Answer:
Per unit customer costs = $4.5 per unit
Explanation:
Under activity based costing cost are allocated based on per activity rate.
Customer return processing activity rate = $45 per return
Shipping activity rate = $10 per shipment
for Product 1
Total cost of shipment and return will be as follows:
Shipment = 1,200 X $10 = $12,000
Returns = 150 X $10 = $1,500
Total = $12,000 + $1,500 = $13,500
Total units = 3,000
Per unit customer costs = $13,500/3,000 units = $4.5 per unit
The Peak & Vale Accountants provides or offers
other firms and institutions with accounting services. Questions of what is ethical
involve the extent to which the Peak & Vale has an ethical duty beyond
those duties mandated by the law.
Answer:
Current dividend per share paid (Do)
= <u>Total dividend </u>
No of shares outstanding
= <u>$1,600,000</u>
1,000,000 shares
= $1.60 per share
Current market price = $31
Growth rate = 8% = 0.08
Ke = Do<u>(1 + g)</u> + g
Po
Ke = $1.60<u>(1 + 0.08)</u> + 0.08
$31
Ke = 0.1357 = 13.57%
Interest rate on borrowing (Kd) = 10%
Tax rate (T) = 40% = 0.40
WACC = Ke(E/V) + Kd(D/V)(1-T)
WACC = 13.57(65/100) + 10(35/100)(1 - 0.4)
WACC = 8.82 + 2.10
WACC = 10.9%
The correct answer is A
Explanation:
In this case, we need to calculate cost of equity. The cost of debt has been given, which is the interest rate on long-term borrowing (10%). Since the debt proportion in the capital structure is 35% and equity proportion is 65%, it implies that the value of the firm is 100%. Then, WACC is the aggregate of cost of each stock and the proportion of each stock in the capital structure.
Answer and Explanation:
The preparation of the analysis showing whether the old machine should be retained or replaced is presented below:
Particulars Retained equipment Replace equipment Change in the net income
Variable cost $1,560,000 $1,230,000 $330,000
($520,000 × 3 years) ($410,000 × 3 years)
Cost of the new
machine $300,000 -$300,000
Net change $30,000
As we can see the amount comes in positive which reflects that the machine should be replaced
Answer:
7.53%
Explanation:
Calculation for the discount rate of d(0,4)d(0,4)
The discount factor is : d=1/1+i
And given that the interest rates are compounded annually the discount factor will gives the present value of the bond when provided with the interest rate and maturity value.
Therefore the present value of a bond with a maturity value of 1 will be;
Present value=1 /(1+i1) (1+i) (1+i3) (1+i4)
Present value=1 / (1.07) (1.073) (1.077) (1.081)
Present value=0.748
The present value of a bond with a maturity value of 1 will therefore be 0.748.
Now, let calculate the discounting factor for the whole 4 years:
1 (1+d (0,4))‐⁴ =0.748
(1+d(0,4))=0.748‐¹/⁴
1+d (0,4) =1.0753
d (0,4)=0.0753
Therefore the discount rate will be 7.53%
