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shepuryov [24]
3 years ago
14

You just signed a business consulting contract with one of your clients. The client will pay you $50,000 a year for five years f

or the service you will provide over this period. You anticipate the general inflation rate over this period to be 6%. If your desired inflation-free interest rate (real interest rate) is to be 4%, what is the worth of the fifth payment in present dollars? The client will pay the consulting fee at the end of each year.
Business
1 answer:
My name is Ann [436]3 years ago
4 0

Answer:

$31,046

Explanation:

real interest rate = nominal interest rate - inflation

4% = nominal interest rate - 6% ⇒ nominal interest rate = 10%

if you want to determine the present value of the fifth payment, and you require a 4% real interest rate, the you must use a discount value = nominal interest rate

present value = payment / (1 + rate)⁵ = $50,000 / (1 + 10%)⁵ = $50,000 / 1.1⁵ = $50,000 / 1.61051‬ = $31,046

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In 2019, Winn, Inc. issued $1 par common stock for $35 per share. No other common stock transactions occurred until July 31, 202
Vadim26 [7]

Answer:

b. <em> </em>Additional paid-in capital is decreased

Explanation:

The entry to record acquisition and retirement is:

                                                                 Debit          Credit

Common stock                                           $1  

Paid-in capital—excess of par                  $34  

   <em> Paid-in capital—share repurchase                        $5</em>

    Cash                                                                  $30

<em>Conclusion: </em>Additional paid-in capital is decreased.  

7 0
3 years ago
The stockholders’ equity section of Blue Spruce Corp.’s balance sheet consists of common stock ($8 par) $1,104,000 and retained
Ne4ueva [31]

Answer:

Only the retained earning changed from $460,000 before the dividend payment to $211,600 after the dividend payment. The total shareholders' equity remain at $1,564,000 before and after the dividend payment.

Explanation:

Note: The two questions (a) and (b) in the question are the same and they just one question which is answered as follows:

Before dividend  payment

Common Stock = $1,104,000

Shares outstanding = $1,104,000 ÷ 8 = 138,000  

Retained earning = $460,000

Total Stockholders' Equity = $1,104,000 + $460,000 = $1,564,000

After Dividend

Shares outstanding  = 138,000 + (138,000 × 10%) = 138,000 + 13,000 = 151,800

Common Stock = $1,104,000 + (13,800 × 8) = $1,104,000 + $110,400 = $1,214,400

In excess of par value = 0 + (13,800 × 10) = $138,000

Total Paid-In Capital = $1,214,400  + $138,000 =  $1,352,400

Retained Earnings = $460,000 - (13,800 × 18) = $460,000 - 248,400 = $211,600

Total Stockholders' Equity = $1,352,400 + $211,600 = $1,564,000

Concluding Note

From the above, only the retained earning changed from $460,000 before the dividend payment to $211,600 after the dividend payment. The total shareholders' equity remain at $1,564,000 before and after the dividend payment.

4 0
3 years ago
If the managers of HHH Enterprises were to commit to an investment project under consideration, they would obtain 40% of the mon
Mamont248 [21]

Answer:

D. 9.44%

Explanation:

The computation of the weighted average cost of capital is shown below:

Weighted average cost of capital is

= Cost of debt × (1 - tax rate) × weight of debt + cost of equity × weight of equity

= 8% × (1 - 0.30) × 40% + 12% × 60%

= 2.24% + 7.2%

= 9.44%

Hence, the weighted average cost of capital is 9.44%

Therefore the right option is D.

6 0
3 years ago
Sally lee, the engineering manager, delegates tasks as a good manager should. However, mark hayes, the engineering director, has
miv72 [106K]

Answer:

The definition becomes defined in the clarification paragraph below, according to the particular circumstance.

Explanation:

  • As either the engineering boss, I believe Sally knows her technical employees better upon where people choose and hate about either the meetings that have been taking place. She understands that her workers like freedom but also that requesting them should report periodically or daily will potentially hinder their efficiency, and also some waste work and attention.
  • Therefore, Sally can find some middle ground path somewhere, practically. She might make an option in which those her boss, Mark Hayes, the director of engineering, including her staff should be satisfied with the conclusion reached. Sally would invite Mark please hold a regular meeting to provide a more excellent method rather than just group communication. Any efficiency improvements barely alter a day, cost too much, and often waste precious time. She should indeed, lift all the questions concerning her workers as well as the negatives involved with either the regular interactions.
  • She could also ensure fine to measure throughout her workers to hold regular sessions because it will encourage the business to always have a daily transcript of the conversation the week before and whether performance might be enhanced within this meeting can already be covered.
7 0
3 years ago
Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 8,000 pounds of oysters in Au
blsea [12.9K]

Answer:

$ 2,100.00 F

Explanation:

Preparation of the report showing the company's revenue and spending variances for August.

QUILCENE OYSTERIA

REVENUE AND SPENDING VARIANCES

For the Month Ended August 31

Actual Results Flexible Budget

Revenue and Spending Variances

Pounds 8,000 8,000

Revenue ($4.00q) $

35,200- $32,000 =$3,200 F

Expenses:

Packing supplies ($0.50q)

4,200-4,000=200 U

Oyster bed maintenance ($3,200)

3,100-3,200=100 F

Wages and salaries ($2,900 + $0.30q) 5,640-5,300=340 U

Shipping ($0.80q)

6,950-6,400=550 U

Utilities ($830) 810-830=20 F

Other

($450 + $0.05q) 980 -850=130 U

TOTAL EXPENSE

21,680 20,580 1,100 U

NET OPERATING INCOME

$ 13,520 $ 11,420 $ 2,100 F

(35,200-21,680=$ 13,520)

($32,000-20,580=$11,420)

($3,200-1,100=$2,100)

Summary:

Quilcene Oysteria

Revenues and Spending Variance

For the Month ended August 31

Revenue $ 3,200.00 F

Expenses:

Packing supplies $ 200.00 U

Oyster Bed Maintenance $ 100.00 F

Wages and Salaries $ 340.00 U

Shipping $ 550.00 U

Utilities $ 20.00 F

Other $ 130.00 U

Total Expenses $ 1,100.00 U

Net Operating Income $ 2,100.00 F

Therefore the company's revenue and spending variances for August will be :$ 2,100.00 F

7 0
3 years ago
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