Haskell Corp. is comparing two different capital structures. Plan I would result in 12,000 shares of stock and $100,000 in debt. Plan II would result in 8,700 shares of stock and $155,000 in debt. The interest rate on the debt is 5 percent. Compare both of these plans to an all-equity plan assuming that EBIT will be $80,000. The all-equity plan would result in 18,000 shares of stock outstanding. Assuming that the corporate tax rate is 40 percent, what is the EPS for each of these plans? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Assuming that the corporate tax rate is 40 percent, what are the break-even levels of EBIT for each plan as compared to that for an all-equity plan? (Do not round intermediate calculations.)
Answers
Answer:
Please find attached detailed solution to the above question.
Explanation:
Please as attached detailed solution.
Related Questions
Your company is a new major player in your technology industry. Surprisingly, this last year has seen your sales explode. Everyone's talking about you and your hot products. Your product designers are ready to roll out the new year's models to capitalize on this success. You have been named as the project manager for your company's trade show exhibit at this year's Consumer Electronics Show (CES), the largest trade show in the world. Marketing has booked half of a whole exhibit area for your company, so none of the company's former trade show materials are going to be reused.
As an individual, or in a group, construct the work breakdown schedule (WBS) for getting the exhibit designed, built, set up at CES and ready for opening day, complete with handouts and giveaways from marketing.
Answers
Explanation:
Marketing management is the act of choosing and targeting different markets and creating good relationships with them, regarding the resources of the company.
The marketing managers are the responsible for directing and entering a company to different markets by setting a marketing plans and strategies based on information allocated by studying the markets and defining the needs and wants of customers and come up with products that satisfy the needs of customers and gain the market.
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According to Richard Branson, the founder and owner of Virgin Company, one of the richest and famous entrepreneurs in the United Kingdom and worldwide, “A business has to be involving, it has to be fun and it has to exercise your creative instinct”.
In marketing we almost use the four P’s, (product, price, promotion, place), these four P’s represent a convenient way to summarize the main factors involved in any marketing strategy.
Often, marketing strategy will evaluate a marketing plan in order to specify how able the company to implement the strategy decided and meet the business objectives.
The purposes of marketing plan to help you state your vision, mission and values, it needs to include your marketing budget, marketing strategy and the advertising plan you will use to market your business, and you need to keep it flexible to be sure you rich you goals and inve
DEFINITION TERM 1. Subtract outstanding checks from the bank balance. 2. Compute the adjusted bank balance. 3. Enter the bank statement balance from the bank statement. 4. Add any unrecorded deposits to the bank balance. 5. Compute the adjusted book balance. 6. Add any unrecorded interest earned to the book balance. 7. Enter the company’s book balance from its accounting records. 8. Subtract bank fees from the book balance.
Answers
Complete Question:
What are the correct steps in preparing Bank reconciliation in a chronological order?
Answer:
1. Enter the bank statement balance from the bank statement.
2. Add any unrecorded deposits to the bank balance.
3. Subtract outstanding checks from the bank balance.
4. Compute the adjusted bank balance
5. Enter the company's book balance from its accounting records.
6. Add any unrecorded interest earned to the book balance.
7. Subtract bank fees from the book balance.
8. Compute the adjusted book balance.
Explanation:
In Financial accounting, bank reconciliation can be defined as an evaluation which give a complete details of the financial items responsible for any difference between the balance of the cash account in the balance sheet and the cash balance reported in an entity's bank statement. These reconciliations should be done at regular intervals so as to ensure a balanced record of the cash account are kept by an organization or firm.
A bank reconciliation mainly computed by an accountant, gives the difference between the balance in relation to the bank statement and the cash balance with respect to the accounting records of the depositor in a particular financial institution.
The steps in preparing Bank Reconciliation in a chronological order are;
1. You should enter the bank statement balance from the bank statement.
2. Add any unrecorded deposits to the bank balance.
3. Subtract outstanding checks from the bank balance.
4. Compute the adjusted bank balance
5. Enter the company's book balance from its accounting records.
6. Add any unrecorded interest earned to the book balance.
7. Subtract bank fees from the book balance.
8. Compute the adjusted book balance.
The main purpose of a bank reconciliation is to ensure an accuracy of the depositor's financial information and that of it's bank records.
In a nutshell, after a reconciliation of the bank statement, the adjusted bank balance should be equal to the company's ending adjusted cash balance on the balance sheet.
The correct steps in preparing Bank reconciliation in a chronological order: 1. Enter the bank statement balance from the bank statement.
2. Add any unrecorded deposits to the bank balance.
3. Subtract outstanding checks from the bank balance.
4. Compute the adjusted bank balance
5. Enter the company's book balance from its accounting records.
6. Add any unrecorded interest earned to the book balance.
7. Subtract bank fees from the book balance.
8. Compute the adjusted book balance.
Bank reconciliation is described in financial accounting as an evaluation that provides detailed details of the financial items responsible for any difference between the balance of the cash account on the balance sheet and the cash balance shown on an entity's bank statement. These reconciliations should be performed at regular periods to guarantee that an organisation or corporation maintains a balanced record of the cash account.
A bank reconciliation, which is mostly computed by an accountant, provides the difference between the balance on the bank statement and the cash balance on the depositor's accounting records at a certain financial institution.
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What are the advantages and disadvantages of making small, frequent purchases from just a few suppliers?
Answers
Answer: The small frequent purchases means purchasing small budget goods and services in a short duration.
