Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.6% × service years × final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2007 and is expected to retire at the end of 2041 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $90,000 at the end of 2021 and the company's actuary projects her salary to be $240,000 at retirement. The actuary's discount rate is 7%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 2. Estimate by the projected benefits approach the amount of Davenport's annual retirement payments earned as of the end of 2021. 3. What is the company's projected benefit obligation at the end of 2021 with respect to Davenport? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.) 4. If no estimates are changed in the meantime, what will be the company's projected benefit obligation at the end of 2024 (three years later) with respect to Davenport? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.)

Answers

Answer 1

Answer:

Kindly check explanation

Explanation:

Given the following :

Annual retirement benefit plan: (1.6% * service years * final years' salary

Year of hire = beginning of 2007

Retiremet year = 2041

Years of service = 35

Required: 2. Estimate by the projected benefits approach the amount of Davenport's annual retirement payments earned as of the end of 2021.

1.6% * service years * final years' salary

Service years = 2021 - beginning of 2007 = 15 years on service

Salary at the end of 2021 = $90000

Hence,

1.6% * 15 * 90000 = $21,600

3. What is the company's projected benefit obligation at the end of 2021 with respect to Davenport?

Period (n) = Retiremet span = 18 years ; rate (r) = 7% ;

Present value of ordinary annuity $1 ; n = 18 ; r = 7% = 10.0591

$21,600 * 10.0591 = $217,276.56

= $217,277

Present value of retirement benefit at the end of 2041

PV factor $1 ; period (2041 - 2021) = 20 ; r = 7% = 0.258

$217,277 * 0.258 = $56,057.466

$56,057

4. If no estimates are changed in the meantime, what will be the company's projected benefit obligation at the end of 2024 (three years later) with respect to Davenport?

1.6% × 18 years × $90000 = $25920

Present value of ordinary annuity $1 ; n = 18 ; r = 7% = 10.0591

$25920 × 10.0591 = $260732

PV factor $1 ; period (2041 - 2021) = 20 - 3 = 17; n = 17 ; r = 7% = 0. 317

$260732 × 0.317 = $82652.044 = $82652


Related Questions

At the end of the current year, Leer Company reported total liabilities of $319,000 and total equity of $119,000. The company's debt ratio on the last year-end was:___________.
a. 72.8%.
b. 268%.
c. 3-68%.
d. 37.3%.
e. $438,000

Answers

Answer:

72.8%

Explanation:

The first step is to calculate the total assets

Total assets= Total liabilities + total equity

= $319,000 + $119,000

= $438,000

Therefore the debt ratio can be calculated as follows

= Total liabilities/total assets

= $319,000/$438,000

= 0.728×100

= 72.8%

1. When will countries trade? Assuming 2 goods, food and clothing, and that both countries’ preferences are homothetic (but not necessarily identical), determine whether two countries will trade in each of the following situations: (a) Countries have identical preferences and identical endowments. (b) Countries have identical preferences, their endowments differ, and their endowments are not in the same ratio of food to clothing. (c) Countries have identical preferences, their endowments differ, but the ratio of food to clothing is the same in both countries. (d) Countries have identical endowments but different preferences. (e) Countries have both different preferences and different endowments.

Answers

Answer:

(a) Countries have identical preferences and identical endowments.

Explanation:

Analyzing the statement, there is information that the preferences of countries are homothetic (but not necessarily identical) with respect to the 2 goods, food and clothing.

That is why it is correct to state that countries will not trade with each other, as countries have identical preferences and identical allocations, which means that the demands for these goods will be related to the prices of the goods and not in relation to income or preferences.

Therefore, there is no need to commercialize these two goods between these countries, except in situations of scarcity.

Skipper Company manufactures toy boats and uses an activitybased costing system. The following information is provided for the month of​ May: Activity Estimated Indirect Activity Costs Allocation Base Estimated Quantity of Allocation Base Materials handling Number of parts parts Assembling Number of parts parts Packaging Number of boats boats Each boat consists of four​ parts, and the direct materials cost per boat is . There is no direct labor. What is the total manufacturing cost per​ boat? (Round any intermediate calculations and your final answer to the nearest​ cent.)

