Answer:
Choice 1 is more profitable.
Explanation:
Giving the following information:
Choice 1:
You receive $100 starting today once a year every year for the rest of eternity.
Choice 2:
You receive $200 today and then $50 once a year starting next year for all of eternity.
<u>I will assume an interest rate of 8%</u>
The first option and second option are a perpetual annuity. To calculate the present value, we need to use the following formula:
Choice 1:
PV= Cf/i
Cf= 100
i=0.08
PV= 100/0.08= $1,250
Choice 2:
PV= 50 + 50/0.08= $825
Choice 1 is more profitable.
Answer:
b. $100,000
Explanation:
Provided information
Beginning balance of account receivable = $25,000
Collection from customers = $100,000
Ending balance of account receivable = $15,000
Since we have to find out the gross taxable income, so we considered only the collection from customers as this is the amount which is received and therefore, it has come under the gross taxable income i.e $100,000.
Answer:
The correct answer is decrease in equilibrium price and a decrease in equilibrium quantity.
Explanation:
The supply being constant, a decrease in demand will cause the demand curve to shift to the left while the supply curve will remain the same.
The new demand curve will intersect the supply curve at a lower point. This rightward shift in the demand curve will cause both the equilibrium quantity as well as the equilibrium price to fall.
Answer:
Earnings per share (EPS) = (net income - preferred dividends) / average number of outstanding shares
EPS for all equity plan:
($80,000 x 60%) / 18,000 = $2.67 per share
EPS for Plan I:
[($80,000 - $5,000) x 60%] / 12,000 = $3.75 per share
EPS for Plan II:
[($80,000 - $7,750) x 60%] / 8,700 = $4.98 per share
Answer: LICENSING
Explanation: Licensing is a business arrangement process whereby an organization or business entity with already existing product and good market prospect allows another company in another country or society to produce it's Products, in return the company licensed to produce the product will pay certain percentage of the Revenue from the sale of the product to the business or organization that issued the License. In this case the company will not face the risk of losing control over the management skills or technological know-how.
