The new CFO thinks that inventories are excessive and could be lowered sufficiently to cause the current ratio to equal the industry average, 2.85, without affecting either sales or net income. Assuming that inventories are sold off and not replaced to get the current ratio to the target level, and that the funds generated are used to buy back common stock at book value, by how much would the ROE change
Answers
Answer:
4.50%
Explanation:
Note: Question is incomplete but very similar one is attached as picture below
Current ROE = Net Income / Equity = $21,000 / $280,000 = 7.50%
Current Inventory = $210,000
Target Current ratio = 2.70
1. Current assets at target Current ratio = Current Liabilities * Target current ratio = $70000 * 2.70 = $189,000
2. Reduction in Inventories = Present Current assets - Current assets under target current ratio
Reduction in Inventories = $14000 + $70000 + $210000 - $189000
Reduction in Inventories = $105000
3. Reduction on common equity using sale of inventory = Current Equity - reduction
Reduction on common equity using sale of inventory = $280,000 - $105,000
Reduction on common equity using sale of inventory = $175,000
4. Change in ROE = New ROE - Current ROE
Change in ROE = [21000 / 175000] - 7.50%
Change in ROE = 12% - 7.50%
Change in ROE = 4.50%
Related Questions
On the same day that the sales department at Duffin House received an order for 500 packages from the OHaganBooks Texas headquarters, it received an additional order for 150 packages from FantasyBooks, based in California. Duffin House has warehouses in New York and Illinois. The New York warehouse has 500 packages in stock, but the Illinois warehouse is closing down and has only 250 packages in stock. Shipping costs per package of books are as follows: New York to Texas: $20; New York to California: $50; Illinois to Texas: $30; Illinois to California: $40. What is the lowest total shipping cost for which Duffin House can fill the orders
Answers
Answer:
Duffin House
The lowest total shipping cost for which Duffin House can fill the orders is:
= $16,000.
Explanation:
a) Data and Calculations:
Orders received from OHaganBooks, Texas = 500 packages
Orders received from FantasyBooks, California = 150 packages
No. of packages in stock at New York Warehouse = 500
No. of packages in stock at Illinois Warehouse = 250
Shipping cost:
New York to Texas: $20;
New York to California: $50;
Illinois to Texas: $30;
Illinois to California: $40
Lowest shipping cost arrangement:
500 packages from New York to Texas at $20 = $10,000
150 packages from Illinois to California at $40 = $6,000
Total shipping cost = $16,000
Other shipping cost arrangement:
150 packages from New York to California at $50 = $7,500
350 packages from New York to Texas at $20 = $7,000
150 packages from Illinois to Texas at $30 = $4,500
Total shipping cost under this arrangement = $19,000
b) The key in making this shipping arrangement is to identify the lowest shipping cost per package. The order that attracts this shipping cost is taken first. Then identify the next lowest shipping cost that is feasible and have the order fulfilled accordingly.
25 points !Please answer thank you !!!!
Answers
Answer: The 3rd one
Explanation: (i think) because it talks about shoes and a graph usually shows the growth in a company or product
To tolerate a risk is to simply ignore it? true or false
Answers
Answer:
False
Explanation:
if you ignored it it would get worse and if you ignore you might get hurt aswell.
The Video Rental Center purchased 24 dozen video tapes of a blockbuster new movie, at a cost of $20 per tape, to sell during the Christmas season.
a. How many individual tapes did video rental center buy?
Answers
Answer:
228 units.
Explanation:
One dozen has 12 units
The video center purchased 24 dozens
In total, they pruchased
= 24 x 12 units
=228 units.
Each tapes cost $20. So they paid
=288 x 20
=$5,760
Splish Brothers Music School borrowed $28,200 from the bank signing a 6%, 6-month note on November 1. Principal and interest are payable to the bank on May 1. If the company prepares monthly financial statements, what adjusting entry should the company make at November 30 with regard to the note (round answer to the nearest dollar)
Answers
Answer:
Dr Interest expense $141
($28,200 * 6% * 1 month / 12 months)
Cr Interest payable $141
Explanation:
Preparation of the adjusting entry that the company should make at November 30 with regard to the note.