Answers

Answer:

$ 22.97

Explanation:

Calculation for the total manufacturing cost per boat

First step is to Calculate the Activity rates

Activity Cost Pool Activity driver Overhead Cost (A) Expected Activity (B) Activity rate (A/B)

Materials handling Number of Part

$ 3,300÷ 3000 =$ 1.10 Per Part

Assembling Number of Part

$ 4,800÷3000 =$ 1.60 Per Part

Packaging Number of Boat

$ 6,000÷ 1300 =$ 4.62 Per Boat

Second step is to Calculate the Cost assigned to Boat

Activity name Activity Rates Activity ABC Cost

(A) (B) (A x B)

Materials handling

$ 1.10 × 4.00=$ 4.40

Assembling

$ 1.60 × 4.00 =$ 6.40

Packaging

$ 4.62 × 1.00 = $ 4.62

Total Overheads assigned per boat $ 15.42

($4.40+$6.40+$4.62)

Last step is to Calculate for the total manufacturing cost per boat

Boat

Direct material $ 7.55

Direct labor $0

Overheads $15.42

Total Cost per unit $ 22.97

($7.55+$15.42)

Therefore the total manufacturing cost per boat is $ 22.97

Chelsea Company has sales of $400,000, variable costs of $10 per unit, fixed costs of $100,000, and a target profit of $60,000. How many units were sold?

a. 12,000
b. 18,000
c. 24,000

Answers

Answer:

24,000

Explanation:

Chelsea company had sales of $400,000

Variable cost is $10 per unit

Fixed costs is $100,000

Tarhet profit is $60,000

Thetefore The units sold can be calculated as follows

400,000-10Q-$100,000= $60,000

$400,000-$100,000-10Q= $60,000

$300,000-Q= $60,000

$300,000-$60,000= 10Q

$240,000= 10Q

Q= 240,000/10

Q= 24,000

Curtis invests $450,000 in a city of Athens bond that pays 6.50 percent interest. Alternatively, Curtis could have invested the $450,000 in a bond recently issued by Initech, Incorporated that pays 7.75 percent interest with similar risk as the city of Athens bond. Assume that Curtis's marginal tax rate is 24 percent. How much explicit tax would Curtis incur on interest earned on the Initech, Incorporated bond

Answers

Answer:

$8,370

Explanation:

Calculation for How much explicit tax would Curtis incur on interest earned on the Initech, Incorporated bond

Using this formula

Explicit tax = (Amount Invested× Interest percentage)×Marginal tax rate

Let plug in the formula

Explicit tax =($450,000×7.75%)×24%

Explicit tax =$34,875×24%

Explicit tax =$8,370

Therefore the amount of explicit tax that Curtis would incur on interest earned on the Initech, Incorporated bond will be $8,370

Simpkins Corporation does not pay any dividends because it is expanding rapidly and needs to retain all of its earnings. However, investors expect Simpkins to begin paying dividends, with the first dividend of $2.00 coming 3 years from today. The dividend should grow rapidly - at a rate of 80% per year - during Years 4 and 5. After Year 5, the company should grow at a constant rate of 5% per year. If the required return on the stock is 13%, what is the value of the stock today (assume the market is in equilibrium with the required return equal to the expected return)

Answers

Answer:

The answer is "$ 52.17"

Explanation:

Third-year dividend,  [tex]D_3 = \$ \ 2.00[/tex] Increasing at  [tex]80 \ \%[/tex] per year in years 4 and 5.

[tex]\to D_4 = 2.00(1.80)=3.6\\\\\to D_5 = 3.6 (1.80) = 4.48\\\\[/tex]

Now, rising at a steady rate of 5 percent per year in year 6

[tex]\to D_6 = 6.48(1.05) =6.804[/tex]

[tex]\text{Price of the stock} = \frac{Expected \ dividend}{(Required \ return - growth \ rate)}[/tex]

                            [tex]=\frac{6.804}{(0.13 - 0.05)}\\\\ =\frac{6.804}{(0.08)}\\\\ = \$ \ 85.05[/tex]

The present value of all flows of cash:

