Answers
Answer:
can be reduced by placing a large number of small bets rather than a small number of large bets.
AND
can be reduced by increasing the number of stocks in a portfolio.
Explanation:
Hope this helps :)
Related Questions
On January 1, 2017, Swen paid $184,000 for $200,000 of the 8%, 20-year bonds of Penn Corporation, issued on January 1, 2013, at par. The bonds are held as an investment. Determine the gain and the character of the gain if the bonds are sold on January 1, 2019, for a. $191,000 b. $185,750 C. $183,000
Answers
The determination of the gain and the character of the gain if the Penn Corporation bonds are sold by Swen on January 1, 2019, for the proceeds of each sale is as follows:
(a) (b) (c)
Sales proceeds $191,000 $185,750 $183,000
Carrying value $185,600 $185,600 $185,600
Capital gain (loss) $5,400 $150 ($2,600)
What is the carrying value of bonds?The carrying value of a bond is the net amount between the bond's face value plus (minus) any unamortized premiums or discounts.
The carrying value is the book value of the bond.
When a bond receivable is sold, capital gain or loss is realized from the sale, which gives rise to capital gain tax.
Data and Calculations:Bond's price = $184,000
Face value of bonds receivable = $200,000
Premium received = $16,000 ($200,000 - $184,000)
Interest rate = 8%
Maturity period = 20 years
Payment date = January 1, 2017
Straight-line amortization of premium = $800 ($16,000/20)
Carrying value after two years, January 1, 2019, = $185,600 ($184,000 + $1,600)
(a) (b) (c)
Sales proceeds $191,000 $185,750 $183,000
Carrying value $185,600 $185,600 $185,600
Capital gain (loss) $5,400 $150 ($2,600)
Carrying value:
Face value $200,000
Unamortized premium $14,400 ($16,000 - $1,600)
Carrying value $185,600
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Tookies Tacos’ next annual dividend will be $4.26 a share and all later dividends are expected to increase by 4.4 percent annually. What is the rate of return if this stock is currently selling for $48.74 a share?
Answers
The rate of return if this stock is currently selling for $48.74 a share is 13.14%.
Rate of returnUsing this formula
Rate of return=(Annual dividend/Stock current price)+Expected rate
Let plug in the formula
Rate of return= ($4.26/$48.74) + .044
Rate of return=0.0874+0.044
Rate of return=0.1314×100
Rate of return=13.14%
Inconclusion the rate of return if this stock is currently selling for $48.74 a share is 13.14%.
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After graduating from college, Joseph Tantillo decided to start a retail Web site that specializes in personalized Greek apparel. To fund his Web site, he borrowed money from his parents (who expect to be repaid with interest). In other words, he used _____ financing.
Answers
Answer:
Debt financing
Explanation:
Debt financing is defined as borrowing that a company undertakes to finance it's operations by selling of debt instruments to investors.
The debt instrument attracts interest payment.
Examples of debt financing includes bank loans, loans from friends and family, and government backed loans.
In the given scenario Joseph Tantillo decided to borrow money from his parents to start a retail Web site that specializes in personalized Greek apparel. This is debt financing
In contrast equity financing involves sale of shares to obtain capital
ROI, Residual Income, and EVA with Different Bases Envision Company has a target return on capital of 12 percent. The following financial information is available for October ($ thousands):
Software Division . Consulting Division Venture Capital Division
(Value Base) (Value Base) (Value Base)
Book Current Book Current Book Current
Sales $100,000 $100,000 $200,000 $200,000 $800,000 $800,000
Income 12,250 11,700 16,400 20,020 56,730 51,920
Assets 70,000 90,000 100,000 110,000 610,000 590,000
Liabilities 10,000 10,000 14,000 14,000 40,000 40,000
Required
a. Compute the return on investment using both book and current values for each division. Round answers to three decimal places.
Book Value Current Value
Software Answer ? Answer ?
Consulting Answer ? Answer ?
Venture Capital Answer ? Answer ?
b. Compute the residual income for both book and current values for each division. Use negative signs with answers, when appropriate.
Book Value Current Value
Software $Answer 3,850 $Answer 900
Consulting Answer 4,400 . Answer 6,820
Venture Capital Answer (16,470) Answer (1,880)
c. Compute the economic value added income for both book and current values for each division if the tax rate is 30 percent and the weighted average cost of capital is 10 percent. Use negative signs with answers, when appropriate. Book Value Current Value
Software $Answer ? $Answer ?
