Using Yahoo! Finance find the value of beta for your reference

Using Yahoo! Finance find the value of beta for your reference company. Write a two page paper discussing the following items:
    What is the estimated beta coefficient of your company? What does this beta mean in terms of your choice to include this company in your overall portfolio?

    Given the beta of your company, the present yield to maturity on U.S. government bonds maturing in one year (currently about 4.5% annually) and an assessment that the market risk premium (that is – the difference between the expected rate of return on the ‘market portfolio’ and the risk-free rate of interest) is 6.5%, use the CAPM equation in order to find out what is the present ‘cost of equity’ of your company? Explain what is the meaning of the ‘cost of equity’.

    Choose two other companies, look up their “Beta” and report the names of these companies and their betas. Suppose you invest one third of your money in each of the stocks of these companies. What will the beta of the portfolio be? Given the data in (b), what will the Expected Rate of Return on this portfolio be? Do you feel that the three-stock portfolio is sufficiently diversified or does it still have risk that can be diversified away? Explain.

SLP Assignment Expectations

In a two-page report explain your answers thoroughly with references to the background materials. Make sure to demonstrate a strong understanding of the concept of beta and the risk/return trade off.

 Here’s the SOLUTION

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During Heaton Company’s first two years of operations, the company

During Heaton Company’s first two years of operations, the company reported absorption costing net operating income as follows:

Year 1         Year 2
Sales (@ $64 per unit)    $1,280,000 $1,920,000
Cost of goods sold (@ $40 per unit)    800,000     1,200,000
Gross margin         480,000               720,000
Selling and administrative expenses*    308,000    338,000
Net operating income    $172,000    $382,000
________________________________________
* $3 per unit variable; $248,000 fixed each year.
The company’s $40 unit product cost is computed as follows:

Direct materials    $ 9
Direct labor         12
Variable manufacturing overhead         1
Fixed manufacturing overhead ($450,000 ÷ 25,000 units)         18
Absorption costing unit product cost    $    40
________________________________________

Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder consists
of depreciation charges on production equipment and buildings.
Production and cost data for the two years are:

Year 1          Year 2
Units produced 25,000         25,000
Units sold     20,000          30,000
________________________   ________________

Required:
1. Prepare a variable costing contribution format income statement for each year.

Heaton Company
Variable Costing Income Statement
Year 1    Year 2
Sales     $1,280,000    $1,920,000
Variable Expenses:
Variables of cost of goods sold
Variable selling & administrative expenses

Total Variable Expenses

Contribution Margin
Fixed expenses:
Fixed manufacturing overhead
Fixed selling and administrative expenses

Total Fixed Expenses
Net operating income (loss)

2. Reconcile the absorption costing and the variable costing net operating income figures for each year.

Reconciliation of variable costing and absorption costing net operating incomes (losses)
  Year 1    Year 2
Variable costing net income (loss)
Add (deduct fixed manufacturing overhead deferred in (released from) inventory under absorption costing
Absorption costing net operating income (loss)

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Return on investment (ROI) is computed in the following manner

Return on investment (ROI) is computed in the following manner: ROI is equal to turnover multiplied by earnings as a percent of sales. Turnover is sales divided by total investment. Total investment is current assets (inventories, accounts receivable, and cash) plus fixed assets. Earnings equal sales minus the cost of sales. The cost of sales consists of variable production costs, selling expenses, freight and delivery, and administrative costs.

Construct an influence diagram that relates these variables.
Define symbols and develop a mathematical model.

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Bill Graham started his career mowing lawns for neighbors while he was in junior high school

Bill’s Lawn Care Module 1 Mini Practice Problem

Bill Graham started his career mowing lawns for neighbors while he was in junior high school.  Bill worked summers for the local golf course while he was in high school and now that he has graduated, he is starting his own lawn care business.  You are taking an accounting class at the local community college and have agreed to help Bill set up and maintain the accounting records for his new business.  He has set up a checking account in the business name, Bill’s Lawn Care, at the local bank.  After some discussion with you, Bill has decided to set the business up as a sole proprietorship.  You and Bill established a chart of accounts to be used in recording the business transactions.  In May, 2014, the following activities occur at Bill’s Lawn Care.

