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4 years ago

Gusler Corporation makes one product and has provided the following information:

Business

1 answer:

Gre4nikov [31]4 years ago

8 0

Answer:

$807,500

Explanation:

First determine the cost per unit (U) as a function of cost of materials (M):

M = 2 * $2.00 = $4.00

And cost of labor and overhead (L):

L = 2.7*($20.00+$10.00)

L= $81.00

Total cost per unit is:

U = M + L = $4.00+ $81.00

U = $85.00

The estimate cost of goods sold for the month of May (C) is the product of the cost per unit by the number of units sold during the month (9,500):

C= $85.00*9,500

C= $807,500

Therefore, the estimated cost of goods sold for May is closest to $807,500

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The Gecko Company and the Gordon Company are two firms whose business risk is the same but that have different dividend policies

julia-pushkina [17]

Answer:

10.67%

Explanation:

Gecko Company

Gecko = Expected Earnings growth rate = 8% annually

As there are no Capital gains tax, thus after Tax returns = Pretax returns

= 8%

Expected Dividend yield of Gordon = 5%

After tax returns = 5(1-.25)

=5(0.75)

= 3.75%

Assuming the pay out ratio = 100%

Gordon’s required pretax return = 8/ (1-.25)

=8/0.75

= 10.67%

At pretax return of 10.67% on Gordon the after tax returns on both the stocks are equal.

5 0

3 years ago

Energy Unlimited, LP, is a limited partnership to which its partners, including Fink, have contributed capital. Energy's credito

fenix001 [56]

Answer: c. Grave first

Explanation:

In dissolving a limited partnership business all creditors are paid first.

4 0

3 years ago

Airline F leases all its aircraft under finance leases. Airline O leases all its aircraft under operating leases. Assuming that

Usimov [2.4K]

Answer: e. Airline O has less lease assets at the inception of the lease

Explanation:

With operating leases, the entity leasing the asset or the lessee, does not get the rights to ownership of the asset being leased but instead simply pay a fee or sort of rent for leasing the asset.

With a finance lease however, ownership is passed to the lessee for the lease period and the lessee would have to depreciate the asset and record it in its books.

Airline O will therefore not record any assets but Airline F will. This means that Airline F will have more assets than O because it had to record its assets but O did not.

5 0

3 years ago

North Bank has been borrowing in the U.S. markets and lending abroad, thereby incurring foreign exchange risk. In a recent trans

Vsevolod [243]

Answer:

A) 10.82%

B) 5.27%

C) 8.56%

Explanation:

Given data :

North Bank Borrow ; $1.4 million at 5 percent

Lend in pounds at 9%

spread = ( 4% )

spot rate = 1.454

A) Determine the loan rate to maintain the 4 percent spread

Expected spot rate = 1.43

First step :

Lending amount = $1.4 million / initial spot rate = 1.4 / 1.454 = £ 0.9628 million

calculate the final amount Required in $ to maintain 4% Spread

= principal ( $1.4 million ) + interest ( 9% of 1.4 ) = 1.4 + 0.126 = $1.526 million

In pound ( at the expected spot rate )

= 1.526 / 1.43 = £1.067 million

expected profit = £1.067 - £0.9628 = £ 0.1042 million

Therefore the interest rate tp maintain the 4 percent spread

= 0.1042 / 0.9628 = 10.82%

B) Determine the net interest margin if the bank hedges its forward foreign exchange exposure

Forward rate = 1.46

assuming interest as value calculated above = ( 10.82% )

lending amount = £0.9628 million

Repayment = 0.9628 * 111% * 1.46 = $1.5603 million

therefore return rate = $1.5603 - $1.4 = $0.1603 million = 10.27%

hence : Net interest margin = 10.27% - 5% = 5.27%

C) Determine the loan rate to maintain the 4 percent spread if the bank intends to hedge its exposure using the forward rates.

Forward Hedging contract forward rate = 1.46

lending amount = $1.4 / 1.454 = £ 0.9628 million

Total Interest and Principal Repayment Required in $ to maintain 4% Spread = $1.526 million

In pound = 1.526 / 1.46 = £ 1.0452

Interest = £1.0452 - £0.9628 = £0.0824 million

therefore interest Rate to maintain 4℅ Spread

= ( 0.0824 / 0.9628 ) * 100 = 8.56%

3 0

3 years ago

Momentum Rollerblades has three product lineslong dashD, E, and F. The following information is available: D E F Sales revenu

maksim [4K]

Answer:

Increase in Net Operating Income = $3,000

Explanation:

Provided Current Operating income

D = $45,000

E = $15,000

F = ($5,000)

Total operating Income = $55,000

In case product f is dropped then fixed cost of $21,000 will not be incurred.

Total fixed cost of Product F = $23,000

Avoidable fixed cost = $21,000

Fixed cost still to be incurred = $23,000 - $21,000 = $2,000

Net operating Income will arise same for Product D and E, there will be additional fixed cost of $2,000 without product F

Net Operating Income will be

D = $45,000

Add: E = $15,000

Operating Income = $60,000

Less: Fixed Cost = -$2,000

Net Operating Income = $58,000 after dropping product F

Less: Net operating income with product F = $55,000

Increase in Net Operating Income = $3,000

4 0

3 years ago