cash Expenses – Increase in Working Capital
Operating Cash flow = $266,376 + $42,700 - 0
Operating Cash flow = $309,076
Final answer:
The operating cash flow for Crandall Oil is calculated by subtracting total costs and taxes from total sales and adding back depreciation. The operating cash flow is $322,740.
Explanation:
To calculate the operating cash flow for Crandall Oil, we need to begin with the total sales and then subtract the costs. We add back the depreciation since it's a non-cash expense and then subtract taxes paid. The formula for operating cash flow (OCF) is OCF = (Sales - Costs + Depreciation)*(1 - Tax Rate).
Following the formula:
Sales = $1,349,800
Costs (excluding depreciation) = $903,500
Depreciation = $42,700
Tax rate = 34%
The operating income before tax is Sales - Costs + Depreciation = $1,349,800 - $903,500 + $42,700 = $489,000.
Now we need to calculate the tax, which is Operating Income before Tax * Tax Rate = $489,000 * 34% = $166,260.
Finally, we calculate the operating cash flow by subtracting the tax from the operating income before tax:
OCF = $489,000 - $166,260 = $322,740.
The following December 31, 2016 fiscal year end account balance information is available for the Stonebridge Corporation:
Cash and cash equivalents $5,000
Accounts receivable (net) 20,000
Inventories 60,000
Property, plant and equipment (net) 120,000
Accounts payable 44,000
Wages payable 15,000
Paid in capital 100,000
The only asset not listed is short term investments.
The only liabilities not listed are a $30,000 note payable due in two years and related accrued interest of $1,000 due in four months.
The current ratio at year end is 1.5:1.
Required:
Determine the following at December 31, 2016:
a) Total current assets.
b) Short term investments.
c) Retained earnings.
Answers
Answer:
a) Total Current Assets $ 90,000
b) Short Term Investments $ 5,000
c) Retained Earnings $ 20,000
Explanation:
To determine the total current assets we have to work with the current ratio information provided in the question.
The current assets are:
Cash and cash equivalents $ 5,000
Accounts receivable (net) $ 20,000
Inventories $ 60,000
Current assets excluding Short term investments $ 85,000
The current liabilities are:
Accounts Payable $ 44,000
Wages Payable $ 15,000
Accrued interest due in 4 months $ 1,000
Total current liabilities $ 60,000
The current ratio at year end is 1.5 : 1
The total current assets is 1.5 * $ 60,000 = $ 90,000
The short term investments is calculated as
Total Current assets - Current assets excluding short term investments
$ 90,000 - $ 85,000 = $ 5,000 Short Term Investments
For determining the retained earnings, we have to use the balance sheet equation.
Total assets = Total liabilities + Stockholders Equity
Total assets = Current assets + Fixed Assets
Total assets = $ 90,000 + 120,000 ( Net Property Plant & Equipment)
Total assets = $ 210,000
Total liabilities = Current Liabilities + Long term Liabilities
$ 60,000 + 30,000 (Note Payable ) = $ 90,000
Using the balance sheet equation
$ 210,000 ( Total assets) - $ 90,000 (Total Liabilities) + Shareholders Equity
$ 120,000 = Shareholders equity
Shareholders equity = Capital + Retained earnings
$ 120,000 = $ 100,000 + Retained earnings
Retained Earnings = $ 20,000
a) Total current assets: $85,000. b) Short term investments cannot be determined. c) Retained earnings cannot be determined.
Explanation:a) Total current assets can be calculated by adding together the Cash and cash equivalents, Accounts receivable (net), and Inventories. In this case, the total current assets would be $5,000 + $20,000 + $60,000 = $85,000.
b) Short term investments are not explicitly mentioned in the information provided. Therefore, we cannot determine the value of short term investments.
c) Retained earnings cannot be determined with the information provided. Retained earnings represents the accumulated profits or losses of a company since its inception. To calculate retained earnings, we would need additional information such as net income, dividends, and any previous year's retained earnings.
Morgan Sondgeroth Inc. began operations in January 2018 and reported the following results for each of its 3 years of operations. 2018 $260,000 net loss 2019 $40,000 net loss 2020 $800,000 net income At December 31, 2020, Morgan Sondgeroth Inc. capital accounts were as follows. 8% cumulative preferred stock, par value $100; authorized, issued, and outstanding 5,000 shares $500,000 Common stock, par value $1.00; authorized 1,000,000 shares; issued and outstanding 750,000 shares $750,000 Morgan Sondgeroth Inc. has never paid a cash or stock dividend. There has been no change in the capital accounts since Sondgeroth began operations. The state law permits dividends only from retained earnings. Instructions a. Compute the book value of the common stock at December 31, 2020. b. Compute the book value of the common stock at December 31, 2020, assuming that the preferred stock has a liquidating value of $106 per share.
