Answer:
1. buy in Los Angeles, sell in Frankfurt
2. buy in Frankfurt; sell in Los Angeles
3. remain unchanged
Explanation:
Note that as for me working for the bank I'm buying Euros, in turn to sell to receive the Dollar.
1. Thus, in Los Angeles the exchange rate indicates a profit if it is bought there and sold in Frankfurt where the Euros values more than it does in Los Angeles.
2. For the foreign exchange traders who already own Euros and want to buy dollars, they would make a profit by buying Dollars in Frankfurt where the Euros has greater and value and selling the bought dollars in Los Angeles where the dollar has greater value.
3. This is the case because there's a balance in demand as a result of the arbitrage trading.
At the end of the year, the records of NCIS Corporation provided the following selected and incomplete data: Common stock ($10 par value); no changes in account during the year. Shares authorized: 210,000. Shares issued: _______ (all shares were issued at $15 per share; $2,130,000 total cash collected). Treasury stock: 4,000 shares (repurchased at $22 per share). The treasury stock was acquired after a stock split was announced. Net income: $262,200. Dividends declared and paid: $140,760. Retained earnings beginning balance: $565,000.Required: 1. Complete the following tabulation: Shares authorized Shares issued Shares outstanding 2. What is the balance in the Additional Paid-in Capital account. Additional paid-in capital 3. What is earnings per share (EPS). (Round your answer to 2 decimal places.) Earnings per share
Answer:
1) Shares authorized: 210,000.
Shares issued: 142,000 shares
Shares outstanding: 135,000 shares
2) Balance in Additional paid in Capital is $710,000
3) Earning Per Share is $1.94 per share
Explanation:
1) Shares Authorized = 210,000 shares
Shares issued = Cash Collected ÷ Issue Price
= $2,130,000 ÷ $15 per share = 142,000
Shares outstanding = Shares issued - Treasury Stock
= 142,000 shares - 7,000 shares
= 135,000 shares
2) Balance in Additional paid in Capital = (Issue Price - Par Value) × Shares issued
= ($15 - $10) × 142,000 shares
= $710,000
3) Earning Per Share = Net Income ÷ Shares Outstanding
= $262,200 ÷ 135,000 shares
= $1.94 per share
1. The Authorized shares refers to shares that a firm is allowed by law to issue to the public.
The Authorized shares = 210,000 sharesThe Issued shares refers to the shares that the company offers to the public for subscription.
The Issued shares = Cash Collected / Issue Price = $2,130,000 / $15 per share = 142,000 sharesThe outstanding shares refers to the remaining shares after the share repurchase.
The outstanding shares = Shares issued - Treasury Stock = 142,000 shares - 7,000 shares = 135,000 shares2. Balance in Additional paid in Capital = (Issue Price - Par Value) × Shares issued
Balance in Additional paid in Capital = ($15 - $10) * 142,000 shares
Balance in Additional paid in Capital = $5 * 142,000 shares
Balance in Additional paid in Capital = = $710,000
3. Earning Per Share = Net Income / Shares Outstanding
Earning Per Share = $262,200 / 135,000 shares
Earning Per Share = $1.94 per share
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The IS curve represents Select one: a. the single level of output where financial markets are in equilibrium. b. the combinations of output and the interest rate where the money market is in equilibrium. c. the single level of output where the goods market is in equilibrium. d. the combinations of output and the interest rate where the goods market is in equilibrium.
Answer:
D. the combinations of output and the interest rate where the goods market is in equilibrium.
Explanation:
The IS curve means investment-savings curve.
The IS curve is the combinations of output and the interest rate where the goods market is in equilibrium.
It is a curve which shows the different combinations of income (Y) and the real interest rate (r) such that the market for goods and services is in equilibrium.
This means that, every point on the IS curve is an income/real interest rate pair (Y,r) such that the demand for goods is equal to the supply of goods(Qs=Qd) or equivalently, the desired national saving is equal to desired investment.
Answer:
d. the combinations of output and the interest rate where the goods market is in equilibrium.
Explanation:
British economist John Hicks was the first to introduce the IS-LM model in 1937, where IS stands for Investment-Savings and LM stands for Liquidity preference-Money supply. It is a Keynesian macroeconomic model that gives the relationship between the market for economic goods (Investment-Savings) and the money market (Liquidity preference-Money supply). The IS-LM model is a graphical representation of Keynesian economic theory.
The IS curve represents the combinations of output and the interest rate where the goods market is in equilibrium. When there's an increase in government spending, the IS curve would shift to the right on the graph.