Explanation:
Advantages of small frequent purchases: It reduces the inventory levels.
Disadvantages of small frequent purchases: It increases the inbound transportation costs.
Using fewer supplier means to fill up the delivery transportation to its capacity of loading so that goods can be delivered at low transportation cost.
The income statement for the year 2015 of Fugazi Co. contains the following information: Revenues$70,000 Expenses: Salaries and Wages Expense$45,000 Rent Expense12,000 Advertising Expense10,000 Supplies Expense6,000 Utilities Expense2,500 Insurance Expense2,000 Total expenses77,500 Net income (loss)$ (7,500) After all closing entries have been posted, the Income Summary account will have a balance of
Answers
Answer:
$0
Explanation:
When the closing entries are recorded, so the net profit or net loss would be transferred to the retained earning account with the help of the closing entries
Therefore after closing entries posting, the balance in the income summary account would be zero and the same is to be considered
hence, the balance would be zero
___________ is/are associated with collecting, storing, and distributing the product or service to buyers. They consist of warehousing, material handling, delivery operation, order processing, and scheduling.
a. Services
b. Inbound logistics
c. Outbound logistics
d. Operations
Answers
Answer:
Outbound logistics
Explanation:
Logistics is defined as the process by which inventory and other goods are moved from their source to locations of use or consumption.
Outbound logistics for a business is concerned with movement of finished goods from a company to the consumer. It is movement of goods outward.
Various activities involved in this are storing, collection, order processing, warehousing, and distribution.
On the other hand inbound logistics deals with inflow of required raw materials and equipment for production or operations.
Despite its drastic downsizing a decade ago under a federally funded bailout and bankruptcy restructuring, General Motors again finds itself with too many U.S. factories that can turn out too many vehicles. GM's factory-utilization rate in North America averaged 95.1% over the past two years, below Ford's 111.9% and Toyota 's 101.4%. (Rates can exceed 100% when factories work a 3rd shift or schedule overtime work on weekends.) The auto industry often runs its factories dawn-till-dusk or even around the clock to boost their efficiency. Factory-utilization rates typically measure how much production capacity a plant uses based on a 16-hour workday. GM says its utilization rate is 100% on average when its round-the-clock truck and SUV lines are figured in with the relatively sleepy factories making cars. GM said it is working to "drive further improvements" in its plant utilization, including adding crossover SUVs to more factory lines. A plant in the Kansas City area that now makes only the Malibu is scheduled to begin assembling a small Cadillac SUV soon. But such a switch-over typically takes car makers several years of lead time, to order and install new assembly-line equipment and tooling.
Answers
Answer:
The question is actually missing (see attached image):
the answer is:
D. Less than that of its competitors.
Explanation:
Personally, I believe that GM is an extremely spoiled child that refuses to assume responsibility for its continuous and never ending mistakes. GM has either filed for bankruptcy or threatened to do so twice in the last 30 years or so, and every time the US government has to bail them out. But GM keeps doing things wrong.
It doesn't matter if you like their cars or not, GM is terribly managed. No other company in US history has received so much financial aid from the government and continued to lose money and work inefficiently. The problem is that whenever things go wrong, stockholders lose their money but the executives keep getting tens of millions of dollars. If a company is managed in such a disastrous way, their top management shouldn't get paid that much.
A car factory costs a lot of money, and not using it efficiently is outrageous considering GM's history. If they had never received a cent from the government, then its only their problem. But the government lost $11.2 billion on GM's last bailout. During the 1980s GM lobbied fro the government to impose import quotas on Japanese cars because they were better cars and GM couldn't compete against them. So whenever they do things wrong, big brother has to help them. During the last couple of years GM had to sell most of its foreign operations in order to get cash, and you generally do not make money by selling your assets.
A double-entry accounting system is an accounting system: Multiple Choice That records each transaction twice. That records the effect of each transaction in at least two accounts with equal debits and credits. In which each transaction affects and is recorded in two or more accounts but that could include two debits and no credits. That allows total credits to be greater than total debits. That allows total debits to be greater than total credits.
Answers
Answer:
That records the effect of each transaction in at least two accounts with equal debits and credits.
Explanation:
A double-entry accounting system is the accounting system in which it shows the impact of each transaction in terms of debit and credit. In this the amount of credit should be equivalent to the amount of credit that means both the amount should be equivalent to each other
hence, the second option is correct and the same is to be considered
Prepare journal entries to record the following merchandising transactions of Lowe’s, which uses the perpetual inventory system and the gross method. (Hint: It will help to identify each receivable and payable; for example, record the purchase on August 1 in Accounts Payable—Aron.) Aug. 1 Purchased merchandise from Aron Company for $8,000 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1. 5 Sold merchandise to Baird Corp. for $5,600 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5. The merchandise had cost $4,000. 8 Purchased merchandise from Waters Corporation for $7,000 under credit terms of 1/10, n/45, FOB shipping point, invoice dated August 8. 9 Paid $210 cash for shipping charges related to the August 5 sale to Baird Corp. 10 Baird returned merchandise from the August 5 sale that had cost Lowe’s $500 and was sold for $1,000. The merchandise was restored to inventory. 12 After negotiations with Waters Corporation concerning problems with the purchases on August 8, Lowe’s received a credit memorandum from Waters granting a price reduction of $700 off the $7,000 of goods purchased. 14 At Aron’s request, Lowe’s paid $500 cash for freight charges on the August 1 purchase, reducing the amount owed to Aron. 15 Received balance due from Baird Corp. for the August 5 sale less the return on August 10. 18 Paid the amount due Waters Corporation for the August 8 purchase less the price allowance from August 12. 19 Sold merchandise to Tux Co. for $4,800 under credit terms of n/10, FOB shipping point, invoice dated August 19. The merchandise had cost $2,400. 22 Tux requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Lowe’s sent Tux a $800 credit memorandum toward the $4,800 invoice to resolve the issue. 29 Received Tux’s cash payment for the amount due from the August 19 sale less the price allowance from August 22. 30 Paid Aron Company the amount due from the August 1 purchase.
