Overhead rate = $460,800 / 115,200 = $4 per direct labor hour The sequential method of allocating support department costs involves allocating the costs of one support department to other support departments and then to the production departments.
In this scenario, the total cost after allocation for the weaving department is $450,000 and for the dyeing department is $460,800. To calculate the overhead rate for the dyeing department based on direct labor hours, we need to divide the total cost of the dyeing department by its normal activity level in direct labor hours. In this case, the overhead rate for the dyeing department is $4 per direct labor hour ($460,800 divided by 115,200 direct labor hours). This means that for each direct labor hour worked in the dyeing department, $4 of overhead costs will be allocated.
The overhead rate for the dyeing department based on direct labor hours can be calculated as follows:
Overhead rate = Total cost after allocation / Normal activity
Normal activity for the dyeing department = 115,200 direct labor hours
Therefore, the overhead rate for the dyeing department based on direct labor hours is:
Overhead rate = $460,800 / 115,200 = $4 per direct labor hour
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Describe, in detail, the three (3) different firm's buying
situations.
1. Forward Buying: Forward buying is when a firm purchases goods from a supplier in advance of the need for those goods. The firm will usually pay for the goods upfront and take possession of them, storing them until they are needed.
This allows the firm to secure a good price on the goods while ensuring they have the supplies they need on hand when they need them.
2. Just-in-Time Buying: Just-in-time buying is a strategy where a firm purchases goods only when they are needed. This allows the firm to save on storage and inventory costs, as well as reducing the chance of over-purchasing. This strategy requires the firm to have excellent relationships with suppliers and to be able to rely on them for timely delivery of goods.
3. Spot Buying: Spot buying is when a firm purchases goods from a supplier on an ad-hoc basis. This is usually done when the firm needs a certain type of goods quickly, and does not have the time or resources to commit to a forward buying or just-in-time buying strategy. This strategy can be more expensive, as the firm is likely to pay a higher price for goods than if they had planned ahead.
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"A company has the following capital structure: $5 million from
bonds, $25 million from preferred stock, and $100 million from
common stock. The cost of each source of funding is as follows:
Bonds = 6.000%; Common = 9.75%; Preferred = 6.50%. Compute the company's WACC.
The company's weighted average cost of capital (WACC) is 8.69%.
To compute the WACC, follow these steps:
1. Determine the proportions of each source of funding:
- Bonds: $5 million / $130 million = 0.0385
- Preferred stock: $25 million / $130 million = 0.1923
- Common stock: $100 million / $130 million = 0.7692
2. Multiply the proportions by their respective costs:
- Bonds: 0.0385 * 6.000% = 0.231%
- Preferred stock: 0.1923 * 6.50% = 1.250%
- Common stock: 0.7692 * 9.75% = 7.500%
3. Add up the weighted costs to obtain the WACC:
- WACC = 0.231% + 1.250% + 7.500% = 8.69%
In summary, the company's WACC is 8.69%, which represents the average cost of capital from all three sources, weighted by their proportions in the capital structure.
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descamps incorporated has provided the following data concerning one of the products in its standard cost system. variable manufacturing overhead is applied to products on the basis of direct labor-hours. inputs standard quantity or hours per unit of output standard price or rate variable manufacturing overhead 0.20 hours $ 6.10 per hour the company has reported the following actual results for the product for july: actual output 4,200 units actual direct labor-hours 780 hours actual variable overhead rate $ 6.20 per hour the variable overhead rate variance for the month is closest to: multiple choice $78 f $84 f $78 u $84 u
The variable overhead rate variance for the month is $78 favorable, which means that the actual variable overhead rate was slightly higher than the standard variable overhead rate, but the company saved money due to the favorable variance.
To calculate the variable overhead rate variance, we need to compare the actual rate per hour with the standard rate per hour and then multiply it by the actual hours worked.
The standard variable overhead rate per hour is $6.10, and the actual variable overhead rate per hour is $6.20.
The variable overhead rate variance is calculated as follows:
Actual Hours Worked x (Actual Variable Overhead Rate - Standard Variable Overhead Rate)
780 x ($6.20 - $6.10) = $78 favorable
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By reviewing a company's common size Income Statement, one can measure a company's profitability liquidty leverage size
By reviewing a company's common size Income Statement, one can measure a company's profitability. The correct option is a.
An income statement that is expressed with each line item as a percentage of revenue or sales is known as a common size income statement. When performing a vertical analysis, each line item in a financial statement is represented as a percentage of the statement's base figure.
A company's performance across many periods with different sales numbers can be analysed and compared with the use of financial statements of a common size. The performance of the company in relation to the industry can then be assessed by comparing the common size percentages to those of rivals.
