PLEASE HELP ASAP!!

Consider Pacific Energy Company and U.S. Bluechips, Inc., both of which reported earnings of $961,000. Without new projects, bot

Daniel [21]

Answer:

a.

Price / Earnings 7.04 times

b.

Price / Earnings 7.14 times

c.

Price / Earnings 7.14 times

Explanation:

a.

Earning = $961,000

Rate of return = 14%

PV of Perpetuity = Cash flow / rate of return

PV of Perpetuity = $961,000 / 0.14 = $6,864,286

As we know that Price is the Present value of future cash flows which is perpetuity of $6,764,286.

Price Earning Ratio = $6,764,286/ $961,000 = 7.04 times

b.

Earning = $961,000 + $111,000 = $1,072,000

Rate of return = 14%

PV of Perpetuity = Cash flow / rate of return

PV of Perpetuity = $1,072,000 / 0.14 = $7,657,143

As we know that Price is the Present value of future cash flows which is perpetuity of $7,657,143.

Price Earning Ratio = $7,657,143/ $1,072,000 = 7.14 times

c.

Earning = $961,000 + $211,000 = $1,172,000

Rate of return = 14%

PV of Perpetuity = Cash flow / rate of return

PV of Perpetuity = $1,172,000 / 0.14 = $8,371,429

As we know that Price is the Present value of future cash flows which is perpetuity of $6,764,286.

Price Earning Ratio = $8,371,429 / $1,172,000 = 7.14 times

7 0

3 years ago

Tharaldson Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Stan

balandron [24]

Answer:

$14,160 F

Explanation:

The computation of the labor efficiency variance is shown below:

As we know that

Labor Efficiency Variance = (Standard Hours - Actual Hours) × Standard Rate

where,

Standard hours is

= 3,400 units × 0.5 hours

= 1,700 hours

And, the actual hours is 520 hours

And, the standard rate is $12

So, the labor efficiency variance is

= (1,700 hours - 520 hours) × $12

= $14,160 favorable

Since standard hours is more than the actual hours so it would lead to favorable variance

5 0

3 years ago

Erin works at a financial Institution. She has offered a housing loan to a customer. While carrying out the transaction, which l

disa [49]

Answer:

D. Ensure that she credits the loan amount accurately to the customer's account.

Explanation:

Financial institutions are companies that offer a wide range of monetary and financial services to various customers. The financial institutions include; commercial banks, brokerage firms, investments firms and currency exchange companies. The services offered are; cash deposits and withdrawals, loans, investment services and currency exchange services.

These services can be offered to individuals or even companies that might need a wide range of financial services. In order for these services to be conducted in an orderly fashion, the services offered have to be regulated. This means that the service providers and the customers have to operate within a legal threshold. A knowledge of the legal responsibility of each party is therefor important in these type of environment.

In our case, the legal responsibility of Erin who works as a representative of the financial institution would be to ensure that she credits the loan amount accurately to the customer's account since Erin had already approved the customer's housing loan.

5 0

3 years ago

Rufus Inc. and Hardy Company are negotiating a nontaxable exchange of business properties. Rufus’s property has a $50,000 tax ba

Norma-Jean [14]

Answer:

Which party to the exchange must pay boot to make the exchange work?

Rufus must pay boot since the FMV of its property is less than the FMV of Hardy's property.

How much boot must be paid?

$90,000 - $77,500 = $12,500

Assuming the boot payment is made, how much gain or loss will Rufus realize and recognize on the exchange, and what tax basis will Rufus take in the property acquired?

Rufus doesn't have any gain, and the tax basis for the new asset will be $50,000 + $12,500 = $62,500

Assuming the boot payment is made, how much gain or loss will Hardy realize and recognize on the exchange and what tax basis will Hardy take in the property acquired?

Since Hardy's property basis is $60,000 and it would be receiving $50,000 (Rufus's property) + $12,500 = $62,500, then it must recognize a $2,500 gain. The basis of Hardy's new property will be $62,500.

8 0

4 years ago

The failure rate for restaurants is higher than for other types of small businesses. a. True O b. False

e-lub [12.9K]

Answer:

true

Explanation:

5 0

4 years ago