Consulting Answer ? Answer ?
Venture Capital Answer ? Answer ?
Answers
Answer:
a. ROI = income / Assets
Book Value Current Value
Software Division 0.175 0.13
Consulting Division 0.164 0.182
Venture Capital Division 0.093 0.088
Workings:
i. Book value
Software Division = 12,250/70,000=0.175
Consulting Division = 16,400/100,000=0.164
Venture Capital Division = 56,730/610,000 =0.093
ii. Current value
Software Division = 11,700/90,000=0.13
Consulting Division = 20,020/110,000=0.182
Venture Capital Division= 51,920/ 590,000=0.088
b. Residual income = Income - {Asset x Return on capital 12% }
Book Value Current Value
Software Division 3850 900
Consulting Division 4400 6820
Venture Capital Division -16470 -18880
Workings:
i. Book value
Software Division = 12,250-(70,000*12%)=3850
Consulting Division = 16,400-(100,000*12%)=4400
Venture Capital Division = 56,730-(610,000*12%) =-16470
ii. Current value
Software Division = 11,700-(90,000*12%)=900
Consulting Division = 20,020-(110,000*12%)=6820
Venture Capital Division= 51,920-(590,000*12%)=-18880
c. Economic Value Added ( EVA ) = Net Income After Tax - ( Amount of Capital x Weighted Average Cost of Capital [WACC] )
C. Software Division
(Value Base)
Book Current
Sales 100,000 100,000
Income 12,250 11,700
Assets 70,000 90,000
Liabilities 10,000 10,000
Capital invested 60,000 80,000
(Asset - Liabilities)
Tax on Income(30%) 3675 3510
Income after Tax 8,575 8,190
(Income - Tax on
income) (A)
Capital invested 6,000 8,000
* WACC - 10% ) (B)
EVA (C)=(A)-(B) 2,575 190
Consulting Division
(Value Base)
Book Current
Sales 200,000 200,000
Income 16,400 20,020
Assets 100,000 110,000
Liabilities 14,000 14,000
Capital invested 86,000 96,000
(Asset - Liabilities)
Tax on Income(30%) 4920 6006
Income after Tax 11,480 14,014
(Income - Tax on
income) (A)
Capital invested 8,600 9,600
* WACC - 10% ) (B)
EVA (C)=(A)-(B) 2,880 4,414
Venture Capital Division
(Value Base)
Book Current
Sales 800,000 800,000
Income 56,730 51,920
Assets 610,000 590,000
Liabilities 40,000 40,000
Capital invested 570,000 550,000
(Asset - Liabilities)
Tax on Income(30%) 17019 15576
Income after Tax 39,711 36,344
(Income - Tax on
income) (A)
Capital invested 57,000 55,000
* WACC - 10% ) (B)
EVA (C)=(A)-(B) -17,289 -18,656
Feed the Hungry Children, a (fictitious) not-for-profit tax-exempt entity under IRC Sec. 501(c)3, has been in operation for six years. The mission of the group is to provide healthy breakfast meals to children in inner city schools, so they can best learn. A wealthy local philanthropist has been meeting with the organization hoping to change the direction of the organization in return for a $1,000,000 permanent endowment donated to the group. While these negotiations were taking place this year, the organization suspended its normal operations. The draft of the Form 990 for this fiscal year shows 0 revenues and 0 expenses for this fiscal year and penciled in is a $1,000,000 gift from the philanthropist. The treasurer of the Board is drafting the Schedule A for the Form 990 in preparation for reporting to the Board whether the organization's status has changed form a public charity to a private foundation. Go to the www.irs.gov website and obtain Form 990, Schedule A. In your own words, construct an argument to support why this tax-exempt entity is still a public charity.
Answers
Despite the suspension of normal operations and the potential $1,000,000 gift from a wealthy local philanthropist, there is still an argument to support that Feed the Hungry Children, the not-for-profit tax-exempt entity, remains a public charity.
1. Review the requirements for a public charity: According to IRC Sec. 501(c)3, a public charity must receive a substantial part of its support from public contributions and grants and be organized and operated for charitable purposes.
2. Examine the mission and purpose: Feed the Hungry Children's mission is to provide healthy breakfast meals to children in inner city schools, with the aim of helping them learn better. This aligns with a charitable purpose focused on improving the well-being of children and promoting education.
