Humana Hospital Corporation installed a new MRI machine at a cost of $750,000 this year in its medical professional clinic in Cedar Park. This state-of-the-art system is expected to be used for 5 years and then sold for $125,000. Humana uses a return requirement of 25% per year for all of its medical diagnostic equipment. As a bioengineering student currently serving a coop semester on the management staff of Humana Hospital Corporation in Louisville, Kentucky, you are asked to determine the minimum revenue required each year to realize the expected recovery and return. In short, you need to estimate first the capitol recovery and then the annual worth.
In: Economics
Eagle has an accountant, John Steinbell, prepare its financial statements and to prepare the tax returns. While the financial statement show a profit for the company, John takes a very aggressive stance in allowing expense deductions from income, resulting in the company showing a significant loss on the tax returns for two years. After Eagle is audited by the Internal Revenue Service, the IRS does not allow many of the deductions and charges Eagle not only for the tax owed but also significant penalties. The Eagle owners are furious with their accountant. Do they have a cause of action against him? Please explain.
In: Accounting
In: Finance
On 1 January 2019, Halo Limited purchased a 12% $900,000 bond as its debt investment.
1. Halo purchased the bond at $968,234.
2. The bond provides bondholders with a 10% yield per annum.
3. The bond matures on 1 January 2024, with interest payable on 31 December each year.
4. Halo’s business model for the bond is held-for collection.
Required: Prepare a bond amortisation schedule by showing cash received, interest revenue, any premium or discount amortised and the carrying amount of bonds on 31 December 2019 and 2020 (rounded to the nearest dollar).
In: Accounting
Which of the following statements is incorrect regarding contribution margin?
A. The total contribution margin tells managers the amount by which sales revenue exceeds cost of goods sold.
B. The contribution margin income statement is organized by cost behavior.
C. The variable cost percentage represents the amount from each sales dollar that covers variable costs.
D. The unit contribution margin is calculated by subtracting the unit variable cost from the sales price.
E. Companies that sell more than one product must consider sales mix when performing CVP analysis
In: Accounting
On October 1, Ebony Ernst organized Ernst Consulting; on October
3, the owner contributed $82,890 in assets to launch the business.
On October 31, the company’s records show the following items and
amounts.
| Cash | $ | 15,140 | Cash withdrawals by owner | $ | 830 | |
| Accounts receivable | 12,720 | Consulting revenue | 12,720 | |||
| Office supplies | 2,110 | Rent expense | 2,380 | |||
| Land | 46,010 | Salaries expense | 5,620 | |||
| Office equipment | 16,780 | Telephone expense | 780 | |||
| Accounts payable | 7,360 | Miscellaneous expenses | 600 | |||
| Owner investments | 82,890 | |||||
Using the above information prepare an October statement of
owner's equity for Ernst Consulting.
In: Accounting
Luke Company has three
divisions: Peak, View, and Grand. The company has a hurdle rate of
6.76 percent. Selected operating data for the three divisions
follow:
| Peak | View | Grand | ||||
| Sales revenue | $ | 343,000 | $ | 228,000 | $ | 301,000 |
| Cost of goods sold | 204,000 | 105,000 | 201,000 | |||
| Miscellaneous operating expenses | 41,000 | 39,000 | 34,000 | |||
| Average invested assets | 1,360,000 | 910,000 | 1,165,000 | |||
Required:
1. Compute the return on investment for each
division.
2. Compute the residual income for each
division.
Return on Investment
Peak (%) =
View (%) =
Grand (%) =
Residual Income (Loss)
Peak =
View =
Grand =
In: Accounting
Assume that you invest in oil, and you plan to sell 350,000 oil barrels in Dec 2020. You think that the price of oil in Dec would be in the range of $50 – $55 per barrel. Show how would you use the futures contract to hedge against oil revenue loss (assume each futures contract calls for the delivery of 1,000 oil barrels and the current futures price is $52.5 per barrel) or against a future price reduction (hint: develop a scenario, in a table, where you show the possible future scenarios with respect to the expected oil price range).
In: Finance
Intermediate microeconomic theory courses, with topics production, cost, and supply
The book used in this course is Intermediate Microeconomics and Its Application, by walter nicholson
The question is :
1. It is known that the total revenue function is ?(?) =
45,75? − ?2
short-run cost function ??? (?) = ?3 - 12?
2 + 60? + 40
A. Prove that: Income rises as price increases when the price
elasticity of demand is inelastic.
Income rises if price falls when the price elasticity of demand is
elastic. How about profit?
B. Calculate consumer surplus and producer surplus in the above problem? Note that the price of equilibrium goods when Qd = Qs
In: Economics
Assume that you invest in oil, and you plan to sell 350,000 oil barrels in Dec 2020. You think that the price of oil in Dec would be in the range of $50 – $55 per barrel. Show how would you use the futures contract to hedge against oil revenue loss (assume each futures contract calls for the delivery of 1,000 oil barrels and the current futures price is $52.5 per barrel) or against a future price reduction (hint: develop a scenario, in a table, where you show the possible future scenarios with respect to the expected oil price range)
In: Finance