Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Financial Accounting Expert

Task1. The president of Worldwide Gadgets would like to offer special, deeply discounted sale prices to worldwide most best and loyal customers under the following terms:

1. The prices will apply only to units bought in excess of the quantity normally bought by any given a customer.

2. The units purchased should be paid for in cash at the time of sale no credit terms to be provided.

3. The total quantity sold under these terms to all customers can’t exceed the excess capability of the firm.

4. The net profit of the firm must not be negatively affected.

5. The prices will be in effect for 10 days only.

Given these conditions, the special sale price must be set equivalent to the:

A. marginal cost of materials only.

B. Average variable cost of the materials only.

C. Marginal cost of each variable inputs.

D. Average cost of all variable inputs.

E. Sensitivity value of the variable costs.

Task2. Powell Plastics, Inc. (PP) currently has zero debt. Its earnings before interest and taxes (EBIT) are $80,000, and it is zero growth company. PP's current cost of equity is 10%, and its tax rate is 40%. The firm has 10,000 shares of common stock outstanding selling at a price per share of $48.00. PP is considering moving to a capital structure that is comprised of 70% equity and 30% debt, based on market values. The debt would have an interest rate of 8%. The new funds would be used to repurchase stock. It is estimated that the raise in risk resulting from the added leverage would cause the needed rate of return on equity to increase to 12%. If this plan were performed, what would be PP's new value of operations?

Task3. An investor has $50,000 in a risky mutual fund and $30,000 invested in t-bills with a return of 5%. The mutual fund has an expected return of 15% and a standard deviation of 25%. Using a second mutual fund with an expected return of 20% and standard deviation of 40% can you enhance the investors position by keeping the risk in the portfolio the same while raising the expected return and if so how much money must the investor put in the second mutual fund and the t-bill respectively.

Financial Accounting, Accounting

  • Category:- Financial Accounting
  • Reference No.:- M93509

Have any Question? 


Related Questions in Financial Accounting

Assignmentangies empanadas cvp and cost behaviortired of

Assignment Angie's Empanadas: CVP and Cost Behavior Tired of the corporate life Angie opened Angie's Empanadas in on April 1st near a large university campus. She had long been told that her empanadas were the best in to ...

Briefly describe a health care provider with which you are

Briefly describe a health care provider with which you are familiar and how that organization should position its offerings. Provide specific examples to support your response. Referring to the same health care provider, ...

James investor corporation acquires 25 of the common shares

James (investor) Corporation acquires 25% of the common shares of Heck (investee) Company for $350,000 on January 1, 2014. For 2014, Heck reports net income of $50,000 and paid dividends of $16,000. Instructions (a) Prep ...

1 distinguish groupthink with managing agreement how are

1. Distinguish groupthink with managing agreement. How are these two concepts? similar? 2. Give multiple examples of the advantages and disadvantages associated with? cross-functional teams.

Exxon versus chevronaccording to the textbook the income

Exxon versus Chevron According to the textbook, the income statement measures the success of a company's operations for a given period. The income statement is important to investors and creditors, because it determines ...

Assignment reorganizations and consolidated tax

Assignment: Reorganizations and Consolidated Tax Returns Suppose you are a CPA, and you have a corporate client that has been operating for several years. The company is considering expansion through reorganizations. The ...

Accounting - financial statement projectobjectivethe

Accounting - Financial Statement Project Objective: The project is meant to show your ability to analyze financial statements of selected companies in depth on a particular accounting method or standard. Submission: Hard ...

Financial accountingfinancial conditionbullfor this

Financial Accounting Financial Condition • For this discussion, assume the role of a financial manager in a company, and assume that you have just hired a new bookkeeper to join your team. You want to assess the new hire ...

Dickens corps fiscal year ends on december 31 it started

Dickens Corp.'s fiscal year ends on December 31. It started fiscal year 20X6 with $4,800 retained earnings. Below is its financial information as of December 31, 20X6. Cash $3,810 Depreciation expense  $1,005 Accumulated ...

Discussion sustainable income and ratio Discussion: Sustainable Income and Ratio Analysis

Discussion: Sustainable Income and Ratio Analysis • Describe sustainable income and the importance of sustainable income in the evaluation of the income statement. Choose at least two items or events that will affect sus ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro