Answer:
$60 million
Explanation:
The quick ratio is the financial ratio of the current assets less inventory to current liabilities. While the accounting equation shows the relationship between the elements of a balance sheet which are assets liabilities and equity.
This may be expressed mathematically as
Assets = Liabilities + Equity
Given that quick ration is 1.7 and current liabilities = $50 million
1.7 = current assets less inventory/$50 million
current assets less inventory = 1.7 * $50 million
= $85 million
The total asset is made up of the current assets less inventory, inventory, fixed assets. Let the balance for fixed assets be y
$85 + $65 + y = $210 (all amounts in millions)
y = $210 - $150 (all amounts in millions)
y = $60 (all amounts in millions)
Answer:
$11.97
Explanation:
Calculation for the price of a one-year put
Using this formula
Price=Call option-Stock+Strike price(1+Risk-free interest rate)
Let plug in the formula
Price = $10 - $53 + $58/(1+.055)
Price = $10 - $53 + $58/(1.055)
Price= $11.97
Therefore the price of a one-year put with strike price of $58 will be $11.97
Answer:
a. 1.40%
b. 8.25%
Explanation:
a. Calculation to determine the inflation premium
Using this formula
Expected IP = i - RIR
Let plug in the formula
Expected IP = 2.15% - 0.75%
Expected IP= 1.40%
Therefore the inflation premium is 1.40%
b. Calculation to determine the fair interest rate on Moore Corporation 30-year bond
Using this formula
Fair interest rate=Default risk premium +Liquidity risk premium+Maturity risk premium +T-bills are currently earning
Let Plug in the formula
Fair interest rate=2.05%+ 1.40%+ 2.65% + 2.15%
Fair interest rate= 8.25%
Therefore the fair interest rate on Moore Corporation 30-year bond is 8.25%
Answer:
c. An addition to (or a deduction from) the beginning balance of retained earnings
Explanation:
A prior period adjustment is the correction of an accounting error that occurred in the past and was reported on a prior year's financial statement, net of income taxes. Prior period adjustment are reported in the statement of retained earnings as an increase or a decrease in the beginning retained earnings. Therefore, the adjusted beginning retained earnings balance is the amount that retained earnings would have been if the error had not been made.
