Answer:
<h2>C. Stops receiving revenue and is stuck with its fixed costs </h2>
Explanation:
Shut down means that a firm is temporarily suspending the production but not exiting the industry or going out o business and the firm would start production if the market improves. It is a short-run decision. A firm that has been shut down generates zero revenue and doesn't incurs variable costs, but does incurs the fixed costs. Its profits is equal to the negative of fixed costs. R<em>ents and other business costs that remains constant regardless of the good and services produced is called fixed costs</em>.
Answer:
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a.
(A) Cash +4,940
(L) Notes payable (short-term) +4,940
b.
(A) Cash +5,630
(S) Common Stock +5,630
c.
(A) Cash -1,200
(A) Equipment +3,000
(L) Notes payable (short-term) +1,800
d.
(A) Cash -1,300
(A) Supplies +1,300
e.
(A) Supplies +1,700
(L) Accounts payable +1,700
Explanation:
(A) = Assets
(L) = Liabilities
(S) = Stockholders' Equity
(A) = (L) + (S)
Transaction a.
(A) Cash +4,940
(L) Notes payable (short-term) +4,940
Transaction b.
(A) Cash +5,630
(S) Common Stock +5,630
Transaction c.
(A) Cash -1,200
(A) Equipment +3,000
(L) Notes payable (short-term) +1,800
Transaction d.
(A) Cash -1,300
(A) Supplies +1,300
Transaction e.
(A) Supplies +1,700
(L) Accounts payable +1,700
By providing the letter with her maximum loan amount Margot risks reducing her negotiating ability
This is further explained below.
<h3>What is a pre-approval letter?</h3>
Generally, A letter from a lender that states that the lender is willing to lend to you in the event of prequalification or preapproval is a document that states the lender is willing to lend to you up to a particular loan amount.
This is not a guaranteed loan offer, and the document that you are looking at is based on certain assumptions.
In conclusion, Margot runs the risk of decreasing her capacity to negotiate by diminishing her leverage by submitting the letter with the maximum loan amount.
Read more about the pre-approval letter
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Answer:
$1.9
Explanation:
The computation of the earning per share is shown below:
Earning per share is
= Net income ÷ Weighted number of oustanding shares
= $380,000 ÷ 200,000 shares
= $1.9
By simply divide the net income from the Weighted number of oustanding shares, the earning per share could be determined
Hence, the earning per share is $1.9
Answer:
Intrinsic Value = $33.23
Explanation:
<em>The intrinsic value of a stock using the dividend valuation model is the present value of the the future dividend expected from the stock discounted at the required rate of return. </em>
This model is represented as follows
D(1+g)/(r-g) = P
Price, D- dividend payable in now, ke- required rate of return, g- growth rate
D- 3.12 , g-6.50% r-6.25%
Intrinsic value = (3.12× 1.065)/(0.1625-0.065)= $33.228
Intrinsic Value = $33.23