Answer:
a. Calculate earnings per share, EPS, under each of the three economic scenarios (recession, normal, expansion) before any debt is issued. = 1.38667
b. Calculate the percentage changes in EPS when the economy expands or enters a recession. = -20.00%
c. Calculate earnings per share (EPS) under each of the three economic scenarios assuming the company goes through with recapitalization. = 1.56444
d. Given the recapitalization, calculate the percentage changes in EPS when the economy expands or enters a recession. = -37.14%
Explanation:
Answer:
overstate net income but days to collect will increase.
Explanation:
A bad debt expense is defined when any receivable is no more collectible as the customer is not able to fulfil or satisfy the obligation in order to pay the obligation of paying an outstanding debt because of some financial problems or due to bankruptcy.
Thus when any organization is more optimistic about the debt collection, it will understate the bad debt expenses and will also overstate the net income. But in this case the number of days to collect the payment increases.
Answer:
the compensation expense for the year is $327,120
Explanation:
The computation of the compensation expense for the year is given below:
= (Number of stock options to be purchased × (1 - forefeiture percentage) × fair value per option)) ÷ 2
= (87,000 shares × (1 - 0.06) × $8)) ÷ 2
= $327,120
Hence, the compensation expense for the year is $327,120
The same should be considered and relevant too
Answer:
Explanation:
a. Revenue from improving recruitment:
Tuition per semester labor hour is $200 per semester credit
Revenue from state = $80 per semester credit
Expenses from improving recruitment,
Labor cost = $7200
Material cost = $35 per student
Number of students per class = 85
So, Total material costs = 85 x 35 = $2975
Overhead costs = $31000
Output for 3 credit hour= number of students x revenue x credit hours
= 85 x (200+80)x3 = $71400
Multifactor productivity related to improving recruitment= Output/(Labor cost+ material cost+ overhead) = 71400/ (7200+2975+31000) = 71400/41175 = 1.734
Answer:
(a) estimated bad debts is $42,500
(b) estimated bad debts is $34,000
Explanation:
(a) 1,700/4%= 42,500
(b) 1,700/5%=34,000