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konstantin123 [22]
3 years ago
14

Johnson Inc. purchases 21% of the voting stock of XYZ Company. This is sufficient to give Johnson significant influence over XYZ

. If Johnson elects to apply fair-value accounting to this investment, then any dividends XYZ pays to Johnson will be _________ treated as an addition to the Investment in XYZ account treated as a reduction to Goodwill treated as dividend income to Johnson treated as a reduction to the Investment in XYZ acc
Business
1 answer:
lutik1710 [3]3 years ago
4 0

Answer:

dividend income to Johnson treated as a reduction to the Investment in XYZ acc

Explanation:

It will debit cash by the amount to be received and credit his investment by the same value. The reasoning is that Johnson decides to distribute the dividends as it has significant influence over XYZ. Thus, it is not earnings. It is just moving cash from one place to another.

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The developing economies' share of the global gross domestic product (GDP) from 2003 to 2017 is shown in the following table.
shepuryov [24]
The quadratic function that best models the developing economies' share of the global GDP as a function of the number of years
3 0
3 years ago
A firm just paid its annual dividend of $1.80 and expects to increase that dividend each year. The discount rate is 11 percent.
Digiron [165]

Answer:

d. Po = $1.80/(0.11 -0.025); The value of D1, is incorrect as $1.80 equals Do.

Explanation:

Calculation to correctly identifies which one of these is an error when computing the current value of this firm's stock

P0 = $1.80/(0.11 - 0.025)

P0 = $1.80/0.085

P0=$9.76

Therefore Based on the information given Po = $1.80/(0.11 -0.025); because The value of D1, is INCORRECT as $1.80 equals Do.

8 0
2 years ago
Yello Bus Lines uses the units-of-activity method in depreciating its buses. One bus was purchased on January 1, 2019, at a cost
Tcecarenko [31]

Answer:

The depreciation cost of the bus per unit is $ 1.4 which is purchased on January 1, 2019.

Explanation:

The depreciation cost per unit is computed as:

Depreciable asset = Cost - Salvage Value

                               = $205,860 - $7,900

                               = $197,960

Depreciation per unit = Depreciable asset /Useful life expected value

                                    = $197,960 / 141,400

                                    = $1.4

Therefore, the per unit cost is $1.4

8 0
3 years ago
Turnbull Corp. is in the process of constructing a new plant at a cost of $30 million. It expects the project to generate cash f
Sergio039 [100]

Answer:

$14 mil.

Explanation:

Net present value is the present value of after tax cash flows from an investment less the amount invested.

NPV can be calculated using a financial calculator:

Cash flow in year 0 = $-30 million

Cash flow in year 1 = $13,000,000

Cash flow in year 2 = $23,000,000

Cash flow in year 3 = 29,000,000 

I = 20%

NPV = $13,587,630

To find the NPV using a financial calacutor:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

I hope my answer helps you

3 0
3 years ago
McAlister Products is considering acquiring a manufacturing plant. The purchase price is $ 1,525,000. The owners believe the pla
Harlamova29_29 [7]

Answer:

Payback is 5 years. The company should purchase the plant as payback occurs before the replacement date.

Explanation:

If a project has equal annual cash-flows, the payback period can be  calculated using the formula:

Payback=\frac{CostOfMachine}{AnnualCashflows}

As such:

Payback=\frac{1,525,000}{305,000}= 5years

McAlister Products, will consider this machine profitable, and worth investing in if payback  occurs before the​ investment's replacement date. In other words, the company should purchase this plant if payback period is less than 7 years. From the calculation above, payback period is 5 years which is less than 7 years. The company should thus purchase this plant.

7 0
3 years ago
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