In may 1991, car and driver described a jaguar that sold for 980,000 dollars. suppose that at that price only

Which one of the following can be classified as an annuity but not as a perpetuity?

Virty [35]

Answer: Option D

Explanation: Annuity refers to the payments made by an individual to another at equal intervals of time. And perpetuity refers to an annuity that has no end.

Hence the correct option is D. As in first two options the amount of payment will increase. Also in the last option the payments are made forever and equally so it is a perpetual annuity.

6 0

4 years ago

Assume that today is December 31, 2019, and that the following information applies to Abner Airlines: After-tax operating income

melamori03 [73]

Answer:

The company's stock price today should be $71.17 per share.

Explanation:

The corporate valuation model approach can be used to estimate this by using the following steps:

Step 1: Calculation of the free cash flow

Free cash flow is the cash a firm generates after accounting for capital expenditure. This can be estimated using the following formula:

Free Cash Flow (FCF) = After-tax operating income + Depreciation expenses - Capital expenditure

For this question, we therefore have:

Free Cash Flow (FCF) = $700 + $150 - $375 = $475 million

Step 2: Calculation of Value of operations (Vo)

Vo = FCF / (WACC - FCF growth rate) = 475 / (11% - 7%) = $11,875 million

Step 3: Calculation of the Firm value

Firm value = Vo + Non-operating assets = $11,875 + $199 = $12,074 million

Step 4: Calculation of value of equity

Value of equity = Firm value - Debt = $12,074 - $3,534 = $8,540 million

Note: The correct amount of debt is $3,534 not $3.540 as mistakenly given, may be due to typographical error, in the question.

Step 5: Calculation of stock price per share today

Stock price per share = Value of equity / Number of shares outstanding = $8,540 / 120 = $71.17 per share

Therefore, the company's stock price today should be $71.17 per share.

7 0

3 years ago

Williams Optical Inc. is considering a new lean product cell. The present manufacturing approach produces a product in four sepa

zzz [600]

Answer:

The value-added, non-value-added, total lead time, and the value-added ratio under the present production approaches is as follows:

value-added=20 minutes

non-value-added=905 minutes

total lead time=925 minutes

value-added ratio=2.2%

The value-added, non-value-added, total lead time, and the value-added ratio under the proposed production approaches is as follows:

value-added=20 minutes

non-value-added=50 minutes

total lead time=70 minutes

value-added ratio=28.6%

Explanation:

In order to calculate the the value-added, non-value-added, total lead time, and the value-added ratio under the present production approaches we would have to use the following formula:

value-added=Process times, step 1 +Process times, step 2+Process times, step 3+Process times, step 4

value-added=5+8+4+3

value-added=20 minutes

non-value-added=Total within batch wait time+movie time

non-value-added=(5+8+4+3)*(45-1)+25

non-value-added=905 minutes

total lead time= value-added+ non-value-added

total lead time=20+905

total lead time=925 minutes

value-added ratio=value-added/total lead time

value-added ratio=20/925

value-added ratio=2.2%

In order to calculate the the value-added, non-value-added, total lead time, and the value-added ratio under the proposed production approaches we would have to use the following formula:

value-added=Process times, step 1 +Process times, step 2+Process times, step 3+Process times, step 4

value-added=5+8+4+3

value-added=20 minutes

non-value-added=Total within batch wait time+movie time

non-value-added=(5+8+4+3)*(3-1)+10

non-value-added=50 minutes

total lead time= value-added+ non-value-added

total lead time=20+50

total lead time=70 minutes

value-added ratio=value-added/total lead time

value-added ratio=20/70

value-added ratio=28.6%

7 0

3 years ago

Z-Mart purchased $3,000 worth of merchandise on credit. Transportation costs were an additional $100, paid cash to the cartage c

Len [333]

Answer:

Z-Mart purchased $3,000 worth of merchandise on credit. Transportation costs were an additional $100, paid cash to the cartage company on delivery. Z-Mart returned $300 worth of merchandise and paid the invoice on time, and took a 2% purchase discount. The amount of this payment was $2744

Explanation:

Purchases excluding freight $3,000

Less:Goods returned -$300

Add:freight charges $100

Net Purchases $2,800

Less:Discount on payment($2,800*2%) -$56

Net cash paid $2,844

6 0

3 years ago

Blast it! said David Wilson, president of Teledex Company. "We’ve just lost the bid on the Koopers job by $4,000. It seems we’re

Bond [772]

Answer:

1. Assuming use of a plant-wide overhead rate:

A. Compute the rate for the current year.

= $903,000 / $645,000 = $1.40 per $ of direct labor cost

B. Determine the amount of manufacturing overhead cost that would have been applied to the Koopers job.

= $14,300 x 1.4 = $20,020

2. Suppose that instead of using a plant-wide overhead rate, the company had used a separate predetermined overhead rate in each department. Under these conditions:

A. Compute the rate for each department for the current year.

fabricating = $376,250 / $215,000 = $1.75 per $ of direct labor cost
machining = $430,000 / $107,500 = $4 per $ of direct labor cost
assembly = $96,750 / $322,500 = $0.30 per $ of direct labor cost

B. Determine the amount of manufacturing overhead cost that would have been applied to the Koopers job.

fabricating = $5,800 x 1.75 = $10,150
machining = $800 x $4 = $3,200
assembly = $7,700 x $0.30 = $2,310
total = $15,660

3. Assume that it is customary in the industry to bid jobs at 150% of total manufacturing cost (direct materials, direct labor, and applied overhead).

A. What was the company's bid price on the Koopers job if a plant-wide overhead rate had been used to apply overhead cost?

total production costs = $7,900 + $14,300 + $20,020 = $42,220
bid price = $42,220 x 1.5 = $63,330

B. What would the bid price have been if departmental overhead rates had been used to apply overhead cost?

total production costs = $7,900 + $14,300 + $15,660 = $37,860
bid price = $37,860 x 1.5 = $56,790

4. There are no requirements for question 4.

Explanation:

Department

Fabricating Machining Assembly Total Plant

Direct labor $215,000 $107,500 $322,500 $645,000

Man. overhead $376,250 $430,000 $96,750 $903,000

Koopers Job

Fabricating Machining Assembly Total Plant

Direct materials $4,500 $500 $2,900 $7,900

Direct labor $5,800 $800 $7,700 $14,300

5 0

3 years ago