3. Consider the organization's history: Feed the Hungry Children has been in operation for six years, consistently providing healthy breakfast meals to children in need. Its long-standing commitment to charitable activities demonstrates a track record of serving the public interest.
4. Evaluate the potential gift: The $1,000,000 gift from the local philanthropist, although substantial, does not automatically change the organization's status from a public charity to a private foundation. The organization's eligibility is determined by its overall sources of support, not a single donation. If the gift does not significantly alter the public support test, Feed the Hungry Children can still maintain its public charity status.
5. Analyze the Form 990, Schedule A: The treasurer of the Board is preparing the Schedule A for the Form 990, which provides information about the organization's public support and support schedule. By reviewing this form, it will be possible to determine whether the organization's public charity status has changed or if it still meets the required criteria.
6. Document the argument: Compile the findings from the review, emphasizing the organization's charitable purpose, its history of serving the public, and the evaluation of the potential gift's impact on public support. Present these points in a well-structured and persuasive argument to support the conclusion that Feed the Hungry Children remains a public charity.
It is important to consult with legal or tax professionals for accurate and specific advice in interpreting tax laws and regulations related to the organization's status.
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Which of the following encourages creativity and innovation. Flexibility, realistic expectations, persistence or organized planning
Answers
Flexibility fosters invention and creativity.
what is flexibility?If we take corporate work into consideration.
Instead, workplace flexibility is fostering an environment where workers may balance work and personal obligations while still performing at a high level. Options for when, where, and how the work is completed are part of flexible work arrangements.
Creative thinking demands flexibility, which makes it easier to come up with original and creative ideas. If someone is flexible, they will have creative thoughts.
In that we are working with ideas, flexibility is similar to fluency. Yet, while fluency focuses on producing as many ideas as possible, flexibility focuses on producing concepts that are unique from one another.
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Jimmy export copra to Australia for A $5000 when exchange rate IS KI= A$0.50 What is the total revenue earn from the export?
Answers
The total revenue earned from export is 10,000KI.
To calculate the total revenue earned from the export, multiply the amount of copra exported by the exchange rate.
Given:
Amount of copra exported = A$5000
Exchange rate: 1 KI = A$0.50
Total revenue = Amount of copra exported * Exchange rate
Total revenue = A$5000 * KI/A$0.50
Simplifying the expression:
Total revenue = A$5000 / (A$0.50/KI)
To divide by a fraction, we can multiply by its reciprocal:
Total revenue = A$5000 * (KI/A$0.50)
Calculating the product:
Total revenue = 5,000 * 2KI
Total revenue = 10,000KI
Therefore, the total revenue earned from the export of copra to Australia is 10,000KI.
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The complete income acquired from trade is 10,000KI. To work out the absolute income acquired from the product, duplicate how much copra traded by the swapping scale.
Exchange includes the exchange of labor and products starting with one individual or substance then onto the next, frequently in return for cash. Financial experts allude to a framework or organization that permits exchange as a market.
An early type of exchange, trade, saw the immediate trade of labor and products for different merchandise and services,[1] for example exchanging things without the utilization of money.
Current income merchants by and large haggle through a mode of trade, like cash. Subsequently, purchasing can be isolated from selling, or acquiring. The innovation of cash (and letter of credit, paper cash, and non-actual cash) incredibly streamlined and advanced exchange.
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Joseph establishes the following goal for his project: "Build swing sets for customer." Is this a "SMART" goal? Explain your answer. (1 point)
Week 1. Week 2 Week 3
Joseph. 5. 5. 5
Susana. 5. 5 5
Luciana 5 5 5
Ana 5 5 5
Swing step per week 20 20 20
Total Swing Sets 60
Answers
Joseph's project goal is not a "SMART" goal because it lacks the characteristics of a smart goal.
What are smart goals?A smart goal is characterized by being:
SpecificMeasurableAchievableRelevantTime-Bound.Besides being time-bound, Joseph's project goal lacks specificity, measurability, achievability, and relevance as it is displayed on paper.
Thus, Joseph's project goal is not a "SMART" goal because it lacks the characteristics of a smart goal.
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If housing prices fall by 4% how much will the value of a $200,000 home decline in price
Answers
Answer:
8000
Explanation:
200000 divided 100 multiply by 4% equal 8000
If housing prices fall by 4%. the value of a $200,000 home decline in price will be $8000.
What do falling house prices mean?200000 will be divided by 100 And the result will be multiplied by 4% Therefore, the value will be 8000.Where there is a reduction in demand and/or an excess of supply, housing prices fall. The following are the primary causes of a decline in housing prices: interest rates rise (making mortgage payments more expensive) recessionary economy and rising unemployment (reducing demand and causing home repossessions). Reduced construction investment from a drop in property prices is expected to result in even more sluggish economic growth.
Through what is known as wealth effects, changes in the housing sector, particularly in property prices, can have a wider impact on the economy. This is due, in part, to the fact that unstable economic situations typically result in fewer potential homebuyers with discretionary cash. When there is less demand for homes, home values frequently fall and any revenue from real estate stagnates.
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The market equilibrium quantity without the $1.50 excise tax is ______________ units. The market equilibrium quantity with the $1.50 excise tax is ______________ units. The change in equilibrium quantity due to the $1.50 excise tax is ______________ units. (Note: Red colored supply curve should be Qs with no tax and Green supply curve is Qs with tax. Error below in labeling)
Answers
Answer:
Equilibrium quantity without excise tax is 130 units.
Equilibrium quantity with excise tax is 110 units.
The change in equilibrium quantity is 20 units decrease due to excise tax.
Explanation:
The quantity demanded without tax is 130 units because this is equilibrium point where quantity supplied equals to quantity demanded. The quantity demanded with tax is 110 units because the price will increase by $1.50 due to excise tax. The new price would be $4.50 after excise tax so the quantity will be declined to 110 units.
On January 1, a company agrees to pay $20,000 in three years. If the annual interest rate is 10%, determine how much cash the company can borrow with this agreement?
Answers
Answer:
Amount borrow P = $15,026.296
Explanation:
Given:
Amount pay A = $20,000
Number of year n = 3
Rate r = 10% = 0.10
Find:
Amount borrow P
Computation:
A = P[1+r]ⁿ
20,000 = P[1+r]³
20,000 = P[1+0.10]³
20,000 = P[1.10]³
20,000 = P[1.331]
Amount borrow P = $15,026.296
If the average propensity to consume is 0.75, and the marginal propensity to consume is 0.70, if income rises by $4,000, consumption will increase by _____. (Remember when we use APC versus MPC. Use only one for this question).
Answers
Answer:
$2,800
Explanation:
The computation of the increase in consumption is shown below:
= Marginal propensity to consume × rise in income
= 0.70 × $4,000
= $2,800
Hence, the consumption would be increased by $2,800
We simply applied the above formula i.e. marginal propensity to consume is multiplied with the rise in income so that the correct answer could come
The information of manufacturing cost of product A and products B in
THANH company in 200N as follows:
Production cost per unit (S)
Product A
Materials 200
Wages 100
Fixed overhead 350
Variable overhead 150
Profit 200
Selling price 1000
Output per week 200
Product B
Materials 150
Wages 200
Fixed overhead 100
Variable overhead 200
Profit 350
Selling price 1000
Output per week 100
Required:
Comments on the relative profitability of product A and products B in THANH company in 200N
Answers
Manufacturing cost of both product A and product B have a profit margin of $0 per unit.
To assess the relative profitability of product A and product B in the THANH company in 200N, we need to compare their profit margins. Profit margin is calculated by subtracting the production cost per unit from the selling price per unit.
Let's calculate the profit margins for both products:
Product A:
Selling price per unit: $1000
Production cost per unit: $200 (Materials) + $100 (Wages) + $350 (Fixed overhead) + $150 (Variable overhead) + $200 (Profit) = $1000
Profit margin per unit = Selling price per unit - Production cost per unit = $1000 - $1000 = $0
Product B:
Selling price per unit: $1000
Production cost per unit: $150 (Materials) + $200 (Wages) + $100 (Fixed overhead) + $200 (Variable overhead) + $350 (Profit) = $1000
Profit margin per unit = Selling price per unit - Production cost per unit = $1000 - $1000 = $0
From the calculations, both product A and product B have a profit margin of $0 per unit.
Based solely on the profit margins, it appears that neither product A nor product B is profitable for the THANH company in 200N. However, it's important to note that this analysis only considers the production cost per unit and does not take into account other factors such as demand, market conditions, or overall company profitability.
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Need Help!!! Plz Brainliest
Answers
I just smacked a baby, feelin good.
Answers
Hi there..i just need to vent i feel so awful. Me and OH really struggled to get our almost 3 year old to sleep tonight. He has been quite defiant all day but just would not go to sleep for OH so i went up & sat for ages.
