Answer:
The Cost of equity and cost of debt would likely to increase
Explanation:
If the debt rises so the cost of debt is also rising. Moreover, the higher leverage represents more risk in which the cost of equity also increased
In the given situation, both the cost of debt and cost of equity is rises but the net income would be decline because there is high interest expense and at the same time the assets would be remain the same and return on assets would be lesser
An investor in a limited partnership generating passive losses can offset these against:___________.
A. REIT dividends
B. income generated from direct investments in real estate
C. dividends received from blue chip corporations
D. capital gains generated from the sale of securities
Answer:
B. income generated from direct investments in real estate
Explanation:
Given that passive losses can only be offset by passive income, then from the available options, REIT otherwise known as Real Estate Investment Trust, the dividend is not categorized as passive income by the Internal Revenue Service, hence, option A is wrong.
Also, dividends received from blue-chip corporations is not a passive income, hence, option C is wrong.
At the same time, option D which is capital gains generated from the sale of securities is not a passive income either.
Therefore, option B, which is income generated from direct investments in real estate is a perfect example of passive income. Hence, the right answer.
The firm's findings are best described as the
The United Nations hires a global firm to study digital
communications around the world. Here is what that firm
wrote based on its research.
Many people in the world have little experience with
computers, and only one-fifth of the world's population
has Internet access. The differences in the ability to use
this technology make it challenging to reach people from
around the world.
digital divide.
O inequality divide.
O Internet divide.
computer divide.
Answer:digital divide.
Explanation:
Which factor will not shift the labor supply curve?A. a change in preferences and social normsB. changes in wealthC. changes in opportunitiesD. a change in the wage rate
Answer:
D. a change in the wage rate
Explanation:
A change in the wage rate would lead to a movement along the supply curve.
An increase in wages would increase the quantity supplied. This would lead to a movement up along the supply curve.
A decrease in wages would decrease the supply of labour. This would lead to a movement down along the supply curve
Company X has a higher degree of financial risk than Company Y. Company X can offset this by lowering its operating leverage. True or false? Firm A has more business risk than Firm B, but they both have the same total risk. Which of the following statements must be true? a. In order to offset its higher business risk, Firm A will increase its operating leverage so that its total risk is the same as Firm B's. b. Because Firm A has more business risk than Firm B, its debt ratio will be greater than Firm B's. c. Because Firm B has less business risk than Firm A, its debt ratio will be lower than Firm A's. d. None of the statements above are true. The correct response is .
Answer:
Trued. None of the statements above are true.Explanation:
1. Financial risk refers to the risk of defaulting on debt obligations by a company. Company X can indeed offset this by lowering its operating leverage because a high operating level means that the company's cashflows are more unpredictable which means there is uncertainty and uncertainty is risky.
If the Operating Leverage is lowered, there is less risk.
2. Option A is wrong because if Firm A increases their operating leverage its risk will become even higher therefore making its total risk higher than Firm B.
Option B is wrong because the debt ratio relates to financial risk not business risk. Option C is wrong for the same reason.
None of the statements are therefore true.
Bi-Lo Traders is considering a project that will produce sales of $41,350 and have costs of $23,900. Taxes will be $4,200 and the depreciation expense will be $2,425. An initial cash outlay of $1,950 is required for net working capital. What is the project's operating cash flow
Answer:
$13,250
Explanation:
Bi-Lo traders is considering a project that will produce sales of $41,350 and costs of $23,900
Taxes will be $4,200
Depreciation expense will be $2,425
Therefore the project operating cash flow can be calculated as follows
= $41,350-$23,900-$4,200
= $13,250
Hence the operating cash flow is $13,250
Nicole is a calendar-year taxpayer who accounts for her business using the cash method. On average, Nicole sends out bills for about 512,000 of her services at the first of each month. The bills are due by the end of the month, and typically 70 percent of the bills are paid on time and 98 percent are paid within 60 days.
a) Suppose that Nicole is expecting a 2 percent reduction in her marginal tax rate next year. Ignoring the time value of money, estimate the tax savings for Nicole if she postpones mailing of bills for December until January 1 of next year.
b) Describe how the time value of money affects your calculations.
c) Would this tax savings strategy create any additional business risks? Explain.
