Anchen Medicine is a publicly-traded biotech company based in Irvine. It has 200 scientists and technician besides a team of 20 middle managers and top executives. It awards stock options to all of its employees. The company’s fiscal year ends on June 30. This year’s fiscal year ends on June 30, 2021. During the three fiscal years of 2018-2020, the company had a "fixed value" stock option plans. That is, each year, the company granted its employees stock options with fair value of $160 million a year. These stock options all had a vesting period of 4 years. That is, employees had to work for the company for 4 years before they could exercise any of the stock options. On August 1, 2020, the beginning of this fiscal year, the company modified its stock option plan. During the year, the company still granted $160 million worth of stock options, but changed the vesting period to 5 years. Assume tax rates are 20% for all years. It is near the end of the fiscal year. Ana Farrell, the CFO of Anchen Medicine, is working hard to close the books for the current year. She is also preparing for a conference call with financial analysts and some investors. At the conference call, the CFO and CEO will explain the operating and financial performance to the audience. The CFO expects a lot of questions from the audience due to poor sales and bad debt expense related to the Covid19. Some investors may ask why the company is still granting stock options when the performance is bad. Right before this year’s fiscal year end, Ana had a meeting with the audit committee and external auditor. In the meeting, the auditor showed some data analytics results, which indicated that the exercise price of stock options were set at the lowest point in the stock option grant year for all years 2016-2021. This caused some concerns among the members of the audit team and audit committee. They need an explanation from Ana. Soon afterwards, Ana met with the CEO, Mike Goldberg. Ana discussed with him this year’s net income, cash flow, and other performance indicators, and the concerns about stock options. During the meeting, Mike started to complain about the auditors. Their audit fees were so high, yet every year they never found any mistakes made by the staff. He dismissed auditors’ concern about the exercise price of stock options. Near the end of the meeting, the CEO said he heard that many other companies in the industry report non-GAAP earnings in the conference call. The CEO would like to follow other companies’ practices and asked the CFO to calculate a non-GAAP earnings by excluding stock option related compensation expense. The CFO just finished the estimation. The non-GAAP number will meet the financial analyst forecast by a few cents while the GAAP earnings would be below analyst forecast.
Question: (Please write no more than 10 lines for each question). What’s the stock option expense in 2021 due to stock option grant of this year? Please consider the tax effects and show your workings.
Answers
The stock option expense in 2021 due to the stock option grant of this year is $32 million, and after considering the tax effects, the net expense would be $32 million - $6.4 million = $25.6 million.
To determine the stock option expense in 2021 due to the stock option grant of this year, we need to consider the fair value of the options granted and the tax effects.
The company granted $160 million worth of stock options this year, which will be expensed over the vesting period. Since the vesting period changed to 5 years, we need to allocate the expense over the new vesting period.
To calculate the annual stock option expense, we divide the total grant value by the vesting period:
Annual stock option expense = Total grant value / Vesting period
Annual stock option expense = $160 million / 5 years
Annual stock option expense = $32 million per year
Considering the tax effects, the tax rate is 20%. The company can deduct the stock option expense for tax purposes, resulting in tax savings.
Tax savings due to stock option expense = Annual stock option expense * Tax rate
Tax savings = $32 million * 20%
Tax savings = $6.4 million per year
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Related Questions
Consider a factory that produces a popular type of drink. According to business investigation, demand of the market is estimated to be 25,000 bottles per month. The factory produces the drink at rate of 250 bottles per hour and works 240 hours per month. It takes 3 hours for the factory to reset and maintain the machines between different operation processes. The cost of each single reset is calculated to be ¥ 1,200.00 per hour. Stock-holding costs are counted at ¥5 per item per month. 1. What is the economic batch quantity (EBQ)? (5 points) 2. Suppose that the unit cost to manufacture each bottle of drink is ¥ 1.2. If we want the total EBIT per month to be ¥ 38908, what value should we set the unit price of each toy at? (4 points) (Hint: EBIT = total revenue – total holding cost – total ordering cost – total manufacturing cost).
Answers
The economic batch quantity (EBQ) is defined as the optimal amount of product that should be ordered to reduce the total cost of manufacturing, ordering, and carrying inventory.
