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Alexeev081 [22]
3 years ago
15

E-Eyes has a new issue of preferred stock it calls 20/20 preferred. The stock will pay a $20 dividend per year, but the first di

vidend will not be paid until 20 years from today. If you require a return of 10.5 percent on this stock, how much should you pay today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current stock price
Business
1 answer:
brilliants [131]3 years ago
6 0

Answer:

$25.86.

Explanation:

To address this problem we first calculate the present value of all dividend received at time t = 20, then we discount that sum to time t = 0 (now).

The cashflow pattern of this preferred stock is similar to perpetuty.

Stock value at time t = 20 = Dividend/Required rate of return = 20/10.5% = 190.48

Stock value at time t = 0 = (Stock value at time t = 20)/(1 + Required rate of return)^20 = 190.48/(1 + 10.5%)^20 = 25.86.

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A product-focused process is commonly used to produce: A) high-volume, high-variety products. B) low-volume, high-variety produc
valkas [14]

Answer:

C. high-volume, low-variety products

Explanation:

 There are other types of processes. This process is completely developed around the product, it is considered a continuous process with high volume of products that have low variety. <em>It presents a high facility utilization (this is considered an advantage), organized by product, which receives a high-fixed price, but the variable cost is low.</em>

7 0
4 years ago
Mitchell Corporation manufactures a single product. The selling price is $85 per unit, and variable costs amount to $68 per unit
Likurg_2 [28]

Answer: $ 70,500

Explanation:

Given, Number of units = 1800

Per unit selling price = $85

Total Sales price = (Number of units ) x (Per unit selling price)

= 1800 x $ 85

= $153,000

Variable cost  per unit = $68

Total variable cost = 1800 x $68 = $122,400

Contribution Margin = (Sales price ) - (Variable cost)

= $ (153000-122400)

= $30,600

Fixed cost = $16,500 per month

Profit = (Contribution Margin) - (Fixed cost)

= $(30,600-16,500)

= $14,100

PV ratio = (Contribution Margin) ÷ (Total sales) x 100%

= $ (30,600÷153,000)x 100%

=20%

Margin of Safety = (profit)  ÷ (PV ratio)

= ($14,100) ÷ (20%)

= ($14,100) ÷ (0.20)

= $ 70,500

Hence, the monthly margin of safety =  $ 70,500

8 0
3 years ago
For Wilton Company, the predetermined overhead rate is 70% of direct labor cost. During the month, $360,000 of factory labor cos
bezimeni [28]

Answer:

The amount of overhead debited to Work in Process Inventory should be: a. $182,00

Explanation:

The Overheads are Applied in the Manufacturing Costs as:

Budgeted Rate × Actual Activity for the Month

At the End of the Period we would need to determined whether this amount of overhead is Over or Under Applied by comparing it to the actual overheads incurred of $180,000 (given)

In our Case,  the predetermined overhead rate is 70% of direct labor cost

<em>Thus we need to find the Direct Labor Cost first</em>:

Total Labor Costs               $360,000

<em>Less </em>Indirect Labor Costs<em>  </em>$100,000

Direct Labor Cost              $260,000

<em>Therefore Overheads applied would be determined as:</em>

= $260,000 × 70%

= $182,000

6 0
3 years ago
Read 2 more answers
Bali Sales Company experienced the following events:
Amanda [17]

Answer:

Bali Sales Company

Identifying events as asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE):

Event Type Assets = Liab. + Equity Rev. - Exp. = Net Inc. Cash Flow Type

1.  AE             + -      = NA    + NA      NA   - NA  = NA           -0A

2. CE             +        = +       +  NA     NA   -  NA =  NA          -OA

3. CE             -         = -       +  NA     NA   -  NA =  NA          +OA

4a. AS           +        =  NA   +  +         +     -  NA =  +              +OA

4b. AU          -         =  NA   +  -         NA   -  +   =  -                -OA

5. CE            -         =  -       +  NA     NA   -  NA =  NA          -OA

6a. AS           +        =  NA   +  +         +     -  NA =  +              +OA

6b. AU          -         =  NA   +  -         NA   -  +   =  -                -OA

7. AU            -         =  NA   +  -         NA   -  -   =   -                -OA

8. AU            -         =  NA   +  -         NA   -  -   =   -                -OA

9. AE            +-       =  NA    + NA     NA   - NA  = NA            -OA

10. AU            -       =  NA   +  -         NA   -  -   =   -                -OA

Explanation:

All the events are classified under operating activities for the cash flow type.  There are no investing activities (IA) nor financing activities (FA) in any of the events listed.  The workings above show the accounting equation in operation as it affects elements of the financial statements.

6 0
3 years ago
The following cost behavior patterns describe anticipated manufacturing costs for 2013: raw material, $7.60/unit; direct labor,
Advocard [28]

Answer: The answer is as follows:

Explanation:

Given that,

Raw material = $7.60/unit

Direct labor = $10.60/unit

Manufacturing overhead = $8.60/unit

(1) Unit cost under variable costing = Raw material + Direct labor + variable Manufacturing overhead

= 7.6 + 10.6 + 8.6

= 26.8

(2) Unit cost under absorption costing = Raw material + Direct labor + variable Manufacturing overhead + fixed Manufacturing overhead

= 7.6 + 10.6 + 8.6 + 8.6

= 35.4

5 0
4 years ago
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