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Furkat [3]
3 years ago
9

Zacher Co.'s stock has a beta of 1.40, the risk-free rate is 4.25%, and the market risk premium is 5.50%. What is the firm's req

uired rate of return?a. 11.36%b. 11.65%c. 11.95%d. 12.25%e. 12.55%
Business
1 answer:
mihalych1998 [28]3 years ago
5 0

Answer:

The answer is option (C). The firm's required rate of return=11.95%

Explanation:

The required rate of return can be expressed using the formula below;

RRR=RFR+B(MRR)

where;

RRR=required rate of return

RFR=risk free return

B=beta

MRR=market rate of return

In our case;

RRR=unknown

RFR=4.25%

B=1.4

MRR=5.5%

This can be written as;

Required rate of return=risk free return+(beta×market rate of return)

replacing;

RRR=4.25%+(1.4×5.5)

RRR=(4.25%+7.7)=11.95%

The firm's required rate of return=11.95%

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Direct Materials, Direct Labor, and Factory Overhead Cost Variance Analysis
seropon [69]

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Mackinaw Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 40,000 units of product were as follows:

Standard Costs - Actual Costs

Direct materials 120,000 lb. at $3.20 118,500 lb. at $3.25

Direct labor 12,000 hrs. at $24.40 11,700 hrs. at $25.00

Factory overhead Rates per direct labor hr., based on 100% of normal capacity of 15,000 direct labor hrs.:

Variable cost, $8.00 $91,200 variable cost

Fixed cost, $10.00 $150,000 fixed cost

Each unit requires 0.3 hour of direct labor.

A) Direct material price variance= (standard price - actual price)*actual quantity

Direct material price variance= (3.20 - 3.25)*118,500= $5925 unfavorable

Direct material quantity variance= (standard quantity - actual quantity)*standard price

Direct material quantity variance= (120,000 - 118,500)*3.20=-$4,800 favorable

Total direct material variance= 5,925 - 4,800= 1,125 unfavorable

B)Direct labor efficiency variance= (SQ - AQ)*standard rate

Direct labor efficiency variance= (12,000 - 11,700)*24.40= -$7,320 favorable

Direct labor price variance= (SR - AR)*AQ

Direct labor price variance= (24.40 - 25)*11,700= $7,020 unfavorable

Total direct labor variance= $300 favorable

C) Variable factory overhead controllable variance= (8*15,000 - 92,100)= -$27,900 favorable

Fixed factory overhead volume variance= (10*15,000 - 150,000)= 0

Total factory overhead variance= 27,900 favorable

3 0
3 years ago
Intel Corporation
statuscvo [17]

Answer:

a. Gross income = sales - COGS

Pretax = gross income - SG$A expense +operating income + non operating income- interest expense - unusual expense

income taxes = Pretax - net income

income statement    2016 2015 2014 2013 2012

sale                        59387 55355 55870 52708 53341

COGS                23425 20651 20522 21418 20507

gross earnings   35962 34704 35348 31290 32834

SG&A EXPENSE   21149 19835 19693 18729 18117

operating income   14813 14869 15655 12561 14717

non operating income  533   -51          224   595 463

interest expense   733    337     192          244 90

unusual expense   1677 269        -114     301          217

pretax                27749 29081 31456 25172 29590

income taxes         17433 17661 19752 15552 18585

Net income          10316 11420 11704 9620 11005

b. Average tax rate = total taxes / total taxable income ( for this calculation we need the tax table for identifying the correct tax brackets for each taxable income falling on it.

                                             2016            2015        2014       2013          2012

gross profit margin       0.61%          0.63%   0.63%   0.59%     0.62%

net profit margin        0.17 %         0.21%        0.21%    0.18%      0.21 %

c. is attached

d.income statement   2016 2015 2014 2013 2012

sale                             100   100   100  100           100

COGS                   39.44% 37.31% 36.73% 40.64% 38.45%

gross earnings   60.56% 62.69% 63.27% 59.36% 61.55%

SG&A EXPENSE   35.61% 35.83% 35.25% 35.53% 33.96%

operating income   24.94% 26.86% 28.02% 23.83% 27.59%

non operating expense  0.90% -0.09% 0.40% 1.13% 0.87%

interest expense   1.23% 0.61% 0.34% 0.46% 0.17%

unusual expense   2.82% 0.49% -0.20% 0.57% 0.41%

pretax                   46.73% 52.54% 56.30% 47.76% 55.47%

income taxes          29.35% 31.90% 35.35% 29.51% 34.84%

Net income        17.37% 20.63% 20.95% 18.25% 20.63%

Explanation:

gross profit margin = gross profit/ sales

net profit margin = net profit / sales

no c is an attachment

5 0
3 years ago
Several years ago Brant, Inc., sold $900,000 in bonds to the public. Annual cash interest of 9 percent ($81,000) was to be paid
gtnhenbr [62]

Answer:

The Journal entries are as follows:

(1) On December 31, 2016

Bonds payable A/c                     Dr. $154,040

Interest income A/c                    Dr. $14,070

Loss on retirement of debt A/c  Dr. $49,000

To investment in bonds                                        $198,870

To Interest expense                                              $18,240

(To record consolidation entry)

(2) On December 31, 2018

Bonds payable A/c                     Dr. $158,884

Interest income A/c                    Dr. $13,761

Investment in Zack A/c              Dr. $40,266

To investment in bonds                                        $194,152

To Interest expense                                              $18,759

(To record consolidation entry)

Workings:

Interest expense for December 31, 2016:

Book value = 20% of Bond liability (as per equity method)

                   = 0.2 × $760,000

                   = $152,000

Interest expense = 12% of Book value

                            = 0.12 × $152,000

                            = $18,240

Interest expense for December 31, 2016:

= 12% of Book value

= 0.12 × $156,325

= $18,759

7 0
3 years ago
Which statement describes the role of the Federal Reserve System? A. It prints all the paper money in circulation in the United
kumpel [21]
The job of the Federal Reserve System is to control the supply of money in the United States. Although it might seem like the Federal Reserve System prints the money as well, but this is in fact not true. The U.S. Treasury prints paper and coin currency and the Federal Reserve System distributes the money globally. 
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