Based on the information given the adjusting entry that the company should make at November 30 with regard to the note will be :
Dr Interest expense $141
($28,200 * 6% * 1 month / 12 months)
Cr Interest payable $141
Luis has an obligation to pay a sum of $3,000 in four years from now and a sum of $5,000 in six years from now. His creditor permits him to discharge these debts by paying $X in two years from now, $1000 in three years from now, and a final payment of $2X in nine years from now. Assuming an annual effective rate of interest of 8%, find X
Answers
Answer:
The value of X is 2455.77
Explanation:
Given the data in the question;
annual effective rate of interest of 8%, = 0.08
Now, we discount all the ash flows to present value, so we get;
3000×[tex]\frac{1}{(1 + 0.08)^{4} }[/tex] + 5000×[tex]\frac{1}{(1 + 0.08)^{6} }[/tex] = X×[tex]\frac{1}{(1 + 0.08)^{2} }[/tex] + 1000×[tex]\frac{1}{(1 + 0.08)^{3} }[/tex] + 2X×[tex]\frac{1}{(1 + 0.08)^{9} }[/tex]
2,205.089 + 3,150.84 = 793.83 + X( [tex]\frac{1}{(1 + 0.08)^{2} }[/tex] + [tex]\frac{1}{(1 + 0.08)^{9} }[/tex] )
5355.929 - 793.83 = X( 0.8573 + 1.0004 )
4,562.099 = X( 1.8577 )
X = 4,562.099 / 1.8577
X = 2455.77
Therefore; value of X is 2455.77
What are two factors used to determine a credit score? Explain how they indicate good or poor credit. Write in complete
sentences
Answers
Answer:
Payment history: Lenders are most concerned about whether or not you pay your bills on time.
Amounts owed: The amount of debt you have in comparison to your credit limits affects your credit. the higher the debt the riskier you seem to a potential creditor.
Length of credit history: Having a longer credit history is favorable because it gives them a more favorable picture that you have built credit over the years with other creditors.
New credit: In general, people who open many new credit accounts in a short amount of are considered a high risk. Too many new accounts can negatively impact your credit score.
Explanation:
Why are credit card companies more willing to offer a young person a secure
credit card than an unsecured card?
Answers
Answer:
Some of the best credit cards for college students often include secured credit cards because approval rates are high on these cards. Secured credit cards for families with no credit or poor credit are great for building up good credit with minimal risk compared to unsecured cards
Explanation:
hich best explains how the law of demand affects consumers?
It helps consumers know when prices are going down.
It helps consumers know when prices are going up.
It helps consumers tell producers when prices are too high.
It helps consumers tell producers when to make new goods.
Answers
Answer:
It helps consumers tell producers when prices are too high.
Explanation:
The law of demand affirms that an increase in price results in reduced demand. It means that when prices increase, consumers will buy fewer quantities of a product or service. The law of demand shows the relationship between price and the quantity of a product consumers are willing to buy in the market.
Consumers can communicate with producers through the volume of products purchased. When the quantity purchased is low, producers will know the set prices are high.
A W-2 form is a record showing an employee's personal payroll
information, yearly earnings, and deductions.*.
True
Or
False
Answers
Answer:
True
Explanation:
6. Microeconomics and macroeconomics Determine whether each of the following topics would more likely be studied in microeconomics or macroeconomics. Microeconomics Macroeconomics The effect of an increase in the money supply on the rate of inflation The effect of government regulation on a monopolist's production decisions The effect of federal government spending on the national unemployment rate
Answers
Answer:
Microeconomics has to do with individual households and firms and the decisions they make in an economic setting.
Macroeconomics on the other hand deals with the economy as a whole which means that figures are more aggregated here.
The effect of an increase in the money supply on the rate of inflation. MACROECONOMICS.
This has to do with how the entire economy will be affected as a result of a change in money supply so is Macroeconomics.