Answer:
a) I guess that Nicole bills $12,000 per month, not $512,000.
Assuming that the last time Nicole billed her customers was November, she was able to collect $11,760 before the year ended. I will also assume that the remaining $240 are uncollectible.
If Nicole postpones billing her customers during December, her taxable income as a cash basis taxpayer will decrease by $12,000 x 70% = $8,400
she will be able to save $8,400 x 2% = $168 in current taxes, but she will have to pay them next year anyways.
b) The time value of money should affect Nicole's calculations because she is saving the interests that could be earned by $168 in 1 year. We are not given any specific interest rate but we could use 6% as an example. Nicole will gain $168 x 6% = $10.08
But she will also lose potential interests earned on the $8,400 that she billed later. Using the same interest rate, 6%, she will lose $8,400 x 6% x 1/12 (only 1 month) = $42.
That means that the net result from this = $10.08 - $42 = -$31.92.
As you can see, Nicole is losing money. The higher the interest rate, the more money she will lose.
c) The risk of increasing uncollectible accounts will always exist. Nicole already has around 2% of uncollectible accounts, and combining two bills at one time might lead to a higher percentage of uncollectible accounts. Of course, this depends on her clients, but the risk will increase a little bit or a lot, but it will increase.
Recently, the owner of Martha's Wares encountered severe legal problems and is trying to sell her business. The company built a building at a cost of $1,240,000 that is currently appraised at $1,440,000. The equipment originally cost $720,000 and is currently valued at $467,000. The inventory is valued on the balance sheet at $410,000 but has a market value of only one-half of that amount. The owner expects to collect 98 percent of the $225,200 in accounts receivable. The firm has $10,500 in cash and owes a total of $1,440,000. The legal problems are personal and unrelated to the actual business. What is the market value of this firm?
Answer:
Net market value of firm = $903,196
Explanation:
Items to determine the Market value of the firm are as below
Item Amount
Current value of building $1,440,000
Current value of equipment $467,000
Market value of inventory $205,000
Cash in hand $10,500
98% of debtors $220,696
Less: Owings -$1,440,000
Net market value of firm $903,196
The Work in Process Inventory account of a manufacturing company that uses an overhead rate based on direct labor cost has a $6,884 debit balance after all posting is completed. The cost sheet of the one job still in process shows direct material cost of $2,600 and direct labor cost of $1,400. Therefore, the company's overhead application rate is:______
a. 111% of direct labor cost.
b. 186% of direct labor cost.
c. 206% of direct labor cost.
d. 49% of direct labor cost.
e. 54% of direct labor cost.
Answer:
d. 49% of direct labor cost.
Explanation:
Overhead Rate based on direct labor has cost of $6,884
Direct material costs $2,600
Direct labor costs $1,400
Overhead Cost based on direct labor cost = Direct Labor Costs * Percentage Rate
Percentage Rate= Overhead Cost / Direct Labor Costs
Percentage Rate = $6,884 /$1,400 = 4.917
This can be rechecked by multiplying the direct labor cost with the given rate.
So multiplying $1400*4.917= $6,884 which is the required amount.
Suppose that you are on a desert island and possess exactly 20 coconuts. Your neighbor, Friday, is a fisherman, and he is willing to trade 2 fish for every 1 coconut that you are willing to give him. Another neighbor, Kwame, is also a fisherman, and he is willing to trade 3 fish for every 1 coconut that you are willing to give him. Another neighbor, Kwame, is also a fisherman, and he is willing to trade 3 fish for every 1 coconut. a. On a single figure, draw budget lines for trading with Friday and for trading with Kwame. (Put coconuts on the vertical axis.) b. What is the slope of the budget line from trading with Friday? c. What is the slope of the budget line from trading with Kwame? d. Which budget line features a larger set of attainable combinations of coconuts and fish? e. If you are going to trade coconuts for fish, would you rather trade with Friday or Kwame?