Also, when there's an increase in the interest rate, it causes investment spending to decrease as the IS curve shifts to the left with respect to economy.
The CEO of Lexington decides to impose a transfer price since the two divisions cannot agree. She chooses the highest feasible price. Her reasoning is that selling for a high price is better for Lexington's profit. Is the CEO's reasoning sound? Explain why or why not.
Answer: Not Sound as Company does not benefit as a Whole.
Explanation:
This question alludes to the presence of Divisions in a company tasked with producing different segments of a good.
One Division makes a segment of the good and transfers it for a price to the other division so that they may be able to show Revenue on their books.
The reasoning of the CEO of Lexington is flawed because if she chooses the highest feasible Transfer Fee for the goods it will be good for the Division doing the Transferring because they make more revenue.
However, it will increase the cost of those being transferred to by the same amount that it increase the revenue of the Division transferred from.
As a result, the increase in Cost and the Increase in Revenue in the two divisions will cancel each other out meaning that the company did not benefit.
Your firm has the opportunity to invest $75,000 in a new project opportunity but due to cash flow concerns, your boss wants to know when you can pay back the original investment. Using the discounted payback method, you determine that the project should generate inflows of $30,000, $30,000, $25,000, $20,000, and $20,000 respectively for an expected five years after completion of the project. Your firm's required rate of return is 10%. How long will it take to pay back the initial project investment
Answer:
It will take the project 3 years 3.6 months to pay back the initial investment.
Explanation:
The discounted payback period is the length of time of time it will take the present value of the cash inflows to recoup its initial cost.
To compute the discounted payback period we will follow the steps below:
Step 1: Compute the present value
Compute the Present Value of the cash inflows
Year Present Value Cumulative PV
0 75,000 (75,000)
1 30,000 × 1.1^(-1)= 27272.72 (47,727.27)
2 30,000 × 1.1^(-2) = 24793.38 (22,933.88)
3. 25,000 × 1.1^(-3)= 18782.87 (4,151.0)
4. 20,000 × 1.1^(4) = 13,660.26911
5. 20,000 × 1.1^(-5)= 12,418.42646
Step 2 : compute the payback period using the present value of cash flows
Discounted payback period = 3 years + ( 4,150/13,660)× 12 months
= 3 years 3.6 months
It will take the project 3 years 3.6 months to pay back the initial investment.
The key difference between an agency shop agreement and an open shop agreement is that in an agency shop:_____________
a) workers must agree not to join a union in order to keep their jobs while in an open shop workers are free to join a union if they wish, but they are not required to do so.
b) the union is restricted to a limited number of employees who perform specific types of jobs, but in an open shop membership in the union is available to all workers.
c) workers must join the union within a stipulated time period (usually 30, 60, or 90 days) in order to keep their jobs, but in an open shop the workers are not required to join the union.
d) workers who do not join the union must pay a fee or regular dues, while in an open shop workers who choose not to join the union do not have to pay any union fees or dues.
Answer:
A
Explanation:
The key difference between an agency shop agreement and an open shop agreement is that in an agency shop workers must agree not to join a union in order to keep their jobs while in an open shop workers are free to join a union if they wish, but they are not required to do so. Thus, option (a) is correct.
What is agreement?An agreement is a written agreement between two or more persons to do something. To make a legally binding commitment, two or more parties must agree on the parameters of the agreement. The terms and conditions are always included in the signed agreement.
The fundamental distinction between the agent shop arrangement and the flow shop agreement is that the employees are in the shop agreement but are not union members. In the agency shop agreement, the order to join a union was the focal point, and the shop staff were members of the union.
As a result, the significance of the agreement are the aforementioned. Therefore, option (a) is correct.
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In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period. You and your new spouse each bring home $1400 each month after taxes and other payroll deductions. By living frugally, you intend to live on just one paycheck and save the other in a mutual fund yielding 7.83% compounded monthly. How long will it take to have enough for a 20% down payment on a $165,000 condo in the city? (Round your answer to two decimal places.)
Answer:
1.93618 or 1.94 years
Explanation:
Monthly household income = 1400(Since you are using just one spouse's income as savings)
Down payment Needed = 20% of $165,000 = $33,000
Interest rate = 7.83% compounded monthly.
This can be easily solved using a financial calculator by inputting following variables
N = this is what we have to calculate.
Interest rate = 7.83%/12 = 0.6525% -----> since it is compounded monthly.
Present Value = 0
PMT = -1400(This is what you intend to invest). Ensure that you put a negative sign here. Because "Cash out flow is treated as negative and cash inflow as positive)
Future Value = 33,000(The required down payment on the house)
When you solve for N, you get the answer as 23.23415 months. To get it in years, divide it by 12.
