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vazorg [7]
3 years ago
14

Frantic Fast Foods had earnings after taxes of $1,070,000 in 20X1 with 311,000 shares outstanding. On January 1, 20X2, the firm

issued 31,000 new shares. Because of the proceeds from these new shares and other operating improvements, earnings after taxes increased by 24 percent.
a. Compute earnings per share for the year 20X1. (Round your answer to 2 decimal places.)




b. Compute earnings per share for the year 20X2. (Round your answer to 2 decimal places.)
Business
1 answer:
Mars2501 [29]3 years ago
7 0

Answer:

X1 EPS =  $ 3.44 per share

X2 EPS = $ 3.88 per share

Explanation:

EPS = \frac{income}{shares}

X1: Earning per share

$1,070,000 / 311,000 shares outstanding = $3.44 per share

X2: net income calcualtions

1,070,000 x ( 1  +  24%) = 1,326,8‬00

X2 shares outstanding:

beginning 311,000 + issued 31,000 = 342,000

EPS: 1,326,800 / 342,000 =  3,8795 = 3.88

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You wish to retire in 10 years, at which time you want to have accumulated enough money to receive an annual annuity of $13,000
nexus9112 [7]

Answer:

Computation of contribution to retirement fund  

Annual payment that the investor wants to receive after retirement = 13000

Number of years after retirement  = 15

Interest rate = 0.11

Value of the fund at 12th year (Use Present Value Formula)  = -93,481.30

Years remaining to retirement = 10

Interest rate = 0.09

Annual contribution upto retirement (Use PMT Formula) = -14,566.27

3 0
3 years ago
Mr. Gupta is also considering giving his employees a raise that would increase total salaries by $35,000.00 per year. What effec
shutvik [7]
I think the taxes would decrease but increase for the company
6 0
2 years ago
Frank is interested in rewriting the vision statement for his antique shops, and he wants his employees and his business to grow
vivado [14]

<u>Answer:</u> Option A True

<u>Explanation:</u>

As an entrepreneur Frank has made the right decision of rewriting the vision statement for his antique shop.  A business can succeed only when it has a strong vision statement. When there is a proper vision statement the entire business works for that purpose.

The vision statement made should be linked with the goals of employees. This will create a positive and inspiring place for the employees to work. Even the small antique shop can expand its business activities and attain growth through proper vision statement.

8 0
2 years ago
Gelb Company currently manufactures 49,500 units per year of a key component for its manufacturing process. Variable costs are $
kirill [66]

Answer:

Incremental cost= $61,875

Explanation:

Giving the following information:

Gelb Company currently manufactures 49,500 units per year of a key component for its manufacturing process. Variable costs are $5.15 per unit, fixed costs related to making this component are $75,000 per year, and allocated fixed costs are $70,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.90 per unit

We need to determine whether it is more convenient to produce the component or outsource it. We will only consider the relevant costs, therefore the fixed costs will not be taken into account.

Make in house:

Cost= 49,500*5.15= $254,925

Buy:

Cost= 49,500*3.90= $193,050

Incremental cost= 254,925 - 193,050= $61,875

8 0
3 years ago
South Tel Communications is considering the purchase of a new software management system. The system is called B-lmage, and it i
gavmur [86]

Answer:

Explanation:

South Tel Communications is considering the purchase of a new software management system. The system is called B-image, and it is expected to drastically reduce the amount of time that company technicians spend installing new software. South Tel's technicians currently spend 6,000 hours per year on installation which cost South Tel $25 per hour. The owners of the B-image system claim that their software can reduce time on task by at least 25%. The system requires an initial investment of $55,000 and an additional investment of$10,000 for technician training on the new system. Annual upgrades will cost the firm $15,000 per year. Because the investment is comprised of software, it can be fully expensed in the year of the expenditure (no depreciation). South Tel faces a 30% tax rate and uses a 9% cost of capital to evaluate projects of this type.

A. Assuming that South Tel has sufficient taxable income from other projects so that it can immediately expense the cost of the software, what are the free cash flows for the project for years zero through five?

Total (65,000)

Cash flow year 1 - 5

Saving on installations per year 450,000

Less: Annual upgrades ( 15,000)

Total 435,000

Less: Tax (30%) (130,500);

Total project free cash flow 304,500.answer

4 0
3 years ago
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