Answer:
Weight of Preferred stock = 0.1428571429 or 14.28571429% rounded off to 14.29%
Explanation:
The capital structure of a business is made up of at least one or at most all of the following components namely Debt, Preferred Stock and Common Equity. The ratio in which each of these components form the capital structure might differ from business to business. The weightage of each component in the capital structure can be calculated by dividing the market value of each component by the sum of the market value of all the components.
Weight of a component = Market Value of component / Sum of market value of all components
Weight of Preferred stock = 1,000,000 / (3,900,000 + 1,000,000 + 2,100,000)
Weight of Preferred stock = 0.1428571429 or 14.28571429% rounded off to 14.29%
Based on the following information, determine the location quotient for KuDu City and whether this city has a competitive advantage in the amusement industry.
Employment in Amusements and Recreation in KuDu City: 54,446;
Total Employment in KuDu City: 578,477;
Employment in Amusements and Recreation (nationally): 1,381,377;
Total Employment (nationally): 106,201,232.
Answer: 7.24
Explanation:
The location quotient for this question can be calculated by;
= ( Employment in Amusements and Recreation in KuDu City / Total Employment in KuDu City) / (Employment in Amusements and Recreation (nationally) / Total Employment (nationally))
= (54,446/578,477) / (1,381,377/ 106,201,232)
= 7.2359
= 7.24
If $800 is borrowed at 8% interest, find the amounts due at the end of 4 years if the interest is compounded as follows. (Round your answers to the nearest cent.)(i) annually(ii) quarterly(iii) monthly(iv) weekly
Answer:
(i) $133.12
(ii) $297.6
(iii) $300.8
(iv) $301.6
Explanation:
From the compounding formula;
Future value = Present value [tex](1+\frac{r}{m}) ^{mn}[/tex]
where r is the rate, m is the number of payment per year, and n is the number of years.
Interest = future value - present value
Given that present value = $800, r = 8%, n = 4 years.
(i) annually,
m = 1, so that;
Future value = 800[tex](1.08)^{4}[/tex]
= $933.12
Interest = $933.12 - $800
= $133.12
(ii) quarterly,
m = 3, so that;
Future value = 800[tex](1+\frac{0.08}{3}) ^{(4x3)}[/tex]
= 800(1.372)
= $1097.6
Interest = $1097.6 - $800
= $297.6
(iii) monthly,
m = 12, so that;
Future value = 800[tex](1+\frac{0.08}{12}) ^{(4x12)}[/tex]
= 800(1.376)
= $1100.8
Interest = $1100.8 - $800
= $300.8
(iv) weekly,
m = 54, so that;
Future value = 800[tex](1+\frac{0.08}{54}) ^{(4x54)}[/tex]
= 800(1.377)
= $1101.6
Interest = $1101.6 - $800
= $301.6
Show how Cablevision can conduct an ROI analysis. Describe the information that the company should collect and how it should b collected.
Answer:
Explanation:
Cablevision can easily accomplish this by doing the following. First gather the number of sales of premium services and other products that non-trained individuals are accomplishing in a given time period (example, one month). Next, under the same conditions place the newly trained individuals and gather the same data from them (number of sales/subscribers gained, premium products, and other products). Finally, they would simply need to compare the difference in the number of sales to see if the training paid off. They would also need to calculate if the difference in sales surpasses the costs of training.
Describe three key inputs (or factors of production) and fixed and variable costs involved in the production of your chosen product or service. Analyze the factors that impact your choice of inputs to produce the chosen product or service. Examine the production decisions that you would make based on the analysis of the factors impacting the choice of inputs to produce the chosen product or service.
Answer:
The product is Organic and Inorganic Ice cream.
It will be sold from a high street location.
The focus is on the wholesale market.
The equipment consists of the following:
One unit of pasteuriser linked One unit of homogeniser One unit of cooler One unit of ageing vat One large batch freezerOne unit each of fruit–feeder and a ripple-pumpOne Blast Freezer and One Cold StoreAnother factor is labour. For a small-sized operation like ours, we don't need more than 3 staff:
Production and Quality Control executiveAccounting and Marketing executive and front desk officerThe size of labour is small because the company is small and is focused on wholesalers, not retailers. It also makes for good business sense to keep to a very lean Human Resource structure. Effectiveness and efficiency will be optimised with the use of technology.
