Product A is normally sold for $9.60 per unit. A special price of $7.20 is offered for the export market. The variable production cost is $5.00 per unit. An additional export tariff of 15% of revenue must be paid for all export products. Assume there is sufficient capacity for the special order.
Required:
A. Prepare a differential analysis dated March 16 on whether to reject (Alternative 1) or accept (Alternative 2) the special order.
B. Should the special order be rejected (Alternative 1) or accepted (Alternative 2)?
2) Product B has revenue of $39,500, variable cost of goods sold of $25,500, variable selling expenses of $16,500, and fixed costs of $15,000, creating a loss from operations of $17,500.
Required:
A. Prepare a differential analysis as of May 9 to determine if Product B should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are unaffected by the decision.
B. Determine if Product B should be continued (Alternative 1) or discontinued (Alternative 2).

Answers

Answer 1

Answer:

A. Differential Analysis dated March 16

                                    Reject            Accept

Sales revenue per unit  $0              $7.20

Variable production cost 0                5.00

Additional export tariff     0                 1.08

Total variable costs          0             $6.08

Net income                    $0                $1.12

B. The special order should be accepted.

2) Product B:

Revenue of $39,500

Variable cost of goods sold of $25,500

Variable selling expenses of $16,500

Fixed costs of $15,000

Operational loss $17,500

Differential Analysis of May 9

                                    Reject            Accept

Sales revenue             $0                $39,500

Variable costs:

Product                        $0                 25,500

Selling                          $0                  16,500

Fixed costs                  $15,000         15,000

Total costs                   $15,000      $57,000

Net loss                       $15,000       $17,500

B) Product B should be discontinued.

Explanation:

a) Data and Calculations:

Normal selling price per unit of Product A = $9.60

Special order price for the export market = $7.20

Variable production cost = $5.00 per unit

Additional export tariff = $1.08 ($7.20 * 15%)

Total variable production and export costs = $6.08


Related Questions

Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next 7 years because the firm needs to plow back its earnings to fuel growth. The company will then pay a dividend of $14.25 per share 8 years from today and will increase the dividend by 6 percent per year thereafter.

If the required return on this stock is 14 percent, what is the current share price?

Answers

The current share price of Metallica Bearings, Inc. is approximately $178.125.

To determine the current share price of Metallica Bearings, Inc., we can use the dividend discount model (DDM) which calculates the present value of future dividends.

Given:

No dividends will be paid for the first 7 years.

Dividend per share after 8 years will be $14.25.

Dividend growth rate after 8 years is 6% per year.

Required return is 14%.

To calculate the current share price, we need to find the present value of all future dividends.

Step 1: Calculate the present value of the dividends after 8 years and beyond:

Dividend in year 8 = $14.25

Dividend growth rate = 6%

Required return = 14%

Present value of dividends after 8 years = Dividend in year 8 / (Required return - Dividend growth rate)

PV of dividends after 8 years = $14.25 / (0.14 - 0.06) = $14.25 / 0.08 = $178.125

Step 2: Calculate the present value of dividends for the first 7 years (which is zero):

Since there are no dividends in the first 7 years, their present value is zero.

Step 3: Calculate the present value of the current share price:

Present value of the current share price = Present value of dividends after 8 years + Present value of dividends for the first 7 years

Current share price = $178.125 + $0 = $178.125

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Madison Corporation's production cycle starts in the Processing Department. The following information is available for April: Units Work-in-process, April 1 (25% complete) 50,000 Total units in process during April 290,000 Work-in-process, April 30 (60% complete) 30,000 Materials are added at the beginning of the process in the Processing Department. What are the equivalent units of production for the month of April, assuming Madison uses the weighted-average method

Answers

Answer:

Equivalent units of production= 278,000

Explanation:

Giving the following information:

Total units in process during April 290,000

Work-in-process, April 30 (60% complete) 30,000

The weighted average method blends the costs and units of the previous period with the costs and units of the current period.

To calculate the equivalent units, we need to use the following formula:

Units completed in the period + Equivalent units in ending inventory WIP (units*%completion) = Equivalent units of production

Equivalent units of production= (290,000 - 30,000) + 30,000*0.6

Equivalent units of production= 278,000

It was established in 1971 as the only newspaper in the country. At the time, the company had virtually no competition. It had a strong financial base with many readers cut across the length and breadth of the country. It was able to engage the best of journalists to work for the brand, a development which has made the company extremely formidable thus, it became a household name.
After 50 years in operation as a media enterprise, the board of APPOT Communications Group Limited (ACGL) is faced with a lot of competition from online news portals, the proliferation of radio and television networks as well as new newspapers that hit the stands on a daily basis.
This development has affected the market share of APPOTS Communications Group Limited. From 90 per cent, today, the market share of the company has dropped to just about 43 per cent and still falling.
As the new Managing Director of the company, your task is to turn around the business to restore it to its former glory.

