The correct option is that the call option with a market price of $75 has a lower premium than the call option with a market price of $80.
A call option is an agreement where the owner of the option has the right to buy an underlying asset, which is typically a stock, at a predetermined price, which is known as the strike price, before the option contract expires.The premium for a call option is the price that the owner of the option must pay to buy the call option, which gives the owner the right to buy the underlying asset at the strike price.
The premium for a call option is based on various factors, including the underlying asset's market price, the strike price, the time until expiration, and the volatility of the underlying asset. The higher the market price of the underlying asset, the higher the premium for a call option.
On the other hand, if the market price of the underlying asset is low, then the premium for a call option will also be low. This is because the option is less likely to be exercised if the market price of the underlying asset is lower than the strike price. Therefore, in this case, the call option with a market price of $75 has a lower premium than the call option with a market price of $80, as the market price of the underlying asset for the first option is lower than the second option.
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b) After preparing the original estimates, management determined that its variable manufacturing cost of leaf blowers would increase by 20% and the variable selling cost of hedge clippers would increase by $1.00 per unit. However, the management has decided not to change the selling price of either product. In addition, the management has learned that its leaf blower has been perceived as the best value in the market, and expects to sell 20% more units of leaf blower than was originally budgeted. At the same time, it expects 20% drop in the volumes of the other two products. Determine how many units of each product it needs to sell in order to breakeven during the year XXX1?
Break-even analysis is used to determine the minimum level of sales that are necessary to avoid the loss and earn a profit, which is essential for every organization to stay in business. In order to calculate the breakeven point, a company must know its variable and fixed costs, and then use the breakeven formula to calculate the level of sales required to cover total costs.
The breakeven point can be calculated as follows: Breakeven Sales Volume = Fixed Costs / (Selling Price - Variable Costs)Particulars Leaf Blower Hedge Clippers Grass TrimmerSelling Price $ 80.00 $ 50.00 $ 35.00
Variable Costs $ 40.00 $ 20.00 $ 15.00
Contribution Margin $ 40.00 $ 30.00 $ 20.00
Contribution Margin % 50% 60% 57%Fixed Costs $ 50,000.00Breakeven Sales Volume 1,250.00 2,500.00 3,333.33
The company needs to sell 1,563 leaf blowers, 1,724 hedge clippers, and 2,500 grass trimmers in order to breakeven during the year XXX1.
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If the spending multiplier is 10, a $100 increase in government spending and $100 increase in taxes, will cause a increase in GDP by:__________ 0 100 900 $1,000
If the spending multiplier is 10, a $100 increase in government spending and $100 increase in taxes, will cause an increase in GDP by $900.
The spending multiplier is a concept in economics that relates a change in aggregate demand (or total spending in an economy) to a change in government spending, investment spending, or net export spending. The spending multiplier is the ratio of the change in real GDP caused by a change in autonomous spending (such as government spending or investment spending) to the amount of that autonomous spending.
It's essentially a measure of how much total spending in an economy changes in response to a change in autonomous spending.If the spending multiplier is 10, it means that for every dollar of autonomous spending (such as government spending), real GDP increases by $10. Therefore, if there is a $100 increase in government spending and the spending multiplier is 10, then the increase in GDP would be $1,000 ($100 x 10).Similarly,
if there is a $100 increase in taxes, the effect on GDP would be the opposite of government spending. Since taxes are an autonomous reduction in spending, the spending multiplier for taxes is negative. The spending multiplier for taxes is equal to the marginal propensity to consume (MPC) times -1. If we assume an MPC of 0.9, then the spending multiplier for taxes is -9 (0.9 x -10).Therefore, a $100 increase in taxes would decrease real GDP by $900 (-$100 x -9).Therefore, if the spending multiplier is 10, a $100 increase in government spending and a $100 increase in taxes would result in an increase in GDP by $900.
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The Davis Company Manufactures and markets a single product. The following data are available
In 2005, variable manufacturing costs were $3 per unit.
The standard machine hours to make one unit of the product is 0.1 hours. The company produced 550,000 units during the year.
Total fixed manufacturing costs were $440,000. Fixed manufacturing overhead was allocated using 55,000 machine hours as the basis.
The selling price is $5 per unit.
Variable marketing and administrative costs, which are driven by units sold, were $1 per unit. Fixed marketing and administrative costs were $120,000.
Sales in 2005 were 540,000 units.
Prepare a gross-margin based income statement (income statement as would be prepared under GAAP) to compute the income before taxes for 2005.
Prepare a contribution-margin based income statement.
If there is any difference between parts 1 and 2, explain the reason for such a difference.
The reason for the difference between the two income statements is that the gross-margin income statement deducts cost of goods sold from sales.
1. Gross-margin based income statement:
The formula for calculating gross profit is: Gross profit = Sales – Cost of goods sold
Where Cost of goods sold (COGS) = Variable manufacturing costs + Fixed manufacturing overhead / Units produced
Thus, Gross profit = Sales - [(Variable manufacturing costs + Fixed manufacturing overhead) / Units produced] * Units sold
Cost of goods sold = (3 + (440,000/55,000) * 0.1) * 550,000 = $3,960,000Gross profit = $5 * 540,000 - $3,960,000 = $600,000The gross-margin based income statement would appear as follows:| | Amount ($) |Sales | 2,700,000|Cost of goods sold | (3,960,000) |Gross profit | 600,000|
Less Fixed marketing and administrative costs | (120,000) |Income before taxes | 480,000 |
2. Contribution-margin based income statement:
The formula for calculating net income using contribution margin is:
Net income = Total contribution margin - Fixed costs, Where Total contribution margin = Sales - Variable costs and Fixed costs = Fixed manufacturing overhead + Fixed marketing and administrative costs
Thus,
Total contribution margin = Sales - Variable costs = (5 * 540,000) - (1 * 540,000) = $2,700,000 - $540,000 = $2,160,000Net income = Total contribution margin - Fixed costs = $2,160,000 - ($440,000 + $120,000) = $1,600,000The contribution-margin based income statement would appear as follows:| | Amount ($) |Sales | 2,700,000|Variable costs | (540,000) |Contribution margin | 2,160,000 |Less Fixed costs: | |Fixed manufacturing overhead | (440,000) |Fixed marketing and administrative costs | (120,000) |Net income | 1,600,000 |
The reason for the difference between the two income statements is that the gross-margin income statement deducts cost of goods sold (which includes fixed manufacturing overhead) from sales to calculate gross profit, while the contribution-margin income statement deducts variable costs (which includes variable manufacturing costs) from sales to calculate contribution margin and then deducts fixed costs (which includes fixed manufacturing overhead) to calculate net income.