May 1    Bill withdraws $20,000 from his savings account and deposits it in the business’ bank account.

May 2    Bill purchases a used truck for $7,000 to use for the lawn care business, he writes a check for $3,500 and signs a 1 year, 6% note for the balance.

May 5     Bill purchases a lawn mower for $300 and an aerator for $500 and writes a check for the total amount.

May 6    Bill writes a $600 check for a six month insurance policy that expires     October 31, 2014

May 7     Bill establishes a $1,000 line of credit account with Jones Fuel, a local gas station.

May 8     Bill writes a check for $50 for a weekly advertisement in the local newspaper.  The advertisement will run every Friday through the end of May, 2014.

May 16    At the end of the first week, Bill has earned $600 for lawn care services.  Of the $600, $500 was paid in cash and $100 was on credit.

May 23     At the end of the second week, Bill has earned $1,100 for lawn care services.  Of the $1,100, $700 was paid in cash and $400 was on credit.

May 26    Bill writes a check for $75 to have the mower blade sharpened.

May 30    At the end of the third week, Bill has earned $1,000 for lawn care services.  Of the $1,000, $800 was paid in cash and $200 was on credit.

May 31    Bill receives payments, on account, in the amount of $500

May 31    Bill receives his monthly invoice and writes a check for $400 to Jones Fuel.

May 31    Bill writes a check to himself for $1,500 for personal expenses.

Instructions:

1. Using the chart of accounts provided below, and the Excel template provided with this assignment, prepare journal entries, in good form, to record the May transactions.  Explanations are optional.
2. Post the journal entries to general ledger accounts.
3. Prepare a trial balance as of May 31, 2014, for Bill’s Lawn Care.

Bill’s Lawn Care
Chart of Accounts

Classification     Account Number    Account Name
ASSETS     101    Cash
110    Accounts Receivable
120    Supplies
130    Prepaid Insurance
150    Equipment
155    Accumulated Depreciation – Equipment
LIABILITIES     201    Accounts Payable
220    Notes Payable
225    Interest Payable
OWNER’S EQUITY    301    Owner’s Capital
305    Owner’s Drawings
REVENUES    401    Lawn Service Revenue
EXPENSES    620    Supplies Expense
630    Fuel Expense
640    Repair and Maintenance Expense
650    Advertising Expense
660    Insurance Expense
670    Depreciation Expense
680    Interest Expense

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QNT 275 Week 2 Assignment (MINI PROJECT 3)

QNT 275 Week 2 Assignment – MINI PROJECT 3

Purpose of Assignment

This assignment provided students with practice in understanding the relationship of averages and standard deviation to make an informed business decision about the gross income performance of each movie genre. Students will learn to implement the use of these statistical measures for better business decision-making.

Assignment Steps

Refer to Mini-Project Movie Data Set. EXCEL

Analyze and write a report summarizing this data. This report should include answers to at least the following questions:

  Calculate the summary measures (the mean, standard deviation, five-number summary, and interquartile range) of the total gross income for each movie genre.
Which genre had greater variability in total gross income? Explain why.
Draw a box-and-whisker plot of a movie’s length of time (minutes) by genre. Are there any differences in movie lengths when compared across genres? Are there any outliers?

Use the mean movie gross income for each genre to compare the movie opening gross income.

Choose an appropriate statistical measure to compare the consistency of movie gross income.

Make the calculations and write a 700-word report comparing the total movie gross income and the consistency of movie opening gross by genre.

Here’s the SOLUTION

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On January 1 of Year 1, Kamili Company leased a truck for a 7-year

1. On January 1 of Year 1, Kamili Company leased a truck for a 7-year period under a capital lease and agreed to pay an annual lease payment of $6,000 at the end of each year. The interest rate associated with this capital lease is 12% compounded annually. On December 31 of Year 1,the first $6,000 payment was made as scheduled. The entry to record the payment of the first $6,000 payment on December 31 of Year 1includes

A DEBIT to Interest Expense of $6,000.