The EBQ is determined by the following formula:
EBQ = Square root of [(2 x D x S)/H]
Where, D = Annual demand or the amount of product demanded each year
S = Cost of setting up or ordering one unit of the product
H = Annual holding cost per unit of product
Therefore, for the factory that produces 25,000 bottles per month at a rate of 250 bottles per hour, the monthly demand can be calculated as follows:
Monthly demand = 25,000 bottles
Hence, daily demand (assuming 30 days in a month) = 25,000/30 = 833.33 bottles
Also, given that the factory works for 240 hours per month and it takes 3 hours for the factory to reset and maintain the machines between different operation processes, the total effective hours of operation per month is 240 - (240/3) = 160 hours.
Hence, the monthly production is given by:
Monthly production = (250 bottles/hour) x 160 hours = 40,000 bottles
Thus, the annual demand can be calculated as follows:
Annual demand = 25,000 x 12 = 300,000 bottles
The cost of each reset is ¥ 1,200.00 per hour and the monthly holding cost is ¥ 5 per item per month.
Thus, the ordering cost can be calculated as follows: Ordering cost = (D/EBQ) x S = (300,000/EBQ) x 1,200 = 300,000 x 1,200 / EBQ = 360,000,000 / EBQ
The holding cost can be calculated as follows:
Holding cost = (EBQ/2) x H = (EBQ/2) x 5 = 2.5 x EBQ
Therefore, substituting the values in the EBQ formula, we get:
EBQ = Square root of [(2 x 300,000 x 1,200) / 5] = 3464.10 bottles
EBIT stands for Earnings Before Interest and Taxes. It is a measure of the profitability of a company.
The formula for EBIT is given by:
EBIT = Total Revenue - Total Holding Cost - Total Ordering Cost - Total Manufacturing Cost
Also, the total manufacturing cost can be calculated as follows:
Total Manufacturing Cost = (Monthly Production / EBQ) x Manufacturing Cost per unit
Total Revenue can be calculated as follows:
Total Revenue = Unit Price x Monthly Demand
Given that the cost of manufacturing each bottle of drink is ¥ 1.2, the total manufacturing cost per month can be calculated as follows:
Total Manufacturing Cost = (40,000 / 3464.10) x 1.2 = ¥ 13,870.28
Therefore, substituting the values in the EBIT formula, we get:¥ 38,908 = Unit Price x 25,000 - (3464.10 / 2) x 5 - (300,000 / 3464.10) x 1,200 - ¥ 13,870.28
Solving for the unit price, we get:
Unit Price = (¥ 38,908 + 8532.75 + 413,128.82 + ¥ 13,870.28) / 25,000 = ¥ 18.68
Thus, the unit price of each bottle of drink should be set at ¥ 18.68 to achieve the desired EBIT per month of ¥ 38,908.
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gamboa, inc. sold 100 selfie sticks for $30 each. if producing the selfie sticks had an average cost of $2 , how much profit did the company make? provide your answer below:
Answers
The company made a profit of $2,800.To calculate the profit, we need to subtract the cost from the revenue. The revenue is calculated by multiplying the selling price per selfie stick ($30).
Profit = Revenue - Cost Profit = $3,000 - $200 Profit = $2,800 Therefore, the company made a profit of $2,800 from selling 100 selfie sticks. Profit is an essential metric for assessing the financial performance of a business. It represents the amount of money left over after deducting all expenses from the revenue generated. In this case, the company Gamboa, Inc. sold 100 selfie sticks for $30 each, resulting in a total revenue of $3,000. To determine the profit, we need to consider the cost of producing the selfie sticks. The average cost per selfie stick is given as $2. Multiplying this cost by the number of selfie sticks sold (100) gives us a total cost of $200. Subtracting the cost from the revenue, we find that the company made a profit of $2,800. This profit represents the net income earned by the company after covering all production costs and expenses associated with selling the selfie sticks.
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1. Why does Taylor need to know the cost of providing meals to customers?