Answer:
a) see attached graph
b) slope = -1/2 = -0.5
c) slope = -1/3 = -.033
d) trading with Kwame (green line)
e) you should trade with Kwame since you can obtain more fish (up to 60 in total)
A desert island possessing exactly 20 coconuts is a different situation.
a) the graph observation.
b) slope = -1/2 = -0.5
c) slope = -1/3 = -.033
d) Friday and Kwame's budget lines have the same number of combinations of coconuts and fish. Kwame was the green line.
e) Kwame can obtain more fish as compared to Friday.
What is an island?
An island is any piece of land that is smaller than a continent and completely encircled by water. Islands can appear in rivers, lakes, seas, or oceans. The archipelago is the term for a collection of islands. The island is on the side of the ocean. The island is the body of land and the surrounding water.
A. ⇔ That for every coconut you give, Friday will give you 2 fish.
number of fish = 2 × the number of coconutsnumber of coconuts = number of fish / 2Fish (horizontal axis) Coconuts (vertical axis)
0 0
2 1
4 2
6 3
40 20
The range is from 0 to 20 coconuts, limiting the number of fish to even numbers between 0 and 40.
⇔ For every coconut you give, Kwame will give you 3 fish. Hence:
number of fish = 3 × the number of coconutsnumber of coconuts = number of fish / 3Fish (horizontal axis) Coconuts (vertical axis)
0 0
3 1
6 2
9 3
60 20
The range is from 0 to 20 coconuts, limiting the number of fish to even numbers between 0 and 60.
B. The slope is the trading rate:
slope = rise / run = Δy / Δx = 1 coconut / 2 fish
slope = -1/2 = -0.5
It simply means that will give 1 coconut per every 2 fish you receive from Friday.
C. Again, the slope is the trading rate:
slope = rise / run = Δy / Δx = 1 coconut / 3 fish
slope = -1/3 = -.033
It means that you will give 1 coconut per 3 fish that you receive from Kwame.
D. Friday and Kwame budget lines have the same number of combinations of coconuts and fish.
For Friday ratio is:
(0,0), (2,1), (4,2), (6, 3), ..... (40, 20), which are 21 combinations.For Kwame ratio is:
(0,0), (3,1), (6, 2), (9, 3), . . . (60, 20), which also are 21 combinations.E. Kwame can obtain more fish as compared to Friday.
As a result, the desert island is exactly 20 coconuts.
Learn more about the island, here:
https://brainly.com/question/22069056
#SPJ2
1. Revenues = $27,000; Expenses = $18,000; Net income = ____________. 2. Increase in stockholders' equity = $17,000; Issuance of common stock = $11,000; Net income = $12,000; Dividends = ____________. 3. Assets = $24,000; Stockholders' equity = $15,000; Liabilities = ____________. 4. Total change in cash = $26,000; Net operating cash flows = $34,000; Net investing cash flows = ($17,000); Net financing cash flows = ____________.