He was quite settled but then became v difficult & started kicking me & got my bump. I just mindlessly retaliated and smacked him on the bottom.. He really cried, i cant believe it.. Didnt help at all. Normally bedtime is all warm & cuddly & he lays down and goes to sleep while one of us sits there for 5 mins, but occasionally hes like this.
I know im feeling really hormonal but hate myself for this and he is going through a phase of hitting then i do this!!! How do i expect him to learn when i go and do exactly what we teach him is wrong? I just feel so awful like the worst mother in the world.... It scares me very occasionally just how angry i can feel. Can anyone offer any help or advice? Feel so ashamed :(
Answer: i- LOL
Explanation: does that happen to be a reference to the dream smp- or is it just me being a big fan O_O
Video Planet (VP) sells a big screen TV package consisting of a 60-inch HDTV, a universal remote, and on-site installation by VP staff. The installation includes programming the remote to have the TV interface with other parts of the customer's home entertainment system. VP concludes that the TV, remote, and installation service are separate performance obligations. VP sells the 60-inch TV separately for $1,700, sells the remote separately for $100, and offers the installation service separately for $200. The entire package sells for $1,900.
Required: How much revenue would be allocated to the TV, the remote, and the installation service?
Answers
Answer:
Video Planet (VP)
The revenue that would be allocated to the TV, the remote, and the installation service:
TV = $1,615
Remote = $95
Installation service = $190
Explanation:
a) Data and Calculations:
Sales price of 60-inch TV = $1,700
Sales price of remote = $100
Installation service = $200
Total sales price, if sold separately = $2,000
Sales price of entire package = $1,900
Revenue allocated to the 3 performance obligations:
TV = $1,700/$2,000 * $1,900 = $1,615
Remote = $100/$2,000 * $1,900 = $95
Installation service = $200/$2,000 * $1,900 = $190
Total revenue allocated = $1,900
Question 14 (3 points)
This tells your customers why they should want your product or service.
Choose the answer.
O place utility
Oform utility
O possession utility
information utility
Answers
Information utility tells your customers why they should want your product or service
For better understanding, lets explain the term Information utility
Utility is simply known as the useful or important characteristics of s thing or something e.g. product or service.Information utility is simple known a importance or value added to a product or service that helps gives the consumer useful information about all products and services. It makes customers aware of why they should want your product or service, how it works, what to expect etc.From the above, we can therefore say that the answer Information utility tells your customers why they should want your product or service is correct
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Kia's company pays its employees on Fridays . This accounting period ended on a Wednesday, so the employees will not be paid for the week for another two days. Kia needs to record an adjusting entry to record and why?
Answers
Kia's company pays its employees on Fridays. This is required because the firm must appropriately report its obligations on its financial accounts and the payment of salary is one of those liabilities.
What is adjusting entry?Generally, An adjusting entry is a journal entry made at the end of an accounting period to correct or update the financial statements for items that have not been recorded or have been recorded incorrectly.
In this case, it sounds like Kia needs to record an adjusting entry to account for the fact that the employees will not be paid until two days after the end of the accounting period.
This is necessary because the payment of salaries is a liability of the company and the company needs to accurately reflect its liabilities on its financial statements.
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(ASAP!!!!)
Go over the bank statement and answer the questions in detail. Use information
from the statement to support your answers.
1. This bank statement is most likely for what kind of account? Provide at least two
pieces of evidence from the statement that explain why.
Answers
Answer:
1.credit card; credit line and payment due date are shown
2.about $2243; credit available less the pending transaction
3.use more than one account; ask for a credit line increase
4.a finance charge is added; credit rating will be negatively impacted
Explanation:
1.
Deposit accounts do not have a "Payment Due Date", so this indicates a loan account of some sort. The listing of transactions with different descriptions suggests the account is used to pay a variety of creditors. The lines "credit line" and "credit available" further suggest this is a credit-card or line-of-credit type of account.
2.
The "total credit available' is a good starting indication of the additional amount the account owner can spend. There are some caveats. One is that there is a pending transaction, which will reduce the available limit when it is paid. Another is that using the maximum available credit will negatively impact the owner's credit score.
That score is maximized if the percentage of available credit used is below some amount (about 10%). A 30% utilization rate is a suggested maximum for maintaining a good credit score.
3.
Several options may be open:
the medical biller may allow payment over time
this account owner may have enough for the payment in all accounts together. (They payment may be split among different available accounts.)
this account owner can ask the credit line be raised
4.
