Answer:
a. Straight line method.
Depreciation per annum = ($ 256,800 - $12,000 ) / 8 = $ 30,600.
Depreciation for 2020 = $ 30,600 * ( 3 /12 ) = $ 7,650.
b. Units of output
Depreciation per unit = ( $ 256,800 - $ 12,000 ) / 48,000 = $ 5.1
Depreciation for 2020 = 1,000 * $ 5.1 = $ 5,100.
c. Working hours.
Depreciation per hours = ( $ 256,800 - $ 12,000 ) / 20,400 = $ 12
Depreciation for 2020 = 600 * $ 12 = $ 7,200.
D. Sum of digits method
Sum of years = 8 ( 8 +1 ) / 2 = 36.
Year - 1 used ( 3 / 12 = 0.25)
Year-2 used ( 12 / 12 = 1 )
Remaining ( 8 - 1 - 0.25 = 6.75)
Depreciation for 2022 = ($ 256,800 - $ 12,000 ) * ( 6.75 / 36 )
Depreciation for 2022 = $ 45,900.
e. Double declining balance
Depreciation rate = 200 / 8 = 25 %.
Depreciation for 2020 = $256,800 * 25 % * (3 /12)
Depreciation for 2020 = $16,050.
Depreciation for 2021 = ( $256,800 - $ 16,050) * 25%
Depreciation for 2021 = $60,188.
Answer:
(A) realize financial rewards.
Explanation:
In theory (textbook) the no.1 reason that people become entrepreneurs is to achieve maximum return. The concept of higher risk, higher return is the key here. Business as compared to Services and Profession, has the highest risk thereby giving the best returns out of the three.
However, in practicality people adopt business to pursue their own ideas, gain prestige, be their own boss, continue a family tradition and also to realize financial rewards.
Answer:
what is the value of a share of Gillette stock if the firm's equity cost of capital is 8.8 %?
$ 13,36
Explanation:
First it's necessary to find the present value of the annual dividend paid during the next 6 years, which is calculate by the formula of the Present Value.
PV = Dt / (1+r)^t , it means that each Dividend at the year "t" will be value with the rate r calculated a this same moment "t".
Year 1
0,61 = Div
1,09 = (1+0,88)^1
0,56 = Div/1,09
Year 2
0,69 = Div Year 1(0,61) * 1,129, because increase at 12,9% by year
1,18 = (1+0,88)^2
0,58 = Div/1,18
Year 3
0,78 = Div Year 2(0,69) * 1,129, because increase at 12,9% by year
1,29 = (1+0,88)^3
0,60 = Div/1,18
Year 4
0,88 = Div Year 3(0,78) * 1,129, because increase at 12,9% by year
1,24 = (1+0,88)^4
0,63 = Div/1,24
Year 5
0,99 = Div Year 4(0,88) * 1,129, because increase at 12,9% by year
1,52 = (1+0,88)^5
0,65 = Div/1,52
Year 6
1,12 = Div Year 5(0,99) * 1,129, because increase at 12,9% by year
1,66 = (1+0,88)^6
0,67 = Div/1,66
PV of 6 Years= 0,56 + 0,58 + 0,60 + 0,63 + 0,65 + 0,67 = $3,70
To this second part the model indicates that de dividend is calculated by = Dividend /(Rate-Growth) , which means that if a dividend grows forever, we applied the perpetuity formula where dividend growth it's applied as negative to the discount rate.
Year 6
1,14 = Div Year 6(1,12) * 1,017, thereafter will growth at 1,7% by year.
7,1% = (8,8%-1-7%) Discount rate less growth of dividend.
16,03 = Div/0,071 = In this case we use the rate not the 1+rate.
This value it's calculated at the moment of Year 7, we need to apply the Present Value to calculate the actual value, which is:
16,03 = Perpetuity calculated before until year 6.
1,66 = Discount Rate applied this year.
9,66 = Present Value of the Dividen which grows forever at 1,7%
TOTAL Value of Share = PV of 6 Years + PV Perpetuity =
$3,70 + $9,66=$13,36
Answer:
$136,363
Explanation:
For computing the willing amount to pay, first we have to determine the expected cash flow that is shown below:
Expected cash flow is
= $80,000 × 0.5 + $220,000 × 0.5
= $40,000 + $110,000
= $150,000
Now the willing amount is
= Expected cash flow × 1 ÷ (1 + risk free investment + risk premium)
= $150,000 × 1 ÷ (1 + 10%)
= $150,000 × 0.9090
= $136,363
Answer:
Feedback
Explanation:
In an effective goal program, feedback is very important and essential. The goals should be open for feedback. If the goals are specific, consistent but lack feedback, then it is no longer effective.
Feedback is important in order to evaluate how effective the goal is. So, in the above, feedback is what is missing.
Direct Labor Hours: 600,000 550,000
Manufacturing Overhead Estimated $720,000 $680,000
Answer:
Underapplied overhead= $20,000
Explanation:
Giving the following information:
Estimated Actual
Direct Labor Hours: 600,000 550,000
Manufacturing Overhead Estimated $720,000 $680,000
I assume that we need to calculate the over/under applied overhead.
First, we need to determine the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 720,000/600,000
Predetermined manufacturing overhead rate= $1.2 per direct labor hour
Now, we apply overhead based on actual hours:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 1.2*550,000
Allocated MOH= $660,000
Finally, the under/over applied overhead:
Under/over applied overhead= real overhead - allocated overhead
Under/over applied overhead= 680,000 - 660,000
Underapplied overhead= $20,000
Answer:
The total equivalent units for conversion cost = 45,600 ounces
Explanation:
Let us arrange the information in a tabular form to help in solution:
% conversion equivalent units
Particulars whole units completed for conversion
Beginning inventory in process 4,000 40% 1,600
started and completed in period 42,000** 100% 42,000
completed . . . . . . . . . . . . . . . . . . 46,000 43,600
ending inventory in process . . . . 8,000 25% 2,000
Total units to be assigned cost 54,000 45,600
Therefore, the total equivalent units for conversion cost = 45,600 ounces
**Note the inventory that was started and completed within the period is the inventory that was 100% completed within the period and it is the difference between the total inventory completed within the period and the beginning inventory, and this is represented as:
46,000 - 4,000 = 42,000 ounces.