Answer:
A: "Past information can get in the way of learning new things."
Answer:
$31,500
Explanation:
On November 1, 2019, Kate leased out a buliding for $4,500 per month.
On the same day( November 1, 2019) she received seven months payment for the building. Which means she received $31,500 (4,500* 7 months).
Accural taxpayers must be able to include all amount they are to receive for payments of services, once they earn it.
Since Kate is an accural taxpayer, and she receive the $31,500 payment on November 1, 2019, she must include the whole $31,500 on her 2019 tax return as a result of this transaction.
Answer: The higher the risk, the higher the return.
Returns from an investment refers to the gains or losses over a specified period, and is quoted as percentage.
Risk refers to the possibility or the chance that the actual return that is earned is greater than or less than the return expected by the investor. Thus, uncertainty is another name for risk.
If the returns from an investment are certain, the risk involved is low. When risk is low, the returns are also low. For e.g. the return from a T-bill is low because the risk of default is zero, since the government can print money to fund its debt.
The higher the level of risk involved, the greater the potential for a higher return.
Answer:
The worth of the contract today = $3,480,817.37
Explanation:
To determine the worth of the contract today,
We will work out the present value of each of the expected future cash cash payment at a discount rate rate of 8.7% and sum them.
The present valus of the payments indicate how much they worth today if the ST Trucking can invest at a rate of 8.7% per annum
This is done as follows:
PV = 1,100,00× (1.087)^(-0) + (1,300,000 × (1.087)^(-1) + (1400000 ×(1.087)^(-2)
PV = 1,100,000 + 1,195,952.2 + 1,184,865.2
= $3,480,817.37
The worth of the contract today = $3,480,817.37
Answer:
The EPS is approximately:
it can be any of them:
- if preferred dividends = $4,800,000, then EPS = $0.40 (option A)
- if preferred dividends = $720,000, then EPS = $1.76 (option B)
- if preferred dividends = $0, then EPS = $2 (option D)
EPS = (net income - preferred dividends) / outstanding shares = ($6,000,000 - preferred dividends) / 3,000,000 shares
The Price/Earnings ratio is approximately:
- if EPS = $0.40, then PE ratio = 12.5 (option D)
- if EPS = $1.76, then PE ratio = 2.84 (option C)
- if EPS = $2, then PE ratio = 2.5 (option B)
Price/earnings (PE) ratio = share price / EPS = $5 / EPS
EPS cannot be $1.80, since PE ratio = 2.78 and that is not an option.
Some companies have a higher share price for the same level of earnings. Why?
Some stocks like Amazon have a very low EPS, form any years its EPS was very low bu its stock price kept rising. The stock price is based mostly on potential future earnings, not current earnings. A company that is being liquidated might have a high EPS, but a very low stock price since it will stop operating soon.
