Answer:
A) Company A is the one that is financially leveraged.
Where there is the presence of debt in the capital structure of a firm, that firm is said to be Financially leveraged.
B) A is true.
A company's return on equity or expected returns increases because the use of leverage increases stock volatility. Volatility increases its level of risk which in turn increases returns. This happens only if the company is operating an ideal level of financial leverage.
On the other hand, however, but excessive debt can increase the risk of default and can lead to low returns or even bankruptcy.
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Answer: Option C
Explanation: As per the monetary unit assumption, only those transactions that could be valued in monetary terms are considered to be important. The transactions or events that have only qualitative aspects are non relevant for accounting purposes.
It makes a assumption that the value of dollar will remain stable over time, which is incorrect. This concept does not take into consideration the problem caused by the historic cost recording.
Hence from the above we can conclude that the correct option is C.
I think it's 59 per cent.
Let me know if I was right.
Answer:
$67,500
Explanation:
Data provided as per the requirement of expected cash collection in July is shown below:-
June sales = $125,000
Percent paid in the month after the sale = 54%
The computation of expected cash collection in July is shown below:-
Expected cash collection in July = June sales × Percent paid in the month after the sale
= $125,000 × 54%
= $67,500
Therefore for computing the expected cash collection in July we simply applied the above formula.