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Travka [436]
3 years ago
9

On december 31, 2016, some of corrigan corporation's key executives were granted the option to buy 100,000 shares of the firm's

$5 par common stock at an option price of $15 per share. according to the black-scholes model, the total compensation expense associated with the options is $375,000. these options represent compensation for services provided over a four-year period beginning on january 1, 2017, and they become exercisable on that date. as of december 31, 2017, none of the executives had chosen to exercise their options. if corrigan uses the fair value method, how will the executives' stock options affect the firm's net income for 2017?
Business
1 answer:
Virty [35]3 years ago
7 0
<span>I believe that if the executives exercised their option to use their fair value method, it would lower the firm's net income for 2017, thereby lowering the overall value of the stock. As a private firm, they do not have to use the fair value method. The compensation expense will also be lower. It would also devalue the projection for the following year.</span>
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Vikki [24]
The statement above is FALSE.
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7 0
3 years ago
A company is considering investing in a new machine that requires a cash payment of $47907 today. The machine will generate annu
swat32

Answer:

12%

Explanation:

Calculation for the internal rate of return if the company buys this machine

Using this formula

IRR = Initial investment/Annual Cash flow

Where,

Initial investment =$47,907

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Let plug in the formula

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=2.402

Using PV factor table = 2.402

IRR = 12%

Therefore internal rate of return if the company buys this machine will be 12%

8 0
4 years ago
On January 1, 20X5, Blaugh Co. signed a long-term lease for an office building. The terms of the lease required Blaugh to pay $1
umka2103 [35]

Answer

The answer and procedures of the exercise are attached in the following image.

Explanation  

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4 0
3 years ago
When Granitia Inc. was faced with serious quality problems and was forced to recall thousands of vehicles, the company quickly f
vampirchik [111]

Answer: Problem Solving Team

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4 years ago
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5 0
3 years ago
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