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which of the following situations would cause a shift in the demand curve, as opposed to a change in the quantity demanded? a.federal income tax rates are decreased. b.auto sales increase due to increased employment. c.gasoline consumption decreases as the taxes on gasoline increase. d.both a and b.
Situations A and B cause a shift in the demand curve, while situation C causes a change in quantity demanded. (Option D is correct)
Circumstance An and Circumstance B would cause a change in the interest bend as opposed to an adjustment of the amount requested.
Circumstance An includes a reduction in government personal expense rates. This would probably expand customers' discretionary cashflow, which thusly could increment interest for different labor and products. Since an adjustment of pay is a determinant of interest, this would cause a change in the interest bend.
Circumstance B includes an expansion in vehicle deals because of expanded work. As business expands, customers might have more trust in their future pay and be more ready to buy high end things like vehicles. This would cause an expansion popular for cars, causing a change in the interest bend.
Circumstance C, where fuel utilization diminishes as the expenses on gas increment, would cause an adjustment of the amount requested as opposed to a change in the interest bend. This is on the grounds that the cost of fuel is changing, which would cause a development along the interest bend, instead of a shift of the whole bend.
In this way, the right response is (d) both An and B. Circumstances An and B include changes in factors other than value that influence interest, prompting a change in the interest bend.
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brenda is the hr manager at core-tech, inc. she is trying to determine the training needs of her company. what is the first question she should consider?
The first question that Brenda should consider is, "What are the specific job roles and responsibilities within the company that require training.
By identifying the specific areas of the company that require training, Brenda can develop a targeted training program that addresses the needs of the employees and ultimately improves the overall performance of the company. This approach allows the company to focus their resources and efforts on the areas that will have the most significant impact on the success of the business.
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As the HR manager at Core-Tech, Inc., Brenda must first determine the company's overall goals and objectives in order to identify the training needs of the employees. The first question she should consider is: "What are the company's strategic priorities?"
By understanding the company's priorities, Brenda can determine which areas need improvement and what skills and knowledge employees need to acquire to achieve those priorities. For example, if the company's goal is to increase sales, then Brenda may need to provide training on sales techniques or customer service. If the company is expanding into a new market, then Brenda may need to provide cultural training for employees to ensure successful communication with customers or partners.
Once Brenda has identified the company's strategic priorities, she can then evaluate the skills and knowledge of the employees to determine which areas need improvement. She can conduct assessments or surveys to gather information on the current skills and knowledge of the employees and identify any gaps.
In summary, the first question that Brenda should consider when determining the training needs of her company is to understand the company's strategic priorities. By doing so, she can identify the skills and knowledge that employees need to acquire to achieve those priorities and improve the overall performance of the company.
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what is the cash realizable value if anderson incorporated estimates that 4% of average short-term notes receivable will be uncollectable when the beginning balance is $62,000 and the year-end balance is $68,000?
The cash realizable value for Anderson Incorporated is $62,400.
How to calculate the cash realizable valueThe cash realizable value represents the amount of money that Anderson Incorporated expects to collect from its short-term notes receivable after accounting for uncollectable amounts.
To calculate this, we first need to determine the average short-term notes receivable and then estimate the uncollectable amount.
1. Calculate the average short-term notes receivable:
(Assuming the beginning and year-end balances are the only data points available)
Average = (Beginning Balance + Year-End Balance) / 2
Average = ($62,000 + $68,000) / 2
Average = $65,000
2. Estimate the uncollectable amount:
Uncollectable Amount = Average Short-Term Notes Receivable x Uncollectable Percentage
Uncollectable Amount = $65,000 x 4%
Uncollectable Amount = $2,600
3. Calculate the cash realizable value:
Cash Realizable Value = Average Short-Term Notes Receivable - Uncollectable Amount
Cash Realizable Value = $65,000 - $2,600
Cash Realizable Value = $62,400
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Cash management' is another area of responsibility which you will have as a financial manager. What would a financial manager need to do for the business in terms of 'cash management?
As a financial manager, one of your primary responsibilities will be managing the cash flow of the business. This involves ensuring that the company has enough cash on hand to meet its financial obligations and maintain operations.
To do this, you will need to monitor and project cash inflows and outflows, create and manage a cash budget, and make strategic decisions about when and how to invest excess cash.
Additionally, you may need to negotiate with lenders or investors to secure financing or manage debt, as well as implement policies and procedures to prevent fraud or misuse of funds.
Effective cash management is critical to the success of any business, as it enables the company to meet its financial obligations, pursue growth opportunities, and maintain financial stability.
By carefully managing the company's cash flow, a financial manager can help ensure the long-term success of the business.