2. Why does Taylor need to know the cost of the donated meals?
3. Should Bene Petit compute the cost of the donated meals the same way as the customized meal kits? Why or why not?
4. What type(s) of costing system(s) is (are) most appropriate for Bene Petit?
5. Give one example of direct materials and one example of indirect materials. How would these costs be assigned to customer meals?
6. Give one example of direct labor and one example of indirect labor. How would these costs be assigned to customer meals?
7. Give two examples of manufacturing overhead costs. How would these costs be assigned to customer meals?
8. Give two examples of nonmanufacturing costs. How are these costs treated in comparison to
manufacturing costs.
9. Assume Taylor determines that the cost to produce a "typical" meal box with 3 meals for 4 adults
(12 servings) is $35. One of Bene Petit’s competitors (Hello Fresh) charges about $5 per serving.
If Taylor bases her price on the competition, what is her gross profit percentage?
10. Would the cost of donated meals be treated as a product cost (reported as Cost of Goods Sold)
or a period cost (reported as a general and administrative expense)?
Answers
When you have a business like Taylor and Bene, you must know every cost that needs to be paid in order to offer a fair price to your customers, and also to keep the business going.
Taylor needs to know the cost of providing meals to customers so she can make sure that the price of the meals covers the cost of materials and labor required to produce them.Taylor needs to know the cost of the donated meals so she can determine the cost of the meals relative to the cost of materials and labor and make sure that they are being donated at a price that is reasonable and fair.No, Bene Petit should not compute the cost of the donated meals the same way as the customized meal kits because the donated meals may not require the same materials and labor that the customized meal kits do.Job Order and Process Costing are the most appropriate costing systems for Bene Petit.Direct materials examples include food ingredients and packaging materials. These costs would be assigned to customer meals based on the amount of direct materials used for the meals.Direct labor examples include those who prepare and assemble the meal kits. These costs would be assigned to customer meals based on the amount of labor time required to produce the meals.Examples of manufacturing overhead costs include equipment depreciation and utilities. These costs would be assigned to customer meals based on the amount of overhead required to produce the meals.Nonmanufacturing costs are administrative costs such as rent, advertising, and insurance. These costs are treated differently than manufacturing costs because they are not directly related to the production process.If Taylor bases her price on Hello Fresh’s price of $5 per serving, her gross profit percentage would be 86.11%.The cost of donated meals would be treated as a period cost, reported as a general and administrative expense.
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deadlines and action information should be included in the body of an e-mail message or memo. T/F
Answers
The statement "Deadlines and action information should be included in the body of an email message or memo" is True because it provides clear and actionable instructions to the recipients.
Why is Including deadlines and action information importamt?
Including deadlines and action information in the body of an email or memo is crucial for effective communication and ensuring that the intended recipients understand what needs to be done and by when.
By explicitly stating deadlines, individuals are aware of the time frame within which they need to complete a task or respond to a request. This helps in prioritizing work and managing time effectively.
Action information provides specific instructions or steps that need to be taken. By including this information in the body of the message, it eliminates confusion or ambiguity and guides the recipients on the necessary actions they need to take. This can include tasks to be completed, forms to be filled, documents to be reviewed, or any other action required.
By including deadlines and action information in the body of an email or memo, it ensures that recipients have all the necessary information readily available, facilitating prompt and efficient execution of tasks or actions.
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there is no right or wrong answer
Answers
Catabolism would be best described as a process that ________.
Answers
Catabolism is a metabolic process that involves the breakdown of complex molecules into simpler ones, resulting in the release of energy.
During catabolism, large molecules such as carbohydrates, lipids, and proteins are broken down into smaller units like glucose, fatty acids, and amino acids. This process involves several enzymatic reactions that occur in different parts of the cell and are regulated by specific enzymes. The energy released during catabolism is used to fuel other metabolic processes in the cell, such as anabolism, which involves the synthesis of new biomolecules. Catabolism is essential for the proper functioning of cells and organisms, as it provides the necessary energy to sustain life processes.
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which theoretical models views public relations as a system of managing relationships among organizations, individuals, and their many publics?
Answers
Two-way symmetrical model views public relations as a system of managing relationships among organizations, individuals, and their many publics.