Our choice to go wholesale stems from the fact that there is a huge gap for unbranded icecream. Because it is cheaper, people don't mind forgoing the big brands for an equally good cup or bucket of ice cream.
Cheers
Dropping Unprofitable Department Penn Corporation has four departments, all of which appear to be profitable except department 4. Operating data for 2019 are as follows: Total Departments 1-3 Department 4 Sales $1,052,000 $900,000 $152,000 Cost of sales 654,000 540,000 114,000 Gross profit $398,000 $360,000 $38,000 Direct expenses $177,000 $150,000 $27,000 Common expenses 140,000 120,000 20,000 Total expenses $317,000 $270,000 $47,000 Net income (Loss) $81,000 $90,000 $(9,000) a. Calculate the gross profit percentage for departments 1-3 combined and for department 4. Department 1-3 Answer 40 % Department 4 Answer 25 % b. What effect would elimination of department 4 have had on total firm net income
Answer:
A. Department (1-3) = 40%
Department 4 =25%
B. $70,000
Explanation:
A. Calculation for the gross profit percentage for departments 1-3 combined and for department 4.
Using this formula
Gross profit percentage = Gross Profit /Sales
Let plug in the formula
Department (1-3) (360,000/900,000) = 40%
Department 4 (28,000/152,000) =25%
B. Calculation for the effect that would elimination of department 4 have had on total firm net income
First step is to find the Increase(Decrease) in overall net income
Using this formula
Increase(Decrease) in overall net income = Direct expenses - Gross profit
Let plug in the formula
Increase(Decrease) in overall net income= 27,000 - 38,000
Increase(Decrease) in overall net income= (11,000) decrease
Second step is to find the net operating income
Net operating income= 81,000 - 11,000
Net operating income= $70,000
Therefore the firm's net operating income would be $70,000
Bluebird Mfg. has received a special one-time order for 15,000 bird feeders at $3 per unit. Bluebird currently produces and sells 75,000 units at $7.00 each. This level represents 80% of its capacity. Production costs for these units are $3.50 per unit, which includes $2.25 variable cost and $1.25 fixed cost. If Bluebird accepts this additional business, the effect on net income will be:
Answer:
Effect on income= $11,250
Explanation:
Giving the following information:
Production costs:
Variable= $2.25
Special offer:
Selling price= $3
Units= 15,000
Because it is a special offer, and there is unused capacity, we will not take into account the fixed costs.
Effect on income= Number of units*unitary contribution margin
Unitary contribution margin= 3 - 2.25= $0.75
Effect on income= 15,000*0.75= $11,250
ear Net Income Profitable Capital Expenditure 1 $ 14 million $ 8 million 2 18 million 11 million 3 9 million 6 million 4 20 million 8 million 5 23 million 9 million The Hastings Corporation has 2 million shares outstanding. (The following questions are separate from each other). a. If the marginal principle of retained earnings is applied, how much in total cash dividends will be paid over the five years? (Enter your answer in millions.)
Answer:
$42 Million
Explanation:
The computation of the total cash dividend is shown below:-
Year Net Income Profitable capital Expenditure Dividends
1 $14 Million $8 Million $6 Million
2 $18 Million $11 Million $7 Million
3 $9 Million $6 Million $3 Million
4 $20 Million $8 Million $12 Million
5 $23 Million $9 Million $14 Million
Total cash dividends $42 Million
Bretton Woods was a multinational meeting of economists and diplomats to discuss the A. Staggering economic problems that would face the postwar world. B. Plans for preventing another economic collapse like the Great Depression. C. Creation of an International Monetary Fund. D. All of the above
Answer:
D. All of the above
Explanation:
The Bretton Woods Agreement represents the United Nations Monetary and Financial Conference that was held in Bretton Woods, New Hampshire from 1st - 22nd of July 1944 by about 730 delegates from 44 countries to discuss about pressing economic issues and trends.
Bretton Woods was a multinational meeting of economists and diplomats to discuss the following economic issues;
1. Staggering economic problems that would face the postwar world.
2. Plans for preventing another economic collapse like the Great Depression.
3. Creation of an International Monetary Fund.
Revenues and gains included in arriving at net income that do not provide cash.
