Answer: b. increases Canadian net exports, and decreases U.S. net capital outflow.
Explanation:
Based on the information given, the net export of Canada will increase. Net exports measures the total trade of a country. It's the difference between the country's export and its import.
Since the U.S bakery is buying wheat from Canada, it means the export will increase thereby increasing the country net export. On the other hand, there's a reduction in the net capital outflow of the United States.
Therefore, the correct option is B
Fong Sai-Yuk Company sells one product. Presented below is information for January for Fong Sai-Yuk Company.
Jan. 1 Inventory 100 units at $5 each
Jan. 4 Sale 80 units at $8 each
Jan. 11 Purchase 150 units at $6 each
Jan. 13 Sale 120 units at $8.75 each
Jan. 20 Purchase 160 units at $7 each
Jan. 27 Sale 100 units at $9 each
Fong Sai-Yuk uses the FIFO cost flow assumption. All purchases and sales are on account.
Required:
a. Assume Fong Sai-Yuk uses a periodic system. Prepare all necessary journal entries, including the end-of-month closing entry to record cost of goods sold. A physical count indicates that the ending inventory for January is 110 units.
b. Compute gross profit using the periodic system.
c. Assume Fong Sai-Yuk uses a perpetual system. Prepare all necessary journal entries.
d. Compute gross profit using the perpetual system.
Answer:
Fong Sai-Yuk Company
a. Journal Entries:
Debit Purchases $2,020
Credit Accounts payable $2,020
To record purchases of goods on account for the month.
Debit Accounts receivable $2,590
Credit Sales revenue $2,590
To record the sale of goods on account for the month.
Debit Sales revenue $2,590
Credit Income Summary $2,590
To close the account to the income summary.
Debit Income Summary $2,790
Credit Purchases $2,020
Credit Ending Inventory $770
To close the accounts to the income summary.
b. Computation of the Gross Profit using the periodic system:
Sales revenue $2,590
Cost of goods:
Opening inventory $500
Purchases 2,020
Less Ending inventory 770 1,750
Gross profit $840
c. Using the Perpetual system:
Journal Entries:
Jan. 4 Debit Accounts receivable $640
Credit Sales revenue $640
To record the sale of goods on account.
Jan. 4 Debit Cost of goods sold $400
Credit Inventory $400
To record the cost of goods sold.
Jan. 11 Debit Inventory $900
Credit Accounts payable $900
To record the purchase of goods on account.
Jan. 13 Debit Accounts receivable $1,050
Credit Sales revenue $1,050
To record the sale of goods on account.
Jan. 13 Debit Cost of goods sold $700
Credit Inventory $700
To record the cost of goods sold.
Jan. 20 Debit Inventory $1,120
Credit Accounts payable $1,10
To record the purchase of goods on account.
Jan. 27 Debit Accounts receivable $900
Credit Sales revenue $900
To record the sale of goods on account.
Jan. 27 Debit Cost of goods sold $650
Credit Inventory $650
To record the cost of goods sold.
Jan. 31:
Debit Income Summary $1,750
Credit Cost of goods sold $1,750
To close the account to the income summary.
Debit Sales Revenue $2,590
Credit Income Summary $2,590
To close the account to the income summary.
d. Computation of the gross profit:
Sales revenue $2,590
Cost of goods 1,750
Gross profit $840
Explanation:
a) Data and Calculations:
Date Description Units Unit Cost Unit Price Total Cost Total Revenue
Jan. 1 Inventory 100 $5 $500
Jan. 4 Sale 80 $8 $640
Jan. 11 Purchase 150 $6 900
Jan. 13 Sale 120 $8.75 1,050
Jan. 20 Purchase 160 $7 1,120
Jan. 27 Sale 100 $9 900
Total goods available 410 $2,520
Total goods sold 300 $2,590
Ending inventory 110
Using FIFO under periodic system:
Ending inventory = 110 * $7 = $770
Cost of goods sold = Cost of goods available minus cost of ending inventory
= $2,520 - $770
= $1,750
Using FIFO under perpetual system:
Cost of goods sold:
Jan. 4 Sale $400 (80 * $5)
Jan. 13 Sale 700 (20 * $5 + 100 * $6)
Jan. 27 Sale 650 (50 * $6 + 50 * $7)
Total cost of goods sold $1,750
Ending inventory = $2,520 - $1,750 = $770
JJ Construction Inc. entered into a contract with a customer to build a corporate office on January 1, 2020, for $9,000,000. JJ construction owns the construction in process during the construction process and the office could be sold to other clients as well. The office is expected to be completed in three years for a total cost of $5,700,000. Actual costs incurred through December 31, 2020, are $2,394,000. Determine the amount of revenue to record in 2020 assuming that the cost-to-cost method is used.
Answer:
$3,780,000
Explanation:
Calculation to Determine the amount of revenue to record in 2020 assuming that the cost-to-cost method is used.
