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2 years ago

Question 26

Business

1 answer:

irakobra [83]2 years ago

4 0

Answer:

3.50 and 0.90

Explanation:

Calculation for the current ratio and acid-test ratio for the boutique

Calculation of CURRENT RATIO

First step is to calculate the current assets and current liabilities

CURRENT ASSETS

Cash 52,000

Short-term investment 12,000

Accounts receivable 54,000

Inventory 325,000

Prepaid expenses 17,500

Total current assets $ 460,500

CURRENT LIABILITIES

Accounts payable$ 106,500

Other current payables $ 25,000

Total current liabilities $ 131,500

Using this formula

Current ratio=Current assets/Current Liabilities

Let plug in the formula

Current ratio=460,500/131,500

Current ratio=3.50

Therefore the Current ratio will be 3.50

Calculation for CURRENT ACID -TEST RATIO

Using this formula

Current acid-test ratio=Quick assets/Current Liabilities

Let plug in the formula

Current acid-test ratio=460,500-(325,000+17,500)/131,500

Current acid-test ratio=118,000/131,500

Current acid-test ratio=0.90

Therefore the Current acid-test ratio will be 0.90

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Answer

Gomez's business accounting profit amounted to $37500 while economic profit is $6000

Accounting profit is simply deducting explicit costs from revenue.Explicit costs are costs that require actual cash flow from the entity.

Economic profit on the other hand is calculated by deducting both explicit and implicit costs from revenue.

Implicit costs are costs relating to alternative opportunities forgone.

Explanation:

Both accounting and economic profits are highlighted below:

Accounting profit=Total revenue-explicit costs

Revenue $82,000

Helper's wages ($15,000)

Rent ($6,500)

Materials ($23,000)

Accounting profit $37,500

Economic profit =Revenue -explicit costs-implicit costs

Revenue $82,000

Helper's wages ($15,000)

Rent ($6,500)

Materials ($23,000)

Return lost money invested ($6,000)

Lost income from porter's offer ($20,500)

Entrepreneur's talent ($5,000)

Economic profit = $6,000

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2 years ago

Ben Chang noticed that his store was lagging in sales. He realized that his staff was not experienced enough. As the store manag

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A.)train staff in the latest sales trends.

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2 years ago

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Answer:

The correct answer is letter "B": Systems Thinking.

Explanation:

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2 years ago

Problem 14-15 Finding the WACC [LO3] You are given the following information for Watson Power Co. Assume the company’s tax rate

german

Answer:

The company's WACC is 9.71%.

Explanation:

Note: See the attached excel file for the computation of company's Weighted Average Cost of Capital (WACC).

The weighted average cost of capital (WACC) can be described as the rate that is expected to be paid on average by a company to all holders of its securities to finance the assets of the company.

The following formula are used in the excel file to compute the WACC of the company.

Cost of debt = Type this function that is used in the excel sheet “=Rate(Number of years * 2,((Coupon rate/2)*Par value),-Selling price),Par value)*2*(1 - Tax rate)”. That is, type “=RATE(27*2,((6.5%/2)*1000),-1080,1000)*2*(1-21%)” in the excel file and press enter. This gives 4.83420280657156%

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2 years ago

In april 2011, consolidated edison (ed) stock cost $50 per share and yielded 5% per year in dividends, while national grid (ngg)

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Ed Stock dividend return = x*0.05*50

Ngg stock dividend return = (1050-x)*0.06*50

Since total was 2,815, we add and equate the two as shown below:

x*0.05*50 + (1050-x)*0.06*50 = 2815

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