Answer:
a. $49,933,333.33 million
b. $48,533,333.33 million
Explanation:
The computations are presented below:
a. For current profits as dividends in before case
= Profits × (1 + opportunity cost) ÷ (opportunity cost - growth rate)
= $1,400,000 × (1 + 0.07) ÷ (0.07 - 0.04)
= $1,400,000 × 35.6666
= $49,933,333.33 million
b. For current profits as dividends in after case
= Profits × (1 + growth rate) ÷ (opportunity cost - growth rate)
= $1,400,000 × (1 + 0.04) ÷ (0.07 - 0.04)
= $1,400,000 × 34.6666
= $48,533,333.33 million
Using the Gordon growth model, the value of the firm before dividend payouts is calculated to be $49,933,333.33. However, instantly after the dividend payouts, the firm's value becomes zero.
The value of the firm can be determined using the Gordon growth model, which is used to determine the value of a firm or stock that pays dividends that are expected to grow at a constant rate. In such a scenario, the firm's value is equal to the dividends of the next period (D1) divided by the required rate of return minus the growth rate of dividends.
Part A: The firm's value, before the payouts, can be calculated as:
Value = D0 * (1+g) / (k-g) = $1,400,000 * (1+0.04) / (0.07-0.04) = $49,933,333.33
Part B: The firm's value, after payouts, assumes that the firm's capital has come back to the company and will start accumulating again once the next cycle begins. Thus the firm's value would become zero.
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Answer:
The correct answer is letter "B": Neither of them is correct, as determining the costs of the Act is possible, but determining the benefits is not fully possible.
Explanation:
The Sarbanes-Oxley (SOX) Act Of 2002 is a legislative response to several corporate scandals that sent shock waves through the world financial markets. The SOX attempts to strengthen corporate oversight and improve internal control. The main purpose of SOX is to protect shareholders from fraudulent representation in corporate financial statements.
In regards to the Roland Company case, the cost of implementing SOX will be a more strict accounting and financial book-keeping. This could provide the company with more accurate information that helps to make better corporate decisions but the benefits cannot be fully measured.
The question as to whether the costs or benefits of the Sarbanes-Oxley Act outweigh each other depends on the specific circumstances of the company and how one interprets these costs and benefits. Nevertheless, the Act is generally understood to enhance transparency, reduce fraud, and build investor confidence.
This is a subjective question as it pertains to the perception of costs and benefits under the Sarbanes-Oxley Act. One cannot definitively say if Ken or his boss is correct without having a complete picture of the Roland Company's financial situation and understanding of the Act's implications. However, the premise of the Sarbanes-Oxley Act is to increase transparency in financial reporting, reduce incidents of corporate fraud, and protect shareholders. While the act does impose significant administrative costs, many argue that its benefits in promoting investor confidence outweigh these costs. Thus, it could be argued that the views of Ken’s boss would align more with the overall objective of the Act.
Answer:
Are try my best if I can able are do when are graduate are happy
Answer and Explanation:
The Calculation of Predetermined OH Rate is shown below:
For Materials Handling, it is
= Estimated Overhead Costs ÷ Estimated allocated base Quantity
= $54,000 ÷ 96
= $562.50 per part
For Machine Setup, it is
= Estimated Overhead Costs ÷ Estimated allocated base Quantity
= $204,000 ÷ 60
= $3,400 per setup
For Insertion of Parts, it is
= Estimated Overhead Costs ÷ Estimated allocated base Quantity
= $486,000 ÷ 96
= $5,062.50 per part
Now
Calculation of allocated OH is
For Basic Model:
Allocated OH is
= $562.50 × 32 + $3,400 × 20 + $5,062.50 × 32
= $248,000
For Professional Model:
Allocated OH is
= $562.50 × 64 + $3,400 × 40 + $5,062.50 × 64
= $496,000
b. On February 1, Trolley received $8,000 for a four-year technical service contract. Trolley is performing the services evenly over the four-year period. The company credited a liability account, Unearned Service Revenue, on February 1.
c. On May 1, Trolley loaned $3,400 to another company on a 12%, one-year note.
d. The weekly (five-day) payroll of Trolley amounts to $2,500. All employees are paid at the close of business each Friday. December 31 falls on a Thursday.
Required:
Prepare the adjusting entries for December 31.
Answer: See explanation
Explanation:
It should be noted that adjusting entries are normally made at the conclusion of an accounting period so that the income and expenditure will be allocated to the particular period when they took place.
Prepaid rent is calculated as:
= 2660 × (36-5)/36
= 2660 × 31/36
= 2290.56
Unearned revenue:
= 8000 × 11/48
= 1833.33
Accrued interest:
= 3400 × 12% × 8/12
= 3400 × 0.12 × 8/12
= 272
Salary expense:
= 2500 × 4/5
= 2000
The adjusting entry has been attached.
The adjusting entries for year-end include recognizing the appropriate portion of prepaid rent, recognizing earned portion of unearned revenue, recording interest receivable and interest revenue, and adjusting for payroll expense and payable.
The adjustments for Trolley Inc. for year-end can be prepared as follows:
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Answer: it reduces the supply of loanable funds which raises the interest rate
Explanation: Contractionary monetary policy is a monetary policy that reduces the supply of money and increases interest rates and is carried out by the Fed through selling of bonds. This reduces the supply of loanable funds and increases the interest rate. It is driven by increases in the various base interest rates with a goal to reduce inflation by limiting the amount of active money in circulation.
$58,300 $93,400 $360,600 $1,135,420 35%
Answer:
3.15 times
Explanation:
Asset turnover = Sales revenue / Average total assets
Asset turnover = $1,135,420 / $360,600
Asset turnover = 3.15 times