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Semenov [28]
2 years ago
14

Assume that you are the president of your company and paid a year-end bonus according to the amount of net income earned during

the year. When prices are rising, would you choose a FIFO or weighted average cost flow assumption? Explain, using an example to support your answer. Would your choice be the same if prices were falling?
Business
1 answer:
kherson [118]2 years ago
8 0

As the president of the company, at a time when the prices are said to  be rising, what is would do is to choose the Weighted average cost.

<h3>Why I would have to choose the Weighted average cost</h3>

This due to the fact that it is going to be more satisfactory to have the lower Bonus bill.

The year end bonus is an amount that is calculated from all of the net income from the year.

A lower net income is only going going to help to bring about a smaller bonus bill.

At a time when the prices are falling, the FIFO is what would be the best choice. It gives a smaller ending cost of inventory since the ending prices are going to be at their lowest.

Read more on FIFO here: brainly.com/question/12883706

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Since there is no debt, all the capital that the company raises is in the form of common equity.

Since there is only equity (meaning the firm is a fully equity firm), the weighted average cost of capital (WACC) is nothing but the cost of equity

In this case the WACC represents the cost of equity

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6 0
3 years ago
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Answer:

general partnership

Explanation:

General partnership -

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The decision about the business is taken along with all the partners ,like the financial decisions.

Any loss or profit is shares equally amongst all .

Hence , from the given scenario of the question ,

Sandra and Clara enters into a general partnership .

3 0
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PilotLPTM [1.2K]
Laura is checking on schedule feasibility.
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7 0
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Learn more about discounts here: brainly.com/question/3541148

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Learn more about Stocks from

brainly.com/question/11514232

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