To forecast 2010 sales based on 2009 sales, Equation 1 must be used: St = $500,000 + $1.10St–1 S2010 = $500,000 + $1.10($1,500,000) = $2,150,000 3. Equation 2 requires a forecast of gross domestic product. Equation 3 uses the actual gross domestic product for the past year and, therefore, is observable. 4. Advantages: Using the highest R2, the lowest
Let (R/P)1 equal the initial value of the real rental price of capital, and (R/P)2 equal the final real rental price of capital after the labour force increases by 10 percent. The rental price increases by The real rental price also increases by 6.9 percent. Let (W/P)1 equal the initial value of the real wage, and (W/P)2 equal the final real wage after the labour force increases by 10 percent. The real wage increases by The real wage decreases by 2.8 percent. c) Using the same logic as (b) So, output increases by about 3 percent.
15. Question: : (TCO D) On January 1, Martinez Inc. issued $3,000,000, 11% bonds for $3,195,000. The market rate of interest for these bonds is 10%. Interest is payable annually on December 31. Martinez uses the effective-interest method of amortizing bond premium.
Running head: INDIVIDUAL TEXT PROBLEMS WEEK 3 Individual Text Problems Week 3 University of Phoenix Individual Text Problems Week 3 P4-23 A. Interest Rate 11% Number of Periods 30 Annuity Payment 20,000 (20,000/.11)X(1-1/(1+.11)^30)=173,875.85 B. 173,875.85X(1+.09)^20=31,024.82 C. Higher compounding interest rates will generate more money, meaning less would be needed today to get the same output tomorrow. P4-32 End of year Budget PV Factor @8% PV 1 $ 5,000 0.9259 4629.63 2 4,000 0.8573 3429.36 3 6,000 0.7938 4762.99 4 10,000 0.7350 7350.30 5 3,000 0.6806 2041.75
Here are the findings for question 2: 1. The CLM (Combined Leverage Multiplier) for Kroger that year was 3.720 (= 4.477 financial structure leverage X 0.831 common earnings leverage). In contrast to a CLM of 2.745 for Safeway. 2. Kroger has greater ROA performance at 6.4% in comparison to 6.0%.
1. Given the following information: Total assets $250,000 Debt (12% interest rate) $150,000 Equity $40,000 Variable costs of production $150 per unit Fixed cost of production $50,000 Units Sold 1,000 Sales price $210 per unit What happens to operating income and net income if output is increased by 10 percent? Verify your answer. Solution: The operating income: Revenues: $210 x (1,000) = $210,000 Expenses: $150 x (1,000) + $50,000 = $200,000 Operating income: $210,000 - 200,000 = $10,000 Net income: $10,000 - (.12 x 150,000) = ($8,000) With 10% increase in revenue: Revenues: $210 x (1,100) = 231,000 Expenses: $150 x (1,100) + $50,000 = $215,000 Operating income: $231,000 - $215,000 = $16,000 Net income $16,000 - (.12 x $150,000) = ($2,000) Operating income rose from $10,000 to $16,000 for a 60% increase. Net income rose from ($8,000) to ($2,000) which cut losses by $6,000.
Goody Company Sales Budget For the year ending December 31, 2010 Quarter 1 2 3 4 Year__ Expected unit sales 10,000 12,000 14,000 18,000 54,000 Unit selling price x $80 x $80 x $80 x $80 x $80 Total sales $800,000 $960,000 $1,120,000 $1,440,000 $4,320,000 Goody Company Production Budget For the six months ending June 30, 2010 Quarter 1 2 Six Months Expected unit sales 10,000 12,000 + Desired ending finished goods 2,400(a) 2,800(c) Total required units 12,400 14,800 - Beginning finished goods inv. 2,000(b) 2,400 Required production units 10,400 12,400 22,800 (a) 12,800 x 020 (b) 10,000 x .20 (c) 14,000 x .20 Moreno Industries
a) PKR 3,200 b) PKR 18,000 c) PKR 30,000 d) PKR 33,200 15. Firm A has a Return on Equity (ROE) equal to 24%, while firm B has an ROE of 15% during the same year. Both firms have a total debt ratio (D/V) equal to 0.8. Firm A has an asset turnover ratio of 0.9, while firm B has an asset turnover ratio equal to 0.4. From this we know that a) Firm A has a higher profit margin than firm B b) Firm B has a higher profit margin than firm A c) Firm A and B have the same profit margin d) Firm A has a higher equity multiplier than firm B 16.
Income Statement figures for the most recent fiscal year Cost of goods sold Amount | Percentage of total revenue | $47,860,000,000 | 68.50% ($47,860,000,000/$69,865,000,000) | Reference: Consolidated Statements of Operations, Form 10-K, Page 31. Reference: Footnote 3 - Cost of Sales and Selling, General and Administrative Expenses, Form 10-K, Page 35. Reference: Footnote 11 –Inventory, Form 10-K, Page 42. Gross profit Amount | Percentage of total revenue | $22,005,000,000 ($69,865,000,000 - $47,860,000,000) | 31.50% ($22,005,000,000/$69,865,000,000)
Value of operations in 2010= $34.96 + $741.15 Value of operations in 2010= $776.11 Value of operations in 2009=$741.15-$41.95 Value of operations in 2009=$699.20 d. What is the total value of the company as of 12/31/2010? Total Value of the Company= $699.20+$49.90 Total Value of the Company= $749.10 e. What is the intrinsic price per share for 12/31/2010? Value of Equity= $749.10-($69.90+$140.80)-$35.00 Value of Equity= $503.40 Price per share= $503.40/10 Price per share=