Answer:
$190,000
; $228,000
Explanation:
Accounting Cost:
= Salary of Jill + Labor costs + Insurance and mortgage payment
= $60,000 + $90,000 + $40,000
= $190,000
Economic Cost:
= Accounting Cost + Investment return lost + Loss in Salary + Loss in Rent
= $190,000 + $8,000 + ($80,000 - $60,000) + ($50,000 - $40,000)
= $228,000
Therefore, accounting and economic costs are $190,000 and $228,000, respectively.
Answer:
a. Revenue is earned when when service or product are delivered to client. Thus Seacoast Magazine should recognize the revenue when it mails the magazines to its subscribers.
b. Total amount received is $60 for 30 issues.
Amount for 1 issues = Total cost / Number of issues of magazines = $60/30 = $2 per issue
Amount of 5 issues = $2 * 5 = $10
Therefore, Seacoast Magazine should record revenue $10 for 5 issues.
Answer:
Take actions by sending the due payments to a collection company.
Explanation:
Collection companies specialise in recovery of funds that are due. These companies can be used by lenders or creditors to get back their money from clients.
The creditor pays the collection company an agreed percentage of funds recovered.
In this scenario staff have not been enforcing the payment policies and patients are not familiar with the requirements or the reasoning behind these policies.
There is a need for specialists that are conversant with the policies to make the collection process efficient
Answer:
Q1) a. 6.60%
Q2) c. retaining a higher percentage of earning will result in a higher growth rate.
Explanation:
Q1.)
Use dividend discount model (DDM) to solve for the growth rate;
g = r- (D1/P0)
whereby;
g = dividend growth rate
r = required rate of return = 11.40% or 0.1140 as a decimal
D1 = next year's dividend = $1.14
P0 = Current stock price = $23.75
g = 0.1140 - (1.14/23.75)
g = 0.1140 - 0.048
g = 0.066 or 6.6%
Therefore, the growth rate is 6.60%, making choice A correct.
Q2.)
c. Retained earning is the proportion of total net profit that a company reinvests back into the business for the purpose of investing in other potentially profitable projects.The returns from these projects would increase the value of the company at a faster rate if a higher percentage e.g 90% is retained. On the other hand, if the company pays a larger portion of its retained earnings e.g 70% as dividends, it will experience a slower growth rate making choice C correct.