What is public relations?Public relations is the management and distribution of information from individuals or organizations to the public to influence their perception. Public Relations are different in that PR is managed internally whereas Public Relations is not managed and contributed by external parties.PR specialists build and maintain a positive image for companies and organizations. They create media, from press releases to social media messages, that shape public opinion about companies and organizations and increase brand awareness.Public Relations can: Be proactive. For example, share positive news to raise awareness of your company. Reactions – such as responding to events that may adversely affect a company's reputation.To learn more about public relations from the given link :
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in the long-run neoclassical view, when wages and prices are flexible, ________ determine the size of real gdp.
a.potensial GDP and aggregtae supply
b.potensial GDP and aggregate demand
c. levels of output and aggregate supply
d.levels of wages and aggreagate demand
Answers
In the long-run neoclassical view, when wages and prices are flexible, Potential GDP and aggregate supply, determine the size of real gdp. The correct answer is option (A).
According to the neoclassical view, in the long run, wages and prices are flexible, and the economy operates at potential GDP, which is the maximum sustainable level of output given the economy's resources and technology. Potential GDP is determined by the supply side of the economy, which includes factors such as labor, capital, and technology.
In the neoclassical view, aggregate supply, which represents the total amount of goods and services that firms are willing and able to produce at different price levels, is determined by the factors of production and technology. In the long run, when wages and prices are flexible, the economy will adjust to changes in demand by changing output, rather than prices.Therefore, in the long run, changes in aggregate demand will only have a temporary effect on the economy's output and will not affect potential GDP. Instead, changes in potential GDP and aggregate supply will determine the size of real GDP in the long run. Hence the right answer is option (A).
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13. Why will the New York times not use the word "torture" when Americans are torturing people but have no
problems using this word to describe the actions of the Chinese?
14. What did early Polio researchers think might have caused Polio and why? What was the matter with this?
15. As the 1980's came to a close, what did most people think would happen to the crime rate of the United States?
Why?
16. Why did Police Forces say that the crime rate went down in the 1990's?
17. What surprising reason does economist Steven Levitt put forward as the real reason that crime rates went down
in the 1990's? What does he use to support this idea?
18. What did Steven Levitt learn about incentives when he tried to potty train his daughter?
Answers
There are terms that people finds offensive. The answers to the questions are below;
The New York times not use the word "torture" when Americans are torturing people as it is a controversial term, has simple bias in media and who the newspaper is connected with and thus they decided to drop it and use harsh interrogation instead.The Early Polio researchers have different reasons that caused Polio. Though at first, No one knew how polio was been transmitted or what result to it. The first theories state that the virus spread as a result of imported bananas or stray cats. The matter is not feasible and no one knows how true it is.
As the 1980's came to a close, there was a decrease in crime rate and as such most people think that the crime rate of the United States will continue to decrease but instead it went up.
Crime rates indexThe Police Forces say that the crime rate went down in the 1990's because as at in the beginning of 1990s, crime rate was 9.4 % while in the later end or in 1995s upwards, crime rate dropped to 8.2%.What Levitt believed that the sharp drop in the United States crime rate during the 1990's due to factors such as better policing, stiffer gun laws and an aging population. He support his idea using Roe v. Wade decision.
Steven Levitt learn about incentives when he tried to potty train his daughter. He learnt that even small children could work the system and see still see the tricks inherent in the system.
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To buy a product, customers in a market must first
Answers
To buy a product, customers must first have the need for the product.
Customers cannot just simply buy anything or everything when it comes to products. People love shopping but money is a very useful and powerful resource and customers understand it well, so they don't want to spend it on useless things.
Firstly, there should be a need or a desire to buy a particular product. After that the customer decides his or her budget or the money he would like to spend on that product. If it crosses his or her budget, then the customer may not able to buy the product.
Lastly, there should be willingness to buy the product. Nowadays, we get impressed by big brands, malls and stores giving us immense discounts for even our daily needs. That is how knowingly or unknowingly, we tend to shop more.
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what is the importance of identifying target markets?
