BUSINESS COLLEGE

Consider the following information: Probability of State Rate of Return if State Occurs
Economy of Economy Stock A Stock B
Recession .20 .010 – .35
Normal .55 .090 .25
Boom .25 .240 .48
a. Calculate the expected return for the two stocks.'

Answers

Answer 1
Answer:

Answer:

11.15%

Explanation:

The formula to compute the expected rate of return is shown below:

Expected rate of return = (Recession probability× Possible Returns ) + (Normal Probability  × Possible Returns ) + (Boom Probability  × Possible Returns 3)

= (0.20 × 0.010) + (0.55 × 0.090) + (0.25 × 0.240)

= 0.002+ 0.0495 + 0.06

= 11.15%

Simply we multiply the probability with its return so that accurate rate could come.

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4. The finest veal is _______-fed. A. fieldB. grassC. grainD. milk
Mulliner Company showed the following information for the year:Standard variable overhead rate (SVOR) per direct labor hour $3.50Standard hours (SH) allowed per unit 3Actual production in units 20,000Actual variable overhead costs $220,500Actual direct labor hours 61,200Required:1. Calculate the standard direct labor hours for actual production.2. Calculate the applied variable overhead. $3. Calculate the total variable overhead variance. Enter amounts as positive numbers and select Favorable or Unfavorable.
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The annual interest rate on a credit card is 17.99%. If a payment of $200.00 ismade each month, how many months will it take to pay off an unpaid balance of
$2,470.04?

Answers

Answer:

It would take a total of 14.572001 Months to pay off the balance, with interest

Explanation:

$2470.04 Would take 12.6 months to pay off, therefore, you must apply 17.99% yearly interest to this figure.

$2470.04 * .1799 = $444.36 interest

Principal + interest = total

$2470.04 + $444.36=  $2914.4

$2914.4 / $200 = 14.57 months

Final answer:

The calculation of how many months it would take to repay a credit card balance, given an annual interest rate and a fixed monthly repayment, is not straightforward due to the compounding effect of interest. However, without considering interest, this would update around 12.35 months to pay off the balance of $2,470.04 with a monthly payment of $200.

Explanation:

The question relates to the concept of credit card debt repayment. Given an annual interest rate of 17.99%, a monthly payment of $200.00, and a balance of $2,470.04, it will take significantly longer than just dividing $2,470.04 by $200 to pay off the debt. This is because the annual interest rate is compounding on the remaining balance every month.

In order to calculate the exact number of months it would take to pay off the credit card, we'd need to set up and solve a complex mathematical equation which requires a good understanding of logarithms and algebra. In this case, it is best to use a financial calculator or an online credit card repayment calculator. However, on a simple base without accounting for interest, by dividing the balance of $2,470.04 by the monthly payment of $200, it would take approximately 12.35 months to pay off the debt. However, due to the added interest, the actual number of months would likely be greater.

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Dmitri was complaining about his workload before the staff meeting began. Later, when the manager announced that 12 parking spaces would be lost due to construction across the street, he raised his hand and asked, "Then where exactly do you expect us to park?" The manager tried to provide some recommendations, but Dmitri continued to complain until the manager gave up and announced the meeting was over.What could Caroline do to make the next meeting more effective and productive?
A. Bring a positive attitude
B. Dominate the conversation
C. Help summarize

Answers

Answer:

A

Explanation:

A company’s past experience indicates that 60% of its credit sales are collected in the month of sale, 30% in the next month, and 5% in the second month after the sale; the remainder is never collected. Budgeted credit sales were: Ch7_Q181 The cash inflow in the month of June is expected to be $282,500. $213,750. $225,000. $270,000.

Answers

Answer:

$213,250

Explanation:

The calculation of cash inflow is shown below:-

                    Expected cash collections

                       For the month of June

Months       Sales              Percentage     Expected collections

April           $282,500        5%                    $14,125

May            $213,750         30%                  $64,125

June           $225,000        60%                 $135,000

Total collection in the month of June        $213,250

Here we assume Sales for April$282,500, May $213,750 and June $225,000.