Answer:
Non-cash revenues.
Explanation:
Non-cash revenues can be defined as revenues and gains included in arriving at net income that do not provide cash.
Basically, on the statement of cash-flow, non-cash revenues are considered not to be a real cash-flow because they don't add to the total inflow of cash.
Some examples of noncash revenues are amortization of premium relating to bonds payable, cash flow from investments that are carried under the equity method, accrued revenues, and gains from disposals of non-current assets.
Check my work Check My Work button is now enabledItem 10Item 10 1.42 points Helix Company has been approached by a new customer to provide 2,000 units of its regular product at a special price of $6 per unit. The regular selling price of the product is $8 per unit. Helix is operating at 75% of its capacity of 10,000 units. Identify whether the following costs are relevant to Helix's decision as to whether to accept the order at the special selling price. No additional fixed manufacturing overhead will be incurred because of this order. The only additional selling expense on this order will be a $0.50 per unit shipping cost. There will be no additional administrative expenses because of this order. Calculate the operating income from the order.
Question Completion:
b. Direct materials cost of $1 per unit
c. Direct labor of $2 per unit
d. Variable manufacturing overhead of $1.50 per unit
e. Fixed manufacturing overhead of $0.75 per unit
f. Regular selling expenses of $1.25 per unit
g. Additional selling expenses of $0.50 per unit
h. Administrative expenses of $0.60 per unit
Answer:
Helix Company
1. Relevant Costs for special orders:
a. is not relevant
b. is relevant
c. is not relevant.
2. Operating income from the special order:
= $2,000
Explanation:
Special order = 2,000 units
Normal selling price = $8
Special selling price = $6
Operating capacity = 75%
Relevant selling expense = $0.50 per unit
Units being produced = 7,500 (10,000 * 75%)
Revenue from the special order:
Sales revenue = $12,000 ($6 * 2,000)
Cost of goods = $9,000 ($4.50 * 2,000)
Total expenses $1,000 ($0.50 * 2,000)
Operating income = $2,000
b. Direct materials cost of $1
c. Direct labor of $2
d. Variable manufacturing overhead of $1.50
Total variable manufacturing costs = $4.50
e. Fixed manufacturing overhead of $0.75 per unit
f. Regular selling expenses of $1.25 per unit
g. Additional selling expenses of $0.50 per unit
h. Administrative expenses of $0.60 per unit
Ivan's, Inc., paid $474 in dividends and $582 in interest this past year. Common stock increased by $192 and retained earnings decreased by $118. What is the net income for the year?
Answer:
$356
Explanation:
Ivan incorporation paid $474 in dividend
$582 was paid in interest
Common stock increased by $192
Retained earnings decreased by $118
Therefore the net income for the year can be calculated as follows
= Dividend - decrease in retained earnings
= $474-$118
= $356
Hence the net income for the year is $356
The Heating Division of Kobe International produces a heating element that it sells to its customers for $45 per unit. Its variable cost per unit is $25, and its fixed cost per unit is $10. Top management of Kobe International would like the Heating Division to transfer 15,000 heating units to another division within the company at a price of $29. The Heating Division is operating at full capacity. What is the minimum transfer price that the Heating Division should accept
Answer:
$45
Explanation:
Note that the Heating Division is operating at full capacity. Therefore, satisfying the internal order will result in external orders of 15,000 heating units being forgone.
Minimum Transfer Price = Variable Costs - Internal Savings + Opportunity cost
Where,
Variable Costs = $25
Internal Savings = $0
Opportunity cost = $45 - $25 = $20
Therefore,
Minimum Transfer Price = $25 + $20
= $45
The minimum transfer price that the Heating Division should accept is $45.
Accounts receivable had a debit balance of $4,000 at the beginning of the period, and a debit balance of $3,000 at the end of the period. Credit sales for the period totaled $22,000. Using this information, cash receipts for the period totaled:
a. $26,000
b. $32,000
c. $28,000
d. $20,000
Answer:
$23,000
Explanation:
The computation of the cash receipts is shown below:
= Opening balance of account receivable + credit sales - ending balance of account receivable
= $4,000 + $22,000 - $3,000
= $23,000
We simply applied the above formula
Hence, the cash receipts is $23,000
The above is the answer.
