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1 year ago

Suppose profits are less than zero. From this it follows that:

Business

1 answer:

Vladimir [108]1 year ago

6 0

Answer:

D. the sum of employee compensation, rents, and interest exceeds aggregate income.

Explanation:

Aggregate income is defined as the total income in an economy of a company that does not take into account inflation, taxes, or double counting.

Aggregate income is equal to summation of employee compensation, interest, rent, and profits.

If profits are less than zero it follows that the other elements of aggregate income, that is the sum of employee compensation, rents, and interest exceeds aggregate income.

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Feldspar Inc. is considering the capital structure for a new division. Management has been given the following cost information:

34kurt

Answer:

Option 4

Explanation:

In this question ,we have to compute the WACC which is shown below:

= Weightage of debt × cost of debt × ( 1- tax rate) + (Weightage of common stock) × (cost of common stock)

For Option 1, it would be

= (0.3 × 10%) × ( 1 - 40%) + (0.7 × 12.5%)

= 1.8% + 8.75%

= 10.55%

For Option 2, it would be

= (0.4 × 10.5%) × ( 1 - 40%) + (0.6 × 13%)

= 2.52% + 7.8%

= 10.32%

For Option 3, it would be

= (0.5 × 11%) × ( 1 - 40%) + (0.5 × 13.5%)

= 3.3% + 6.75%

= 10.05%

For Option 4, it would be

= (0.6 × 11.7%) × ( 1 - 40%) + (0.4 × 14.2%)

= 4.212% + 5.68%

= 9.89%

For Option 5, it would be

= (0.7 × 13%) × ( 1 - 40%) + (0.3 × 15.5%)

= 5.46% + 4.65%

= 10.11%

So based on this, the management should accept option 4 as it derives the best debt asset ratio

The weightage of equity would be come

= 1 - weightage of debt

8 0

2 years ago

During its most recent fiscal year, Raphael Enterprises sold 380,000 electric screwdrivers at a price of $20.40 each. Fixed cost

Gwar [14]

Answer:

Option (a) is correct.

Explanation:

Pretax income = Contribution - Fixed cost

Contribution = Pretax income + Fixed cost

= $1,824,000 + $1,444,000

= $3,268,000

Sales - Variable Cost = Contribution

Variable Cost = Sales - Contribution

= (380,000 electric screwdrivers × $20.40 each) - $3,268,000

= $7,752,000 - $3,268,000

= $4,484,000

3 0

1 year ago

During 2019, Ocean Consulting had the following transactions with it clients (customers): On February 1, 2019, the company recei

vova2212 [387]

Answer:

$20,000

Explanation:

According to the given situation, the computation of stockholder equity is shown below:-

Stockholder equity = Service in cash + Sent bills

= $15,500 + $4,500

= $20,000

Therefore for computing the stockholder equity we simply applied the above formula so that the correct value could come

Hence, the stockholder equity is $20,000

6 0

1 year ago

On January 15, Pinkney, Inc., issued 10,000 shares of $10 par value common stock in exchange for land and a building. Five years

MAXImum [283]

Answer:Pinkney Journal $

Date

January 15

Land $ Building. Dr 100,000

Share capital. Cr. 100,000

Narration. Transfer of share for the purchase of land and building.

Explanation:

The firm will record the value of the land and building at the price of shares it has transferred for the purchase not withstanding the price of it's purchase by the seller nor the market fair value on purchase.

The payment of the price of the land & building with shares does not represents a new issue of shares but it's a transfer of share ownership from the firm to the seller and this will be reflected in the share register.

8 0

1 year ago

Globalization has been driven by five major factors: political, technological, market, cost, and competitive. Business has fuele

maria [59]

Answer:

Competitive Drivers 

Description

Explosive growth in international business

Implication for Business

Intense competition in world markets

Globalization has led to an explosive growth in international.business which has led to increased competition amongst companies because they now have to compete on a global scale against numerous companies in various locales.

Political Drivers 

Description

Preferential trading arrangements and privatization of industries

Implications for Business

Increased opportunities for trade and investment

Some Countries offer great trading agreements this enabling companies to trade in other countries. This opportunity means that there are increased opportunities for trade by companies in the countries involved in the agreement.

Cost Drivers

Description

Exporting or producing Overseas

Implications for Business

Lower Cost of Goods sold

Globalization has enabled companies to be able to produce in cheaper markets for labor such as in Asia and Africa. This has led to a lower cost of goods sold and therefore higher profits.

Technological Drivers 

Description

Explosive growth of high-power, low-cost computing

Implications for Business

Growth in Services.

Driving Globalization is an increased use of technology by human beings. The world is now connected by mere seconds which has enabled companies to derived clients all over the world this enabling them to offer more services.

Market Drivers

Description

Emergence of Global Customers

Implications for Business

New Opportunities and New Markets.

Another factor driving Globalization is the availability of new markets to sell their goods in in different territories. Companies can therefore have an increased demand base which will mean more Profitability.

5 0

1 year ago