Answers
Answer:
Aug 1 Dr Inventory $8,000
Cr Accounts Payable - Aaron $8,000
Aug 5 Dr Accounts Receivable - Baird Corp $5,600
Cr Sales $5,600
Aug 5 Dr Cost of Good Sold $4,000
Cr Inventory $4,000
Aug 8 Dr Inventory $7,000
Cr Accounts Payable - Walter Corporation $7,000
Aug 9 Dr Freight - Out $210
Cr Cash $210
Aug 10 Dr Sales Return and Allowance $1,000
Cr Accounts Receivable - Baird Corp $1,000
Aug 10 Dr Inventory $500
Cr Cost of Good Sold $500
Aug 12 Dr Accounts Payable - Walter Corporation $700
Cr Inventory $700
Aug 14 Dr Accounts Payable - Aaron $500
Cr Cash $500
Aug 15 Dr Cash $4,508
[(100%-2%)×$4,600]
Dr Discount on Sales $92
[($5,600-$1,000) x2%]
Cr Accounts Receivable - Baird Corp $4,600
($5,600-$1,000)
Aug 18 Dr Accounts Payable - Walter Corporation $6,300
($7,000-$700)
Cr Discount on Purchase $63
[($7,000-$700) x1%]
Cr Cash $6,237
[(100%-1%)×$6,300]
Aug 19 Dr Accounts Receivable - Tux Co $4,800
Cr Sales $4,800
Aug 19 Dr Cost of Good Sold $2,400
Cr Inventory $2,400
Aug 22 Dr Sales Return and Allowance $800
Cr Accounts Receivable - Tux Co $800
Aug 29 Dr Cash $4,000
Cr Accounts Receivable - Tux Co $4,000
($4,800-$800)
Aug 30 Dr Accounts Payable - Aaron $7,500
Cr Cash $7,500
($8,000-$500)
Explanation:
Preparation of Journal entries
Aug 1 Dr Inventory $8,000
Cr Accounts Payable - Aaron $8,000
(To record purchase of inventory)
Aug 5 Dr Accounts Receivable - Baird Corp $5,600
Cr Sales $5,600
(To record sale of merchandise)
Aug 5 Dr Cost of Good Sold $4,000
Cr Inventory $4,000
(To record cost of good sold)
Aug 8 Dr Inventory $7,000
Cr Accounts Payable - Walter Corporation $7,000
(To record purchase of inventory)
Aug 9 Dr Freight - Out $210
Cr Cash $210
(To record freight outward expense)
Aug 10 Dr Sales Return and Allowance $1,000
Cr Accounts Receivable - Baird Corp $1,000
(To record sales return)
Aug 10 Dr Inventory $500
Cr Cost of Good Sold $500
(To record restore the inventory )
Aug 12 Dr Accounts Payable - Walter Corporation $700
Cr Inventory $700
(To record price reduction)
Aug 14 Dr Accounts Payable - Aaron $500
Cr Cash $500
(To record payment of freight charges on behalf of Aaron)
Aug 15 Dr Cash $4,508
[(100%-2%)×$4,600]
Dr Discount on Sales $92
[($5,600-$1,000) x2%]
Cr Accounts Receivable - Baird Corp $4,600
($5,600-$1,000)
(To record amount received from Baird Corp)
Aug 18 Dr Accounts Payable - Walter Corporation $6,300
($7,000-$700)
Cr Discount on Purchase $63
[($7,000-$700) x1%]
Cr Cash $6,237
[(100%-1%)×$6,300]
(To record payment made to Walter Corporation)
Aug 19 Dr Accounts Receivable - Tux Co $4,800
Cr Sales $4,800
(To record sale of merchandise)
Aug 19 Dr Cost of Good Sold $2,400
Cr Inventory $2,400
(To record cost of good sold)
Aug 22 Dr Sales Return and Allowance $800
Cr Accounts Receivable - Tux Co $800
(To record price reduction for sales made to Tux Co)
Aug 29 Dr Cash $4,000
Cr Accounts Receivable - Tux Co $4,000
($4,800-$800)
(To record payment received from Tux Co)
Aug 30 Dr Accounts Payable - Aaron $7,500
Cr Cash $7,500
($8,000-$500)
(To record payment made to Aaron)
Cameroon Corp. manufactures and sells electric staplers for $16 each. If 10,000 units were sold in December, and management forecasts 4% growth in sales each month, the number of units of electric stapler sales budgeted for March should be:_______
Answers
Answer:
= $173,056
Explanation:
The computation of the number of units of electric stapler sales budgeted for March is shown below:-
February = 10,000 + (4% × 10,000)
= 10,400
March = 10,400 + (4% × 10,400)
= 10816
and finally
The Budget sale for stapler for the month of March = 10,816 × 16
= $173,056
You are considering how to invest part of your retirement savings.You have decided to put $400,000 into three stocks: 61% of the money in GoldFinger (currently $28/share), 24% of the money in Moosehead (currently $73/share), and the remainder in Venture Associates (currently $9/share). Suppose GoldFinger stock goes up to $43/share, Moosehead stock drops to $67/share, and Venture Associates stock drops to $6 per share. a. What is the new value of the portfolio? b. What return did the portfolio earn? c. If you don't buy or sell any shares after the price change, what are your new portfolio weights?