23.23415/12 = 1.93618 or 1.94 years
Alternatively, you can use the formula =NPER (0.6525%,-1400,0,33000,0) in Excel to obtain the number of months as 23.23415. 0.6525% is the monthly interest rate, -1400 is the payment per period, 0 is the Present Value, 33000 is the required down payment, and the last zero is telling excel to calculate everything at the end of the period
On January 1, 2021, Splash City issues $340,000 of 9% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. Assuming the market interest rate on the issue date is 10%, the bonds will issue at $310,831.
On January 1 2021, Splash City issues $390,000 of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year.
Assuming the market interest rate on the issue date is 6%, the bonds will issue at $419,013.
Required:
a. Record bonds issued at a discount and related semiannual interest.
Answer:
Dr cash $310,831
Dr discount on bonds payable $29,169
Cr bonds payable $340,000
On 30th June 2021
Dr interest expense $ 15,542
Cr cash $15,300
Cr discount on bonds payable $242
On 31st December 2021
Dr interest expense $ 15,554
Cr cash $15,300
Cr discount on bonds payable $254
Explanation:
The bond issued at a discount is the first bond whose cash proceeds of $310,831 were less than face value of $340,000.
Discount=face value -cash proceeds=$340,000-$310,831=$29,169.00
Find attached bond amortization schedule.
Here, we are preparing the journal entry to record bonds issued at a discount and related semiannual interest for Splash City.
Journal Entries
Date Account Titles and Explanation Debit Credit
1-Jan-21 Cash $310,831
Discount on issue of bond $29,169
To Bond Payable $340,000
(To record issue of bond at discount)
Date Account Titles and Explanation Debit Credit
30-Jun-21 Interest expense $15,542
($310,831*10% * 6/12)
To Discount on issue of bond $242
To Cash $15,300
(To record interest expense and discount amortization)
Date Account Titles and Explanation Debit Credit
31-Dec-21 Interest expense $15,554
[($310,831+$242)*10%*6/12)
To Discount on issue of bond $254
To Cash $15,300
(To record interest expense and discount amortization)
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A newly issued bond pays its coupons once annually. Its coupon rate is 5.7%, its maturity is 20 years, and its yield to maturity is 8.5%. a. Find the holding-period return for a 1-year investment period if the bond is selling at a yield to maturity of 7.5% by the end of the year. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Answer:
16.56%
Explanation:
Intial Price, P0=753.03
when n=20, pmt=57 ,fv=1,000 ,i=8.5
Next year price = P1= $820.74
when n=19, pmt= 57, fv =1,000, i= 7.5
HPR=$57+(820.74-75303) / $753.03
HPR= 0.165611 = 16.56%
The holding period return is 16.56%
When two people are talking, they want the listener to understand what they are saying. They both want to be effective communicators. The same is true of the salesperson who wants the buyer to listen to a sales presentation. What can the salesperson do to help ensure that the buyer is listening
A company began the year with $500 in raw materials and purchased $10,250 more during the year. If the company has $725 in raw materials at the end of the year, then they would report direct materials used of $_______on the schedule of cost of goods manufactured.
A company reported Cost of goods manufactured of $50,000 on the statement of cost of goods manufactured. If the beginning balance in Work in process inventory was $20,000 and the ending balanc was $25,000, then the total manufacturing costs were $______.
A company began the year with $500 in raw materials and purchased $10,250 more during the year. If the company has $725 in raw materials at the end of the year, then they would report direct materials used of $_______on the schedule of cost of goods manufactured.
Answer:
$10,025
Explanation:
Given that,
Company's Beginning Raw materials = $500
Purchases = $10,250
Company's Ending Raw Materials = $725
Hence,
Direct Materials Used:
= Beginning Raw materials + Purchases - Ending Raw Materials
= $500 + $10,250 - $725
= $10,025
Clarissa is unable to do her job efficiently because her supervisor often interrupts her work to ask trivial questions. The supervisor can send an email instead of disrupting Clarissa's work. This scenario depicts _____.
Answer:
the use of an incorrect communication medium
Explanation:
In this scenario the supervisor keeps disrupting Clarissa's work by speaking with her and asking trivial questions.
If the supervisor uses the email instead of verbally asking questions this will remove distractions Clarissa is having in her work.
This depicts use of incorrect medium of communication.
When a wrong medium is used to communicate it causes inefficient delivery of the message and can even cause the recipient to not respond.
For example if instructions are to be given to staff for immediate implementation, the most effective way is to set up a meeting feedback can be gotten. This ensures all challenges to implementation are dealt with.