Answers
Answer:
Identifying a target market allows marketers to focus on those most likely to purchase the product. Limiting the population funnels research and budgets to the customers with the highest profit potential
what happens when a note receivable is dishonored
Answers
When a note receivable is dishonored, it means that the debtor has failed to pay the amount due as per the agreed terms of the note. The dishonored note receivable is no longer considered an asset for the creditor, and it must be recorded as a loss.
The creditor can take legal action against the debtor to recover the amount due, but this process can be lengthy and expensive. The first step in recording a dishonored note is to reverse the original journal entry that recorded the note receivable. This means debiting the note receivable account for the amount due and crediting the accounts receivable account, which will reduce the number of accounts receivable.
Next, the creditor must record the loss incurred as a result of the dishonored note. The loss is recorded by debiting the bad debt expense account and crediting the note receivable account. The bad debt expense account represents the amount of money the creditor has lost due to the debtor's failure to pay, and it reduces the net income of the creditor.
If the creditor decides to take legal action, the dishonored note receivable can still be used as evidence of the debtor's obligation to pay. However, the creditor must be aware of the statute of limitations for taking legal action, which varies depending on the jurisdiction. In some cases, the creditor may decide to sell the dishonored note receivable to a collection agency for a percentage of its face value, allowing the creditor to recoup some of the lost funds without having to go through the legal process.
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the amount of unemployment varies a. substantially over time and across countries. b. substantially over time but little across countries.
Answers
The unemployment varies substantially over time and across countries. So, the correct answer is A).
The amount of unemployment varies both over time and across countries, but to different degrees. Over time, unemployment rates can be influenced by changes in economic conditions, government policies, technological advancements, and demographic shifts.
For example, during recessions, unemployment rates tend to increase as businesses lay off workers to cut costs. Similarly, advances in automation and artificial intelligence can lead to job displacement and higher unemployment rates in certain industries.
Across countries, unemployment rates can also vary due to differences in labor market regulations, education systems, social safety nets, and cultural attitudes towards work. For example, countries with more flexible labor markets may have lower unemployment rates than those with rigid employment laws. So, the correct option is A).
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2 Suppose a basket of goods and services that costs $100
in the United States costs 800 pesos in Mexico and the
current nominal exchange rate is 10 pesos per U. S. Dollar. Over the next hve years, the cost of that market basker
rises to $120 in the United States and to 1,200 pesos in
Mexico, although the nominal exchange rate remains at
10 pesos per U. S. Dollar. Calculate the following:
a. The real exchange rate now and five years from
now, if today's price index in both countries is 100. [Reminder: Equation 15-1 provides the price index
formula: (Cost of market basket in a given year/Cost
of market basket in base year) × 100. For this prob-
lem, use the current year as the base year. ]
b. Purchasing power parity today and five years from now
Answers
a. To calculate the real exchange rate, we need to compare the price levels between the two countries using the price index formula:
Price Index = (Cost of Market Basket in a Given Year / Cost of Market Basket in Base Year) × 100
For the base year, we can use the current year. Let's calculate the price index for both countries now and five years from now:
In the United States:
Price Index (now) = (Cost of Market Basket now / Cost of Market Basket now) × 100 = (100 / 100) × 100 = 100
Price Index (five years from now) = (Cost of Market Basket five years from now / Cost of Market Basket now) × 100 = (120 / 100) × 100 = 120
In Mexico:
Price Index (now) = (Cost of Market Basket now / Cost of Market Basket now) × 100 = (800 / 100) × 100 = 800
Price Index (five years from now) = (Cost of Market Basket five years from now / Cost of Market Basket now) × 100 = (1200 / 100) × 100 = 1200
Now, let's calculate the real exchange rate using the formula:
Real Exchange Rate = (Price Index in the United States / Price Index in Mexico) × Nominal Exchange Rate
Real Exchange Rate (now) = (100 / 800) × 10 = 1.25
Real Exchange Rate (five years from now) = (120 / 1200) × 10 = 1
b. Purchasing power parity (PPP) is a theory that suggests that the exchange rate between two countries should equalize the prices of a basket of goods and services. We can calculate the PPP using the formula:
PPP = (Cost of Market Basket in the United States / Cost of Market Basket in Mexico) × Nominal Exchange Rate
PPP (now) = (100 / 800) × 10 = 1.25
PPP (five years from now) = (120 / 1200) × 10 = 1
Therefore, the purchasing power parity is 1 in both cases, indicating that the nominal exchange rate is in line with the relative price levels of the two countries.
