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Answer:
Total Asset = $2,598,200
Explanation:
Accounting equation : Asset = Equity + liabilities
Equity =common stock + retained earnings
= ( 5000*$400) + (40000 - 1800)
= $2,000,000 + 38200
= $2,038,200
Liabilities = $240,000 + 320000
= $560,000
Total Equity and Liabilities = 2038200 + 560000
= $2,598,200
double entry principle helps to ensure that the accounting equation is done e.g when common stock is issued contra entry is bank if cash is received.
Answer: a. Operational efficiency
c. Efficiency in use of total assets
Explanation:ROE(RETURNS ON EQUITY) This is a term used in financial analysis,it is the percentage representation of the value of a company's NET INCOME DIVIDED BY THE VALUE OF THE SHAREHOLDERS SHARES. Both the balance sheet and the income statement is used when calculating ROE.
OPERATIONAL EFFICIENCY tries to Describe how well the management of the entire Operations is carried out. It is a major determining factor in ROE.
EFFICIENCY IN USE OF TOTAL ASSETS this is a term used to determine how well a company is effectively using it's assets. This assets can be in the form of Financial, Machines,raw materials etc.
Since ROE involves NET INCOME, efficiency in use of total assets is a major determining factor in ROE.
Answer: e) lower wage costs
Explanation: Reduction in the size of the workforce always have an immediate positive result or outcome in the case of lower wage costs. Companies who tend to cut employees and don't restructure experience stress reactions among their employees that can lead to increased sickness absences, lower concentration on the job, and lower creativity. But reduction in wages tend to have positive effects on the company.
Answer:
Consider the following calculation
Explanation:
Year 1 dividend = 2.85 (1 + 30%) = 3.705
Year 2 dividend = 3.705 (1 + 30%) = 4.8165
Year 3 dividend = 4.8165 (1 + 30%) = 6.26145
Year 4 dividend = 6.26145 + 2.4 = 8.66145
Year 5 dividend = 8.66145 (1 + 2%) = 8.834679
Value at year 4 = D5 / required rate - growth rate
Value at year 4 = 8.834679 / 0.108 - 0.02
Value at year 4 = 8.834679 / 0.088
Value at year 4 = 100.39408
Share price = Present value of cash inflows
Share price = 3.705 / (1 + 0.108)1 + 4.8165 / (1 + 0.108)2 + 6.26145 / (1 + 0.108)3 + 8.66145 / (1 + 0.108)4 + 100.39408 / (1 + 0.108)4
Share price = $84.23