[tex]= \frac{2.00}{(1.13)^3} + \frac{3.6}{(1.13)^4} + \frac{(4.48+ 85.05)}{(1.13)^5}\\\\ = \frac{2.00}{1.442897} + \frac{3.6}{1.63047361} + \frac{(4.48+ 85.05)}{1.84243518}\\\\ = \frac{2.00}{1.442897} + \frac{3.6}{1.63047361} + \frac{(89.53)}{1.84243518}\\\\= 1.38 +2.20+ 48.59\\\\=52.17[/tex]

Heels, a shoe manufacturer, is evaluating the costs and benefits of new equipment that would custom fit each pair of athletic shoes. The customer would have his or her foot scanned by digital computer equipment; this information would be used to cut the raw materials to provide the customer a perfect fit. The new equipment costs $107,000 and is expected to generate an additional $43,000 in cash flows for five years. A bank will make a $107,000 loan to the company at a 15% interest rate for this equipment’s purchase. Compute the recovery time for both the payback period and break-even time. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)
Chart Values are Based on:
10%
Cumulative Cash Inflow Present Value of Inflow Year Present Value PV Factor (Outflow) (Outflow)
(91,000) x 1.0000- (91,000) $ (91,000) 36,000 x 36,000 x 2.5 years

Answers

Answer:

Payback period = 2.49 years

Break-even time = 3.36 years

Explanation:

a. Calculation of payback period

The payback period can be described as the amount of time it will take a firm recover its cost on a project or an investment.

The payback period can be calculated as follows:

Equipment cost = $107,000

Annual cash flow = $43,000

Payback period = Equipment cost / Annual cash flow = $107,000 / $43,000 = 2.49 years

b. Calculation of break-even time

Note: See the attached excel file for the computation of the cumulative present value of inflow (outflow).

In the attached excel, the present value (PV) factor is calculated using the following formula:

PV factor = 1/(1 + r)^n ............................... (1)

Where;

r = interest rate = 15%

n = a particular year from 1 to 5.

Break even time can be described as the amount of time that is needed for both the discounted cash flows and the initial cost of a project to be equal.

The break-even time is calculated using the following formula:

Break-even time = X + (Y / Z) .................... (2)    

X = Last year with a negative cumulative cash flow = 3

Y = Absolute value of cumulative cash flow at the end of period X = $8,821.32

Z = Present value of cash inflow for the period following X = $24,585.39  

Break-even time = 3 + ($8,821.32 / $24,585.39) = 3 + 0.36 = 3.36 years

During a recent week, Maya Schneiderman worked 42 regular hours. She earns $9.25/hour, is paid an overtime rate of 1.5 times her regular wage rate, and has requested that 3% of her gross pay be withheld and contributed to a 401(k) retirement plan. Maya's taxable pay for federal income tax withholding is

Answers

Answer:

$385.82

Explanation:

Maya's total earnings = (40 x $9.25) + (2 x $9.25 x 1.5) = $397.75

Contributions to her 401k retirement plan reduce her taxable income (they are above the line deductions. She will contribute $397.75 x 3% = $11.93.

Her taxable income for federal income tax withholding = $397.75 - $11.93 = $385.82.

The actual amount withheld will depend on Maya's W-4 form (includes information about filing status, dependents, other income, etc.)

Consider a mutual fund with $240 million in assets at the start of the year and 10 million shares outstanding. The fund invests in a portfolio of stocks that provides dividend income at the end of the year of $2.5 million. The stocks included in the fund's portfolio increase in price by 5%, but no securities are sold and there are no capital gains distributions. The fund charges 12b-1 fees of .75%, which are deducted from portfolio assets at year-end. a. What is the fund's net asset value at the start and end of the year

Answers

Answer:

Net asset value at the start of the year = $240,000,000 / 10,000,000 shares

Net asset value at the start of the year = $24

Asset in the beginning                                            $240,000,000

Increase in value $240,000,000*5%                     $12,000,000  

Assets at the end                                                    $352,000,000

Less: 12b-1 Charges $352,000,000 * 0.75%)         $2,640,000    

Asset at the end                                                       $349,360,000

Net asset value at the end of the year = $349,360,000/10,000,000 shares

Net asset value at the end of the year = $34.936

You and a partner are considering the purchase of a convenience store.? The store has annual sales of $500,000 and is paying annual payroll of $100,000. The cost of goods sold every year is $150,000. The firm has miscellaneous expenses (taxes, insurance, garbage, electricity, natural gas, security, maintenance, property taxes, training, advertising, accounting fees, bank charges, etc.) of roughly $68,000 per year. If depreciation is equal to $15,000 per year and the tax rate is equal to 38% then what is the net income?

