Answer:
b. 10% doubling
Explanation:
Options are "a. tripling, b. 10% doubling, c. 90% tripling, d. 90% doubling, e. 10%"
In this question, 90%(0.9) learning rate means that (1-0.9)10% unit of input is reduced each time the production is doubled. In a nutshell, the learning curve percentage represents the proportion by which the amount of an input per unit of output is reduced each time production is doubled.
Answer:
$168,000
Explanation:
Depreciation expense using the double declining method = Depreciation factor x cost of the asset
Depreciation factor = 2 x (1/useful life)
Depreciation factor = 2 x (1/10) = 0.2
depreciation expense in year 1 = 0.2 x $1,050,000 =$210,000
book value at the beginning of year 2 = $1,050,000 - $210,000 = $840,000
depreciation expense in year 2 = 0.2 x $840,000 = $168,000
Answer:
b. spending by individuals and households on only non-durable goods.
Explanation:
Consumption spending is spending by individuals and households on only non-durable goods. Consumption is a component of GDP which includes spending on goods and services by individuals and households as it includes non-durable as well as durable goods on the basis of consumption patterns.
Balance, 1/1/2017 290 $5.00 $1450
Purchase, 1/15/2017 140 ..5.10 714
Purchase, 1/28/2017 140 ..5.30 742
An end of the month (1/31/2017) inventory showed that 230 units were on hand. If the company uses LIFO, what is the value of the ending inventory?
Answer:
Ending inventory= $1706
Explanation:
Giving the following information:
Units Per unit price Total
1/1/2017: 290 *$5.00= $1450
1/15/2017: Purchase, 140*$5.10= $714
1/28/2017: Purchase, 140*$5.30= $742
At the end of the month (1/31/2017) inventory showed that 230 units. If the company uses LIFO (last-in, first-out)
Ending inventory= 140*5.30+140*5.10+50*5= $1706
Steel 1.18 30%
Financial
Services 1.14 70%
The average tax rate for these industries is 40%.
In the most recent period, the company you are analyzing earned 70% of its operating income from steel and 30% from financial services. The firm also had a debt/equity ratio of 150%, and a tax rate of 30%. Estimate the levered beta for the company.
Answer:
The levered beta for the company is 1.93.
Explanation:
Levered beta for the company = (Weight of steel business*levered beta of steel business) + (Weight of financial services business*levered beta of financial services business)
Levered beta of steel business = Unlevered beta of steel sector*[1+(1 - firm's tax rate)*(firm's debt/equity ratio)
levered beta of financial services business = Unlevered beta of financial services sector*[1+(1 - firm's tax rate)*(firm's debt/equity ratio)
Unlevered beta of steel sector = Current beta of steel sector/[1+(1 - avg. tax rate of firms in the sector)*(Avg. debt/equity ratio of the sector)
Unlevered beta of steel sector = 1.18/[1+((1-0.4)*0.3)]
Unlevered beta of steel sector = 1.18/[1+(0.6*0.3)]
Unlevered beta of steel sector = 1.18/(1+0.18)
Unlevered beta of steel sector = 1.18/1.18
Unlevered beta of steel sector = 1
Levered beta of steel business = 1*[1+((1-0.3)*1.5)]
Levered beta of steel business = 1*[1+(0.7*1.5)]
Levered beta of steel business = 1*(1+1.05)
Levered beta of steel business = 1*2.05
Levered beta of steel business = 2.05
Unlevered beta of financial services sector = Current beta of financial services sector/[1+(1 - avg. tax rate of firms in the sector)*(Avg. debt/equity ratio of the sector)
Unlevered beta of financial services sector = 1.14/[1+((1-0.4)*0.7)]
Unlevered beta of financial services sector =1.14/[1+(0.6*0.7)]
Unlevered beta of financial services sector = 1.14/(1+0.42)
Unlevered beta of financial services sector = 1.14/1.42
Unlevered beta of financial services sector = 0.80
Levered beta of financial services business = 0.8*[1+((1-0.3)*1.5)] = 0.8*[1+(0.7*1.5)] = 0.8*(1+1.05) = 0.8*2.05 = 1.64
Levered beta for the company = (0.7*2.05) + (0.3*1.64)
Levered beta for the company = 1.44 + 0.49
Levered beta for the company = 1.93
Hence, the levered beta for the company is 1.93.
To estimate the levered beta for a company with operations in multiple sectors - steel and financial services in this case - you take a weighted average of the sector betas based on earnings distribution to get the unlevered beta. You then adjust for the company's debt/equity ratio and tax rate to get the levered beta. The estimated levered beta for this company is 2.378.
To estimate the levered beta for the company, we first need to consider the betas for each of the sectors the company operates in - steel and financial services. Given the firm's earnings distribution, the unlevered beta is computed as 0.7*Steel Beta + 0.3*Financial Services Beta = 0.7*1.18 + 0.3*1.14 = 1.16.
Next, to calculate the levered beta, we need to factor in the firm's debt/equity ratio. We use the formula for the levered beta: Levered Beta = Unlevered Beta * (1 + (1 - Tax Rate) * D/E ratio). Substituting the values we have: Levered Beta = 1.16 * (1 + (1 - 0.3) * 1.5) = 1.16 * 2.05 = 2.378. Therefore, the estimated levered beta is 2.378.
#SPJ11
Answer: Please see below
Explanation: The values from the question are scattered, but here is how they should appear
Case A Case B Case C
Net income $310,000 15,000 $420,000
Depreciation expense 40,000 150,000 80,000
Accounts receivable increase
(decrease 100,000 (200,000) (20,000)
Inventory increase (decrease) (50,000) 35,000 50,000
Accounts payable increase (50,000) 120,000 70,000
Accrued liabilities increase
(decrease) 60,000 (220,000) (40,000)
To calculate the operating activities section of cash flows for each of the given cases,
we use the Indirect method formula
Net cash flow from operating actvities = Net Income + Non-Cash Expenses – Increase in Working Capital
Net cash flow from operating actvities =Net Income +/- Changes in Assets & Liabilities + Non-Cash Expenses
Net cash flow from operating actvities = Net Income + Depreciation + Stock Based Compensation + Deferred Tax + Other Non Cash Items – Increase in Accounts Receivable – Increase in Inventory + Increase in Accounts Payable + Increase in Accrued Expenses + Increase in Deferred Revenue
Following the formulae above, we can determine what expense should be added or subtracted to give the operating activities of cash flow below as
Case A Case B Case C
Net Income $310,000 15,000 $420,000
Net Income Adjustments to Reconcile Net Income to net Cash provided by operating activities
Depreciation 40,000 150,000 80,000
Changes in Assets and Liabilities
Accounts Receivable - 100,000 200,000 20,000
Inventory 50,000 -35,000 - 50,000
Accounts Payable -50,000 120,000 70,000
Accrued Liabilities 60,000 - 220,000 -40,000
Net Cash Provided by Operating Activities
$310,000 $230,000 $500,000
Answer:
According to law, the gift in lifetime means that the asset is legally owned by the person who receives the gift. But in this case, Larry has died and had left his assets behind which has to be distributed according to his will statement and the residue will belongs to his family members. The first thing here is the inheritance tax payment on these assets must be paid by the Owner Kari to have the right to use this asset.