The effect of government regulation on a monopolist's production decisions. MICROECONOMICS.
This relates to how government regulation will affect an individual monopolist so is Microeconomics.
The effect of federal government spending on the national unemployment rate. MACROECONOMICS.
This has to do with the national unemployment rate which is an aggregated figure to represent unemployment as a whole in the economy so this is most definitely Macroeconomics.
An investor has up to $250,000 to invest in three types of in-vestments. Type A pays 8% annually and has a risk factor of0. Type B pays 10% annually and has a risk factor of 0.06.Type C pays 14% annually and has a risk factor of 0.10. Tohave a well-balanced portfolio, the investor imposes the fol-lowing conditions. The average risk factor should be nogreater than 0.05. Moreover, at least one-fourth of the totalportfolio is to be allocated to Type A investments and at leastone-fourth of the portfolio is to be allocated to Type B invest-ments. How much should be allocated to each type of invest-ment to obtain a maximum return?
Answers
Answer:
Answer is explained below in the explanation section.
Explanation:
Solution:
An investor has up to $250,000 to invest in three types of investment.
Type A pays 8% annually and has risk factor of 0.
Type B pays 10% annually and has risk factor of 0.06.
Type C pays 14% annually and has risk factor of 0.10.
So,
Decision Variables are:
[tex]X_{1}[/tex] = Total Amount invested in Type A.
[tex]X_{2}[/tex] = Total Amount invested in Type B.
[tex]X_{3}[/tex] = Total Amount invested in Type C.
So, the Objective Function will be:
Objective function:
Max Z = 0.08[tex]X_{1}[/tex] + 0.10[tex]X_{2}[/tex] + 0.14[tex]X_{3}[/tex]
And the Constraints will be:
1. Total Amount Variable:
[tex]X_{1}[/tex] + [tex]X_{2}[/tex] + [tex]X_{3}[/tex] [tex]\leq[/tex] 250000
2. Total Risk is no greater than 0.05:
0[tex]X_{1}[/tex] + 0.06[tex]X_{2}[/tex] + 0.10[tex]X_{3}[/tex] [tex]\leq[/tex] 0.05
3. At least one fourth of the total amount invested to be allocated to Type A investment.
[tex]X_{1}[/tex] [tex]\geq[/tex] 0.25 ( [tex]X_{1}[/tex] + [tex]X_{2}[/tex] + [tex]X_{3}[/tex] )
0.75[tex]X_{1}[/tex] - 0.25[tex]X_{2}[/tex] - 0.25[tex]X_{3}[/tex] [tex]\geq[/tex] 0
4. At least one fourth of the total amount to be allocated to Type B investment.
[tex]X_{2}[/tex] [tex]\geq[/tex] 0.25 ( [tex]X_{1}[/tex] + [tex]X_{2}[/tex] + [tex]X_{3}[/tex] )
-0.25[tex]X_{1}[/tex] + 0.75[tex]X_{2}[/tex] - 0.25[tex]X_{3}[/tex] [tex]\geq[/tex] 0
5. And the non- negativity constraints are:
[tex]X_{1}[/tex],[tex]X_{2}[/tex], and [tex]X_{3}[/tex] [tex]\geq[/tex] 0
How important are communication skills in project management? 2. Was Herb the right person to be assigned as the project manager? 3. There were communications issues with Alice, Bob, Betty, and Frank. For each communication issue, where was the breakdown in communications: encoding, decoding, feedback, and so on?
Answers
Answer:
1)
Communication plays a very important role in any of the project.
1.Good communication helps the project to complete in hassle free way.
2.If communication is clear, the project complete its deadline without any failure of delivering .
3.Proper communication also reduces the redundancy of data and ensures effective working of project.
If the present case study is considered, there is a communication gap between the team members because of which Herb faced a lot of problems.
If the communication is clear, then it surely helped Herb to do things better.
Hence communication skills are very important part in any project management.
2)
Yes, herb is the right person to be assigned as the project manager.