First step is to calculate the % of work completed by December 31, 2020 using this formula
% of work completed by December 31, 2020 = Actual cost incurred / Total estimated costs
Let plug in the formula
% of work completed by December 31, 2020=$2,394,000 / $5,700,000
% of work completed by December 31, 2020= 42%
Now let calculate the Amount of revenue to record in 2020 using cost to cost method using this formula
Amount of revenue to record in 2020 = Total contract price * % completion
Let plug in the formula
Amount of revenue to record in 2020 = $9,000,000*42%
Amount of revenue to record in 2020 = $3,780,000
Therefore the amount of revenue to record in 2020 assuming that the cost-to-cost method is used is $3,780,000
The following transactions took place at Five Flags Amusement Park during May. Five Flags Amusement Park must charge 8 percent sales tax on all sales: DATE TRANSACTIONS 20X1 May 1 Sold merchandise on account to Bill Gomez; issued Sales Slip 1015 for $1,250 plus 8 percent sales tax, terms n/30. 15 Recorded cash sales, $3,300 plus 8 percent sales tax. 31 Received payment on account due from Bill Gomez for the sale on May 1. Required: Record the above transactions in a general journal:
Answer and Explanation:
The journal entries are given below:
On May 1
Accounts receivable $1,300
To sales revenue $1,250
To Sales tax liability ($1,250 ×8%) $100
(Being the sales is recorded on account)
On May 15
Cash $3,564
To Sales revenue $3,300
To Sales tax liability ($3,300 ×8%) $264
(Being the sales is recorded on account)
On May 31
Cash $1,300
To Account receivable $1,300
(Being received payment on account due is recorded)
Jeff Heun, president of Splish Always, agrees to construct a concrete cart path at Dakota Golf Club. Splish Always enters into a contract with Dakota to construct the path for $200,000. In addition, as part of the contract, a performance bonus of $34,000 will be paid based on the timing of completion. The performance bonus will be paid fully if completed by the agreed-upon date. The performance bonus decreases by $8,500 per week for every week beyond the agreed-upon completion date. Jeff has been involved in a number of contracts that had performance bonuses as part of the agreement in the past. As a result, he is fairly confident that he will receive a good portion of the performance bonus. Jeff estimates, given the constraints of his schedule related to other jobs, that there is 55% probability that he will complete the project on time, a 30% probability that he will be 1 week late, and a 15% probability that he will be 2 weeks late.
Required:
Determine the transaction price that Concrete Always should compute for this agreement.
Answer:
$234,000
Explanation:
Calculation to determine the transaction price that Concrete Always should compute for this agreement
Using this formula
Transaction price=Contract Price* Estimated performance bonus
Let plug in the formula
Transaction price=$200,000+$34,000
Transaction price=$234,000
Therefore the transaction price that Concrete Always should compute for this agreement are $234,000
J&J Materials and Construction Corporation produces mulch and distributes the product by using dump trucks. The company uses budgeted fleet hours to allocate variable manufacturing overhead. The following information pertains to the company's manufacturing overhead data: Budgeted output units 710 truckloads Budgeted fleet hours 568 hours Budgeted variable manufacturing overhead costs for 710 loads $89,460 Actual output units produced and delivered 660 truckloads Actual fleet hours 468 hours Actual variable manufacturing overhead costs $85,460 What is the flexible-budget amount for variable manufacturing overhead? (Round intermediary calculations two decimal places and your final answer to the nearest whole dollar.)
Answer:
$3,999.04 F
Explanation:
Calculation to determine the flexible-budget amount for variable manufacturing overhead?
First step is to calculate the Budgeted fleet hours per unit
Budgeted fleet hours per unit = 568 ÷ 710
Budgeted fleet hours per unit = 0.8
Second step is to calculate the Budgeted fleet hours allowed for 660 truckloads
Budgeted fleet hours allowed for 660 truckloads
Budgeted fleet hours allowed for 660 truckloads = 660 × 0.8
Budgeted fleet hours allowed for 660 truckloads = 528
Third step is to calculate the Budgeted variable overhead rate per machine hour
Budgeted variable overhead rate per machine hour = $89,460 ÷ 528
Budgeted variable overhead rate per machine hour = $169.43
Fourth step is to calculate the Flexible-budget amount
Flexible-budget amount = 528× $169.43
Flexible-budget amount= $89,459.04
Now let calculate the Flexible-budget variance
Flexible-budget variance = $85,460 − $89,459.04
Flexible-budget variance= $3,999.04 F
Therefore the Flexible-budget variance is $3,999.04 F
The standardized shipping container, along with the BLANK to enable it to be integrated into companies’ processes, made it much easier to transport goods around the world, by eliminating the need to repack them every time the mode of transportation changed. This illustrates the key role of BLANK and integrated systems for managing it as factors of production.
Fill in the blanks.
Options:
supply chain management
consumption
inspect
physical capital
natural resources
human capital
transport ship
Answer:
1. supply chain management and 2nd blank is physical capital
Explanation:
The standardized shipping container, along with the supply chain management enables it to be integrated into companies’ processes, making it much easier to transport goods around the world, by eliminating the need to repack them every time the mode of transportation changes. This illustrates the key role of physical capital and integrated systems in managing it as a factor of production.
