Answer:
$232,825
Explanation:
Step 1: Calculation of cost of goods sold (COGS) under First In First Out (FIFO)
Since we know that;
Ending inventory = Beginning inventory + Purchase - COGS of FIFO
Therefore, we can rearrange to make COGS the subject of the formula and substitute the values as follows:
COGS under FIFO = Beginning inventory + Purchase - Ending inventory
= $110,000 + $237,500 - $114,000 =
COGS under FIFO = $233,500
Step 2: Calculation of COGS under Last In First Out (LIFO)
COGS under LIFO = COGS under FIFO - Rise in LIFO reserve
= $233,500 - $675
COGS under LIFO = $232,825
Therefore, the value of COGS LIFO for Brady Inc. in 2018 is $232,825.
Answer:
Effect on income= $115,000 decrease
Explanation:
Giving the following information:
Fixed costs= $45,000
Number of units= 20,000
Unitary contribution margin= $8
<u>To calculate the effect on income, we need to use the following formula:</u>
Effect on income= decrease in fixed costs - decrease in contribution margin
Effect on income= 45,000 - 20,000*8
Effect on income= $115,000 decrease
<span>"The smallest deed is better than the greatest intention"
Here's my look on this saying:
Many of people, including myself have talked about our great intentions to impact somebody or some place. We might intend to do something, but forget about the importance of following through with those intentions. It is far better to make time to complete small good deeds than to spend your time talking about what you will do “one day.” This can be brought back to the quote, "No deed is too small the be appreciated". No matter how much good we intend to do, it will never compare, in all actuality, to how much good we actually do.
Thank you for your question! I hope this helped! Have an amazing day! :D
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Answer:
Stocks and Bonds
Yes. It is a rational behavior for individuals with a long-term investment horizon to choose to invest in bonds rather than investing in stocks despite the overwhelming "evidence that suggests that over long periods of time stocks still outperform bonds."
Rational behavior involves making rational choices that provide optimal levels of benefit or utility for the individual. People who make rational choices would rather choose bonds with lower risks and returns than stocks with higher risks and returns.
Explanation:
Every rational investor would prefer to reduce her risk exposure instead of increasing it. Every investor is also aware that investments with higher risks attract higher returns. However, determining the certainty of the returns is difficult.
Answer:
e) $37.05
Explanation:
Using the dividend growth model, the value of a stock is the present value of the future dividends receivable discounted at the required rate of return . The required rate of return is given as 12%.
So we discount the year 3 dividend using the dividend growth model formula
P = D (1+g)/r-g
r- rate of return, g = growth rate
Present value of the future dividends:
PV of Year 1 = 1.55(1.015)m × 1.12^(-1)
= 1.4047
PV of Year 2 = 1.55 (1.015)(1.015) × 1.12^(-2)
= 1.27
PV of Year 3 (this will be done in two steps)
Step 1; PV (in yr 2) of year 3 dividend
= (1.55)(1.015)^2×(1.08)/(0.12-0.08)
=43.114
Step 2 : PV (in yr 2) of year 3 dividend
=43.114 × (1.12^(-2))
= 34.37
Best estimate of stock = 1.40 + 1.27 +34.37
= $37.05
Note
To discount the year 3 dividend, we use two steps. The first stp helps get the PV in year 2, and step 3 helps to take it further to the PV in year 0