Answer:
1. $9,000
2. $6,000
3. $9,000
4. -$25,000
Explanation:
Here, we are expected to calculate values for the terms using the values in the preceding term for each question;
1. Net Income
Mathematically, net income = Revenues - Expenses = 27,000 - 18,000 = $9,000
2. Dividends
Mathematically;
Change in stock holder’s equity = Issuance of common stock + Net Income - Dividends
Hence;
Dividends = Net Income + Issuance of Common Stock - Dividends
Dividends = 12,000 + 11,000 - 17,000 = 23,000 -17,000 = $6,000
3. Assets
Mathematically ;
Assets = Liabilities + Stockholder’s Equity
Thus;
Liabilities = Assets - Stockholder’s Equity
Liabilities = 24,000 -15,000 = $9,000
4. Net Operating Cash Flows;
Mathematically;
Net Financing cash flows = Total change in cash - ( Net operating cash flows + Net Investing Cash flows)
Net Financing cash flows = $26,000 - (34,000 + 17,000)
Net financing cash flows = 26,000 - 17,000 -34,000 = -$25,000
Three major segments of the transportation industry are motor carriers such as YRC Worldwide, railroads such as Union Pacific, and transportation logistics services such as C.H. Robinson Worldwide, Inc. Recent financial statement information for these three companies follows (in thousands): YRC Union Pacific C.H. Robinson Sales $4,832,400 $21,813,000 $13,476,084 Average total assets 1,939,800 53,486,000 3,199,348 a. Determine the asset turnover for all three companies. Round to one decimal place. YRC Union Pacific C.H. Robinson
Answer and Explanation:
The formula that is to be used to determine the asset turnover is shown below:
Asset turnover is
= Net sales ÷ Average total assets
For YRC
= $4,832,400 ÷ $1,939,800
= 2.5 times
For Union Pacific
= $21,813,000 ÷ $53,486,000
= 0.4 times
For C.H robinson
= $13,476,084 ÷ $3,199,348
= 4.2 times
We simply applied the above formula
Which of the following is one of the reasons that the supply curve for loanable funds is upward sloping? A lower real interest rate makes saving less appealing. A higher real interest rate makes borrowing less expensive. A lower real interest rate encourages domestic consumers to purchase foreign securities and discourages foreigners from purchasing domestic securities. A lower interest rate makes borrowing less expensive
Answer:
A lower real interest rate makes saving less appealing.
Explanation:
The lower the interest rate, the lower the amount saved and the higher the interest rate, the higher the amount of money saved. There is a positive relationship between interest rate and the supply of loanable funds. This is why the supply curve for loanable funds is upward sloping
The objective of tests of details of transactions performed as tests of controls is to A. Monitor the design and use of entity documents such as pre-numbered shipping forms. B. Determine whether internal controls have been implemented. C. Evaluate whether internal controls operated effectively. D. Detect material misstatements in the account balances of the financial statements.
Answer:
C. Evaluate whether internal controls operated effectively.
Explanation:
Given that, a test of details of the transaction is an activity or process carried out by auditors, which can be done together with the test of control. The purpose of the test of control is, however, to determine the effectiveness of internal control.
Hence, in this situation, the correct answer is option C: Evaluate whether internal controls operated effectively.
Professor’s Annuity Corp. offers a lifetime annuity to retiring professors. For a payment of $74,000 at age 65, the firm will pay the retiring professor $450 a month until death. If the professor’s remaining life expectancy is 15 years, what is the monthly interest rate on this annuity?
Answer: 0.10%
Explanation:
The following can be gotten from the question:
n = 15 years
We change it to months. Thus will be:
= 15 × 12
= 180
Present value of an annuity :
= A × {1- (1 +r ) -n ]/r}
74000 = 450 × [ 1- (1 +r) - 180]/r
r= 0.10%
Therefore, the monthly interest rate is 0.10%.
Haack Inc. is a merchandising company. Last month the company's cost of goods sold was $69,800. The company's beginning merchandise inventory was $13,200 and its ending merchandise inventory was $29,300. What was the total amount of the company's merchandise purchases for the month?
Answer:
cost of goods purchased= $85,900
Explanation:
Giving the following information:
Last month the company's cost of goods sold was $69,800.
The company's beginning merchandise inventory was $13,200 and its ending merchandise inventory was $29,300.
To calculate the purchases, we need to use the following formula:
COGS= beginning finished inventory + cost of goods purchased - ending finished inventory
69,800 = 13,200 + cost of goods purchased - 29,300
69,800 - 13,200 + 29,300= cost of goods purchased
cost of goods purchased= $85,900
Jack performs maintenance on the manufacturing machinery, and Charlie performs maintenance on the office computers. Would their salaries be classified differently? A : Yes, Jack’s salary would be classified as direct labor, whereas Charlie’s salary would be classified as indirect labor. B : Yes, Jack’s salary would be classified as a product cost, whereas Charlie’s salary would be classified as a period cost. C : No, both salaries would be classified as indirect labor. D : No, both salaries would be classified as a product cost.
