Answer:
Physical flow schedule
Inputs
Beginning Work in Process 86,300
Add Units Started 105,900
Total 192,200
Outputs
Units Completed and Transferred 172,900
Units in Ending Work in Process 19,300
Total 192,200
Explanation:
A physical flow schedule is simply a schedule of units introduced into the process and units outputs without expressing them to equivalent units.
Units Introduced must always be equal to units outputs in physicals terms.
Units Completed and Transferred = Beginning Inventory + Units Started - Units in Ending Work in Process
= 86,300 + 105,900 - 19,300
= 172,900
Adjusted Trial Balance
Account Title Debit Credit
Cash 1,500
Accounts Receivable 1,460
Prepaid Insurance 800
Supplies 900
Equipment 5,500
Accumulated Depreciation-Equipment 550
Accounts Payable 1,300
Wages Payable 760
Owner, Capital 6,550
Owner, Drawing 1,400
Service Revenue 8,900
Wages Expense 3,000
Rent Expense 1,500
Supplies Expense 900
Utilities Expense 600
Depreciation Expense—Equipment 500
18,060 18,060
Required:
From the above adjusted trial balance, journalize the necessary closing entries.
Answer:
a. Dr Service Revenue $8,900
Cr Income Summary $8,900
b. Dr Income Summary $6,500
Cr Wages Expense $3,000
Cr Rent Expense $1,500
Cr Supplies Expense $900
Cr Utilities Expense $600
Cr Depreciation Expense Equipment $500
c. Dr Income Summary $2,400
Cr Owner, Capital $2,400
d. Dr Owner, Capital $1,400
Cr Owner, Drawing $1,400
Explanation:
Preparation of the Closing Entries
a. Dr Service Revenue $8,900
Cr Income Summary $8,900
b. Dr Income Summary $6,500
($3,000+$1,500+$900+$600+$500)
Cr Wages Expense $3,000
Cr Rent Expense $1,500
Cr Supplies Expense $900
Cr Utilities Expense $600
Cr Depreciation Expense Equipment $500
c. Dr Income Summary $2,400
($8,900-$6,500)
Cr Owner, Capital $2,400
d. Dr Owner, Capital $1,400
Cr Owner, Drawing $1,400
You are a seller of farm equipment. Sidney Lanier puts in an order for a new combine harvester, which costs $425,000. Under the terms of the agreement, Mr. Lanier has to forward you a certified check for 25% of the purchase price within 15 days of the signing of the purchase agreement. Meanwhile you are preparing the combine harvester for shipment to Sidney Lanier's farm.
On the 15th day, you do not receive a check from Mr. Lanier. You do not receive a check on the 16th, 17th, or 18th day either. Meanwhile, another farmer has come into your office to ask about buying the combine harvester.
What can you do in this situation?
A. Since you and Mr. Lanier have a contract, you have to wait until he sends you the check before you can do anything.
B. Mr. Lanier had a duty to send you a check by the 15th. He's breached that duty under the contract, and it appears to be a material breach, so you have the right to rescind the contract.
Answer: B. Mr. Lanier had a duty to send you a check by the 15th. He's breached that duty under the contract, and it appears to be a material breach, so you have the right to rescind the contract.
Explanation:
Material breach occurs when a particular party fails to fulfill his or her part in a contract and this can lead to the other party rescinding the contract or sue for a breach of contract.
Since under the terms of the agreement, Mr. Lanier has to forward a certified check for 25% of the purchase price within 15 days of the signing of the purchase agreement but he didn't send the check, this means that the there's a breach in the contract, and the contract can be rescinded.
Why is it difficult to maintain relations with multiple stakeholders?
