Q: A design studio received a loan of $260,000 at 3.6% compounded monthly to use as working capital for…
A: Loan (L) = $260000 r = 3.6% per annum = 0.3% per month n = Number of payments Monthly payment (M) =…
Q: What is the value of an investment of Php 3,500 after 2 years if it earns 1.5% compounded quarterly?
A: Using the Compound Interest Formula A=P1+rnnt where: A = Accrued amount (principal + interest)P =…
Q: O a. If the Yen appreciates against the GBP, then the MNC will stand to make a loss on its GBP…
A: When home currency appreciate against the other currencies than less amount to paid in for foreign…
Q: You are required to use a financial calculator or spreadsheet (Excel) to solve 10 problems related…
A: Here, Face value = $1,000 Time to maturity = 25 years Semiannual coupon rate = 7.5% Present value of…
Q: Question 7 of 16 Erin purchased a house for $375,000. He made a downpayment of 20% of the value of…
A: Purchased a house - $375,000 Downpayment - 20% of the value of the house Mortgage for the rest of…
Q: Discuss how to determine the risk or beta of a stock, the required rate of return of a stock and the…
A: In financial analysis, beta is a statistic used to estimate the volatility of an asset or portfolio…
Q: The following information is from Dave's Sporting Goods. Dave’s is a Midwest sporting goods store…
A: Given in the question is the information regarding DAVE'S SPORTING GOODS,
Q: On January 2, 2021, an Australian Copper Exploration Company was investigating the feasibility of…
A: Net present value is the difference between the present value of cash inflows and present value of…
Q: Holly received a 15 year loan of $340,000 to purchase a truck. The interest rate on the loan was…
A:
Q: what are the consequences of bank failures?
A: A bank failure occurs when a bank is unable to meet its obligations to its depositors or other…
Q: Stocks A and B have the following probability distributions of expected future returns: Probability…
A: Here, Risk-free rate = 2.5% To Find: Part a). Expected rate of return =? Part b). Standard…
Q: An elective project is currently under review. One alternative requires an initial investment of…
A: 1st alternative Initial Investment = $116,000 Profit = $28,000 Salvage Value = $22,000 Time Period =…
Q: how do you determine if a stock has high or low or average risk when compared to the S&P 500?
A: In the world of investing and finance no two stocks are similar. Some stocks are riskier than the…
Q: A price level adjusted mortgage (PLAM) is made with the following terms: Amount $95,800 Initial…
A: Given: Particulars Amount Amount $95,800 Interest rate 4% Term 30 Points 6% Inflation…
Q: A put option in finance allows you to sell a share of stock at a given price in the future. There…
A: Number of shares purchased =200 Purchasing price= $28, No. of put options bought =65 put options…
Q: A firm reported the following financials for 2021: Sales revenue = $3,060 %3D Accounts receivables =…
A: Sales = $3060 COGS = $1800 Total operating expenses = $600 Interest expenses = $126 Tax rate = 40%…
Q: risk pooling premium actuarially fair insurance premium deductible third party payer moral bazard
A: In the world of finance insurance is an important concept. Insurance is used for the purpose of risk…
Q: Asset allocation is the proportion of your overall investment portfolio that you have invested in…
A: As Sondra is willing to take small amout of risk, she is Moderate Risk taking Investor with time…
Q: The Caseys recently bought a new condo by taking out a $118,000 mortgage that charges 8.5%…
A: FV = Remaining Balance PV = Loan Amount = $118000 r = 8.25% / 12 = 0.0825/12 = 0.006875 n = 6 x 12 =…
Q: Hayward Enterprises, a successful imaging products firm, is considering expanding into the lucrative…
A: Revenue in year 1 = 1,800,000 Revenue in Year 3 = 1,800,000 *(1+0.11)2 = 2,217,780 Operating costs…
Q: Wesfarmers (Australian MNC) has imported heavy machinery totaling USD25 million and the payable is…
A: Wesfarmers(Australian MNC) will pay USD 25 Million to BHF (US MNC) in one year Base rate is the rate…
Q: Use the ordinary annuity formula shown to the right to determine the accumulated amount in the…
A: Future Value of Ordinary Annuity refers to the concept which determines the sum total of all the…
Q: What are The challenges and strategies of organisational budgeting?
