Answer:
If the required rate of return is 14 percent, the price I am willing to pay is 11.113
Explanation:
To calculate what you are willing to pay today to purchase stock in this company if your required rate of return is 14 percent, you have to use the following formula.
Po = D1 / (k-g)
Po = purchase price
D1 = Dividend in paid in next year
k = required rate of return
g= growth rate
Po = (3.30 (1-0.121)) / (0.14-(-0.121))
Po = 2.9007/ 0.261
Po= 11.113.
• Initially default risk increases, yield increases, price of AIG decreases
• After government intervention, default decreases, yield decreases, price of AIG increases
Answer:
1. 4,200
2. $12,810
3. -$3,090 Unfavorable
4. a. $265 Favorable
b. -$3,355 Unfavorable
Explanation:
The computation of given question is shown below:-
1. Standard labor-hours
Standard labor-hours = Shipped items × Direct labor-hours
= 140,000 × 0.03
= 4,200
2. Standard variable overhead cost allowed
Standard variable overhead cost allowed = Standard variable Overhead rate per hour × Standard labor-hours
= $3.05 × 4,200
= $12,810
3. Variable overhead spending variance
Variable overhead spending variance = Standard variable overhead for actual output - Actual variable Overhead
= $12,810 - $15,900
= -$3,090 Unfavorable
4. a. Variable overhead rate variance
Variable overhead rate variance = (Actual hours × Standard rate per hour) - Actual variable Overhead
= (5,300 × $3.05) - $15,900
= $16,165 - $15,900
= $265 Favorable
b. Variable overhead efficiency variance
Variable overhead efficiency variance = Standard rate per hour × (Standard hours - Actual hours)
= $3.05 × ( 4,200 - 5,300)
= $3.05 × -$1,100
= -$3,355 Unfavorable
Answer:
Okay, but where is the question or it's free points?
What company are you referring to<span />