Answers
Answer:
a. Number of shares of GoldFinger = 61%*400000/24
Number of shares of GoldFinger = 10166.6667
Number of shares of Moosehead = 24%*400,000/73
Number of shares of Moosehead = 1315.0685
Number of shares of Venture Associates = (1 - 61% - 24%) * 400,000/9
Number of shares of Venture Associates = 15% * 400,000/9
Number of shares of Venture Associates = 6666.6667
New value of the portfolio = 10166.6667*$43 + 1315.0685*$67 + 6666.6667*$6
New value of the portfolio = $437,166.6681 + $88,109.5895 + $40000.0002
New value of the portfolio = $565,276.2578
b. The return that the portfolio earn is = ($565,276.2578 - $400,000) / $400,000 = $165,276.2578 / $400,000 = 0.4131906445 = 41.32%
c. Weight of Goldfinger is now = (10166.6667*$43) / $565,276.2578
= $437166.6681 / $565,276.2578
= 0.7734
= 77.34%
Weight of Moosehead is now = (1315.0685*$67) / $565,276.2578
= $88109.5895 / $565,276.2578
= 0.15587
= 15.59%
Weight of Venture is now = 100% - 77.34 - 15.59%
= 7.07%
Other restaurants in the industry are seeing improvements in their sales, rather than declines. The reporters mention this is in part due to the rise of the celebrity chef and the contrasting styles of the newer quick-serve options that emphasize recipes and quality. Identify which strategy these newer organizations are using to compete against the older more established rivals.
a. Price signaling strategy
b. Capacity control strategy
c. Non-price competition strategy
d. Price leadership strategy
Answers
Answer: Non price competition strategy
Explanation:
The strategy that's been utilized by the newer firms as against the fish that are more established is referred to as non price competition strategy.
Non-price competition strategy is referred to as a marketing strategy which doesn't have to do with the reduction in price buth rather, utlizes promotional expenditures like free gifts, sales promotion, advertising, special orders etc. For this strategy, the company's product quality and brand is of importance to the company.
A company declared and paid a cash dividend. The dividend would appear on the company's statement of cash flows as: Select one: a. an addition to net income in order to arrive at net cash provided by operating activities under the indirect method. b. a deduction from net income in order to arrive at net cash provided by operating activities under the indirect method. c. a deduction under investing activities. d. a deduction under financing activities.
Answers
Answer:
d. a deduction under financing activities.
Explanation:
As if the company declared and paid the cash dividend so the same is to be considered in the financing activities of the cash flow statement.
This amount should be shown in the negative amount as it decreases the cash that means it is an outflow of cash
Hence, the correct option is d. and the same is to be considered
Westbank Real Estate, Inc. owns 10 acres of forested land. Westbank wants the land cleared in order to build houses. Westbank emails a signed electronic memorandum to a representative of Hardell Lumber Co. offering to sell the mature trees and rich topsoil to Hardell for lumber and agricultural purposes. The electronic memorandum includes the parties' typed names, the consideration, the price, and a description of the property, lumber, and soil. Hardell replies via email to Westbank that it accepts Westbank's terms, electronically signs the memorandum, and will start removing the trees and soil next month. Before Hardell can begin clearing the land, Westbank changes its mind, wants to keep the land forested, and prevents Hardell from accessing the property claiming no contract has been formed.
2. Does the electronic agreement for the sale of trees and soil fall under the statute of frauds? (YES / NO)
3. Under which category? (CONTRACTS INVOLVING LAND/ CONTRACTS THAT BY THEIR TERMS CANNOT BE PREFORMED IN LESS THAN A YEAR AFTER THE DATE OF AGREEMENT/ A PROMISE TO ANSWER FOR A DEBT OF ANOTHER/ A PROMISE MADE IN CONSIDERATION OF MARRIAGE/ CONTRACTS FOR THE SALE OF GOODS OVER $500)
4. An electronic memorandum (DOES/ DOES NOT) satisfy the writing requirements for the Statute of Frauds.
5. Land is considered to be (REAL PROPERTY/ PERSONAL PROPERTY)
6. The definition of land includes (NO/ SOME/ ALL) physical objects that are permanently attached to the property.
7. Examples of physical objects that constitute land for purposes of the statute of frauds include (BUILDINGS/ FENCES/ TREES/ SOIL/ ALL OF THESE)
8. A written or electronic memorandum evidencing a contract will suffice provided that the writing is signed by (THE PERSON WHO IS ENFORCING THE CONTRACT/ THE PERSON AGAINST WHOM THE CONTRACT IS BEING ENFORCED)
9. Who signed the e-mails? (WESTBANK REAL ESTATE/ HARDELL LUMBER/ BOTH PARTIES)
10. What type of signature must be on an e-mail in order to enforce an electronic record? (A TYPED NAME/ AN OFFICIAL SIGNATURE/ A NOTARIZED SIGNATURE/ AN ENCRYPTED SIGNATURE)
11. Does the electronic memorandum have the parties' typed names? (YES/ NO)
12. Does the electronic memorandum describe the property involved?(YES/ NO)
13. Is it likely a court would find that the electronic memorandum satisfied the statue of frauds? (YES/ NO)
14. As a result, Hardell (WILL/ WILL NOT) likely be able to enforce the contract against Westbank.
Answers
Answer:
Westbank Real Estate, Inc. and Hardell Lumber Co.