Failure to make a payment will cause ...
a finance charge to be added to the account
(possibly) a late-payment charge to be added to the account
a "failure to pay as agreed" notice to credit reporting agencies
available credit to be reduced (possibly to zero)
The details of the consequences of a missed payment are in the account terms and conditions provided by the bank.
In one paragraph explain how the US government protects the money you deposit in a bank
Answers
Bank savings accounts, bank CDs, and money market mutual funds administered by brokerage firms like Fidelity are the most popular venues to save cash.
How will my money be safeguarded?The Financial Services Compensation Scheme (FSCS) is the principal form of defence. In case a bank failed, it was designed to protect people's savings
How is the money in a bank secured?One of the many advantages of holding an account with an FDIC-insured bank is deposit insurance, which is how the FDIC safeguards your funds in the unusual case of a bank failure. Every category of account ownership is covered by the basic insurance policy, which provides $250,000 per depositor, each insured bank.
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Calculate the Net Present Value Weather Co has recently taken over many smaller companies, which it now runs as separate divisions. One division, Thunder, has just developed a new product called Lightning and is now considering whether to put it into production. The following information is available:
(i) Costs incurred in the development of Lightning amount to $480,000.
(ii) Production of Lightning will require the purchase of new machinery at a cost of $2,400,000, payable on the first day of the new financial year. The machinery is specific to the production of Lightning and will be obsolete and valueless when production ceases. The machinery has a production life of four years and a production capacity of 30,000 units per annum.
(iii) Production costs of Lightning (at year 1 prices) are estimated as follows:
Direct material $8
Direct labour $12
Variable overheads $ 12
In addition, incremental fixed production costs (at year 1 prices), including straight-line depreciation on plant and machinery, will amount to $800,000 per annum.
(iv) The selling price of Lightning will be $80 per unit (at year 1 prices). Demand is expected to be 25,000 units per annum for the next four years.
(v) The consumer price index is expected to be at 5% per annum for the next four years and the selling price of Lightning is expected to increase at the same rate. Annual inflation rates for production costs are expected to be as follows:
Direct materials 4%
direct labour 10%
variable overheads 4%
Fixed costs 5%
(vi) The company's cost of capital in money terms is expected to be 15%. Direct materials Direct labour Variable overheads
(vii) Corporation tax is 30% and is payable one year in arrears. Tax-allowable depreciation of 25 per cent on a reducing balance is available on capital expenditure.
(viii) This investment will also require an investment in working capital of $500,000 payable at the start of the project.
This is not expected to change during the life of the investment. Unless otherwise specified, all costs and revenues should be assumed to arise at the end of each year.
The financial manager has recommended that a discounted cash flow method of project appraisal be used, but some members of the board are reluctant to do this.
Answers
Answer: Net Present Value (NPV) = -$2,400,000 + [25,000 x $80 x (1 - 0.30)]/1.15 - [$480,000 + ($800,000 x 4)]/1.15^4 + ($500,000/1.15^4)
NPV = -$2,400,000 + $1,946,739.13 - $2,719,565.22 + $385,217.39
NPV = -$1,077,608.70
Explanation:
Based on this analysis, the Lightning project has NPV of -$2,279,126.25 which is negative. Hence, the project is not economically viable and should not be pursued.
How to calculate the Net Present ValueTo calculate the net present value (NPV) of the Lightning project
Firstly, estimate the cash flows associated with the project and discount them to their present values using the company's cost of capital.
To calculate the annual cash inflows and outflows associated with the project.
The annual revenue from selling 25,000 units of Lightning at a price of $80 per unit is:
25,000 x $80 = $2,000,000
The annual production costs can be calculated as follows:
Direct material: 25,000 x $8 = $200,000
Direct labour: 25,000 x $12 = $300,000
Variable overheads: 25,000 x $12 = $300,000
Incremental fixed costs: $800,000
Total annual production costs: $1,600,000
To calculate the annual cash flow, subtract the annual production costs from the annual revenue:
Annual cash inflow: $2,000,000 - $1,600,000 = $400,000
In addition to the annual cash inflow, consider the initial investment in the project.
