Answer:
Earnings for the year = Addition to retained earnings + Dividend paid = $643,000 + $40,000 = $683,000
a. Earnings per share = Earnings / No of shares = $683,000 / 750,000 = 0.91
Dividend per share = Dividend / No of shares = $40,000 / 750,000 = 0.05
Book value per share = Ending equity / No of shares = $7,380,000 / 750,000 = $9.84
b. Market price per share is 30.8. Market to book ratio = $30.80 / $9,84 = $3.13
c. Price earning ratio = $30.80/$0.91 = $33.82
Total sales = $10,680,000, Sales per share = 14.24
Price sales ratio = Market price / Sales = $30.80 / $14.24 = $2.16
Answer:
a. The preparation of partial amortization is shown below:-
b. $2,892
Explanation:
a. Date Lease Effective Decrease in Outstanding
payment interest balance balance
July 1 $150,000
July 1 $5,376 $5,376 $144,624
($150,000 - $5,376)
Oct 1 $5,376 $2,892 $2,484 $142,140
( $5,376 - $2,892) ($144,624 - $2,484)
b. Interest expense on October 1 = $2,892
Working Note:-
Take the outstanding balance times 2% (8% annual = 2% quarterly)
So, the Effective interest = $144,624 × 0.02
= $2,892.48
Answer:
The number of mugs Fiwrt should plan on producing during the month of November is 35400 units of mugs.
Explanation:
Production unit (november) = Sale unit + Desired ending inventory-Beginning inventory
= 36000 + (34000*30%) - (36000*30%)
= 35400 Units
Therefore, The number of mugs Fiwrt should plan on producing during the month of November is 35400 units of mugs.
Answer (A):
Need more data to select the better adviser
<u>Explanation: </u>
Adviser A averaged 19% return on the investment which is more than that of Adviser B who averaged 16% return on investment. However, adviser A has a beta of 1.5 which is also greater than that of Adviser B who has a beta of 1. This means that adviser A made a more riskier investment and hence a higher average return on investment. We need more data to tell which adviser performed better in relation to each other.
Answer (B):
Investment Adviser B
<u>Explanation:</u>
= T-bill rate = 6%
= Market return = 14%
= Market risk premium = 14% - 6% = 8%
= Average Return by Adviser A =19%
= Beta of Adviser A = 1.5
= Average Return by Adviser B =16%
= Beta of Adviser B = 1
CAPM Equation is 
<u>For Adviser A</u>
= 6 + 1.5 (14 - 6) = 18%
The expected average return for the investment is 18% which means that Adviser A over performed the market by 1 %
<u>For Adviser B</u>
= 6 + 1 (14 - 6) = 14%
The expected average return for the investment is 14% which means that the Adviser B over performed the market by 2 %
Clearly, Adviser B performed better than Adviser A.
Answer (C):
Adviser B
<u>Explanation:</u>
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In this part, the 
and 
All else remains the same
We make similar calculation as in part B