What is Supply Chain Management?SCM is the integrated planning and execution of processes needed to control the flow of goods, information, and capital investments in activities that broadly include demand planning, product sourcing, production, inventory management and storage, transportation — or logistics — and exchanging overstock or defective goods.
Today's supply chains must be managed using technology, and ERP suppliers provide modules that concentrate on important SCM tasks. There are additional vendors of business software who specialize in SCM.
To learn more about Supply Chain Management follow the link.
https://brainly.com/question/7094883
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Pipelines rank third after railroads and motor carriers in ton-miles transported, but most people do not recognize pipelines as a major mode of transportation. Nevertheless, pipelines are the preferred method used for transporting crude oil, diesel fuel, kerosene, and gasoline in the United States. What are some drawbacks to transporting via pipeline
Answer: See explanation
Explanation:
Some of the drawbacks to transportation via pipeline include:
1. Pipeline transportation isn't flexible, it's typically a one way system and can be used for certain fixed points only. It's flexibility is poor.
2. Once it has been laid, the capacity of the pipeline cannit be increased further.
3. Once there is leakage, repairing it is a challenge as it may not be easily detected.
4. It requires huge investment to set up and maintaining it is challenging.
5. It can lead to illegal pilferage which may being about accidents and death.
The following are budgeted data: January February March Sales in units 16,100 22,200 19,100 Production in units 19,100 20,100 18,600 One pound of material is required for each finished unit. The inventory of materials at the end of each month should equal 30% of the following month's production needs. Purchases of raw materials for February would be budgeted to be:
Answer:
Purchases= 19,650 pounds
Explanation:
Giving the following formula:
Production in units:
February= 20,100
March= 18,600
One pound of material is required for each finished unit.
The inventory of materials at the end of each month should equal 30% of the following month's production needs.
To calculate the purchase of raw material for February, we need to use the following formula:
Purchases= production + desired ending inventory - beginning inventory
Purchases= 20,100 + (18,600*0.3) - (20,100*0.3)
Purchases= 19,650 pounds
1.1.2. Name the type of energy classified as solids.
(1)
Answer: Crystalline solids
Ionic solids
Molecular solids
Network covalent solids
Metallic solids
Amorphous solids
Explanation:
On July 1, 2020, Riverbed Inc. made two sales.
1. It sold land having a fair value of $912,330 in exchange for a 4-year zero-interest-bearing promissory note in the face amount of $1,435,565. The land is carried on Riverbed's books at a cost of $597,200.
2. It rendered services in exchange for a 3%, 8-year promissory note having a face value of $401,660 (interest payable annually).
Riverbed Inc. recently had to pay 8% interest for money that it borrowed from British National Bank. The customers in these two transactions have credit ratings that require them to borrow money at 12% interest.
Record the two journal entries that should be recorded by Agincourt Inc. for the sales transactions above that took place on July 1, 2014.
Answer:
Riverbed Inc.
Journal Entries:
1. Debit 0% 4-year Promissory Notes Receivable $1,435,565
Credit Land $597,200
Credit Gain on Sale of Land $315,130
Credit Interest Revenue $523,235
To record the sale of land in exchange for a note with face value of $1,435,565
2. Debit 3% 8-year Promissory Note Receivable $401,660
Credit Service Revenue $162,224
Credit Interest Revenue $239,436
To record the rendering of service in exchange for a note with face value of $401,660.
Explanation:
a) Data and Analysis:
July 1, 2020:
1. 0% 4-year Promissory Notes Receivable $1,435,565 Land $597,200 Gain on Sale of Land $315,130 Interest Revenue $523,235
From an online financial calculator, the PV and Interest:
N (# of periods) 4
I/Y (Interest per year) 12
PMT (Periodic Payment) 0
FV (Future Value) 1435565
Results
PV = $912,330
Total Interest $523,235
Gain on Sale of Land:
Fair value of the land = $912,330
Book value of the land 597,200
Gain on sale of land = $315,130
2. 3% 8-year Promissory Note Receivable $401,660 Service Revenue $162,224 Interest Revenue $239,436
From an online financial calculator, the PV and Interest:
N (# of periods) 8
I/Y (Interest per year) 12
PMT (Periodic Payment) 0
FV (Future Value) 401660
Results
PV = $162,224
Total Interest $239,436
On January 1, 2020, Mehan, Incorporated purchased 15,000 shares of Cook Company for $150,000 giving Mehan a 15% ownership of Cook. The fair value of the 15% investment was the same as the carrying value of the investment when, on January 1, 2021, Mehan purchased an additional 25,000 shares (25%) of Cook for $300,000. This last purchase gave Mehan the ability to apply significant influence over Cook. The book value of Cook on January 1, 2020 was $1,000,000. The book value of Cook on January 1, 2021, was $1,100,000. Any excess of cost over book value for this second transaction is assigned to a database and amortized over four years. Cook reports net income and dividends as follows. These amounts are assumed to have occurred evenly throughout the years: Net Income Dividends 2020 $200,000 $50,000 2021 225,000 50,000 2022 250,000 60,000 On April 1, 2022, just after its first dividend receipt, Mehan sells 10,000 shares of its investment How much of Cook's net income did Mehan report for the year 2022?
a) $72,500
b) $81.250.
c) $59 250.
d) $75,000,
e) 61.750.