The options that are given is wrong
Below is Salem Company’s income statement for 2019 that was prepared by an inexperienced accountant.
Salem Company
Income Statement
As of December 31, 2019
Revenues:
Sales revenue ……………..…………………………………… $298,000
Wages payable…………..……………………………………….. 4,000
Gain on sale of investment…………………………………….. 5,250
Deferred revenue………………………………………………. 2,500
Interest payable………………………………………………… 1,000
Accumulated depreciation……………………………………… 8,000
Total revenues ………………………………………………….. $318,750
Less operating expenses:
Selling expenses….……………………… …………………. $32,250
Research and development expense………………….…….. 4,75
Question Completion:
Research and development expense………………….…….. 4,750
Prepaid advertising …….…………………………………. 3,000
Indirect manufacturing labor cost..………………………… 16,200
Utilities expense..…. .....................………………………… 10,200
Direct manufacturing labor cost. ………………………..… 41,000
Factory equipment………………………………………….. 40,000
Insurance expense…………………….………………. …… 3,500
Restructuring costs………………………………………….. 4,000
Direct materials purchased………………………………..... 93,000
Interest expense……………………………………………. 1,750
Rent expense…..…………….………………. …………….. 18,000
Other factory indirect costs…………………………………. 3,000
Dividend paid………………………………………………. 1,500
Administrative expenses………………….…………………. 40,400
Short-term investment……………………………………… . 19,000
Total operating expenses …………………………………….. 331,550
Net operating loss …………………………………………….. ($10,800)
a. Seventy percent (70%) of utilities expense and 80% of insurance expense are for factory operations. Apply the remaining utilities and insurance expenses equally to selling expense and administrative expenses.
b. Sixty percent (60%) of the rent expense is associated with factory operations. Allocate the remaining rent equally to selling expense and administrative expenses.
c. Factory equipment was purchased January 1, 2017. It was estimated that the useful life of the equipment is 10 years and the residual value, $4,000. The $10,000 accumulated depreciation above is for 2017. No depreciation was charged for 2018. The company uses the double-declining balance method of depreciation.
d. Inventory balances are: January 1, 2018 December 31, 2018
Direct materials……………… $5,000 $6,600
Work-in-process ……………..$8,000 $10,000
Finished goods ……………$25,000 $28,000
e. The company’s tax rate is 21%. The president is disappointed with the results of operations and has asked you to review the income statement and make a recommendation as to whether the company should look for a buyer for its assets. Required:
1. As one step in gathering data for the president, prepare a corrected schedule of cost of goods manufactured for the year ended December 31, 2018.
2. As a second step, prepare a new multiple-step income statement for the year ended December 31, 2018.
3. Calculate the cost of producing one unit if the company produced 120,000 units in 2018 (round your answer to two decimal points).
