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maria [59]
3 years ago
14

Janet is planning to purchase the stock of Mortensen Petro, Inc. She expects the stock to pay a $1.98 dividend next year, and sh

e would sell the stock for $28 next year. If the required return of the stock is 12.5%, what is the (highest) price that she is willing to pay for the stock today?
Business
1 answer:
Arada [10]3 years ago
7 0

Answer: Current Price $26.65

Explanation:

Rate of return = 12.5%

dividends = $1.98

Expected Price (in a year from now) Pe= $28

Current price = Pc

R = (Pe - Pc + D)/Pa

0.1250 = (28 - Pc + 1.98)/Pc

28 - Pc + 1.98 = 0.1250Pc

-Pc - 0.1250Pc = - 28 - 1.98

- 1.125Pc = -29.98

 Pc = -29.98/(-1.1250Pc) = 26.64888889

 Pc = $ 26.65

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E Corporation produces a single product. The cost of producing and selling a single unit of this product at the company's normal
dolphi86 [110]

Answer: $91120

Explanation:

The The monthly financial advantage (disadvantage) for the company will be calculated thus:

Incremental revenue = (3400 × $90.40) = $307360

Less: Incremental Cost

Direct material (3400 × $49.60) = $168640

Direct labor (3400 × $9.5) = $32300

Variable manufacturing overhead = (3400 × $2.5) = $8500

Variable selling & administrative expense = (3400 × $2) = $6800

Total incremental Cost = $216240

Therefore, the monthly financial advantage will be:

= $$307360 - $216240

= $91120

4 0
3 years ago
Question 2 of 10
Sergio039 [100]

Answer:

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4 0
2 years ago
The Dorilane Company specializes in producing a set of wood patio furniture consisting of a table and four chairs. The set enjoy
marin [14]

Answer:

1.COST BEHAVIOUR

Variable Fixed

$321,000 $182,000

SELLING OR ADMINISTRATIVE

Cost $197,000

PRODUCT COST

Direct Indirect

$212,000 $94,000

2. $153 per set

3. I would expect the average product cost per set to increase.

Explanation:

1. Calculation to Enter the dollar amount of each cost item under the appropriate headings

COST BEHAVIOUR

VARIABLE FIXED

Direct labor $118,000 $0

Advertising $0 $50,000

Factory supervision $0 $40,000

Property taxes, factory building$0 $3,500

Sales commissions$80,000 $0

Insurance, factory $0 $2,500

Depreciation, administrative office equipment$0 $4,000

Lease cost, factory equipment$0 $12,000

Indirect materials, factory $6,000 $0

Depreciation, factory building $0 $10,000

Administrative office supplies (billing) $3,000 $0

Administrative office salaries $0 $60,000

Direct materials used (wood, bolts, etc.)$94,000 $0

Utilities, factory $20,000 $0

TOTAL COSTS $321,000 $182,000

SELLING OR ADMINISTRATIVE

COST

Direct labor $0

Advertising $50,000

Factory supervision $0

Property taxes, factory building $0

Sales commissions $80,000

Insurance, factory $0

Depreciation, administrative office equipment $4,000

Lease cost, factory equipment $0

Indirect materials, factory $0

Depreciation, factory building $0

Administrative office supplies (billing) $3,000

Administrative office salaries$60,000

Direct materials used (wood, bolts, etc.) $0

Utilities, factory $0

TOTAL COSTS $197,000

PRODUCT COST

DIRECT INDIRECT

Direct labor $118,000 $0

Advertising $0 $0

Factory supervision $0 $40,000

Property taxes, factory building$0 $3,500

Sales commissions $0 $0

Insurance, factory $0 $2,500

Depreciation, administrative office equipment $0 $0

Lease cost, factory equipment$0 $12,000

Indirect materials, factory$0 $6,000

Depreciation, factory building $0 $10,000

Administrative office supplies (billing) $0 $0

Administrative office salaries $0 $0

Direct materials used (wood, bolts, etc.)$94,000 $0

Utilities, factory$0 $20,000

TOTAL COSTS $212,000 $94,000

Therefore the dollar amount of each cost item under the appropriate headings will be :

COST BEHAVIOUR

Variable Fixed

$321,000 $182,000

SELLING OR ADMINISTRATIVE

Cost $197,000

PRODUCT COST

Direct Indirect

$212,000 $94,000

2. Computation to determine the average product cost of one patio set.

Using this formula

Average product cost of one patio set =(Direct costs +Indirect costs)/Capacity set per year

Let plug in the formula

Average product cost of one patio set=($212,000+$94,000)/2,000 sets

Average product cost of one patio set =$306,000/2,000 sets

Average product cost of one patio set = $153 per set

Therefore The Average product cost of one patio set will be $153 per set

3. In a situation were the production drops I Would expect the average product cost per set to INCREASE, reason been that the fixed costs would extend over few units which will inturn cause the average cost per unit to increase.

3 0
3 years ago
What types of experiences, especially staffingrelated ones, will an organ ization be likely to have if it does not engage in hr
Reika [66]

There are various types of experiences that in case when the organization does not engage in HR and staffing planning which are as follows

1. Employees in shortage capacity

2. In shortage of skills

3. Lacking of motivation skills

4. Inflexible working environment

5. Inadequate workforce, etc

These types of experiences the organization is facing if it is not engaged with the HR and the staffing planning

Learn more about staffing planningbrainly.com/question/28072798

#SPJ4

5 0
1 year ago
Which of the following is a nonmanufacturing business where process costing would most likely be used? An auto body shop. A furn
solmaris [256]

All of them are the non-manufacturing business where process costing would most likely be used.

Explanation:

  • All are non-manufacturing business which are as follows,
  • An auto body shop.
  • A furniture repair shop.
  • A laboratory that tests water samples for lead A tailoring shop.
  • A beauty shop.
  • Non-manufacturing business costs refers to those business where it is incurred outside the factory or production unit
  • Non-manufacturing costs includes,
  • selling expenses
  • general expenses
  • Selling Expenses
  • It is also called as selling and distribution expenses.
  • Non-manufacturing expenses have no impact on the production cost of the company due to their period costs.
7 0
3 years ago
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