Indicate the relevance of PESTLE analysis as a framework to analyse some of the key factors that can influence the strategic plan of the company going forward.

Answers

PESTEL Analysis-

PESTEL Analysis provides the strategic framework for the analysis of all components which have impact on the functioning of the business.

According to the given case, Market share of the media company has reduced from 90% to 43%. As the new Managing Director of the company, my task is to turn around the business to restore it to its former glory. For this, we have to analyse the PESTEL Analysis of the company which is as follows-

1. Political Analysis- There is a impact of political parties , their policies , rules and regulations on every company. On media industry, there is a huge impact of the political parties as media demand news and there is a flood of news of political parties. As if my company will focus on the upcoming topics of the political party, then we will provide the latest news to our customer and will be able to beat our competitor and can increase their market share back to 90% from 43%.

2.Economic Analysis- Economic components includes fiscal policy, taxation policy, monetary policy etc. These have impact on the functioning of the business of media industry also.

3. Social Analysis- This factor constitutes demographic component. Media industry should provide news of such type which can focus on the demographic dividend. Like- Age composition, Gender-composition, income, interest, their needs, purchasing power. What is the interest of different segments of society in what kind of topic that a media industry should focus on to increase its market share.

4. Technological Analysis- Technology is an application of scientific knowledge to the practical task. Various technologies and up gradations have impact on the business scenario. Research and Development, innovation etc provides various opportunities to the business. Online platform is the result of technological innovation. This provide better opportunity to media-user like they can have information and news on different apps on their phones.

5. Environmental Analysis- Environment means scanning. It is the combination of various micro and macro factors which affects the functioning of the business. These have impact on the strategic framework of the business for the development of counter strategies to beat the competitor.

6. Legal Analysis-         Legal factors pertain to any legal forces that define what a business can or cannot do.

Legal factors include the following:

Industry Regulation

Licenses & Permits

Intellectual Property:

Garcia Co. sells snowboards. Each snowboard requires direct materials of $113, direct labor of $43, and variable overhead of $58. The company expects fixed overhead costs of $661,000 and fixed selling and administrative costs of $130,000 for the next year. It expects to produce and sell 11,300 snowboards in the next year. What will be the selling price per unit if Garcia uses a markup of 15% of total cost

Answers

Answer:

See

Explanation:

Total cost of 11,300 snow balls

Per unit total =

Direct material = $113 × 100

Direct labor = $43 × 262.79

Variable overhead = $58 × 194.82

Fixed overhead = $661,000

Total cost of 11,300 snow balls $2,700,000

Cost of 1 snow ball = Total cost of 11,300 snow balls / Total number of snowballs

Poulter Corporation will pay a dividend of $4.15 per share next year. The company pledges to increase its dividend by 6.25 percent per year, indefinitely.

If you require a return of 9 percent on your investment, how much will you pay for the company’s stock today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Answers

You should pay $46.11 for Poulter Corporation's stock today to achieve a 9 percent return on your investment, considering the expected dividend growth rate of 6.25 percent per year indefinitely.

To determine the price you should pay for Poulter Corporation's stock today, you need to calculate the present value of its infinite stream of dividends.

Since the company pledges to increase its dividend by 6.25 percent per year indefinitely, the dividends can be considered a perpetuity.

The formula for the present value of a perpetuity is:

PV = D / r

Where PV is the present value, D is the dividend payment, and r is the required return.

Given that the dividend next year is $4.15 per share and the required return is 9 percent, we can calculate the present value as follows:

PV = $4.15 / 0.09 = $46.11

Therefore, you should pay $46.11 for Poulter Corporation's stock today to achieve a 9 percent return on your investment, considering the expected dividend growth rate of 6.25 percent per year indefinitely.