2. Does the electronic agreement for the sale of trees and soil fall under the statute of frauds? (YES / NO)
3. Under which category? (CONTRACTS INVOLVING LAND/ CONTRACTS THAT BY THEIR TERMS CANNOT BE PERFORMED IN LESS THAN A YEAR AFTER THE DATE OF AGREEMENT/ A PROMISE TO ANSWER FOR A DEBT OF ANOTHER/ A PROMISE MADE IN CONSIDERATION OF MARRIAGE/ CONTRACTS FOR THE SALE OF GOODS OVER $500)
4. An electronic memorandum (DOES/ DOES NOT) satisfy the writing requirements for the Statute of Frauds.
5. Land is considered to be (REAL PROPERTY/ PERSONAL PROPERTY)
6. The definition of land includes (NO/ SOME/ ALL) physical objects that are permanently attached to the property.
7. Examples of physical objects that constitute land for purposes of the statute of frauds include (BUILDINGS/ FENCES/ TREES/ SOIL/ ALL OF THESE)
8. A written or electronic memorandum evidencing a contract will suffice provided that the writing is signed by (THE PERSON WHO IS ENFORCING THE CONTRACT/ THE PERSON AGAINST WHOM THE CONTRACT IS BEING ENFORCED)
9. Who signed the emails? (WESTBANK REAL ESTATE/ HARDELL LUMBER/ BOTH PARTIES)
10. What type of signature must be on an email in order to enforce an electronic record? (A TYPED NAME/ AN OFFICIAL SIGNATURE/ A NOTARIZED SIGNATURE/ AN ENCRYPTED SIGNATURE)
11. Does the electronic memorandum have the parties' typed names? (YES/ NO)
12. Does the electronic memorandum describe the property involved?(YES/ NO)
13. Is it likely a court would find that the electronic memorandum satisfied the statute of frauds? (YES/ NO)
14. As a result, Hardell (WILL/ WILL NOT) likely be able to enforce the contract against Westbank.
Explanation:
The memoranda exchanged between Westbank Real Estate and Hardell Lumber Co provides the evidence of their oral contract. The statute of fraud covers most oral contracts, especially those involving real property or sale of land. It is important to note that land includes all its permanent attachments.
Even though commercial airlines have excellent safety records, in the weeks following a crash, airlines often report a drop in the number of passengers, probably because people are afraid to risk flying. a) A travel agent suggests that since the Law of Averages makes it highly unlikely to have two plane crashes within a few weeks of each other, flying soon after a crash is the safest time. What do you think? b) If the airline industry proudly announces that it has set a new record for the longest period of safe flights, would you be reluctant to fly? Are the airlines due to have a crash?
Answers
Answer:
A) There is no such thing as the "Law of Averages." The overall probability of an airplane crash does not change due to recent crashes.
Explanation:
This is the complete question below;
Even though commercial airlines have excellent safety records, in the weeks following a crash, airlines often report a drop in the number of passengers, probably because people are afraid to risk flying. A travel agent suggests that since the Law of Averages makes it highly unlikely to have two plane crashes within a few weeks of each other, flying soon after a crash is the safest time. What do you think?
Choose the correct answer below.
A. There is no such thing as the "Law of Averages." The overall probability of an airplane crash does not change due to recent crashes.
B. The "Law of Averages" states that outcomes must even out in the short run. This means that the overall probability of an airplane crash is higher due to recent crashes.
C. The "Law of Averages" states that outcomes must even out in the short run. This means that the overall probability of an airplane crash is lower due to recent crashes.
D. The "Law of Averages" does not apply to this situation. The overall probability of an airplane crash does not change due to recent crashes.
We are informed from the question that commercial airlines have excellent safety records, in the weeks following a crash, airlines often report a drop in the number of passengers, probably because people are afraid to risk flying. A travel agent suggests that since the Law of Averages makes it highly unlikely to have two plane crashes within a few weeks of each other, flying soon after a crash is the safest time.
In this case, There is no such thing as the "Law of Averages." The overall probability of an airplane crash does not change due to recent crashes.
There was fact that the commercial airlines has excellent safety records in the past and there is a crash after the following week, all these doesn't have any connection with people flying soon after a crash because they think is the safest time.
Airline transportation has its pros and cons. The answers are given below;
My point is that There is nothing like the "Law of Averages." The total likelihood of an airplane crash will not be altered due to recent crashes. When one take a flight, it is usually done at your own risk.If the airline industry proudly announces that it has set a new record for the longest period of safe flights, I would not be be reluctant to fly. Every airline companies are known to have strict maintenance of their planes are its parts.
They ensure that their flights does not have any issue on the way, Even though things do happen, that does not mean I would be scare and not fly.
The airline is not due to crash. This is because the likelihood of a crash occurring is not due to the time a previous crash occurred. One should not be scared or afraid of flying.
