Answer:
B. minus$2,000.
Explanation:
The computation of the economic profit is shown below:
As we know that
Economic profit = Total revenue - Explicit costs - Implicit costs
= $35,000 - $30,000 - $7,000
= -$2,000
The implicit cost is come from
= $70,000 ×10%
= $7,000
We simply applied the above formula so that the economic profit could come
Answer:
Wilson Inc. developed a business strategy that uses stock options as a major compensation incentive for its top executives. On January 1, 2021, 20 million options were granted, each giving the executive owning them the right to acquire five $1 par common shares. The exercise price is the market price on the grant date—$10 per share. Options vest on January 1, 2025. They cannot be exercised before that date and will expire on December 31, 2027. The fair value of the 20 million options, estimated by an appropriate option pricing model, is $40 per option. Ignore income tax.
Assume that all compensation expense from the stock options granted by Wilson already has been recorded. Further assume that 200,000 options expire in 2014 without being exercised. The journal entry to record this would include
Answer:
After calculating, we get to know that the Product A should be sell now because, it show a difference of $23,800 through which company can earn more in the future. As the company will be better off by $23,800
Explanation:
For calculation, following things need to be considered which is shown below:
1. Product A process costing = Pounds × Per pound price
= 34,000 × $8
= $272,000
2. Product A costing after selling = Pounds × sale price per pound
= 34,000 × $14
= $476,000
3. Difference of costing :
= Product A costing after selling - Product A process costing
= $476,000 - $272,000
= $204,000
4. Invested amount = $227,800
5. Actual Difference = Invested amount - costing difference
= $227,800 - $204,000
= $23,800
After calculating, we get to know that the Product A should be sell now because, it show a difference of $23,800 through which company can earn more in the future. As the company will be better off by $23,800
Answer:
The correct answers are letters "A", "B", and "C": Explaining the resolution to the problem; Preventing a recurrence of the problem; Communicating compliance.
Explanation:
Adjustment letters are communications with legal nature from companies to customers who filed a claim. The main purpose of the letter is to politely <em>inform the client that the claim was received, what steps were taken to analyze the situation, what is the final resolution after the study </em>and <em>what will be done as a result</em>. The ultimate goal of the adjustment letter is to <em>keep a good relationship with the customer so they can continue doing business</em>.
Answer:
Statement a. is correct.
Explanation:
The effective annual rate is always higher than the nominal interest rate, as the formula is clear for any number of periods, for any interest rate:
Effective Annual Rate of return = 
Further if we calculate the present value of annuity due and ordinary annuity assuming 6 % interest rate, then:
Present value of annuity due =
= 1.06 
$400.95
= $425.0089
Present value of ordinary annuity = 
= $150 2.6730
= $400.95
Therefore, value of annuity due is more than value of ordinary annuity.
Statement a. is correct.
