Answer
The answer and procedures of the exercise are attached in the following image.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. Is an opinion what contains the image. Judge it like it is.
All of them... why would your employee be allowed to keep your pay
Answer:
0.175 or 17.5%
Explanation:
The calculation of the cost of common equity is shown below:-
WACC = Weight of Equity × Cost of Equity + Weight of Debt × ( 1- Tax rate) × Cost of Debt
0.13 = (0.55 × Cost of equity) + ((0.45 × (1 - 0.25) × 0.10)
0.13 = (0.55 × Cost of equity) + 0.045 × 0.75
(0.55 × Cost of equity) = 0.13 - 0.03375
(0.55 × Cost of equity) = 0.09625
Cost of equity = 0.09625 ÷ 0.55
= 0.175
Therefore for computing the cost of equity we simply applied the above formula.
Answer:
Increase in net Operating income = $14,600
Explanation:
Sales
i. 8000 units X $220
=$1,760,000
ii. 8200 units X $220
=$1,804,000
Variables expenses
i. 8000 units X $66 = $528,000
ii8200 units X $72 = $631,400
Contribution margin
CM=Sales -Variables expenses
i. 1,760,000 - 528,000=
$1,232,000
ii. 1,804,000 - 631,400
=$1,172,000
Our Fixed expenses are
i. $991,000
ii. $917,000
Therefore Net operating income = Contribution margin - Fixed expenses
i. 1,232,000 - 991,000
=$241,000
ii. 1,172,600 - 917,000
=$255,600
From the answers above, there is an increase of $14,600 as a difference between $241,000 and $255,600 which are the Net Operating income.
Answer:
The Net cash is 224.000
Explanation:
To get net cash flow using the indirect method we must make adjustment to the net income.
It depends on the movement if it is added or subtracted to net income
In this case,
Net income 252.000
+ Depreciation expense 26.000
- Increase in accounts receivable (15.000)
- inventory increased (40.000)
+ decreased Prepaid expenses 2.000
- accounts payable decreased (4.000)
+ loss on the sale of equipment 3.000
Net cash 224.000