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The following expenditures relating to plant assets were made by Glenn Company during the first 2 months of 2014. (b) Indicate the account title to which each expenditure should be debited.
1. Paid $7,000 of accrued taxes at the time the plant site was acquired. choose an account title
2. Paid $200 insurance to cover a possible accident loss on new factory machinery while the machinery was in transit. choose an account title
3. Paid $850 sales taxes on a new delivery truck. choose an account title
4. Paid $21,000 for parking lots and driveways on the new plant site. choose an account title
5. Paid $250 to have the company name and slogan painted on the new delivery truck. choose an account title
6. Paid $8,000 for installation of new factory machinery. choose an account title
7. Paid $900 for a 1-year accident insurance policy on the new delivery truck. choose an account title
8. Paid $75 motor vehicle license fee on the new truck.
Answers
Answer with Explanation:
According to International Accounting Standard IAS 16 Property, Plant and Equipment, the cost of the asset acquired must include all the cost necessary to make it ready for its intended use.
This means that the expenditure that is the legal cost or must be very important for making it ready for use must form part of the asset.
The double entry of such transaction is as under:
Dr Non Current Asset XX
Cr Cash or Cash Equivalent Paid or Payables XX
From the above criteria, we can say that following accounts must be debited:
1. Paid $7,000 of accrued taxes at the time the plant site was acquired.
Dr Land-Plant Site $7,000
Cr Accrued Taxes $7,000
2. Paid $200 insurance to cover a possible accident loss on new factory machinery while the machinery was in transit.
Dr Factory Machine $200
Cr Cash $200
3. Paid $850 sales taxes on a new delivery truck.
Dr Delievery Truck $850
Cr Sales Tax - Not refundable $850
If the sales tax is refundable while we file tax returns then it must not be included in cost as it is paid for completing formalities of the vendor company.
4. Paid $21,000 for parking lots and driveways on the new plant site.
Dr Land-Plant Site $21,000
Cr Cash $21,000
5. Paid $250 to have the company name and slogan painted on the new delivery truck. choose an account title
Dr Delievery Truck $250
Cr Cash $250
6. Paid $8,000 for installation of new factory machinery.
Dr Factory Machinery $8,000
Cr Cash $8,000
7. Paid $900 for a 1-year accident insurance policy on the new delivery truck.
Dr Prepaid Insurance $900
Cr Cash $900
8. Paid $75 motor vehicle license fee on the new truck.
Dr Lisence Expense $75
Cr Cash $75
It is paid on behalf of an employee but it is 100% business oriented not employee oriented benefit. Hence is classified as a revenue expenditure.
All three of the $5000 billion GDP figures (Production, Income and Spending) are in ____________ dollars.
Answers
Answer: D inflation adjusted, real
Explanation:
The GDP calculation acquired in the flow chart of $5,000 billion were all done after adjusting for inflation which means that they were in real dollars.
Inflation adjusted GDP enables more effective comparison between different periods as inflation tends to inflate the prices of goods and services and can make one think that the economy has grown more than it actually has.
When the value of GDP is inflation adjusted, it can then be seen just how much the economy improved or shrank.
Joseph just received an inheritance of $35,775 from his great aunt. He plans to invest the funds for retirement. If Joseph can earn 4.75% per year with quarterly compounding for 32 years, how much will he have accumulated?
a. $237,416.b. $71,550.c. $184,622.d. $162,113.
Answers
Answer:
FV= $162,113.25
Explanation:
Giving the following information:
Initial investment= $35,775
Interest rate= 0.0475/4= 0.011875
Number of periods= 32*4= 128
To calculate the future value, we need to use the following formula:
FV= PV*(1+i)^n
FV= 35,775*(1.011875^128)
FV= $162,113.25
If a firm's sales are $250,000 and its variable costs are $190,000, the contribution margin in dollars is:_______.
a. $440,000
b. $60,000
c. $190,000
d. $250,000
Answers
Answer:
b. $60,000
Explanation:
Given the following data;
Sales price = $250,000
Variable cost = $190,000
Contribution margin can be defined as the subtraction of variable cost from the sales price.
Mathematically, it given by the formula;
[tex] Contribution \; margin = sales \; price - variable \;cost[/tex]
[tex] Contribution \; margin = 250000 - 190000[/tex]
Contribution margin = 60,000
Therefore, the contribution margin in dollars is $60,000.
Tuition of $3400 is due when the spring term begins, in 4 months. What amount should a student deposit today, at 12%, to have enough to pay tuition
Answers
Answer: The student should deposit= $3,272.40
Explanation:
The formula we need to use is
FV = P ( 1 + rt )
where:
F V = the future value.
P = the principal amount.
r= the rate of interest. = `12%= 0.12
t= time in years. = 4/12= 1/3 =O.3333
FV = P ( 1 + rt )
$3,400 = P (1 + 0.12 X 0.3333)
$3,400 = P (1 + 0.039)
$3,400 = P (1.039)
P= 3400 /1.039= $3,272.40
At the end of May, the unadjusted trial balance of Barker Industries included the following accounts:
Debit Credit
Sales (75% represent credit sales) $400,000
Accounts Receivable $240,000
Allowance For Doubtful Accounts 1,800
Barker Industries uses the percentage of sales approach in estimating uncollectible accounts. The uncollectible accounts expense is estimated to be 3% of credit sales The net realizable value of Barker's accounts receivable in the May 31 balance sheet is:_____.
a. $250,800.b. $229,200.c. $236,400.d. $226,200.
