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Natali5045456 [20]
3 years ago
5

Management Theories, Inc. at a cash price of $1.5 million. Management Theories, Inc. has short-term liabilities of $500,000. As

a result of acquiring Management Theories, Inc., Marketing Concepts, Inc. would acquire the copyrights to a national best-seller which would provide an estimated cash flow of $300,000 for the next five years. The firm has a cost of capital of 20 percent. The approximate net present value of this acquisition is
Business
1 answer:
Pavlova-9 [17]3 years ago
4 0

Answer:

$1,102,820

Explanation:

 The computation of the net present value is shown below:

= Present value of yearly cash inflows - initial investment

where,

Present value of yearly cash inflows is

= Annual year cash inflows × PVIFA factor

= $300,000 × 2.9906

= $897,180

And, the initial investment is

= $1,500,000 + $500,000

= $2,000,000

So the net present value is

= $897,180 - $2,000,000

= $1,102,820

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E15-2 (Recording the Issuance of Common and Preferred Stock) Kathleen Battle Corporation was organized on January 1, 2014. It is
Mekhanik [1.2K]

Answer:

Explanation:

Jan 10 Issue of common stock for cash

Dr Cash 400,000 [80,000*5]

    Cr Common stock 80,000 [80,000*1]

    Cr Additional paid in capital - Common Stock [80,000*4] 320,000

Mar 1 Issue of preferred stock foor cash

Dr Cash 540,000 [5000*108]

     Cr Preferred stock [5000*1000] 500,000

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Apr 1 Issue of common stock for land

Dr Land 80,000

   Cr Common stock 24,000

   Cr Additional paid in capital - Common stock 56,000

May 1 Issue of common stock for cash

Dr Cash [80,000*7] 560,000

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Aug 1

Dr Attorney 50,000

   Cr Common stock [1*10,000] 10,000

   Cr Additional paid in capital - Common stock 40,000

Sep 1  Issue of common stock for cash

Dr Cash [10,000*9] 90,000

   Cr Common stock [10,000*1] 10,000

   Cr Additional paid in capital - Common stock 80,000

Nov 1  Issue of preferred stock foor cash

Dr Cash 112,000 [1000*112]

     Cr Preferred stock [1000*100] 100,000

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4 0
3 years ago
The cost system best suited to industries that manufacture a large number of identical units of commodities on a continuous basi
ValentinkaMS [17]

Answer:

Process Costing

Explanation:

Process Costing allows so many units to be in production at the same time which are identical. The cost of each unit can be determined by calculating the average price using to total units produced.

7 0
3 years ago
In an attempt to reduce poaching of elephant tusks for ivory, officials in Kenya burned illegally gathered ivory. Economists ten
Brut [27]

Answer:

b. the supply of ivory has fallen, leading to an increase in price and reward for poaching.

Explanation:

In Economics, there are primarily two (2) factors which affect the availability and the price at which goods and services are sold or provided, these are demand and supply.

The law of demand states that, the higher the demand for goods and services, the higher the price it would be sold all things being equal. On the other hand, law of supply states that the higher the price of goods and services, the lower the supply.

Poaching can be defined as an illegal or illegitimate procurement (purchase) of protected wildlife living organisms such as elephants, fish, trees, gaming, etc.

In an attempt to reduce poaching of elephant tusks for ivory, officials in Kenya burned illegally gathered ivory. Economists tend to point out that the supply of ivory has fallen, leading to an increase in price and reward for poaching in accordance with the law of supply.

This ultimately implies that, an increase in the price level of a product usually results in a decrease in the quality of real output demanded along the aggregate demand curve.

6 0
3 years ago
According to Redpath and Greg Urban, what is the threshold amount for determing if a substantial basis adjusment is mandatory?
Nataly_w [17]

Answer: According to Ian Redpath and Greg Urban, the threshold amount required for conclusively stating whether a substantial basis adjustment is mandatory is $250,000. The amount required is $250,000 in order for one to  know whether they are in need for a substantial basis reduction or maybe not. It's required when the amount indeed exceeds $250,000.

5 0
3 years ago
Read 2 more answers
The three-letter code that summarizes your three strongest career types is called your
lorasvet [3.4K]
I think it's called the Holland code.
8 0
3 years ago
Read 2 more answers
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