Why are so many people on brainly weird.

Port Allen Chemical Company processes raw material D into joint products E and F. Raw material D costs $4 per liter. It costs $1

Sergeu [11.5K]

Answer:

a) Product G should be produced and sold

b) Net financial advantage $80

Explanation:

A company should process further a product if the additional revenue from the split-off point is greater than than the further processing cost.

Also note that all cost incurred up to the split-off point are irrelevant to the decision to process further .

$

Revenue after split-off point

($9× 40 litres) 360

Revenue at the slit of point

($4 × 40) (160)

Additional income from further processing 200

Further processing cost ($3× 40) (120)

Incremental income from further processing 80

Incremental income from further processing = $80

a) The product F should be processed further and sold as product G. Doing so would increase the net income by $80.

b) Net advantage $80

4 0

3 years ago

Evans Ltd. is now considering the possibility of offering a lifetime membership option to its subscribers. Under this proposal,

Ahat [919]

Answer: $329.75

Explanation:

The one year subscription is $40 per year. It is estimated that the average age of current subscribers is 38 and they will leave on average to 78. This means that they will leave for,

= 78 - 38

= 40 years

Evans Ltd average interest rate on long-term debt is 12% so this means that we can use that 12% as a discount rate for the cash-flow expected.

I have attached a Present Value Interest Factor of an Annuity table to this question. It helps calculate annuities faster.

The above can be treated as an annuity because the $40 is constant every year.

The present value of the $40 over 40 years can be calculated by,

= $40 * present value Interest Factor of an Annuity for 40 years at 12% (look at the table for where 40 years on the y axis intersects with 12% on the x axis)

= $40 * 8.2438 (this is the figure when it is not rounded off to 3 dp)

= $329.752

= $329.75

This shows that the lifetime flat fee of $480 is more profitable for Evans Ltd as opposed to the yearly subscription. They should therefore try to sell more of the lifetime contract with the flat fee.

3 0

3 years ago

Arnold, a single individual, has adjusted gross income of $65,000 in the current year. Arnold donates the following items to his

Olin [163]

Answer:

Option A. $15,400

Explanation:

The net deduction allowed as an charitable contributions are as under:

$

1. ABC Cop. stock

Cost $6000

FMV $22000 $16000

2. Personal Clothing Items

Cost $1000

FMV $400 ($600)

Net Deduction $15,400

The amount that qualifies as charitable contribution for the year is $15400.

3 0

3 years ago

Green Caterpillar Garden Supplies Inc.'s income statement reports data for its first year of operation. The firm's CEO would lik

sergeinik [125]

Answer:

Green Caterpillar Garden Supplies Inc.

a) Income Statement for Year Ending December 31

Year 1 Year 2 (Forecasted)

Net sales $30,000,000 $37,500,000

Less: Operating costs 19,500,000 24,375,000

Depreciation &amortization expenses 1,200,000 1,200,000

Operating income (or EBIT) $9,300,000 $11,925,000

Less: Interest expense 930,000 1,788,750

Pre-tax income (or EBT) 8,370,000 10,136,250

Less: Taxes (40%) 3,348,000 4,054,500

Earnings after taxes $5,022,000 $6,081,750

Less: Preferred stock dividends 100,000 100,000

Earnings to common shareholders 4,922,000 5,981,750

Less: Common stock dividends 2,008,800 2,432,700

Contribution to retained earnings $2,913,200 $3,549,050

b) In Year 2, if Green Caterpillar has 5,000 shares of preferred stocks issued and outstanding, then each preferred share should expect to receive _ $20 _ in annual dividends.

-If Green Caterpillars has 400,000 shares of common stock issued and outstanding, then the firm's earnings per share (EPS) is expected to change from _ $12.31 _ in Year 1 to _ $14.95 _ in Year 2.

-Green Caterpillar's before interest, taxes, depreciation and amortization (EBITDA) value changed from _ $10,500,000 _ in Year 1 to _ $13,125,000_ in Year 2.

-It is _ wrong _ to say that Green Caterpillar's net inflows and outflows of cash at the end of Years 1 and 2 are equal to the company's annual contribution to retained earnings, $2,913,200 and $3,549,050, respectively. This is because _ not all_ of the items reported in the income statement involve payments and receipts of cash.

Explanation:

a) The preferred dividend per share = Preferred Dividends divided the number of preferred stock shares.

b) The EPS is the Earnings Per Share and is calculated as Net Income to Common Stockholders divided by the number of common stock shares outstanding.

The operating cost figure may not be based on a cash basis. It could be accrued costs. Similarly, the net sales may as well involve sales on credit, which do not involve cash flows.

8 0

4 years ago

Organ Rentals Corporation has been having numerous problems. Communication across departments is poor and decisions are backing

enot [183]

The answer is Functional.

8 0

3 years ago