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svetoff [14.1K]
4 years ago
15

Parker Inc. is obligated to pay its creditors $33,333 very soon. If the market value of the firm's assets equals $49,700, calcul

ate the residual value owed to the shareholders.
Business
1 answer:
AnnyKZ [126]4 years ago
3 0

Answer:

The market value of shareholders’ equity is $16,367

Explanation:

In this question, we are asked to calculate the residual value owed to shareholders.

We proceed as follows:

Firstly, we identify the following;

Amount payable to creditors = $33,333

Market value of assets = $49,700

Mathematically,

Market value of shareholders equity = Market value of assets - Amount payable to creditors = $49,700 - $33,333 = $16,367

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Answer:

Projects Y and Z

b. Projects W and Z

c. Projects W and Y

Explanation:

CAPM equation : Expected return = Risk free rate + Beta x (Expected market return - Risk free rate)

W = 4% + [0.85 x (11% - 4%)] = 9.95%

X = 4% + (0.92 x 7%) = 10.44%

Y = 4% + (1.09 x 7%) = 11.63%

Z = 4% + (1.35 x 7%) = 13.45%

Projects Y and Z have an expected return greater than 11%

b. Projects W and Z should be accepted because its expected return is higher than the IRR

c. Project W would be incorrectly rejected because the expected rate of return is less than the overall cost of capital (i.e. 9.95 is less than 11). But its expected rate of return is greater than the IRR

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3 years ago
Below is the aging of receivables schedule for Evers Industries. Aging-of-Receivables Schedule November 30 Customer Balance Not
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Answer:

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            allowance for doubtful account    47,972 credit

Explanation:

Fro mthe talbe we are given the amount of account over-time fro meach customer.

As we are presented with all date we should proceed directly with the journal entry:

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the current balance is for                            <u>     (12,755)   </u>

the adjustment will be for:                         <em>       47,972 </em>

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malfutka [58]

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