Answers

Answer:

the net income is $103,540

Explanation:

The computation of the net income is shown below:

= (Annual sales - annual payroll - cost of goods sold - miscellaneous expenses - depreciation expense) × (1 - tax rate)

= ($500,000 - $100,000 - $150,000 - $68,000 - $15,000) × (1 - 38%)

= $103,540

Hence,  the net income is $103,540

We simply applied the above formula

Donald is an agent representing Xmart, a large department store chain. Xmart has sent him to deal with Fred in regard to purchasing Fred's land in order to erect a new store. When Donald first meets Fred, Fred calls Xmart to verify that Donald is in fact an agent authorized to deal on Xmart's behalf. Xmart sends Fred a written confirmation of Donald's authorization to act as its agent and states that a contract signed by Donald will be honored by Xmart. Donald and Fred meet every other day during the negotiations. While the negotiations are still ongoing, Donald is fired by Xmart because it doesn't feel that he is making sufficient progress. Why is it important for Xmart to communicate with Fred regarding Donald's firing

Answers

Answer:

If Xmart doesn't notify Fred that Donald is not there agent anymore, then any agreement made between Donald and Fred will be valid and binding to Xmart.

Donald is no longer Xmart's agent, but unless Fred is notified, he still may act as an apparent agent. Apparent agents are people that someone could assume are acting on behalf of a principal, e.g. a person that wears a store's uniform inside a store is presumably a salesperson or someone that works for the store, therefore, he/she is an apparent agent. You do not ask for employment contracts when you enter a store.

Which of the following best describes why German firms were nationalized after World War II?
A. Extract money.
B. Job preservation.
C. Ideology.
D. Happenstance.

Answers

Answer:

D. Happenstance.

Explanation:

The fact that German firms were nationalized has often been regarded as mere happenstance; meaning it just occurred based on the circumstances they were in immediately after World War II.

It thus encompasses several factors such as the cost of operations, changes in government, etc, not just one factor.

German firms were nationalized after World War II because of Happenstance.

World War II:

The fact that German companies were nationalized has frequently been dismissed as a coincidence, implying that it happened simply because of the circumstances in which they found themselves following World War II.

It thus incorporates multiple aspects, not just one, such as operational costs, government changes, and so on.

So, option "D" is the correct answer to the following question.

Find out more information about 'German'

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If the interest rate this year is 8.8% and the interest rate next year will be 10.8%, what is the future value of $1 after 2 years? What is the present value of a payment of $1 to be received in 2 years?

Answers

Answer:

Results are below.

Explanation:

Giving the following information:

The interest rate this year is 8.8% and the interest rate next year will be 10.8%.

a) To calculate the future value, we need to use the following formula:

FV= PV*(1+i)^n

FV1= 1*1.088= 1.088

FV2= 1.088*1.108=$1.206

b) To calculate the present value, we need to use the following formula:

PV=FV/(1+i)^n

PV2= 1/1.108= 0.903

PV1= 0.903/1.088= $0.83

Explain the risks associated with leveling resources, compressing or crashing projects, and imposed durations or "catch-up" as the project is being implemented. Why is it critical to develop a time-phased baseline? Subscribe to unlock

Answers

Answer:

Explain the risks associated with leveling resources, compressing or crashing projects, and imposed durations or "catch-up" as the project is being implemented.

a project manager will try to level resources in order to even out the use of resources throughout the whole project, but that can result in a deficit of resources during critical times.  E.g. trying to use 25% of resources during each year for a project that lasts 4 years. But some activities require a lot o resources but last a short time, while other activities might last longer and consume fewer resources. a project manager will try to compress a project's schedule because he/she wants to finish early, ideally without affecting the project's scope. The problem with compressing a project is that you might have to skip or eliminate certain activities in order to so so. E.g. a lot of pharmaceutical companies are trying to develop a vaccine that ends the current health crisis, and their rush are not following the appropriate steps. crashing activities refers to trying to finish some critical activity early by assigning more resources to it. The risks of crashing critical activities is that they might not be well done, or it might be too expensive.