A: Budget is referred as an organizational technique, which are actually used for the planning as well…
Q: A U.S. firm will be ________ by dollar _______ if its expenses are more susceptible to exchange rate…
A: There are instances when a company based in USA has expenses that are more susceptible to exchange…
Q: An investor is considering making an investment and is deciding between two possible alternatives: •…
A: An effective rate of interest is the actual rate of interest that an investment holds. In this…
Q: Adam purchases a retirement annuity that will pay him $1,500 at the end of every six months for the…
A: Semi Annual Payment $ 1,500.00 Time Period (years) 8 Interest rate 4% Monthly…
Q: a) Write the equation to evaluate this project when using Present Worth Method b) What is the…
A: Present worth of an investment is the net present value of all cash inflows and outflows of the…
Q: Greg is bullish on the stock of Google and expects the company to deliver excellent results. The…
A: Given, The theoretical value of an option is calculated by the Black Scholes model . Assumptions…
Q: The regular price for a dishwasher is 399. Best Buy is having a sale for 20% off all dishwashers.…
A: Cash Discount: Cash Discount is the discount provided by the sellers to encourage buyers to make…
Q: Jean and Dan both work. Each earns a salary of $51,000, but only Jean is a member of a registered…
A: Given That: Jean and Dan Salary=$51000 Jean's Contribution to pension= 2% Dean's unused…
Q: Mr. Nowak has contributed $113.00 at the end of each month into an RRSP paying 5% per annum…
A: Given That: Quarterly Deposit=$113 Interest rate=5% per annum=1.25% per quarter(i) Term (n)=20…
Q: "Risk management is essentially about looking at your project goals and finding out what the dangers…
A: Project risk management is the process of identifying, analysing, and responding to any risk that…
Q: Given a 10% interest rate, what is the equivalent uniform annual worth of a system, given the…
A: The equal annual net cash flow is known as the equivalent uniform annual worth. It is calculated by…
Q: If you pay a price to buy a bond that is below its value, you will get a return that is lower than…
A: The statement is false
Q: Book Co. has 1.5 million shares of common equity with a par (book) value of $1.30, retained earnings…
A: Debt and equity are the two main sources to raise the funds. Value of these securities fluctuates on…
Q: The market risk premium (E[Rm]-Rf) is 6%. The risk-free rate (Rf ) is 2%. Asset X has beta equal to…
A: Here, Market Risk Premium is 6% Risk Free Rate is 2% Beta of Asset X is 0.8 Expected Return of Asset…
Q: Common Bond Investment Strategies: Interest Rate Strategy: Passive Strategy:…
A: Step 1 Your investment goals and time frames, the amount of risk you are willing to face, and your…
Q: The following table shows the expected returns from six different stocks in three different states…
A: State of Economy Probability Return Stock A Return Stock B Growth 25.00% 31.00% 3.00% Status Quo…
Q: Galbraith Co. is considering a four-year project that will require an initial investment of $9,000.…
A: Net present value is the difference between the present value of cash inflows and present value of…
Q: Compute the required return for this stock.
