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Cloud [144]
3 years ago
6

Tulip Midwifery's cost formula for its wages and salaries is $2,420 per month plus $388 per birth. For the month of January, the

company planned for activity of 119 births, but the actual level of activity was 123 births. The actual wages and salaries for the month was $50,544. The wages and salaries in the flexible budget for January would be closest to:
Business
1 answer:
Neko [114]3 years ago
3 0

Answer:

$ 50144

Explanation:

Given:

Cost formula for the the wages and salaries = $ 2420 / month + $ 388 / birth

planned number of activity = 119 births

Actual level of activity = 123 births

the wages and salaries in the flexible budget for January, using the given formula will be calculated as:

the wages and salaries = ( $ 2420 × 1 ) + ( $ 388 × 123) = $ 50144

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If the company were to issue an annual zero-coupon bond with a maturity of 2 years and par value of $1,000, what would be the ar
Firdavs [7]

Answer:

Note: <em>The complete question is attached as picture below</em>

1a. The one year spot rate can be calculated using the one year zero bond.

PV * (1 + S1) = FV

1 + S1 = 1000 / 900

S1 = 1.1111 - 1

S1 = 0.1111  

S1 = 11.11%

1b. PV of the 2 year bond = $950

Annual coupon = 1000 * 5% = $50

950 = 50 / (1 + S1) + (50 + 1000) / (1 + S2)^2

950 = 50 / 1.1111 + 1,050 / (1 + S2)^2

1,050/ (1 + S2)^2 = 950 - 45 = 905

(1 + S2)^2 = 1050 / 905

1 + S2 = 1.160221/2

S2 = 7.714%

1c. Price of the 2 year zero bond = 1,000 / (1 + 0.07714)^2

Price of the 2 year zero bond = 1,000 / 1.1602

Price of the 2 year zero bond = 861.9203586

Price of the 2 year zero bond = $861.92

3 0
3 years ago
The relationship between financial leverage and profitability Pelican Paper, Inc., and Timberland Forest, Inc., are rivals in th
OLEGan [10]

Answer:

Pelican Paper, Inc., and Timberland Forest, Inc.

Financial leverage and profitability Ratio Analysis

A. Computation of debt and coverage ratios:

1. debt ratio  = Total debt to Total assets x 100

Pelican = $1,000,000/$10,000,000 x 100

= 10%

Timberland =v$5,000,000/$10,000,000 x 100

= 50%

2. times interest earned ratio = EBIT/Interests

Pelican = $6,250,000/$100,000

= 62.5 times

Timberland = $6,250,000/$500,000

= 12.5 times

A discussion of their financial risk and ability to cover the costs:

Pelican Paper's financial leverage is 10% compared to Timberland's 50%, showing that debt creditors finance and lay claim to half of the company's assets.  This is very high and not attractive to potential investors and creditors.  Timberland has already hampered its ability to borrow more as it is highly leveraged.  Whereas Pelican Paper can meet its debt obligations and pay its interest expenses 62.5 times from current earnings, these pale in comparison with Timberland's 12.5 times, further jeopardizing its opportunities for more debt financing.

B. Calculation of the profitability ratios:

1. Operating profit margin  = EBIT/Sales x 100

Pelican Paper = $6,250,000/$25,000,000 x 100 = 25%

Timberland = $6,250,000/$25,000,000 x 100 = 25%

2. Net profit margin  = (EBIT less Interest)/Sales x 100

Pelican Paper = ($6,250,000 - $100,000)/$25,000,000 x 100

= $6,150,000/$25,000,000 x 100 = 24.6%

Timberland = ($6,250,000 - $500,000)/$25,000,000 x 100

= $5,750,000/$25,000,000 x 100 = 23%

3. Return on total assets  = EBIT/Total Assets x 100

Pelican Paper = $6,250,000/$10,000,000 x 100

= 62.5%

Timberland = $6,250,000/$10,000,000 x 100

= 62.5%

4. Return on common equity = Earnings available to Common Stockholders/Equity x 100

Pelican = $3,690,000/$9,000,000 x 100

= 41%

Timberland = $3,450,000/$5,000,000 x 100

= 69%

A discussion of their profitability relative to one another:

The two companies make the same level of operating profit margin at 25%, but Pelican's net profit margin of 24.6% is better than Timberland's 23%.  They show that Pelican's management has better ability to control expenses than Timberland's.

The returns on assets are similar for both companies, but Timberland performed better than Pelican Paper in terms of the return on equity.  This shows that Timberland with ROE of 69% is making larger returns for its common stockholders than Pelican because it is leveraging debts, whose interests are tax-deductible, and also using less equity in generating the returns.

C. The larger debt of Timberland has made it more profitable than Pelican Paper because the debt interests are deductible from EBIT before tax expense is computed and it reduces the tax burden for the company, thus making it to pay less tax and saving more profits for distribution to its stockholders.

However, this higher return to the investors in Timberland also comes with higher risks, as the investors are exposed to debt risks, higher pressure to satisfy debt creditors, heightened interference and oversight from creditors since they own half of the assets of the company, and an increased threat of business takeover in case of debt default.

Explanation:

a) Data:

Items                        Pelican Paper, INC    Timberland Forest, INC

Total assets              $10,000,000               $10,000,000

Total equity                  9,000,000                   5,000,000

Total Debt                     1,000,000                   5,000,000

Annual Interest                100,000                      500,000

Total Sales                 25,000,000                25,000,000

EBIT                              6,250,000                  6,250,000

Earnings available for  common

stockholders               3,690,000                   3,450,000

b) Ratio computation and analysis help companies to compare their performances and positions with competitors.  They can spot risks facing a company and even point out ways to address such business risks.

8 0
3 years ago
Consumer _____ refers to the personal, social, and economic significance of a purchase. Group of answer choices acculturative re
puteri [66]

Answer:

Consumer Involvement

Explanation:

Consumer Involvement refers to the level of importance a consumer places on a purchase. The consumer factors in the personal, social and economic significance of the product before going ahead to make the purchase. The levels of consumer involvement could be of three types, namely; low, medium and high involvement.  

A low involvement purchase is one in which the consumer does not give so much thought to before making the purchase. Example is household products like detergents. Medium Involvement purchase are those in which the consumer puts in some thought before acquisition. An example could be new clothes. High Involvement purchase require considerable thought and research before the purchase is made. An example could be a new car.

3 0
3 years ago
The output of u. S. Citizens who work in canada would be included in the
mestny [16]

The output of u. S. Citizens who work in Canada would be included in the: D. Gross domestic product.

<h3>What is gross domestic product?</h3>

Gross domestic product  can be defined as the value of goods or products produce within a country at a particular period of time.

If a united State of American citizen work in Canada the output of the United State citizen will be added to the Gross domestic product of Canada.

Therefore the correct option is D.

Learn more about gross domestic product here:brainly.com/question/1383956

#SPJ12

6 0
1 year ago
You and a friend are putting together a film on a very small budget. the script takes place in the 1970s, but you don't have muc
myrzilka [38]

Some of the ways that you could find costumes for your film are the following:

<span>1. </span><span>It would first help to have actors that already look like they belong in the 1970’s. Having the authentic look can help sell the costumes even more. </span>

<span>2.</span> Relying on second-<span> hand/low-budget vintage stores would be the way to go.</span>

<span>3. </span><span>Go to a Fabric store or some place online and order fabric to create, If there were a piece that couldn’t be find and needed in the film.</span>





7 0
3 years ago
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