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Budgeting for Needs Select your needs from your cash expenses. CASH Last Month Gas for car$120 Fast food$20 Movie tickets$30 Amusement park$115
Answers
The necessities would be last month's gasoline for the car, while the expenses would be fast food, movie and amusement park tickets.
What are needs and expenses?Needs are a term that refers to the goods and services that a person needs in a fixed way for their daily life, some examples are:
TransportationFeedingEducationOutfitLiving placeAmong othersAccording to the above, it can be inferred that car gasoline is a necessity because it is a means of transportation that we can use to go to our work or place of study.
On the other hand, expenses are the goods and services that are not necessary for our daily lives but that we acquire for leisure and entertainment purposes. For example:
Video gameCinemaTheaterMake-upToysSweetStreet foodAmong othersBased on the above, it can be inferred that movie tickets, fast food, and amusement park tickets are expenses.
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Which of these producer activities did you participate in this week? Check all that apply.
U
I served people at a restaurant, hotel, coffee shop, or other business.
I worked in a bank, library, or retail store.
I created art to be sold in an art show
I made a product
I did yard work or other chores for pay.
Answers
Answer:
2nd and 4th
Explanation:
Answer:
2 and 4
Explanation:
In nims, resource inventorying refers to preparedness activities conducted outside of incident response.
Answers
Resource inventorying in NIMS (National Incident Management System) refers to a set of preparedness activities that are conducted outside of incident response.
These activities involve identifying, cataloging, and assessing the resources that are available to respond to potential incidents or emergencies.
The purpose of resource inventorying is to ensure that the necessary resources, including personnel, equipment, supplies, and facilities, are available to respond to an incident effectively and efficiently.
This is achieved through a systematic approach that involves identifying potential hazards and their associated risks, assessing the availability and capability of existing resources, and developing strategies to fill any gaps or deficiencies.
The process of resource inventorying typically involves collaboration between various stakeholders, including emergency responders, government agencies, private sector organizations, and community groups.
These stakeholders work together to develop plans and protocols for resource inventorying, as well as to identify and prioritize the resources that are most critical to effective incident response.
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What was in the sealed box from the Virginia Company in England that the settlers
A opened once they arrived?
B guns and weapons for protection from Indians
C gold
D the names of the seven men who would be the leaders
E a map that showed where the gold was
Answers
Answer:
B
Explanation:
Answer:
The Virginia Company sent a list of seven qualified men who could serve on a council and be the leaders. The company leaders did this because they knew the men would have a hard time agreeing on who should be the leaders.
Explanation:
In a local market, the price of product X decreases from $20 to $12, and the total quantity of sales increases from 100,000 to 225,000. A. Using the price elasticity of demand formula for calculating elasticity, what is the price elasticity of demand for product X? B. Is the demand elastic, unit-elastic or inelastic? C. What is the change in revenue for this product from the price decrease?
Answers
A. The formula for calculating price elasticity of demand is (% change in quantity demanded / % change in price). Using the given values, the % change in quantity demanded is (225,000-100,000)/100,000 = 1.25, and the % change in price is (20-12)/20 = 0.4. Therefore, the price elasticity of demand for product X is 1.25/0.4 = 3.125.
B. A price elasticity of demand greater than 1 indicates that the demand for the product is elastic, meaning that a small change in price leads to a proportionately larger change in quantity demanded. In this case, the price elasticity of demand for product X is 3.125, which is greater than 1, so the demand for product X is elastic.
C. To calculate the change in revenue, we need to multiply the new quantity sold by the new price, and then subtract the old revenue (quantity sold before the price decrease multiplied by the old price). The new revenue is 225,000 x 12 = $2,700,000, and the old revenue is 100,000 x 20 = $2,000,000. Therefore, the change in revenue is $2,700,000 - $2,000,000 = $700,000. The change in revenue is positive, indicating that the price decrease led to an increase in revenue for product X.
