When a firm has flotation costs equal to 6.8 percent of the funding need, project analysts should increase the initial project cost by dividing that cost by (1-0.068). The flotation cost is the cost which emerge when a corporation gather its fund by issuing new securities. Underwriting fees, legal fees, registration fees are the common fees that will increase corporate's expense when they issue securities. Therefore, we can consider those fees as a flotation cost.
Answer:
$27,400 and $59,600
Explanation:
The computation of the depreciation expense and the book value using the sum of-the-years'-digits method is shown below:
Depreciation expense is
= (Purchase cost - residual value) × useful life ÷ sum of years
= ($87,000 - $4,800) × 5 years ÷ (5 + 4 + 3 + 2 + 1)
= $27,400
And, the book value is
= Purchase cost - depreciation expense
= $87,000 - $27,400
= $59,600
Answer:
d.) laissez-faire
Explanation:
Laissez-faire is one of Adam Smith's ideas which made Mark think of starting a restaurant because the business is free from government intervention. Also because Mark would be the sole owner of the business.
Answer:
$429.60 Favorable
Explanation:
Provided information,
Standard Hours for each product = 3 hours
Standard Cost per hour = $14.00
Actual hours used = 198
Actual output = 80 connectors
Standard hours for actual output = 80 
3 = 240 hours
Actual Rate = $14.80 per hour
Direct labor cost variance = Standard Cost - Actual Cost
Standard Cost = Standard hours Standard Rae
= 240 $14 = $3,360
Actual Cost = 198 $14.80 = $2,930.40
Variance = $3,360 - $2,930.40 = $429.60
Since actual cost is less than standard variance is favorable.
$429.60 Favorable