Why is it critical to develop a time-phased baseline?

Without a well done time-phased baseline, it is very difficult to prepare a project schedule, or at least one that actually works. It is also important because it is very useful for cost control, and projects can easily go out of control and cost more than their budget.

Which type of educational worker will most likely help students find books outside the classroom to help them write research papers? administrator librarian designer principal

Answers

Answer:

Librarian

Explanation: Enjoy (っ^▿^)۶٩(˘◡˘ )

The  type of educational worker  that will most likely help students find books outside the classroom to help them write research papers is  librarian.

Who is a librarian?

A librarian can be defined as the person that works in the library whose soles reponsibility is to find, sort and arrange bookes.

A  librarian is the right position to help a student find books because that is the duty or work of a librarian.

Therefore the type of educational worker  that will most likely help students find books is  librarian.

Learn more about a librarian here:https://brainly.com/question/27274812

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g Larry recorded the following donations this year: $540 cash to a family in need $2,440 to a church $540 cash to a political campaign To the Salvation Army household items that originally cost $1,240 but are worth $340. What is Larry's maximum allowable charitable contribution if his AGI is $60,400

Answers

Answer:

$2780

Explanation:

Given the following donations by Larry:

Cash to family in need $540

Cash to political campaign = $540

Church donation = $2440

Donation to salvation Army household = $340 (worth)

The allowable charitable contribution when applied to the an individual's adjustable Gross income. These contribution must be made to qualified charitable organizations in other to become eligible for deduction. In the scenario above, the qualified charitable organization include the donation to church and the salvation Army household :

Hemce, maximum allowable charitable contribution is :

$(2,440 + 340) = $2780

Sydney accepts delivery of $39,000 of merchandise it purchases for resale from Troy: invoice dated May 11, terms 3/10, n/90, FOB shipping point. The goods cost Troy $26,130.

Sydney pays $440 cash to Express Shipping for delivery charges on the merchandise.
Sydney returns $1,100 of the $39,000 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $737.
Sydney pays Troy for the amount owed. Troy receives the cash immediately.
part 2 Prepare journal entries that Troy Wholesalers (seller) records for these three transactions.
Record the merchandise sold on account.
Record the cost of goods sold.
Record the sales return.
Record the cost of sales return.
Record the cash collected for credit sales.

Answers

Answer:

39,000 Explanation:

FOB shipping point. The goods cost Troy $26,130.

Nancy Company has an idle machine that originally cost $200,000. The book value of the machine is $100,000. The company is considering three alternative uses of the idle machine: Alternative 1: Disposal of machine. Disposal value of machine is $50,000. Alternative 2: Use the idle machine to increase production of Product A. Contribution margin from additional sales of Product A is estimated to be $60,000. Alternative 3: Use the idle machine to increase production of Product B. Contribution margin from additional sales of Product B is estimated to be $70,000. When considering Alternative 2, what is the opportunity cost of the idle machine

Answers

Answer:

$10,000

Explanation:

The opportunity cost of the idle machine when considering Alternative 2 can be calculated by deducting the benefit from alternative 2 from the benefits of alternative 3

DATA

Benefits from alternative 1 = $50,000

Benefit from alternative 2 = $60,000

Benefit from alternative 3 = $70,000

Net financial benefit from Alternative 3 = Benefit from alternative 3 - opportunity cost

Net financial benefit from Alternative 3  = $70000-60000

Net financial benefit from Alternative 3 = $10000

Decision on Transfer Pricing Materials used by the Instrument Division of XPort Industries are currently purchased from outside suppliers at a cost of $185 per unit. However, the same materials are available from the Components Division. The Components Division has unused capacity and can produce the materials needed by the Instrument Division at a variable cost of $154 per unit. a. If a transfer price of $168 per unit is established and 33,200 units of materials are transferred, with no reduction in the Components Division's current sales, how much would XPort Industries’ total income from operations increase?