If however the instructions are placed on a notice board, some employees may not read them.
Michael is a senior in high school and wants to major in a business-related class when he goes to college. Michael plans to select a variety of courses from the School of Business curriculum yet not select a major. After selecting courses based upon availability and interest he earns a sufficient number of credits within this chosen area that enables him to graduate with a major in marketing. Michael has engaged in:
Answer:
Domain planning
Explanation:
Maggie must decide if she wants to open a start-up or work as an economics tutor. The business she is considering is risky because with 60% probability she earns $300 and with 40% probability she earns nothing. As an economics tutor she earns $160 with certainty. She has an initial wealth of $100 and her utility function is
Answer: The answer is provided below
Explanation:
Here is the complete question:
Maggie must decide if she wants to open a start-up or work as an economics tutor. The business she is considering is risky because with 60% probability she earns $300 and with 40% probability she earns nothing. As an economics tutor she earns $160 with certainty. She has an initial wealth of $100 and her utility function is
U(C) = ✓C
a. What is Maggie's expected income from her start up?
b. What is Maggie's expected utility for opening the start up?
c. What is Maggie's certainty equivalent associated with opening the start up?
a. Expected income = 60% of ($100 + $300) + (40% of $100)
= (0.6 × 400) + (0.4 × 100)
= $240 + $40
= $280
Maggie's expected income from her start up is $280.
b. Expected utility
= (60% × ✓100 + ✓300) + (40% × ✓100)
= (0.6 × ✓400) + (0.4 × 10)
= (0.6 × 20) + (0.4 × 10)
= 12 + 4
= 16
Maggie's expected utility for opening the start up is 16
c. Certainty equivalent
U(C) = ✓C
Since expected utility= 16
✓C = 16
C = 16²
C = 16 × 16
= 256
Maggie's certainty equivalent associated with opening the start up is 256.
The company produced 5,600 units during the month.A total of 14,700 pounds of material were purchased at a cost of $41,160.There was no beginning inventory of materials on hand to start the month; at the end of the month, 2,940 pounds of material remained in the warehouse.During March, 3,000 direct labor-hours were worked at a rate of $19.50 per hour.Variable manufacturing overhead costs during March totaled $6,950. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for March is:
Answer:
-$3,500 Unfavorable
Explanation:
For computation of materials quantity variance for March firstly we need to find out the standard quantity and actual quantity which is shown below:-
Standard quantity = Production units × Standard quantity of direct material
= 5,600 × 2.0
= 11,200
and
Actual quantity = Total pounds of material - Ending pounds of material
= 14,700 - 2,940
= 11,760
Now, we will put these value by using the formula of material quantity variance for march which is shown below:
Materials quantity variance for March = (Standard quantity - Actual quantity) × Standard price
= (11,200 - 11,760) × $6.25
= -$560 × $6.25
= -$3,500 Unfavorable
The unfavorable variance is the variance at which the actual cost is more than the standard cost and the same is to be considered
Discuss the statement: ‘Silence is Golden’ in approximately a hundred 300 words, in
relation to ethics in communicating at the workplace.
Answer:
Silence is golden
Silence is very peace word and it is describing as the golden word. It is the very popular proverb. In the common word we say, it is the better word for everyone to make silence because, without any important topic, unnecessary talk creates bad effort, so it better to remain in the silent zone.
‘Silence is golden’ is the great idiom used by the most nations. Silence is the best policy and everyone have to better understand the value of the make silence.
‘Speech is silver, Silence is golden’ is the full phrase. It is better to maintain the quiet and silent and not say nothing. One should think before saying any words.
There is the comparison in both words listen and silent is same letters but arranged differently.
Latin word
The Latin version of “Silence is Golden” is “silentium est aurum”. “Silentium’ means “Silence” and “aurum” means “Gold or something made of gold”.
It is the tendency of human to talk more and to listen less, the main cause of it is that we have forgotten the art of waiting and allowing ourselves to listen to other viewpoints.
Explanation:
When the person is a silent, they should prefer to keep quiet, so it will be the great think for them. It is abstaining from speaking for the people.
The understanding and learned people say something only that time when talking are necessary and meaningful.
On the other hand, people say that little thing, which expresses the knowledge of them and where it needs to speak.
The one thing is always should in our mind is that whenever you want to speak something, so before saying any word you have to understand the own word.
It displays great ability of everyone, so make good control during speaking and speak related to the subject, what they want to say.
Value of silence
The value of silence is great, especially when it is desirable.
You don’t need to speak every time to create an impression.
