BUSINESS COLLEGE

Kinslow Manufacturing Company paid a dividend yesterday of $2.50 per share. The dividend is expected to grow at a constant rate of 5% per year. The price of Kinslow's common stock today is $25 per share. If Kinslow decides to issue new common stock, flotation costs will equal $2.00 per share. Keys' marginal tax rate is 34%. Based on the above information, the cost of retained earnings is;

Answers

Answer 1
Answer:

Answer:

15.50%

Explanation:

The computation of the cost of retained earning is shown below:

As we know that

Price = Dividend × (1 + growth rate) ÷ (required rate of return - growth rate)

$25 = $2.50 × (1 + 0.05) ÷ (required rate of return - 5%)

$25 = $2.625  ÷ (required rate of return - 5%)

After solving the required rate of return is 15.50%

We simply applied the above formula to find out the cost of retained earning

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A useful economic model a. deals only with possibilities that actually occurred. b. will avoid conclusions that have public policy implications, because economists do not make value judgments. c. makes only realistic assumptions. d. may make some unrealistic assumptions in order to simplify a complex reality. g
Blue is the owner of all of the shares of an S corporation, and Blue is considering receiving a salary of $110,000 from the business. She will pay the 7.65% FICA taxes on the salary, and the S corporation will pay the same amount of FICA tax. Blue reduces her salary to $50,000 and takes an additional $60,000 as a cash distribution. How would her Federal income tax liabilities change
Shen has plans to go to an opera and already has a $100 nonrefundable, nonexchangeable, and nontransferable ticket. Now Valerie, whom Shen has wanted to date for a long time, asks him to a party. Shen would prefer to go to the party with Valerie and forgo the opera, but he doesn't want to waste the $100 he spent on the opera ticket. From the perspective of an economist, if Van decides to go to the party with Amy, what has he just done?1. Incorrectly allowed a sunk cost to influence his decision2. Made a choice that was not optimal3 Correctly ignored a sunk cost
1.Calculate the present value (PV ) of a cash inflow of $500 in one year, and a cash inflow of $1,000 in 5 years, assuming a discount rate of 15%.

Consider two products, X and Y, that have identical cost, retail price, and demand parameters and the same short selling season (the summer months from May through August). The newsvendor model is used to manage inventory for both products. Product X is to be discontinued at the end of the season this year and the leftover inventory will be salvaged at 75 percent of the cost. Product Y will be reoffered next summer, so any leftovers this year can be carried over to the next year while incurring a holding cost on each unit left over equal to 20 percent of the product's cost. The quantity of each product is selected to maximize expected profit. How do those quantities compare?

Answers

Answer: b. stocking quantity of product B is higher.

Explanation:

We are using the Newsvendor model and are told that the products have identical cost, retail price, and demand parameters and the same short selling season.

Using this model, it is important to understand 2 terminologies for this question, Overage cost and Underage costs.

Overage Costs is the cost of unused inventor and is calculated by subtracting Salvage Value from the cost price.

Underage costs are costs arising from unmet Demand. In this scenario they are the same because both products share the same demand.

The Overage costs for the products are,

Overage cost for Product X =100-75

=25%

Overage cost for Product Y = 20%

When deciding which product to stick more of we look at the one with the higher CRITICAL RATIO.

The formula of which is,

= Cu/(Cu+Co)

Where,

Cu is the Underage cost,

Co is the Overage cost

As earlier mentioned, both have the same Underage cost meaning that B will give a higher CRITICAL ratio as it's Co is smaller.

Product B should therefore be stocked more than Product A.

Answer:

Stocking quantity of product B is higher

Explanation:

Overage cost for Product A(Co)=100-75=25%

Overage cost for Product B (Co)=20%

The underage cost (Cu) for both the products is same hence critical ratio i.e, Cu/(Cu+Co) is lower for product A than Product B which means product B should will be stocked more compare to product A

So the correct answer will be stocking quantity of product B is higher

Dr. Evil presents the sound of a buzzer to his pet rabbit, and he follows it with the delivery of a small electric shock. After repeated pairings of the buzzer and shock, the rabbit learns to fear the sound of buzzers. Dr. Evil then proceeds to extinguish the rabbit’s fear of buzzers. Now suppose that, after extinction, Dr. Evil decides to present the buzzer and shock to the rabbit once again. After only one pairing, the rabbit will demonstrate __________ and fear the buzzer again.