Answers
Answer:
b. $229,200
Explanation:
Computation for the net realizable value of Barker's accounts receivable in the May 31 balance sheet
First step is to find the credit sales
Credit sales=.75(400,000)
Credit sales=300,000
Second step is to find the 3% of 300,000
3% of 300,000=9,000
Third step is to add credit sales amount to Allowance For Doubtful Accounts
9,000 +1,800
=$10,800
Last step is to find the net realizable value
Net realizable value=Accounts Receivable $240,000-$10,800
Net realizable value=$229,200
Therefore the net realizable value of Barker's accounts receivable in the May 31 balance sheet is $229,200
Iverson Company purchased a delivery truck for $45,000 on January 1, 2018. The truck was assigned an estimated useful life of 5 years and has a residual value of $10,000. Compute depreciation expense using the double-declining-balance method for the years 2018 and 2019.
Answers
Answer:
Results are below.
Explanation:
Giving the following information:
Purchase price= $45,000
Useful life= 5 years
Salvage value= $10,000
To calculate the annual depreciation under the double-declining balance method, we need to use the following formula:
Annual depreciation= 2*[(book value)/estimated life (years)]
2018:
Annual depreciation= 2[(45,000 - 10,000) / 5]
Annual depreciation= 14,000
2019:
Annual depreciation= 2*[(35,000 - 14,000)/5]
Annual depreciation= $8,400
The depreciation expense using the double-declining-balance method in 2018 is $18,000 and in 2019 is $10,800.
The double-declining balance method is an accelerated depreciation method when compared with other deprecation methods.
Depreciation expense = (2 x cost of the asset) / useful life of the asset
Deprecation expense in 2018
(2 x $45,000) / 5 = $18,000
Deprecation expense in 2019
Book value in 2019 = cost of the asset - deprecation expense
$45,000 - $18,000 = $27,000
Deprecation expense = (2 x $27,000) / 5 = $10,800
A similar question was answered here: https://brainly.com/question/16502007?referrer=searchResults
Rocky Mountain Bottling Company produces a soft drink that is sold for a dollar. At production and sales of 1,000,000 units, the company pays $700,000 in production costs, half of which are fixed costs. At that volume, general, selling, and administrative costs amount to $320,000, of which $70,000 are fixed costs. What is the amount of contribution margin per unit
Answers
Answer:
contribution margin per unit = $0.40
Explanation:
total variable production costs = $350,000
total fixed production costs = $350,000
total variable S&A expenses = $250,000
total fixed S&A expenses = $70,000
total costs = $1,020,000
total fixed costs = $420,000
total variable costs = $600,000
sales price = $1
variable cost per unit = $600,000 / 1,000,000 = $0.60
contribution margin per unit = $1 - $0.60 = $0.40
At the beginning of 2015, Elixir Inc. has the following ledger balances:During the year, credit sales amounted to $800,000. Cash collected on credit sales amounted to $760,000 and $18,000 has been written off. At the end of the year, company adjusted for bad debts expense using the percent-of-sales method and applied a rate, based on past history, of 2.5%. The ending balance in the Allowance for Bad Debts would be ________. Prepare all necessary journal entries.
Answers
Answer:
$$7,000
Explanation:
Calculation for the ending balance in the Allowance for Bad Debts
Using this formula
Allowance for Bad Debts Ending balance =
Debts - Write offs + Bad Debt Expense
Let plug in the formula
Allowance for Bad Debts Ending balance= $5,000 - $18,000 + (2.5%*$800,000)
Allowance for Bad Debts Ending balance= $5,000 - $18,000 + $20,000
Allowance for Bad Debts Ending balance = $$7,000
Therefore the ending balance in the Allowance for Bad Debts would be $7,000
Smith and Jones start a business to build custom bicycles. Smith invests personal funds of $100,000 and Jones invests $70,000. Grandma Smith loans the company $24,000 with the provision it is to be paid back in 12 equal monthly payments plus 1.5% monthly interest on her original contribution. Smith and Jones agreed that ownership would be proportional to their equity investments. In addition, they borrow $40,000 from the bank at interest of 1.5% per month payable monthly. (They do not have to pay back the principal for five years, so ignore it.) They buy $120,000 worth of parts. They use $80,000 of those parts in the first month. They pay factory workers a total of $15,000 for the first month. They pay rent of $4,000 for the month for a factory. They each (not Grandma) draw salaries of $4,000 per month. They sell the resulting bicycles for $150,000. a. Prepare a balance sheet for day zero, that is, store is ready, people hired, parts on hand, money collected from bank, Grandma, Smith, and Jones. b. Prepare an income statement for the first month. c. Prepare a balance sheet for the last day of the first month. d. What is the percent ownership by Smith, Jones, and Grandma on the first day of the month.
Answers
Answer:
See answers below.
Explanation:
Question a
The balance sheet for day 0 will have the following balances.
Asset side
Parts $120,000
Cash $114,000
Total assets $234,000
Liabilities and Equity side
Capital $170,000
Short term loan $24,000
Long term loan $40,000
Total liabilities $234,000
Question b
The income statement for the first month will have the following balances.
Revenue (credit) side
Sales $150,000
Expenses (debit) side
Parts used $80,000
wages to factory workers $15,000
rent $4,000
salary $8,000
Interest on grandma's loan $360
Interest on bank loan $600.
Profit for the month $42,040.