Answers

Answer:

$1,029,200

Explanation:

The computation of net income increases is shown below:-

Market purchase cost = 33,200 × $185

= $6,142,000

Component division variable cost = 33,200 × $154

= $5,112,800

Net income increases = $6,142,000 - $5,112,800

= $1,029,200

hence, the net income would be increased by $1,029,000 and the same is to be considered

manufactures an optical switch that it uses in its final product. TechSystems incurred the following manufacturing costs when it produced 73,000 units last​ year: LOADING...​(Click the icon to view the manufacturing​ costs.) Another company has offered to sell TechSystems the switch for $13.00 per unit. If TechSystems buys the switch from the outside​ supplier, none of the fixed costs are avoidable. The company prepared an outsourcing decision analysis to show the cost per unit of making the switches versus the cost per unit of buying​ (outsourcing) the switches. LOADING...​(Click the icon to view the outsourcing decision​ analysis.) TechSystems needs 82,000 optical switches next year​ (assume same relevant​ range). By outsourcing​ them, TechSystems can use its idle facilities to manufacture another product that will contribute $220,000 to operating​ income, but none of the fixed costs will be avoidable. Should TechSystems make or buy the​ switches? Show your analysis. Complete the Best Use of Facilities Analysis. ​(Enter a​ "0" for any zero​ amounts.) TechSystems Best Use of Facilities Analysis Buy and Use Facilities for Other Make Product Expected sales price of the other product × × Total variable cost of obtaining the optical switches Expected net cost of obtaining the optical switches

Answers

Answer:

Since the question is missing most of its numbers, I looked for similar question.

variable cost per unit = $1,015,000 / 73,000 = $13.9041

total fixed costs = $490,000

since fixed costs are not avoidable, but can be used to generate $220,000 in revenues, the differential analysis is the following:

                                      Make                Buy             Net income increase

                                                                                    (decrease)

variable costs             $1,140,136.20        $0                $1,140,136.20

fixed overhead             $490,000        $270,000            $220,000

purchase price                   $0             $1,066,000       ($1,066,000)

total                            $1,630,136.20   $1,336,000       $294,136.20

TechSystems should outsource the production since it will be able to increase its operating profits by $294,136.20.

Simpleton, Inc. budgeted a material cost of $10 per lb. They ended up purchasing 2,300 lbs at $16 per lb. and using 1,800 lbs for production. The material price variance is:

Answers

Answer:

Direct material price variance= $13,800 unfavorable

Explanation:

Giving the following information:

Simpleton, Inc. budgeted a material cost of $10 per lb.

Actual:

2,300 lbs at $16 per lb.

To calculate the direct material price variance, we need to use the following formula:

Direct material price variance= (standard price - actual price)*actual quantity

Direct material price variance= (10 - 16)*2,300

Direct material price variance= $13,800 unfavorable

what is the function of product and service management​

Answers

The answer is Perform market

5. The average total cost to produce 100 cookies is $0.25 per cookie. The marginal cost is constant at $0.10 for all cookies produced. What is the total cost to produce 50 cookies

Answers

Answer:

$20

Explanation:

First, we need to find the total cost of producing 100 cookies.

From the above question, the total cost to produce 100 cookies is given by the average total cost of $0.25 multiplied by 100 units

TC = $0.25 × 100 = $25.

Therefore, the total cost to produce 50 cookies, is equal to the cost of producing 100 units minus the marginal cost ($0.10 per unit) of the additional 50 units.

TC = $25 - ($0.1 × 50) = $20

Karla owns a monopolistically competitive firm that has many competitors that advertise. What can Karla realistically hope to achieve if she decides to advertise as well?

Answers

Answer:

1.) Katy can educate her consumers about the differences between her store and her competitors.

2.) Katy can protect her consumer base.

Explanation:

Using advertisements, Katy can show her consumer the differences and advantages that her products have over those of her competitors thereby encouraging them to patronise her.

She can also use these adverts to protect her customer base from her competitors because when they see the adverts, they will be even more encouraged to keep buying from Katy and will thus be less likely to switch to her competitors.

The other two options are incorrect.