Answer:
Salem Company
Income Statement
For the year ended December 31, 2019
Description Reference Amount ($) Amount ($)
Sales Revenue A 298,000.00
Cost of goods Sold:
Purchases - Change in Inventory 6,600.00
Direct Materials purchased 93,000.00
Direct Manufacturing labor cost 41,000.00
Manufacturing Costs:
Utilities Exp (70%) 7,140.00
Insurance Exp (80%) 2,800.00
Rent Exp (60%) 10,800.00 20,740.00
Total Cost of Goods Sold 161,340.00
Gross Profit $136,660.00
Operating Expenses:
Indirect Manufacturing labor cost 16,200.00
Other factory indirect cost 3,000.00
Selling Expenses 32,250.00
Utilities Exp (15%) 1,530.00
Insurance Exp (10%) 350.00
Rent Exp (20%) 3,600.00
Administrative Exp 40,400.00
R&D Expenses 4,750.00
Restructuring cost 4,000.00
Depreciation 7,200.00
Total Operating Expense 118,760.00
Operating Income $17,900.00
Non - Operating Expenses:
Interest Exp 1,750.00
Dividend Paid 1,500.00
Total Non- Operating Expense (3,250.00 )
Non-operating / Other Income
Gain on sale of investment 5,250.00
Total Non- Operating Income
Net Income before tax 19,900.00
Tax at 21% 4,179.00
Net Income after taxes $15,721.00
3. Assume company produced 120,000 units for year 2018, then cost per unit would be
Total cost of goods sold = $ 161,340 divided by 120,000 units
= $ 1.34 per unit
Explanation:
a) Data and Calculations:
Salem Company
Income Statement
As of December 31, 2019
Revenues:
Sales revenue ……………..…………………………………… $298,000
Wages payable…………..……………………………………….. 4,000
Gain on sale of investment…………………………………….. 5,250
Deferred revenue………………………………………………. 2,500
Interest payable………………………………………………… 1,000
Accumulated depreciation……………………………………… 8,000
Total revenues ………………………………………………….. $318,750
Less operating expenses:
Selling expenses….……………………… …………………. $32,250
Research and development expense………………….…….. 4,750
Depreciation= (40000-4000)*(100%/10yrs*2) = $7,200.00
Monitor Muffler sells franchise arrangements throughout the United States and Canada. Under a franchise agreement, Monitor receives $760,000 in exchange for satisfying the following separate performance obligations: (1) franchisees have a five-year right to operate as a Monitor Muffler retail establishment in an exclusive sales territory, (2) franchisees receive initial training and certification as a Monitor Mechanic, and (3) franchisees receive a Monitor Muffler building and necessary equipment. The stand-alone selling price of the initial training and certification is $18,200, and $578,000 for the building and equipment. Monitor estimates the stand-alone selling price of the five-year right to operate as a Monitor Muffler establishment using the residual approach.
Monitor received $89,000 on July 1, 2016, from Perkins and accepted a note receivable for the rest of the franchise price. Monitor will construct and equip Perkin's building and train and certify Perkins by September 1, and Perkin's five-year right to operate as a Monitor Muffler establishment will commence on September 1 as well.
Required:
1. What amount would Monitor calculate as the stand-alone selling price of the five-year right to operate as a Monitor Muffler retail establishment?
2. What journal entry would Monitor record on July 1, 2016, to reflect the sale of a franchise to Dan Perkins?
3. How much revenue would Monitor recognize in the year ended December 31, 2016, with respect to its franchise arrangement with Perkins? (Ignore any interest on the note receivable.)
Total revenue
Answer:
1. $163,800
2. Dr Cash $ 89,000
Dr Notes receivable $ 671,000
Cr Deferred revenue $ 760,000
3. $ 607,120
Explanation:
1. Computation of the amount that Monitor would calculate as the stand-alone selling price
Total amount of franchise agreement $760,000
Less: stand-alone selling price of training $ (18,200)
Less: stand-alone selling price of building and equip $ (578,000)
Stand-alone selling price of five-year right $163,800
2. Preparation of journal entry that Monitor would record on July 1, 2016,
Dr Cash $ 89,000
Dr Notes receivable $ 671,000
(760,000-89,000)
Cr Deferred revenue $ 760,000
3. Calculation for the amount of revenue that Monitor would recognize in the year ended December 31, 2016,
Revenue to be recognised on:
1st Sep 2021:
Training $ 18,200
Building and Equipment sale $ 578,000
31st Dec 2021:
$163,800/60 Months*4 Months $ 10,920
Total Revenue to be recognized $ 607,120
Note that five-year will give us 60 months (5*12months and September to December will give us 4 months
If the budget at completion for a project is $200,000 and the cost performance index is .5, what is the estimate at completion
Answer:
$400,000
Explanation:
Estimate at completion in finance can be explained as forecast cost of a particular project. It can be estimated by using the expression below
Estimate at completion =[Budget at Completion] /(Cost Performance Index)
From the question, our budget at completion for a project = $200,000
cost performance index is = 0 .5,
Then just input the values we have,
Estimate at completion= 200000/0.5
=$400,000
Therefore, Estimate at completion is
$400,000
Link Communications programs voicemail systems for businesses. For a recent project, they charged $135,000. The customer secured this amount by signing a note bearing 7% interest on February 1, 2019. Required: 1. Prepare the journal entry to record the sale on February 1, 2019. Record sale 2. Determine how much interest Link will receive if the note is repaid on December 1, 2019. Round your answer to the nearest whole dollar. $ 3. Prepare Link's journal entry to record the cash received to pay off the note and interest on December 1, 2019. If an amount box does not require an entry, leave it blank. Record collection of note
Answer:
1) February 1, 2019, service revenue
Dr Notes receivable 135,000
Cr Service revenue 135,000
2) if the note is collected on December 1, 2019, the amount of interest revenue = $135,000 x 7% x 10/12 months = $7,875
3) December 1, 2019, cash collected
Dr Cash 142,875
Cr Notes receivable 135,000
Cr Interest revenue 7,875
Marketing-oriented managers see segmenting as a process of aggregating people with similar needs into a group.