Answers

Answer:

Reconditioning

Explanation:

Reconditioning means to "condition again" so the rabbit will demonstrate and condition the fear of the buzzer again.

You are head of the Schwartz Family Endowment for the Arts. You have decided to fund an arts school in the San Francisco Bay area in perpetuity. Every 3 ​years, you will give the school $ 1 comma 000 comma 000. The first payment will occur 3 years from today. If the interest rate is 10.1 % per​ year, what is the present value of your​ gift?

Answers

Answer:

PV=  $749,269.48

Explanation:

Giving the following information:

Every three years= $1000000

i= 10,1%

The first payment will occur 3 years from today.

We need to find what is the present value of the​ gift

Using the following formula:

PV= FV/[(1+i)^n)

PV= 1000000/[1,101^3]= $749,269.48

Horton Co. was organized on January 2, 2014, with 500,000 authorized shares of $10 par value common stock. During 2014, Horton had the following capital transactions: January 5-issued 375,000 shares at $14 per share.
July 27-purchased 25,000 shares at $11 per share.
November 25-sold 18,000 shares of treasury stock at $13 per share.

Horton used the cost method to record the purchase of the treasury shares. What would be the balance in the Paid-in Capital from Treasury Stock account at December 31, 2014?

Answers

Answer:

The balance in the Paid-in Capital from Treasury Stock account at December 31, 2014 is $36,000

Explanation:

The computation of the balance in the treasury stock account is shown below:

= Number of shares sold × (Selling price of share - purchase price of share)

= 18,000 shares × ($13 per share - $11 per share)

= 18,000 shares × $2 per share

= $36,000

The other items which are mentioned like issued shares, authorized shares are irrelevant because we have to compute for the treasury stock, not for the common stock. So, these parts would be ignored in the computation part.

Suppose a 15 to 18-year-old male from Chile was 176 cm tall from 2009 to 2010. The z-score when x = 176 cm is z = _______. This z-score tells you that x = 176 cm is ________ standard deviations to the ________ (right or left) of the mean _____ (What is the mean?)

Answers

Answer:

z = 0.96, standard deviations to the right of the mean 170 cm

Explanation:

z= (176 - 170)/(0.96)

x = 176 cm is 0.96, standard deviations to the right of the mean 170 cm

Preparing a Sales Budget Patrick Inc. sells industrial solvents in 5-gallon drums. Patrick expects the following units to be sold in the first three months of the coming year: January 41,000 February 38,000 March 50,000 The average price for a drum is $35. Required: Prepare a sales budget for the first 3 months of the coming year, showing units and sales revenue by month and in total for the quarter. Do not include a multiplication symbol as part of your answer. Patrick Inc. Sales Budget For the Coming Quarter January February March 1st Quarter Total Units Price $ $ $ $ Sales $ $ $ $

Answers

Answer:

Patrick Inc.      

Sales Budget    

For the First Quarter    

January February March Total Quarter 1

Sale Units  41,000   38,000   50,000   129,000  

Average Selling Price per Unit $35.00  $35.00  $35.00  

Sales Value   $1,435,000   $1,330,000   $1,750,000   $4,515,000  

Explanation:

The Sales unit for each month is multiplied by its average sales price for e.g for January (41,000 units × by $35 = $ 1,435,000)

The Quarter totals (Units and sales Values in $) are added up to give the answer under the heading of Total Quarter 1.

The working is also attached with the answer.

Final answer:

For Patrick Inc., the sales budget for the first quarter is calculated by multiplying the expected units sold each month by the average price per unit. The total sales for the first quarter amount to $4,515,000.

Explanation:

Preparing a sales budget for Patrick Inc. involves multiplying the units sold each month by the price per unit. The average price for a 5-gallon drum of industrial solvent is $35.

For January: 41,000 units * $35/unit = $1,435,000.

For February: 38,000 units * $35/unit = $1,330,000.

For March: 50,000 units * $35/unit = $1,750,000.

Adding these amounts will give the total revenue for the 1st Quarter: $1,435,000 (January) + $1,330,000 (February) + $1,750,000 (March) = $4,515,000.

So, the sales budget for the first quarter would be as follows:
January: $1,435,000
February: $1,330,000
March: $1,750,000
Total first Quarter: $4,515,000.

Learn more about Sales Budget here:

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