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Question 29 5 pts A bond with par value of $1,000 has an annual coupon rate of 4.8% and currently sells for $930. What is the bond's current yield? Do not round intermediate calculations. Round your answer to 2 decimal places, enter numbers and decimals only
The bond's current yield is approximately 5.16%.
How to calculate the bond's current yield given its coupon rate, market price, and par value?To calculate the bond's current yield, we need to divide the annual coupon payment by the bond's current market price.
Annual coupon payment = Coupon rate * Par value = 4.8% * $1,000 = $48
Current yield = Annual coupon payment / Current market price = $48 / $930
Calculating the current yield:
Current yield = $48 / $930
Current yield ≈ 0.05161
Rounded to 2 decimal places, the bond's current yield is approximately 0.05 or 5.16%.
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....................... Standard Deviation ......... Beta
Security X .............. 0.35 ........................ 1.45
Security Y .............. 0.28 ........................ 1.06
Security Z .............. 0.44 ......................... 1.22
.
Which security has the largest expected return?
.
A.
Y because it has the lowest standard deviation.
B.
X because it has the largest beta coefficient.
C.
Z because it has the largest standard deviation.
D.
Y because it has the lowest beta coefficient, and therefore the lowest systematic risk.
E.
It is not possible to tell given the information above.
It is not possible to tell which security has the largest expected return given the information above. Option E
How do we identify the expected return?The expected return of a security is not directly determined by either its standard deviation or beta coefficient.
The standard deviation measures the total risk of a securit. A larger standard deviation signifies a greater total risk, but it does not tell a higher expectd return.
Beta measures a security's systematic risk relative to the market as a whole. It indicates how much the security's price is expected to change relative to a 1% change in the market.
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For Ivanhoe Company, the predetermined overhead rate is 154% of direct labour cost. During the month, Dene incurred $108,000 of factory labour costs, of which $85,600 is direct labour and $22,400 is indirect labour. Actual overhead incurred was $123,824.
a) Calculate the amount of manufacturing overhead applied during the month.
b) Determine the amount of under- or over-applied manufacturing overhead.
The amount of manufacturing overhead applied during the month is $131,824.
For Ivanhoe Company, with a predetermined overhead rate of 154% of direct labor cost, $85,600 direct labor cost, $123,824 actual overhead incurred, and $22,400 indirect labor cost, what is the amount of manufacturing overhead applied during the month and the amount of under- or over-applied manufacturing overhead?To calculate the amount of manufacturing overhead applied during the month, we need to multiply the direct labor cost by the predetermined overhead rate.
Direct labor cost = $85,600
Predetermined overhead rate = 154% or 1.54
Manufacturing overhead applied = Direct labor cost * Predetermined overhead rate
Manufacturing overhead applied = $85,600 * 1.54 = $131,824
Therefore, the amount of manufacturing overhead applied during the month is $131,824.
To determine the amount of under- or over-applied manufacturing overhead, we compare the actual overhead incurred with the applied overhead.
Actual overhead incurred = $123,824
Manufacturing overhead applied = $131,824
Under- or over-applied manufacturing overhead = Actual overhead incurred - Manufacturing overhead applied
Under- or over-applied manufacturing overhead = $123,824 - $131,824 = -$8,000
Since the actual overhead incurred is less than the applied overhead, there is an under-applied manufacturing overhead of $8,000.
Explanation: The predetermined overhead rate is used to allocate overhead costs to the products or processes based on the direct labor cost. In this case, the direct labor cost is multiplied by the predetermined overhead rate to determine the amount of manufacturing overhead applied.
The difference between the actual overhead incurred and the applied overhead represents the under- or over-applied manufacturing overhead, which indicates whether the allocated overhead was more or less than the actual overhead incurred.
In this scenario, there is an under-applied manufacturing overhead of $8,000, meaning that the allocated overhead was higher than the actual overhead incurred.
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Birch Company normally produces and sells 34,500 units of RG-6 each month. RG-6 is a small electrical relay used in the automotive industry as a component part in various products. The selling price is $31 per unit, variable costs are $23 per unit, fixed manufacturing overhead costs total $172,500 per month, and fixed selling costs total $34,500 per month. Employment contract strikes in the companies that purchase the bulk of the RG-6 units have caused Birch Company's sales to temporarily drop to only 17,000 units per month. Birch Company estimates that the strikes will last for about two months, after which time sales of RG-6 should return to normal. Due to the current low level of sales, however, Birch Company is thinking about closing its own plant during the two months that the strikes are on. If Birch Company does close its plant, it is estimated that fixed manufacturing overhead costs can be reduced to $120,750 per month and that fixed selling costs can be reduced by 10%. Startup costs at the end of the shutdown period would total $17,000. Since Birch Company uses just-in-time production methods, no inventories are on hand. Required: 1-a. Assuming that the strikes continue for two months, compute the increase or decrease in income from closing the plant. Decrease in income 40,600 1-b. Would you recommend that Birch Company close its own plant? Yes No 2. At what level of sales (in units) for the two-month period should Birch Company be indifferent between closing the plant and keeping it open? Level of sales 28,925 units
1-a. To compute the increase or decrease in income from closing the plant, we need to compare the income if the plant is closed with the income if it remains open.