Answer: b) $81.250.
Explanation:
Cook Net income was $250,000 in 2022.
In the first quarter of 2022 (Jan to March), Mehan owned 40% of Cook as they had purchased 15% and then 25%.
Share of net income is:
= 250,000 * 40% * 3/12 months
= $25,000
In the remaining months, they owned 30% of Cook because the 10,000 shares sold were 10% of equity as 15,000 shares are 15%.
Their share of net income would be:
= 250,000 * 30% * 9/12 months
= $56,250
Total income recognized:
= 25,000 + 56,250
= $81,250
The nations of Grapefruit Land and Peachland produce grapefruits and peaches. In Grapefruit And, there are 650,000 hours of labor available in a month, and it takes 2 hours of labor to produce a barrel of grapefruits, and 4 hours of labor to produce a crate of peaches. In Peachland, there are 350,000 hours of labor available in a month, and it takes 1 hour of labor to produce a barrel of grapefruits and 2 hours of labor to produce a crate of peaches.
Required:
a. Which country has an absolute advantage in each good?
b. What is the opportunity cost of a crate of peaches in Grapefruitland?
c. What is the opportunity cost of a crate of peaches in Peachland?
d. Which country has a comparative advantage in each good?
Answer:
Peachland has absolute advantage in the production of grape fruis and peaches
grapefruits = 2
peaches = 0.5
Peachland
grapefruits = 2
peaches = 0.5
None of the countries have a comparative adantage in the production of either goods
Explanation:
Materials used by the Instrument Division of T_Kong Industries are currently purchased from outside suppliers at a cost of $301 per unit. However, the same materials are available from the Components Division. The Components Division has unused capacity and can produce the materials needed by the Instrument Division at a variable cost of $250 per unit.
Question Completion:
a. If a transfer price of $280 per unit is established and 50,000 units of materials transferred, with no reduction in the Components Division’s current sales, how much would T_Kong Industries’ total income from operations increase?
$
b. How much would the Instrument Division's income from operations increase?
$
c. How much would the Components Division's income from operations increase?
Answer:
T_Kong Industries
1. T_Kong Industries’ total income from operations would increase by;
= $2,550,000.
2. The Instrument Division's income from operations would increase by:
= $1,050,000.
3. The Components Division's income from operations would increase by:
= $1,500,000.
Explanation:
a) Data and Calculations:
Outside supply price = $301 per unit
Variable cost per unit = $250
Transfer price = $280
Units transferred = 50,000
Increase in total income for T_Kong Industries = $2,550,000 ($301 - $250)50,000
Instrument Division's income would increase by $1,050,000 ($301 - $280)50,000
Increase in total income for the Components Division = $1,500,000 ($280 - $250)50,000
Rawlings purchased a typewriter from Kroll Type-writer Co. for $600. At the time of the purchase, hemade an initial payment of $75 and agreed to paythe balance in monthly installments. A securityagreement that complied with the UCC was pre-pared, but no financing statement was ever filed forthe transaction. Rawlings, at a time when he stillowed a balance on the typewriter and without theconsent of Kroll, sold the typewriter to a neighbor.The neighbor, who had no knowledge of the securityinterest, used the typewriter in her home. Could Kroll repossess the typewriter from the neighbor?
Answer: Kroll cannot repossess the typewriter from the neighbor.
Explanation:
Based on the information given in the question, we can infer that Kroll cannot repossess the typewriter from the neighbor.
According to the UCC 9-320(b), when an individual purchases a particular consumer good in a situation whereby the individual isn't aware of the security interest and also when a financial statement wasn't filled, then the buyer is free from the security interest.
In this situation, even though a security agreement that complied with the UCC was pre-pared, but no financing statement was ever filed fort the transaction, this implies that Kroll cannot repossess back the typewriter as no financial statement was filed.
Caughlin Company needs to raise $75 million to start a new project and will raise the money by selling new bonds. The company will generate no internal equity for the foreseeable future. The company has a target capital structure of 75 percent common stock, 5 percent preferred stock, and 20 percent debt. Flotation costs for issuing new common stock are 11 percent, for new preferred stock, 8 percent, and for new debt, 3 percent.
What is the true initial cost figure the company should use when evaluating its project? (Enter your answer in dollars, not millions of dollars, i.e. 1,234,567. Do not round intermediate calculations and round your final answer to the nearest whole dollar amount.)
