Cash makes it easier to budget and stick to it. Its easier to track exactly how much money you are spending.
Answer:
9.47%
Explanation:
The computation of the cost of preferred stock is shown below:
Cost of preferred stock = Annual coupon ÷ Price of preferred stock per share
where,
Preferred stock sale price = 100 × 95% = $95
And, the annual coupon = 9% × 100 = $9
= $9 ÷ $95
= 9.47%
We assume the par value be 100
Simply we divide the annual coupon by the price of preferred stock per share so that the correct cost of
preferred stock can be computed
Answer:
Predetermined manufacturing overhead rate= $391.78 per direct labor hour
Explanation:
Giving the following information:
Budgeted factory overhead= $2,948,125.
Direct labor hours:
Flutes= 2,000*2= 4,000
Clarinets= 1,500*3= 4,500
Oboes= 1,750*1.5= 2,625
Total direct labor hours= 7,525
To calculate the predetermined manufacturing overhead rate we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 2,948,125/7,525
Predetermined manufacturing overhead rate= $391.78 per direct labor hour
Answer:
4.71
Explanation:
Cash coverage is a financial tool to calculate the proportion of available cash to interest expenses. It is useful in that it gives a deeper insight into available cash to offset interest expense and guide towards proper investment of cash.
<u>Workings</u>
Cash coverage ratio = cash + cash equivalent / interest expenses.
To arrive at the cash equivalent , depreciation is added back to the net income
Cash equivalent = 15,585+ 2,525 = 18,110
Interest expenses = 3,846
Cash coverage ratio = 18,110 / 3,846 = 4.71
This seems high and it is advisable that cash should be used for some short term investments to earn other profit