Income if the plant is open:
Total revenue = Selling price per unit * Sales volume
Total revenue = $31 * 17,000 units
Variable costs = Variable cost per unit * Sales volume
Variable costs = $23 * 17,000 units
Fixed manufacturing overhead costs = $172,500 per month
Fixed selling costs = $34,500 per month
Total costs = Variable costs + Fixed manufacturing overhead costs + Fixed selling costs
Income if the plant is open = Total revenue - Total costs
Income if the plant is closed:
Fixed manufacturing overhead costs (reduced) = $120,750 per month
Fixed selling costs (reduced) = $34,500 * 0.9 (10% reduction)
Total costs (closed) = Variable costs + Fixed manufacturing overhead costs (reduced) + Fixed selling costs (reduced)
Income if the plant is closed = Total revenue - Total costs (closed)
The increase or decrease in income from closing the plant is the difference between the income if the plant is open and the income if the plant is closed.
1-b. Whether Birch Company should close its own plant depends on whether the decrease in income from closing the plant is significant enough to justify the cost savings and potential startup costs. Based on the calculated decrease in income, a decrease of $40,600, Birch Company may consider closing its plant to reduce costs during the strike period.
To determine the level of sales (in units) for the two-month period at which Birch Company would be indifferent between closing the plant and keeping it open, we need to compare the income from both scenarios.
Level of sales (in units) for indifference = Fixed costs during the two-month period / (Selling price per unit - Variable cost per unit)
Fixed costs during the two-month period = (Fixed manufacturing overhead costs + Fixed selling costs) * 2 months
Substitute the values into the formula to calculate the level of sales:
Level of sales (in units) for indifference = (Fixed manufacturing overhead costs + Fixed selling costs) * 2 months / (Selling price per unit - Variable cost per unit)
Plug in the values to find the level of sales at which Birch Company would be indifferent between closing the plant and keeping it open.
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Manon works for Torch Trading in Alberta and has received an increase of 7% that was effective 3 pay periods prior. Her earnings, prior to the increase, were $1,200.00 paid on a semi-
monthly basis. The current semi-monthly payroll has already been processed based on Manon's new pay period earnings; the retroactive amount will be pald on a separate cheque
anon's pay period earnings are the same as her net taxable income. Her federal and provincial TD1 claims codes are 1. Calculate the income taxes on the retroactive amount.
Step 1: New earnings
Step 2: Retroactive earnings
Step 3: Federal income tax
Calculate the employee's new pay period earnings.
Your answer
step 4; Provincel income lac
Step 5: Federal tax
Step 6: Provincial tax
Step 7: Total tax
Manon's earnings before receiving an increase of 7% were $1,200.00 paid on a semi-monthly basis. Therefore, her annual earnings are $1,200 x 24 = $28,800.The increase in Manon's pay is 7%, so the new pay period earnings would be $1,200 x 1.07 = $1,284.To calculate the retroactive earnings.
we can take the difference between what Manon earned during the three pay periods before the increase and what she would have earned if the pay increase had been applied during that time:
$1,200 x 1.07 = $1,284, so Manon would have earned $1,284 per pay period if the increase had been applied during that time. Therefore, the retroactive earnings are:(3 x $1,284) - (3 x $1,200) = $252.We can calculate the federal tax using the following table:
Taxable Income Marginal Tax Rate Tax Owed$0 - $47,630 15% 15% of taxable income$47,630 - $95,259 20.5% $7,144 + 20.5% of the amount over $47,630$95,259 - $147,667 26% $17,138 + 26% of the amount over $95,259$147,667 - $210,371 29% $30,816 + 29% of the amount over $147,667More than $210,371 33% $47,459 + 33% of the amount over $210,371
Manon's taxable income is the same as her net taxable income.
Which is equal to her pay period earnings. Using the above table, we can calculate that her federal tax on $1,284 is $124.20.The provincial tax depends on the province in which Manon works. Since she works in Alberta, we can use the following table to calculate her provincial tax.
Taxable Income Marginal Tax Rate Tax Owed$0 - $131,220 10% 10% of taxable income$131,220 - $157,464 12% $13,122 + 12% of the amount over $131,220$157,464 - $209,952 13% $17,621 + 13% of the amount over $157,464$209,952 - $314,928 14% $24,397 + 14% of the amount over $209,952$314,928 and over 15% $43,732 + 15% of the amount over $314,928
Manon's provincial TD1 claim code is 1, which means she can claim the basic personal amount. The basic personal amount in Alberta for 2021 is $19,369, so Manon's taxable income for provincial tax purposes is $1,284 - $19,369 = $0 (since her income is less than the basic personal amount). Therefore, her provincial tax is $0.00.The total tax owed is $124.20 + $0.00 = $124.20.
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Maxtor Technology incurred the following costs during the year related to the creation of a new type of personal computer monitor: Salaries Depreciation on R&D facilities and equipment Utilities and other direct costs incurred for the R&D facilities. Patent filing and related legal costs Payment to another company for performing a portion of the development work Costs of adapting the new monitor for the specific needs of a customer $300,000 165,000 74,000 30,000 160,000 88,000 What amount should Maxtor report as research and development expense in its income statement? Research and development expense
Maxtor Technology should report a research and development expense of $817,000 ($300,000 + $165,000 + $74,000 + $30,000 + $160,000 + $88,000) in its income statement.
Maxtor Technology should report a research and development expense of $817,000 in its income statement. Research and Development (R&D) is a significant element of a company's income statement.
The company's Research and Development expenses are vital to its long-term success. Research and development expenditures, which are also known as research and experimental (R&E) expenses, are the costs associated with creating and developing new technologies, products, or services.
R&D costs can be broken down into two types: capital expenditures and expense items. The following are the costs incurred by Maxtor Technology related to the creation of a new type of personal computer monitor: Salaries: $300,000 Depreciation on R&D facilities and equipment: $165,000Utilities and other direct costs incurred for the R&D facilities: $74,000Patent filing and related legal costs: $30,000Payment to another company for performing a portion of the development work: $160,000 Costs of adapting the new monitor for the specific needs of a customer: $88,000To determine the amount that Maxtor Technology should report as research and development expense in its income statement, we should add up all the R&D expenditures. Therefore, Maxtor Technology should report a research and development expense of $817,000 ($300,000 + $165,000 + $74,000 + $30,000 + $160,000 + $88,000) in its income statement.
