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Alik [6]
3 years ago
9

Crane Company on January 1, 2018, granted stock options for 63000 shares of its $10 par value common stock to its key employees.

The market price of the common stock on that date was $25 per share and the option price was $20. The Black-Scholes option pricing model determines total compensation expense to be $627000. The options are exercisable beginning January 1, 2021, provided those key employees are still in Crane’s employ at the time the options are exercised. The options expire on January 1, 2022. The amount of compensation expense Crane should record for 2017 under the fair value method is:_______.
a. $0.
b. $207000.
c. $103500.
d. $310500.
Business
1 answer:
attashe74 [19]3 years ago
3 0

The amount of compensation expense Crane should record for 2017 under the fair value method is $207000

<u>Solution:</u>

From the given,

Stock options for 63000 shares

$10 par value common stock

$25 per share and the option price was $20

Total compensation expense = $627000

On calculating we get,

\Rightarrow\frac{627000}{3}= \$207,000

We can conclude that there is $207,000 decrease. Therefore, the correct answer is option c.

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A company's sales budget indicates the following sales:
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Answer:

26500.

Explanation:

Given: Sales of January, February and March.

           Beginning inventory is 12000.

           Company´s ratio of inventory to future sales is 45%.

Formula; unit to be produced= (\textrm{ next month budgeted sales + present months sales budget- beginning inventory})

First step: finding February´s budgeted sales

Next months (February) budgets sales= \frac{45}{100} \times 30000= 13500.

Now, putting values in the formula to find unit to be produced.

Unit to be produced in January= ((13500 + 25000 - 12000)= (38500 - 12000)

∴ Unit to be produced in the month of January is 26500.

                 

4 0
3 years ago
On the basis of the following data for Breach Co. for the current and preceding years ended December 31, prepare a statement of
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Answer:

2. c. 66.982

See explaination

Explanation:

Please kindly check attachment for the step by step solution of the given problem.

7 0
3 years ago
In the circular flow model of the market system, households’ major role is to Multiple Choice buy both products and resources. s
STALIN [3.7K]

Answer:

Explanation:

the diagram of circular flow, shows the graphical representation of the exchange of goods, services and money between two parties as are families and businesses, where families exchanged money for goods and services and the companies through these monies that they receive to acquire factors of production to provide to the families.

5 0
3 years ago
My pension plan will pay me $10,000 once a year for a 10-year period. The first payment come in at the end of 6th year from now.
Gala2k [10]

Answer:

0.75163

Explanation:

So, we are given the following data or parameters or information which is going to help us in solving the question above;

=> Payment for the pension = $10,000 once a year for a 10-year period.

=> Time for the first payment = ''end of 6th year from now''.

=> Type of Pension plan for immunization = " 5-year zero-coupon bond and 20-year zero coupon bond to construct the immunization position''

=> Interest rate = 10%.

Therefore, the weight on the 5-year zero-coupon bond can be calculated as follows:

Duration = (Weight × 5) + [( 1 - weight) × 20].

=> 5b + 20 - 20b = 8.7255.

=> b = 0.75163.

Therefore, the weight on the 5-year zero-coupon bond is 0.75163.

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6 0
3 years ago
Waterway Industries has a material price standard of $2.00 per pound. 6600 pounds of materials were purchased at $2.20 a pound.
GrogVix [38]

Answer:

The appropriate solution will be "$1320".

Explanation:

The given values are:

Material's actual quantity

= $6600

Standard price

= $2.00

Actual price

= $2.20

Now,

The material price variance will be:

= Actual quantity (Standard price - Actual price)

On substituting the values, we get

= 6600(2.00-2.20)

= 6600\times (-0.20)  

= 1320 ($)

6 0
3 years ago
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