Initial cost $
Answer: $82,644,628
Explanation:
The true initial cost figure that the company should use when evaluating its project will be calculated as:
First we calculate the weighted average flotation which will be:
= (0.75 × 0.11) + (0.05 × 0.08) + (0.20 × 0.03)
= 9.25%
Therefore, the amount raised will be:
= 75 million / (1 - 9.25%)
= 75 million / (1 - 0.0925)
= $82,644,628
Therefore, the true initial cost is $82,644,628.
Fordman Company has a product that passes through two processes: Grinding and Polishing. During December, the Grinding Department transferred 20,000 units to the Polishing Department. The cost of the units transferred into the second department was $40,000. Direct materials are added uniformly in the second process. Units are measured the same way in both departments.
The second department (Polishing) had the following physical flow schedule for December:
Units to account for:
Units, beginning work in process 4,000 (40% complete)
Units started ?
Total units to account for ?
Units accounted for:
Units, ending work in process 8,000 ( 50% complete)
Units completed ?
Units accounted for ?
Costs in beginning work in process for the Polishing Department were direct materials, $5,000; conversion costs, $6,000; and transferred in, $8,000. Costs added during the month: direct materials, $32,000; conversion costs, $50,000; and transferred in, $40,000.
Assume the company uses the FIFO method.
Required:
1-a. Prepare a schedule of equivalent units.
1-b. Compute the unit cost for the month of December.
Answer:
Fordman Company
1-a. A Schedule of Equivalent Units (Weighted-Average Method)
Equivalent units of production:
Units Direct Materials Conversion
Units completed 16,000 16,000 16,000
Ending WIP 8,000 4,000 4,000
Total equivalent units 20,000 20,000
1-b. The unit cost for the month of December is:
= $7.05
Explanation:
a) Data and Calculations:
Units transferred from Grinding Department = 20,000
Cost of units transferred = $40,000
Polishing Department's
Physical Flow Schedule for December:
Units to account for:
Units, beginning work in process 4,000 (40% complete)
Units started 20,000
Total units to account for 24,000
Units accounted for:
Units, ending work in process 8,000 (50% complete)
Units completed 16,000 (100% complete)
Units accounted for 24,000
Cost of production:
Direct Conversion Transferred Total
Materials In
Beginning work in process $5,000 $6,000 $8,000 $19,000
Current period 32,000 50,000 40,000 122,000
Total costs of production $37,000 $56,000 $48,000 $141,000
Equivalent units of production:
Units Direct Materials Conversion
Units completed 16,000 16,000 16,000
Ending WIP 8,000 4,000 4,000
Total equivalent units 20,000 20,000
Cost per equivalent units:
Direct Materials Conversion Total
& Transferred In
Total costs of production $85,000 $56,000 $141,000
Total equivalent units 20,000 20,000
Cost per equivalent units $4.25 $2.80
Cost assigned to: Direct Materials Conversion Total
& Transferred In
Units completed $68,000 $44,800 $112,800
($4.25 * 16,000) ($2,80 * 16,000)
Ending WIP 17,000 11,200 28,200
($4.25 * 4,000) ($2.80 * 4,000)
Total $85,000 $56,000 $141,000
Unit cost for the month of December:
Total cost of completed units = $112,800
Total units completed = 16,000
Unit cost = $7.05 ($112,800/16,000
what is the difference between general and applied ethics
Answer:
The answer is below
Explanation:
Both General ethics and Applied Ethics are part of philosophical knowledge in understanding humans and their society.
Hence, the difference between general and applied ethics is:
General ethics is a philosophical term that is used to describe the theory of values in human activities. It deals with answering the controversial questions of human morality by establishing the idea of good and evil, right and wrong.
On the other hand, Applied Ethics is a term used in philosophy to describe a branch of ethics that is established to answer the issue of moral dilemmas, strategies, and operations in individuals' life, organizations, technology, and state.
In Step 4, the EUP from Step 2 and the cost per EUP from Step 3 are used to assign costs to the:___.
a. units in beginning inventory.
b. units completed and transferred to finished goods.
c. units in ending work in process inventory.
d. units sold.
Indirect labor includes:____.
a. labor of employees working directly on the product.
b. labor of the maintenance employees.
c. labor of the clerical staff.
Answer:
b. units completed and transferred to finished goods.
c. units in ending work in process inventory.
b. labor of the maintenance employees.
c. labor of the clerical staff.
Explanation:
EUP stands for the "equivalent units of production". It is the largest number of the units a factory can produce during the period for a given cost if all the efforts were used for one type of unit only.
The assigned cost relates to the unites that is completed as well as transferred to the finished goods. It also refers to the units in the ending work in the process inventory.
Indirect labor cost is the cost that is associated with the cost of the labors which is not directly associated to the production of goods. It includes the cost of the labor for the clerical staff and also for the maintenance employees.
