Answer:
Expected exchange rate = $2.1867 * (1 + 0.07) / (1 + 0.05)
Expected exchange rate = $2.1867 * 1.07 / 1.05
Expected exchange rate = $2.33799143
Explanation:
To calculate the expected value of the British Pound (GBP) in U.S. dollars (USD) in one year based on Purchasing Power Parity (PPP), we can use the formula:
Expected exchange rate = Current exchange rate * (1 + Inflation rate of home country) / (1 + Inflation rate of foreign country)
Given:
Nominal interest rate in the UK: 9%
Inflation rate in the UK: 7%
Nominal interest rate in the US: 8%
Inflation rate in the US: 5%
Current spot rate GBP/USD: $2.1867
Let's calculate the expected value of the British Pound in U.S. dollars:
Expected exchange rate = $2.1867 * (1 + 0.07) / (1 + 0.05)
Expected exchange rate = $2.1867 * 1.07 / 1.05
Expected exchange rate = $2.33799143
Therefore, based on Purchasing Power Parity (PPP), the expected value of the British Pound in U.S. dollars in one year is approximately $2.3379.
Please note that exchange rates are subject to various factors and can fluctuate, so this calculation is based on the assumption that PPP holds true and other factors remain constant.
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Type the correct answer in the box, and use correct spelling
What is the correct strategy that Alejandra must use to deliver a negative message?
Alejandra is a customer relations manager at a toy company. A customer posted a complaint on the company's social media page saying that one of its
toys is unsafe for children. Alejandra should use a/an
strategy to respond to the situation
Answer: Apologise for the mistake and suggest a new plan
Explanation:
Alejandra should apologize for the inconvenience caused due to the product and suggest a plan to rectify the error like giving the customer a discount on the next purchase or replacing the purchased item. She should also assure the customer that steps will be taken to make it safe for the children.
is a short-term investment that is considered highly liquid.
a. stock
b. bond
c. cash equivalent
d. mutual fund
Answer:
c. cash equivalent
Explanation:
highly liquid means can be made into cash quickly
Cash equivalent examples are money market funds Treasury bills. Treasury notes. Commercial paper.
in 2008 a problem with money market funds signaled a banking crisis. banks were giving mortgages to people with bad credit histories. on top of that those mortgages were insured so if someone couldn't pay the mortgage the insurers would pay. but at that time there were too many people who couldn't pay mortgages
a. stock is a share of ownership in a company. can't make it into cash unless you sell it.
d. mutual fund : basically a stock of stocks. company gathers money to buy a bunch of different stocks. whole thing is called a portfolio. company sells stocks of that portfolio. those stocks are mutual funds.
b. a bond is basically a loan. bond lasts for a period of time. can't sell it until that period is over. otherwise there is a penalty.
.
hedge funds : the words hedge in hedge means to reduce risk. they make it for people with more money. it combines risky, non risky, long term, & short term investments to hedge or reduce risk.
What do you think the future trend of women's involvement in
marketing and executive level careers will be?
Future trend of women's involvement in marketing and executive level careers:
1. Increasing representation of women in leadership positions.
2. on diversity and inclusion.
3. Advancement in closing the gender pay gap.
4. Continued efforts to break gender stereotypes and biases.
5. Greater support for work-life balance and flexible work arrangements.
The future trend of women's involvement in marketing and executive level careers is expected to witness positive developments. Firstly, there will likely be an increasing representation of women in leadership positions. Organizations are recognizing the value of diverse perspectives and the benefits of gender-balanced leadership teams.
Furthermore, there will be a growing emphasis on diversity and inclusion, with companies actively working to create inclusive environments that support the advancement of women. This includes implementing policies and initiatives to ensure equal opportunities for career growth and development.
Efforts to close the gender pay gap are also expected to continue. As awareness grows, organizations are striving to address pay disparities and ensure equitable compensation for women in marketing and executive roles.
Breaking gender stereotypes and biases will remain an important focus. Society's perception of women's capabilities in leadership positions is changing, and organizations are challenging traditional norms to promote gender equality and recognize individual merit.
