Sarah's Popcorn Inc acquired a delivery van to help it transition to online sales. The van had a purchase price of $82,000. The van has a 12-year useful life and an estimated salvage value of $4,000. Decal and custom paint cost $4,250, and freight charges were $1,750. The annual license fee and insurance for the van cost the company a total of $3, Colonel's uses straight-line depreciation. Sarah estimates that the van will enable the company to 300 extra bags of popcorn per month. Each bag sells for $12. The cost of a ba of popcorn is $4, and the labor cost to make a bag of popcorn is $1.50. Required a. Compute the payback period for the new van. b. Compute the annual rate of return for the new van
Q: The S&P 500 spot price is $4,570. The futures price with 6-months delivery is $4,895. The risk-less…
A: To calculate the profit, you need to consider the present value of the future price and compare it…
Q: company will receive €75 million in 1 year from an Italian customer. observe the following data.…
A: Amount to be received=€75 millionForward rate=$1.30:€1.00Amount to be received in dollars.
Q: Mom's Cookies, Inc., is considering the purchase of a new cookie oven. The original cost of the old…
A: Project cash flows refer to the estimated cash inflows and outflows associated with a particular…
Q: suppose that you have a call option that is at 1.30. it has a Delta of .35 a Gamma of .06 a Theta of…
A: Value of call option at end of day 2= original value of the option + change in the option value due…
Q: v. What is the no-arbitrage price for this option? S
A: An option is an agreement between two parties granting one the opportunity to buy or sell a security…
Q: The Bandon Pine Corporation's purchases from suppliers in a quarter are equal to 65 percent of the…
A: Cash outlays:Cash outlays refer to the actual expenditures made by an individual or entity for a…
Q: Western Electric has 30,000 shares of common stock outstanding at a price per share of $75 and a…
A: WACC means weighted average cost of capital.WACC = (ke*we)+(kp*wp)+(kd*wd)whereke =cost of equitykp…
Q: (Related to Checkpoint 11.4) (IRR calculation) Determine the internal rate of return on the…
A: The internal rate of return is the discount rate which makes the project NPV equal to 0. The…
Q: On December 12, Lowell Corporation accepted a $160,000, 120-day, non-interest-bearing note from…
A: principal=$160,000days =120maturity value=?
Q: ser A European call option with a strike price of 105 will expire in two years. The current stock…
A: Binomial tree is constructed based upon the values given in the question.u stands for the up value…
Q: Deli Llama operates in a state with a sales tax. What will be the effect if it records a cash sale…
A: The journal entry for recording a cash sale is Cash A/C Dr........To Sales A/C.......(Being goods…
Q: Mark Welsch deposits $8,100 in an account that earns Interest at an annual rate of 8%, compounded…
A: Present value annuity factor is computed as follows:-PVAF = wherePVAF = Present value annuity…
Q: 1. Pricing a bond in the secondary market. For each question, use the three methods we learned in…
A: BOND PRICEBond price refers to the current market value of a bond, which is determined by various…
Q: which of the following could be required to file a gst return? a. Chan's clothing store (an…
A: GST stands for Goods and Services Tax. It is a value-added tax levied on the supply of goods and…
Q: What is the new IIR? Nominal Value: N= |= Emission Date Valuation Date: New Price: What is the new…
A: Certainly, here are short definitions for Internal Rate of Return (IRR), Effective Annual Yield…
Q: Suppose the beta of PetrolCom is 0.75, the risk - free rate is 3 percent, and the market risk…
A: The expected rate of return on a stock can be calculated using the Capital Asset Pricing Model…
Q: A company has a five year weighted average after tax cash flow of $125,000. It has been determined…
A: The process of estimating a company's economic worth or value is known as valuation, and it is…
Q: Keeds Products has projected the following sales for the coming year 01 02 03 04 Sales $ 14,600…
A: A critical component of budgeting and business planning is generating a sales estimate. It assists…
Q: The weekly payment on a 4-year loan at 6.8% compounded weekly is $321.09. Calculate the amount of…
A: The amount of the loan has to be computed using the present value of expected cash flows. The…
Q: Fingen's 12-year, $1000 par value bonds pay 11 percent interest annually. The market price of the…
A: The process of estimating a bond's fair market value by computing the present value of its future…
Q: Consider the following information: State of Economy Recession Boom Probability of State of Economy…