Sometimes, people leave better impressions who display the strength of character by remaining quiet and calm during challenging moments.
Remember, that “words are like arrows, you can’t take them back after you let them back.”
Why make silence
When we are silent and waiting, something great inside us keeps on growing, and silence gives birth to creativity, moreover the more we keep silent the less the heart that can be hurt.
There are times when silence become the most potential way of communication and it’s more effective than words, for instance sometimes a silent angry look from our parents enough to let us feel their fury and agony, and this angry look capable of making us behave better than harsh reprimand or scolding.
Lovers all over the world prefer to communicate with silent, It’s more romantic and it’s a famous telepathy between two people who have strong feelings for each other.
Undeniably, silence needs a special kind of power and authority of mind, to say nothing is more difficult than expressing anger, happiness, love, betrayal with words.
That’s why it’s a quite difficult conflict between a man and his mind to a long journey of controlling our senses and reactions.
5. Suppose that you are the governor of Istanbul and trying to decide whether you should support the third Bosporus Bridge construction project. The project is estimated to take 5 years to complete. The project will require $50 million in construction materials per year and $20 million in labor costs per year. In addition, the project will disrupt transportation within the city for the duration of the construction. The transportation disruption lengthens transport times for 1 million workers by 20 hours a year. The project, when finished, will ease transportation within the city. Each of the 1 million workers will have their transport time reduced by 60 hours a year as compared to the pre-construction transport time for 10 years. Assume that all workers are paid $10 per hour (in other words, one hour of a worker lost/gained is worth $10), the discount rate is 5% and the benefits of the project is accrued between years 6 and 15. (a) (10 points) Show the yearly benefits and costs of this project on a table. (b) (10 points) Calculate the present value of the net benefits of this project.
Answer:
Explanation:
Part a)
Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Benefits $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000
Costs
Construction materials $50,000,000 $50,000,000 $50,000,000 $50,000,000 $50,000,000
Labor costs $20,000,000 $20,000,000 $20,000,000 $20,000,000 $20,000,000
Transport disruption cost $200,000,000 $200,000,000 $200,000,000 $200,000,000 $200,000,000
Net benefit -$270,000,000 -$270,000,000 -$270,000,000 -$270,000,000 -$270,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000
Part b)
Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Benefits $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000
Costs
Construction materials $50,000,000 $50,000,000 $50,000,000 $50,000,000 $50,000,000
Labor costs $20,000,000 $20,000,000 $20,000,000 $20,000,000 $20,000,000
Transport disruption cost $200,000,000 $200,000,000 $200,000,000 $200,000,000 $200,000,000
Net benefit -$270,000,000 -$270,000,000 -$270,000,000 -$270,000,000 -$270,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000 $600,000,000
P V F at 5% $0.9524 $0.9070 $0.8638 $0.8227 $0.7835 $0.7462 $0.7107 $0.6769 $0.6447 $0.6140 $0.5848 $0.5570 $0.5305 $0.5052 $0.4811
P V of net benefit -$257,148,000 -$244,890,000 -$233,226,000 -$222,129,000 -$211,545,000 $447,720,000 $426,420,000 $406,140,000 $386,820,000 $368,400,000 $350,880,000 $334,200,000 $318,300,000 $303,120,000 $288,660,000
Present value of net benefit = sum of P V of net benefit = $2,461,722,000
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The Stone Harbor Fund is a closed-end investment company with a portfolio currently worth $430 million. It has liabilities of $8 million and 10 million shares outstanding. If the fund sells for $40 a share, what is its premium or discount as a percent of NAV
Answer:
5.21%
Explanation:
The Stone Harbor Fund
NAV= Investment in portfolio - liabilities/ Numbers of share outstanding
(430-8)/10
=422/10
=$42.2
Discount will be : $42.2 -40 shares
=$2.2
Hence:
$2.2/$42.2
=5.21%
Therefore the premium or discount as a percent of NAV will be 5.21%
Angelena files as a head of household. In 2018, she reported $52,300 of taxable income, including a $10,000 qualified dividend. What is her gross tax liability, rounded to the nearest whole dollar amount
Answer:
Her gross tax liability is $4,882
Explanation:
According to given data out of $52,300 , $10,000 is qualified dividend so remaining $42,300 will be taxed at normal rate.
Therefore, tax on ordinary income = $1,360 + ($42,300-$13,700)*12% =
tax on ordinary income =$4,792
In qualified dividend is taxed at 0% if income upto $51,700.
