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Reptile [31]
3 years ago
11

Jonathan Wynn has developed a budget that he follows each month. Jonathan has an envelope for each type of expenditure. After he

cashes his paycheck, he puts the amount of cash in each envelope that he plans to spend on that category each month. What type of budget has Jonathan created
Business
1 answer:
Colt1911 [192]3 years ago
5 0

Answer:

Physical budget.

Explanation:

A budget can be defined as the total amount of money that is required for a particular purpose. A budget shows how an individual decides to spend his/her income.

A good budget must start with the individual source of income, that is the person source of money. It is very important for an individual to know how much comes in so as to effectively plan his expenses.

Jonathan Wynn has developed a physical budget by putting a specific amount of money in different envelopes which he plans to spend each month.

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The above is an example of directing

Directing is one of the responsibilities of a management accountant. It involves governing the operations of a company in a particular direction. It is a process through which the manager guides the performance of workers to achieve set goals.

4 0
3 years ago
In the DuPont Model, return on equity (ROE) is dependent on the firm's:
Anna35 [415]

Answer:

A. Net margins, debt leverage, and asset turnover.

Explanation:

ROE = (Net income / sales) x (sales / total assets) x (total assets / shareholders equity)

I hope my answer helps you

8 0
3 years ago
You want to invest $37,000 today to accumulate $41,650 to buy a car. If you can invest at an interest rate of 3% compounded annu
Gnom [1K]

Answer:

4 years

Explanation:

It takes 4 years to accumulate the required amount.

5 0
3 years ago
Company AA and Company BB have identical Assets, Revenues and Ebit. They are in the same line of business. Company AA has a Debt
saveliy_v [14]

Answer:  BB

Explanation:

Because the credit help the company BB to run over and to make monney.

7 0
3 years ago
The Corner Bakery has a bond issue outstanding that matures in 7 years. The bonds pay interest semi-annually. Currently, the bon
MaRussiya [10]

Answer:

Ans. The after tax cost of this bond is 2.09%

Explanation:

Hi, first we need to establish the cash flow of the bond, so we can find the after tax cost of the bond. After we find the after tax cash flow of the bond, we must use the IRR function of MS Excel to find the semi-annual cost of this debt, but, all after tax debts should be presented in annual basis. Let me walk you through the process. First, let me show you how it should look.

Face Value      100  

price              101,4  

years                7 years  

Coupon                9%  

Coupon                4,5% semi-annually  

tax                      30%  

   

Per       Cash Flow After Tax  

0                 101,4 101,4  

1                   -4,5 -3,15  

2                   -4,5 -3,15  

3                   -4,5 -3,15  

4                   -4,5 -3,15  

5                   -4,5 -3,15  

6                   -4,5 -3,15  

7                   -4,5 -3,15  

8                   -4,5 -3,15  

9                  -4,5 -3,15  

10                  -4,5 -3,15  

11                  -4,5 -3,15  

12                  -4,5 -3,15  

13                  -4,5 -3,15  

14               -104,5 -73,15  

   

Cost of Debt 1,04% semi-annually

Cost of Debt 2,09% annually

Ok, now, as you can see, there are 14 periods, that is because the coupon is paid semi-annually, the way to find the cash flow (I mean, the bond´s coupon) is:

Coupon (semi-annual)=(Face Value)x\frac{0.09}{2} =4.5

At the end (period 14), we need to add the face value and the coupon, that is $100+$4.5=$104.5

Now, to find the value of the third column (after-tax cost), we do the following.

After-tax-Cost=Couponx(1-taxes)=4.5(1-0.3)=3.15\\

Now, consider this, you are receiving 101.4 for every 100 of debt, that means that you are receiving more money than the emission value, and paying interests over 100 instead of 101.4, that is why we have to use the IRR excel function to find out the semi-annual cost of debt. That is, 1.04%.

Now, to make this an effective annual rate, we calculate it like this.

EffectiveAnnualRate=(1+semi-annual Rate)^{\frac{1}{2} }  -1=(1+0.0104)^{\frac{1}{2} } -1=0.0209

Finally, the after-tax cost of this debt is = 2.09%

Best of luck.

6 0
3 years ago
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