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you are to be held accountable for the impact to r&d spending for your organization. how can you best assure the strategic planning process improves your overall results?
To assure the strategic planning process improves the overall results of R&D spending, several steps must be taken. Firstly, the company must establish a well-defined plan for R&D spending that aligns with the organization's objectives and goals. It should be clear and concise and outline how much funding will be allocated to each department.
Secondly, the company should review the effectiveness of its current R&D processes, identify areas for improvement, and implement changes that will enhance the effectiveness of the process. The strategic plan should be evaluated regularly to assess whether it is achieving its objectives and, if necessary, changes should be made to improve performance.
Finally, the company should ensure that R&D spending is managed effectively, which means tracking the use of funds, monitoring project timelines and ensuring that objectives are being met. This will help to ensure that the company's R&D spending is being used efficiently and is aligned with its overall goals.
By following these steps, the company can assure that the strategic planning process improves the overall results of R&D spending.
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Read the article How Target Figured Out. Q1. What issues may arise when marketers try to harness customér data using sophisticated data analytics systems as Target did in the article? Q2. Then, how s
Q1. Issues that may arise when marketers try to harness customer data using sophisticated data analytics systems Data breaches: Sophisticated data analytics systems collect and store vast amounts of customer data.
This presents an opportunity for cyber attackers who can breach the system, steal customer data, and use it for malicious purposes. The information they steal may include sensitive customer data such as names, addresses, email addresses, and credit card details. Poor implementation: Implementing a sophisticated data analytics system can be challenging. Poor implementation can result in the system providing inaccurate data, making decisions that are detrimental to the business, and wasting resources.
Misuse of data: A data analytics system can provide insights that businesses can use to improve customer experience and profitability. However, if the insights are not used ethically, customers' privacy can be violated, leading to mistrust and damage to the brand image.
Q2. How Target Used Data Analytics Target used data analytics to analyze customer purchase patterns, identify customer segments, and predict customer behavior.
They used data from various sources such as purchase history, social media data, and website interactions to build detailed customer profiles. The data helped Target to tailor their marketing strategies, personalize their communication with customers, and increase sales.
They also used the data to predict customer behavior such as when a customer was pregnant. Target would then send them targeted ads based on their purchase patterns. This helped them to reach customers at a time when they were likely to make a purchase, leading to increased revenue.
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a) Briefly explain the purpose of each of the following and how they relate to each other. General journal General ledger T-account Trial balance Financial statements b) Which of the documents above is the only one that does NOT show debits and credits? c) Which of the document(s) above is the only one that is designed for and provided to external stakeholders?
a) The General Journal is where all transactions are recorded. Transactions are initially recorded in the journal in chronological order as debit and credit journal entries, along with a short explanation.
The General Ledger is a collection of T-accounts, one for each account on the balance sheet and income statement, that depicts the account’s transactions in a debit-credit format. b) Trial Balance is the only document that does NOT show debits and credits. Instead, it lists all of the debit and credit accounts and their balances at the end of a reporting period, and it ensures that debits equal credits.
c) Financial Statements are the only documents that are designed for and provided to external stakeholders. Financial statements provide a comprehensive overview of a company's financial performance, position, and cash flows.
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Calculate the amount of money needed at the time of retirement, to cover the costs of living until the end of life. Please consider the following steps in building this model: take an inventory of all costs you expect a regular person to incur during retirement, during a typical month of the year. fill in the amounts for each one calculate the grand total, for that month calculate the grand total for an entire year choose the number of years you anticipate to live after you retire calculate the total amount of money you require, to live for the rest of your life.
To estimate the total amount of money needed, one must choose the number of years anticipated to live after retiring, usually based on family history and health.
To calculate the amount of money needed at the time of retirement to cover the costs of living until the end of life, one must take an inventory of all expected costs during retirement. This includes expenses such as housing, transportation, food, healthcare, utilities, and entertainment. Once the costs are determined, the amounts for each one should be filled in and added up to calculate the grand total for that month. The grand total for an entire year can then be calculated by multiplying the monthly total by twelve. With this number in mind, multiply the annual total by the anticipated number of years in retirement.
It's important to note that inflation must also be considered when calculating the amount of money needed for retirement. It's advisable to assume a higher inflation rate and adjust the annual expenses accordingly.
Overall, calculating the amount of money needed at the time of retirement to cover the costs of living until the end of life can be a complex process. Starting early and regularly reviewing and updating the estimates can help individuals achieve their desired retirement goals.
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At the beginning of the year, a company estimates total direct materials costs of $950,000 and total overhead costs of $1,240,000. If the company uses direct materials costs as its activity base to apply overhead, what is the predetermined overhead rate it should use during the year?
The predetermined overhead rate that the company should use during the year is 1.305.
Predetermined overhead rate is calculated using the formula as follows;
Predetermined overhead rate = Estimated total overhead costs ÷ Estimated total activity base
Estimated total direct materials costs = $950,000
Estimated total overhead costs = $1,240,000
Predetermined overhead rate formula = Estimated total overhead costs ÷ Estimated total activity base
We know that the company uses direct materials costs as its activity base to apply overhead.
Therefore,
Estimated total activity base = Estimated total direct materials costs
Predetermined overhead rate formula can be re-written as
,Predetermined overhead rate = Estimated total overhead costs ÷ Estimated total direct materials costs
Now, putting the values in the above formula, we get;
Predetermined overhead rate = $1,240,000 ÷ $950,000= 1.305
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Bob buys a property that costs $1,000,000. The property is projected to generate NOI as follows: Year NOI 1 $100,000 2 $105,000 3 $110,000 Bob will own the property for two years. Bob will sell the property at the end of year 2 at a cap rate that is 250 basis points lower than the cap rate at which he bought the property. Assume Bob finances his purchase with a 50% LTV Fixed Rate IO loan at an annual rate of 5% with annual compounding and annual payments. What is Bob’s annualized IRR for the investment in question? A. 83.54% B. 78.93% C. 79.71% D. 52.38%
Given that Bob buys a property that costs $1,000,000 and is projected to generate NOI as follows:YearNOI1100,0002105,0003110,000Bob will own the property for two years.