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On the first day of its fiscal year, Chin Company issued $10,000,000 of five-year, 7% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 8%, resulting in Chin Company receiving cash of $9,594,415.
a. Journalize the entries to record the following:
1. Issuance of the bonds.
2. First semiannual interest payment. The bond discount amortization is combined with the semiannual interest payment. (Round your answer to the nearest dollar.)
3. Second semiannual interest payment. The bond discount amortization is combined with the semiannual interest payment. (Round your answer to the nearest dollar.)
Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. The straight-line method of amortization provides equal amounts of amortization over the life of the bond.
b. Determine the amount of the bond interest expense for the first year.
$
c. Why was the company able to issue the bonds for only $9,594,415 rather than for the face amount of $10,000,000.?

Answers

Answer:

Chin Company

Journal Entries

1. Issuance of the bonds:

Debit Cash $9,594,415

Debit Bond Discounts $405,585

Credit Bonds Liability $10,000,000

To record the issuance of the bonds at a discount.

2. June 30:

Debit Bond Interest Expense $383,777

Credit Cash $350,000

Credit Amortization of Bond Discount $33,777

To record the first interest payment and amortization of bond discount.

3. December 31:

Debit Bond Interest Expense $385,128

Credit Cash $350,000

Credit Amortization of Bond Discount $35,128

To record the second interest payment and amortization of bond discount.

b. The amount of the bond interest expense for the first year:

June 30: Bonds' Interest expense = $383,777

Dec. 31: Bonds' Interest expense = $385,128

Total bond interest expense for the first year = $768,905

c. Chin Company was able to issue the bonds for only $9,594,415 rather than for the face amount of $10,000,000 because the bonds were issued at a discount and not face value.  Bonds can be issued at face value, discount, or premium, depending on the prevailing investor's sentiments and the attractiveness of the bonds to investors.

Explanation:

a) Data and Calculations

Face value of bonds = $10 million

Discounted value (Cash receipt) = $9,594,415

Total amount of discount = $405,585

Bond's interest rate = 7%

Market yield = 8%

Bond maturity period = 5 years

Payment period = semiannually

Issuance of the bonds:

Cash $9,594,415 Bond Discounts $405,585 Bonds Liability $10,000,000

June 30:

Cash payment for interest = $350,000 ($10,000,000 * 3.5%)

Bonds' Interest expense = $383,777 ($9,594,415 * 4%)

Amortization of bond discount = $33,777 ($383,777 - $350,000)

Bond book value = $9,628,192 ($9,594,415 + $33,777)

December 31:

Cash payment for interest = $350,000 ($10,000,000 * 3.5%)

Bonds' Interest expense = $385,128 ($9,628,192 * 4%)

Amortization of bond discount = $35,128 ( $385,128 - $350,000)

Bond book value = $9,663,410 ($9,628,192 + $35,218)

Crane Company offered detachable 5-year warrants to buy one share of common stock (par value $5) at $20 (at a time when the stock was selling for $30). The price paid for 700, $1,000 bonds with the warrants attached was $810000. The market price of the Crane bonds without the warrants was $710000, and the market price of the warrants without the bonds was $71800. What amount should be allocated to the warrants

Answers

Answer:

$ 74,389.87

Explanation:

It is given that :

The cost of 700, $1000 bonds with warrant attached to the bond = $810,000

The cost of Crane bonds with warrant = $710,000

The cost of market price of the warrants without bonds = $71,800

Therefore, the amount should be allocated to the warrants :

[tex]$=\frac{\$71,800}{\$71,800+\$710,000}\times \$ 810,000$[/tex]

[tex]$=\frac{\$71,800}{\$781,800}\times \$ 810,000$[/tex]

= $ 74,389.87

Logan, a 50% shareholder in Military Gear Incorporated (MG), is comparing the tax consequences of losses from C corporations with losses from S corporations. Assume MG has a $116,000 tax loss for the year, Logan's tax basis in his MG stock was $158,000 at the beginning of the year, and he received $83,000 ordinary income from other sources during the year. Assuming Logan's marginal tax rate is 24 percent, how much more tax will Logan pay currently if MG is a C corporation compared to the tax he would pay if it were an S corporation?

