Answer:
Level of sales (dollars) to earn profit of $50,000
= <u>Fixed cost + desired profit</u>
Contribution margin ratio
= <u>$275,000 + $50,000</u>
0.5
= $650,000
Number of units to earn profit of $50,000
= <u>Level of sales</u>
Selling price
= <u>$650,000</u>
$200
= 3,250 units
The correct answer is A
Explanation:
First and foremost, the level of sales (dollars) to earn $50,000 profit is calculated, which is the ratio of fixed cost and desired profit to contribution margin ratio. Then, we will calculate the number of units to be sold in order to earn $50,000 profit by dividing the level of sales by selling price.
Answer: 8.05%
Explanation:
From the question, we are informed that Holdup bank has an issue of prefered stock witha stated dividend of $7 that just sold for $87 per share.
The banks cost of prefered will be:
= Dividend / Stock value
= 7/87
= 0.0805
= 8.05%
Answer:
The adjusting entry Fred should make on December 31, the end of the accounting period:
b. Debit : Insurance Expense 6,000 Credit: Prepaid Insurance 6,000
Explanation:
On October 1, Fred Company paid $48,000 for a two-year insurance policy, ($2,000 per month)
From October 1 to December 31, Fred Company has used the insurance for 3 months.
Insurance Expense = $2,000 x 3 = $6,000
The adjusting entry Fred should make on December 31, the end of the accounting period:
Debit Insurance Expense $6,000
Credit Prepaid Insurance $6,000
Explanation:
Money and Family r two emotional benefits to find a job
Answer:
True
Explanation:
For raising long term finance, a firm may resort to different means such as issue of common stock or issue of bonds or debentures.
Shareholders are to be paid dividends while debenture holders are to be paid periodic interest. The difference being, unlike dividend, interest paid on bonds is a tax deductible expense.
For example, if a firm issues a $1000 8% bonds and the firm's profits are subject to taxation at the rate 30%. Further suppose, the firm earned $5000 profits. Then, the interest paid on $1000 bond i.e $ 80 would be deducted from $5000 and the income that would eventually get taxed would be $4920.
Hence, in the above case, had the firm not issued bonds, the whole of $5000 would've been taxable at 30% rate.
The tax saved by such bonds being $ 80 × 30% i.e $24
This $24 represents interest tax shield. This means, had there been no debt in the firm's capital structure, it would've ended up paying this additional amount of $24 as taxes.