Because he has experience of 8 years due to which his company has believed in him. Herb is considered a subject matter expert and a Ph.D holder with knowledge of working in both R&D and manufacturing projects earlier. His experience and knowledge would definitely be an asset to the project, if the communication gets better. This will also help the company to enhance their business.
3)
Yes, there were communication issues with all the four team members.
In the case of Alice, there is a encoded message that she expects that Herb would be writing a recommendation mail for her promotion.
In case of Bob, there is a lack of feedback as Herb didn’t get the required follow up from the technicians.
In case of Betty, there is a problem in decoding Herb’s message of just determining the cost of procurement because of which Betty has actually procured the materials.
The case of Franck , there is feedback issue and that could been better in procuring the materials which did not actually happen.
A company that manufactures air-operated drain valve assemblies currently has $100,000 available to pay for plastic components over a 5-year period. If the company spent only $52,000 in year 1, what uniform annual amount can the company spend in each of the next 4 years to deplete the entire budget
Answers
Answer:
$18,297.31
Explanation:
The computation of the uniform amount that could be spend is shown below"
Here we determine the PMT
Given that
We assume the RATE = 10%
NPER = 5 - 1 = 4
PV = $100,000 × 1.1 - $52,000
= $110,000 - $52,000
= $58,000
FV = $0
The formula is given below:
= PMT(RATE,NPER,PV,FV,0)
The present value comes in negative
After applying the above formula, the uniform annual amount is $18,297.31
what is the acronym of MHA
Answers
no body know hahahaga
Explanation:
yeah
Answer:
The last Masters degree that we will take a look at today includes the M.H.A., or Master of Health Administration.
The broadcast news test advises corporate executives to _______. Multiple Choice Make certain that the things they do that are questionable do not end up on the front page of the newspaper or in the media to preserve the appearance of good ethics and meet the bottom line goal of profits Test all corporate policy by the standards of good publicity; that is, only do those things that will increase corporate bottom line profits by leading to good publicity Only do those things in secret that you would not mind becoming public, that is, showing up in the broadcast news All of the answer choices are correct
Answers
Answer: Make certain that the things they do that are questionable do not end up on the front page of the newspaper or in the media to preserve the appearance of good ethics and meet the bottom line goal of profits
Explanation:
The broadcast news test is simply defined as the approach taken in a company to ensure that it's employees are acting in an ethical manner.
The broadcast news test advises corporate executives to make certain that the things they do that are questionable do not end up on the front page of the newspaper or in the media to preserve the appearance of good ethics and meet the bottom line goal of profits.
Assume that in 2018, the first edition of a comic book was sold at auction for $762,400. The comic book was originally sold in 1938 for $.05. For this to have been true, what was the annual increase in the value of the comic book
Answers
Answer:
See below
Explanation:
The above is calculated using;
A = P(1 + r/100)^n
Where
A = Future value
P = Present value
r = rate of interest
n = time period
762,400 = 0.05(1 + r/100) ^ 80
(762,400/0.05)^(1/80) = 1 + r/100
does anyone know the accounting cycle???
Answers
uppose the annual demand function for the Honda Accord is Qd = 430 – 10 PA + 10 PC – 10 PGwhere PA and PC are the prices of the Accord and the Toyota Camry respectively (in thousands), and PGis the price of gasoline (per gallon). What is the elasticity of demand of the Accord with respect to the price of Camry when both cars sell for $20,000 and fuel costs $3 per gallon? What is the elasticity with respect to the price of gasoline?
Answers
Answer:
Qd = 400 units
elasticity of demand of the Accord with respect to the price of Camry = 0.5
elasticity with respect to the price of gasoline = -0.075
Explanation:
Solution:
The annual demand function for the Honda Accord is:
Qd = 430 – 10 PA + 10 PC – 10 PG
Where,
PA = Price of Honda Accord
PC = Price of Honda Camry
PG = Price of Gasoline per gallon.