a) True
b) False
Answer:
a) True
Explanation:
Given that it can be difficult to capture the whole market considering limited time, capital, and labor. Consequently, Marketing-oriented managers see segmenting as a process of aggregating people with similar needs into a group. This is because, Segmentation is a technique of dividing the marketplace into components, which are available, and profitable with considerable probable growth.
Hence, in this case, the correct answer is TRUE.
ACE Co. stock is not paying a dividend today, but has announced it will start paying a dividend in year 4 of $2.00 per share, and that will increase 5% per year forever. What is an estimate of the price of the stock today if r
Answer:
$77.22
Explanation:
the question is incomplete, so I looked for a similar question and found that Re = 9%
Div₀ = 0
Div₁ = 0
Div₂ = 0
Div₃ = 0
Div₄ = $2
the terminal value at year 3 = Div₄ / (Re - g) = $4 / (9% - 5%) = $100
in order to determine the current stock price we must discount $100 by 9% for 3 periods = $100 / 1.09³ = $77.22
Assume that if Ivanhoe Water accepts Clifton’s offer, the company can use the freed-up manufacturing facilities to manufacture a new line of growing lights. The company estimates it can sell 80,410 of the new lights each year at a price of $13. Variable costs of the lights are expected to be $10 per unit. The timer unit supervisory and clerical staff would be transferred to this new product line. Calculate the total relevant cost to make the timer units and the net cost if they accept Clifton's offer.
Question Completion:
Question 2 Ivanhoe Water Co. is a leading producer of greenhouse irrigation systems. Currently, the company manufactures the timer unit used in each of its systems. Based on an annual production of 40,330 timers, the company has calculated the following unit costs Direct fixed costs include supervisory and clerical salaries and equipment depreciation. Direct materials Direct labor Variable manufacturing overhead Direct fixed manufacturing overhead Allocated fixed manufacturing overhead $12 10 (30% salaries, 70% depreciation) 10 Total unit cost $42 Clifton Clocks has offered to provide the timer units to Sandhill at a price of $34 per unit. If Sandhill accepts the offer, the current timer unit supervisory and clerical staff will be laid off (a1) Your answer is correct. Calculate the total relevant cost to make or buy the timer units. (Round answers to O decimal places, eg, S250.) Make Buy 100825 1371220
Answer:
Ivanhoe Water
1. Total relevant cost to make the timer units:
If Ivanhoe does not accept the Clifton's offer, its total cost = $35 * 40,330 = $1,411,5500
If it accepts Clifton's offer, the total cost = $34 * 40,330 = $1,371,220
2. Net cost = $40,330
Explanation:
a) Data and Calculations:
Cost of producing 40,330 timers
Direct materials $12
Direct labor 7
Variable manufacturing overhead 3
Direct fixed manufacturing overhead 10
Allocated fixed manufacturing overhead 10 (30% salaries, 70% depreciation)
Total unit cost $42
Clifton's offer = $34 per unit
Total relevant cost to make the timer units:
If Ivanhoe does not accept the Clifton's offer, its total cost = $35 * 40,330 = $1,411,5500
If it accepts Clifton's offer, the total cost = $34 * 40,330 = $1,371,220
Net cost = $40,330
Out of the total cost of $42, $7 for the depreciation is not considered relevant. This leaves the relevant cost at $35 per unit. Any cost that cannot be eliminated by a decision is not relevant, it is a sunk cost. The salaries of the supervisory and clerical staff can be eliminated, so it is relevant here.
