A firm should never accept a project if its acceptance would lead to an increase in the firm's cost of capital (its WACC).

What happens if a product has a negative contribution margin?

saul85 [17]

Read from this following website this will answer your question it answered mine.
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http://smallbusiness.chron.com/happens-contribution-margin-company-negative-22905.html

4 0

3 years ago

Jay owns 100% of Kaye Company. Jay (an individual) is in the 37% tax bracket. Assume that Kaye Company is a corporation and dist

iren [92.7K]

Answer:

$10,000 as qualified dividends

Explanation:

As this is in the form of dividends we assume the business is a corporation therefore their dividends are taxed as well.

As Jay is the sole owner of Kaye Company we have to assume their dividends are qualified as were held during the entire 121-days period

Therefore are subject to his capital gains rate rather than his rate of 37%

According to the IRS table for the year 2020:

Income Tax Bracket Income Tax Rate Capital Gains Rate

$0 – $9,875 10% 0%

$9,876 – $40,000 12% 0%

$40,001 – $40,125 12% 15%

$40,126 – $85,525 22% 15%

....

$518,401+ 37% 20%

Thus the $50,000 qualified dividends will be taxes at 20%

50,000 x 20% = 10,000

8 0

3 years ago

Dynamic Weight Loss Co. offers personal weight reduction consulting services to individuals. After all the accounts have been cl

Veronika [31]

Answer:

Dynamic Weight Loss Co.

Statement of Financial position as at June 30, 20Y7

Assets

Current Asset $ $

Cash 72,000

Accounts Receivable 187,500

Supplies 11,200

prepaid Insurance 8,400

Prepaid Rent 6,000

Total Current asset 285,100

Property, plant and Equipment

Land 375,000

Equipment 325,900

Accumulated Depreciation - Equipment (186,000) 514,900

Total Assets 800,000

Liabilities and Owners Equities

Current liabilities

Accounts Payable 51,200

Salaries Payable 7,500

Unearned Fees 21,000

Total liabilities 79,700

Owners Equities

Common Stock 100,000

Retained Earnings 620,300

Total Equities 720,300

Total Liabilities and Owners Equities 800,000

Explanation:

The balance sheet shows the company's assets, liabilities and equities.

Using the accounting equation

Assets = Liabilities + Equities

Total assets

= 187,500 + 325,900 - 186,000 + 375,000 + 8400 + 6000 + 11,200 + C

where C is the closing balance in the cash account

= 728,000 + C

Total liabilities

= 51,200 + 7500 + 21,000

= $79,700

Total equities

= 620,300 + 100,000

= $720,300

Since Assets = Liabilities + Equities

728,000 + C = 720,300 + 79,700

C = 720,300 + 79,700 - 728,000

C = $72,000

5 0

3 years ago

Whole Grain Bakery purchases an industrial bread machine for $30,000. In addition to the purchase price, the company makes the f

Andrei [34K]

Answer:

The initial cost of the bread machine is $37,500

Explanation:

Initial cost is the sum of all the expenditure incurred from the purchase of asset to make it usable for the business. It includes purchase price, transportation cost, testing costs etc.

Bread Machine

Purchase price $30,000

Freight $2,000

Installation $4,000

Testing $1,500

Total Initial Cost $37,500

6 0

3 years ago

Weaver Corporation had the following stock issued and outstanding at January 1, Year 1: 131,000 shares of $15 par common stock.

OLga [1]

Answer:

a. amount of dividends to be paid to the preferred shareholders and common shareholders.

preferred shareholders = $24,000

common shareholders = $524,000

b (1). general journal entries to record the declaration

June 10

Dividends - preferred shareholders SCE $24,000 (debit)

Dividends - common shareholders SCE $524,000 (debit)

Shareholders for Dividends SFP $548,000 (credit)

b (2). general journal entries to record the cash dividends

July 1

Shareholders for Dividends SFP $548,000 (credit)

Cash $548,000 (debit)

Explanation:

a. amount of dividends to be paid to the preferred shareholders and common shareholders.

preferred shareholders = 5,000 shares × $80 × 6% = $24,000

common shareholders = 131,000 shares × $4 = $524,000

b (1). general journal entries to record the declaration

June 10

Dividends - preferred shareholders SCE $24,000 (debit)

Dividends - common shareholders SCE $524,000 (debit)

Shareholders for Dividends SFP $548,000 (credit)

Recognise Equity item - Dividends to the respective Equity Accounts and Recognise Liability - Shareholders for Dividends

b (2). general journal entries to record the cash dividends

July 1

Shareholders for Dividends SFP $548,000 (credit)

Cash $548,000 (debit)

De-recognise Liability - Shareholders for Dividends and De-recognise Cash Asset

6 0

4 years ago