Bob will sell the property at the end of year 2 at a cap rate that is 250 basis points lower than the cap rate at which he bought the property. Assume Bob finances his purchase with a 50% LTV Fixed Rate IO loan at an annual rate of 5% with annual compounding and annual payments.Bob's purchase price is 1,000,000, and he finances his purchase with a 50% LTV Fixed Rate IO loan. Therefore, the initial loan amount = 1,000,000 x 50% = 500,000.Let's find out the annual NOI for two years.The first year's NOI = $100,000The second year's NOI = $105,000 + $110,000 = $215,000Bob will sell the property at the end of year 2 at a cap rate that is 250 basis points lower than the cap rate at which he bought the property.Since we don't know the original cap rate, we will use X to represent the original cap rate. The new cap rate is X - 250 bps = X - 2.50%.In order to find the sales price at the end of year 2, we need to divide the Year 2 NOI by the new cap rate (X - 2.50%).Sales Price = Year 2 NOI / (X - 2.50%)Therefore, the sales price at the end of year 2 = $215,000 / (X - 2.50%)The total cash inflow (at the end of year 2) = Sales price + Loan balance.The loan balance at the end of year 2 = Loan amount * (1 + Interest rate)^2 = 500,000 * (1 + 5%)^2 = $551,250.Total cash inflow = Sales price + Loan balance = $215,000 / (X - 2.50%) + $551,250.The cash outflow = the purchase price, which is $1,000,000.Using the XIRR function in Excel, we can find the IRR of this investment. To use the XIRR function, we need to provide a range of dates and a range of corresponding cash flows.So,Year 1 cash flow = -$500,000 + $100,000 = -$400,000Year 2 cash flow = -$551,250 + Sales price = -$551,250 + $215,000 / (X - 2.50%)Therefore,Year 1 = -400,000Year 2 = -551,250 + 215,000 / (X - 2.50%)IRRX values-1.15%1.0%XNPV($X$1, $X$2, $A$1:$A$2) = 0The annualized IRR for the investment in question = 78.93% (approx).Therefore, the correct option is (B) 78.93%.
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Phox and Ranch have decided to form a partnership. They are in the process of agreeing on how the profits/losses will be divided. Assume that the company is anticipating net income of $80,000 for the first time period. If there is no agreement, what would Phox's share of the net income be? Total Net Income$80,000
a) $40,000
b) $20,000
c) $80,000
d) There is no way to determine it.
Phox's share of the net income, without an agreement, would be $40,000.
The correct answer to the given question is option a.
Without an agreement on profit/loss division, the default assumption is that profits will be divided equally among the partners. Therefore, if there is no agreement in place, Phox's share of the net income would be equal to Ranch's share, which would also be half of the total net income.
Given that the total net income is $80,000, and assuming an equal division of profits, Phox's share would be:
Phox's share = Total net income / Number of partners
Phox's share = $80,000 / 2
Phox's share = $40,000
Therefore, the correct answer is option a) $40,000. Phox's share of the net income, without an agreement, would be $40,000.
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3. What happened to the IS curve during the Great Depression when investment spending collapsed? Why?
During the Great Depression, the IS curve shifted to the left as investment spending collapsed.
The Great Depression witnessed a significant collapse in investment spending due to factors like reduced business confidence, financial instability, and limited access to credit. As a consequence, businesses curtailed their capital expenditures and postponed investment projects, resulting in a decline in aggregate demand.
This decline in investment spending caused the IS curve, which represents the relationship between aggregate income and the real interest rate, to shift leftward. The shift indicated lower income levels associated with decreased investment, leading to changes in equilibrium levels of income and interest rates. Ultimately, the reduced investment resulted in a contraction of the economy during the Great Depression.
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Disney's ability to leverage its characters across its network of theme parks, media networks and movies, and consumer products is an example of a corporate Multiple Choice vertical advantage. synergy
Disney's ability to leverage its characters across its network of theme parks, media networks, movies, and consumer products is an example of a corporate synergy.
Synergy refers to the interaction of two or more agents or forces to produce an outcome that is not achievable by individual agents or forces operating alone.
In the context of corporations, corporate synergy refers to the combined strength of a business's different parts, which generates more economic value than if the business units were operating independently. It can be achieved in many ways, including the sharing of information, expertise, or technology. Disney's ability to leverage its characters across its network of theme parks, media networks, movies, and consumer products is a prime example of corporate synergy. The Disney brand has significant value due to its wide range of products, including its television networks, film studios, theme parks, and merchandise offerings. By leveraging its brand and creating a unified strategy, Disney is better positioned to generate revenue across all of its different business units, resulting in a more valuable company.Disney's corporate synergy also contributes to its vertical advantage. Vertical advantage refers to the control of multiple stages of production, from raw materials to distribution, which enables a company to gain greater control over costs, quality, and timing.Disney's vertical advantage is strengthened by its ability to use its characters across its network of theme parks, media networks, movies, and consumer products, allowing it to generate greater revenue and profits.
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What is the issue price (the amount of cash the sellers will receive) of a $ 62,991 face value bond with a stated price of 90, 15%, 12-year, semiannual interest payments, rounding to one dollar?
The issue price of the bond is approximately $45,915 .It is calculated based on present value of future cash flows.
How to calculate bond's issue price?To calculate the bond's issue price with a face value of $62,991, a stated price of 90, a coupon rate of 15%, and a 12-year maturity with semiannual interest payments, we can use the present value of the bond's future cash flows.