Answers
Final answer:
To compute the book value of the common stock at December 31, 2020, subtract the net losses from the net income to determine retained earnings. Divide the retained earnings by the number of outstanding common shares to get the book value per share. If the preferred stock has a liquidating value, add it to the retained earnings before dividing.
Explanation:
To compute the book value of the common stock at December 31, 2020, we need to determine the retained earnings of Morgan Sondgeroth Inc. Retained earnings can be calculated by subtracting the net income from the net losses of the previous years. So, for Morgan Sondgeroth Inc., retained earnings at December 31, 2020, would be:
$800,000 (2020 net income) - $260,000 (2018 net loss) - $40,000 (2019 net loss) = $500,000
The book value of the common stock can be calculated by taking the retained earnings and dividing it by the number of outstanding common shares. In this case, the book value would be:
$500,000 (retained earnings) / 750,000 (outstanding common shares) = $0.67 per share
If we assume that the preferred stock has a liquidating value of $106 per share, then the book value of the common stock at December 31, 2020 would be:
$500,000 (retained earnings) + ($106 x 5,000) (preferred stock liquidating value) / 750,000 (outstanding common shares) = $0.93 per share
Qualitative research methods __________.
a. focus on media ratings
b. are the best form of audience measurement
c. often use statistics to measure effects
d. provides non-numerical knowledge about communication
e. all of the above
Answers
Answer: d. provides non-numerical knowledge about communication
Explanation:
Qualitative research Methods mainly provide numerical information about what we are investigating, these are important because they bring us a little closer to knowing about the Target of the target market we want to reach.
An example of the qualitative information method could be the information of preferences about a product, such as a shampoo or soap, asking women in households according to the area that they want to hang and by asking these questions through a survey we can obtain the Information we want to know.
Final answer:
Qualitative research methods provide non-numerical knowledge about communication through techniques like interviews and focus groups, aimed at understanding people's opinions and experiences without the use of statistics.
Explanation:
Qualitative research methods provide non-numerical knowledge about communication(option d). This includes gaining insights into people's opinions, motivations, and experiences through methods such as in-depth interviews, focus groups, and content analysis. Qualitative methods allow researchers to explore concepts and phenomena in detail but do not typically involve statistical analysis.
Instead, they yield results such as words, pictures, and objects, which are then interpreted to understand their meaning within the context of the study. Some common qualitative techniques include conducting intensive interviews, engaging in participant observation, or holding focus groups. These methods are rooted in social sciences like anthropology, sociology, and psychology.
The world price of grapefruits is above the price that currently prevails in Cuba in the absence of trade. Assuming that Cuba is a small economy compared to the rest of the world, what happens if Cuba decides to open up trade with the world grapefruit market?
Answers
Answer:
The price of domestic Cuban grapefruit for consumers will ... Increase
Cuban exports of grapefruits will ... Increase
Consumer surplus in Cuba will ... Decrease
Production surplus in Cuba will ... Increase
Explanation:
Suppose that Spain and Denmark both produce jeans and olives. Spain's opportunity cost of producing a crate of olives is 3 pairs of jeans while Denmark's opportunity cost of producing a crate of olives is 11 pairs of jeans.
By comparing the opportunity cost of producing olives in the two countries, you can tell that Spain has a comparative advantage in the production of olives and Denmark has a comparative advantage in the production of jeans.
Suppose that Spain and Denmark consider trading olives and jeans with each other. Spain can gain from specialization and trade as long as it receives more than 3 pairs of jeans for each crate of olives it exports to Denmark. Similarly, Denmark can gain from trade as long as it receives more than 1/11 crate of olives for each pair of jeans it exports to Spain.
Based on your answer to the last question, which of the following prices of trade (that is, price of olives in terms of jeans) would allow both Denmark and Spain to gain from trade? Check all that apply.
a. 2 pairs of jeans per crate of olives
b. 6 pairs of jeans per crate of olives
c. 4 pairs of jeans per crate of olives
d. 13 pairs of jeans per crate of olives
Answers
Answer:
b. 6 pairs of jeans per crate of olives; and
c. 4 pairs of jeans per crate of olives
Explanation:
Olives Jeans Trade off Ratio (Olives:Jeans)
Spain 1 3 1:3 or 0.33:1 (1/3 = 0.33)
Denmark 1 11 1:11 or 0.09:1 (1/11= 0.09)
Spain & Denmark have less opportunity cost & hence comparative advantage than each other, in Olive & Jeans respectively.
