Coronado Inc. had beginning inventory of $12700 at cost and $20900 at retail. Net purchases were $113930 at cost and $158500 at retail. Net markups were $9600, net markdowns were $7400, and sales revenue was $151100. Compute ending inventory at cost using the conventional retail method. (Round ratios for computational purposes to 0 decimal places, e.g. 78% and final answer to 0 decimal places, e.g. 28,987.)


Answer 1


Ending Inventory:21,267.70


                cost   retail  

beginning        12,700    20,900

purchases   113,930   158,500

markups                9,600  

markdowns               (7,400)

total                 126,630    181,600  

inventory to retail ratio: 126,630 / 181,600 =  0.6973

sales revenues   151,100  

COGS: 151,100 x 0.6973 =  105,362.30

Ending Inventory: 126,630 - 105,362.30 = 21,267.70

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IRR= 17%


The internal rate of return is the profitability (IRR) of the money that remains invested during a project life. To calculated we need to use the net present value formula (NPV). The IRR is the rate at which the NPV is cero. I attached the formula but it is better to calculate the IRR using excel.

First, you have to copy all cash flows including the investment with a negative sign. Then you use the financial formula "IRR" in this way:

"=IRR(C3:C8)" (I attached the excel figure)

In this case, you have to sum the cash flow produced by the property plus the earnings of the its sale on year 5.

Consider how McKnight Valley River Park Lodge could use capital budgeting to decide whether the $ 11 comma 500 comma 000 River Park Lodge expansion would be a good investment. Assume McKnight ​Valley's managers developed the following estimates concerning the​ expansion: LOADING...​(Click the icon to view the​ estimates.) Assume that McKnight Valley uses the​ straight-line depreciation method and expects the lodge expansion to have a residual value of $ 950 comma 000 at the end of its ten​-year life. The average annual net cash inflow from the expansion is expected to be $ 2 comma 779 comma 548. Compute the payback for the expansion project. Round to one decimal place.



4.1 years


The payback period is the time it takes the project to recover the initial investment required to carry it out.

We are not given any information about the actual yearly revenues and costs, but you give the average net cash flow per year, so we can use that amount to calculate the payback period:

the payback period = total investment / net cash flow = $11,500,000 / $2,779,548 = 4.137 ≈ 4.1 years

Cash 5,345 Accounts Receivable 2,662 Prepaid Expenses 725 Equipment 14,421 Accumulated Depreciation 6,970 Accounts Payable 1,643 Notes Payable 5,223 Common Stock 1,000 Retained Earnings 6,003 Dividends 664 Fees Earned 7,033 Wages Expense 2,463 Rent Expense 804 Utilities Expense 441 Depreciation Expense 234 Miscellaneous Expense 113 Totals 27,872 27,872 Determine the net income (loss) for the period.



Net income = $8,318


Current asset

Cash 5,345

Accounts receivables 2,662

Prepaid expenses 725

Total 8,732

Fixed asset

Equipment 14,421

Less dep. 6,970

Balance. 7,451

Total 8,733 + 7,451 = 16,184

Current liabilities

Accounts payable 1,643

Notes payable. 5,223

Total. 6,866

Financed by

Common stock 1,000

Net Income. 8,318

Total 6,866 + 9,318 = 16,184

A new project would require an immediate increase in raw materials in the amount of $12,000. The firm expects that accounts payable will automatically increase $8,500. How much must the firm expect its investment in net working capital to change if they accept this project


Answer: Increase by $3,500


The Net Working Capital of a company is calculated by subtracting Current liabilities from current assets.

Raw materials are current assets and Accounts Payable are current liabilities.

The Net working capital resulting from accepting this project is;

= 12,000 - 8,500

= $3,500

Net Working capital investment would increase by $3,500.

Gilligan Co.'s bonds currently sell for $1,150. They have a 6.75% annual coupon rate and a 15-year maturity, and are callable in 6 years at $1,067.50. Assume that no costs other than the call premium would be incurred to call and refund the bonds, and also assume that the yield curve is horizontal, with rates expected to remain at current levels on into the future. Under these conditions, what rate of return should an investor expect to earn if he or she purchases these bonds, the YTC or the YTM?(A) 3.92%
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(E) 4.81%


See the image below to get the explanation

Compared to a perfectly competitive firm, a monopolist____________.A. will, according to Schumpeter, invest fewer resources in research and development.
B. is less likely to face government regulation.
C. is less likely to advertise.
D. usually produces an inefficiently small level of output.



D. usually produces an inefficiently small level of output.


A perfect competition is characterised by many buyers and sellers of homogenous goods and services. Market prices is usually set by market forces. There is no need for advertising because all firms produce homogenous products. There is little or no need for government regulation because goods and services are efficiently distributed.

A monopoly is characterised by one firm in the industry. The firm sets the market price. The government regulates the activities of the activities of a monopoly to reduce inefficiency that usually occur. Either quantity produced or price are usually regulated by the government to reduce inefficiency and ensure fair distribution of goods and services.

Monopoly firms usually advertise and undertake more research activities when compared to a pure competition.

I hope my answer helps you

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