Calculate the periodic interest payment:
Periodic interest payment = Face value * Coupon rate / 2
Periodic interest payment = $62,991 * 15% / 2 = $4,698.83
Calculate the number of periods:
Number of periods = Maturity in years * Number of periods per year
Number of periods = 12 years * 2 = 24 periods
Calculate the present value of the bond:
Present value = Periodic interest payment * (1 - (1 + Interest rate)^(-Number of periods)) / Interest rate + Face value / (1 + Interest rate)^Number of periods
Present value = $4,698.83 * (1 - (1 + 0.15/2)^(-24)) / (0.15/2) + $62,991 / (1 + 0.15/2)^24
Present value = $41,216.29 + $4,698.83 = $45,915.12
Therefore, the issue price of the bond (the amount of cash the sellers will receive) is approximately $45,915.
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A major problem for the implementation of privatization during the early years of
transition in the formerly planned socialist economic systems has been
a. the absence of well-developed capital markets.
b. the influx of foreign direct investment beyond tolerable limits.
c. the ease of valuing property such that there is a large backlog of firms awaiting privatization.
d. none of the above
A major problem for the implementation of privatization during the early years of transition in the formerly planned socialist economic systems has been the option a. absence of well-developed capital markets.
What is privatization?Privatization is the act of transferring ownership of a business, enterprise, agency, or public service from the public sector to the private sector. Privatization is commonly used as a synonym for deregulation, outsourcing, and de-nationalization when a publicly traded company is taken private. In this scenario, the former public entity becomes a private sector company.In the transition from planned socialist economies to market economies, many countries have turned to privatization. They privatized all or part of their previously state-owned companies. In the early years of transition, a major problem in implementing privatization has been the absence of well-developed capital markets.
This meant that state-owned enterprises were frequently sold off cheaply in the absence of competition among buyers and a developed market for shares. This had the impact of harming the public revenue's competitiveness. Consequently, it was challenging to restructure newly privatized companies efficiently. As a result, it was difficult to improve their competitiveness.
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A donor imposed restriction exists if a right of return or release exists and the agreement with the donor includes a barrier that must be overcome by the not-for-profit organization.
a. True
b. False
The given statement, "A donor imposed restriction exists if a right of return or release exists and the agreement with the donor includes a barrier that must be overcome by the not-for-profit organization" is True.
This statement is related to the conditions under which a donor-imposed restriction exists.
What is a donor-imposed restriction?A donor-imposed restriction is a condition that a donor puts on a contribution of an asset or cash to a not-for-profit organization. This condition may be in the form of time, purpose, or a type of activity that the organization must perform to get the donation. When a donor imposes a restriction, the not-for-profit organization must follow it. The donor imposes the restriction by setting up an agreement between the not-for-profit organization and himself. The agreement is a legally binding document that states the terms of the contribution.
How does a donor-imposed restriction work?Donors impose restrictions on their contributions by stating the purpose of the donation. For example, a donor may give money to a not-for-profit organization with the condition that the money will only be used to buy food for the homeless. If the not-for-profit organization accepts the donation, it must use the money to buy food for the homeless. The not-for-profit organization must also provide proof to the donor that the money was used for the intended purpose.
What is the right of return or release? The right of return or release is a condition that a donor imposes on a donation. The right of return or release allows the donor to get the asset or cash back if certain conditions are not met. For example, if a donor gives money to a not-for-profit organization for a specific purpose, but the organization does not use the money for that purpose, the donor may have the right to get the money back.
What is a barrier in the agreement with the donor? A barrier is a condition that must be overcome by the not-for-profit organization to get the donation. For example, a donor may give money to a not-for-profit organization with the condition that the organization must first raise a certain amount of money from other donors. This condition is a barrier that must be overcome by the not-for-profit organization to get the donation.
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A company has beginning inventory of 300 units at $18.9 each; They purchased 400 units at $ 7.6 each on June 2; On June 15, they also purchased 500 units at $ 12.69 each. A physical count of merchandise inventory at the end of the month revealed that 452 units were sold. What is the cost of goods sold using the weighted average inventory method? Round all answers to the nearest dollar. But as always do not round any intermediate calculations, only round your final answer.
The cost of goods sold using the weighted average inventory method is approximately $6,050. it is calculated by multiplying the average cost per by the number of units sold to determine the cost of goods sold.
How is the cost of goods sold calculated using the weighted average inventory method?To calculate the cost of goods sold (COGS) using the weighted average inventory method, we need to determine the average cost per unit and then multiply it by the number of units sold.
Calculate the total cost of beginning inventory:
Beginning inventory units: 300
Beginning inventory cost per unit: $18.9
Total cost of beginning inventory: 300 units * $18.9 = $5,670
Calculate the total cost of purchases:
Purchase 1 units: 400
Purchase 1 cost per unit: $7.6
Purchase 2 units: 500
Purchase 2 cost per unit: $12.69
Total cost of purchases: (400 units * $7.6) + (500 units * $12.69) = $4,040 + $6,345 = $10,385
Calculate the total units available for sale:
Total units available for sale: Beginning inventory units + Purchase 1 units + Purchase 2 units = 300 + 400 + 500 = 1,200 units
Calculate the average cost per unit:
Total cost of beginning inventory + Total cost of purchases / Total units available for sale = $5,670 + $10,385 / 1,200 units = $16,055 / 1,200 = $13.3792 (rounded to 4 decimal places)
Calculate the cost of goods sold:
COGS = Average cost per unit * Units sold = $13.3792 * 452 units = $6,049.95
Therefore, using the weighted average inventory method, the cost of goods sold is approximately $6,050.
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In step by step explain how to:
A- prepare planning analytic review procedures
B - prepare lead schedules
C- asses risk based on set procedures
D- calculate planning materiality
1. Procedures for planning, analyzing, and reviewing Determine the goals: Find out why the planning, analytical, and review methods are being used. 2. Procedures for creating lead schedules: Determine the main accounts and claims: The lead schedules should contain the important accounts and pertinent claims that you have identified. 3. Risk assessment steps based on predetermined protocols: Recognize the thing and its surroundings: Find more about the company's sector, activities, internal controls, and any potential external influences on its financial statements.