Selling Price of both cars = $20,000
Fuel Cost = $3 per gallon.
a) Elasticity of Demand of the Accord with respect to the price of Camry.
First, we need to calculate the number of units demanded.
Qd = 430 – 10 PA + 10 PC – 10 PG
Qd = 430 – 10 (20) + 10 (20) – 10 (3.00)
Qd = 430 - 200 + 200 - 30
Qd = 430 - 30
Qd = 400 units
Cross-price elasticity of the Accord with respect to the price of the Camry will be:
Cross Price = (dQd/dPC) x (PC)/(Qd)
dQd/dPC = 10
PC = 20
Qd = 400
So,
Cross Price = 10* 20/400
Cross Price = 0.5
b) Elasticity with respect to the price of gasoline?
Elasticity = (dQd/dPG)*(PG/Qd)
dQd/dPG = -10
PG = 20
Qd = 400
Elasticity = (-10)*(3/400)
Elasticity = -0.075
a) The Qd is = 400 units
b) When The elasticity of demand of the Accord regarding the price of Camry is = 0.5 then elasticity concerning the price of gasoline is = -0.075
Calculation Elasticity of demand
When The annual demand function for the Honda Accord is:
Then Qd = 430 – 10 PA + 10 PC – 10 PG
Where,
PA is = Price of Honda Accord
PC is = Price of Honda Camry
PG is = Expense of Gasoline per gallon.
Selling Price of both cars is = $20,000
Fuel Cost is = $3 per gallon.
a) When the Elasticity of Demand of the Accord about the price of Camry.
First, we need to estimate the number of units demanded.
Qd is = 430 – 10 PA + 10 PC – 10 PG
Qd is = 430 – 10 (20) + 10 (20) – 10 (3.00)
Qd is = 430 - 200 + 200 - 30
Qd is = 430 - 30
Qd is = 400 units
When the Cross-price elasticity of the Accord with respect to the price of the Camry will be:
Cross Price is = (dQd/dPC) x (PC)/(Qd)
dQd/dPC is = 10
PC is = 20
Qd is = 400
So,
Cross Price is = 10* 20/400
Cross Price is = 0.5
b) When is the Elasticity affecting the price of gasoline?
Elasticity is = (dQd/dPG)*(PG/Qd)
dQd/dPG = -10
PG = 20
Qd is = 400
Elasticity is = (-10)*(3/400)
Elasticity is = -0.075
Find out more information about Elasticity of demand here:
https://brainly.com/question/14997249
Nico is interested in buying a franchise from Oz Inc. For Nico to make an informed decision concerning this purchase, Oz must disclose in writing or online:a.general estimates of costs and sales, but not the basis for them.b.material facts such as the basis of projected earnings figures.c.no information.d.the money the franchisor makes from all its franchise sales.
Answers
Answer: b.material facts such as the basis of projected earnings figures.
Explanation:
A franchise simply means when a company allows another company to use it's brand and name in order to help the distribution of its products. The franchisee in this case pays a certain amount to the franchisor.
Bare on the above situation in the question, Oz must disclose in writing or online material facts such as the basis of projected earnings figures.
CULLUMBER COMPANY
Trial Balance
June 30, 2017
Debit Credit
Cash $ 5,240
Accounts Receivable $ 5,340
Supplies 2,150
Equipment 5,150
Accounts Payable 5,836
Unearned Service Revenue 2,550
Common Stock 11,150
Dividends 800
Service Revenue 5,630
Salaries and Wages Expense 3,530
Utilities Expense 945 $20,465 $27,856
Each of the listed accounts has a normal balance per the general ledger. An examination of the ledger and journal reveals the following errors:______.
1. Cash received from a customer on account was debited for $760, and Accounts Receivable was credited for the same amount. The actual collection was for $706.
2. The purchase of a printer on account for $340 was recorded as a debit to Supplies for $340 and a credit to Accounts Payable for $340.
3. Services were performed on account for a client for $900. Accounts Receivable was debited for $90 and Service Revenue was credited for $900.