This includes the development costs of $480,000, the purchase of new machinery for $2,400,000, and the investment in working capital of $500,000. The total initial investment is:
$480,000 + $2,400,000 + $500,000 = $3,380,000
To calculate the tax-allowable depreciation on the capital expenditure, The value of the machinery after each year can be calculated as follows:
Year 1: $2,400,000 x (1 - 0.25) = $1,800,000
Year 2: $1,800,000 x (1 - 0.25) = $1,350,000
Year 3: $1,350,000 x (1 - 0.25) = $1,012,500
Year 4: $1,012,500 x (1 - 0.25) = $759,375
The tax-allowable depreciation for the first year is:
$2,400,000 - $1,800,000 = $600,000
The tax-allowable depreciation for the remaining years is calculated in the same way.
Using the information above, calculate the annual cash flows and the NPV of the project as follows:
Year 0:
Initial investment: -$3,380,000
Year 1:
Cash inflow: $400,000
Tax-allowable depreciation: $600,000 x 30% = $180,000
Tax savings: $180,000 x 30% = $54,000
Net cash flow: $400,000 - $54,000 = $346,000
Discounted cash flow: $346,000 / (1 + 15%\()^1\) = $300,870.13
Year 2:
Cash inflow: $400,000
Tax-allowable depreciation: $1,800,000 x 25% x 30% = $135,000
Tax savings: $135,000 x 30% = $40,500
Net cash flow: $400,000 - $40,500 = $359,500
Discounted cash flow: $359,500 / (1 + 15%\()^2\) = $281,880.18
Year 3:
Cash inflow: $400,000
Tax-allowable depreciation: $1,350,000 x 25% x 30% = $101,250
Tax savings: $101,250 x 30% = $30,375
Net cash flow: $400,000 - $30,375 = $369,625
Discounted cash flow: $369,625 / (1 + 15%\()^3\) = $260,775.85
Year 4:
Cash inflow: $400,000
Tax-allowable depreciation: $1,012,500 x 25% x 30% = $75,938
Tax savings: $75,938 x 30% = $22,781.40
Net cash flow: $400,000 - $22,781.40 = $377,218.60
Discounted cash flow: $377,218.60 / (1 + 15%\()^4\) = $257,347.59
Total discounted cash flow: $300,870.13 + $281,880.18 + $260,775.85 + $257,347.59 = $1,100,873.75
To calculate the NPV, subtract the initial investment from the total discounted cash flow:
NPV = $1,100,873.75 - $3,380,000 = -$2,279,126.25
Based on this analysis, the Lightning project has a negative NPV of -$2,279,126.25. Therefore, the project is not economically viable and should not be pursued.
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11. Identify five products sold in shops around your home. (5mks) 12. Identify any five occupations found in your trading centre. (5mks) 13. Outline the role of division of labour and specialisation. (5mks)
Answers
Groceries, apparel, electronics, books, and home products are the five items that are sold in stores close to my house. Shop owners, salespeople, the cashiers, guards for safety, and dry cleaners are the five jobs present in my trading center.
The separation of tasks and functions inside a system to boost production and efficiency is referred to as the division of labour and specialization.
Specialization enables workers to concentrate on the stages of the production process where they have an advantage, increasing productivity and output. The separation of roles and duties within a system is made possible by the division of labour, which boosts production and efficiency.
As a result, the significance of the five products sold in shops around home are the aforementioned.
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DO you know what 407
Answers
Answer:
wdym wut 407
Explanation:
dnvkhfbfdjbkjbddbjkfbjkdfbkjdfbdjfbfdbjkdf
Answers
Answer:
fr
Explanation:
what are the challenges facing today's management
Answers
The challenges facing today's management are Uncertainty about the Future; the Well-being of Employees; Tracking Team Productivity, and turnover, technology, and digitalization.
What is management?The process of completing the labour or task necessary for accomplishing an organization's goals in an effective and efficient way is referred to as management. The management functions are implied by the process. Planning, organizing, staffing, directing, and managing are therefore involved.
In management, there are decreased levels of performance, hiring competent personnel; inadequate communication.
Time management issues, difficult coworkers, difficult clients, performance pressure, poor cooperation, Skepticism, etc are some of the major challenges faced by the management. Therefore, the success of the management depends on those who are able to overcome these challenges.
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McBurgers Inc. noticed brown pellets in some areas of
their kitchen. They assume that it is a sign of pest
infestation. What action should they take?
Check all that apply:
Store food away from walls and dispose of trash
regularly.
Change humidity, light, and temperature conditions
in the whole food service area.
Block all entry points to prevent pests from entering
the kitchen or other storage areas.
Sweep the pellets away and clean the floor with
water and a cleaner and apply floor sanitizer.