james Lawson's Bed and Breakfast, in a small historic Mississippi town, must decide how to subdivide (remodel) the large old home that will become its inn. There are three alternatives: Option A would modernize all baths and combine rooms, leaving the inn with four suites, each suitable for two to four adults. Option B would modernize only the second floor; the results would be six suites, four for two to four adults, two for two adults only. Option C (the status quo option) leaves all walls intact. In this case, there are eight rooms available, but only two are suitable for four adults, and four rooms will not have private baths. Below are the details of profit and demand patterns that will accompany each option: Annual Profit under Various Demand Patterns Alternatives High p Average p A (modernize all) B (modernize 2nd) C (status quo) This exercise contains only part b. b) The option with the highest expected value for James Lawson's Bed and Breakfast is ▼ B C A , with an expected value of $ nothing (round your response to the nearest whole number).
Answer:
The numbers are missing, so I looked for a similar question (see attached image).
the expected value for option A (modernize everything) = (0.5 x $90,000) + (0.5 x $25,000) = $57,500the expected value for option B (modernize only second floor) = (0.4 x $80,000) + (0.6 x $70,000) = $74,000the expected value for option C (do nothing) = (0.3 x $60,000) + (0.7 x $33,000) = $41,100The option with the highest expected value is option B (modernize only second floor).
A company reported net income of $260,000. Beginning balances in Accounts Receivable and Accounts Payable were $18,000 and $23,000 respectively. Ending balances in these accounts were $13,500 and $28,000, respectively. Assuming that all relevant information has been presented, what is the company's net cash flows from operating activities
Answer:
$260,500
Explanation:
Cash flow from Operating Activities
Net income $260,000
Adjustment for changes in working capital :
Decrease in Accounts Receivable ($4,500)
Increase in Accounts Payable $5,000
Net Cash From Operating Activities $260,500
K Manufacturing would like to install a machine costing $37,500 with a life of 12 years to bring in benefits to the company of $5,100 per month. The monthly expenses for the machine are $4,650. If the MARR that the company uses is 12% per year, what should be the minimum salvage value as a percentage of the initial machine cost that the company should get at the end of the machine life to justify installing the machin
Answer:
$12,585
Explanation:
initial investment = -$37,500
then you have 143 cash flows = $5,100 - $4,650 = $450
the last cash flow = $450 + salvage value
we can use an annuity factor to determine the present value of the first 143 payments = $450 x 75.89853 (PV annuity factor, 1%, 143 periods) = $34,154.34
not considering the last cash flow, the NPV = -$37,500 + $34,154.34 = $3,345.66
we need to find the future value of $3,345.66:
FV = $3,345.66 x (1 + 12%)¹² = $13,034.61
the last cash flow = $13,034.61
salvage value = $13,034.61 - $450 = $12,584.61 ≈ $12,585
A company purchased a weaving machine for $350,170. The machine has a useful life of 8 years and a residual value of $19,500. It is estimated that the machine could produce 769,000 bolts of woven fabric over its useful life. In the first year, 114,500 bolts were produced. In the second year, production increased to 118,500 units. Using the units-of-production method, what is the amount of depreciation expense that should be recorded for the second year
Answer:
$50955
Explanation:
Purchase value = $350170
Residual value = $19500
Total Production = $769000
Increase in production = $118500
Depreciation expense for second year = (Purchase value - Residual value)/Total Production * Increase in Production
Depreciation expense for second year = ($350170 - $19500 / $769000) * $118500
Depreciation expense for second year = $330670 / $769000 * $118500
Depreciation expense for second year = $50955
During the year, credit sales amounted to $800,000. Cash collected on credit sales amounted to $760,000 and $18,000 has been written off. At the end of the year, company adjusted for bad debts expense using the percent-of-sales method and applied a rate, based on past history, of 2.5%. The ending balance in the Allowance for Bad Debts would be ________. Prepare all necessary journal entries.
Answer:
the journal entry to record bad debt expense should be:
December 31, 202x, allowance for uncollectible accounts
Dr Bad debt expense 550
Cr Allowance for bad debts 550
The balance of the allowance for bad debts (uncollectible accounts) is $550.