Answers

Answer:

$13,920

Explanation:

Calculation to determine how much more tax will Logan pay currently if MG is a C corporation compared to the tax he would pay if it were an S corporation

First step is to calculate what Logan's pay, if MG is a C corporation

Logan's pay, if MG is a C corporation =($83,000*24%)

Logan's pay, if MG is a C corporation = $19,920

Second step is to calculate Logan's pay, if MG is a S Corporation

Logan's pay, if MG is a S Corporation =[($83,000-$58,000)*24%]

($116,000*50% = $58,000)

Logan's pay, if MG is a S Corporation=$6,000

Now let calculate how much more tax will Logan pay currently

Logan pay currently = ($19,920-$6,000)

Logan pay currently = $13,920

Therefore how much more tax will Logan pay currently if MG is a C corporation compared to the tax he would pay if it were an S corporation will be $13,920

Smelly Perfume Company manufactures and distributes several different products. The company currently uses a plantwide allocation method for allocating overhead at a rate of $7 per direct labor hour. Cindy is the department manager of Department C which produces Products J and P. Department C has $16,200 in traceable overhead. Diane is the department manager of Department D which manufactures Product X. Department D has $11,100 in traceable overhead. The product costs (per case of 24 bottles) and other information are as follows:

J P X
Direct materials $100.00 $ 72.00 $48.00
Direct labor 42.00 31.50 12.00
Overhead 28.00 21.00 14.00
$170.00 $124.50 $74.00
Machine hours 4 2 3
Number of cases (per year) 300 500 600

1. If Smelly changes its allocation basis to machine hours, what is the total product cost per case for Product P?

a. $163.50
b. $144.00
c. $138.15
d. $117.15

2. If Smelly changes its overhead allocation to departmental rates, what is the product cost per case for Product P assuming Departments C and D use direct labor hours and machine hours as their respective allocation bases?

a. $117.15
b. $163.50
c. $131.50
d. $138.15

Answers

Answer:

Smelly Perfume Company

1. a. $117.15

2. $115.95

Explanation:

a) Data and Calculations:

                                                J              P            X         Total

Direct materials              $100.00  $ 72.00   $48.00

Direct labor                        42.00       31.50     12.00

Overhead                          28.00       21.00     14.00

                                       $170.00  $124.50  $74.00

Direct labor hours per unit   4              3           2

Total direct labor hours    1,200          1,500     1,200      3,900

Machine hours per unit        4              2           3

Total machine hours        1,200          1,000     1,800      4,000

Number of cases (per year) 300        500      600

Department                                C                    D              Total

Traceable overheads           $16,200            $11,100    $27,300

Product costs (machine hours):

Predetermined overhead rate based on machine hours = $6.825 ($27,200/4,000) per machine hour

                                                J              P            X

Direct materials              $100.00  $ 72.00   $48.00

Direct labor                        42.00       31.50     12.00

Overhead (machine hour) 27.30      13.65     20.48

                                       $169.30    $117.15   $80.48

Product costs (departmental overhead rates):

Departmental overhead rates per hour:

Department C  $4.15 ($16,200/3,900) per labor hour

Department D $2.78 ($11,100/4,000) per machine hour

                                                J              P            X

Direct materials              $100.00  $ 72.00   $48.00

Direct labor                        42.00       31.50     12.00

Overhead                           16.60       12.45       8.34

                                      $158.60   $115.95   $68.34

At a movie theater box office, all tickets are sequentially prenumbered. At the end of each day, the beginning ticket number is subtracted from the ending number to calculate the number of tickets sold. Then, ticket stubs collected at the theater entrance are counted and compared with the number of tickets sold. Which of the following situations does this control detect?

a. Some customers presented tickets purchased on a previous day when there wasn't a ticket taker at the theater entrance (so the tickets didn't get torn.)
b. A group of kids snuck into the theater through a back door when customers left after a show.
c. The box office cashier accidentally gives too much change to a customer.
d. The ticket taker admits his friends without tickets.

Answers

C hope this helps and bye if it’s wrong blame my mom she told me lol

What is the impact on the accounting equation when an accounts receivable is collected?

Answers

DONT TRUST THAT LINK! IT IS USED TO STEAL PERSONAL INFORMATION! Report any links people give you.

Answer for your question!

Because one asset increases and another decreases by the same amount, the accounting equation remains unchanged and in balance, suggests Principles of Accounting. For example, if you collect $100 from an account receivable, cash increases by $100 and accounts receivable decreases by $100.