Two mutually exclusive alternatives are being considered. Both have lives of 10 years. Alternative A has a first cost of $10,000 and annual7-65 benefits of $4500. Alternative B costs $25,000 and has annual benefits of $8800. If the minimum attractive rate of return is 6%, which alternative should be selected
Answer:
Alternative B should be selected since its NPV is higher
Explanation:
year cash flow alternative A cash flow alternative B
0 -10000 -25000
1 4500 8800
2 4500 8800
3 4500 8800
4 4500 8800
5 4500 8800
6 4500 8800
7 4500 8800
8 4500 8800
9 4500 8800
10 4500 8800
discount rate 6% 6%
NPV 23120 39769
The Investments Fund sells Class A shares with a front-end load of 5% and Class B shares with 12b-1 fees of 0.75% annually as well as back-end load fees that start at 5% and fall by 1% for each full year the investor holds the portfolio (until the fifth year). Assume that you have $1,000 to invest and the portfolio rate of return net of operating expenses is 13% annually.
a-1.If you invest in each fund and sell after 4 years, how much will you receive from each sale?(Round your answers to 2 decimal places. Omit the "$" sign in your response.)
Amounts
Class A $
Class B $
a-2. Are Class A or Class B shares the better choice for you?
Class A
Class B
b-1.If you invest in each fund and sell after 12 years, how much will you receive from each sale?(Round your answers to 2 decimal places. Omit the "$" sign in your response.)
Amounts
Class A $
Class B $
b-2.Are Class A or Class B shares the better choice for you?
Class A
Class B
Answer:
The responses to the given choices can be defined as follows:
Explanation:
Assume is the investment. Each original Class A investment is of the net-front unburden. The portfolio will be worth four years from now:
[tex]\$1,000 \times 5\% = \$50 =\$1,000 - \$50 = \$950\\\\ \$950 (1 + 0.13)^4 = \$950 (1.13)^4 = \$950 (1.630474) = \$1,548.95\\\\[/tex]
You will place the total of [tex]\$1,000[/tex] on class B shares, but only [tex]12b-1[/tex]will be paid [tex](13-0.75 = 12.25)[/tex] at a rate of [tex]12.25\%[/tex] and you'll pay a [tex]1\%[/tex]back-end load charge if you sell for a four-year period.
After 4 years, your portfolio worth would be:
[tex]\$1,000 (1 + 0.1225)^4 = \$1,437.66 \\\\ \$1,000 (1.1225)^4 = \$1000 (1.587616) = \$ 1,587.62[/tex]
Their portfolio worth would be: after charging the backend load fee:
[tex]\$1,587.616 \times 0.99 = \$1,571.74 \\\\ Amounts \\\\ Class A \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 1,548.95\\\\ Class B \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 1,571.74 \\\\[/tex]
When the horizon is four years, class B shares are also the best option.
Class A shares would value from a 12-year time frame:
[tex]\$950 (1.13)^{12} = \$950 (4.334523) = \$4,117.80 \\\\[/tex]
In this case, no back-end load is required for Class B securities as the horizon is larger than 5 years.
Its value of the class B shares, therefore, is as follows:
[tex]\$1,000 (1.1225) 12 = \$1,000 (4.001623) = \$4,001.62 \\\\Amounts \\\\\ Class A \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 4,117.80\\\\ Class B \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 4,001.62\\\\[/tex]
Class B shares aren't any longer a valid option in this, prolonged duration. Its impact on class B fees of [tex]0.75\%\ \ 12b-1[/tex]cumulates over a period and eventually outweighs the [tex]5\%[/tex] the burden of class A shareholders.
The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $940,000, and it would cost another $25,000 to install it. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $624,000. The MACRS rates for the first three years are 0.3333, 0.4445, and 0.1481. The machine would require an increase in net working capital (inventory) of $19,000. The sprayer would not change revenues, but it is expected to save the firm $301,000 per year in before-tax operating costs, mainly labor. Campbell's marginal tax rate is 25%.
Required:
a. What is the Year 0 net cash flow?
b. What are the net operating cash flows in Years 1, 2, 3?
c. What is the additional Year 3- cash flow (i.e. after tax salvage and the return of working capital)?
d. If the project's cost of capital is 12%, should the machine be purchased
Answer:
a. Year 0 Net Cash Flows = $984,000
b. We have:
Year 1 net operating cash flows = $306,159
Year 2 net operating cash flows = $332,986
Year 3 net operating cash flows = $261,479
c. Additional Year 3- cash flow = $504,877
d. The machine should be purchased.
Explanation:
We start by first calculating the following:
Initial Investment = Base Price + Modification Cost = $940,000 + $25,000 = $965,000
Useful Life = 3 years
Depreciation in Year 1 = 0.3333 * $965,000 = $321,634.50
Depreciation in Year 2 = 0.4445 * $965,000 = $428,942.50
Depreciation in Year 3 = 0.1481 * $965,000 = $142,916.50
Book Value at the end of Year 3 = $965,000 - $321,634.50 - $428,942.50 - $142,916.50 = $71,506.50
After-tax Salvage Value = Salvage Value - (Salvage Value - Book Value) * Marginal tax rate = $624,000 – ($624,000 - $71,506.50) * 25% = $485,877
Initial Investment in NWC = $19,000
We can now proceed as follows:
a. What is the Year 0 net cash flow?
