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Vitek1552 [10]
3 years ago
7

Data below for the year ended December 31, 2021, relates to Houdini Inc. Houdini started business January 1, 2021, and uses the

LIFO retail method to estimate ending inventory. Cost Retail Beginning inventory $ 70,000 $ 107,000 Net purchases 302,290 450,000 Net markups 23,000 Net markdowns 43,000 Net sales 402,000 Current period cost-to-retail percentage is: Multiple Choice 69.3%. 65.4%. 63.9%. 70.3%.
Business
1 answer:
katrin [286]3 years ago
5 0

Answer:

70.3%

Explanation:

Current period cost-to-retail percentage is:

  • Beginning inventory  $70,000     $107,000
  • Plus: Net Purchases  $302,290  $450,000
  • Plus: Net markups                         $23,000
  • Less: Net markdowns                   ($43,000)

Goods available for sale (excluding beginning inv.) $302,290   $430,000

Goods available for sale (including beginning inv.)  $372,290   $537,000

Cost-to-retail percentage = $302,290 / $430,000 = 70.3%

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Fama’s Llamas has a WACC of 9.7 percent. The company’s cost of equity is 12 percent, and its pretax cost of debt is 7.5 percent.
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Answer:

0.4766

Explanation:

Given:

WACC = 9.7%

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Now,

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=  Weight × Cost of equity + (1 - weight) × Pretax cost of debt × (1-tax rate)

or

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or

weight = 0.6772

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weight = \frac{\textup{Equity}}{\textup{Debt + Equity}}

or

\frac{\textup{1}}{\textup{weight}}  = \frac{\textup{Debt+equity}}{\textup{Equity}}

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1.4766 = \frac{\textup{Debt}}{\textup{Equity}}  + 1

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\frac{\textup{Debt}}{\textup{Equity}}  = 0.4766

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