Indicate whether each of the following costs of an airplane manufacturer would be classified as direct materials cost, direct labor cost, or factory overhead cost: Cost Classification a. Aircraft engines b. Controls for flight deck c. Depreciation of welding equipment d. Landing gear e. Machine lubricants f. Salary of plant superintendent g. Tires h. Wages of assembly line worker

Answers

Answer:

Cost Classification :

a. Aircraft engines = direct materials cost

b. Controls for flight deck = direct materials cost

c. Depreciation of welding equipment = factory overhead cost

d. Landing gear = direct materials cost

e. Machine lubricants = factory overhead cost

f. Salary of plant superintendent = factory overhead cost

g. Tires = direct materials cost

h. Wages of assembly line worker = direct labor cost

Explanation:

direct materials cost,

This is the cost of materials directly traced to the Product manufactured.

direct labor cost,

This is the cost of factory labor directly traced to the Product manufactured.

factory overhead cost

This is the factory costs incurred not directly traced to the Product being manufactured

The table below shows Lanark's production possibilities.


A B C D E F
Wheat 0 180 315 405 450 468
Cars 190 181 163 127 73 0

a. If Lanark is producing 145 cars, it can produce approximately
wheat.

b. If Lanark is currently producing combination C, the cost of 90 more wheat is

(Click to select)
.

c. If Lanark is currently producing combination D, the approximate per unit cost of an additional car is

(Click to select)
. If necessary, round your answers to 1 decimal place. Remember to round 0.05 up to 0.10.

Answers

If Lanark is currently generating 145 buses, it can generate about 180 units of wheat. .

b. The cost of 90 further wheat is 90.

c. The approximate per unit cost of an fresh auto is 54.

To determine the approximate quantum of wheat Lanark can produce if it's presently producing 145 buses , we need to find the matching value in the" Wheat" column. Grounded on the given table, we can see that the values in the" buses" column drop from left to right. thus, we need to find the combination where the number of buses is closest to 145, which is combination B. In combination B, Lanark can produce roughly 180 units of wheat.

We can find the cost of 90 further wheat by comparing the wheat values between combinations C and D, If Lanark is presently producing combination C. The wheat value in combination C is 315, and the wheat value in combination D is 405.

The difference between these two values represents the fresh wheat produced when moving from combination C to combination D. In this case, the difference is 405- 315 = 90. thus, the cost of 90 further wheat is the difference between the wheat values in combination C and D, which is 90.

we can determine the approximate per unit cost of an fresh auto by comparing the auto values between combinations D and E, If Lanark is presently producing combination D. The auto value in combination D is 127, and the auto value in combination E is 73.

The difference between these two values represents the drop in auto product when moving from combination D to combination E. In this case, the difference is 127- 73 = 54.

thus, the approximate per unit cost of an fresh auto is the difference between the auto values in combination D and E, divided by the drop in auto product, which is 54/ 1 = 54.

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Relative to a competitively organized industry, a monopoly Group of answer choices produces more output and charges a higher price. produces less output and charges a higher price. produces more output and charges a lower price. produces less output and charges a lower price.

Answers

Answer:

A higher-priced less output

Explanation:

A monopoly has full rain on a certain item in the country or state, for example we have a sort of diamond monopoly, There are so many diamonds in the world but they choose to only produce a small amount for jewlery or other such things to drive the price up.

Please for future reference when typing out a multiple choice question type it in the

- one

- two

- three

format. That is so we can better help you!

Carlos transfers property with a tax basis of $750 and a fair market value of $1,200 to a corporation in exchange for stock with a fair market value of $975 and $75 cash in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $150 on the property transferred. What is the corporation's tax basis in the property received in the exchange

Answers

Answer:

$975

Explanation:

Use the following formula to calculate the Corporation's Tax basis in the property received in exchange

Corporation's Tax basis = Tax basis of Property transferred + Gain recognized

Where

Tax basis of Property transferred = $750

Gain recognized = 975 - $750 = $225

Placing values in the formula

Corporation's Tax basis = $750 + $225

Corporation's Tax basis = $975

Eagle Inc. sold apparel to customers in May of 2020 for $240,000. At the point of sale, Eagle Inc. provided customers 2,400 coupons for 30% off purchases in June and July of 2020. The coupon is considered a separate performance obligation. Eagle Inc. estimates the standalone selling price of the apparel to be $240,000 and the standalone selling price of the coupons to be $36,000 ($30 estimated coupon value x 1,200 coupons expected to be redeemed). Determine the amount of revenue that Eagle would record in May for the sale of apparel, and the amount of revenue deferred for the customer options (coupon promotion).

Answers

Answer:

Eagle Inc.

The amount of revenue that Eagle would record in May for the sale of apparel is $240,000.  

