Answer: $105.49
Explanation:
The Value of the stock today is given by;
![P = \frac{D1}{1 + r} + \frac{D2}{(1+r)^2} + \frac{D3}{(1+r)^3} + \frac{P3}{(1+r)^3}](https://tex.z-dn.net/?f=P%20%3D%20%5Cfrac%7BD1%7D%7B1%20%2B%20r%7D%20%2B%20%5Cfrac%7BD2%7D%7B%281%2Br%29%5E2%7D%20%2B%20%5Cfrac%7BD3%7D%7B%281%2Br%29%5E3%7D%20%20%2B%20%5Cfrac%7BP3%7D%7B%281%2Br%29%5E3%7D)
![80 = \frac{2}{1 + 0.13} + \frac{3}{(1+0.13)^2} + \frac{4}{(1+0.13)^3} + \frac{P3}{(1+0.13)^3}](https://tex.z-dn.net/?f=80%20%3D%20%5Cfrac%7B2%7D%7B1%20%2B%200.13%7D%20%2B%20%5Cfrac%7B3%7D%7B%281%2B0.13%29%5E2%7D%20%2B%20%5Cfrac%7B4%7D%7B%281%2B0.13%29%5E3%7D%20%20%2B%20%5Cfrac%7BP3%7D%7B%281%2B0.13%29%5E3%7D)
![P3 = (80 * {1.13^3) - (\frac{2}{1.13} + \frac{3}{1.13^2} + \frac{4}{1.13^3})](https://tex.z-dn.net/?f=P3%20%3D%20%2880%20%2A%20%7B1.13%5E3%29%20-%20%28%5Cfrac%7B2%7D%7B1.13%7D%20%2B%20%5Cfrac%7B3%7D%7B1.13%5E2%7D%20%2B%20%5Cfrac%7B4%7D%7B1.13%5E3%7D%29)
P3 = $105.49
Answer:
The correct option is C. Recognize $9 million Gross Profit in 2016.
Explanation:
IFRS-15 states that a 4-step approach should be followed when the performance obligation is satisfied over a period of Time. In-this case, the performance obligation will be satisfied within three years from 2016 to 2018.
4-step Approach:
1) First of all you have to calculate the over gain/loss of the project, and the result will decide the entries to be made. In this case, the contract price is $150m and the total costs (Costs incurred + Expected Costs) are $120m. This gives us a Profit of $30m.
2) In the second step, we have to determine the progress of the contract, It means that how much work have we done so far. There are two methods to calculate the progress: Input Method and the Output Method. Based on the data available, we will go for Input Method. To calculate progress under this method, simply divide the costs incurred by the total costs and multiply the result with 100 to get the percentage. 30% is the progress of the contract.
3) Revenue (150 * 30%) = $45m
COS (120 * 30%) = $36m
Gross Profit = $9m
* 120 is the Total Cost.
4) The last step involves determining Contract Assets and Liabilities. I won't go in to the detail because this step is not concerned with your question. You are open to ask questions regarding this step if you need.
Thanks.
Answer:
$9,280
Explanation:
The computation of the inventory amount reported in the balance sheet is shown below:
(A) (B) (A × B)
<u>Particulars Quantity Cost per item NRV Lower of Reported</u>
<u> Cost or Market Amount</u>
Item A 80 $87 $102 $87 $6,980
Item B 40 $82 $57 $57 $2,280
Total $9,280
Answer:
e. None of these.
Explanation:
John's expenses on the trip;
Air fare = $3,200
Lodging = $900
Meals = $800
Entertainment = $600
Of all the expenses incurred by John, only the expense on entertainment is a non-deductible expense. A such,
Total deductible expense = $3,200 + $900 + $800
= $4,900
Hence, the right option is e. None of these.
Answer:
The sort of returns to scale the firm face is a decreasing return to scale.
Explanation:
The production function is correctly restated as follows:
.................................. (1)
To determine the type of return to scale, the input usages K and L are scaled by the multiplicative factor ∝, and substituting it into equation (1), we can have the following:
![Q =( \alpha K)^{0.4}(\alpha L)^{0.5}](https://tex.z-dn.net/?f=Q%20%3D%28%20%5Calpha%20K%29%5E%7B0.4%7D%28%5Calpha%20L%29%5E%7B0.5%7D)
![Q = \alpha^{0.4} K^{0.4}\alpha^{0.5} L^{0.5}](https://tex.z-dn.net/?f=Q%20%3D%20%5Calpha%5E%7B0.4%7D%20K%5E%7B0.4%7D%5Calpha%5E%7B0.5%7D%20L%5E%7B0.5%7D)
![Q = \alpha^{0.4} \alpha^{0.5}K^{0.4} L^{0.5}](https://tex.z-dn.net/?f=Q%20%3D%20%5Calpha%5E%7B0.4%7D%20%5Calpha%5E%7B0.5%7DK%5E%7B0.4%7D%20L%5E%7B0.5%7D)
![Q = \alpha^{0.4}^{+0.5}K^{0.4} L^{0.5}](https://tex.z-dn.net/?f=Q%20%3D%20%5Calpha%5E%7B0.4%7D%5E%7B%2B0.5%7DK%5E%7B0.4%7D%20L%5E%7B0.5%7D)
![Q = \alpha^{0.9}K^{0.4} L^{0.5}](https://tex.z-dn.net/?f=Q%20%3D%20%5Calpha%5E%7B0.9%7DK%5E%7B0.4%7D%20L%5E%7B0.5%7D)
Since the sum of the exponents of the multiplicative factor ∝ is 0.9 which is less than 1, the sort of returns to scale the firm face is a decreasing return to scale.