Additionally, there will be greater support for work-life balance and flexible work arrangements. Recognizing the importance of work-life integration, companies are adopting policies and practices that enable women to succeed in their careers while maintaining personal well-being and family responsibilities.
Overall, the future trend indicates a positive shift towards increased opportunities, recognition, and support for women's involvement in marketing and executive level careers, fostering a more diverse and inclusive professional landscape.
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Shane receives $100 as a birthday gift. In deciding how to spend the money, he narrows his options down to four choices: Option A, Option B, Option C, and Option D. Each option costs $100. Finally he decides on Option B. The opportunity cost of this decision is
Answer:
options
because too many options makes so much options, so if you have those options, u'll have a hard time to pick just one option. So might as well option an option so u have the best option
Suppose that consumers purchase fish and computer chips. In 2010, one pound of fish costs $1, a computer chip costs $1, and the typical consumer buys 10 pounds of fish and 10 computer chips. In 2011, one pound of fish costs $2, a computer chip costs $0.50, and the typical consumer buys 5 pounds of fish and 20 computer chips. In 2012, one pound of fish costs $2.10, a computer chip costs $0.90, and the typical consumer buys 12 pounds of fish and 20 computer chips. Using 2011 as the base year, the inflation rate between 2012 and 2011 is _____ percent.
Answer:
42.5%
Explanation:
The computation of the inflation rate between 2012 and 2011 is shown below:
But before that we need to do the following calculations
Cost of basket for the year 2011 is
= 5 × 2 + 20 × 0.5
= 10 + 10
= 20
And the base year price index i.e. CPI is 100
Now
Cost of same basket in year 2012 is
= 5 × 2.10 + 20 × 0.90
= 10.5 + 18
= 28.5
Now
CPI in 2012 is
= ($28.5 ÷ $20) × 100
= 142.5
So,
Inflation rate is
= (142.5 ÷ 100) - 1
= 1.425 - 1
= 0.425
= 42.5%
what dollar amount of loans have lending tree and prosper (p2p) disbursed so far?
The dollar amount of loans, lending tree, and prosper (p2p) has done in disbursement so far is 3.4 trillion dollars
What is a lending tree?Generally, LendingTree is a digital marketplace for loans with its headquarters in Charlotte, North Carolina.
The commercial platform gives prospective borrowers the ability to connect with multiple loan operators in order to locate the most advantageous terms for various types of loans, credit cards, deposit accounts, and insurance policies.
In conclusion, They have provided loans for a total of 3.4 quadrillion dollars up to this point. They have provided loans for a total of 3,4 trillion dollars up to this point.
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Research and media firm Youth Culture publishes Watch magazine, a teen publication distributed free to high school students, and wanted to gauge whether it was meeting the needs of its audience. Youth Culture handed out surveys to learn how students felt about the publication. Feedback indicated teen boys and girls were demanding very different things from the magazine. This feedback was gleaned from ________ data.
The feedback received through the survey that indicated that boys and girls were demanding very different things from Watch magazine was obtained from questionnaire data, which is a survey method used to gather information.
Qualitative researchIt is a method of scientific investigation that uses verbal and visual data to understand a given phenomenon in a more comprehensive and subjective way, being a method widely used in the social sciences.
Therefore, the questionnaire corresponds to a method of collecting information through an exploratory character that can use words, phrases and images for a better understanding of subjective aspects of human behavior.
The correct answer is:
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Juul’s ceo was forced to quickly respond to the increased scrutiny the company was facing. Which decision-making style allows senior leaders to quickly act?.
The directive decision-making fashion uses quick, decisive thinking to come to a solution. A directive decision-maker has a low tolerance for doubtful or ambiguous ideas.
They're focused on the venture and will use their personal information and judgment to come to a conclusion with selective enter from other individuals.
Which kind of decision is made by using senior management?strategic decision
A strategic choice is taken with the aid of top-level managers after a lot of analysis, study, and fact-finding. This is because such selections will affect the entire functioning of the business enterprise and are very vital and large in nature.
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https://brainly.com/question/27004710#SPJ4Uing "The Evolution of Economic Thought" book by Randy R. Grant and Stanley L. Brue a reference,
1. What wa the hitorical background of neoclaical chool?
2. What were the major tenet of neoclaical chool? Write all the major tenet. 3. Which tenet of the chool became lating contribution?
