Answer: not affecting the manager's bonus
Explanation:
Under Variable costing, fixed manufacturing overhead is not charged on inventories produced or not sold for the year which means that regardless of inventory level, the relevant inventory here when it comes to calculating operating profit is the one that was sold.
The manager's bonus will therefore not change as a result of higher inventory levels. Were this absorption costing where fixed overhead was charged to inventory that was not sold, the manager's bonus would increase because the higher inventory level would absorb more of the cost.
Answer:
For 100 shares, the mount that should be paid = $1766
Explanation:
We have to calculate the price of the stock in the 4th year because the investor cannot afford the stock in another 3 years.
Price of the stock = Do + g / ke - g
Dividend in current year = $1.2
Dividend after 1 year = 1.2 +2.5% (1.2)= 1.23
Dividend after 2 years = 1.23 + 2.5%(1.23) = 1.26075
Dividend after 3 years = 1.26075 + 2.5%(1.26) = 1.29227
Price in 4th year = 1.29227 + 2.5% / (0.10 - 0.025)
=1.29227 + 2.5%(1.29227)/0.075
= 17.66
Therefore, for 100 shares, the mount that should be paid = 17.66 * 100 = $1766
Answer:
The annual difference between Option 1 (15 years) and Option 2 (20 years) is $7,211.19 in favor of the first one.
Explanation:
Giving the following information:
Option 1:
Number of years= 15
FV= 450,000
i= 0.0525
Option 2:
Number of years= 20
FV= 450,000
i= 0.0525
To calculate the annual cash flow, we will use the following formula on each option:
A= (FV*i)/{[(1+i)^n]-1}
A= annual cash flow
<u>Option 1:</u>
A= (450,000*0.0525) / [(1.0525^15) - 1]
A= $20,464.72
<u>Option 2:</u>
A= (450,000*0.0525) / [(1.0525^20) - 1]
A= $13,253.53
The annual difference between Option 1 (15 years) and Option 2 (20 years) is $7,211.19 in favor of the first one.
Answer:
Return on company's stock = 15.6%
Explanation:
<u><em>The capital asset pricing model (CAPM)</em></u><em> relates the price of a share to the market risk or systematic risk. The systematic risk is that which affects all the all the economic agents, e.g inflation, interest rate e.t.c</em>
Using the CAPM , the expected return on a asset is given as follows:
E(r)= Rf +β(Rm-Rf)
E(r) =? , Rf- 6%, Rm- 14%, β- 1.2
E(r) = 6% + 1.2× (14- 6)%
= 6% + 9.6%
= 15.6%
Return on company's stock = 15.6%
<span>Assuming that we consider the standard workday of eight hours, each part would take 18.75 minutes per part completion. In order to complete 1,250 parts, it would take 8.33 days to complete. In order to complete the 1,250 parts, the manufacturer would have to create at least eight work stations to meet the daily demand.</span>