The amount of revenue deferred for the customer options (coupon promotion) is $0.

Explanation:

a) Data and Calculations:

Sales of apparel to customers in May 2020 = $240,000

Coupons for 30% off purchases in June and July = 2,400

Standalone selling price of the apparel = $240,000

Standalone selling price of the coupons expected to be redeemed = $36,000 (1,200 * $30)

b) The amount of revenue to record in May for the sale of apparel equals $240,000.  The coupon expense of $36,000 will not be recognized by Eagle Inc. until the coupons are redeemed or used because the coupons were given to induce future purchases and not for the past purchase of apparel.

You plan to visit Geneva, Switzerland in three months to attend an international business conference. You expect to incur the total cost of SF 5,000 for lodging, meals and transportation during your stay. As of today, the spot exchange rate is $0.60/SF and the three-month forward rate is $0.63/SF. You can buy the three-month call option on SF with the exercise rate of $0.64/SF for the premium of $0.05 per SF. Assume that your expected future spot exchange rate is the same as the forward rate. The three-month interest rate is 6 percent per annum in the United States and 4 percent per annum in Switzerland.

Required:
a. Calculate your expected dollar cost of buying $F5,000 if you choose to hedge by a call option on SF.
b. Calculate the future dollar cost of meeting this SF obligation if you decide to hedge using a forward contract.
c. At what future spot exchange rate will you be indifferent between the forward and option market hedges?
d. Illustrate the future dollar cost of meeting the SF payable against the future spot exchange rate under both the options and forward market hedges.

Answers

Answer:

A. 3403.75 dollars

B. 3150

C. 0.579

D. Is an attachment

Explanation:

A. We first find the premium cost

= 0.05x5000 x 1+0.06/4

= 250x1.015

= 253.75

From here we find expected dollar cost

= Exchange rate x units + premium

= 0.63x5000+253.75

= 3,403.75 dollars

B. Forward rate = 0.63

Total cost of dollar

= 0.63x5000

= 3150

C. The investor would be indifferent at 0.579

Forward rate = unit * future + premium

3150 = 5000 * future + 253.75

3150-253.75 = 5000*future

We solve and divide through by 5000

Future = 0.579

D is in the attachment

The expected dollar cost of buying $F5,000 through the call option is $3403.75.

The first thing to do is to calculate the premium cost. This will be:

= (5% × 5000) × (1 + 6%/4)

= (0.05 × 5000) × (1 + 0.06/4)

= 250 × 1.015

= 253.75

The expected dollar cost will be:

= Exchange rate × Number of units + Call premium cost

= 0.63 × 5000 + 253.75

= 3403.75

The future dollar cost of meeting this SF obligation will be calculated thus:

= Forward rate × Number of units

= 0.63 × 5000

= $3150

The future spot exchange rate that the person will be indifferent will be:

= (3150 - 253.75) / 5000

= $0.579

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what is marketing strategies ​

Answers

Answer:

A marketing strategy refers to a business's overall game plan for reaching prospective consumers and turning them into customers of their products or services :)

Explanation:

In other words!

It refers to a business's overall game plan for getting more costumers and more money with the work of their products and services.

Luther Industries has no debt and expects to generate free cash flows of $48 million each year. Luther believes that if it permanently increases its level of debt to $100 million, the risk of financial distress may cause it to lose some customers and receive less favorable terms from its suppliers. As a result, Luther's expected free cash flows with debt will be only $44 million per year. Suppose Luther's tax rate is 40%, the risk-free rate is 6%, the expected return of the market is 14%, and the beta of Luther's free cash flows is 1.25 (with or without leverage). The value of Luther with leverage is closest to:_______.
A) 11.5%.
B) 10.8%.
C) 9.8%.
D) 13.0%.

Answers

Answer: $315 million

Explanation:

First find the cost of capital as a required rate of return using CAPM:

= Risk free rate + Beta * (Market return - Risk free rate)

= 6% + 1.25 *(14% - 6%)

= 16%

Value of Luther with leverage:

= (Cash flows with debt / required return) + (Debt * Tax)

= (44 million / 16%) + (100 million * 40%)

= $315 million

Options do not represent value.

Smiling Elephant, Inc., has an issue of preferred stock outstanding that pays a $5.70 dividend every year, in perpetuity.

If this issue currently sells for $80.45 per share, what is the required return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Answers

The required return for the preferred stock is approximately 7.08%.