The study of the various thinkers' philosophies and theories in the fields that subsequently became political economy and economics, from antiquity to the current day in the twenty-first century, is known as the history of economic thinking.
What is the history of economic thought?The study of the various thinkers' philosophies and theories in the fields that subsequently became political economy and economics, from antiquity to the current day in the twenty-first century, is known as the history of economic thinking.Different schools of economic thought are all included in this field.According to the theory of evolutionary economics, people and society as a whole both influence and shape economic processes.It disdains the classic economics' rational choice theory, contending that psychological variables are the main forces that shape the economy.Economic thought, which spans from antiquity to the present, is the study of many philosophies, theories, and thinkers in the field of economics.A philosophy or an art, rather than a science, is what economics is more of.To learn more about economy refer
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if a bank is both the drawer and the drawee with regard to a draft, then the draft is a
If a bank is both the drawer and the drawee with regard to a draft, then the draft is considered a "self-drawn" or "banker's draft." This means that the bank has effectively issued the draft to itself, and it is not being used to transfer funds between two separate parties.
Banker's drafts are commonly used in situations where a large sum of money needs to be transferred securely, such as for purchasing a house or a car. The buyer will typically request a banker's draft from their bank, which the bank will issue to itself, deducting the appropriate funds from the buyer's account. The draft can then be used to pay the seller directly, ensuring that the funds are available and secure.
Overall, if a bank is both the drawer and the drawee of a draft, it is likely a banker's draft, used for internal transfers or to facilitate secure payments between parties. A cashier's check is a type of official check issued by a bank, where the bank acts as both the drawer (the party creating the check) and the drawee (the party responsible for paying the amount specified on the check).
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Can Treasury bill be matured for 90 days
Answer:
Yes
Explanation:
Treasury bills can mature in 90 days depending on the term of issuance.
Generally, treasury bills are considered to be short-term security and are issued for 90-days, 180-days, or a year term. They are often sold for an amount that is less than their face values and at maturity, the government buys the treasury bills back at an amount that is equal to the face values of the bills.
Treasury bills are issued as means for the government to pay off off their debts.
Answer:
Yes, Treasury bill can be matured for 90 days.
You work for an investment bank that is marketing a new credit card. As part of your company's marketing strategy, you come up with an animated penguin who is associated with your services, and your company comes up with the slogan, "Shopping with kings." Your ad campaign is viewed by millions around the country through television commercials, online ads, direct mail, and celebrity sponsors. Which of the following would be considered feedback?
a. customers apply for your bank’s credit card
b. college-aged students appreciate the slogan
c. Your target market likes the animated penguin
d. young adults see the ad on a bus and call to ask questions
e. the media through which potential customers view the ads
Answer:
Option D
Explanation:
Feedback is the information about reactions to a product, a person's performance of a task, etc. which is used as a basis for improvement.
When the company ran a campaign of marketing credit cards the young adults saw the ad and called to ask questions therefore the campaign was successful. Option D matches perfectly in this scenario.
True or false? When creating a budget to repay your student loans, you can
save money by paying only the interest.
O True because paying only the interest reduces the length of the loan and
reduces the total amount you pay in the long-term
True because paying interest means monthly payments will be small
O False because it is not possible to only pay the interest,
O False because paying only interest lengthens the life of the loan and increases
the total amount you pay in the long-term.
Next →
Sign out
The correct answer choice is; True, because paying only the interest reduces the length of the loan and reduces the total amount you pay in the long-term.
Paying off Student LoansIt follows from study that; while paying off student loans, it usually pays off to pay the interest first. On this note, it follows that the principal of the loan remains constant and hence, compound interest is avoided and consequently, the total amount you pay in the long-term is reduced.
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In a CPMT, the ____ leads the project to make sure a sound project planning process is used, a complete and useful project plan is developed, and project resources are prudently managed.
Answer:
managers or skateholders
Explanation:
bc that is the answer
What are the goals of government regulation?
low unemployment, price stability,
economic growth
O high unemployment, price instability,
economic growth
low unemployment, price stability,
economic steadiness
O high unemployment, price instability,
economic steadiness
Answer: A) low unemployment, price stability, economic growth
Explanation: Government regulation attempts to promote growth, full employment, and price stability for the well-being of the citizens
The goals of an ideal government while making regulations shall include the following purposes,
low unemployment, price stability,economic growth.Therefore, the option A holds true.
What is the significance of government goals?The goals of a government can be referred to or considered as the qualitative and quantitative targets set by the government in order to foresee better conditions in the future. These are backed by economic plans and regulations.
For a developing or a developed government, the goals must be economically based while being regulated. These goals must include reduced poverty and unemployment in order to achieve a healthy economic growth.
Therefore, the option A holds true and states regarding the significance of the goals of a government.
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Bill smith economic influences
I don't really know of Bill Smith but I know Adam
Smith's best - known ideas formed the basis of economic theory , including the invisible hand theory ( the idea that free - markets coordinate themselves ) , the division of labor ( the idea that people should specialize in specific tasks ) , and the measurement of economic activity ( Gross Domestic Product ) .
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(NEED HELP ASAP)Which is a possible effect of identity theft?
Increased savings balance
Increased purchasing power
Decreased credit score
Decreased debt to credit load
The possible effect of identity theft is "Decreased credit score."
This is because when an identity of a credit card owner is stolen, often the stealer tends to use the information of the credit card owner to borrow more money or buy expensive goods and run away with it.
This often leads to more debt for the original credit card owner.
In turn, having more debt on a single credit card without repayment as at when due leads to "Decreased credit score."
Hence, in this case, it is concluded that the correct answer is option C. "Decreased credit score."
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Answer:
Decreased credit score
in the book Romeo and juliet what is Juliet's dads name
Answer:
Lord Fulgencio Capulet
Explanation:
Members of Generation Z are most likely to influence Multiple Choice a. furniture design b. health care and insurance. c. retirement plans.
d. e-textbooks
Based on the given options, members of Generation Z are most likely to influence technology related to e-textbooks. The correct option is "D".
It is becoming increasingly evident that members of Generation Z have the greatest influence when it comes to technology related to e-textbooks. This is due to the fact that they have grown up in a world surrounded by technology and have an innate understanding of how it works.
Moreover, they are more likely to be early adopters of new technology and products. Their opinions and preferences will shape the future of e-textbooks, from how they are created to how they are consumed.
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A __________ is a way in which a testator can change his will and is a separate testamentary document whose purpose is to amend an existing will.
A codicil is a separate legal document that allows a testator to make changes to an existing will without creating a new one, providing flexibility in updating testamentary intentions.
A codicil is a way in which a testator can change his will. It is a separate testamentary document specifically created to amend an existing will. A codicil allows the testator to make modifications, additions, or revocations to their original will without having to create an entirely new will.
It is a legally recognized instrument that must adhere to the same formalities as a will, such as being in writing, signed, and witnessed.
By using a codicil, the testator can ensure that their testamentary intentions are updated and accurately reflected, providing flexibility in managing their estate planning without completely rewriting the will.
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QUESTIONS 4 66. - Neatness has great value Consider the following short run production function: Q=6L-0.4L (each a point) a. Find the value of L that maximizes output and maximum output b. Find the value of L that maximizes marginal product and maximum marginal product c. Find the value of L that maximizes average product and maximum average product Given a short run cost function as TC= 1/3Q¹-2Q²-6Q +100 a. Find the minimum value of AVC and MC (a point) A firm operates in a perfectly competitive market. The market price of its product is 4 birr and the total cost function is given by TC= 1/3Q - SQ+z0Q+50, where TC is the total cost and Q is the level of output. (each a point) a. What level of output should the firm produce to maximize its profit? b. Determine the level of profit at equilibrium. c. What minimum price is required by the firm to stay in the market Which Economic System is suit for Ethiopia? Discuss it? (4 point) Discuss the goals of macroeconomics and the measurement of economic performance of the country (6- the point) 6 6. What are problems and instruments of macroeconomics, Discuss it? (6-point)?
a. The value of L is 7.5 and the maximum output is 22.5.
b. The value of L is 7.5 and maximum marginal product is 0.
c. There is no value of L.
