Good managers demonstrate commitment to ethical business practices with

The firm projected its proforma of financial statements using AFN method and finds that next year its AFN is $2 million. Its tot

Varvara68 [4.7K]

Answer:

Its earnings per share will decrease.

Its return on equity will go down.

Its equity multiplier will go down.

Explanation:

Since net income remains the same, earnings per share will decrease. This happens because there will be more stocks outstanding (the denominator in the EPS formula), so the result will be lower.

Return on equity will also decrease, since net income will remain the same while equity increases (same logic as EPS).

Unless this company is 100% financed through equity, it will have some debt (liabilities). The equity multiplier = total assets / total equity. E.g. total assets increase from $20 to $22 million, and total equity increases from $30 to $32 million.

Original equity multiplier = $40 / $30 = 1.333

Equity multiplier after issuing more stocks = $42 / $32 = 1.3125

C. Its equity multiplier will go down.

D. Its current ratio will go down.

E. Its quick ratio will go down.

5 0

3 years ago

On January 1 of Year 1, Bryson Company obtained a $147,750, four-year, 7% installment note from Campbell Bank. The note requires

Murljashka [212]

Installment note from Campbell Bank.

1-Jan Note intt expense Decrease 31-Dec

Amortization of Installment Notes Carrying payment 7% in Carrying

Year ending December 31 amount cash paid notes payable amount

year 1 147,750 43,620 10343 33,278 114,473

year 2 114,473 43,620 8013 35,607 78,866

year 3 78866 43,620 5521 38,099 40,766

year 4 40766 43,620 2854 40,766 0

b) Journal Entries

Date Account titles & Explanations Debit Credit

year 1 1-Jan Cash 147,750

Notes payable 147,750

(to record issuance of note)

year 1 31-Dec Interest expense 10343

Notes payable 33,278

cash 43,620

(to record interest expense)

year 2 31-Dec Interest expense 8013

Notes payable 35,607

cash 43,620

(to record interest expense)

year 3 31-Dec Interest expense 5521

Notes payable 38,099

cash 43,620

(to record interest expense)

year 4 31-Dec Interest expense 2854

Notes payable 40,766

cash 43,620

(to record interest expense)

c) interest expense of 10,343 would be reported on the income statement of Bryson Company.

Learn more about installment notes at

brainly.com/question/24317141

#SPJ4

6 0

2 years ago

Adam and Bob are identical twins who attended grammar school through high school together. Adam got a job after high school, and

Alexxandr [17]

Answer: Option A

Explanation: In simple words, human capital refers to the economic value of an individual employee to the organisation in which he or she works as based on the skill sets and experience that he she possess.

The economic value can be created using various tools like education, training, good health or loyalty etc. Human capital is considered as an intangible asset but is not recorded in the balance sheet of the company as it cannot be quantified.

However, it is considered as the most important asset because the effective use of other resources depends on the human capital of an organisation.

7 0

3 years ago

The current price for a good is $25, and 100 units are demanded at that price. The price elasticity of demand for the good is

mrs_skeptik [129]

Answer:

Consumer surplus increases by $2

Explanation:

The consumer surplus can be defined as the benefit that consumers gain when they pay less for a good that they are willing to pay more for.

a). Determine the final demand as follows;

Price elasticity of demand=% change in price/% change in demand

where;

price elasticity of demand=-1

% change in price={(Final price-initial price)/initial price}×100

Final price=$24

initial price=$25

% change in price=(24-25)/25=(1/25)×100=-4%

% change in demand=x

replacing in the original expression;

-1=-4/x

x=4%

% change in quantity={final quantity-initial quantity/initial quantity}×100

let final quantity=y

4%={(y-100)/100}×100

0.04=(y-100)/100

4=y-100

y=4+100=104

final quantity=104 units

Consumer surplus=(1/2)×change in price×change in quantity

where;

change in price=25-24=1

change in quantity=104-100=4

Consumer surplus=(1/2)×1×4=2

Consumer surplus increases by $2

8 0

2 years ago

Lease or Sell Casper Company owns a equipment with a cost of $366,000 and accumulated depreciation of $53,200 that can be sold f

aalyn [17]

Answer:

The Company should Lease the equipment (Alternative 1)

Explanation:

Preparation of a differential analysis on March 23 as to whether Casper Company should lease or sell the equipment.

DIFFERENTIAL ANALYSIS

Lease Equipment (Alternative 1); Sell Equipment (Alternative 2) Differential Effect on Income (Alternative 2)

Revenues $285,200 $273,400 –$11,800

Costs –$15,100 –$8,202 $6,898

($273,400*3%=$8,202)

Income (Loss) $270,100 $265,198 $4,902

Therefore Based on the above Differential Analysis the Company should LEASE the equipment (Alternative 1).

6 0

2 years ago