Please ignore the last value as it is not relevant to the question

Bedeker, Inc., has an issue of preferred stock outstanding that pays a $6.55 dividend every year in perpetuity. If this issue currently sells for $91 per share, what is the required return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Answers

Answer:

The required rate of return is 7.20%

Explanation:

The price of a share that pays a particular dividend amount in perpetuity is given by the below formula:

price of share=dividend/required rate of return

price of share is $91.00 per share

dividend payable in perpetuity is $6.55

required rate of return is unknown

$91=$6.55/required rate of return

required rate of return =$6.55/$91

                                       =7.20%

to confirm the required of return,I divided the by the required rate of return as shown below:

6.55/0.0.72=$90.97 .approximately $91

That is a way to validate the computed required rate of return

Evergreen Company sells lawn and garden products to wholesalers. The company’s fiscal year-end is December 31. During 2021, the following transactions related to receivables occurred:Feb. 28 Sold merchandise to Lennox, Inc., for $10,000 and accepted a 10%, 7-month note. 10% is an appropriate rate for this type of note.
Mar. 31 Sold merchandise to Maddox Co. that had a fair value of $7,200, and accepted a noninterest-bearing note for which $8,000 payment is due on March 31, 2022.
Apr. 3 Sold merchandise to Carr Co. for $7,000 with terms 2/10, n/30. Evergreen uses the gross method to account for cash discounts.
11 Collected the entire amount due from Carr Co.
17 A customer returned merchandise costing $3,200. Evergreen reduced the customer’s receivable balance by $5,000, the sales price of the merchandise. Sales returns are recorded by the company as they occur.
30 Transferred receivables of $50,000 to a factor without recourse. The factor charged Evergreen a 1% finance charge on the receivables transferred. The sale criteria are met.
June 30 Discounted the Lennox, Inc., note at the bank. The bank’s discount rate is 12%. The note was discounted without recourse.
Sep. 30 Lennox, Inc., paid the note amount plus interest to the bank.

Required:
1. Prepare the necessary journal entries for Evergreen for each of the above dates. For transactions involving the sale of merchandise, ignore the entry for the cost of goods sold.
2. Prepare any necessary adjusting entries at December 31, 2021. Adjusting entries are only recorded at year-end.
3. Prepare a schedule showing the effect of the journal entries on 2021 income before taxes

Answers

Final answer:

The answer provides the necessary journal entries for Evergreen, including transactions, adjusting entries, and the effect on income before taxes.

Explanation:

1. Journal Entries:

Feb. 28: Debit Notes Receivable-$10,000; Credit Sales-$10,000
Mar. 31: Debit Notes Receivable-$7,200; Credit Sales-$7,200
Apr. 3: Debit Accounts Receivable-$7,000; Credit Sales-$7,000
Apr. 11: Debit Cash-$6,860; Debit Sales Discounts-$140; Credit Accounts Receivable-$7,000
Apr. 17: Debit Sales Returns-$0; Debit Accounts Receivable-$5,000; Credit Cost of Goods Sold-$3,200; Credit Sales-$5,000
Apr. 30: Debit Cash-$49,500; Debit Finance Charge Expense-$500; Credit Transfer of Receivables-$50,000
June 30: Debit Cash-$9,105; Debit Loss on Discount of Note Receivable-$895; Credit Notes Receivable-$10,000
Sep. 30: Debit Cash-$10,560; Credit Notes Receivable-$10,000; Credit Interest Income-$560

2. Adjusting Entries:

Dec. 31: Debit Interest Receivable-$340; Credit Interest Income-$340 (to recognize accrued interest on the Lennox note)

3. Income Before Taxes:

The journal entries will impact the 2021 income before taxes as follows:
- Sales of merchandise will increase the income
- Sales returns and discounts will decrease the income
- Interest income and finance charge expense will affect the income

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On July 1, Shady Creek Resort borrowed $330,000 cash by signing a 10-year, 12% installment note requiring equal payments each June 30 of $58,405. What amount of interest expense will be included in the first annual payment

Answers

Answer:

Borrowed Amount = $330,000

Interest Rate = 12%

Interest Expense = Borrowed amount * Interest Rate

Interest Expense = $330,000 * 12%

Interest Expense = $39,600
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