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In finance, we separate operating decisions from financing decisions and thus exclude ________ as a part of operating income from the income statement. Question 4 options: A) interest expense B) earnings C) dividends D) cash flow
Answers
Answer:
A) interest expense
Explanation:
Operating income or EBIT (earnings before interest and taxes) are calculated considering that the company is financed only through equity. The same applies when we are evaluating different projects, since we must be able to determine if the company or project can yield a profit without considering who paid for its operations.
The same applies for taxes, since it doesn't matter how high or low taxes are, if the company doesn't make a profit, then it will pay none.
this is for ap-ex learning
_____ is important because it helps you create a plan to complete all tasks.
A. A long-term goal
B. Prioritization
C. A short-term goal
D. An instant goal
Answers
Answer:
B. Prioritization
Explanation:
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How can a company hide 2000$ of debts in a double entry journal accounting….. using debits and credits
Answers
A company can buy a machine that is expected to have a three-year life and a $21,000 salvage value. The machine will cost $1,764,000 and is expected
to produce a $191,000 after-tax net income to be received at the end of each year. If a table of present values of $1 at 12% shows values of 0.8929 for
one year, 0.7972 for two years, and 0.7118 for three years, what is the net present value of the cash flows from the investment, discounted at 12%?
Multiple Choice
$105,214
$564 457
$615,438
$689,319
O $1,869,214
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Answers
The net present value of the cash flows from the investment, discounted at 12% is $564,457.
Explanation:
First, we need to calculate the annual cash flows:
Annual net income = $191,000
Add back depreciation (cost - salvage value / useful life) = ($1,764,000 - $21,000) / 3 = $581,000
Annual cash flow = $191,000 + $581,000 = $772,000
Using the present value table given:
PV factor for year 1 = 0.8929
PV factor for year 2 = 0.7972
PV factor for year 3 = 0.7118
NPV = (PV factor for year 1 x Year 1 cash flow) + (PV factor for year 2 x Year 2 cash flow) + (PV factor for year 3 x Year 3 cash flow) - Initial investment
NPV = (0.8929 x $772,000) + (0.7972 x $772,000) + (0.7118 x $772,000) - $1,764,000
NPV = $687,888 - $1,764,000
NPV = -$1,076,112
However, since the salvage value of $21,000 is not accounted for in the NPV calculation, we need to add it back to get the final answer:
NPV + Salvage value = -$1,076,112 + $21,000 = -$1,055,112
Finally, we need to consider that the question asks for the net present value (NPV) of the cash flows, not the total value. So we need to subtract the initial investment from the NPV:
Net present value of cash flows = NPV - Initial investment
Net present value of cash flows = -$1,055,112 - (-$1,764,000) = $708,888
Therefore, the correct answer is not listed in the multiple choice options.
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show the vegetable market of nepal in pyramid
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Due to massive increases in agriculture and production area over the last two decades, per capita vegetable consumption has increased to 105 kg from 60 kg. Nepal has reported 3,243,521 vegetable holdings. Vegetable crops are grown on a total of 232,295 hectares of cultivable land.
What is market?A market is a collection of systems, institutions, procedures, social relations, or infrastructures through which parties exchange goods and services. While parties can barter for goods and services, most markets rely on sellers offering their goods or services to buyers in exchange for money. The exchange of goods and services that occurs as a result of buyers and sellers coming into contact with one another, either directly or through mediating agents or institutions, is referred to as a market.A market is defined as the total number of buyers and sellers in the area or region under consideration. The area could be the entire planet, a country, a region, a state, or a city.To learn more about market, refer to:
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a family spends $59,000 a year for living expenses. if prices increase 3 percent a year for the next four years, what amount will the family need for their annual living expenses after four years?
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The annual living expense is the amount of money needed to cover basic expenses such as housing, food, taxes, and healthcare in a certain place and time period.
The annual living expense is usually used to compare how expensive it is to live in one city versus another. The cost of living is tied to wages. If expenses are higher in a city, such as New York, for instance, salary levels must be upward so that people can afford to live in that city.