Hence excess $52,300-$51,700) will be taxed at 15%
Hence tax on dividend = $600*15% = $90
Hence total tax = $4,792+$90 = $4,882
Her gross tax liability is $4,882
Assume that you own an annuity that will pay you $15,000 per year for 12 years, with the first payment being made today. You need money today to start a new business, and your uncle offers to give you $156,000 for the annuity. If you sell it, what rate of return would your uncle earn on his investment
Answer: 2.72%
Explanation:
An annuity is a series of payments that is made at equal intervals. Examples are monthly home mortgage payments, regular deposits to a savings account, pension payments.
Number of payment period (NPER) = 12 years
Payment per period (PMT) = $15000
Amount needed, PV = $156000
The formula for an annuity is calculated as:
P = PMT x ((1 – (1 / (1 + r) ^ -n)) / r)
= Rate(12,15000,-156000,1)
Rate = 2.72%
The Hasting Company began operations on January 1, 2013 and uses theFIFO method in costing its raw material inventory. An analyst is wondering what net income would have been if the company had consistently followed LIFO (instead of FIFO) from the beginning, 1/1/2013. He has the following information available to him:What would net income have been in 2014 if Hastings had used LIFO since 1/1/2013?a) -$ 110,000 b) -$ 150,000 c) -$ 170,000 d) -$ 230,000
Answer:
b) $ 150,000
Explanation:
Calculation of Hasting Company net income in 2014
Particulars Amount ($)
Pretax Income under FIFO for 2014 170,000
Less:
12/31/2014 Final Inventory under FIFO 270,000
Add:
12/31/2014 Final Inventory under LIFO 210,000
Add:
12/31/2013 Final Inventory under FIFO 240,000
Less:
12/31/2013 Final Inventory under LIFO 200,000
Pretax Income under LIFO for 2014 150,000
Sams Job Shop buys one part- Tegdiws for use in its production system. The parts are needed throughout the entire 365-day year. Tegdiws are used at a relatively constant rate and are ordered whenever the remaining quantity drops to the reorder level. Data for the product is as follows:
ITEM TEGDIW WIDGET
Annual demand 10,000 5,000
Holding cost (% of item cost) 20% 20%
Setup or order cost $ 150.00 $ 25.00
Lead time 4 weeks 1 weeks
Safety stock 55 units 5 units
Item cost $ 10.00 $ 2.00
Required:
What is the inventory control system for Tegdiws? That is, what is the reorder quantity and the reorder point for Tegdiws?
Answer:
The inventory control system for Tegdiws is 1224.74 Units, the re-order point for Tegdiws is 824.24 Units.
The economic order quantity is also called the inventory control system for Tegdiws.
Explanation:
Solution
Given that:
Now
For Tegdiws Company the following information is given below:
The Annual demand = 10,000
The cost of item = $10.00
The lead time (L)= 4 weeks
The safety cost = 55 units
The ordering cost (S)= $150.00
The holding cost (H) = 20%
The economic order quantity is referred to as the inventory control system for Tegdiws
Thus, we find the inventory control system for Tegdiws which is given below:
EOQ =√ 2DS/h
=√2*10000 *150/2
=1224.74 Units
The next step is to calculate the re-order point for Tegdiws company which is computed below:
R = dL + safety stock
Where
d = This is the demand done weekly
which is,
d = 10000/52
=192.31
Thus,
R = (192.31 * 4) +55
= 120 + 11
=824.24 Units.
Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next nine years, because the firm needs to plow back its earnings to fuel growth. The company will pay a dividend of $18 per share exactly 10 years from today and will increase the dividend by 6 percent per year thereafter. If the required return on this stock is 13 percent, what is the current share price
Answer:
The current share price $85.60
Explanation:
Share Price is the present value of all the future dividends associated with that share.
Use following formula to calculate the value of share at year 9.
Price of share at year 9 = Dividend / ( Required rate of return - growth rate )
Price of share at year 9 = $18 / ( 13% - 6% )
Price of share at year 9 = $257.14
The Current Price of the bond can be calculated by discounting the Price of share at year 9.
Current Price = Price of share at year 9 x ( 1 + r )^-n
Current Price = $257.14 x ( 1 + 13% )^-9
Current Price = $85.60
A popular cellular telephone provider offers its customers the following data plan: the first 4 gigabytes of data cost $10 each, and each additional gigabyte of data costs $20. Suppose the typical consumer has $100 to spend on gigabytes of data (D) or chocolate bars (C) which cost $1 each.
Required:
a. How many gigs of data is the typical customer likely to use?
b. Does your answer depend critically on the steepness or flatness of the typical customer’s indifference curves? Explain.
Answer:
a. 7 gigabytes
b. My answer depends critically on the steepness of the indifference curve
Explanation:
If the first 4 gigabytes of data cost $10 each, and each additional gigabyte of data costs $20, then the customer uses
4 gigabytes for $40 + 3 gigabytes for $20 each = 7 gigabytes of data with $100.
An indifference curve shows the combination of two goods that give the consumer equal satisfaction and utility. The indifference curve is typically a graph that has a downward sloping convex to the origin.
My answer depends critically on the steepness of the indifference curve
Ben Collins plans to buy a house for $281,000. If that real estate is expected to increase in value by 8 percent each year, what will its approximate value be seven years from now? Use Exhibit 1-A. (Round time value factor to 3 decimal places and final answer to the nearest whole number.)
Answer:
$ 481,634.00
Explanation:
The approximate value of the property in seven years's time can be determined by using the future value formula given below:
FV=PV(1+r)^n
PV is the current value of the house which is the cost of $281,000
r is the rate of appreciation in value yearly which is 8%
n is the number of years in which the property is expected to appreciate
FV=$281,000*(1+8%)^7=$ 481,584.62
Alternatively:
FV=PV*annuity factor of 8% in year 7
annuity factor is 1.714
FV=$281,000*1.714=$481,634.00
Dickinson Company has $11,820,000 million in assets. Currently, half of these assets are financed with long-term debt at 9.1 percent and a half with the common stock having a par value of $8. Ms. Smith, Vice President of Finance, wishes to analyze two refinancing plans, one with more debt (D) and one with more equity (E). The company earns a return on assets before interest and taxes of 9.1 percent. The tax rate is 40 percent. Tax-loss carryover provisions apply, so negative tax amounts are permissible.
How would each of these plans affect earnings per share? Consider the current plan and the two new plans. (Round your answers to 2 decimal places.)
Answer:
Current Plan Plan D Plan E
Earnings per share (EPS) 0.44 0.34 0.04
Explanation:
I-Current Plan :
Total assets $11,820,000 million
Total debt 50% $11,820,000
= $5,910,000 million
Total equity
= $5,910,000 million
Number of shares
5910000/8= 738750 million
Current Plan:
Return on asset before interest and tax is 9.1%
= 11820000*9.1%
=$1075620 million
Less Interest paid to debt holders 9.1%
=5910000*9.1%
= ($537810) million
Less Tax 40%
=(1075620-537810)*40%
= ($215124)million
Available Net Income to equity shareholder
$322686 million
EPS=322686/738750
= 0.44
II-Plan D
Total assets= $11,820,000 million
Total debt= (50% ×11,820,000)+2955000
= $8865000 million
Total equity
5910000 - (369375*8)
=5910000-2955000
= $2955000 million
Number of shares =
=2955000/8
=369375 million
Plan D :
Return on asset before interest in which tax is given as 9.1%
= 11820000*9.1%
=$1075620 million
Less Interest paid to debt holders 9.1% =5910000*9.1%
= ($537810) million
Less Interest paid to debt holders 11.1%
=295500*11.1%
= ($328005) million
Less Tax40%
=(1075620-537810-328005)*40%
($83922)million
Net Income available to equity shareholder $125883 million
EPS=
=125883/369375= 0.34
III Plan E :
Total assets= $11,820,000 million
Total debt
= 5910000-2955000
=$2955000 million
Total equity
= 5910000 + (369375*8)
=5910000+2955000
= $8865000 million
Number of shares =8865000/8
=1108125 million
Plan E :
Return on asset before interest and tax is given as 9.1%
= 11820000*9.1%
=$1075620 million
Less Interest paid to debt holders 9.1% =2955000*9.1%= ($268905) million
Less Tax 40%
=(1075620-268905)*40% ($322686)million
Net Income available to equity shareholder $484029 million
EPS
=484029/1108125= 0.04
Current Plan Plan D Plan E
Earnings per share (EPS) 0.44 0.34 0.04
A firm wishes to shut down an office and fire 100 employees. The company will save $3000 per month per employee. It is estimated that each employee contributes $4,100 to the company. The firm rents office space for this group of employees at $1500. What should the company do
Answer:
The multiple choices are as follows:
a.Fire the employees and save $1500 on rent
b.Not fire the employees keeping them generates a profit of $1100 per employee
c.Not fire the employees since keeping them generates a profit of $1085 per employee
d.None of the above
The correct option is C,not fire the employees since keeping them generates a profit of $1085 per employee
Explanation:
The cost of paying all 100 employees is $300,000 i.e ($3000*100)
Since each employee contributes $4,100 to the company bottom-line,all of them would contribute $410,000 as a whole.