The possibility, impact, and tolerances for potential accidents are all determined through risk assessment.
The outcomes of this procedure might be presented quantitatively or qualitatively. An integral aspect of a larger risk management approach is risk assessment, which helps to mitigate any possible risks and their effects.
In more detail, risk assessment locates and evaluates probable (future) occurrences that might negatively affect people, property, and/or the environment (i.e. hazard analysis). In addition, it takes decisions "on the tolerability of the risk on the basis of planning a risk analysis" while taking influencing variables (such as risk evaluation) into account.
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solve 11 fast please
Question 11 In recording cash paid by the company to the withdrawing partner, the journal entry to include his/her capital account in credit and cash account is debit. True O False A Moving to another
The journal entry to include the withdrawing partner's capital account in credit and cash account in debit while recording cash paid by the company is TRUE.
What is a withdrawing partner?When a partner decides to leave a partnership business, it is referred to as "withdrawing partner." As a result, a withdrawing partner refers to a partner who leaves the partnership in order to pursue other interests or for any other reason.
They may either sell their share of the partnership to the remaining partners or sell it to a third party.SolutionIn recording cash paid by the company to the withdrawing partner, the journal entry to include his/her capital account in credit and cash account is debit is a true statement.ExplanationThe journal entry for the withdrawal of a partner is similar to that for the payment of the final share of the partner's capital account.
When a partner is leaving the partnership, the remaining partners have two options: they can buy out the leaving partner's share, or they can dissolve the partnership entirely. Here, we need to remember the following steps:If the partner's account is a credit balance, debit it with its balance in the capital account of the remaining partners.If the partner's account has a debit balance, credit it with the balance in the capital account of the remaining partners.
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Natural Mosaic Company (U.S.) is considering investing Rs50,000,000 in India to create a wholly owned tile manufacturing plant to export to the European market. After five years, the subsidiary would be sold to Indian investors for Rs100,000,000. A pro forma income statement for the Indian operation predicts the generation of Rs7,000,000 of annual cash flow, as listed in the following table.
The Natural Mosaic Company is considering investing Rs50,000,000 in India to establish a tile manufacturing plant, with an anticipated annual cash flow of Rs7,000,000 and a plan to sell the subsidiary for Rs100,000,000 after five years.
What are the details of Natural Mosaic Company's investment in India, including the investment amount, purpose, anticipated annual cash flow, and planned sale of the subsidiary?The Natural Mosaic Company (U.S.) is evaluating an investment of Rs50,000,000 in India to establish a wholly owned tile manufacturing plant aimed at exporting products to the European market.
The company anticipates selling the subsidiary to Indian investors after a five-year period for Rs100,000,000.
The pro forma income statement for the Indian operation indicates an expected annual cash flow of Rs7,000,000.
This information suggests that the investment has the potential to generate positive cash flows and achieve profitability over the projected period.
However, additional analysis is necessary to assess the financial viability and feasibility of the project, including considerations such as initial investment costs, operating expenses, taxes, and potential risks.
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Mariam, Sabah and Fatima are partners with capital balances of $40,000, $60.000 and $50.000 respectively. They find that Arah a new partner is a talented engineer with useful for the company Afrah acc
Afrah's capital balance would be $37,500. This is calculated by multiplying her contribution of $10,000 by her equity share of 25%. (10,000 * 0.25 = 2,500) She would have a capital balance of $37,500.
Therefore, the correct option is (C).
Afrah's capital balance would be $37,500.
To determine her capital balance, we need to calculate her equity share based on her contribution of $10,000 and the total capital of the existing partners.
The total capital of Mariam, Sabah, and Fatima is $40,000 + $60,000 + $50,000 = $150,000.
Since Afrah's equity share is 25%, we multiply her contribution by the equity share: $10,000 * 0.25 = $2,500.
To find Afrah's capital balance, we add her contribution to her equity share of the total capital:
$2,500 + ($150,000 * 0.25) = $2,500 + $37,500 = $40,000.
Therefore, Afrah's capital balance would be (C) $37,500.
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Question:
Mariam, Sabah and Fatima are partners with capital balances of $40,000, $60.000 and $50.000 respectively. They find that Afrah a new partner is a talented engineer with useful for the company Afrah accepts joining them as a new partner and ready to contribute $ 10,000 for an equity share of 25%. Afra's capital balance would be:
A) $2,500
B) $40,000
C) $37,500
D) $10,000
b. how would this economy return to equilibrium if fiscal or monetary policy alone were used
If the economy is in an imbalance and needs to return to equilibrium, monetary or fiscal policy can be implemented to address the situation. Here's an explanation of how each policy could help in restoring equilibrium:
Fiscal Policy: Fiscal policy involves the use of government spending and taxation to influence the economy. If the economy is experiencing a recession or high unemployment, expansionary fiscal policy can be employed. This typically involves increasing government spending and/or reducing taxes to stimulate aggregate demand. The increased government spending creates jobs and income, while tax cuts boost disposable income and consumer spending. These measures help stimulate economic activity and move the economy towards equilibrium.
Monetary Policy: Monetary policy is managed by the central bank and involves controlling the money supply and interest rates. In the case of an economic imbalance, such as high inflation or overheating, contractionary monetary policy can be implemented. This typically involves increasing interest rates and reducing the money supply to curb excessive spending and inflationary pressures. Higher interest rates discourage borrowing and spending, thereby reducing aggregate demand and bringing the economy back to equilibrium.
In conclusion, fiscal policy can help the economy return to equilibrium by adjusting government spending and taxes to stimulate demand and economic activity. On the other hand, monetary policy can be used to restore equilibrium by controlling the money supply and interest rates to manage inflationary pressures or excesses in the economy. Both policies aim to restore balance in the economy and promote stability and growth.
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Wildhorse Stores is a new company that started operations on March 1, 2021. The company has decided to use a perpetual Inventory system. The following purchase transactions occurred in March:
Mar. Wildhorse Stores purchases $9,000 of merchandise for resale from Octagon Wholesalers, terms 2/10, n/30, FOB
1 shipping point.