A. Because different stakeholders may have conflicting goals.
B. Because not all stakeholder needs are well known.
C. Because stakeholders want to harm the organization.
D. Stakeholders don't understand the organization's goals.
Answer:
A
Explanation:
Essence of Skunk Fragrances Calculate the average collection period. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) What is the receivables turnover? (Use 365 days a year. Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) What is the amount of the company’s average receivables? (Use 365 days a year. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
1. Average collection period 41.25 days
2. Receivable Turnover 8.84848485
3. Average Receivable $521,558.22
Explanation:
1. Calculation for Average collection period
First step is to calculate the Percentage of customers not receiving discounts
Percentage of customers not receiving discounts = 100% - 65%
Percentage of customers not receiving discounts= 35%
Now let calculate Average collection period
Average collection period = (65% * 15) + (35% *90)
Average collection period = 9.75 + 31.5
Average collection period= 41.25 days
Therefore the Average collection period is 41.25 days
2. Calculation to determine the Receivable Turnover using this formula
Receivable Turnover = 365 / Average collection period
Let plug in the formula
Receivable Turnover = 365/41.25
Receivable Turnover = 8.84848485
Therefore the Receivable Turnover is 8.84848485
3. Calculation to determine the amount of the company’s average receivables
First step is to calculate the Total Credit Sales
Total Credit Sales = $6,500 * $710
Total Credit Sales= $4,615,000
Now let calculate the Average Receivable using this formula
Average Receivable =Credit sales / Receivable turnover
Let plug in the formula
Average Receivable= $4,615,000 /8.84848485
Average Receivable= $521,558.22
Therefore Average Receivable is $521,558.22
A machine that cost $225,000 has an estimated residual value of $15,000 and an estimated useful life of 15,000 machine hours. The company uses units-of-production depreciation and ran the machine 3,000 hours in year 1, 4,000 hours in year 2, and 5,000 hours in year 3. Calculate its book value at the end of year 3
Answer:
$57,000
Explanation:
Step 1 : Depreciation Rate
Depreciation Rate = (Cost - Residual Value) ÷ Estimated Production
therefore,
Depreciation Rate = $14.00 per machine hour
Step 2 : Depreciation expenses
Depreciation expense = Depreciation Rate x Annual production
therefore
Year 1 = $42,000
Year 2 = $56,000
Year 3 = $70,000
Total = $168,000
Step 3 : Book Value
Book Value = Cost - Accumulated Depreciation
= $225,000 - $168,000
= $57,000
Conclusion :
book value at the end of year 3 is $57,000
What form do some schools, especially private schools, use in addition to the FAFSA to determine how to award aid? A) FAFSA II B) Core Residency Form C) CSS/Financial Aid PROFILE D) College Access Loan (CAL) Form
Answer:
C.) CSS/ Financial aid profile
Explanation:
I took the USA Test Prep quiz.
Early deadlines are imposed by many schools and universities that use the FAFSA to calculate financial aid. To decide how to distribute their own funds, certain institutions—mostly private colleges—use an additional form called the College Scholarship Service Profile, or CSS Profile. Therefore, choice (C) is the best one.
What is CSS Profile?College students can apply for non-federal financial aid through the CSS Profile, also known as the College Scholarship Service Profile, an online application developed and administered by the College Board, a company based in the United States.
Its main purpose is to provide College Board member institutions with a thorough assessment of students and their families financially and family circumstances for use in determining their eligibility for organizational financial aid. Compared to the Free Application for Federal Student Aid, or FAFSA, it is more comprehensive.
Hence, option (C) is the most accurate.
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You are evaluating two investment alternatives. One is a passive market portfolio with an expected return of 10% and a standard deviation of 16%. The other is a fund that is actively managed by your broker. This fund has an expected return of 16% and a standard deviation of 20%. The risk-free rate is currently 7%. Answer the questions below based on this information. a. What is the slope of the Capital Market Line
Answer:
the slope of the capital market line is 0.1875
Explanation:
The computation of the slope of the capital market line is shown below:
= (Expected return - risk free rate of return) ÷ (standard deviation)
= (10% - 7%) ÷ 16%
= 3% ÷ 16%
= 0.1875
hence, the slope of the capital market line is 0.1875
We simply used the above formula to measured the slope of the capital market line
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
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
two ways in which best bank can adapt to the challenges of the macro environment
Answer:
Mergers or Information Management
Explanation:
Mergers-In order to respond to certain challenges, businesses may choose to merge with another business. The new business will have a larger market share than either of the original businesses did.
Information management -All changes lead to new information that needs to be distributed to all the relevant parties.
Information must be managed efficiently and a system must be in place so that the relevant staff can easily access it.
Information must be protected and kept secure to protect the company's intellectual property.
Jonathan was granted enough nonqualified stock options (NQSOs) to purchase 10,000 shares of Capital, Inc. stock at $10 per share two years ago. He exercised the options this year when Capital, Inc. stock was $25 per share. Three years later, Jonathan sells the 10,000 shares for $100 per share. Which of the following statements regarding the tax ramifications of Jonathan's transactions are CORRECT?
Capital gains tax is due the year the options are granted to Jonathan.
Jonathan's cost to exercise all of the NQSOs is $50,000.
