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2 years ago

The following data for Romero Products Inc. are available:

Business

1 answer:

Mkey [24]2 years ago

3 0

Answer:

Sales quantity factor = - $600,000

Unit price factor = $760,000

Explanation:

sales quantity factor is the effect of change in number of units sold with respect to the budgeted price or planned price.

Unit price factor is the change in price per unit with respect to the actual number of units sold.

Unit price factor $(220-200)×38,000 = $760,000

Sales quantity factor (38,000 - 41,000) × $200 = -$600,000

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Within a PPF framework, explain each of the following:_______.

ra1l [238]

Explanation:

a. Remember, the PPF (Production Possibility Frontier) framework allows for the selection of a preferred choice as regards budget spending. Hence, in such a situation, it calls for a choice to be made.

b. According to the PPF framework, where there is an increase in the population, it is expected that such change would result in an increase in the labor force capacity; and ultimately leading to an upward shift in the PPF curve. Thereby, increasing the overall production of the economy.

c. Within the PPF framework, a technological change that makes resources less specialized will result also result in an upward shift in the PPF curve.

3 0

2 years ago

It announces that it plans to pay dividends of $1 per share exactly three years from now and $2 per share exactly four years fro

kkurt [141]

The Question is incomplete.

The complete question is as follows:

It announces that it plans to pay dividends of $1 per share exactly three years from now and $2 per share exactly four years from now. From year 5 onwards, dividends are expected to grow at a constant rate of 10% per year. The company pays no dividends in years one and two. The risk-free rate is 5%, the company's beta is 1.5 and the expected return on the market is 11%. Calculate the price of this stock today

Answer:

Price of stock = $34.42

Explanation:

The Dividend Valuation Model is a technique used to value the worth of an asset. According to this model, the worth of an asset is the sum of the present values of its future cash flows discounted at the required rate of return.

Required rate of return

Using the CAPM , the rate of return on equity can be determined as follows:

E(r)= Rf +β(Rm-Rf)

E(r) =? , Rf- 5%, Rm- 11%, β- 1.5

Ke = 5% + 1.5× (11-5)%

= 14%

Present value of Dividends(PV)

Year PV

3 $1.00, × (1.14^(-3) = 0.6749

4 $2.00× 1.14^(-4) = 1.18416

5 and beyond

This will be done in two (2) steps as follows:

PV in year 4 = (2 × 1.10) /(0.14-0.1) = 55

PV in year 0 = 55× 1.14^(-4) = 32.56

Price of stock

= 0.6749 + 1.18416 + 32.56

= $34.423

7 0

2 years ago

Crane Corporation's computation of cost of goods sold is:

slava [35]

Answer:

16.64 days

Explanation:

Given the above information, we will calculate the average days to sell inventories with the formula below;

Average days to sell inventories = [Ending inventory / Cost of goods sold] × 100

Ending inventory = $72,000

Cost of goods sold = $432,800

Then, Average days to sell inventories

= [$72,000 / $432,800] × 100

= 16.64 days

Therefore, the average days to sell inventory for Fry are 16.64 days

5 0

3 years ago

XYZ Corp issued $600,000 of 9% , 10-year bonds on June 30,2020, for $562,500. This price provided a yield of 10% on the bonds. I

Rom4ik [11]

Answer:

c. $18, 750

Explanation:

The computation of the amount of interest expense i.e. accrued is shown below:

= Issued amount × yield on the bonds × given months ÷ total number of months in a year

= $562,500 × 10% × 4 months ÷ 12 months

= $18,750

The 4 months is calculated from July 1 to October 31

Hence, the correct option is c. $18,750

5 0

3 years ago

During a certain year, the nominal interest rate was 7 percent, the real interest rate was 4 percent, and the CPI was 198.3 at t

Dima020 [189]

Answer:

CPI at the beginning of the year = 192.52

Explanation:

given data

nominal interest rate = 7 percent

real interest rate = 4 percent

CPI = 198.3

to find out

CPI at the beginning of the year

solution

we know that according to fisher equation

1 + r = $\frac{1+n}{1+i}$ ....................1

and for smaller values is equivalent to r

r = n - i .....................2

here r is real interest rate and n is nominal interest rate and i is inflation rate

so from equation 2

4 = 7 - inflation rate

inflation rate = 3 percent

Rate of inflation = (CPI at the end of the year - CPI at the beginning of the year) × 100 ÷ CPI at the beginning of the year

put here value

3% = (198.3 - CPI at the beginning of the year) × 100 ÷ CPI at the beginning of the year

CPI at the beginning of the year = $\frac{19830}{103}$

CPI at the beginning of the year = 192.52

7 0

2 years ago