Answer:
The net income earned during the year is $ 5,000
Explanation:
The first point to kn ow is the accounting equation is A=L+SE
So to calculate the opening stockholders equity we can rearrange the accounting equation to be:
A-L = SE
so opening SE is
Assets $ 50,000 - Liabilities $ 40,000 = Stockholders Equity $ 10,000
Ending Stockholders equity is:
Assets $ 35,000 - Liabilities $ 20,000 = Stockholders Equity $ 15,000
Since the question mentions that the change in stockholders equity is only due to net income, the increase of $ 5,000 represents the net income for 2019.
A. Will management allow this message to be sent?
Answer A:
This depends upon the financial health of the company and the project for which the funds are required. If the company is raising debt finance and its financial health is not good, then it seems the management might reject the idea to raise debt finance because the company have to pay interest on this amount borrowed. But if the company is raising equity finance then greater chances exist that the management will encourage this move.
B. Will anything change as a result of the message?
Answer B:
Ofcourse, if the debt finance is used it would make the financial health of the company worse than before if the project for which the loan option is choosen does not performs well in the market. If the projects performs well then it will reduce the financial distress and head the company towards another investment to further reduce the gearing and increase the interest cover.
C. Is the time right?
Answer C:
It might be right time to borrow because after some time there might be a rare chances to borrow or raise equity because of further poor performance. It is also possible that the investment will decrease the financial gearing from its better performance, which is the need of the time. So it depends a lot on the source of finance, project profitability and time. If we use equity finance then it provides financial protection for a greater period.
D. Is the purpose acceptable to the organization?
Answer D:
If the company raising the finance to pay its debt then that's not the right option. The company must raise finance to invest somewhere else and earn a good share of investment in the comings year to meet the interest due and make another investments. It also depends what is the purpose of the fund raising. Usually the lenders prefer to pay to companies when companies make investments.
E. Is the purpose realistic?
Answer E:
If the company is making unrealistic assumptions then it is probable that the company performance in the year will be very poor. So making better forecasting is a better way to sense the risks in the market and also tells the way we must tackle these risks.
Answer:
AdCreate billed Anchor Motors $529,412 for the third quarter in 2010
Explanation:
The advertizing company usually takes a 15% commision
Which means from the total amount billed to customer 15% ar commision which means:
money paid to media + 15% comission of the billed amount= total amount billed
450,000 + 0.15X = X
Now, we try to solve for X and get the amount billed to anchor motors.
X = 450,000/.85 =<em> 529.411,76</em>
The answer in the given statement above is false because
Gross Domestic Product has the capability of providing measurement when it
comes to the economy’s income. It measures the goods that are produced and the
services that are given in the course of one year where in it is concluded that
it has the capability of measuring the economy’s income.
Answer:
$4,565.22
; $5,434.78
Explanation:
Weight of X be “W” and Weight of Y be “1 - W”
Expected return = (Stock X × Weight of X) + (Stock Y × Weight of Y)
10.85% = (12.1% × W) + [9.8% × (1 - W)]
10.85% = (12.1% × W) + 9.8% - (9.8% × W)
2.3% × W = 1.05%
W = 45.6522%
Therefore, 1 - W = 54.3478%
Investment in Stock X = 10,000 × 45.6522%
= $4,565.22
Investment in Stock Y = 10,000 - 4,565.22
= $5,434.78