A DEBIT to Interest Expense of $3,286.

A DEBIT to Interest Expense of $2,714.

A DEBIT to Lease Liability of $6,000.

A DEBIT to Lease Liability of $24,669.

2) The University of Northern Utah purchased a van for $40,000 on January 1 of Year 1. The van has an estimated useful life of 8 years and an estimated salvage value of $4,000. Using double-declining-balance depreciation, compute the amount of depreciation expense to be recognized in Year 2 (the second year).

$6,000

$7,500

$12,000

$5,600

$11,200

$6,7203.

3) On September 12 of Year 1, Rosie Company purchased land, a building,and some equipment for a total price of $450,000. The land, building,and equipment were appraised at $240,000, $180,000, and $80,000,respectively. At what amount should Rosie Company record the building?

$180,000

$150,000

$130,000

$216,000

$162,000

$72,000

4. Sholpan Company purchased a machine for $90,000. The machine had an estimated residual value of $6,000 and an estimated useful life of 8years. After two full years of experience with the machine, it was determined that its total useful life would be only 5 years instead of 8. The estimated residual value remains unchanged at $6,000. Compute depreciation expense for the third year. Sholpan Company uses straight-line depreciation.

$21,000

$16,800

$10,500

$23,000

$12,600

$11,500

5. Frodo Enterprises owns equipment located in Middle Earth. The cost and the accumulated depreciation of the equipment are $2,800,000 and $1,300,000, respectively. Because of a changing political environment, management is concerned that the equipment has become impaired. Management hired several independent appraisers who agreed that the current value of the equipment is $900,000. Management also estimates that the equipment will generate cash inflows of $80,000 per year for the next 20 years.

Currently, the equipment is recorded in Frodo’s accounting records at a net book value of $1,500,000 ($2,800,000 – $1,300,000). After this re-examination of the equipment,which ONE of the following is the appropriate accounting action?

Do not recognize an asset impairment loss; continue to report the asset at a net book value of $1,500,000.

Recognize an asset impairment loss; the asset should be recorded at $900,000.

Recognize an asset impairment loss; the asset should be recorded at $1,500,000.

Recognize an asset impairment loss; the asset should be recorded at $1,600,000.

Recognize an asset impairment loss; the asset should be recorded at $2,400,000.

Recognize an asset impairment loss; the asset should be recorded at $2,500,000.

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Why are firms reluctant to implement REA modeling concepts

1. Why are firms reluctant to implement REA modeling concepts?

2. Do you believe that REA modeling will become a standard for developing & implementing accounting information systems? Explain why or why not?

3. As you read this short example, think about which items need more detailed examples and what seems to be in error. Can you pick them out? Do you agree with the assessment or REA?

Ralph’s surveying company (Ralph and three other survey agents) has several things that add economic value to his company. He is the biggest resource his company has to offer…that and orders for surveys, and of course cash. This is the resource part or R of REA.

The company collects information like section, township, range, parcel ID numbers in a efficiency process in order to save time with land surveying. It is nice to know that you just completed a survey on the next lot when you begin a new survey. Believe me, after a while all lots look very similar. These are the events that our important to our company and represent the E in REA.

Like most companies our agents are important to us. They are the clients and our personnel. Without them the REA model would seem useless. These are the agents we encounter and the A in REA.

4. What would be the problem of using standardized REA diagrams?

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Wealth Ltd (Wealth) is an asset management and consulting company

Wealth Ltd (Wealth) is an asset management and consulting company which listed on the ASX (Australian Stock Exchange) five years ago. It has eight directors. Alan, Ben, Chris, David and Elias are non-executive directors, with Alan, David and Elias making up the audit committee. Fred, Gerald and Hal are executive directors, being the chief executive officer, chief financial officer and chief operating officer respectively. The company has around 20,000 shareholders although the precise number changes on a daily basis.