What is the value of L?a. To get value of L that maximizes output (Q), we need to differentiate the production function with respect to L:
\(Q = 6L - 0.4L^2\)
Taking derivative with respect to L:
dQ/dL = 6 - 0.8L
6 - 0.8L = 0
0.8L = 6
L = 6 / 0.8
L = 7.5
The value of L that maximizes output is 7.5 and maximum output (Q) will be:
\(Q = 6(7.5) - 0.4(7.5)^2\)
Q = 45 - 0.4(56.25)
Q = 45 - 22.5
Q = 22.5
To get value of L that maximizes marginal product (MP), we have to differentiate function:
MP = dQ/dL = 6 - 0.8L
Setting MP = 0:
6 - 0.8L = 0
0.8L = 6
L = 6 / 0.8
L = 7.5
The maximum marginal product is computed by substituting value into function:
MP = 6 - 0.8(7.5)
MP = 6 - 6
MP = 0
c. To find the value of L that maximizes average product (AP):
AP = Q / L = (6L - 0.4L^2) / L
Simplifying:
AP = 6 - 0.4L
Taking derivative:
dAP/dL = -0.4
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Three types of financial assistance that can be applied for after Grade 12
What does the term 'user
experience' refer to regarding a
website?
A. the overall ease of navigation and ability to
purchase on a company's website
B. the general experience a customer has when
using a product of a business
C. the customer experience when dealing with
customer service representatives
Answer:b
Explanation:
1.All illegal acts are also immoral true/ false. Give one example.
Answer:
false
Explanation:
Just because something is immoral does not make it illegal and just because something is illegal it does not make it immoral. Not all immoral acts are illegal.
please mark me brainliestwhat three variables determine how much interest a person could earn from a savings account?
your current financial health, payment history, and debt obligations before
how does the slope of a budget line illustrate opportunity costs and trade-offs? how does a budget line illustrate scarcity and the effect of limited incomes
The slope of a budget line illustrates the opportunity costs and trade-offs involved in making economic choices. The slope represents the rate at which one good must be given up to obtain more of the other. It shows the trade-off between the two goods in terms of their relative prices and the limited resources available. A steeper slope indicates a higher opportunity cost and a larger trade-off between the goods.
The budget line represents the different combinations of goods that can be purchased with a given income and prevailing prices. The slope of the budget line is determined by the relative prices of the goods. As the consumer chooses to consume more of one good, they have to give up some quantity of the other good. This represents the concept of opportunity cost, as the consumer is sacrificing the consumption of one good to obtain more of the other.
The slope of the budget line also reflects the scarcity of resources and the effect of limited incomes. It shows the trade-offs that individuals or households must make due to the limited resources available. With a limited budget, consumers must allocate their income to maximize their utility and satisfy their preferences. The budget line illustrates the constraint imposed by limited income, as it represents the maximum affordable combinations of goods.
Overall, the slope of the budget line provides a visual representation of the trade-offs, opportunity costs, and the impact of limited incomes on consumer choices. It highlights the concept of scarcity and the need to make rational decisions based on available resources and individual preferences.
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woodland hotels incorporated operates four resorts in the heavily wooded areas of northern california. the resorts are named after the predominant trees at the resort: pine valley, oak glen, mimosa, and birch glen. woodland allocates its central office costs to each of the four resorts according to the annual revenue the resort generates. for the current year, the central office costs (000s omitted) were as follows: front office personnel (desk, clerks, etc.) $ 10,000 administrative and executive salaries 5,000 interest on resort purchase 4,000 advertising 600 housekeeping 3,000 depreciation on reservations computer 80 room maintenance 1,000 carpet-cleaning contract 50 contract to repaint rooms 500 $ 24,230 pine valley oak glen mimosa birch glen total revenue (000s) $ 7,750 $ 11,580 $ 12,830 $ 9,490 $ 41,650 square feet 60,660 83,735 45,655 91,455 281,505 rooms 86 122 66 174 448 assets (000s) $ 100,975 $ 149,485 $ 79,080 $ 62,855 $ 392,395 required: 1. based on annual revenue, what amount of the central office costs are allocated to each resort? 2. suppose that the current methods were replaced with a system of four separate cost pools with costs collected in the four pools allocated on the basis of revenues, assets invested in each resort, square footage, and number of rooms, respectively. which costs should be collected in each of the four pools? 3. using the cost pool system in requirement 2, how much of the central office costs would be allocated to each resort?
