Answer:
The stock's current intrinsic price is c. $18.29
Explanation:
Hi, by definition, the intrinsic value of a stock is defined by the present value of its future free cash flows, in our case, for the next year it will be $0.75 million and it will grow at a 6.4% rate, every year, "forever".
SInce there are $2 million in short term investment and $2 million in debt, both amounts cancel out each other therefore, all we have to do is to bring to present value the future free cash flows, as follows.
So the value of all the outstanding share of the company is:
Since there are 1 million shares, each one is worth $18,292,683/1,000,000= $18.29. So the answer is c.
Best of luck.
Answer: D. an understatement of expenses and an overstatement of owners' equity
Explanation:
If a purchase of merchandise was not recorded, it would mean that Purchases being <u>an expense</u> that contributes to the Cost of Goods sold would be understated.
This understatement would mean that the the Net income is overstated because the purchase expenses were never deducted from it. Net Income is part of owners' equity so if it is overstated, so is owners' equity .
Answer:
E) I, II, and III
Explanation:
When an organization realizes that there are certain quality problems within the products who are already in services, the ethical approached would including informing the customers (people across the globe who might be interested) about the problem, recall the products which are defective and managing complaints on one to one basis prioritizing every single customer facing the issue.
Therefore, all three ethical approaches are applicable
Answer:
c. payment for interest on short-term notes payable
Explanation:
Cash flow statement shows positive and negative cash flows that result from activities of a business. It is divided into 3 parts: cash flow from operating activities, cash flow from investing activities, cash flow from financing activities.
Cash flows form operations involves cash flows from regular business activities. A positive change in assets represents an outflow and a negative change in liability represents an inflow.
Items considered under operating activities include inventory, accounts receivable, accrued revenue, accounts payable, and tax liabilities.
Payment for interest on short-term notes payable is a account payable item, so it is included in cash flow from operations