The rent of office of $1,500 is also a cost to consider as shutting down would mean rent is no longer paid
Profit from employees=$410,000-$300,000-$1,500=$108,500
Profit per employee=$108500 /100=$1085
The question is incomplete. Here is the complete question
A firm wishes to shut down an office and fire 100 employees. The company will save $3000 per month per employee. It is estimated that each employee contributes $4,100 to the company. The firm rents office space for this group of employees at $1500. What should the company do
a. Fire the employees and save $1500 on rent
b. Not fire the employees keeping them generates a profit of $1100 per employee
c. Not fire the employees since keeping them generates a profit of $1085 per employee
d. None of the above
Answer:
Not fire the employees since keeping them generates a profit of $1085
Explanation:
The amount of money contributed by each employee in the company is $4,100
The amount of expenses made is $3,000
Fixed costs can be calculated by dividing the amount of money used in purchasing the office space by the total number of employees
= 1500/100
= $15
Therefore, the earnings made from each employee is
= $4,100-$3,000-$15
= $1085
Hence since the company is making a profit of $1085 per employee then there is no need to fire them.
The following costs are included in a recent summary of data for a company: advertising expense, $99,500; depreciation expense - factory building, $147,500; direct labor, $264,500; direct material used, $314,500; factory utilities, $119,500; and sales salaries expense, $164,500. Determine the dollar amount of overhead costs.
Answer:
Total overhead= $267,000
Explanation:
Giving the following information:
advertising expense, $99,500
depreciation expense - factory building, $147,500
direct labor, $264,500
direct material used, $314,500
factory utilities, $119,500
sales salaries expense, $164,500.
The overhead costs are all costs incurred involved in the production, but can't be directly assigned to a single product line.
Total overhead= depreciation of factory + factory utilities
Total overhead= 147,500 + 119,500= $267,000
Depreciation is not a cash disbursement.
In 2015, a former Google engineer, Erica Baker, made a spreadsheetshowing pay disparities at the company. She shared the information in a Twitter thread. In 2017, the U.S. Department of Labor alleged that the search giant had "systematic compensation disparities against women" and sought payroll records. Google annually reviews pay levels and denies any disparities. In reviewing pay levels, Google's management is focused on:________a. Job satisfaction b. Organizational justice c. Organizational commitment
Answer:
b. Organizational justice.
Explanation:
In reacting to the allegations that Google engages in "systematic compensation disparities against women" and the request of payroll records by the U.S. Department of Labor in 2017.
Google annually reviews pay levels and denies any disparities against women. In reviewing pay levels, Google's management is focused on organizational justice. The concept of organizational justice was first introduced by Greenberg in the year 1987.
Organizational justice is an organizational concept that describes an employee's perception of decisions, fairness, behaviors and actions with respect to how these employees are affected or influenced both psychologically and other wise at work.
Organisational justice deals with all workplace related activities, ranging from salary to relationships between superiors and their subordinates, equal rights, gender equality and even access to training and promotion.
For the purpose of trust, loyalty and progressive work attitudes, it is very important that organizations prioritize organizational justice.
Hence, if Google focuses on organizational justice, it will help to build trust and address the issue of pay level disparities among its employees.
An online retailer monitors customer complaints through social media. There are seventeen categories associated with these complaints and include such categories as poor quality, not as described on-line, price too high and slow delivery. When creating a chart to determine which of these categories represents the most frequent problem, it will be necessary to draw a?
Answer: Pareto Chart
Explanation:
A Pareto Chart is a type of chart that mixes both the line and bar graphs.
It works by putting the Frequency of the complaint categories on the vertical axis and the category on the horizontal axis.
The frequency bars are arranged from the most frequent to the least frequent and then there is a line that shows the cumulative frequencies of the complaint categories.
The benefit of this graph is that one can see the most frequent complaint as soon as they look at the graph which is why it is most useful to this question.
I have attached an example to better explain.
You just won the lottery and after taxes you have $32,000. You want to have $1,000,000 by the time you are 65, which is 45 years from now. Assuming that you can earn 9 percent each year on your money, how much (in dollars) of the $32,000 must you invest today
Answer:
$20.692.24 must be invested
Explanation:
The amount to be invested today is the present value of $1,000,000 discounted at 9%.
PV = FV× (1+r)^-n
PV - present value , FV- Future value , r- rate of return, n- number of years
FV =1,000,000, r- 9%, n- 45
PV = 1,000,000 × 1.09^(-45)
PV = 20,692.24
Present Value = $20.692.24
$20.692.24 must be invested out of the $32,000