A: State of economyProbabilityRate of return if state occursRecession0.39-0.13Bust0.610.25
Q: Magnum Headache, Inc., is unlevered, with equity valued at $7 million and with 3.5 million shares…
A: Unlevered and levered firm data UnleveredLeveredNumber of shares35000002500000Debt2000000Annual…
Q: A company sets up a fund that will be used in 2 years to replace aging equipment. The company will…
A: Initial investment=$107500Quarterly deposit=$53700Period=2 yearsInterest rate=4%Period=n=8…
Q: Question 16. On February 15, 2023, Hank gave some stock shares to his niece Sarah, which Sarah used…
A: A capital gain is the profit realized from the sale of a capital asset, such as stocks, real estate,…
Q: Nancy has a project with a $17000 first cost that returns $7000 per year over its 13- year life.…
A: Equivalent annual cost refers to the cost incurred for owning, operating, and the maintenance of an…
Q: The returns on the common stock of Alpha Cycles, Inc. are quite cyclical. In a boom economy, the…
A: Standard deviation is a statistical measure that quantifies the dispersion or variability of data…
Q: TB TF Qu. 04-05 About 38 percent of all U.S.... About 38 percent of all U.S. banks are members of…
A: Federal Reserve System:The Federal Reserve System, often referred to simply as the Federal Reserve…
Q: Sonia borrowed $7829.00 compounded monthly to help finance her education. She contracted to repay…
A: It can be calculated using=NPER(rate,pmt,pv,[fv],[type])Rate The interest rate for the loan.Nper…
Q: Which of the following types of businesses would be most attractive to a financial buyer for an LBO?
A: The most attractive business for a financial buyer for an LBO would be the slow growing distribution…
Q: Laker Grind Coffee House, Inc. purchased Brian's Bakery, Inc. for $400,000. The fair market value of…
A: Calculation of total assetsBuilding $200,000Equipment $150,000Furniture $50,000Inventory…
Q: Differentiate between Portfolio Investment theoretically and graphically the effect of movement of…
A: Purchasing financial assets, like stocks or bonds, overseas is known as portfolio investment. The…
Q: Suppose you bought a December British pound call option with an exercise price of $1.3000/£. The…
A: Options give the buyer the right but not the obligation to buy or sell an underlying asset at a…
Q: September 30 and December 31 over a 10 year period. Determine X. ect one: ) a. 3118 b. 3157 c. 3137…
A: Present value illustrates the current value of a sum of money that will be received or paid in the…
Q: Suppose that initially a share price is £80 and each month thereafter either increases by 1% or…
A: A mathematical model used in finance to value options is called the binomial model. It makes the…
Q: A firm can be worth $60 or $195 with equal probability. The firm's debt consists of a zero -coupon…
A: A zero coupon bond is a financial instrument issued at a discounted price, devoid of periodic…
Q: The current price of a non-dividend paying stock is $50. Use a two-step tree to value a European put…
A: To value the European put option using a two-step binomial model, we can follow these steps:1.…
Q: Pelican Feeders Ltd. has an annual return of 15.27%. The risk-free asset returns 5.25%, and the S&P…
A: The objective of the question is to calculate the beta of the stock of Pelican Feeders Ltd. Beta is…
Q: isk and Return: Introduction isk is an important concept affecting security prices and rates of…
A: Risk and return are foundational concepts in finance, representing the dynamic relationship between…
Q: The Consumer-Mart Company is going to introduce a new consumer product. If it is brought to market…
A: Net Present Value (NPV) is a financial metric used to evaluate the profitability of an investment or…
Q: Sheridan Service has a line of credit loan with the bank. The initial loan balance was $6000.00.…
A: We have a loan account where borrowing and payment is a continuous process as per requirement. We…
Q: 39 Identify the correct formula to calculate the payment for a loan, where the rate is 6%, the loan…
A: We take loans to tide over a liquidity crunch situation. We also take a loan to buy things like a…
Q: Oriole, Inc., has bonds outstanding that will mature in eight years. The bonds have a face value of…
A: Yield to Maturity (YTM) is a financial concept that reflects the total return an investor can…
Q: Assume the one period binomial model with initial share price £400, up and down factors u = 1.25, d…
A: The binomial distribution is a discrete probability distribution that characterizes the number of…
Q: A demand loan for $8955.33 with interest at 9.3% compounded semi-annually is repaid after 8 years, 8…
A: Amount of loan=$8955.33Interest rate=9.3%Period=8 year and 8 monthRequired is to find interest.
