One advantage of a sole proprietorship is:

A favorable cost variance occurs when actual costs are more than standard costs standard costs are more than actual costs standa

Orlov [11]

A favorable cost variance occurs when: Standard costs are more than actual costs
Standard cost refers to the cost that projected to happen when acquiring an asset. Meanwhile, actual cost refers to the total cost that actually happens when acquiring that asset.

6 0

2 years ago

When the current price of an item is greater than the item's market clearing price:_________.

irina1246 [14]

Answer:

C) quantity supplied is greater than the quantity demanded.

Explanation:

We need not be confused, the market-clearing price is referring to the equilibrium price. Thus, if the current price is above the market-clearing price (that is, the price at which quantity demanded equals quantity supplied), it means the quantity supplied is greater than the quantity demanded of the item.

For example, at a price of $1 per orange, there's an equal amount in quantity demanded and quantity supplied of orange. However, the price increases to $2 per orange; which makes the current price of an orange greater than the market-clearing price of $1.

4 0

3 years ago

Fast Turnstiles Co. is evaluating the extension of credit to a new group of customers. Although these customers will provide $41

k0ka [10]

Answer:

Follows are the solution to this question:

Explanation:

In point A-1:

Calculating the value of Incremental sales after tax:

Further revenues= $414,000

Recognize(Less)=Costs

Debt worth =$33,120

Set Exp. = $17,400

Production and commercialization cost= $314,640

Pre-sales tax =$48,840.

Lower: 35% tax = $17,094

Incremental tax income =$31,746

In point A-2:

Determine profits for extra expenditure

Extra spending on debts $= \frac{ \$ 414,000}{\$ 5}$

$= \$ 82,800.$

Return on the Expenditure $= \frac{\$ 31746}{ \$ 82800}$

$= 38.34 \%$

In point A-3:

Yeah, For the Fast Turnstiles company must provide certain consumers with loans.

In point B-1:

Incremental taxes after-tax calculation:

Further sales = $ 414,000

Return: Costs

gross debt= $45,540

Set Exp = $17,400

Cost for production and marketing = $314,640

Net profits=$ 36,420

Without tax 35% = $12,747

Incremental tax revenue= $23,673

In point B-2:

Determine profits for extra expenditure

Extra investment in debts $= \frac{ \$ 414,000 }{ \$ 5}$

$= \$ 82,800$

Incremental return on that investment $= \frac{\$ 23673}{\$ 82800}$

$= 28.59 \%$

In point B-3:

Yeah, The Fast Turnstiles company must provide to certain consumers to credit.

In point C-1:

The incremental tax revenue estimate

$414,000 = excess revenue

Remember Costs

Debt worth= $ 33,120

set Exp = $17,400

Production and commercialization cost= $314,640

Pre- sales tax = $48,840.

Less: 35% Tax = $17,094

Incremental tax income= $31,746

Calculate profits for extra expenditure

Extra Accounting Investment $= \frac{\$ 414000}{1.6}$

$= \$ 258750$

Incremental Return $= \frac{\$ 31,746} {\$ 258,750}$

$= 12.27 \%$

In point C-2:

Yeah, its credit should be granted to all these consumers through Fast Turnstiles company limited.

3 0

3 years ago

The common stock of the C.A.L.L. Corporation has been trading in a narrow range around $125 per share for months, and you believ

Bezzdna [24]

Answer:

The price of a 6-month call option on C.A.L.L. stock is $13.52

Explanation:

According to the given data we have the following:

P = Price of 6-months put option=$10.50.

So = Current price=$125

X = Exrecise price=$125

r = Risk free interest rate= 5%

T = Time 6 months = 1/2

In order to calculate the price of a 6-month call option on C.A.L.L. stock at an exercise price of $125 if it is at the money, we would have to use the formula of put-call parity as follows:

C=P+So- ( X )

( 1+r)∧T

C=$10.50+$125-($125 )

(1+0.05)∧1/2

C=$135.5-121.98

C=$13.52

The price of a 6-month call option on C.A.L.L. stock is $13.52

3 0

3 years ago

Turnbull Co. is considering a project that requires an initial investment of $270,000. The firm will raise the $270,000 in capit

svp [43]

Answer:

WACC = 11.45 %

Explanation:

Weighted average cost of capital is the average cost of all of the long-term types of finance used by a company weighted according to the that amount of finance used in relation to the total pool of fund

WACC = (Wd×Kd) + (We×Ke) + (Wp × Kp)

After-tax cost of debt = Before tax cost of debt× (1-tax rate)

Kd-After-tax cost of debt = 11.1%(1-0.4) =6.66%

Ke-Cost of equity = 14.7%

Kp= Cost of preferred stock = 12.2%

Wd-Weight of debt =100/270=0.370

We-Weight of equity = 140/270=0.518

Wp= weight of preferred stock = 30/270=0.111

WACC = (0.518× 14.7%) + (0.370 × 6.7%) + (0.111×12.2) = 11.447%

WACC = 11.45 %

6 0

2 years ago