A: Required Return: It refers to the minimum return required for investing in a business by the…
Q: If you thought that interest rates were going to rise in the next few months, how might this affect…
A: A down payment is the amount paid by the purchaser in the early stages of purchasing an expensive…
Q: Explain the effect of Changes in domestic and foreign Interest Rates on the equilibrium exchange…
A: The foreign exchange market brings together firms, households, and investors who demand and supply…
Q: b) What principal will have a maturity value of $40 000.00 at 5.25% p.a. in 4 years? Answer
A: Principal amount can be calculated as: = Amount / (1 + rate)^years
Q: Samantha wants to be able to withdraw $530 at the end of each month for two years while she travels,…
A: Here, Investment Amount (PV) is $10,300 Interest Rate earned on Investment Amount (Rate) is 4.54%…
Q: Charlie wants to withdraw $12,000 each year forever from his account. At an interest rate of 6% per…
A: Annual withdraw = $12,000 Interest rate = 6%
Q: Network Systems is introducing a new network card. Suppose Network Systems knows its fixed costs are…
A: Breakeven refers to the point at which the original cost equals the market price which is determined…
Q: 0.2 EbJ Perform semsivity analysis by invetigating annual worth of the "fllouing projet of iange…
A: Concept Sensitivity analysis involves changing the assumptions or estimates in a calculation to see…
Q: QUESTION TWO A large Bahraini company issued BD10,000, 10%, 10-year bonds that paid interest semi-…
A: Par value = BD10,000 Coupon rate = 10% Coupon amount = 10,000*0.10/2 = BD500 Years to maturity = 10…
Q: o and you are planning to add a single security to that security you are adding is relevant, The…
A: Portfolio refers to the combination of financial investments like bonds, stocks, cash, etc., and…
Q: Cameron Corporation purchase land for $434,000. Later in the year, the company sold a different…
A: Under cash flow statement, cash flows are segregated into three categories which includes Operating…
Reuben’s Deli currently makes rolls for deli sandwiches it produces. It uses 26,000 rolls annually in the production of deli sandwiches. The costs to make the rolls are:
| Materials | $0.24 per roll |
| Labor | 0.39 per roll |
| Variable overhead | 0.15 per roll |
| Fixed overhead | 0.20 per roll |
A potential supplier has offered to sell Reuben the rolls for $0.88 each. If the rolls are purchased, 30% of the fixed overhead could be avoided. If Reuben accepts the offer, what will the effect on profit be?
Reuben would see a $fill in the blank
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Country Diner currently makes cookies for its boxed lunches. It uses 40,000 cookies annually in the production of the boxed lunches. The costs to make the cookies are: A potential supplier has offered to sell Country Diner the cookies for $0.85 each. If the cookies are purchased, 10% of the fixed overhead could be avoided. If Jason accepts the offer, what will the effect on profit be?Power Corp. makes 2 products: blades for table saws and blades for handsaws. Each product passes through the sharpening machine area, which is the chief constraint during production. Handsaw blades take 15 minutes on the sharpening machine and have a contribution margin per blade of $15. Table saw blades take 20 minutes on the sharpening machine and have a contribution margin per blade of $35. If it is assumed that Power Corp. has 5,000 hours available on the sharpening machine to service a minimum demand for each product of 4,000 units, how much will profits increase if 200 more hours of machine time can be obtained?Power Corp. makes 2 products: blades for table saws and blades for handsaws. Each product passes through the sharpening machine area, which is the chief constraint during production. Handsaw blades take 15 minutes on the sharpening machine and have a contribution margin per blade of $15. Table saw blades take 20 minutes on the sharpening machine and have a contribution margin per blade of $35. If it is assumed that Power Corp. has 5,000 hours available on the sharpening machine to service a minimum demand for each product of 4,000 units, how many of each product should be made?
- Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 4.000 units were produced: Variable manufacturing overhead is applied at $1.00 per unit. The other $0.30 of overhead consists of allocated fixed costs. Gent will need 6,000 units of part A for the next years production. Cory Corporation has offered to supply 6,000 units of part A at a price of $7.00 per unit. It Gent accepts the offer, all of the variable costs and $1,200 of the fixed costs will be avoided. Should Gent Designs accept the offer from Cory Corporation?Remarkable Enterprises requires four units of part A for every unit of Al that it produces. Currently, part A is made by Remarkable, with these per-unit costs in a month when 4,000 units were produced: Variable manufacturing overhead is applied at $1.60 per unit. The other $0.50 of overhead consists of allocated fixed costs. Remarkable will need 8,000 units of part A for the next years production. Altoona Corporation has offered to supply 8,000 units of part A at a price of $8.00 per unit. If Remarkable accepts the offer, all of the variable costs and $2,000 of the fixed costs will be avoided. Should Remarkable accept the offer from Altoona Corporation?Dimitri Designs has capacity to produce 30,000 desk chairs per year and is currently selling all 30,000 for $240 each. Country Enterprises has approached Dimitri to buy 800 chairs for $210 each. Dimitris normal variable cost is $165 per chair, including $50 per unit in direct labor per chair. Dimitri can produce the special order on an overtime shift, which means that direct labor would be paid overtime at 150% of the normal pay rate. The annual fixed costs will be unaffected by the special order and the contract will not disrupt any of Dimitris other operations. What will be the impact on profits of accepting the order?