Answer:
B : Yes, Jack’s salary would be classified as a product cost, whereas Charlie’s salary would be classified as a period cost.
Explanation:
In determining the product cost, Jack's salary which forms part of the manufacturing overhead will be included in the total manufacturing costs whereas Charlie's salary will be regarded as a period cost. This makes option B the correct choice. The maintenance costs on manufacturing machinery and office computers are classified differently in a manufacturing setting because Jack's maintenance affects manufacturing indirectly while Charlie's maintenance affects the office administration directly.
At December 31, 2021 and 2020, P Co. had 50,000 shares of common stock and 5,000 shares of 5%, $100 par value cumulative preferred stock outstanding. No dividends were declared on either the preferred or common stock in 2021 or 2020. Net income for 2021 was $500,000. For 2021, basic earnings per common share amounted to:
Answer:
Earning per for Common Share = $9.50
Explanation:
Earning per Common Share = Earning Attributable to Common Shareholders / No. of Common Share
No. of Common Share = 50,000
Where Earning Attributable to Common Shareholders = Net Income - Dividend to Preferred Stock = $500,000 - (5,000 shares * 100 * 5%) = $475,000
Since the preferred stocks are cumulative, dividend to these stock will be deducted even if it is not declared.
Earning per for Common Share = $475,000 / 50,000 shares
Earning per for Common Share = $9.50.
During this stage of résumé review, employers use the résumé to guide interview questions: a. Stage 1 b. Stage 2 C. Stage 3
Answer:
the correct option is C
Explanation:
good luck!
During this stage of resume review, employers use the resume to guide interview questions as Stage 3. Thus, option (c) is correct.
What is resume?
The term “resume” is a formal document to present a job applicant with mention of specific details. The resume is a one- or two-page summary of a person's details, such as education, skills, and work experience.
There are divided into four categories of resumes, such as functional resume, combination resume, chronological resume, and targeted resume.
During the requirements process, resume review is divided into three stages, such as stage one: technology check; stage two: human screening; and stage three: interviewing.
A supervisor or hiring manager will now place the job applicant's resume in the “interview pile” for further consideration. This is the third stage of the resume evaluation process.
Therefore, option (c) is correct.
Learn more about on resume, here:
https://brainly.com/question/862477
#SPJ6
What is the essential concept in understanding compound interest?
Answer:
Explanation:
The main concept that needs to be understood is the idea of getting paid interest on money that you made from interest payments. This is technically the entire system of compound interest, you invest money into something that provides such interest. You get paid a percentage interest on that money, you then reinvest that payment back into the same investment. Now your next interest payment will be more due to the reinvested amount, and so on. This drastically increases the amount of money that is made over time.
what is the purpose of the accounting debit and credit system
Explanation:
to make sure that both are balanced
Which two terms are associated directly with the way an annuity is funded?
A) Renewable or convertible.
B) Single payment or periodic payments.
C) Increasing or decreasing.
D) Level of flexible.
Answer:
D
Explanation:
Annuities can either be paid for as a lump sum (Single payment) or periodic payment.
Periodic payments can wither be fixed or variable
fixed payment is when a fixed amount is payed at a particular year. For example, $400 is paid at the beginning of every year.