Spain will export Olives to Denmark (importer). Denmark will export Jeans to Spain (Importer). Trade will be gainful if they get exchange ratio better than domestic exchange ratio.
'2 jeans pairs per olive crate' not gainful trade ratio for Spain, as it is getting more i.e 3 jeans pair per olive crate at its own domestic ratio. '13 jeans per olive' not gainful for Denmark, as 0.07 = (1/13) olive per jeans is worse than its own domestic ratio i.e 0.09 = (1/11) olive per jeans'4 jeans pairs per olive crate' is gaining trade ratio for:
Spain: As it gets 4 i.e more than 3 pairs of jeans per olive crate Denmark : As it gets 0.25 = (1/4) i.e more than 0.09 olive crates per pair of jeans'6 jeans pairs per olive crate' is gaining trade ratio for:
Spain: As it gets 6 i.e more than 3 pairs of jeans per olive crate Denmark : As it gets 0.16 = (1/6) i.e more than 0.09 olive crates per pair of jeansBoth of them are gainful trade ratios, but:
1olive:4 jeans is more gainful for Denmark, as it is gaining relatively more than domestic exchange rate (0.25 is more > 0.09 than 4 > 3). 1olive:6jeans is more gainful for Spain as it is gaining relatively more than domestic exchange rate (6 is more > 3 than 0.16 > 0.09)The trade rates that would allow both countries to gain from trade are 6 pairs of jeans per crate of olives and 4 pairs of jeans per crate of olives. This is because these rates fall between the opportunity costs of both countries.
Explanation:In the given scenario, for both Spain and Denmark to gain from trade, the trade rate should fall between both countries' opportunity costs. Hence, Spain's opportunity costs for producing olives, which is 3 pairs of jeans, and Denmark's opportunity cost of producing olives which is 11 pairs of jeans, would determine the trade rate. Therefore, the trade rates that would benefit both countries are:
6 pairs of jeans per crate of olives4 pairs of jeans per crate of olivesThis is because for Spain to gain, it should receive more than 3 pairs of jeans for each crate of olives it exports, and for Denmark to gain, it should receive more than 1/11 crate of olives for each pair of jeans it exports.
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Will and Lyndsey are married with no dependents and file a joint tax return. In 2019, they paid $3,000 in qualified student loan interest in addition to $22,550 in itemized deductions. What is the total of their "FROM AGI" deductions in 2019?
O $22,250
O $27,400
O $24,400
O $25,250
Answers
Answer:
The FROM AGI deductions for year 2019 are $24,400.
Explanation:
FROM AGI deduction for a year are the maximum of the following two items
itemized deductions standardized deductionsHere itemized deduction is given as $22,550 where as value of standardized deduction is $24,400 (for 2019)
Thus as the maximum of two is valid thus the FROM AGI deductions for year 2019 are $24,400.
In the long run, will Enviromax produce the allocatively and productively efficient level of output? Explain.
Answers
Enviromax achieves productive and allocative efficiency by operating on the PPF, reflecting the optimal balance between economic output and environmental protection as preferred by society.
Explanation:In the long run, Enviromax will produce the allocatively and productively efficient level of output if it operates on the production possibility frontier (PPF). Productive efficiency is achieved when Enviromax operates at a point on the PPF curve where it cannot produce more of one good without giving up some other good. Allocative efficiency means Enviromax is producing at a point on the PPF that reflects society’s preferences, with the optimal tradeoff between economic output and environmental protection.
Choices on the PPF like point P, with a high level of economic output and lower environmental protection, or point T, with high environmental protection and lower economic output, represent different allocative efficiencies. These choices involve an opportunity cost, which is the cost of forgoing the next best alternative when making a decision. To be allocatively efficient, Enviromax’s output level should reflect society’s preferred balance between economic goods and environmental quality.
What are some of the unintended effects of rent control?
a. Rent-control laws incentivize the development of upscale housing instead of low-income units.
b. Rent-controlled units have a high ownership turnover rate. c. More low-income residents are able to find more housing in rent-controlled cities in the long term.
d. Rent control decreases landlords’ profits and subsequently lower their incentive to invest in property upkeep.
Answers
Rent control, though intended to keep housing affordable, can result in incentives for the development of upscale housing over low-income units, high turnover of rent-controlled units and decreased property upkeep due to lower profits.
