Answer:
The compensation to the fund manager is based on the performance of the pension fund. If the fund performs well and earns significant profit, then the compensation to the mangers should increase.
If it incurs losses, then the argument for capping the compensation of funds managers will gain ground. Note that the manager is being paid according to the pay-for-performance scheme. Thus it is unjustified that his compensation is reduced when there is no significant evidence that his performance was responsible for the poor performance of the fund. The manager has earned over $1.2 million last year. Hence fixing the compensation of managers to $100,000 should be considered only when the fund has under performed drastically. Without such evidence, such capping will only demoralize them and the profitability of the company will fall.
Explanation:
Answer:
$36
Explanation:
Computation for comparable firm 1
Price earning = Share price / Earning per share
= $50 / 5 = $10
Computation for comparable firm 2
Price earning = Share price / Earning per share
= $28 / 2 = $14
Average price earning = (Price earning of firm 1 + Price earning of firm 2) / 2
= ($10 + $14) / 2
= $12
Computation of stock price For STU
Stock price = Average price earning × Earning per share of STU
STU = 12 × ($3 million / $1 million) = $36
Answer: The risk of stock out = 2.94%
Explanation:
Reorder point is calculated as: Lead time*demand per unit time=45*9=405
While the amount on-hand reaches 422 pounds, the manager was reordering lubricant.
During the lead time, Standard Deviation of Demand =Daily S.D*(Lead time)^0.5=3*(9^0.5)=9
Risk of Stock Out=(422-405)/9 S.D=1.89 S.D
From Normal distribution curve 1.89 S.D=0.0294=2.94%
Therefore, the risk of stock out=2.94%
Answer and Explanation:
The computation is shown below:
a) The adjusted basis for the land and the building at the acquisition date is
Land = $100,000
Building = $400,000
We recognized the purchase price of land and building
b. And, the adjusted basis for the land and the building at the end of 2019 is
Land = $100,000
Building is
= $400,000 - $4,708
= $395,292
We considered the cost recovery for the computation above
Answer:
$138,000
Explanation:
The computation of the cost of Raw Materials Purchased is shown below:
= Direct materials used + ending direct material inventory - beginning direct material inventory
= $130,000 + $40,000 - $32,000
= $138,000
Simply we added the ending direct material inventory and deduct the beginning direct material inventory to the direct material used so that the accurate amount can come