Answer: A.True
Explanation: Marketing continues up till after sales activities such as getting feedback and after sales observation and sales repair and servicing. The marketing process starts from the product development. The activities carried out by sales representatives of HomeWork Helper Appliances Store will help to push up their sales and customer satisfaction which will help them to retain customers and build more customer confidence and customer loyalty.
Answer:
WACC = 12.040%
Explanation:
WACC represents weighted average cost of all sources of financing. In the question there are three sources of finance 1) Equity 2) Preferred Stock 3) Debt.
1) Equity: The firm intends to raise $ 320,000 from equity out of total financing of $ 570,000 e.g. 56% of total financing comes from Equity. Thus multiplying the cost of equity 14.7% (given) with ratio of equity financing, we get to weighted average cost of equity of 8.253%.
2) Debt: The firm is raising $ 230,000 from debt e.g. 40% of total financing. The proportion of debt is multiplied by post tax cost of debt as the interest expense is deductible expense for tax purposes in most of the jurisdiction. Therefore we reduce the cost of debt with element of (1 - tax rate), thus we get to 8.325% = 11.1 (1 - 25%) as total cost of debt. In order to get weighted average cost of debt we multiply this post tax cost of debt with ratio of debt financing 40%, thus weighted average cost of debt is 8.325 * 40% = 3.359%
3) Preferred Stock: The firm is also raising finance from preferred stock having cost of 12.2%. Proportion of financing from preferred stock is 4% in total mix of financing, thus weighted average cost of preferred stock is 12.2% * 4% = 0.428%.
Now adding weighted average cost of all three sources of funding, we get WACC: 8.253% + 3.359% + 0.428% = 12.040%
Answer:
1. Adjusted net income = Ending inventory higher by amount * (1-Tax rate) = $70,000*(1-34%) = $70,000 * 66% = $46,200
Details Amount
Beginning retained earnings for the year 2017 $880,000
Add: Adjusted net income <u>$46,200</u>
Beginning adjusted retained earnings for year 2017 <u>$926,200</u>
2. Tax payable = Inventory * Tax rate = $70,000*34% = $23,800
Date Account Titles and Explanation Debit Credit
Inventory $70,000
Retained earnings $46,200
Tax payable $23,800
(To record adjustment of ending inventory)