Explanation:
Accounts receivable
debit credit
800,000
760,000
18,000
22,000
550
21,450
$22,000 x 2.5% = $550
When accounts were written off, the journal entry was:
Dr Bad debt expense 18,000
Cr Accounts receivable 18,000
II. In order to establish a p-chart with 3-sigma control limits, you have collected the following 10 samples of size 300.
Sample Defects Sample Defects
1 25 6 15
2 22 7 14
3 17 8 15
4 42 9 16
5 16 10 16
Required:
a. Determine CL, UCL, and LCL for the p-chart.
b. Is the process in statistical control? Explain.
Answer and Explanation:
Please find answer and explanation attached
What benefits do customers receive in return for the sacrifice they make when buying a membership at Planet Fitness?
Answer:
Customers receive the following benefits in return for the price they pay when they buy membership at Planet Fitness:
a) Fitness training
b) Physical exercise
c) Relaxation and comfort
d) Clean and safe environment and conducive atmosphere
e) the friendly and courteous staff is a bonus
Explanation:
Planet Fitness operates fitness centers and clubs around the world under franchises. Planet Fitness has adequate and clean cardio machines, free weights of up to 80 lbs., curl bars, and other strength training equipment and accessories. The average gym user is offered abundant, 5-star, and world-class Cardio equipment and services.
You invested $1,400 in an account that pays 7 percent simple interest. How much more could you have earned over a 20-year period if the interest had compounded annually
Answer:
$4,017,56
Explanation:
The Future Value is the amount that you would have earned over the 20year period. This will be greater than the amount of the initial investment due to the interest compounded.
The Future Value (FV) is calculated as follows :
PV = - $1,400
I = 7 %
N = 20
P/yr = 1
PMT = $0
FV = ?
Using a financial calculator to in put the values as shown, the Future Value will be $5,417.56.
The Total Interest on this Investment was $4,017,56 ($5,417.56 - $1,400).
During August, Boxer Company sells $363,000 in merchandise that has a one year warranty. Experience shows that warranty expenses average about 4% of the selling price. The warranty liability account has a credit balance of $12,100 before adjustment. Customers returned merchandise for warranty repairs during the month that used $8,700 in parts for repairs. The entry to record the estimated warranty expense for the month is:
Answer:
Warranty Expense A/c ($363,000 × 4%) $14,520
To Estimated Warranty Liability A/c $14,520
(Being the warranty expense is recorded)
Explanation:
The journal entry to record the estimated warranty expense is shown below:
Warranty Expense A/c ($363,000 × 4%) $14,520
To Estimated Warranty Liability A/c $14,520
(Being the warranty expense is recorded)
Here we debited the warranty expense as it is an expense and it increased the expense also it contains normal debit balance likewise the liability is credited as it increased the liability
Assume the sales budget for April and May is 48,000 units and 50,000 units, respectively. The production budget for the same two months is 45,000 units and 46,000 units, respectively. Each unit of finished goods required 3 pounds of raw materials. The company always maintains raw materials inventory equal to 20% of the following month's production needs. How many pounds of raw material need to be purchased in April
Answer:
Purchases= 135,600 pounds
Explanation:
Giving the following information:
The production budget for the same two months is 45,000 units and 46,000 units, respectively.
Each unit of finished goods required 3 pounds of raw materials.
To calculate the purchases for April, we need to use the following formula:
Purchases= production + desired ending inventory - beginning inventory
Purchases= 45,000*3 + (46,000*3)*0.2 - (45,000*3)*0.2
Purchases= 135,000 + 27,600 - 27,000
Purchases= 135,600 pounds
Given the data, the number of pounds of materials to be purchased in April is 135,600 pounds.
Data and Calculations:
April May
Sales units 48,000 50,000
Production units 45,000 46,000
Number of pounds of raw materials per unit = 3
Material Requirement:
April May
Production materials required 135,000 138,000 (46,00 x 3)
Ending inventory required 27,600 0
Total materials for production 162,600
Beginning inventory 27,000 27,600 (138,000 x 20%)
Purchases of materials 135,600
Thus, the number of pounds of raw materials to be purchased for April production is 135,600.
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