Q: Consider a 9-month forward contract on a zero-coupon bond with a face value of $1,000 that is…
A:
Q: Prior to its ill-fated foray into the theme park business, bioengineer had a WACC of 17% and had the…
A: Cost of CapitalThe cost of capital refers to the expense a company incurs in order to finance its…
Q: You have purchased a $1,000 Face Value, 9-month (270-day) Treasury-bill (T-bill) with a quoted…
A: Given:Face Value (FV) = $1,000Quoted Market Discount Yield (DMY) = 5.25%Number of Days to Maturity…
Q: Find the arithmetic average, variance, and standard deviation for X and Y. What would the return be…
A: PORTFOLIO RETURN:Portfolio return refers to the overall gain or loss on an investment portfolio over…
Q: Tiempo restante U:28:23 What is the beta of a portfolio that has $18,400 in Stock M, $6,320 in Stock…
A: The beta of the portfolio represents the sensitivity of the portfolio compared to the market, it…
Q: If you wish to purchase a mutual fund with low annual fees you should collect information on the of…
A: The correct answer to the question is a) MERManagement Expense Ratio (MER) is calculated as…
A6
Step by step
Solved in 3 steps with 5 images
- Southwest Milling Co. purchased a front-end loader to move stacks of lumber. The loader had a list price of $122,380. The seller agreed to allow a 4.25 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Freight cost amounted to $2,200. Southwest Milling had to hire a specialist to calibrate the loader. The specialist’s fee was $1,190. The loader operator is paid an annual salary of $42,940. The cost of the company’s theft insurance policy increased by $2,290 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $5,500. Determine the amount to be capitalized in the asset account for the purchase of the front-end loader. What is the discount?Southwest Milling Co. purchased a front-end loader to move stacks of lumber. The loader had a list price of $122,380. The seller agreed to allow a 4.25 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Freight cost amounted to $2,200. Southwest Milling had to hire a specialist to calibrate the loader. The specialist’s fee was $1,190. The loader operator is paid an annual salary of $42,940. The cost of the company’s theft insurance policy increased by $2,290 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $5,500. Determine the amount to be capitalized in the asset account for the purchase of the front-end loader. (Round your answers to the nearest whole dollar. Amounts to be deducted should be indicated with minus sign.)southwest milling co. purchased a front end loader to move stacks of lumber. the loader had a list price of $117,270. the seller agreed to allow 5.50 percent discount because southwest milling paid cash. delivery terms were FOB shipping point. Freight cost amounted to $2790. southwest milling had to hire a specialist to calibrate the loader. The specialist's fee was $990. The loader operator is paid an annual salary of $13,640. The cost of the company's theft insurance policy increased by $1,770 per year as a result of acquiring the loader. The loader had a four year useful life and an expected salvage value of $6,100. a. Determine the amount to be capitalized in an assest accound for the purchase of the front end loader.
- Southwest Milling Company purchased a front-end loader to move stacks of lumber. The loader had a list price of $121,170. The seller agreed to allow a 5.50 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Freight cost amounted to $2,650. Southwest Milling had to hire a specialist to calibrate the loader. The specialist's fee was $1,070. The loader operator is paid an annual salary of $39,060. The cost of the company's theft insurance policy increased by $2,070 per year as a result of acquiring the loader. The loader had a four-year useful life and an expected salvage value of $11,100. Required Determine the amount to be capitalized in the asset account for the purchase of the front-end loader. Note: Round your answers to the nearest whole dollar. Amounts to be deducted should be indicated with minus sign. Costs that are to be capitalized: List price Total costsSouthwest Milling Company purchased a front-end loader to move stacks of lumber. The loader had a list price of $118,810. The selleragreed to allow a 6.00 percent discount because Southwest Milling paid cash. Delivery terms were FOB shipping point. Freight costamounted to $2,840. Southwest Milling had to hire a specialist to calibrate the loader. The specialist’s fee was $800. The loader operatoris paid an annual salary of $29,210. The cost of the company’s theft insurance policy increased by $2,180 per year as a result ofacquiring the loader. The loader had a four-year useful life and an expected salvage value of $13,500.Requireda. Determine the amount to be capitalized in an asset account for the purchase of the loader.b. Record the purchase in general journal format. Required A Required B Complete this question by entering your answers in the tabs below.Anchor Company purchased a manufacturing machine with a list price of $88,000 and received a 2% cash discount on the purchase. The machine was delivered under terms free on board (FOB) shipping point, and transportation costs amounted to $2,800. Anchor paid $3,900 to have the machine installed and tested. Insurance costs to protect the asset from fire and theft amounted to $5,000 for the first year of operations. What is the cost of the machine? Multiple Choice O O O O $92,940 $97,940 $89,040 $86,240
