Answer:
Accounts receivable to be reported at the end of 2019 = $1090000
Explanation:
Assuming that all sales are made on credit.
The opening accounts receivable were = $ 1200000
We add the credit sales made during the year to the opening balance of accounts receivable to reach at total accounts receivable.
Total accounts receivable = 1200000 + 6250000 = 7450000
We deduct the amount received from customers against these sales to reach at the closing balance for accounts receivables.
Closing balance Accounts receivables 2019 = 7450000 - 6360000 = $1090000
Answer:
Explanation:
The coach of a college men’s soccer team records the resting heart rates of the 27 team members. You should not trust a confidence interval for the mean resting heart rate of all male students at this college based on these data because;
(a) with only 27 observations, the margin of error will be large.
(b) heart rates may not have a Normal distribution.
(c) the members of the soccer team can’t be considered a random sample of all students.
Answer:
Vo = <u>C1 </u> + <u>C2 + V2</u>
1 + k (1 + K)2
Vo = <u>$129,600 </u> + <u>$129,600 + $3,200,000</u>
1 + 0.14 (1 + 0.14)2
Vo = $113,684.21 + $2,562,019.08
Vo = $2,675,703.29
The correct answer is C
Explanation:
The current value of the business equals cashflow in year 1 divided by 1 + K plus the aggregate of cashflow and sales value in year 2 divided by 1 + k raised to power 2.
Answer:
Hart's note should be reported at $10,000 and Maxx's note should be reported at $7,820
Explanation:
Since Hart's note is a current note (due within one year) it should be reported at future value = $10,000
Marxx's note must be reported at present value:
present value = future value x discount factor = {$10,000 [1 + (3% x 5)]} x 0.68
present value = $11,500 x 0.68 = $7,820
*we use simple interest to calculate the future value of Marxx's debt since Jet Co. doesn't charge compound interest
Answer:
Using the discount cash flow model to value the company, we can say that the company is worth $85 million / 12% = $708.33 million
Each stock should be worth approximately $708.33 million / 100 million = $7.0833 per stock
If the company uses the cash to finance new projects, then future cash flows should be approximately $97.75 million, and the company's value = $97.75 million / 12% = $814.583 million. This represents a 15% increase in value. The stock price should also increase by 15% to $8.1458 per stock.
If the company instead decides to repurchase stocks using all the cash, then it could repurchase 35.29 million stocks. Since we are assuming that the company's future cash flows wouldn't be affected by this decision, then the company's total value will still be $708.33 million, but each stock would be worth much more = $708.33 / 64.71 million stocks = $10.95. This represents a 34.36% increase with respect to the other alternative of investing the cash.
The issue here, is that this situation is not very realistic. It is not normal for a company to use all of its cash to repurchase stocks since it would result in a huge increase in stock prices (stock prices are set by supply and demand). Also, this would also result in a sharp increase in the cost of equity due to higher risks.
