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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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On January 1, 2021, Algerian Delivery had 100,000 shares of common stock outstanding. The following transactions occurred during
defon

Answer:

Algerian Delivery's basic earnings per share for the year ended December 31, 2021 is $3.01

Explanation:

In order to calculate Algerian Delivery's basic earnings per share for the year ended December 31, 2021 we would have to make first the following calculations:

Net Income = $298,750

Calculation of Weighted Average of Number of Equity Shares:

Outstanding on Jan 1 = 100,000*12/12 = 100,000

Less: Treasury Stock 3,100*10/12 = (2,583)

Sold Treasury Shares 3,100*3/12 = 775

New Shares Sold 12100*1/12 = 1,008

Therefore, Weighted Average of Equity Shares during the year = 100,000  - 2,583 + 775 + 1,008 =99,200

Therefore, Basic Earnings per Share = Net Income/Weighted Average of Equity Shares outstanding during the year

= $298,750/99,200 = $3.01

Algerian Delivery's basic earnings per share for the year ended December 31, 2021 is $3.01

6 0
2 years ago
Kate's Diner offers one breakfast item, a breakfast special. The market price for this meal is $5. At her profit-maximizing leve
bazaltina [42]

Answer:

keep producing in the short run but exit the industry or go out of business in the long run

Explanation:

A perfect competition is characterised by many buyers and sellers of homogeneous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.  

In the long run, firms earn zero economic profit.  If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.  

Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.  

A firm should shut down in the short run if price is less than average variable cost. But since the diner's price is greater than average variable cost, it should continue production.

A firm should exit the industry in the long run if price is less than average total cost. the diner's price is less than average total cost, so it should shut down in the long run

6 0
3 years ago
A​ person's website specializes in the sale of rare or unusual vegetable seeds. He sells packets of​ sweet-pepper seeds for ​$2.
ANTONII [103]

Answer:

7 packets of  sweet-pepper seeds and 9 packet of hot-pepper seeds.

Explanation:

Let x packets of​ sweet-pepper seeds for ​$2.16 each and y packets of​ hot-pepper seeds for ​$4.24 each are mixed to obtain 16​-packet mixed pepper assortment for ​$3.33 per packet,

i.e. x + y = 16       ..........(1)

Also,

The price of sweet-pepper seeds + price of hot pepper seeds = price of the mixture

⇒ 2.16x + 4.24y = 3.33(x+y)

⇒ 2.16x + 4.24y = 3.33x+3.33y

⇒ 2.16x + 4.24y - 3.33x-3.33y = 0

⇒ −1.17x +0.91y = 0  ........(2)

Equation (2) + 1.17 × equation (1)

0.91y + 1.17y = 18.72

2.08y = 18.72

⇒ y = 9

From equation (1),

x + 9 = 16 ⇒ x = 16 - 9 ⇒ x = 7

Hence, there are 7 packets of  sweet-pepper seeds and 9 packet of hot-pepper seeds.

7 0
2 years ago
A shift in a PPC/PPF to the right (or outward) illustrates Growth which may be generated by __________________ (better utilizing
Elina [12.6K]

Answer:

The correct answer is economic growth.

Explanation:

A production possibility curve or frontier shows the different combinations or bundles of two goods that can be produced using limited resources. The curve is concave because of increasing opportunity cost.  

An outward shift in the production possibility curve shows an increase in the level of production. This can happen because of two reasons ,

  1. Increase in the quantity of resources available , and
  2. Improvement in technology

Both of these factors will help in increasing the level of production. In other words, we can say that the outward shift in the production possibility curve shows economic growth.

8 0
3 years ago
Soup and salad cost $5.50 in total. the soup costs a dollar more than the salad. how much does the salad cost (in cents)?
atroni [7]
Soup + Salad = 5.50

Soup = Salad + 1

Subtitute both formulas into:

Salad + 1 + Salad = 5.50

2 Salad = 4.50

Salad = $ 2.25
 
          = 225 cents




4 0
3 years ago
Read 2 more answers
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