On December 31, 2019, The Bates Company's revenue is $440,000 and expenses total $340,000 before consideration of the following: Accrued wages total $21,000; Accrued revenues total $56,000; Depreciation expense is $27,000; Rental revenue of $7,000 was earned; the rent from a tenant was initially recorded by Bates as unearned rent revenue; The income tax rate is 40% of income before income taxes. What is Bates' net income after consideration of the above information

Answers

Answer:

Explanation:

Revenue = $440,000

Expenses = $340000

Accrued wages = $21000

Accrued revenues = $56000

Depreciation exp = $27000

Rental value earned but not recorded = $7000

Income tax rate = 40%

Total revenue = 440000 +56000 + 7000 = $503000

Total expenses = 340000 + 21000 + 27000 = $388000

Income before tax = 503000 - 388000 = $115000

income tax = 115000 x .4 = $46000

Net income = 115000 - 46000 = $69000 .

The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.55 per share on its stock. The dividends are expected to grow at a constant rate of 6 percent per year indefinitely. Investors require a return of 14 percent on the company's stock. a. What is the current stock price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What will the stock price be in 3 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What will the stock price be in 7 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Answers

Answer:

(A) 20.54

(B) 24.46

(C) 30.88

Explanation:

(A) The current stock price can be calculated as follows

Po= 1.55(1+6/100)/(14/100-6/100)

= 1.55(1+0.06)/(0.14-0.06)

= 1.55(1.06)/0.08

=1.643/0.08

= 20.54

(B) The stock price after 3 years can be calculated as follows

Po = 1.55(1+6/100)^4/(14/100-6/100)

= 1.55(1+0.06)^4/(0.14-0.06)

= 1.55(1.06)^4/0.08

= 1.55(1.2624)/0.08

= 1.9567/0.08

= 24.46

(C) The stock price after 7 years can be calculated as follows

Po= 1.55(1+6/100)^8/(14/100-6/100)

= 1.55(1+0.06)^8/(0.14-0.06)

= 1.55(1.06)^8/(0.08)

= 1.55(1.5938)/0.08

= 2.470/0.08

= 30.88

Coca Cola stock has the following probability distribution of expected prices one year from now: State Probability Price 1 25 % $ 50 2 40 % $ 60 3 35 % $ 70 If you buy Coca Cola today for $55 and it will pay a dividend during the year of $4 per share, what is your expected holding-period return on Coca Cola

Answers

Answer:

18.18%

Explanation:

Calculation for the expected holding-period return on Coca Cola

First step is to calculate the Expected Price in one year

Expected Price in one year = 50*25% + 60*40% + 70*35%

Expected Price in one year =12.5+24+24.5

Expected Price in one year = $61

Last step is to get Calculate the Holding period return using this formula

Holding period return = (Price after 1 year + Dividend - Price amount paid)/Price amount paid

Let plug in the formula

Holding period return= (61+4-55)/55

Holding period return=10/55

Holding period return=0.1818*100

Holding period return= 18.18%

Therefore the expected holding-period return on Coca Cola will be 18.18%

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.

Answers

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.

The journal entry to record the transfer of units to the next department in process accounting is a(n):

Answers

Answer:

Decrease in one asset and an increase in another asset

Explanation:

The journal entry to record the transfer of units to the next department in process accounting is a(n):

i. Decrease in one asset

ii. Increase in another asset

Lightfoot Company sells its product for $55 per unit and has variable costs of $30 per unit. Total fixed costs are $25,000. Suppose variable costs increase by 10% due to an increase in the cost of direct materials. What will be the effect on the breakeven point in units if variable costs increase by​ $5 due to an increase in the cost of direct​materials?
A. It will increase by 250 units.
B. It will decrease by 167 units.
C. It will decrease by 250 units.
D. It will increase by 167 units.

Answers

Answer:

The Break-even point in units will increase by 250 units.

Explanation:

Giving the following information:

Fixed costs= $25,000

Selling price= $55

Unitary varaible cost= $30

First, we need to calculate the current break-even point in units:

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 25,000 / 25

Break-even point in units= 1,000

Now, the new Break-even point in units:

Break-even point in units= 25,000 / (55 - 35)

Break-even point in units= 1,250

The Break-even point in units will increase by 250 units.

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