- VITRAN Bus Services purchases diesel fuel from Domino Gas Supply. In addition to fuel cost, Domino Gas Supply charges VITRAN Bus Services $250 per order to cover the expenses of delivering and transferring the fuel to VITRAN Bus Services storage tanks. The lead time for new shipment from Domino Gas Supply is 10 days, the cost of holding a gallon of fuel in the storage tanks is $0.04 per month, or $0.48 per year and the annual usage of fuel is 150,000 gallons. VITRAN Bus Services buses operate 300 days a year. The VITRAN Bus Services storage tanks a capacity of 15,000 gallons. Should VITRAN Bus Services considers expanding the capacity of its storage tanks? What is the reorder point?Triton Limited purchases a new delivery truck for $80,000. The insurance cost during transit from the motor vehicle dealer to Triton is $3,000. The logo of the company is painted on the side of the truck for $500. The recurring annual truck registration is $700 and a 12 month accident insurance policy is $1,100. The truck undergoes the initial safety testing to make sure it is road worthy for the first time is $330. What does Triton Limited record as the cost of the new truck? Select the one correct answer: O $85,630. O $80,000. O $83,830. O $83,000.Jefferson Print Supplies, Inc., sells laser printers and supplies. Assume Jefferson started the year with 100 containers of ink (average cost of $9.10 each, FIFO cost of $8.40 each, LIFO cost of $7.90 each). During the year, the company purchased 800 containers of ink at $10.00 and sold 600 units for $20.00 each. Jefferson paid operating expenses throughout the year, a total of $3,900. Ignore income taxes for this exercise. Prepare Jefferson's income statement for the current year ended December 31 using the average-cost, FIFO, and LIFO inventory costing methods. Include a complete statement heading. Complete the income statement by selecting the appropriate heading and income statement labels, and then calculating the amounts for each of the three required inventory methods. (Calculate unit costs to the nearest cent. Round all other calculations to the nearest whole dollar.) Sales revenue Cost of goods sold Gross profit Operating expenses Net income Jefferson Print Supplies, Inc.…
- Fischer Construction purchased a used front-end loader for $42,000, terms 1/10, n/30, F.O.B. shipping point, freight collect.Fischer paid the freight charges of $405. One week after the machine was delivered, a check for $41,580 was sent to the seller.The loader required a new battery, which cost Fischer $225. Fischer also spent $360 to have the company name printedon the loader and $563 for one year’s insurance coverage on it. Fischer hired a new employee to operate it at a wage of $19 per hour;the employee spent one morning (four hours) practicing with the machine and went to work at a construction site that afternoon.Calculate the amount at which the front-end loader should be reported on the company’s balance sheet.Carson Print Supplies, Inc., sells laser printers and supplies. Assume Carson started the year with 100 containers of ink (average cost of $8.90 each, FIFO cost of $9.00 each, LIFO cost of $7.80 each). During the year, the company purchased 800 containers of ink at $9.80 and sold 600 units for $21.50 each. Carson paid operating expenses throughout the year, a total of $4,000. Ignore income taxes for this exercise. Prepare Carson’s income statement for the current year ended December 31 using the aver-age-cost, FIFO, and LIFO inventory costing methods. Include a complete statement heading.Freebird Inc acquired a truck to transport its inventory from the port to its various stores. The truck cost $125,000; taxes and licensing fees were $12,000; a custom paint job to put the firm logo on cost $5,000. In the first week of use, an inexperienced driver shredded two of the truck's tires, necessitating replacement tires that cost $750. The truck is estimated to last 5 years or 200,000 miles. It has an expected salvage value of $10,000. In year 1, the truck is estimated to be driven 40,000 miles; in years 2 and 3 the truck's mileage is estimated to be 50,000 per year, and 30,000 per year for years 4 and 5. Required: Find the depreciation expense, A/D, and book value after two years, using 3 different methods: straight-line, units of production, double-declining balance.