Variable payment is when there is no structure in the amount or time the annuity is funded
Adison Winery had beginning long-term debt of $41,436 and ending long-term debt of $46,883. The beginning and ending total debt balances were $51,283 and $56,480, respectively. The company paid interest of $4,471 during the year. What was the company's cash flow to creditors
Answer:
-$976
Explanation:
Adison winery has beginning long term debt of $41,436 and ending long term debt of $46,883
The beginning and ending total balance were $51,283 and $56,480
The company paid an interest is $4,471
Therefore the company cash flow to creditors can be calculated as follows
= $4,471-($46,883-$41,436)
= $4,471 - $5,447
= -$976
Hence the operating cash flow to the creditors is -$976
Three phases of the management process are planning, directing, and controlling. Match the following descriptions to the proper phase. a. Process by which managers, given their assigned levels of responsibilities, run day-to- day operations. b. Isolating significant departures from plans for further investigation and possible remedial action. It may lead to a revision of future plans. c. Developing long-range courses of action to achieve goals. Phases:1. Planning 2. Directing 3. Controlling
Answer:
1. Directing.
2. Controlling.
3. Planning.
Explanation:
Management can be defined as the process of controlling or dealing with the affairs of an organization such as employees, policies etc in order to achieve set goals and objectives. The three (3) phases of the management process are planning, directing, and controlling.
a. Directing: process by which managers, given their assigned levels of responsibilities, run day-to- day operations.
b. Controlling: isolating significant departures from plans for further investigation and possible remedial action. It may lead to a revision of future plans.
c. Planning: developing long-range courses of action to achieve goals.
C 0
a.
Hank is a salaried plus commission employee. Hank has a monthly salary of $2.500 and earns 5.5% commission on all
sales. Which of the following expressions represents Hank's total earnings in one month if he has $6,300 in sales?
2,500 + (0.055)(6,300)
b. 2,500 + (5.5)(6,300)
c. (2,500) (5.5) + 6,300
d. (2,500) (0.055) + 6,300
Answer:
The answer is A
2,500 + (0.055)(6,300)
Explanation:
Answer:
A
Explanation:
g Bonds of ABC Corp. are currently priced at $932. The bonds have a face value of $1,000. Coupon payments occur twice per year. The bonds have 12 years left until maturity. These bonds are: a. discount bonds. b. premium bonds. c. par bonds. d. money market securities. e. deluxe bonds.
Answer:
a. discount bonds
Explanation:
When the Price of the Bond is less than the par value (face value) of the bond, we say that the bonds are trading at a discount.
When the Price of the Bond is greater than the par value (face value) of the bond, we say that the bonds are trading at a premium.
In this case the price is $932 and the face value is $1,000, thus the bonds are discount bonds.
Huggies is a popular brand of diapers that offers a variety of sizes and styles to fit babies based on weight, gender, and activity, such as swim diapers. Huggies devotes significant resources to conduct market research to understand customer needs and to ensure that its diaper products meet the needs of the customer. Rather than make just one diaper formulation, the products are highly customized and appeal to each customer's unique situation. This highlights one of the key differences between sales-oriented firms and marketing-oriented firms, which is _______.
Answer:
c. the organization's approach to marketing its products to specific customer segments rather than "everyone" or the average customer
Explanation:
Options includes: "a. the organization's primary goal to achieve profitability through sales volume , b. the organization's mission to produce the highest volume of products in a cost-efficient manner, c. the organization's approach to marketing its products to specific customer segments rather than "everyone" or the average customer , d. the organization's internal, sales-oriented focus
This highlights one of the key differences between sales-oriented firms and marketing-oriented firms, which is the organization's approach to marketing its products to specific customer segments rather than "everyone" or the average customer.
Sales oriented firm pursue the idea that the companies will produce products but will require effort from sales team to sell the product. They believe the success of the companies relies on the aggressiveness of the sales people.
Marketing oriented firm pursue the idea that the companies need to communicate the value proposition of the product. That if the value of the product can be successfully communicated, then the product will sell with considerable less effort from other departments.
Answer: c. the organization's approach to marketing its products to specific customer segments rather than "everyone" or the average customer.
Which one of the following is true regarding the descriptive approach to data-driven decision making?Select one:A. It is applied when an insurer or risk manager has a specific problem to solve.B. It is exemplified by a computer making an underwriting decision and issuing a price quote.C. It is applied by insurers or risk managers continually beyond their specific problem.D. It can be used repeatedly to provide information for data-driven decision making by humans.