1. Based on annual revenue, the central office costs allocated to each resort would be as follows: Pine Valley - $3,277.64, Oak Glen - $4,898.94, Mimosa - $5,411.88, Birch Glen - $4,041.54.
2. Under the new system of four separate cost pools, the costs that should be collected in each of the four pools are as follows:
- Revenue pool: Advertising costs
- Asset pool: Interest on resort purchase and depreciation on reservations computer
- Square footage pool: Front office personnel, administrative and executive salaries, and housekeeping costs
- Room pool: Room maintenance, carpet-cleaning contract, and contract to repaint rooms costs
3. Using the cost pool system in requirement 2, the central office costs allocated to each resort would be as follows:
- Pine Valley: $3,008.45
- Oak Glen: $4,665.38
- Mimosa: $5,334.17
- Birch Glen: $4,221.60
Note that these numbers are based on the assumption that the allocation percentages for each cost pool are the same as the revenue percentages for each resort.
1. To allocate central office costs based on annual revenue, first calculate the allocation percentage for each resort by dividing each resort's revenue by the total revenue. Then, multiply each resort's allocation percentage by the total central office costs.
Pine Valley: (7,750 / 41,650) * 24,230 = 4,536.87
Oak Glen: (11,580 / 41,650) * 24,230 = 6,756.14
Mimosa: (12,830 / 41,650) * 24,230 = 7,493.54
Birch Glen: (9,490 / 41,650) * 24,230 = 5,443.45
2. For the four separate cost pools, the following costs should be collected:
Revenue pool: Front office personnel, administrative and executive salaries, advertising.
Assets pool: Interest on resort purchase, depreciation on reservations computer.
Square footage pool: Housekeeping, room maintenance.
Rooms pool: Carpet-cleaning contract, contract to repaint rooms.
3. Using the cost pool system, allocate the costs to each resort based on the relevant metric for each pool:
Revenue pool total costs: 10,000 + 5,000 + 600 = 15,600
Assets pool total costs: 4,000 + 80 = 4,080
Square footage pool total costs: 3,000 + 1,000 = 4,000
Rooms pool total costs: 50 + 500 = 550
Revenue pool allocation percentages, as calculated in step 1, remain the same.
Assets pool, square footage pool, and rooms pool allocation percentages should be calculated in the same manner, using each resort's assets, square footage, and number of rooms, respectively.
Allocate costs in each pool to each resort by multiplying the respective allocation percentages with the total costs of each pool. Then, add the allocated costs from all pools for each resort to find the total central office costs allocated to each resort.
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Which of the following combines a cooktop and oven into one appliance?
Answer:
A freestanding range, great for both large and small kitchens, combines a cooktop and oven into one versatile appliance. Whether you're baking, roasting, boiling or frying, a range lets you do it all.
Question 08 (07 points) Beta Corporation's comparative balance sheets are presented below. Cash Accounts receivable Inventory Land Equipment Accumulated depreciation-Equipment Total assets Accounts payable Interest payable Bonds payable (Long term) Share Capital-Ordinary Retained earings Total liabilities and stockholders' equity Beta Corporation Comparative Statement of Financial Position Dec. 31, 2021 Assets $ 30,700 10,600 14,000 25,000 $ 59,000 (15,200) 43,800 $ 124,100 Liabilities and Stockholders' Equity $ 8,000 6,000 5,000 52,000 53,100 $.124.100 Dec. 31, 2020 $70,000 (10,000) $ 22,000 13,300 9,000 16,000 60,000 $ 120,300 $ 9,000 2,100 30,000 45,000 34,200 $120.300 Per Net income for the year ending December 31, 2021 was $28,500. Equipment which cost $11,000 and had accumulated depreciation of $2,000 was sold for $10,800. Depreciation expense for 2021 is $7,200. Cash dividends were declared and paid during the year 2021: $9,600. All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation. Prepare the statement of cash flows for the year ended December 31, 2021.