Jonathan will have a $750,000 capital gain when he sells the stock at $100 per share.
Jonathan will have an additional $150,000 included in his W-2 compensation income, which is a type of ordinary income, subject to payroll taxes this year.
A) I, II, and III
B) III and IV
C) I and II
D) I, II, III, and IV
Answer: B. III and IV
Explanation:
Based on the information given, we should note that the capital gain will be:
= $1,000,000 - $250,000
= $750,000
Also, the bargain amount will be calculated as:
= 10000 × ($25 - $10)
= 10000 × $15
= $150,000
We should also note that the statement in option 1 that "Capital gains tax is due the year the options are granted to Jonathan" is wrong. Capital gain will only arise when the shares have been sold, therefore option I is incorrect.
Based on the information above, the answer is option III and IV.
The following information is available for Quality Book Sales's sales on account and accounts receivable:
Accounts Receivable Balance, January 1, Year 2 $78,500
Allowance for Doubtful Accounts, January 1, Year 2 4,710
Sales on Account, Year 2 550,000
Collections of Accounts Receivable, Year 2 556,000
After several collection attempts, Quality Book Sales wrote off $2,850 of accounts that could not be collected. Quality Book Sales estimates that 0.5% of sales on account will be uncollectible. Required:
(A) Compute the following amounts:
(1) Using the allowance method, the amount of uncollectible accounts expense for Year 2.
(2) Net realizable value of receivables at the end of Year 2.
(B) Explain why the uncollectible accounts expense amount is different from the amount that was written off as uncollectible.
(1) Uncollectible accounts expense is an estimate of current receivables that may eventually be uncollectible.
(2) Uncollectible accounts expense is the actual amount that was determined in the current accounting period to be uncollectible.
Answer:
Quality Book Sales
1) Uncollectible accounts expense for Year 2 = $890
2) Net realizable value of receivables at the end of Year 2 = $69,650
B) The reason why the uncollectible accounts expense amount is different from the amount that was written off as uncollectible is:
(2) Uncollectible accounts expense is the actual amount that was determined in the current accounting period to be uncollectible.
Explanation:
a) Data and Calculations:
Accounts Receivable Balance, January 1, Year 2 = $78,500
Allowance for Doubtful Accounts, January 1, Year 2 = 4,710
Sales on Account, Year 2 = 550,000
Collections of Accounts Receivable, Year 2 = 556,000
Uncollectibles written off = $2,850
Allowance for Uncollectible accounts = 0.5% of Sales ($550,000 * 0.5%)
= $2,750
1) Uncollectible accounts expense for Year 2 = $890 ($2,850 + $2,750 - $4,710)
2) Net realizable value of receivables at the end of Year 2 = $69,650
B) The reason why the uncollectible accounts expense amount is different from the amount that was written off as uncollectible is:
(2) Uncollectible accounts expense is the actual amount that was determined in the current accounting period to be uncollectible.
Accounts Receivable Account
Account Titles Debit Credit
Beginning balance $78,500
Sales 550,000
Cash $556,000
Allowance for Uncollectibles 2,850
Ending balance 69,650
Allowance for Uncollectible Accounts
Account Titles Debit Credit
Beginning balance $4,710
Accounts receivable $2,850
Uncollectible Accounts Expense 890
Ending balance 2,750
True or False: A partner cannot legally bind the other partners to a business agreement.
Answer: False
Explanation: In many cases, a partner will be able to bind the partnership without the other owners' consent. However, steps can be taken to prevent any one partner from entering into an agreement without the consent of the others.
Grace wants to sell her motorcycle, and Ryan is looking for a used motorcycle to buy. Ryan takes it for a test drive. Grace knows that the clutch is going out on her motorcycle, the fuel filter is leaking, and the tires will need to be replaced soon. If she does not disclose this information to Ryan and he cannot tell from his test drive, this is an example of
Answer:
lack of disclosure
Explanation:
As a rider, this is idiotic as both are clear when riding and even before mounting the vehicle. it is highly illegal to sell a vehicle or piece of property without disclosing problems that you know of.
The given situation is an example of asymmetric information.
What is the meaning of Asymmetric Information?
Asymmetric information refers to the transaction in which two parties are involved and one party has more information than the other. In those transactions buyers and take the advantage of the seller.
According to the given situation there is transaction of selling of the motorcycle is involved between Grace and Ryan. The Grace does not disclose the complete information about the clutch. This type of the transaction is called as Asymmetric information.
