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2 years ago

A partial list of Waterways' accounts and their balances for the month of November 2016 follows:

Business

1 answer:

lesya [120]2 years ago

4 0

Answer:

Total current assets = $697,750

Explanation:

The partial balance sheet is as follows:

Waterways Corporation

Balance Sheet (Partial)

For the month of November 2016

Details $ $ 

Current Assets

Cash 260,000

Accounts Receivable 275,000

Finished Goods Inventory, November 68,800

Raw Materials Inventory, November 52,700

Prepaid Expenses 41,250

Total current assets 697,750

Note:

Cash is the most liquid of assets.

Accounts receivable which should be collected within 30 to 60 days are less liquid than cash, but more liquid than inventory.

Finished Goods Inventory which is expected to be sold and converted to cash within one year, and Raw Materials Inventory which is expected to be converted to finished good within one year are more liquid than Prepaid expense.

Therefore, the least liquid among current assets’ item above is the Prepaid Expense as it is cash paid for services not yet received..

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Avicorp has a $15.5 million debt issue outstanding, with a 6.3% coupon rate. The debt has semi-annual coupons, the next coupon i

Studentka2010 [4]

Answer:

a) Pre-tax cost of debt is 8.45%

b) After tax cost of debt is 5.07%

Explanation:

a) Given:

Debt issue outstanding = $15.5 million

Semi-annual coupon rate = 0.063 / 2 = 0.0315

Assumed par value (FV) = $1,000

Coupon payment (pmt) = 0.0315 × 1000 = $31.5

Current bond price (PV) = 92% of $1,000 = $920

Time period (nper) = 5 × 2 = 10 periods

Calculate semi-annual rate using spreadsheet function =Rate(nper,pmt,PV,FV)

Semi-annual rate = 4.14%

Pmt and FV are negative as they are cash outflows.

YTM = 4.14 × 2 = 8.28%

Effective annual rate = $(1+\frac{Rate}{compounding\ periods}) ^{2} -1$

= $(1+\frac{0.0828}{2}) ^{2} -1$

= 0.0845 or 8.45%

b) Tax rate is 40%

After tax cost of debt = Pre tax cost of debt × (1 - 0.4)

= 0.0845 × 0.6

= 0.0507 or 5.07%

4 0

3 years ago

A customer has purchased 1,000 shares of ABC stock at $44 per share, paying a commission of $1.00 per share for the transaction.

Sonbull [250]

Answer:

Option D) 1,200 shares held at a cost basis of $37.50 per share

Explanation:

Data provided in the question:

Number of shares of ABC stocks purchased by the customer = 1,000

Price per share of ABC stock = $44

Commission paid = $1.00 per share

Stock dividend declared = 20%

Now,

The Payment of a stock dividend will increase the number of shares held by the investor

also,

each share is theoretically worth less after the stock dividend is paid.

Therefore,

The number of shares customer will have = Shares purchased × (1 + Dividend declared)

= 1000 × ( 1 + 0.20)

= 1200 shares

Also,

Cost basis for the share = Selling price + Commission

= $44 + $1

= $45

Thus,

The adjusted cost basis = $45 ÷ 1.20

= $37.50 per share

Hence,

Option D) 1,200 shares held at a cost basis of $37.50 per share

3 0

3 years ago

The 2019 balance sheet of Dyrdek’s Skate Shop, Inc., showed $530,000 in the common stock account and $2.3 million in the additio

Tju [1.3M]

Answer:

$80,000

Explanation:

$The \ expression \ for \ calculating \ cash \ flow \ to \ stockholders \ is:$

$Cashflow \ = \ Dividend \ paid \ during \ the \ year \ - \ change \ in \ t he \ value \ of \ common \ stock \ during \ - \ change \ in \ value \ of \ stock \ in \ the \ previous \ year$ $Here;$

$Change \ in \ value \ of \ Common \ stock \ during \ the \ year \ =$ $\ Value \ of \ Common \ stock \ of \ the \ Curren t \ Year - Value\ of \ Common \ stock \ of \ the \ Previous \ Year$

$Change \ in \ valu e \ of \ Additional \ paid \ in \ surplus \ account \ during \ the \ year =$

$Value \ of \ Additional \ paid \ in \ surplus \ account \ o f \ the \ Current \ Year \ -$ $\ Value \ of \ Additional \ paid \ in \ surplus \ account \ of \ th e \ Previous \ Year$

From the information given:

$Dividend \ Payment \ during \ the \ year$ 2020 = $320000

$Value \ of \ stock \ in \ current \ yr$ = i.e. 2020 = $570000

$Value \ of \ stock \ in \ previoius \ yr$ = i.e. 2019 = $530000

Change = $570000 - $530000 = $40,000

$Value \ of \ Ad ditional \ paid-in \ surplus \ acct \ of \ the \ current \ year$ = $2,500,000

$Value \ of \ Ad ditional \ paid-in \ surplus \ acct \ of \ the \ previous \ year$ = $2,300,000

Change = $2,500,000 - $2,300,000 = $ 200000

∴

$By \ using \ the \ above \ information \ in \ the \ formula \ for \ calculating \ the \ cash \ flow \ to$

$\ stackholder, \ we \ get:$

= $320000 - $40,000 - $ 200000

= $80,000

4 0

2 years ago

Run-of-the-Mills provides your marketing firm with the following data: When the price of penguin patties decreases by 20%, the q

aalyn [17]

Answer:

Penguin patties and kipples should be advertise together.

Explanation:

The cross-price elasticity formula is:

CPE= % Δq of good A/ %Δp of good B

The CPE of penguin patties and raskels is:

CPE= -22%/-20%

CPE= 1.1

If the CPE is positive, then both goods are substitutes, which means that an increase in price of on good will affect positively the quantity demanded for the other good.

The CPE of penguin patties and kipples:

CPE= 7%/-20%

CPE=-0.35

If the CPE is negative, then both goods are complementary, which means that an increase in price of one good will affect negatively de quantity demanded for the other good.

You should advertise complementary goods together because both could be positively benefited by advertising. If the demand for good A increases, it is probable that the demand for good B increases too. If you advertise substitute goods, people will always prefer one, then the advertising will only be effective for one of the good but not for both.

6 0

3 years ago

Your boss has asked you to implement a non-disruptive and incremental approach to ensure business process excellence. What kind

Vesnalui [34]

Answer:

I would propose a business process improvement (BPI) where management will analyze business procedures and try to determine which ones can be improved and how they should be improved. The advantage of using BPI is that it focuses on organizing work around business processes and not individual tasks which makes it non-disruptive, and it is also incremental in nature.

5 0

3 years ago