To calculate the required return for the preferred stock, we can use the dividend discount model (DDM). The DDM formula is:

Required Return = Dividend / Current Stock Price

In this case, the preferred stock pays a dividend of $5.70 per year and is currently selling for $80.45 per share. Plugging these values into the formula, we get:

Required Return = $5.70 / $80.45 ≈ 0.0708

To convert this decimal to a percentage, we multiply by 100:

Required Return ≈ 0.0708 × 100 ≈ 7.08%

Therefore, the required return for the preferred stock is approximately 7.08%.

This indicates that investors expect to earn a 7.08% return on their investment in Smiling Elephant, Inc.'s preferred stock, given the current market price and the annual dividend payment.

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Labor unions are organizations of employees formed to protect and advance their members' interests by bargaining with management over job-related issues.

a. True
b. False

Answers

Answer:

I think that the correct answer is True

Jerryworld, Inc., is looking at setting up a new manufacturing plant in Dallas to produce footballs. The company bought some land six years ago for $5.2 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent these facilities from a competitor instead. If the land were sold today, the company would net $4.6 million. The company wants to build its new manufacturing plant on this land; the plant will cost $10.4 million to build, and the site requires $840,000 worth of grading before it is suitable for construction. What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project

Answers

Answer:

the proper cash flow amount to use as the initial investment in fixed assets  is $15,840,000

Explanation:

The computation of the  proper cash flow amount to use as the initial investment in fixed assets  is shown below:

= (Net amount + cost of the plant + grading cost)

= ($4.6 million  + $10.4 million  + $0.84 million )  

= $15,840,000

Hence, the proper cash flow amount to use as the initial investment in fixed assets  is $15,840,000

1. A deposit of $100,000 is made to an investment account today. At the end of each of the next four years, $5000 must be paid out to a beneficiary, and the account liquidated at the end of year four. If the liquidation value is $100,000 the account has earned an annual internal rate of return of

Answers

Answer: 5%

Explanation:

Use an Excel worksheet to determine the internal rate of return:

Investment or Cost = $100,000. This will be negative in the computation.

Cashflow = $5,000 per year

Fourth year cashflow = 5,000 + liquidation value = $105,000

IRR = 5%

Sales and Production Budgets Ultimate Audio Company manufactures two models of speakers, U500 and S1000. Based on the following production and sales data for June. U500 S1000 Estimated inventory (units), June 1 25,000 10,000 Desired inventory (units), June 30 30,000 15,000 Expected sales volume (units): Northeast Region 140,000 100,000 Southwest Region 160,000 125,000 Unit sales price $45 $80 a. Prepare a sales budget. Enter all amounts as positive numbers.

Answers

Answer:

Part a

Ultimate Audio Company

Sales Budget

For the Month Ending June 30

Product and Area         Unit Sales Volume  Unit Selling Price  Total Sales

Model U500 :

Northeast Region             140,000                       $45               $6,300,000

Southwest Region            160,000                       $45               $7,200,000

Total                                                                                            $13,500,000

Model U500 :

Northeast Region            100,000                       $80               $8,000,000

Southwest Region           125,000                       $80              $10,000,000

Total                                                                                           $18,000,000

Total Revenue from Sales                                                        $31,500,000

Part b

Ultimate Audio Company

Production Budget

For the Month Ending June 30

                                                                   Model U500     Model S1000

Expected Units to be Sold                           300,000             225,000

Add Desired Closing Inventory                      30,000                15,000

Total                                                               330,000             240,000

Less Desired Opening Inventory                  (25,000)              (10,000)

Total Production                                            305,000            230,000

Explanation:

Note : I have attached the complete question as images below !

A Sales Budget shows the Total Expected Revenue from sale of budgeted units.

     Total Revenue = Total Expected Units Sales x Selling Price Per Unit

A Production Budget shows the number of units to be produced to meet the Sales and Inventory targets

     Total Production = Expected Sales + Desired Closing Inventory - Desired Opening Inventory

Big Corporation receives management consulting services from its 95 percent owned subsidiary, Small Inc. For the year 20X8, Small billed Big $140,000. Small's labor cost and other associated costs for the employees providing services to Big totaled $121,000 in 20X8. Big reported $2,567,000 of income from its own separate operations for 20X8, and Small reported net income of $695,000. Based on the preceding information, what amount of income should be assigned to the noncontrolling shareholders in the consolidated income statement for 20X8

Answers

Answer: $34750

Explanation:

The amount of income should be assigned to the noncontrolling shareholders in the consolidated income statement for 20X8 will be:

Net income of Small = $695,000

Bug company's share = 95% × $695000 = $660250

Therefore, non controlling shareholders at 5% will be:

= 5% × Net income of Small

= 5% × $695000

= 0.05 × $695000

= $34750

Peterson Company's general ledger shows a cash balance of $7,420 on May 31. May cash receipts of $1,290, included in the general ledger balance, are placed in the night depository at the bank on May 31 and processed by the bank on June 1. The bank statement dated May 31 shows an NSF check for $170 and a service fee of $60. The bank processes all checks written by the company by May 31 and lists them on the bank statement, except for one check totaling $1,900. The bank statement shows a balance of $7,800 on May 31. Prepare a bank reconciliation to calculate the correct ending balance of cash on May 31.

Answers

Answer:

The correct ending balance of cash on May 31 is $7,190

Explanation:

The bank reconciliation can be prepared as follows:

Peterson Company

Bank Reconciliation

At May 31

Particulars                                                                                            $      

Bank statement balance at May 31 yet  to be reconciled             7,800

Add:

Cash deposited on May 31 yet to be credited                               1,290

Less:

Outstanding check                                                                         (1,900)  

Adjusted bank statement balance at May 31                              7,190  

Peterson Company

Bank Reconciliation

At May 31

Particulars                                                                                            $      

Cash book balance yet to be reconciled                                     7,420

Less:

NSF check                                                                                        (170)

Service fee                                                                                        (60)  

Adjusted cash balance at May 31                                                7,190  

Since in each of the Adjusted bank statement balance at May 31 and the Adjusted cash balance at May 31 is equal to $7,190, it implies that the correct ending balance of cash on May 31 is $7,190.

9. A Japanese car manufacturer built a factory in the United
States, It did so to reduce shipping and other costs. Make a list
of who will benefit and who will not benefit from this factory.

Answers

Answer:

Se benefician los estado unidenses porque no tienen que pagar más por el coche, también porque al abrir una fábrica pueden llegar a crear más de 5.000 puestos de trabajo. Y los japoneses no salen beneficiados porque la empresa que lleva los coches de Japón a estados unidos seguramente sea japonesa y también los trabajadores japoneses pierden trabajo

Explanation:

The __________ strategy involves deciding what goods and services the firm should offer to a group of consumers and also making decisions about customer service, brand name, packaging, labeling, product life cycles and new product development.

Answers

Answer:

a. trate

Explanation:

some trate is so much good then trote so yeah

Any four principles of administrative management theory ​

Answers

Answer

Fayol's administrative management theory can be described as an approach to management and increasing productivity by emphasizing organizational structure and human behavior. Fayol's theory is grounded in the five functions that represent management: planning, organizing, command, coordination, and control.

Answer:

Explanation:

Here are four principles of administrative management theory:


1- Scalar Chain: The principle of scalar chain emphasizes the formal chain of command within an organization. It establishes a hierarchical structure where authority flows from top to bottom. It implies that each subordinate should have a clear line of communication with their superior and that messages or instructions should pass through the established chain.


2- Unity of Command: The principle of unity of command states that an employee should receive orders and be accountable to only one superior. This ensures clarity and avoids confusion or conflicts arising from multiple authorities giving contradictory instructions.


3- Unity of Direction: The principle of unity of direction emphasizes the need for a clear and unified direction for the organization. It implies that all activities and efforts should align with the overall goals and objectives of the organization. This principle helps to avoid fragmentation and ensures that everyone is working towards a common purpose.


4- Span of Control: The principle of span of control refers to the number of subordinates that a manager can effectively supervise. It suggests that there should be a balance between a manager's span of control and their ability to provide adequate supervision, guidance, and support to their subordinates. A narrow span of control allows for closer supervision, while a wider span of control enables greater efficiency by reducing layers of management.


hope it helps!

Explain how planning involves making decisions today that will have an impact later.

Answers

Planning is figuring out what you will do and when. If you plan to play video games instead of doing homework, then tomorrow at school you will get in trouble. If you plan on dropping out of high school, later in life you will not be able to get as many jobs.

Answer: Decision making is the core of planning. Unless a decision has been made, a plan cannot be implemented in the field. ... Decisions can be made without planning but planning cannot be done without making decisions. Planning can be defined as the process of selecting a future course of action.\

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