Explanation:Rent control is a form of government regulation that restricts the amount landlords can increase rent for housing. Unintended effects of rent control include:
Rent-control laws can incentivize the development of upscale housing instead of low-income units, which could potentially lead to affordable housing shortages. There's a high ownership turnover rate in rent-controlled units. This happens because, as rents are restrained by control laws, landlords may choose to sell their properties instead of renting them out at a reduced rate. Rent control can decrease landlords’ profits and subsequently lower their incentives to invest in property upkeep, leading to a deterioration in the quality of rental units over time.Learn more about Rent Control here:
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Suppose a wet and sunny year increases the nation's sweetcorn crop by 20%. How will this affect the market for frozen peas,a substitute for sweet corn?
a) increase in demand
b) decrease in supply
c) increase in supply
d) decrease in demand
Answers
Answer:
d) decease in demand
Explanation:
When the produce of sweet corn crop rises by 20%, this would lead to an increase in supply. With increase in supply, the price of sweet corn shall fall, which would lead to an increase in demand as now consumers will consume more of sweet corn.
Since the relationship between price of a good and demand for it's substitute is positive, the demand for the substitute shall fall.
Thus, demand for frozen peas shall decrease as demand for sweet corn has increased.
Since George is a shift manager, ________. a. he need not have any empirical skills b. his interpersonal skills are not important c. his conceptual skills are of the utmost priority d. his technical skills are of the utmost priority
Answers
Answer:
The correct answer is letter "D": his technical skills are of the utmost priority.
Explanation:
Shift managers require technical and conceptual skills. However, most of their job implies being in permanent interaction with subordinates in helping them perform their day-to-day duties efficiently. Then, the technical skills are likely to be more necessary for this type of job.
Any activity that results in the conversion of resources into products that can be used in consumption is called A. production. B. transformation. C. derived demand. D. substitution.
Answers
Answer:
A. production
Explanation:
The production or manufacturing process is when the raw materials are converted into a finished good ready for use for the population who compose the economy of hte given region.
The other economic activities are extraction which is take the resource from the land (mining, argiculture and other)
and services which provides services to citizen without the exchange of good
The termed used to describe the process of converting resources into products that can be consumed is 'production'. The terms transformation, derived demand and substitution, while related, do not exactly define this process.
Explanation:The correct answer to the question, 'What is any activity that results in the conversion of resources into products that can be used in consumption?' is A. production. In the context of business and economics, production refers to the processes and methods used to transform tangible inputs (raw materials, semi-finished goods, or subassemblies) and intangible inputs (ideas, information, knowledge) into goods or services. B. transformation, C. derived demand, and D. substitution are related terms, but they don't have the exact meaning mentioned in the question. Thus, the activity of converting resources into usable products is called production, not transformation, derived demand, or substitution.
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A customer bought a $1,000 par convertible subordinated debenture at par, convertible into common at $32 per share. If the bond's market price increases by 12.5%, the parity price of the stock will be:a. $32b. $36c. $37.50d. $38.40
Answers
Answer:
correct option is b. $36
Explanation:
given data
bought = $1,000 par convertible
convertible into common = $32 per share
bond market price increases = 12.5%
solution
we know that conversion ratio is fixed when the convertible security are issued and it does not change
we have bond is issued with a conversion price = $32
so as per each bond converting conversion ratio will be
conversion ratio = [tex]\frac{1000}{32}[/tex] = 31.25 : 1
so by every bond which is converted , then receives = 31.25 share
so now bond price will be = $1125
parity price of the stock will as = [tex]\frac{1125}{31.25}[/tex]
parity price of the stock = $36
correct option is b. $36
The parity price of the stock when the market price of a $1,000 par convertible subordinated debenture increases by 12.5%, and is convertible at $32 per share, will be $36.
The subject of the question is related to convertible subordinated debentures and their relationship to the parity price of stocks. A convertible bond can be a complex financial instrument which is a type of bond that can be converted into a set number of shares of the issuer's stock. Specifically, this question addresses the calculation of the parity price of a stock when a convertible bond's market price increases.
If a customer bought a $1,000 par convertible subordinated debenture at par, convertible into common stock at $32 per share, and the bond's market price increases by 12.5%, this would affect the stock's parity price. An increase of 12.5% on the bond's par value ($1,000) results in a new bond price of $1,125. As the conversion ratio is $1,000/$32 = 31.25 shares, the parity price of the stock after the bond price increase will be $1,125/31.25 shares = $36 per share. Therefore, The parity price of the stock will be: b. $36.