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H. Tillman performed legal services for J. Laney. Due to a cash shortage, an agreement was reached whereby J. Laney. would pay H. Tillman a legal fee of approximately $12800 by issuing 3100 shares of its common stock (par $1). The stock trades on a daily basis and the market price of the stock on the day the debt was settled is $3.90 per share. Given this information, the journal entry for J. Laney. to record this transaction is:
Answer:
The journal entry for J. Laney to record this transaction is
Dr legal expenses $12,990
______Cr Common stock $3,100
_______Cr Share premium $8,990
Explanation:
The common stocks are carried at par value of $1. This implies that any price paid in excess of the par value is made provision for in the share premium account.
Again, the common stocks issued are measured at the price required to settle the legal expenses and are paid in excess of par value of $1.
Share premium = ($3.90 - $1) × 3,100
Share premium = $8,990
Discuss the economic conditions and economic institutions that affect personal finance.
Answer:
Economics and Personal Finance. Instruction in economics and personal finance prepares students to function effectively as consumers, savers, investors, entrepreneurs, and active citizens. Students learn how economies and markets operate and how the United States' economy is interconnected with the global economy.
The cost-plus approach: Multiple Choice uses an assumed reasonable profit margin to determine the stand-alone price. refers to contracts where the contractor is not expected to recover all costs incurred in completing the project. is not allowed under ASC Topic 606 guidance for revenue recognition. refers to contracts that are modified from their original terms during the course of the contract.
Answer:
Uses an assumed reasonable profit margin to determine the stand-alone price.
Explanation:
Is the pricing method in which a resonable profit margin is added to the total product cost to determine the sale price of a product.
For Example
Product A Incurred a total cost of $20 to produce one unit. The company XYZ wants to earn 20% profit margin on the cost of the product, hence the price will be $24 ( $20 x ( 1 + 20% ).
The properly formatted question is as follow
The cost-plus approach:
Uses an assumed reasonable profit margin to determine the stand-alone price.
refers to contracts where the contractor is not expected to recover all costs incurred in completing the project.
is not allowed under ASC Topic 606 guidance for revenue recognition.
refers to contracts that are modified from their original terms during the course of the contract.
10. Identical wages
Which of the following is required for all workers to earn identical wages in the long run? Check all that apply.
All workers are protected by a union.
Workers can move from one labor market to another at zero cost.
All workers have equal ability and can be trained to do different types of employment at minimum cost.
All workers must have a bachelor's degree.
Answer:
hi how are you
Explanation:
What is three ways eBay helps support small businesses? Full sentences please :)
Answer:
1. Gets you customers fast
2. There is a 95% chance you will make a profit
3. eBay is a big platform with multiple users
Treasury Stock Coastal Corporation issued 25,000 shares of $9 par value common stock at $21 per share and 6,000 shares of $54 par value, eight percent preferred stock at $82 per share. Later, the company purchased 3,000 shares of its own common stock at $24 per share. a. Prepare the journal entries to record the share issuances and the purchase of the common shares. b. Assume that Coastal sold 2,000 shares of the treasury stock at $30 per share. Prepare the general journal entry to record the sale of this treasury stock. c. Assume that Coastal sold the remaining 1,000 shares of treasury stock at $19 per share. Prepare the journal entry to record the sale of this treasury stock.
Answer:
Treasury Stock Coastal Corporation
a. Journal Entries:
Debit Cash $525,000
Credit Common stock $225,000
Credit Additional Paid-in Capital - Common Stock $300,000
To record the issuance of 25,000 shares of $9 par value at $21.
Debit Cash $492,000
Credit 8% Preferred Stock $324,000
Credit Additional Paid-in Capital - Preferred Stock $168,000
To record the issuance of 6,000 shares of $54 par value at $82.
Debit Treasury Stock $27,000
Debit Additional Paid-in Capital - Common Stock $45,000
Credit Cash $72,000
To record the repurchase of 3,000 shares at $24.
b. Journal Entry
Debit Cash $60,000
Credit Treasury Stock $18,000
Credit Additional Paid-in Capital - Common Stock $42,000
To record the re-issuance of 2,000 treasury shares at $30.
c. Journal Entry:
Debit Cash $19,000
Credit Treasury STock $9,000
Credit Additional Paid-in Capital - Common Stock $10,000
To record the re-issuance of 1,000 treasury shares at $19.
