Ask Question, Ask an Expert


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

1 assignmentthe following data in thousands of dollars have

1. Assignment The following data (in thousands of dollars) have been taken from the accounting records of Karmana Corporation for the just-completed year. Sales ........................................................... ...

I loss contingencies entries and essayon november 24 2014

I. (Loss Contingencies: Entries and Essay) On November 24, 2014, 26 passengers on Windsor Airlines Flight No. 901 were injured upon landing when the plane skidded off the runway. Personal injury suits for damages totalin ...

Rob leslie induced people to invest their savings in a

Rob Leslie induced people to invest their savings in a business venture that he represented to be risky. Because the planned venture never became operational, Leslie never applied the investors' funds in the way he promi ...

Assignmentglorious garden lawn service1 prepare the entries

Assignment Glorious Garden Lawn Service 1. Prepare the entries using the list of transactions. Put them in the general journal. 2. Post the journal entries from the general journal to the general ledger. 3. Prepare a tri ...

Nmims global accessschool for continuing education

NMIMS Global Access School for Continuing Education (NGA-SCE)  Course: Financial Accounting and Analysis  _____________________________________________________________________________ Question1. Following information is ...

What is meant by the statement when a resource becomes

What is meant by the statement: "when a resource becomes essential to competition but inconsequential to strategy, the risks it creates become more important than the advantages it provides"? On the topic " It doesn't ma ...

You need to prepare a report on the topic communication amp

You need to prepare a report on the topic communication & leadership for the introduction to financial accounting. Learning Outcomes a) Use the accounting elements (assets, liabilities, equity, revenues and expenses) and ...

Assignmentrowland company is a small editorial services

Assignment Rowland Company is a small editorial services company owned and operated by Marlene Rowland. On August 31, 2016, the end of the current year, Rowland Company's accounting clerk prepared the following unadjuste ...

Assignmentconsider the listing at 4815 catoctin san diego

Assignment Consider the listing at 4815 Catoctin San Diego, CA 92115 Price $475,000 Bob Betty Homebuyers want to make an offer on this property at the list price. Bob earns $48,000 per year and Betty earns $54,000 per ye ...

Financial accounting assignmentapa neededprocess cost

Financial Accounting Assignment APA NEEDED Process Cost Accounting Victory Company uses weighted-average process costing to account for its production costs. Direct labor is added evenly throughout the process. Direct ma ...

  • 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