BUSINESS COLLEGE

What is the payback period for the following set of cash flows? (Round your answer to 2 decimal places, e.g., 32.16.) Year Cash Flow 0 –$ 5,500 1 1,525 2 1,725 3 2,125 4 1,625

Answers

Answer 1

Answer:

Answer:

3.08 years

Explanation:

The computation of the payback period is shown below:

Year Cash flows Cumulative cash flows

0 -$5,500 -$5,500

1 $1,525 -$3,975

2 $1,725 -$2,250

3 $2,125 -$125

4 $1,625 $1,500

Now the pay back period is

= 3 years + $125 ÷ $1,625

= 3.08 years

Answer 2

Answer:

Final answer:

The payback period of the given cash flows is calculated by subtracting each year's cash inflow from the initial investment until the remaining amount is completely paid off. The payback period is found to be approximately 3.08 years.

Explanation:

The Payback Period is a capital budgeting method that calculates the time required to recoup the cost of an investment. In your case, the cash flow starts with an investment of $5,500 at Year 0, followed by cash inflows in subsequent years. Let's calculate the payback period in years.

Year 1: $5,500 - $1,525 = $3,975 remaining
Year 2: $3,975 - $1,725 = $2,250 remaining
Year 3: $2,250 - $2,125 = $125 remaining

At the end of Year 3, there is still $125 remaining from the original investment that has not been recouped. We need a part of the Year 4 cash inflow to pay back the rest. Therefore, the payback period in years is: 3 + ($125 / $1,625) = 3.08 years.

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Ryder Supplies has its stock currently selling at $63.25. The company is expected to grow at a constant rate of 7 percent. If the appropriate discount rate is 17 percent, what is the expected dividend, a year from now?a) 4.43 b) 3.25 c) 10.75 d) 6.33
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Which part or phrase in the passage describes a method of primary market research that Jeremy might choose?Jeremy works as a researcher for his employer. He will be conducting market research because his company plans to launch a new
product in the market. Jeremy hasn't decided on the type of research method that will help him accomplish the research task. He has
considered searching for available information in trade journals and newsletters. He also thinks that he could collect a group of
consumers and interview them personally to understand their opinions. He could also look for relevant data on business-related
websites. He has also considered referring to census reports and other publications that might help him with the research.

Answers

He also thinks that he could collect a group of consumers and interview them personally to understand their opinions.

This is the answer because in the primary market research you find people to do it for you and getting a group involves other people.

Answer:

The answer is B. I think.

Explanation:

The following information relates to year-end adjusting entries as of December 31, 2021. Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $6,660. Six months’ of the one-year insurance policy purchased on July 1 has expired. Four months of the one-year rental agreement purchased on September 1 has expired. Of the $1,000 of office supplies purchased on July 4, $300 remains. Interest expense on the $44,000 loan obtained from the city council on August 1 should be recorded. Of the $2,100 of racing supplies purchased on December 12, $110 remains. Suzie calculates that the company owes $13,900 in income taxes.

Answers

Question Completion:

Record the adjusting entries.

Answer:

Adjusting Journal Entries:

Debit Depreciation Expense - Mountain Bikes $6,660

Credit Accumulated Depreciation - Mountain Bikes $6,660

To record depreciation expense for the period.

Debit Insurance Expense $

Credit Prepaid Insurance $

To record the insurance expense for the period.

Debit Rental Expense $

Credit Prepaid Rental $

To record the rental expense for the period.

Debit Office Supplies Expense $700

Credit Office Supplies $700

To record office supplies expense for the period.

Debit Interest Expense $

Credit Interest Expense Payable $

To record interest expense on the $44,000 loan.

Debit Racing Supplies Expense $1,990

Credit Racing Supplies $1,990

To record racing supplies expense for the period.

Debit Income Tax Expense $13,900

Credit Income Tax Payable $13,900

To record income tax expense payable.

Explanation:

Adjusting journal entries are recorded in order to present elements of financial statements based on the accrual basis and not whether cash was paid or received.

In this question, some data were not provided. This is why some figures were not disclosed for Insurance Expense, Rental Expense, and Interest Expense. But, the accounting treatments remain valid. Only the figures are missing.

Final answer:

The subject of this question is Accounting. The year-end adjusting entries involve various financial transactions that need to be adjusted to reflect the company's financial position and performance. Examples include recording depreciation, recognizing expired insurance and rental agreement portions, adjusting remaining supplies and interest expense, and calculating income taxes owed.

Explanation:

The subject of this question is Accounting.

These year-end adjusting entries relate to various financial transactions such as depreciation, insurance, rental agreement, office supplies, interest expense, and racing supplies. The adjustments need to be made to accurately reflect the company's financial position and performance for the year.

Some examples of these adjustments are:

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At Bargain Electronics, it costs $30 per unit ($16 variable and $14 fixed) to make an MP3 player at full capacity that normally sells for $51. A foreign wholesaler offers to buy 3,580 units at $28 each. Bargain Electronics will incur special shipping costs of $3 per unit. Assuming that Bargain Electronics has excess operating capacity, indicate the net income (loss) Bargain Electronics would realize by accepting the special order. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Should the order be accepted or rejected?

Answers

Answer:

(17,900) net loss

Explanation:

51 - 16 = 35

Special order Contribution margin

28 sales price - 16 variable cost - 3 shipping cost = 9

Total contribution for the order

3,580 units x 9 CM= 32,220

3,580 x 14 fixed cost = (50,120)

(17,900) net loss

We should assume the fixed cost will increase because we are at full capacity.

Final answer:

Bargain Electronics would realize a loss of $17,300 by accepting the special order.

Explanation:

To determine the net income (loss) from accepting the special order, we need to calculate the cost of producing the units, including both variable and fixed costs, and subtract it from the revenue generated from selling the units to the foreign wholesaler. The cost to produce each unit is $16 variable cost + $14 fixed cost + $3 shipping cost = $33. So, the total cost to produce 3,580 units is $33 × 3,580 = $117,540.

The revenue from selling the units to the wholesaler would be 3,580 × $28 = $100,240. The net income (loss) is calculated by subtracting the total cost from the revenue: $100,240 - $117,540 = ($17,300). Therefore, Bargain Electronics would realize a loss of $17,300 by accepting the special order.

The primary topic of this question is calculating net income (loss) for a business.

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Assume that Jose is indifferent between investing in a corporate bond that pays 10 percent interest and a stock with no growth potential that pays an 9.7 percent dividend yield. Assume that the tax rate on dividends is 15 percent. What is Jose's marginal tax rate?a. 47%.b. 37%.c. 32%.d. 15%.e. None of these.

Answers

Answer:

e. None of these.

Explanation:

Step 1. Given information.

Taxable Dividend Yield = 9.7%

Tax rate on Dividend yield=15%

Interest rate=10%

Let Tax rate on Interest=X

Step 2. Formulas needed to solve the exercise.

Interest rate * (1 - x) = taxable dividend yield ( 1 - tax rate on dividend yield)

Step 3. Calculation.

0.10*(1-x)=0.097*(1-0.15)

0.10-0.10x=0.08245

0.10x=0.01755

x=0.01755/0.10

=0.1755

=17.55%

Step 4. Solution.

e. None of these.

) A homeowner is considering putting solar panels on the roof of his house. The installed cost of putting 3 kW of solar panels is $6000 and the panels come with a 25 year guarantee. The panels would be able to meet the average monthly electrical consumption of 850 kW-hrs for the house. a) If the homeowner has the $6000 available for the project, what would the cost of electricity from the power company need to be greater than ($/kW-hr) to make the project viable if other investments are providing 8% interest. ($0.0545/kW-hr) b) If the homeowner had to borrow the $6000 from the bank at 5% interest for 10 years (monthly payments) what would the cost of electricity need to be greater than in $/kWhr from the power company to make the project viable if other investments are providing 8% interest. ($0.0476/kW-hr)

Answers

Answer:

a) If the homeowner has the $6000 available for the project, what would the cost of electricity from the power company need to be greater than ($/kW-hr) to make the project viable if other investments are providing 8% interest. ($0.0545/kW-hr)

we can use the present value of an annuity formula:

PV = monthly savings x annuity factor

PV = $6,000
Annuity factor, 300 periods, 0.6667% = 129.52005

monthly savings = $6,000 / 129.52005 = $46.3249

price of kW-hr = $46.3249 / 850 = $0.054499851 ≈ $0.0545

b) If the homeowner had to borrow the $6000 from the bank at 5% interest for 10 years (monthly payments) what would the cost of electricity need to be greater than in $/kWhr from the power company to make the project viable if other investments are providing 8% interest. ($0.0476/kW-hr)

the monthly payment to cover the loan = PV / annuity factor

PV = $6,000
Annuity factor, 120 periods, 0.4167% = 94.28033

monthly payment = $6,000 / 94.28033 = $63.64

price of kW-hr = $63.64 / 850 = $0.074870588 ≈ $0.0749

Jill's Job Shop buys two parts (Tegdiws and Widgets) for use in its production system from two different suppliers. The parts are needed throughout the entire 52-week year. Tegdiws are used at a relatively constant rate and are ordered whenever the remaining quantity drops to the reorder level. Widgets are ordered from a supplier who stops by every four weeks. Data for both products are as follows: ITEMTEGDIWWIDGET Annual demand 11,000 8,000 Holding cost (% of item cost) 10% 20% Setup or order cost$110.00 $10.00 Lead time 4weeks 4week Safety stock 65units 7units Item cost$15 $8

Answers

Final answer:

The question discusses inventory management at Jill's Job Shop. For Tegdiws, a reorder level is calculated based on the annual demand, lead time, and the fact that orders are placed as soon as this level is reached. Widgets are ordered every four weeks, so the ordering quantity is determined considering the holding cost and safety stock.

Explanation:

The question revolves around the concept of inventory management at Jill's Job Shop. Given the figures, we're looking at two factors here- reorder level for Tegdiws and fixed interval time for ordering Widgets. The primary consideration is to minimize holding costs while ensuring enough quantity is available to meet demand throughout the year.

For Tegdiws, the reorder level must be calculated to ensure that when the remaining quantity reaches this level, a new order is placed. This level is typically the amount necessary to meet demand during the lead time. Given an annual demand of 11,000 units, a lead time of 4 weeks, and a 52-week year, the reorder level for Tegdiws would be around 846 units.

On the other hand, Widgets are ordered every four weeks, so the quantity of each order should be calculated to meet the four-week demand while considering the holding cost and safety stock. With an Annual demand of 8,000 units and a 52-week year, the quantity for each order of Widgets would be approximately 615 units.