Answer:
14.10%
Explanation:
The calculation of expected return on this stock is shown below:-
Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)
= 4.5% + 1.28 × (12% - 4.5%)
= 4.5% + 1.28 × 7.5%
= 4.5% + 9.6%
= 14.10%
The Market rate of return - Risk-free rate of return) is also called as the market risk premium
hence, the expected rate of return is 14.10%
selling goods only at certain predetermined prices that reflect definite price breaks is called Price lining
Price lining, also known as product line pricing, is a marketing tactic where a company charges for its products in accordance with its quality, features, or other characteristics to set them apart from competing ones.
Price line, to put it simply, is the practice of placing comparable products in various price ranges, each of which differs significantly in terms of the characteristics or qualities it offers. These brackets typically have lower starting prices and higher price points.
Despite having "price" in its name, price lining is a marketing tactic. The major goal of this strategy is to increase sales and audience size by making the offering more appealing to a wider range of consumers.
Apple, a company that makes smartphones, is a good illustration of price lining in action. Apple offers its iPhone lineup in a range of price points, with each model differing mainly in the small number of extra features that are added to the more expensive ones. Instead of solely selling expensive iPhones, Apple now offers a variety of models to appeal to customers with varying levels of purchasing power, which helps them grow sales.
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Answer:
The main conflict that results between planning and control use of budgets is that managers might place their own personal interests before the interests of the company. This might result in budgets that are easily achievable (resulting in bonuses) or shifting income from one period to another in order to achieve certain budgets that will result in bonuses.
I will use a real life example that happened to me to explain this. I worked as a B2B sales representative for a large corporation (we were only 2 B2B salespeople + 1 manager) and when sales were slowing down, upper management would set up bonuses for achieving certain sales goals. The problem was that intentionally certain large sales that required management's approval were delayed and total sales would fall. Then suddenly the bonus show sup and all the large sales were approved and in two weeks the sales goals were achieved. Since B2B sales are not about selling to a lot of customers, but instead selling to the right customers a lot of products, a couple of delayed big sales made a huge difference and a 1% bonus meant changing your old car for a new one.
Answer:
The correct answer is A
Explanation:
The formula to compute the present value interest factor using excel is as:
= 1/(1+r)^ n
where
r is the rate
n is number of years
So, in case of A,
The present value interest factor is:
= 1/(1+0.06)^5
= 0.74725
In case of B,
The present value interest factor is:
= 1/(1+0.06)^8
= 0.62741
In case of C,
The present value interest factor is:
= 1/(1+0.06)^10
= 0.55839
In case of D,
The present value interest factor is:
= 1/(1+0.08)^5
= 0.68058
In case of E,
The present value interest factor is:
= 1/(1+0.08)^10
= 0.46319
Therefore, it is highest in option A.
Answer:
a. $13
b. $20,625 Unfavorable
Explanation:
a. Computation of overhead volume variance is shown below:-
Variable overhead rate = Variable overhead cost ÷ Expected standard hours
= $275,000 ÷ 25,000
= 11 direct labor hour
Fixed overhead rate = Productive capacity ÷ Expected standard hours
= $50,000 ÷ 25,000
= $2 direct labor hour
Total overheard rate = Variable overhead rate + Fixed overhead rate
= $11 + $2
= $13
b. The computation of overhead controllable variance is shown below:-
Variable overhead cost = Overhead rate × Standard hours
= $11 × 21,875
= $240,625
Fixed overhead cost = Overhead rate × Standard hours
= $2 × 21,875
= $43,750
Total overhead cost = $13 × 21,875
= $284,375
Actual result = $305,000
Variance = Actual result - overhead cost applied
= $305,000 - $284,375
= $20,625 Unfavorable
Working note:-
Standard direct labor hours = Actual units ÷ Standard hours
= 35,000 × 1.6
= $21,875
Standard units per hour = (Standard capacity × Expected production) ÷ Standard hours
= (50,000 units × 80%) ÷ 25,000 hours
= 1.6 units per hour