- Cinnamon Depot bakes and sells cinnamon rolls for $1.75 each. The cost of producing 500,000 rolls in the prior year was: At the start of the current year, Cinnamon Depot received a special order for 18,000 rolls to be sold for $1.50 per roll. The company estimates it will incur an additional $1,000 in total fixed costs in order to lease a special machine that forms the rolls in the shape of a heart per the customers request. This order will not affect any of its other operations. Should the company accept the special order? (Show your work.)Carltons Kitchens makes two types of pasta makers: Strands and Shapes. The company expects to manufacture 70,000 units of Strands, which has a per-unit direct material cost of $10 and a per-unit direct labor cost of $60. It also expects to manufacture 30.000 units of Shapes, which has a per-unit material cost of $15 and a per-unit direct labor cost of $40. It is estimated that Strands will use 140,000 machine hours and Shapes will require 60,000 machine hours. Historically, the company has used the traditional allocation method and applied overhead at a rate of $21 per machine hour. It was determined that there were three cost pools, and the overhead for each cost pool is shown: The cost driver for each cost pool and its expected activity is shown: A. What is the per-unit cost for each product under the traditional allocation method? B. What is the per-unit cost for each product under ABC costing?Oat Treats manufactures various types of cereal bars featuring oats. Simmons Cereal Company has approached Oat Treats with a proposal to sell the company its top selling oat cereal bar at a price of $27,500 for 20,000 bars. The costs shown are associated with production of 20,000 oat bars currently. The manufacturing overhead consists of $3,000 of variable costs with the balance being allocated to fixed costs. Should Oat Treats make or buy the oat bars?
- Box Springs, Inc., makes two sizes of box springs: twin and double. The direct material for the twin is $25 per unit and $40 s used in direct labor, while the direct material for the double is $40 per unit, and the labor cost is $50 per unit. Box Springs estimates it will make 5,000 twins and 9,000 doubles in the next year. It estimates the overhead for each cost pool and cost driver activities as follows: How much does each unit cost to manufacture?Rolertyme Company manufactures roller skates. With the exception of the rollers, all parts of the skates are produced internally. Neeta Booth, president of Rolertyme, has decided to make the rollers instead of buying them from external suppliers. The company needs 100,000 sets per year (currently it pays 1.90 per set of rollers). The rollers can be produced using an available area within the plant. However, equipment for production of the rollers would need to be leased (30,000 per year lease payment). Additionally, it would cost 0.50 per machine hour for power, oil, and other operating expenses. The equipment will provide 60,000 machine hours per year. Direct material costs will average 0.75 per set, and direct labor will average 0.25 per set. Since only one type of roller would be produced, no additional demands would be made on the setup activity. Other overhead activities (besides machining and setups), however, would be affected. The companys cost management system provides the following information about the current status of the overhead activities that would be affected. (The supply and demand figures do not include the effect of roller production on these activities.) The lumpy quantity indicates how much capacity must be purchased should any expansion of activity supply be needed. The purchase price is the cost of acquiring the capacity represented by the lumpy quantity. This price also represents the cost of current spending on existing activity supply (for each block of activity). Production of rollers would place the following demands on the overhead activities: Producing the rollers also means that the purchase of outside rollers will cease. Thus, purchase orders associated with the outside acquisition of rollers will drop by 5,000. Similarly, the moves for the handling of incoming orders will decrease by 200. The company has not inspected the rollers purchased from outside suppliers. Required: 1. Classify all resources associated with the production of rollers as flexible resources and committed resources. Label each committed resource as a short- or long-term commitment. How should we describe the cost behavior of these short- and long-term resource commitments? Explain. 2. Calculate the total annual resource spending (for all activities except for setups) that the company will incur after production of the rollers begins. Break this cost into fixed and variable activity costs. In calculating these figures, assume that the company will spend no more than necessary. What is the effect on resource spending caused by production of the rollers? 3. Refer to Requirement 2. For each activity, break down the cost of activity supplied into the cost of activity output and the cost of unused activity.Box Springs. Inc., makes two sizes of box springs: queen and king. The direct material for the queen is $35 per unit and $55 is used in direct labor, while the direct material for the king is $55 per unit, and the labor cost is $70 per unit. Box Springs estimates it will make 4,300 queens and 3,000 kings in the next year. It estimates the overhead for each cost pool and cost driver activities as follows: How much does each unit cost to manufacture?