Explanation:
a) Data and Calculations:
Cash $525,000 Common stock $225,000 Additional Paid-in Capital - Common Stock $300,000
Cash $492,000 8% Preferred Stock $324,000 Additional Paid-in Capital - Preferred Stock $168,000
Treasury Stock $27,000 Additional Paid-in Capital - Common Stock $45,000 Cash $72,000
b. Cash $60,000 Treasury Stock $18,000 Additional Paid-in Capital - Common Stock $42,000
c. Cash $19,000 Treasury STock $9,000 Additional Paid-in Capital - Common Stock $10,000
University Printers has two service departments (Maintenance and Personnel) and two operating departments (Printing and Developing). Management has decided to allocate maintenance costs on the basis of machine-hours in each department and personnel costs on the basis of labor-hours worked by the employees in each. The following data appear in the company records for the current period:
Maintenance Personnel Printing Developing
Machine-hours — 1,800 1,800 5,400
Labor-hours 650 — 650 2,600
Department direct costs $4,000 $14,000 $15,900 $12,600
Required:
Use the direct method to allocate these service department costs to the operating departments. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.)
Maintenance Personnel Printing Developing
service dept. costs
maintenance allocation
personnel allocation
total cost allocation
Answer:
Maintenance $0
Personnel $0
Printing $19,700
Developing $26,800
Explanation:
Calculation to allocate these service department costs to the operating departments Using the direct method
Particulars Allocation Basis Maintenance Personnel Printing Developing
Cost as per primary data
$4,000 $14,000 $15,900 $12,600
SERVICE DEPARTMENT COSTS:
Maintenance allocation (S)
$0 $0 $1,000 $3,000
Personnel allocation (S)
$0 $0 $2,800 $11,200
Total Costs Allocated
$0 $0 $19,700 $26,800
Computation for the allocation of costs:
Maintenance = $4,000 *1,800/(1,800+5,400)
Maintenance = $4,000 *1,800/7,200
Maintenance =$1,000
Personnel = $14,000 *650/650+2,600
Personnel=$14,000 *650/3,250
Personnel=$2,800
Maintenance = $4,000 *5,400/(1,800+5,400)
Maintenance = $4,000 *5,400/7,200
Maintenance = $3,000
Personnel = $14,000 *2,600/650+2,600
Personnel = $14,000 *2,600/3,250
Personnel = $11,200
Therefore allocation of these service department costs to the operating departments Using the direct method will be :
Maintenance $0
Personnel $0
Printing $19,700
Developing $26,800
In the short run, the quantity of output that firms supply can deviate from the natural level of output if the actual price level in the economy deviates from the expected price level. Several theories explain how this might happen.
For example, the misperceptions theory asserts that changes in the price level can temporarily mislead firms about what is happening to their output prices. Consider a soybean farmer who expects a price level of 100 in the coming year. If the actual price level turns out to be 90, soybean prices will _________, and if the farmer mistakenly assumes that the price of soybeans declined relative to other prices of goods and services, she will respond by ____________the quantity of soybeans supplied. If other producers in this economy mistake changes in the price level for changes in their relative prices, the unexpected decrease in the price level causes the quantity of output supplied to __________ the natural level of output in the short run. Suppose the economy's short-run aggregate supply (AS) curve is given by the following equation:
Answer:
1. A fall in prices of soybean
2. Reduce quantity she supplies
3. Falls below
Explanation:
We are to fill in the blanks here
1. In this question the farmer expected price level of 100 but the actual price realized was 90 so there would be a fall in the price of soybean.
2. If farmer feels that price of other goods caused this fall, she would reduce the quantity of soybean that she supplies
3. The quantity supplied is then going to fall below natural level in the short run
The aggregate supply curve Multiple Choice is explained by the interest rate, real-balances, and foreign purchases effects. gets steeper as the economy moves from the top of the curve to the bottom of the curve. shows the various amounts of real output that businesses will produce at each price level. is downsloping because real purchasing power increases as the price level falls.
