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dlinn [17]
2 years ago
10

The interest rate that should be used when evaluating a capital investment project is sometimes called the ______________. i. in

ternal rate of return
Business
1 answer:
OlgaM077 [116]2 years ago
3 0

The interest rate that should be used when evaluating a capital investment project is sometimes called the appropriate discount rate and cost of capital.

The cost of capital refers to the minimum rate of return needed from an investment to make it worthwhile, whereas the discount rate is the rate used to discount the future cash flows from an investment to the present value to determine if an investment will be profitable. Appropriate Discount Rate means, at any time, the real (i.e., not inflation adjusted) weighted average cost of capital (after taxes payable by the concession business).

Cost of Capital = (Risk-Free Rate of Return + Credit Spread) × (1 – Tax Rate)

To know more about cost of capital here

brainly.com/question/16031467

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On July 1, 2010, Ellison Company granted Sam Wine, an employee, an option to buy 400 shares of Ellison Co. stock for $30 per sha
gregori [183]

Answer:

Ellison Company should recognize compensation expense on its books in the amount of $600

Explanation:

Solution

The transaction in the books of Ellison Company during the period of July 1st 2010 to December 31st 2010

On July 1st the share value was $30 *400 =  12000

On October 1st 2010 sold at $ 36 * 400 =  14400

The gain on this transaction was = $2,400          

31st July 2010, less compensation expenses =$ 1,800    

The fair vale to be recorded as a gain = $ 600

3 0
3 years ago
Red Raider Company uses a plantwide overhead rate with direct labor hours as the allocation base. Next year, 560,000 units are e
andrew11 [14]

Answer:

d. $11.11 per unit

Explanation:

Plant wide overhead rate = Total manufacturing cotsts / Total direct labor hours

Plant wide overhead rate = ($2,530,000 + $900,000) / (168,000+110,000)

Plant wide overhead rate = $3,430,000 / 278,000

Plant wide overhead rate = $12.34 per DLH

Overhead cost per unit = Plant wide overhead rate * Direct hours per unit

Overhead cost per unit = $12.34 * 0.90

Overhead cost per unit = $11.11 per unit

7 0
3 years ago
Exercise 10-2 Straight-Line: Amortization of bond discount LO P2 Tano issues bonds with a par value of $180,000 on January 1, 20
Nitella [24]

Answer:

bonds' face value $180,000

coupon rate 8%, semiannual = 4%

maturity 3 years x 2 = 6 periods

market interest rate = 10% or 5% semiannual

the journal entry to record the issuance of the bonds:

January 1, 2017, bonds issued at a discount

Dr Cash 170,862

Dr Discount on bonds payable 9,138

    Cr Bonds payable 180,000

the amortization of the bond discount should be $9,138 / 6 = $1,523 on every coupon payment.

Journal entry to record payment of first coupon:

June 30, 2017, first coupon payment

Dr Interest expense 8,723

    Cr Cash 7,200

    Cr Discount on bonds payable 1,523

6 0
3 years ago
The most recent data from the annual balance sheets of Free Spirit Industries Corporation and LeBron Sports Equipment Corporatio
shutvik [7]

Answer:

Free Spirit Industries Corporation and LeBron Sports Equipment Corporation

1a. Free Spirit Industries Corporation’s current ratio is , and its quick ratio is 1.3337 : 1 and 0.7469 : 1 respectively.

1b. LeBron Sports Equipment Corporation’s current ratio is , and its quick ratio is 1.6596 : 1 and 0.9294 : 1 respectively.

2. True: Free Spirit Industries Corporation has less liquidity but also a greater reliance on outside cash flow to finance its short-term obligations than LeBron Sports Equipment Corporation.

3. True: A current ratio of 1 indicates that the book value of the company’s current assets is equal to the book value of its current liabilities.

4. True: An increase in the current ratio over time always means that the company’s liquidity position is improving.

Explanation:

a) Data:

Balance Sheet December 31st (Millions of dollars)

LeBron Sports Equipment Corporation   Free Spirit Industries Corporation

                             LeBron   Free Spirit                             LeBron   Free Spirit

Assets                                                        Liabilities

Current assets                                        Current liabilities

Cash                            $1,435      $922     Accounts payable         $0    $0

Accounts receivable      525         338      Accruals                       316      0

Inventories                   1,540         990      Notes payable          1,793   1,687

Total current assets $3,500   $2,250 Total current liabilities $2,109$1,687

Net fixed assets                                          Long-term bond      2,578 2,063

Net plant & equipment 2,750 2,750         Total debt             $4,687 $3,750

                                                                    Common equity

                                                                    Common stock     $1,016     $813

                                                                    Retained earnings   547       437

                                                            Total common equity $1,563  $1,250

Total assets      $6,250 $5,000 Total liabilities and equity$6,250 $5,000

b) Current Ratio and Quick Ratio:

Current Ratio = Current Assets/Current Liabilities

Quick Ratio = (Current Assets - Inventory)/Current Liabilities

1a. Free Spirit Industries Corporation’s current ratio is , and its quick ratio is

Current Ratio = $2,250 / $1,687 = 1.3337 : 1

Quick Ratio = ($2,250 - 990) / $1,687 = 0.7469 : 1

1b. LeBron Sports Equipment Corporation’s current ratio is , and its quick ratio is:

Current Ratio = $3,500 / $2,109 = 1.6596 : 1

Quick Ratio = $3,500 -1,540 / $2,109 = 0.9294 : 1

5 0
3 years ago
Use the following Window Breeze Company income statement to answer the question. Window Breeze Company is a small manufacturer o
Vikki [24]

Missing information:

How much is the value of full costing ending inventory?

Answer:

$8,750

Explanation:

1,000 units were produced and 800 were sold, so ending inventory = 200 units

total production cost per unit (under full costing) = $35,000 / 800 = $43.75

ending inventory = $43.75 x 200 = $8,750

Full costing basically refers to absorption costing, which calculates COGS using both variable and fixed costs (total production costs).

8 0
3 years ago
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