Year 0 Net Cash Flows = Initial Investment + Initial Investment in NWC = $965,000 + $19,000 = $984,000
b. What are the net operating cash flows in Years 1, 2, 3?
Year 1 net operating cash flows = (Pretax Cost Saving * (1 - tax)) + (tax * Depreciation in year 1) = ($301,000 * (1 – 0.25)) + (0.25 * $321,634.50) = $306,159
Year 2 net operating cash flows = (Pretax Cost Saving * (1 - tax)) + (tax * Depreciation in year 2) = ($301,000 * (1 – 0.25)) + (0.25 * $428,942.50) = $332,986
Year 3 net operating cash flows = (Pretax Cost Saving * (1 - tax)) + (tax * Depreciation in year 3) = ($301,000 * (1 – 0.25)) + (0.25 * $142,916.50) = $261,479
c. What is the additional Year 3- cash flow (i.e. after tax salvage and the return of working capital)?
Additional Year 3- cash flow = NWC recovered + After-tax Salvage Value = $19,000 + $485,877 = $504,877
d. If the project's cost of capital is 12%, should the machine be purchased?
This can be determined from the net present value (NPV) calculated as follows:
NPV = -$984,000 + ($306,159/1.12^1) + ($332,986/1.12^2) + ($261,479/1.12^3) + ($504,877/1.12^3) = $100,287.71
Since the NPV of the machine of $100,287.71 is positive, the machine should be purchased.
At the beginning of the month, the Forming Department of Martin Manufacturing had 29,000 units in inventory, 40% complete as to materials, and 15% complete as to conversion. During the month the department started 98,000 units and transferred 100,000 units to the next manufacturing department. At the end of the month, the department had 27,000 units in inventory, 90% complete as to materials and 60% complete as to conversion. How many units did the Forming Department start and complete in the current month
Answer:
71,000 units.
Explanation:
Units started and completed = Units Completed - Units in Opening Inventory
therefore
Units started and completed = 100,000 units - 29,000 units = 71,000 units
thus,
Units started and completed in the current month for the Forming Department is 71,000 units.
This type of budgeting technique is commonly used because it provides a budget that is tied directly to the company's strategy and tactics for the year. While it is demanding and calls for a lot of information up front, it is one of the most logical ways to set a budget for marketing efforts. This budgeting method is called:
Answer:
Objective and task.
Explanation:
A budget is a financial plan used for the estimation of revenue and expenditures of an individual, organization or government for a specified period of time, often one year. Budgets are usually compiled, analyzed and re-evaluated on periodic basis. The benefits of having a budget is that it aids in setting goals, earmarking revenues and resources, measuring outcomes and planning against contingencies.
The budgeting method described in the question is called objective and task. It is typically used by various organizations or companies due to the fact that, it's tied directly to the strategy and tactics of a company on an annual basis. Also, it is used to set a budget for marketing efforts while anticipating on informations about the company.
The minimum amount of total quality costs is achieved when the: A. marginal voluntary expenditures are less than the marginal savings on failure costs. B. marginal voluntary expenditures equal the marginal savings on failure costs. C. marginal voluntary expenditures exceed marginal failure costs. D. none of the other answers are correct.
Answer:
B. marginal voluntary expenditures equal the marginal savings on failure costs.
Explanation:
In Accounting, Costing is the measurement of the cost of production of goods and services by assessing the fixed costs and variable costs associated with each step of production.
The various type of costs involved in the manufacturing or business processes are;
1. Product cost is the expenses incurred when a product is sold.
2. Period cost refers to the period in which costs are incurred.
3. Fixed cost refers to costs that remains constant over variations in production activity, irrespective of amount of goods.
3. Variable cost refers to cost which are the same per unit of production but vary directly with level of output.
4. Direct costs refer to the costs that are peculiar to a particular department or area while indirect cost can't be traced to any.
5. Manufacturing overhead are all indirect cost required in producing a good that isn't associated with direct materials or direct labor.
A total quality cost include the overall cost of producing products with poor qualities. The minimum amount of total quality costs is achieved when the marginal voluntary expenditures equal the marginal savings on failure costs.
You are given the following information with respect to a bond: par value: 1000 term to maturity: 3 years annual coupon rate 6% payable annually You are also given that the one, two, and three year annual spot interest rates are 7%, 8%, and 9% respectively. The bond is sold at a price equal to its value. Calculate the annual effective yield rate for the bond i.