Submit Answer
Answers
The action that they should take are:
Store food away from walls and dispose of trash regularly.Change humidity, light, and temperature conditions in the whole food service area.Block all entry points to prevent pests from entering the kitchen or other storage areas.Sweep the pellets away and clean the floor with water and a cleaner and apply floor sanitizer.What is pest infestation?Pest Infestation is the state of being invaded or overrun by pests or parasites.
To avoid pest infestation, it is important to keep the house clean.
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. What must be the beta of a portfolio with E ( rP ) =18%, if rf
=6% and E ( rM ) = 14%?
Answers
The beta of the portfolio must be 1.50.
What is the beta?Beta is a measure of the systemic risk of a portfolio. The value of beta can be determined using the capital asset pricing model.
According to CAPM :
Expected portfolio return = risk free + beta( expected market return - risk free return)
18% = 6% + b(14 - 6)
18% = 6% + 8b
18% - 6% = 8b
12% = 8b
b = 12 / 8 = 1.50
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The identity thief's information on your credit report wouldn't impact your ability to
get certain types of jobs.
True
False
Answers
Last year sales of XYZ company are Rs. 900,000 and 80% sales are on credit. Gross profit margin is 25% on sales. The closing stock value is Rs. 90,000. What must be the inventory turnover ratio and age of inventory of the firm?
Answers
The inventory turnover ratio of the firm is 7.5 times, and the age of inventory is 48.67 days.
What is turnover?
In business and finance, turnover refers to the total amount of revenue generated by a company through its operations over a specific period of time, typically a year. It can also refer to the rate at which a company's inventory is sold and replaced over a given period of time, usually a year. Turnover can be measured in terms of sales revenue, number of units sold, or number of transactions processed.
In accounting, turnover can also refer to the number of times a particular asset, such as inventory or accounts receivable, is replaced or converted into cash over a specific period of time. This is commonly referred to as the inventory turnover ratio or accounts receivable turnover ratio, respectively.
In general, turnover is an important metric used to evaluate a company's financial performance and efficiency, as it indicates how effectively a company is able to generate revenue from its operations and manage its assets.
To calculate the inventory turnover ratio and age of inventory of the firm, we need to use the following formulas:
Inventory turnover ratio = Cost of goods sold / Average inventory
Age of inventory = 365 days / Inventory turnover ratio
To calculate the cost of goods sold, we first need to calculate the total sales and the gross profit.
Total sales = Rs. 900,000
Credit sales = 80% of total sales = 0.8 x Rs. 900,000 = Rs. 720,000
Cash sales = Total sales - Credit sales = Rs. 900,000 - Rs. 720,000 = Rs. 180,000
Gross profit = Gross profit margin x Total sales = 0.25 x Rs. 900,000 = Rs. 225,000
Cost of goods sold = Total sales - Gross profit = Rs. 900,000 - Rs. 225,000 = Rs. 675,000
To calculate the average inventory, we need to add the opening and closing stock values and divide by 2.
Closing stock value = Rs. 90,000
Assuming that the opening stock value is the same as the closing stock value, the average inventory is (Rs. 90,000 + Rs. 90,000) / 2 = Rs. 90,000
Now we can calculate the inventory turnover ratio and the age of inventory:
Inventory turnover ratio = Cost of goods sold / Average inventory = Rs. 675,000 / Rs. 90,000 = 7.5 times
Age of inventory = 365 days / Inventory turnover ratio = 365 days / 7.5 times = 48.67 days
Therefore, the inventory turnover ratio of the firm is 7.5 times, and the age of inventory is 48.67 days. This means that the company sells its entire inventory 7.5 times in a year, and it takes around 48.67 days to sell its inventory.
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Mark wants to add a splash of color to his suit with a new pocket square. He finds that the blue and the teal pocket squares match his suit well.
He flips his business card to decide on a color. To see if the card is a fair model, he flips the card 50 times and records the results in the table.
Which statement is true based on the results in the table?
O A. The two outcomes are equally likely because their relative frequencies are similar.
OB. The two outcomes are not equally likely because 38 is not a multiple of 12.
C. The two outcomes are equally likely because the relative frequency of the card landing faceup is higher than the relative
frequency of the card landing facedown.
OD
The two outcomes are not equally likely because their relative frequencies are significantly different.
Reset
Next
Answers
Answer:
d
Explanation:
Answer: I believe it is D tell me if im wrong