4. A debit posting to Salaries and Wages Expense of $735 was omitted.
5. A payment on account for $206 was credited to Cash for $206 and credited to Accounts Payable for $260.
6. Payment of a $600 cash dividend to Cullumber Company's stockholders was debited to Salaries and Wages Expense for $600 and credited to Cash for $600.
Prepare a correct trial balance.
CULVER CO.
TRIAL BALANCE
JUNE 30, 2017
Debit Credit
Cash
Accounts Receivable
Supplies
Equipment
Accounts Payable
Unearned Service Revenue
Common Stock
Retained Earnings
Service Revenue
Salaries and Wages Expense
Office Expense
Dividends
Totals
Answers
Answer:
Realidades 2 WKBK page 109
Explanation:
Realidades 2 WKBK page 109
What kind of economy uses a free-enterprise system?
Answers
Answer:
The U.S. economy is a free enterprise system.
Explanation:
That means that individuals — and not the government — own most of our country's resources.
Cranston LTD. prepares its financial statements according to International Financial Reporting Standards. In October 2021, the company received a $5 million government grant. The grant represents 20% of the total cost of equipment that will be used to improve the roads in the local area. Cranston recorded the grant and the purchase of the equipment as follows: Cash 5,000,000 Revenue 5,000,000 Equipment 25,000,000 Cash 25,000,000 Required: 2. Prepare the correcting entries required under the two alternative accounting treatments allowed under IFRS.
Answers
Answer:
Alternative 1:
Debit Revenue $5,000,000
Credit Equipment $5,000,000
Alternative 2:
Debit Revenue $5,000,000
Credit Deferred revenue $5,000,000
Explanation:
Preparation of the correcting journal entries required under the two alternative accounting treatments allowed under IFRS
Based on the information given if in the October 2021, the company received the amount of $5 million as government grant in which we were told that the grant represents 20% of the total cost of equipment which means that the correct journal entries required under the two alternative accounting treatments allowed under IFRS will be :
Alternative 1:
Debit Revenue $5,000,000
Credit Equipment $5,000,000
Alternative 2:
Debit Revenue $5,000,000
Credit Deferred revenue $5,000,000
Pamela, the manager of an electronics store in California, has redesigned the jobs of her sales staff so that they have the authority to resolve customer complaints without first getting the approval from management. (In the past, sales staff did not have the authority to issue refunds or replace merchandise). Which job design technique does this represent
Answers
Answer:
Job enrichment
Explanation:
Job enrichment is defined a a way of working in an organisation where the individual is motivated to employ their skill in solving problems and working with clients.
In this system employees have some autonomy on how to resolve customer problem.
Thereby fostering accountability and sense of responsibility non the staff.
In the given scenario sales staff now have have the authority to resolve customer complaints without first getting the approval from management.
This is Jobe enrichment strategy.
During 2019, Zigma Company earned service revenue amounting to $800,000, or which $645,000 was collected in cash; the balance will be collected in January 2020. Also in 2019, there were collections of cash prior to the delivery of goods/services totaling $11,100. What amount should the 2019 income statement report for service revenue
Answers
Answer:
$800,000
Explanation:
Given that;
Sales revenue = $800,000
Cash collected = $645,000
Remaining amount cash collected in January = $155,000
And the delivery of goods is $11,100
Here, since the service revenue earned is $800,000 and same amount would be reported under the income statement, other items given would be ignored.
It therefore means that the sum of $800,000 should be the 2019 income statement report for service revenue.
Arrange the types of investments in the correct order from the least risky to the most risky investment. property
bonds
starting a business
mutual funds
Answers
Answer:
Bonds
property
speculative bonds
starting a business
Explanation:
Bonds are low-risk investments. They are issued by governments or highly reputable corporations. The returns from bond investments are almost guaranteed.
Property refers to investing in land or building. They are low-risk investments. Land is always appreciating in value. The possibility of incurring losses is low.
Speculative bonds will experience price fluctuations during a trading session. They offer a chance to make high returns. They are risky due to the high chances of incurring losses.