Question c
The balance sheet for the last day of the month will have the following balances.
Asset side
Parts $40,000
Cash $234,040
Total assets $274,040
Liabilities and Equity side
Capital $170,000
Profit (added to reserves) $42,040
Short term loan $22,000
Long term loan $40,000
Total liabilities $274,040
Question d
Grandma is not an equity owner since she will be repaid after 1 year.
Therefore, percentage ownership by Smith, Jones and Grandma will be as follows in the ratio of their equity contribution.
Total capital contributed = 100,000 + 70,000 = 170,000
Smith percentage ownership = [tex]\frac{100,000}{170,000}[/tex] = 58.8%
Jones percentage ownership = [tex]\frac{70,000}{170,000}[/tex] = 41.2%
Grandma's ownership = 0% (no equity contribution).
It is estimated that the net cash flows to be received from the copyright will be $63,000, and its fair value is $59,850. The accumulated amortization at the end of 2021 was $15,435. Compute the amount of impairment, if any, to be recorded on December 31, 2021. (If there is a loss on impairment, then enter amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Answers
Answer:
The amount of the impairment = $3,150.
Explanation:
a) Data and Calculations:
Net cash flows = $63,000
Fair value of copyright = $59,850
Accumulated amortization = $15,435
Impairment gain = $3,150 ($63,000 - $59,850)
b) There is an impairment gain of $3,150 since the net cash flows is higher than the fair value of the copyright. Copyright is an intangible asset and impairment assessment must be conducted yearly.
which entity will meet the following requirements 1. unlimited number of owners 2. limited liability 3. self-employment tax on all income
Answers
Answer: Limited Liability Company (LLC)
Explanation:
Limited Liability Companies are allowed to have as many owners (members) as possible and all these owners have limited liability in case the business defaults on its debt obligations.
LLCs also pay self-employment tax on income as a replacement for the Medicare and Social Security taxes the members would have paid if they were employed by an entity.
Argent Corporation has $60 million in current liabilities, $150 million in total liabilities, and $210 million in total common equity; Argent has no preferred stock. Argent’s total debt is $120 million. What is the debt-to-assets ratio? What is the debt-to-equity ratio?
Answers
Answer and Explanation:
The computation is shown below
Debt to asset ratio is
= Total debt ÷ total asset
= $120 million ÷ ($150 million + $210 million)
= $120 million ÷ $360 million
= 0.33
And, the debt to equity ratio is
= Total debt ÷ total equity
= $120 million ÷ $210 million
= 0.57
We simply applied the above formula so that the correct value could come
And, the same is to be considered
Osgood Company, which applies overhead at the rate of 190% of direct material cost, began work on job no. 101 during June. The job was completed in July and sold during August, having accumulated direct material and labor charges of $27,000 and $15,000, respectively. On the basis of this information, the total overhead applied to job no. 101 amounted to:
Answers
Answer: $51300
Explanation:
From the question, we are informed that Osgood applies overhead at rate of 190% of direct cost material and we've been given the direct cost material as $27, 000. Therefore, the total overhead applied to the job will be:
= $27000 × 190%
= $27000 × 1.9
= $51300
Halifax Technologies primarily relies on 100% equity financing to fund projects. A good opportunity is available that will require $250,000 in capital. The Halifax owner can supply the money from personal investments that currently earn an average of 8.5% per year. The annual net cash flow from the project is estimated at $30,000 for the next 15 years. Alternatively, 60% of the required amount can be borrowed for 15 years at 9% per year. Using a before-tax analysis and setting the MARR equal to the WACC, determine which plan, if either, is better.
Answers
Answer:
100% equity financing from personal investments is better
Explanation:
100% equity financing option.
Expected annual return on the project = $30,000
Lost investment opportunity = 8.5% * 250,000 = $21,250.
Therefore incremental return from 100% equity financing option = $30,000 - $21,250 = $8,750 annually.
60% debt and 40% equity financing option.
Expected annual return on the project = $30,000
Lost investment opportunity = 8.5% * 40% * 250,000 = $8,500.
Interest rate on debt = 9% * 60% * 250,000 = $13,500.
Therefore incremental return = $30,000 - $8,500 - $13,500 = $8,000 annually.
Since the 100% financing gives a higher return than the debt-equity option, the 100% financing option is better.
ere are simplified financial statements for Watervan Corporation:
INCOME STATEMENT
(Figures in $ millions)
Net sales $
888.00
Cost of goods sold
748.00
Depreciation
38.00
Earnings before interest and taxes (EBIT) $
102.00
Interest expense
19.00
Income before tax $
83.00
Taxes
17.43
Net income $
65.57
BALANCE SHEET
(Figures in $ millions)
End of Year Start of Year
Assets
Current assets $
376
$
326
Long-term assets
272
229
Total assets $
648
$
555
Liabilities and shareholders’ equity
Current liabilities $
201
$
164
Long-term debt
115
128
Shareholders’ equity
332
263
Total liabilities and shareholders’ equity $
648
$
555
The company’s cost of capital is 8.5%.
a. Calculate Watervan’s economic value added (EVA). (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)
b. What is the company’s return on capital? (Use start-of-year rather than average capital.) (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
c. What is its return on equity? (Use start-of-year rather than average equity.) (Enter your answer as a percent rounded to 2 decimal places.)
d. Is the company creating value for its shareholders?
Answers
Answer:
income statements okay
Explanation:kokay