Answer:
. shows the various amounts of real output that businesses will produce at each price level
Explanation:
Aggregate supply can be regarded as " domestic final supply" in domain of economics, it is the overall supply of services/ goods that is been produced at a particular overall price within an economy at a given period. It should be noted that aggregate supply shows the various amounts of real output that businesses will produce at each price level
Windsor, Inc. purchased a delivery truck for $32,000 on January 1, 2022. The truck has an expected salvage value of $4,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years. Actual miles driven were 16,600 in 2022 and 13,100 in 2023. (a1) Calculate depreciable cost per mile under units-of-activity method. (Round answer to 2 decimal places, e.g. 0.50.) Depreciable cost
Answer:
Depreciable cost per mile= $0.28
Explanation:
Giving the following information:
Purchase price= $32,000
Salvage value= $4,000
Miles= 100,000
To calculate the depreciable cost per mile under the units-of-activity method, we need to use the following formula:
Depreciable cost per mile= (original cost - salvage value)/useful life of production in miles]
Depreciable cost per mile= (32,000 - 4,000) / 100,000
Depreciable cost per mile= $0.28
The payoff matrix supplied shows outcomes of various strategies that two firms might follow in response to action on the part of the other company. This payoff matrix describes actions in developing vaccines for not-too-rare but also not-too-common diseases. Each element shows the payoffs to a set of strategies as the payoff to the domestic firm, then a comma, then the payoff to the foreign firm.
Foreign firm
Enter Not Enter
Domestic firm Enter -3,-3 183,0
Not Enter 0,183 0,0
Required:
What is the minimum subsidy the US must offer the domestic firm to ensure that it will choose to produce the vaccine?
Answer:
Subsidy per unit must be equal to 3.
Explanation:
The payoff matrix shows that the Domestic firm can earn -3 or 183 from entering into the market. While, it will get only 0 from not entering. So it will be beneficial for it to enter provided the government can bear the negative payoff it gets from entering as the foreign firm also enters.
Thus, if the government can subsidise the domestic firm's negative payoff of $3 from entering such that its payoff becomes, 0 or 186 from entering and 0 from not entering. Like this the domestic firm will be more likely to enter and produce the vaccine.
Thus, the amount of the subsidy must be $3.
Pls hurry ! In your own words, why is using an outline to take notes a good strategy?
Answer:
It is better used to locate things.
Explanation:
Answer:
helps organize your ideas
Explanation:
edg 2021
A company decides to let go of some employees due to a financial crisis. Irena loses her job, while her colleagues with similar performance ratings and productivity retain their jobs. Irena's judgment of her loss when compared to her colleagues' is a perception of
Answer:
The correct answer is "Procedural unfairness".
Explanation:
A basis for a respondent to challenge constitutional amendments for setting aside legal procedures throughout family legal proceedings will be found procedurally unfair.Throughout the event that a participant challenges a court decision, as well as a basis for the appeal, involves procedural injustice throughout a community court appearance, the privy council should first address the procedural fairness issue.Umbarra Company bonds have a stated coupon rate of 5% and pay interest on an annual basis. They mature in 18 years and have a par value of $1,000. The market rate of interest on similar debt is 8%. The value of Umbarra bonds is (round to the nearest dollar).
Answer:
Value of Bond =$718.8
Explanation:
The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV) discounted at the yield rate
Value of Bond = PV of interest + PV of RV
The PV of interest payment
A ×(1- (1+r)^(-n))/r
Interest payment = 5%× 1000 = 50
PV = 50× (1- 1.08^(-18))/0.08 = 468.59
PV of redemption value
PV = RV× (1+r)^(-n)
PV = 1000× 1.18^(-18) = 250.24
The value of bond = 468.59 + 250.24= 718.84
The value of Bond = $718.84
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.
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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https://brainly.com/question/25603919
Chavez S.A., a Venezuelan company, wishes to borrow $8,000,000 for eight weeks (maturity). A rate of 6.250% per year is quoted by potential lenders in Great Britain, and Switzerland. British, and the Swiss-Euro bond definitions of interest (day count conventions) are 56 days and 60 days, respectively. Numbers of days in a financial year are 360. From which source should Chavez borrow?
Answer:
Chavez should borrow from the British market.
Explanation:
We need to compare the interest payment of both markets to make the decision
First, calculate the Interest payment in case, if borrowed from the British market
Interest Payment ( British ) = Principal Value x Interest rate x Time fraction
Interest Payment ( British ) = $8,000,000 x 6.250% x 56/360
Interest Payment ( British ) = $77,777.78
First, calculate the Interest payment in case if borrowed from Swiss market
Interest Payment ( Swiss ) = Principal Value x Interest rate x Time fraction
Interest Payment ( Swiss ) = $8,000,000 x 6.250% x 60/360
Interest Payment ( Swiss ) = $83,333.33
As the British market offers a lower rate, Chavez should borrow from the British market.
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
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