Starting a business is the riskiest. Almost 82% of all start-ups will fail in their first year.
Answer:
bonds
mutual funds
starting a business
Explanation:
Hopes this helps :)
Please help ASAP!
Zeke had great fun as a kid running a lemonade stand, and his ideas helped his class reach their fundraising goal for the class trip last year. What career cluster might Zeke be interested in?
A. Information Technology
B. Human Services
C. Science, Technology, Engineering, and Mathematics
D. Marketing, Sales, and Service
Answers
Hope this helps :)
Answer: the correct answer is d
Explanation:check for yourself
Sonor Systems undertakes its own machine maintenance. The depreciation on the equipment is $20,000 per year and operating cost is $2 per machine hour. Last year 275,000 machine hours were used to produce 100,000 units. If 300,000 machine hours had been worked last year, what would be the total machine maintenance cost
Answers
Answer:
$570,000
Explanation:
Total machine maintenance cost calculation.
Depreciation expenses $20,000
Operating cost
($275,000 MH × $2). $550,000
Total machine machine maintenance cost $570,000
Therefore, the total machine maintenance cost of the machine is $570,000
Suppose that Boeing Corporation exported a Boeing 747 to Lufthansa and billed €10 million payable in one year. The money market interest rates and foreign exchange rates are given as follows: Picture Assume that Boeing sells a currency forward contract of €10 million for delivery in one year, in exchange for a predetermined amount of U.S. dollar. Which of the following is (or are) true? On the maturity date of the contract Boeing will: (i) have to deliver €10 million to the bank (the counterparty of the forward contract) (ii) take delivery of $14.6 million (iii) have a zero net euro exposure (iv) have a profit, or a loss, depending on the future changes in the dollar-euro exchange rate, from this German (euro currency zone) sale Group of answer choices (i) and (iv) (ii) and (iv) (ii), (iii), and (iv) (i), (ii), and (iii)
Answers
Answer:
All Choices (i) (ii) and (iii) except (iv) are correct.
Explanation:
Solution:
Choices (i) (ii) and (iii) are correct in this question.
As we know that, it is a forward contract at the time of maturity so, Boeing 747 will have to deliver 10 million euros to the bank as per the forward contract obligation (fulfills the choice (i)). Furthermore, with forward currency, after selling 10 million euro worth of contract, Boeing 747 will take delivery at 14.6 million dollars which is in US dollars as currency exchange (fulfills the choice (ii)). Hence, after maturity it will not have any exposure to euro (fulfills the choice (iii)).
Hence, All Choices (i) (ii) and (iii) except (iv) are correct.
Chang and Smith Tours has the following balance sheets: 2018 2019 Assets Cash $209 $197 Accounts Receivable 684 726 Inventory 918 1,023 Net Fixed Assets 2,014 1,944 Total Assets $3,825 $3,890 Liabilities and Equity Accounts Payable $748 $818 Notes Payable 306 300 Long-Term Debt 1,647 1,724 Stockholders' Equity 1,118 1,048 Total Liabilities and Equity $3,819 $3,890 What is the amount of net working capital for 2019
Answers
Answer:
Chang and Smith Tours
The amount of net working capital for 2019 is:
$828.
Explanation:
a) Data and Calculations:
Chang and Smith Tours
Balance sheets: 2018 2019
Assets
Cash $209 $197
Accounts Receivable 684 726
Inventory 918 1,023
Net Fixed Assets 2,014 1,944
Total Assets $3,825 $3,890
Liabilities and Equity
Accounts Payable $748 $818
Notes Payable 306 300
Long-Term Debt 1,647 1,724
Stockholders' Equity 1,118 1,048
Total Liabilities and Equity $3,819 $3,890
Working capital:
Current assets:
Cash $209 $197
Accounts Receivable 684 726
Inventory 918 1,023
Less current liabilities
Accounts Payable $748 $818
Notes Payable 306 300
Net working capital $757 $828
b) The net working capital is the difference between current assets and current liabilities.