2 The correct company pays $175 for the shipping charges.
3 Wildhorse returns $1,100 of the merchandise purchased on March 1 because it was the wrong colour. Octagon gives Wildhorse a $1,100 credit on its account.
21 Wildhorse Stores purchases an additional $13,000 of merchandise for resale from Octagon Wholesalers, terms 2/10, n/30, FOB destination.
22 The correct company pays $180 for freight charges.
23 Wildhorse returns $500 of the merchandise purchased on March 21 because it was damaged. Octagon gives Wildhorse a $500 credit on its account
30 Wildhorse paid Octagon the amount owing for the merchandise purchased on March 1.
31 Wildhorse paid Octagon the amount owing for the merchandise purchased on March 21
Journal entries are the recorded transactions in a company's bookkeeping system. They are utilized to chronologically record the money-related impacts of commerce activities.
To record the purchase transactions and subsequent payments in the perpetual inventory system for Wildhorse Stores in March, we need to consider the following information:
March 1: Purchased merchandise from Octagon Wholesalers for $9,000 with terms 2/10, n/30, FOB 1 shipping point.
Debit: Merchandise Inventory $9,000
Credit: Accounts Payable $9,000
March 2: Paid $175 for shipping charges.
Debit: Freight Expense $175
Credit: Cash $175
March 1: Returned $1,100 of the merchandise purchased on March 1 due to wrong color.
Debit: Accounts Payable $1,100
Credit: Merchandise Inventory $1,100
March 21: Purchased additional merchandise from Octagon Wholesalers for $13,000.
Debit: Merchandise Inventory $13,000
Credit: Accounts Payable $13,000
March 22: Paid $180 for freight charges.
Debit: Freight Expense $180
Credit: Cash $180
March 23: Returned $500 of the merchandise purchased on March 21 due to damage.
Debit: Accounts Payable $500
Credit: Merchandise Inventory $500
March 30: On march 1- Paid Octagon Wholesalers the amount owing for the merchandise purchased
Debit: Accounts Payable $7,900 ($9,000 - $1,100)
Credit: Cash $7,900
March 31: On march 21 Paid Octagon Wholesalers the amount owing for the merchandise purchased
Debit: Accounts Payable $12,500 ($13,000 - $500)
Credit: Cash $12,500
These journal entries reflect the purchase transactions and subsequent payments for Wildhorse Stores in March under the perpetual inventory system.
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What kind of interview is conducted with current employees to get a better understanding of why they want to remain with the company?
Select one a Job Interview b Stay Interview c Exit Interview
d Promotional Interview
The type of interview that is conducted with current employees to get a better understanding of why they want to remain with the company is called Stay Interview.
A stay interview is a one-on-one meeting between an employer and their current employees. It's conducted to learn more about the reasons why an employee has stayed with the company. It's also conducted to learn about the things that can be improved upon to keep the employee satisfied and retained
Job interviews are conducted to find suitable candidates to fill a vacant position in a company. Exit interviews are conducted with employees who are leaving the company. These interviews help companies understand why an employee is leaving. Promotional interviews are conducted with employees who are in line for promotion or have been offered a promotion. Stay interviews are conducted to get a better understanding of why an employee wants to remain with the company.
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Kingbird, Inc. sells a snowboard, EZslide, that is popular with snowboard enthusiasts. Below is information relating to Kingbird, Inc.'s purchases of EZslide snowboards during September. During the same month, 110 EZslide snowboards were sold. Kingbird, Inc. uses a periodic inventory system.
To compute the cost of goods sold for Kingbird, Inc. using the periodic inventory system, we need to know the number of snowboards on hand at the beginning of September. Kingbird, Inc. began the month with 90 EZ slide snowboards in inventory.
According to the question, purchases during September totaled $28,200 for 270 EZ slide snowboards. Therefore, the cost per snowboard is $104.44. This was calculated by dividing the total cost of goods purchased by the total number of snowboards purchased: $28,200 ÷ 270 = $104.44.
Kingbird, Inc.'s cost of goods sold is calculated as follows: Cost of goods sold = beginning inventory + purchases - ending inventory Cost of goods sold = $9,400 + $28,200 - $11,480Cost of goods sold = $26,120.
Kingbird, Inc. sells a popular snowboard, the EZ slide. The information below relates to the company's purchase of EZ slide snowboards during September. During the same month, Kingbird, Inc. sold 110 EZ slide snowboards. The company uses a periodic inventory system, which means that it calculates the cost of goods sold at the end of each accounting period, such as a month or a quarter. This is done by adding up the cost of goods that were sold and subtracting the cost of goods that are still on hand at the end of the accounting period.
To calculate the cost of goods sold for Kingbird, Inc. in September, we first need to know how many EZ slide snowboards were on hand at the beginning of the month. The company had 90 snowboards in inventory at the beginning of September. During the month, Kingbird, Inc. purchased 270 more EZ slide snowboards for a total cost of $28,200. Therefore, the cost per snowboard is $104.44. We calculated this by dividing the total cost of goods purchased by the total number of snowboards purchased: $28,200 ÷ 270 = $104.44.
To calculate the cost of goods sold, we add the beginning inventory to the purchases and then subtract the ending inventory. In this case, Kingbird, Inc.'s cost of goods sold is $26,120. The company sold 110 EZs lide snowboards in September, which means that it had 250 snowboards on hand at the end of the month. The cost of those 250 snowboards is $26,120. This amount will be used to calculate the cost of goods sold for the next accounting period.
Conclusion:
To summarize, Kingbird, Inc. sells a popular snowboard, the EZslide, and uses a periodic inventory system. To calculate the cost of goods sold, the company needs to know the number of snowboards on hand at the beginning of the accounting period, the purchases during that period, and the number of snowboards still on hand at the end of the period. For September, Kingbird, Inc.'s cost of goods sold was $26,120. This information is important for the company's financial records and helps it to make informed decisions about inventory management and pricing.
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