Answer:
D) $25,000.
Explanation:
The Accrual Basis of Accounting is the process in which income earned or expenses incurred are recorded at the time the transaction takes place, whether or not the cash has been exchanged.
Net Income is derived by subtracting Expenses from Revenue.
N.B. Prepaid Expenses are Advance Payments towards expenses and are a Balance Sheet Items and will not be recorded under Net Income Calculations until the Expenses are realized.
So, The Net Income can be calculated as follows;
Revenue $60,000
Less: Expenses $35,000
Net Income $25,000
Hence Option D will be correct answer.
#NETINCOME
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Answer:
The present value of the cashflows will be $12830.30
Explanation:
The present value of the cashflows can be calculated by dividing the cash flows by the appropriate discount rate and for the appropriate time period.
The present value of the given cash flows will be,
Present Value = CF1 / (1+r) + CF2 / (1+r)^2 + .... + CFn / (1+r)^n
As the first payment is received today, it will already be in the present value so it will not be discounted.
Present value = 2000 + 3000 / (1+0.1) + 5000 / (1+0.1)^3 + 7000 / (1+0.1)^5
Present value = $12830.295 rounded off to $12830.30
Answer:
C. protects the current shareholders against a dilution of their ownership interests.
Explanation:
Preemptive rights are rights given to shareholders in an organization allowing them to buy additional shares in any future issue in order to maintain their percentage ownership, before the shares are available to the general public. It guards against dilution or decrease in a shareholders stake or ownership interest buy allowing them buy more shares for future issues before it is available for the general public to own shares. In doing so, shareholders avoid involuntary dilution.
Answer:
No
Explanation:
Long term bonds might not be great investments if the interest rate fall or even slide into negative value in the future. This means that the bond will become insignificant in value.
Cheers
Answer:
NPV = (53,222.44)
Explanation:
Net fixed asset 345,000
Working capital
160,000 inventory + 35,000 Ar = 195,000
short term deb (110,000)
net working capital 85,000
Total investment 430,000
salvage value 345,00 x 25% = 86,250
release of the working capital 85,000
Cash flow at end of project 171,250
annual cash flow
sales 550,000
cost (430,000)
depreciation 69,000
EBT 51,000
tax expense 35%
(17,850)
net income 33,150
+ dep 69,000
cash flow 102,150
Now we calculate the present value of the net cash flow and the present alue fothe end of the project
C 102150
time 4
rate 0.15
PV $291,636.04
Principla (sum of salvage and released Working capital 171,250.00
time 5.00
rate 0.15
PV 85,141.52
NPV = 291,636.04 + 85,141.52 - 430,000 = (53,222.44)