Fifteen years ago, Gerald was disqualified from managing companies for eight years for failing to keep adequate accounting records and causing significant losses to the company he directed. Two years ago, Fred, Gerald and Hal set up another company, Boss Enterprises Pty Ltd (Boss), of which they own all the shares and are the only directors. They then caused Wealth to enter into a number of contracts for the supply of services with Boss on terms which are unfavourable to Wealth. They have also been diverting a substantial amount of business from Wealth to Boss. For a while they managed to conceal the losses these actions were causing to Wealth by producing fake accounting figures. While the figures were very obviously fake, the fraud was not discovered by the company’s auditors or the audit committee for a couple of years, but with the appointment of new auditors, the true position has been uncovered. As a result of this, Wealth’s turnover and profits are down, and its share price has fallen considerably.

A number of shareholders have complained to ASIC, which has launched an investigation. Focusing on duties and remedies found in the Corporations Act 2001 (Cth) and related case law, advise Alan, Ben and Fred as to whether they are at risk of liability or other sanctions.

Here’s the SOLUTION

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Write a 350- to 700-word letter to the City Council in neighboring

Write a 350- to 700-word letter to the City Council in neighboring Glimmerville, using your Gamescape Episode 1 Results PDF as a resource. In your letter, explain the situation with the Grass Carp and some of the challenges faced in restoring balance to Sparksville’s aquatic ecosystem. Since Glimmerville is experiencing a similar situation, provide advice on how to restore their lake ecosystem. Include the following points in your letter:

   What is ecosystem balance? Which reduction factors and which growth factors impacted ecosystem balance in Episode 1? Describe two ways in which the invasive species and native species impact ecosystem balance.
Based on Episode 1 and the assigned readings, describe how native and invasive species might affect succession. How might an invasive species impact the natural selection of the native species within a habitat? Describe how native and invasive species affect the flow of energy in an ecosystem?
Describe four possible solutions to the Grass Carp invasion problem. Describe one advantage and one disadvantage for each solution.
As you learned in Chapters 5 and 6 of Environmental Science, the flow of energy, species interactions, and natural selection change over time. Since ecosystems and species are in flux, why should humans strive to restore and maintain ecosystem balance? Use one example from Episode 1 and one example from the assigned reading materials to support your points. Why is sustainability important to these environmental concerns?

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ACT 5140 Accounting for Decision Makers – Homework 4

ACT 5140 Accounting for Decision Makers – Homework # 4

The ABC Company estimates that its total cost to send out invoices, receive payments, deposit payments, and update the accounting records was $70.00 per sales invoice in 2016. In 2016, there were 700,000 sales invoices and total fixed costs of $1,000,000 relating to these invoices.

a.) What was the total cost and total cost per invoice in 2017? in 2017, the company expects total fixed costs and variable costs per unit to remain the same as in 2016.

b.) If the company budgets 500,000 sales invoices in 2017, what will be the expected total cost and expected cost per unit for 2017? (Round your answer to 2 decimal places)

Question 2:

A company estimates that its total cost to acquire materials, setup machines, and produce products is $150.00 per unit produced in 2016. In 2016, there we 100,000 units produced and variable cost per unit produced totaled $75.00
In 2017, the company expects total fixed costes and variable costs per unit to be the same as in 2016.
If the company budgets to produce 125,000 units in 2017, what are the expected total cost and expected cost per unit for 2017?

Question 3:   

The ABC Company collected the following annual information on total net sales and total operating costs:
Year    Total Net Sales    Total Operating Costs
2015     $ 21,000     16,000$
2016     $ 22,000     16,400$

IN 2017, total net sales are budgeted to be $24,000. Using the high-low method, prepare an estimate of total operating costs for 2017, assuming total fixed costs as a percentage of total net sales are expected to be the same in 2017 as in 2015 and 2016.

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