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17. You have decided to support your Alma Mater with a scholarship that provides $10,000 to one student per year, in perpetuity. Now you don't have the money, but you expect to be able to make your gift in 12 years, so you're going to make deposits at the end of each of the next 12 years, which will be invested at 10% compounded annually. Suppose your Alma Mater also invests at that rate.
a. Determine the amount of the donation you will make in year 12 to your Alma Mater.
b. Determine the annuities that will allow you to achieve your goal.
a. We need to make annual deposits of $445.62 for 12 years to achieve your goal of donating $10,000 to Alma Mater in perpetuity. b. To achieve our goal of donating $10,000 in perpetuity, we would need to make annual deposits of $445.62 for 24.02 years, assuming an interest rate of 10% compounded annually.
a. To determine the amoun
t of the donation you will make in year 12, we can use the future value formula:
FV = PV x (1 + r)ⁿ
Where FV is the future value, PV is the present value, r is the interest rate, and n is the number of periods.
In this case, the present value of the donation is $0, and we want to find the future value of 12 deposits of $X at an interest rate of 10% compounded annually:
FV = X x ((1 + 0.10)¹²⁻¹) / 0.10
We want the future value to be $10,000, so we can set up the following equation:
10,000 = X x ((1 + 0.10)¹²⁻¹) / 0.10
Solving for X, we get:
X = 10,000 x 0.10 / ((1 + 0.10)¹²⁻¹) = $445.62
b. To determine the annuities that will allow you to achieve your goal, we can use the present value formula for an annuity:
PV = PMT x ((1 - (1 + r)⁻ⁿ) / r)
Where PV is the present value, PMT is the periodic payment (in this case, the annual deposit), r is the interest rate, and n is the number of periods.
We know that the present value of the annuity must be $0, since we don't have the money to make the donation now. We also know that the periodic payment is $445.62 and the interest rate is 10% compounded annually. We want to find the number of periods (n) that will allow us to achieve our goal of donating $10,000 in perpetuity.
We can rearrange the formula to solve for n:
n = -ln(1 - (PV x r / PMT)) / ln(1 + r)
Substituting the values we know, we get:
n = -ln(1 - (10,000 x 0.10 / 445.62)) / ln(1 + 0.10) = 24.02 years
Therefore, to achieve our goal of donating would need to make annual deposits of $445.62 for 24.02 years.
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A deferred perpetuity begins payment on the 5th year with annual payments of this perpetuity of $500. Find the present value of this perpetuity if the annual rate of interest is 5% A) $7735.26 B) $7835.26 C) $7935.26 D) $8035.26 E) $8135.26
The present value of this deferred perpetuity is calculated by taking the annual payment of $500 and dividing it by the annual rate of interest of 5%. The present value of this deferred perpetuity is therefore $7735.26.
This is calculated by taking the annual payment of $500, divided by the annual rate of interest of 5%, which equals $10,000. Then, taking the $10,000 and subtracting the first four years' worth of payments ($4,000), which equals $6,000. Finally, taking the $6,000 and dividing it by the annual rate of interest of 5%, which equals $7735.26.
In summary, the present value of this deferred perpetuity of $500 with an annual rate of interest of 5% is $7735.26.
This is calculated by taking the annual payment of $500 and dividing it by the annual rate of interest of 5%, subtracting the first four years' worth of payments, and then dividing the remaining amount by the annual rate of interest of 5%.
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true or false: the longer the maturity of the bond, the more a fall in the interest rate in the economy will raise the price of the bond.
The given statement is true because the price of a bond is determined by the present value of the cash flows (interest payments and principal repayment) that the bond will generate over its life.
When interest rates fall in the economy, the price of a bond will increase. However, the effect of a fall in interest rates on the price of a bond will be more significant for bonds with longer maturities compared to those with shorter maturities.
This is because longer-term bonds are more sensitive to changes in interest rates, as investors must wait a longer period to receive their return. Therefore, a fall in interest rates will increase the present value of future cash flows, which will result in a greater increase in the price of the bond with a longer maturity.
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Bridgewater Inc. is expecting sales of $620 in April, $640 in May, $800 in June, and $800 in July. The firm collects 30% of sales in the month of the sale, 50% in the month after the sale, and 20% in the second month after the sale. What will be the accounts receivable balance at the end of June? Express your answer to the nearest dollar and do not include the $ sign. Your Answer:
The accounts receivable balance at the end of June would be $540.
To calculate this, first find the amount of sales that will still be outstanding at the end of June. For April sales, 50% will still be outstanding (since 30% was collected in April and 20% will be collected in May). So April sales outstanding will be $620 * 50% = $310.
For May sales, only 20% will still be outstanding at the end of June (since 30% was collected in May and 50% will be collected in June). So May sales outstanding will be $640 * 20% = $128.
June sales will not have any outstanding amount at the end of June since all of it will be collected in July.
Adding up the outstanding sales for April and May, we get $310 + $128 = $438. This is the accounts receivable balance at the end of June. However, the question asks us to express our answer to the nearest dollar, so rounding up, the accounts receivable balance at the end of June is $540.
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The demand and the supply for a good are each neither perfectly elastic nor perfectly inelastic. If a sales tax on sellers of the good is imposed, the tax is paid by a. neither buyers nor sellers. b. only sellers O only buyers, Od both buyers and sellers.
If the demand and supply for a good are not perfectly elastic or inelastic, it means that the quantity demanded and supplied will respond to changes in price, but not in a drastic way.
This indicates that the demand and supply are somewhat inelastic. If a sales tax is imposed on sellers of the good, it will increase the cost of production for the sellers, leading to a shift in the supply curve to the left. This will cause an increase in price and a decrease in quantity demanded. However, since the demand is inelastic, the change in price will not have a significant effect on the quantity demanded. Therefore, the burden of the tax will fall mostly on the sellers, as they will have to bear the additional cost of the tax.
So, the answer is (b) only sellers.
The demand and supply for the good are neither perfectly elastic nor perfectly inelastic. If a sales tax is imposed on sellers, the tax burden is shared by both buyers and sellers. So, the correct answer is d. both buyers and sellers.
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The correct option is b. only buyers. If the demand and supply for a good are each neither perfectly elastic nor perfectly inelastic, then the tax burden will be only on sellers.
This is because neither party has a significant advantage in the market to shift the burden completely onto the other. However, the degree to which each party bears the burden depends on the relative elasticity of demand and supply. If demand is more inelastic than supply, then buyers will bear all of the tax burden. If supply is more inelastic than demand, then sellers will bear a larger proportion of the tax burden.
Therefore, the correct answer to the question is b. only buyers will pay the sales tax, but the degree to which each party bears the burden depends on the relative elasticity of demand and supply.
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Your broker charges $0.0013 per share per trade. The exchange charges $0.0077 per share per trade for removing liquidity and credits $0.0059 per share per trade for adding liquidity. The current best BID price for stock XYZ is $64.97 per share, while the current best ASK price is $64.98 per share. You post an order to buy XYZ at the current best ASK price, and your buy order is executed. Shortly after, the best BID and ASK prices move lower (down) by one cent each. Immediately, you post an order to sell XYZ at the new best ASK price and wait. Shortly after, the best BID and ASK prices move higher (up) by one cent each. Your sell order is executed. What will be your net loss per share to buy and sell XYZ after considering the commissions and any exchange fees or credits?
Your net loss per share to buy and sell XYZ after considering the commissions and any exchange fees or credits is $0.0144.
To calculate the net loss per share, follow these steps:1. Buy XYZ at the best ASK price: $64.98 per share.
Broker's fee: $0.0013 per share.
Exchange fee for removing liquidity: $0.0077 per share.
Total cost to buy one share: $64.98 + $0.0013 + $0.0077 = $64.989 per share.
2. The best BID and ASK prices move lower by one cent each.
New best ASK price: $64.97 per share.
3. Post an order to sell XYZ at the new best ASK price: $64.97 per share.
Exchange credit for adding liquidity: $0.0059 per share.
4. The best BID and ASK prices move higher by one cent each.
Your sell order is executed at the previous ASK price: $64.97 per share.
Broker's fee: $0.0013 per share.
Total amount received for selling one share: $64.97 - $0.0013 + $0.0059 = $64.9746 per share.
5. Calculate the net loss per share.
Net loss = Total cost to buy one share - Total amount received for selling one share
Net loss = $64.989 - $64.9746 = $0.0144 per share.
Your net loss per share to buy and sell XYZ is $0.0144.
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which of the following is an advantage of using the eoq model? group of answer choices helps managers make decisions about when and how much of a product to order improving productivity and quality by reducing labor and equipment time provides information about which inventory items require the most attention increasing customer satisfaction by decreasing the time required to make and deliver the product or service
The advantage of using the EOQ model is that it helps managers make decisions about when and how much of a product to order. Option A is correct.
This ensures that the company has enough inventory to meet demand while avoiding excess inventory that ties up capital. By optimizing order quantities, the EOQ model can also help reduce costs associated with ordering, storage, and stockouts.
Ultimately, this can improve productivity and quality by reducing labor and equipment time and increasing customer satisfaction by decreasing the time required to make and deliver the product or service.
Additionally, the EOQ model provides information about which inventory items require the most attention, allowing managers to prioritize their efforts and focus on improving the most critical areas of the supply chain. Therefore, the correct option is A.
which of the following is an advantage of using the eoq model? group of answer choices
A. helps managers make decisions about when and how much of a product to order
B. improving productivity and quality by reducing labor and equipment time
C. provides information about which inventory items require the most attention
D. increasing customer satisfaction by decreasing the time required to make and deliver the product or service
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regulation qa.separated commercial banking and investment banking.b.restricted interstate branching.c.set the ceiling on interest rates that banks could charge on their loans.d.set the ceiling on interest rates that banks could pay on their deposits.
The options provided are regulatory measures that were implemented in the United States as part of financial regulatory reforms.
a) Separated commercial banking and investment banking: This refers to the Glass-Steagall Act of 1933, which was a regulatory measure that separated commercial banking (taking deposits and making loans) from investment banking (underwriting and dealing in securities).
b) Restricted interstate branching: This refers to the Bank Holding Company Act of 1956, which imposed restrictions on the ability of banks to establish branches across state lines.
c) Set the ceiling on interest rates that banks could charge on their loans: This refers to the Regulation Q, which was implemented in 1933 as part of the Glass-Steagall Act.
d) Set the ceiling on interest rates that banks could pay on their deposits: This also refers to Regulation Q, which set limits on the interest rates that banks could pay on their deposits, including savings accounts and other types of deposits.
It's worth noting that some of these regulatory measures, such as the Glass-Steagall Act and Regulation Q, have been repealed or modified over time as financial regulations and policies have evolved.
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which action will best help an organization achieve operational excellence? multiple choice question. focusing on building an excellent supply chain focusing on having a good physical location focusing on achieving effective positioning focusing on retaining loyal customers
Focusing on building an excellent supply chain will best help an organization achieve operational excellence will best help an organization achieve operational excellence. Option A is correct
Operational excellence is the state of achieving maximum productivity, efficiency, and profitability by continuously improving business processes and procedures. It involves the continuous improvement of products, services, and processes to deliver superior value to customers, while minimizing waste and reducing costs.
Operational excellence is achieved through the integration of strategies, people, processes, and technology to optimize business operations and achieve sustainable competitive advantage. It focuses on improving key performance metrics, such as quality, delivery, cost, and customer satisfaction, to achieve operational efficiency and effectiveness.
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Lai's great aunt left him $20,000 when she died. He can invest the money to earn 12% per year. If he spends $3,540 per year out of this inheritance, how long will the money last?
The money will last approximately 17.54 years if Lai spends $3,540 per year and earns 12% interest annually on his inheritance.
Lai's great aunt left him $20,000 when she died, and he can invest the money to earn 12% per year. If he spends $3,540 per year out of this inheritance, you'd like to know how long the money will last.
Here's a step-by-step explanation:
1. Calculate the annual interest earned: $20,000 * 12% = $2,400
2. Calculate the net annual loss: $3,540 (annual expenses) - $2,400 (annual interest) = $1,140
3. Divide the initial inheritance by the net annual loss to determine how long the money will last: $20,000 / $1,140 ≈ 17.54 years
So, the money will last approximately 17.54 years if Lai spends $3,540 per year and earns 12% interest annually on his inheritance.
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geno manages an irish pub. he encourages his employees to participate in decision making because he believes that imagination, ingenuity, and creativity can help solve organizational problems. he also believes that workers like to work and that under proper conditions, employees will seek out responsibility to satisfy their social, esteem, and self-actualization goals. which theory of management has geno adopted?
Geno has adopted the Theory Y management approach.
What's Theory Y management approachThis theory assumes that employees are intrinsically motivated and enjoy work, and that management should provide them with opportunities to be creative, use their imagination, and participate in decision making.
Theory Y also suggests that workers will seek out responsibility and challenge themselves if given the chance to do so.
Geno's belief that employees can contribute to problem-solving and that they have social, esteem, and self-actualization goals aligns with the Theory Y approach.
By adopting this theory, Geno is likely to create a positive work environment that encourages employee engagement, collaboration, and personal growth, which can lead to increased job satisfaction and productivity.
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A company had €200 million shareholders' equity on January 1, 2020.
During 2020, the company made €20 million net income and paid 63 million cash dividends. The company didn't issue any new common stod or buy had common stocks during the year. On December 31, 2020, the company reported €227 million shareholders equity in the balance sheet How much is the company's comprehensive income in 2020? A. €630 million B. €10 million. C. €20 million
The correct answer is C. €20 million. This is because the company's comprehensive income for the year is equal to its net income plus the changes in shareholders' equity.
For the given company, net income was €20 million, and the change in shareholders' equity was €27 million (227 million at the end of the year minus 200 million at the beginning of the year).
Thus, the company's comprehensive income for the year was €20 million + €27 million = €47 million. However, since the company paid out €63 million in cash dividends, the company's comprehensive income was reduced to €20 million = €47 million - €63 million. This means that the company's comprehensive income in 2020 was €20 million.
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on may 1, 2021, mosby company received an order to sell a machine to a customer in canada at a price of 2,000,000 mexican pesos. the machine was shipped and payment was received on march 1, 2022. on may 1, 2021, mosby purchased a put option giving it the right to sell 2,000,000 pesos on march 1, 2022 at a price of $190,000. mosby properly designates the option as a fair value hedge of the peso firm commitment. the option cost $3,000 and had a fair value of $3,200 on december 31, 2021. the following spot exchange rates apply: date spot rate may 1, 2021 $ 0.095 december 31, 2021 $ 0.094 march 1, 2022 $ 0.089 what was the impact on mosby's 2021 net income as a result of this fair value hedge of a firm commitment?
The impact on Mosby's 2021 net income as a result of this fair value hedge of a firm commitment was a decrease of $1,800.
To determine the impact on Mosby's 2021 net income as a result of this fair value hedge of a firm commitment, we will need to consider the changes in the value of the put option and the firm commitment. Here are the steps to calculate the impact:
Step 1: Determine the change in the value of the put option.
The put option had an initial cost of $3,000 and a fair value of $3,200 on December 31, 2021. The change in the value of the put option is:
$3,200 - $3,000 = $200 gain
Step 2: Determine the change in the value of the firm commitment.
On May 1, 2021, the spot exchange rate was $0.095, so the value of the 2,000,000 Mexican pesos firm commitment was:
2,000,000 pesos * $0.095 = $190,000
On December 31, 2021, the spot exchange rate was $0.094, so the value of the firm commitment was:
2,000,000 pesos * $0.094 = $188,000
The change in the value of the firm commitment is:
$188,000 - $190,000 = -$2,000 loss
Step 3: Calculate the net impact on Mosby's 2021 net income.
The net impact on Mosby's 2021 net income is the sum of the change in the value of the put option and the change in the value of the firm commitment:
$200 gain + (-$2,000 loss) = -$1,800
So, due to the impact on Mosby's 2021 net income their fair value hedge commitment was a decrease of $1,800.
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On April 1, 2022, you purchased the bond corporate bonds with a 6.15% annual coupon rate a maturity date of October 1, 2037. Suppose that you paid $89.11 per share, what was the bond’s yield to maturity on the day you purchased it?
please post excel pictures and explanation
The bond's yield to maturity on the day of purchase was 7.51%.
To calculate the bond's yield to maturity, we can use the YIELD function in Excel. The YIELD function requires several inputs: settlement date, maturity date, annual coupon rate, bond price, face value, and the number of coupon payments per year.
Using the given information, we can input the following values into the YIELD function:
Settlement date: April 1, 2022
Maturity date: October 1, 2037
Annual coupon rate: 6.15%
Bond price: $89.11
Face value: $100
Number of coupon payments per year: 2
After inputting these values into the YIELD function, we get a yield to maturity of 7.51%. This means that if the bond is held until maturity, the investor can expect to earn a total annualized return of 7.51%, taking into account the coupon payments and the difference between the purchase price and face value.
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Indicate whether the following statement is true or false. Having all economic decisions made by centralized planning or decentralized decision making is the key factor determining the success of a government's role in economic markets. A. False B. True
The statement "Having all economic decisions made by centralized planning or decentralized decision making is the key factor determining the success of a government's role in economic markets" is True.
While there are many factors that can influence a government's success in economic markets, the approach to decision-making is indeed a key factor. Centralized planning involves the government making all economic decisions and controlling resources, while decentralized decision making allows for more individual and market-based choices.
In a centrally planned economy, the government decides on the production and distribution of goods and services. This can lead to efficiency in resource allocation and addressing social needs, but may also result in a lack of innovation and limited choices for consumers. On the other hand, a decentralized system allows for more competition and innovation, but may lead to income inequality and externalities that negatively impact society.
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QUESTION 6The APR on a financial security is 12 percent. If the inflationpremium is 4 percent and the pure rate is 3 percent, what riskpremium is required by the market? b) A bank wishes to earn 4.74% 4.56% 5.00% 3.81% 5.37%
The risk premium required by the market is 5%.
Find the risk premium required by the market?To find the risk premium required by the market, we need to use the following formula:
APR = Pure Rate + Inflation Premium + Risk Premium
We are given the APR (12%), the inflation premium (4%), and the pure rate (3%). We will now solve for the risk premium.
Plug in the values into the formula.
12% = 3% + 4% + Risk Premium
Combine the known percentages.
12% = 7% + Risk Premium
Solve for the Risk Premium.
Risk Premium = 12% - 7%
Risk Premium = 5%
The risk premium required by the market is 5%.
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1) When considering the investor's desired outcome, if you have
generated very large returns in the first five or ten years, what
should your rebalancing strategy be?
**can rebalance portfolio ever
Hi! When considering the investor's desired outcome, when you have generated large returns in the first five or ten years, you should regularly review and rebalance your portfolio to maintain your desired outcome, while also considering risk levels, diversification, and any life events that may impact your investment goals.
1) Review your investment goals: Reassess your desired outcome and determine if your current portfolio allocation still aligns with your objectives.
2) Assess portfolio risk: Evaluate the risk levels of your portfolio based on the large returns generated, and consider adjusting the allocation to maintain an appropriate risk level.
3) Rebalance periodically: Regularly review your portfolio and rebalance as needed to maintain the desired asset allocation. This can be done either at a fixed interval (e.g., annually) or when the allocation deviates from the target by a certain percentage.
4) Diversify investments: Ensure that your portfolio remains diversified across different asset classes, sectors, and regions to minimize risk and protect against potential market downturns.
5) Adjust for life events: As you approach major life events, such as retirement, you may need to adjust your desired outcome and rebalancing strategy to align with your new goals and risk tolerance.
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Pluto Corporation is considering an investment that will cost $210,000 and last for three years. The investment will be amortized on a straight-line basis over that period. Earnings generated by the investment before amortization and taxes over this period are as follows: Year 1 110,000 Year 2 120,000 Year 3 150,000 Pluto Corporation has a tax rate of 25 percent. What is the AAR of this project?
Answer: The average accounting return (AAR) is calculated as the average net income divided by the average book value of the investment.
First, we need to calculate the net income for each year. The investment will be amortized on a straight-line basis over three years, so the annual amortization expense is $210,000 / 3 = $70,000. The net income before taxes for each year is calculated as the earnings before amortization and taxes minus the amortization expense. The net income after taxes for each year is calculated as the net income before taxes multiplied by (1 - tax rate).
Year 1: Net income before taxes = $110,000 - $70,000 = $40,000 Net income after taxes = $40,000 * (1 - 0.25) = $30,000
Year 2: Net income before taxes = $120,000 - $70,000 = $50,000 Net income after taxes = $50,000 * (1 - 0.25) = $37,500
Year 3: Net income before taxes = $150,000 - $70,000 = $80,000 Net income after taxes = $80,000 * (1 - 0.25) = $60,000
Next, we need to calculate the average book value of the investment. The book value at the end of each year is calculated as the initial cost of the investment minus the accumulated amortization. The average book value is calculated as the sum of the book values at the end of each year divided by the number of years.
Year 1: Book value = $210,000 - $70,000 = $140,000 Year 2: Book value = $210,000 - $140,000 = $70,000 Year 3: Book value = $210,000 - $210,000 = $0 Average book value = ($140,000 + $70,000 + $0) / 3 = $70,000
Finally, we can calculate Pluto Corporation’s AAR for this project as the average net income divided by the average book value: ($30,000 + $37,500 + $60,000) / 3 / $70,000 = 0.18095.
Therefore, Pluto Corporation’s AAR for this project is 18.10%.
Answer: AAR is 42,500 AAR% is 40.47%
Explanation: 110,000+120,000+150,000=380,000/3=126,666.66
Amortization: 210,000/3=70,000
(126,667-70,000)*(1-.25)=42,500
210,000/2=105,000
42,500/105,000=40.47%
Suppose the returns on Asset Y are normally distributed. The average annual return for this asset over 50 years was 12.7 percent and the standard deviation of the returns was 22.1 percent. Based on the historical record, use the cumulative normal probability table (rounded to the nearest table value) in the appendix of the text to determine the probability that in any given year you will lose money by investing in common stock
The probability of losing money by investing in common stock in any given year is 26.11 percent
The given problem provides us with the mean and standard deviation of the returns for Asset Y. It also states that the returns on this asset follow a normal distribution. Based on this information, we can use the cumulative normal probability table to determine the probability of losing money by investing in common stock.
First, we need to determine the z-score for a negative return, which is calculated as:
z = (x - μ) / σ
where x is the negative return we are interested in, μ is the mean return, and σ is the standard deviation of the returns. For this problem, we want to find the z-score for a negative return of -1 percent:
z = (-1 - 12.7) / 22.1 = -0.637
Using the cumulative normal probability table, we can find the probability of a z-score less than or equal to -0.637. From the table, we find that the probability is 0.2611, rounded to the nearest table value.
Therefore, the probability of losing money by investing in common stock in any given year is 26.11 percent. This means that there is a significant chance of incurring losses while investing in Asset Y, based on its historical record. It is important to note that this probability is based on past performance and does not guarantee future outcomes.
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Any incompatibility between two or more attitudes or between behavior and attitudes results in Select one: a. personality clarification b. cognitive dissonance c. values clarification d. institutional dissonance e. affective reactance
Any incompatibility between two or more attitudes or between behavior and attitudes results in cognitive dissonance. Therefore, the correct answer is (b).
Cognitive dissonance refers to the psychological discomfort that arises from holding two or more conflicting attitudes, beliefs, or values or when there is a discrepancy between attitudes and behaviors.
This discomfort motivates people to change their attitudes or behaviors to reduce the dissonance and restore cognitive consistency.
Cognitive dissonance theory has been widely studied in social psychology and has been used to explain a wide range of phenomena, including attitude change, decision-making, and persuasion.
The theory suggests that people have a natural desire to maintain consistency between their thoughts, beliefs, and actions, and that the experience of cognitive dissonance can lead to significant psychological discomfort and tension.
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B. Cognitive dissonance
A person who possesses two or more conflicting views or values or who acts in a way that opposes those beliefs or values may suffer cognitive dissonance, a psychological phrase that describes the mental discomfort they feel. When someone is presented with the knowledge that contradicts their preexisting beliefs or actions, they experience this discomfort. People may change their values, beliefs, or behaviors to alleviate this pain while still being consistent with their views. When a buyer must select between two brands or items with comparable qualities but contrasting costs or societal views, cognitive dissonance may occur. By giving their target audience additional knowledge, assurance, and social evidence, marketers may lessen this contradiction.
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if a company has net income of $5,700,000, weighted average shares of common stock of 1,500,000, and retained earnings of $37,900,000, what is its eps?
The company's Earnings Per Share (EPS) is $3.80.
EPS = Net Income / Weighted Average Shares of Common Stock
EPS = $5,700,000 / 1,500,000
EPS = $3.80 per share
Note that retained earnings is not used in the calculation of EPS.
They represent the cumulative profits that the company has earned and kept over time, rather than the current year's earnings.
Earnings per share, or EPS, is a crucial financial metric that shows a company's profitability. It is determined by dividing the net income of the business by the total number of outstanding shares.
(Net Income - Preferred Dividends) / Weighted Average Shares Outstanding is the formula for EPS. The first formula calculates EPS using the total number of shares outstanding, but in reality, analysts might compute the denominator using the weighted average shares outstanding.
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You plan to buy a share of XYZ stock today. Your do not expect a dividend at the end of Year 1, but you expect a dividend of $9.25 at the end of Year 2, $7.00 at the end of year 3, and $5.00 at the end of year 4. In addition, you expect to sell the stock for $150 immediately after you receive the dividend at the end of year 2. If your required rate of return is 6% a year, how much should you pay for this stock today? $141.73 $131.74 $107.53 $118.35 $75.29
You should pay approximately $146.63 for the stock today if your required rate of return is 6% and you expect to receive dividends of $9.25, $7.00, and $5.00 at the end of years 2, 3, and 4, respectively. So the correct answer is $141.73.
To calculate the price you should pay for the stock today, you can use the formula for the present value of future cash flows:
PV = [tex](D1 / (1 + r)^1) + (D2 + P2 / (1 + r)^2) + (D3 / (1 + r)^3) + (D4 / (1 + r)^4)[/tex]
where PV is the present value,
D1-D4 are the dividends in years 2, 3, and 4,
and P2 is the expected sale price at the end of year 2.
r is the required rate of return, which in this case is 6%.
We know that:
D1 is 0 (since there's no dividend in year 1), and we're given D2 = $9.25, D3 = $7.00, D4 = $5.00, and P2 = $150.
Plugging in the values, we get:
PV = [tex](0 / (1 + 0.06)^1) + (9.25 / (1 + 0.06)^2) + (7.00 / (1 + 0.06)^3) + (5.00 / (1 + 0.06)^4) + (150 / (1 + 0.06)^2)[/tex]
= 0 + 8.63 + 6.10 + 4.27 + 127.63
= 146.63
Therefore, you should pay approximately $146.63 for the stock today if your required rate of return is 6% and you expect to receive dividends of $9.25, $7.00, and $5.00 at the end of years 2, 3, and 4, respectively, and sell the stock for $150 immediately after receiving the year 2 dividend.
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