To prepare the statement of cash flows for the year ended December 31, 2021, we will use the indirect method. Let's begin by analyzing the information given and calculating the changes in different balance sheet accounts:
Changes in Current Assets:
Cash: ($30,700 - $70,000) = -$39,300
Accounts receivable: ($10,600 - (-$10,000)) = $20,600
Inventory: ($14,000 - $22,000) = -$8,000
Changes in Current Liabilities:
Accounts payable: ($8,000 - $9,000) = -$1,000
Interest payable: ($6,000 - $2,100) = $3,900
Changes in Long-Term Liabilities:
Bonds payable: ($52,000 - $30,000) = $22,000
Changes in Equity:
Share Capital-Ordinary: No change
Retained earnings: $28,500 - $9,600 = $18,900
Now, let's calculate the cash flows from operating activities:
Net income: $28,500
Adjustments for non-cash expenses:
Depreciation expense: $7,200
Loss on equipment sale: $11,000 (cost) - $10,800 (sale price) = -$200
Changes in current assets:
Increase in accounts receivable: $20,600
Decrease in inventory: -$8,000
Changes in current liabilities:
Decrease in accounts payable: -$1,000
Increase in interest payable: $3,900
Changes in long-term liabilities:
Increase in bonds payable: $22,000
Operating activities:
Net cash provided by operating activities = Net income + Depreciation expense +/- Loss on equipment sale +/- Changes in current assets and liabilities
= $28,500 + $7,200 - $200 + $20,600 - $8,000 - $1,000 + $3,900 + $22,000
Next, let's calculate the cash flows from investing activities:
Cash received from equipment sale: $10,800
Investing activities:
Net cash provided by investing activities = Cash received from equipment sale
= $10,800
Finally, let's calculate the cash flows from financing activities:
Cash dividends paid: -$9,600
Financing activities:
Net cash used in financing activities = Cash dividends paid
= -$9,600
Now, we can prepare the statement of cash flows for the year ended December 31, 2021:
Statement of Cash Flows
For the Year Ended December 31, 2021
Cash flows from operating activities:
Net income $28,500
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense $7,200
Loss on equipment sale -$200
Changes in current assets and liabilities:
Accounts receivable $20,600
Inventory -$8,000
Accounts payable -$1,000
Interest payable $3,900
Changes in long-term liabilities:
Bonds payable $22,000
Net cash provided by operating activities $71,000
Cash flows from investing activities:
Cash received from equipment sale $10,800
Net cash provided by investing activities $10,800
Cash flows from financing activities:
Cash dividends paid -$9,600
Net cash used in financing activities -$9,600
Net increase in cash $72,200
Cash at the beginning of the year $30,700
Cash at the end of the year $102,900
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Sugarland Industries reported a net income of $760,750 on December 31, 2021. At the beginning of the year, the company had 510,000 common shares outstanding. On April 1, the company sold 27,600 shares for cash. On August 31, the company issued 49,200 additional shares as part of a merger. Required: Compute Sugarland's net income that would produce a basic EPS of $2. 05 per share for 2021
To achieve a basic earnings per share (EPS) of $2.05 for 2021, Sugarland Industries would need a net income of $1,050,750.
To calculate the required net income, we need to consider the changes in the number of common shares outstanding throughout the year.
At the beginning of the year, the company had 510,000 shares outstanding. On April 1, they sold 27,600 additional shares, increasing the total to 537,600 shares. Then, on August 31, the company issued 49,200 more shares as part of a merger, bringing the total to 586,800 shares.
To calculate the EPS, we divide the net income by the weighted average number of shares outstanding. The weighted average is calculated by multiplying the number of shares by the portion of the year they were outstanding.
Using the formula:
EPS = Net Income / Weighted Average Number of Shares
We can rearrange the formula to solve for net income:
Net Income = EPS x Weighted Average Number of Shares
Given an EPS of $2.05 and a weighted average number of shares of 586,800, the net income required to achieve this EPS is $1,050,750.
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