Answer:
A. It is applied when an insurer or risk manager has a specific problem to solve.
Explanation:
The descriptive approach to decision-making based on data is an approach that uses the provision of data that has already occurred in an organization so that there is a statistical understanding of the facts and that decision-making is carried out more effectively and based on evidence.
This approach makes it possible to solve specific problems by understanding the real situation of an organization financially and of all variables such as sales, production, operation, etc. that can be analyzed in a statistical way.
Inventory Valuation under Absorption Costing Amiens Company produced 20,000 units during its first year of operations and sold 18,900 at $17 per unit. The company chose practical activity—at 20,000 units—to compute its predetermined overhead rate. Manufacturing costs are as follows: Direct materials $ 80,000 Direct labor 101,400 Variable overhead 15,600 Fixed overhead 54,600Required: 1. Calculate the unit cost for each of these four costs. Round your answers to the nearest cent. Direct Materials Cost $ Direct Labor Cost $ Variable Overhead Cost $ Fixed Overhead Cost $ 2. Calculate the cost of one unit of product under absorption costing. Round your answer to the nearest cent. $ 3. How many units are in ending inventory? $ 4. Calculate the cost of ending inventory under absorption costing. $
Answer:
Required 1
Direct Materials Cost = $4.00
Direct Labor Cost = $5.07
Variable Overhead Cost = $0.78
Fixed Overhead Cost = $2.73
Required 2
Unit Cost = $12.58
Required 3
Units in Ending Inventory = 1,100
Required 4
Cost of ending inventory = $13,838
Explanation:
Unit Cost Calculations :
Direct materials = $ 80,000 ÷ 20,000 units
= $4.00
Direct labor = $101,400 ÷ 20,000 units
= $5.07
Variable overhead = $15,600 ÷ 20,000 units
= $0.78
Fixed overhead = $54,600 ÷ 20,000 units
= $2.73
Unit Cost (Absorption Costing) = All Manufacturing Costs
= $4.00 + $5.07 + $0.78 + $2.73
= $12.58
Units in Ending Inventory = Opening Inventory Units + Production - Sales
= 0 + 20,000 units - 18,900 units
= 1,100
Cost of ending inventory = Unit Cost × Units in Ending Inventory
= $12.58 × 1,100
= $13,838
Suppose you need $1 million dollars to start your dream business. Describe two ways you would generate the funds needed to start such a business. Next, discuss any risks or benefits you should be aware of when gathering these funds. Provide examples to support your response.
Answer:
Following are the two ways to generate the fund and start a new business:
Explanation:
Venture capitalist- It would be a type of equity finance in which venture capitalists will in particular aim for just a considerable amount of interest throughout the new startup. It enables you to get control of the mangers and try to get the funds from it by providing venture capital, that is diluting the interest in exchange for the funds necessary to begin the company. It will also add the knowledge on different issues, which is associated with this form of financing. It also ventures capitalists tend to intervene with leadership and try to control their company to harm the developer. It may also aim to manage the capital via a bank loan, in which it seeking to arrange funds by the use of cash, and these credits will have set loan repayment responsibilities even if it gains no profit, it is extremely risky and also has lower costs, because interest costs are mostly taxable income in design. This problem with both the taking of loans is because it has a fixed obligation and also poses a business liquidity position.g Given the information below: ASSETS LIABILITIES Cash and cash equivalents $10,000 Current debts for the year $15,000 Other liquid assets $20,000 Other total liabilities $200,000 Investments $250,000 Fixed assets $300,000 INCOME DATA Annual after-tax income $75,000 Annual spending $67,000 The solvency ratio is closest to: A. 63% B. 33% C. 4% D. none of the above
Answer:
The solvency ratio is closest to: B. 33%.
Explanation:
The solvency ratio = After tax Net Operating Income ÷ Total Debt
Thus,
The solvency ratio = $75,000 ÷ ($15,000 + $200,000)
= 35.88%
Therefore this is closest to B. 33%.