Answer:
Tha annual effective yield rate for the bond is:
= 6.2%
Explanation:
a) Data and Calculations:
Bond par value = $1,000
Annual coupon rate = 6%
Annual spot interest rates = 7%, 8%, and 9% for year 1, year 2, and year 3 respectively
Current value of bond = $970 ($1,000 * 99% * 99% * 99%)
Annual coupon payments = $60 * 3 = $180
Effective rate for the three years = $180/$970 * 100 = 18.6%
Annualized effective yield rate = 6.2% (18.6%/3)
OR
Annualized effective yield rate = (Annual coupon payments/Current value of bonds)
= 6.2% ($60/$970)
Differential Analysis for Further Processing
The management of Dominican Sugar Company is considering whether to process further raw sugar into re-fined sugar. Re-fined sugar can be sold for $2.20 per pound, and raw sugar can be sold without further processing for $1.40 per pound. Raw sugar is produced in batches of 42,000 pounds by processing 100,000 pounds of sugar cane, which costs $0.35 per pound of cane. Re-fined sugar will require additional processing costs of $0.50 per pound of raw sugar, and 1.25 pounds of raw sugar will produce 1 pound of re-fined sugar.
1. Prepare a differential analysis as of March 24 to determine whether to sell raw sugar (Alternative 1) or process further into refined sugar (Alternative 2)
2. Briefly report your recommendations.
Answer:
Dominican Sugar Company
1. Differential Analysis as of March 24:
Raw Sugar Refined Sugar
Alternative 1 Alternative 2 Difference
Sales volume 42,000 33,600
Selling price per pound $1.40 $2.20
Sales revenue $58,800 $73,920 $15,120
Materials requirement 100,000 42,000
Output from process 42,000 33,600
Unit cost $0.35
Cost of materials $35,000 $35,000
Cost of further refining $21,000
Total costs $35,000 $56,000 ($21,000)
Net income $23,800 $17,920 ($5,880)
2. Based on cost implications, Dominican Sugar should not refine the raw sugar further. Further refining will cause the company $5,880 in lost income. This means that it costs more to refine the raw sugar.
Explanation:
a) Data and Calculations:
Raw Sugar Refined Sugar
Alternative 1 Alternative 2
Sales volume 42,000 33,600 (42,000/1.25)
Selling price per pound $1.40 $2.20
Sales revenue $58,800 $73,920
Materials requirement 100,000 42,000
Output from process 42,000 33,600 (42,000/1.25)
Unit cost $0.35
Cost of materials $35,000 $35,000
Cost of further refining $21,000 (42,000 * $0.50)
Total costs $35,000 $56,000
Net income $23,800 $17,920
Currently, Forever Flowers Inc. has a capital structure consisting of 20% debt and 80% equity. Forever's debt currently has an 7% yield to maturity. The risk-free rate (rRF) is 3%, and the market risk premium (rM - rRF) is 8%. Using the CAPM, Forever estimates that its cost of equity is currently 13.5%. The company has a 40% tax rate. What is Forever's current WACC
Answer:
WACC = 11.6%
Explanation:
The weighted average cost of capital (WACC) is the average cost of all the various sources of long-term finance used by a business weighted according to the proportion which each source of finance bears to the the entire pool of fund.
To calculate the weighted average cost of capital, follow the steps below:
Step 1: Calculate cost of individual source of finance
Cost of Equity= 13.5%
After-tax cost of debt:
= (1- T) × before-tax cost of debt
= 7%× (1-0.4)= 4.2%
Step 2 : calculate the proportion or weight of the individual source of finance . (This already given)
Equity = 80%
Debt= 20%
Step 3:Work out weighted average cost of capital (WACC)
WACC = ( 13.5%× 80%) + ( 4.2%× 20%) = 11.64%
WACC = 11.6%
Division A makes a part with the following characteristics: Production capacity in units 34,000 units Selling price to outside customers $ 21 Variable cost per unit $ 13 Total fixed costs $ 105,800 Division B, another division of the same company, would like to purchase 10,000 units of the part each period from Division A. Division B is now purchasing these parts from an outside supplier at a price of $18 each. Suppose that Division A is operating at capacity and can sell all of its output to outside customers at its usual selling price. If Division A agrees to sell the parts to Division B at $18 per unit, the company as a whole will be: rev: 10_24_2020_QC_CS-237557 Multiple Choice worse off by $30,000 each period. better off by $30,000 each period. worse off by $60,000 each period. There will be no change in the status of the company as a whole.
Answer:
Division A
If Division A agrees to sell the parts to Division B at $18 per unit, the company as a whole will be:
worse off by $30,000 each period.
Explanation:
a) Data and Calculations:
Production capacity of Division A = 34,000
Selling price per unit to outside customers = $21
Variable cost per unit = $13
Total fixed costs = $105,800
Order from Division B = 10,000
Price that Division B purchases from outside supplier = $18
Selling to Division B instead of selling to outside customers will result in a loss of $3 ($21 - $18) per unit
The total loss = $30,000 ($3 * 10,000)
Under the consumer Credit Protection Act, if you report your credit card
lost or stolen within 30 days, your liability is limited to:
A. $25
B. $50
C. $100
D. $200
What is Gnp gap? in economics
Answer:
Gross National Product (GNP) is the total value of all finished goods and services produced by a country's citizens in a given financial year, irrespective of their location.
Hope that helps! :)
Explanation:
