Answer: Management will not look at this investment in equipment favorably, as the net present value of the project is negative, which will decrease shareholder's wealth.
Explanation:
0 1 2 3 4
Net Cashflows -370,000 160000 140000 80000 80000
Discount factor 12% 1 0.893 0.797 0.712 0.636
PV of cashflows -370000 142857 111607 56942 50841
NPV -7752
Answer:
controllable margin for the year is $180,000.
Explanation:
The Controllable Margin is the Profit that is controllable by the divisional manager.
<u>Calculation of Controllable Margin : </u>
Contribution Margin $360,000
Less Controllable fixed costs ($180,000)
Division Controllable Margin $180,000
Answer:
the movement of drawings across a screen
Explanation:
Answer:
translation exposure
Explanation:
Translation exposure is also known as translation risk. In this type of risk, the value of a company's assets, equities, income, or liabilities change due to changes in the exchange rate,
French subsidiary received a lesser income last year, although payment will be adjusted in US dollars as per the contract.
Due to this, the subsidiary has a balance sheet loss, although the consolidated global result is positive.
This type of foreign exchange risk is known as translation exposure.
Answer:
The answer is:
Disagree
The matching principle is violated
Explanation:
The order of a customer worth $40, 000 was received at year end. However, the merchandise will only ship in the year following the fiscal year. When goods are shipped, revenue is recognised on shipping the goods or receipt of the goods by the customer. According to the information provided, merchandise will only be shipped in 2021, therefore the customer will only receive the goods in 2021. Given this information, recognising revenue in the current period would be an incorrect treatment of the transaction and contravene the matching principle. This principle indicates that revenue and the costs associated with the revenue should be recognised in the same period.
The sale should not be recognised in 2020 because the goods' delivery and the costs incurred in delivering those goods will only be incurred in 2021. No indicated payment, cash or otherwise, was received in lieu of this transaction. Recognising this sale in the income statement and the associated asset in the statement of financial position could be misconstrued as an attempted enhancement of Pastel Inc.'s financial position for the 2020 fiscal year end.