The annual living expense can be a important factor in personal wealth accumulation because a salary can provide a higher standard of living in a city where daily expenses such as rent, food and entertainment are less.
Accordingly, a big salary can seem not adequate in an expensive city such as New York.
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The high-low method is often employed in analyzing a. mixed costs b. variable costs c. fixed costs d. conversion costs
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The high-low method is often employed in analyzing mixed costs. The correct answer is option (A)
The mixed costs can be referred to as semi-variable costs that comprise both fixed and variable components. The high-low method aids in separating the fixed and variable cost elements within the mixed costs. This method of cost analysis is an accounting technique that helps in the separation of a mixed cost into its fixed and variable components by analyzing the changes in the cost that correspond to changes in an organization's activity level. A business may use the high-low method in analyzing the mixed costs to plan its budget, set prices for its goods and services, and make managerial decisions. The high-low method entails the use of data from the highest and lowest levels of production and the related costs.
Therefore, it helps in determining the variable cost per unit of production by analyzing the change in the total cost incurred and the changes in the level of production. The high-low method involves the following steps: Identifying the highest and lowest levels of production and their associated costs. Calculating the variable cost per unit of production by dividing the change in the cost by the change in the units of production. Calculating the fixed cost component by subtracting the variable cost per unit of production from the total cost of production.
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this shows a lender, if you have a good track record of paying debts. A. loan B.profit planning C. SBA D. credit rating
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Answer:
The big three C's – Credit, Capacity, and Collateral – are really the drivers how lenders determine who gets a loan, how much they'll loan, and what the interest charge will be.What is a sales quote?
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Answer:
Explanation:
A sales quote allows a prospective buyer to see the costs that will be involved for desired work.
Draw the flowchart diagram and write the pseudocode for a program that calculates the amount of tax withheld from an employee's weekly salary, the tax deduction to which the employee is entitled for each dependent, and the employee's take-home pay. The program output includes state tax withheld, federal tax withheld, dependent tax deductions, salary, and take-home pay. Variables: num salary 1250.00 num state Tax num federalTax num numDependents=2 num dependentDeduction num totalWithholding num takeHomePay None Calculate state withholding tax (stateTax) at 6.5 percent. Calculate federal withholding tax (federalTax) at 28.0 percent. Calculate dependent deductions (dependentDeduction) at 2.5 percent of the employee's salary for each dependent. Calculate total withholding (totalWithholding) as state Tax + federalTax + dependent Deduction. Calculate take-home pay (takeHomePay) as salary-totalWithholding. Output: State Tax: $81.25 Federal Tax: $350 Dependents: $62.5 Salary: $1250 Take-Home Pay: $756.25 Input: - Process:
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Here is the pseudocode for the program:
markdown
Copy code
1. Initialize variables:
- salary = 1250.00
- stateTax
- federalTax
- numDependents = 2
- dependentDeduction
- totalWithholding
- takeHomePay
2. Calculate stateTax as 6.5% of salary.
3. Calculate federalTax as 28.0% of salary.
4. Calculate dependentDeduction as 2.5% of salary multiplied by numDependents.
5. Calculate totalWithholding as the sum of stateTax, federalTax, and dependentDeduction.
6. Calculate takeHomePay as salary minus totalWithholding.
7. Output the results:
- "State Tax: $stateTax"
- "Federal Tax: $federalTax"
- "Dependents: $dependentDeduction"
- "Salary: $salary"
- "Take-Home Pay: $takeHomePay"
The pseudocode outlines the steps to calculate the state tax withheld, federal tax withheld, dependent tax deductions, salary, and take-home pay based on the given variables and formulas. It initializes the variables and then performs the necessary calculations. The results are then outputted to display the state tax, federal tax, dependent deductions, salary, and take-home pay. The pseudocode provides a structured plan for implementing the desired program.
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About which activity or aspect of the distribution function does David need more guidance?
David works as a warehouse employee for a business that manufactures kitchenware. The utensils and other items that the business manufactures are extremely delicate. Recently, David dropped some expensive glassware when he was loading the items in a truck. David’s manager has decided to provide him better guidance about an important aspect of distribution, which is BLANK.
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Answer: I think it’s marketing
Explanation: