Answer:
A.
If Grommit increases leverage so that its interest expense rises by $16.1M its net income will therefore fall by the after-tax interest expense.
B.
For the same increase in interest expense the free cash flow will not be affected.
Explanation:
A.
If Grommit increases leverage so that its interest expense rises by $16.1M its net income will therefore fall by the after-tax interest expense.
40.13M -16.1*(1-0.30)
=40.13M-15.8
=$24.33M
B.
For the same increase in interest expense the free cash flow will not be affected.
Answer:
Carey should accept buyer A's offer
Explanation:
we need to compare the present values of both proposals:
Present value of proposal A = $480,000
Present value of proposal B:
present value of annuity in 5 years = $75,000 x 9.1285 (PVIFA, 9%, 20 periods) = $684,637.50
present value (today) = $684,637.50 / (1 + 9%)⁵ = $444,967.40
It should disclose all the terms and conditions, otherwise the purchase agreement wouldn't be binding.
Answer:
A) $5,000
Explanation:
Jermaine and Kesha can claim an American Opportunity (AO) credit for both of their daughters, Devona and Arethia.
Devona's AO credit is $2,500 (100% of the initial $2,000 qualifying expenses and 25% of the next $2,000 qualifying expenses).
Arethia's AO credit is the same as Devona's, $2,500.
The total American Opportunity credit claimed is $5,000 ($2,500 + $2,500)
Answer and Explanation:
The adjusting entry made on Tuesday is as follows
Salaries expense Dr $120 ($300 × 2 days ÷ 5 days)
To Salaries payable $120
(Being the salaries expense is recorded)
here the salaries expense is debited as it increased the expenses and salaries payable is credited as it also increased the liabilities.