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3 years ago

Telecom Systems can issue debt yielding 5 percent. The company is in a 30 percent bracket. What is its aftertax cost of debt?

Business

1 answer:

Alla [95]3 years ago

3 0

Answer:

after-tax cost odf debt 0.035 = 3.5%

Explanation:

the debt provides a tax shield for companies, as the interest expense, decrease the net income. Interest decrease income and therefore, the tax income associate with the income.

So the cost of debt with taxes is lower, because it lower the income tax expense

<u>the formula will be:</u>

cost of debt ( 1 - tax-rate)

0.05 ( 1 - 0.3) = 0.05 x 0.7 = 0.035

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TRUE OR FALSE - ACCOUNTING

TEA [102]

1 True
2 False - Must be accrual basis
3 True
4 True
5 True

3 0

2 years ago

On March 1, Retro Inc. reported a balance in Supplies onf $200. During March, the company purchased supplies for $950 and consum

-BARSIC- [3]

Answer:

stockholer's equity will be overstated by $800.

Explanation:

The adjustment required is to record $800 of supplies used as an expense, hence, by carrying out the adjustment, net income is overstated by $800 so also retained earnings and shareholders' equity.

In other words,the balance that would be left in supplies is opening balance of $200 plus purchase of supplies which is $950 minus the supplies used.

balance of supplies=$200+$950-$800=$350

Option B is wrong the balance expected is $350 and the balance without adjustment is $200,that is $150 understatement not $350

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3 years ago

Zachary Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly

V125BC [204]

Answer:

Zachary Electronics

Zachary should continue to make the containers. It is cheaper to make than to buy from Russo Container Company.

Explanation:

a) Data and Calculations:

Production units = 9,100 containers

Unit-level materials $ 6,400

Unit-level labor 6,400

Unit-level overhead 3,800

Total unit-level costs $16,600

Product-level costs* 8,400

Allocated facility-level costs 28,000

Relevant or avoidable costs:

Unit-level materials $ 6,400

Unit-level labor 6,400

Unit-level overhead 3,800

Total unit-level costs $16,600

Product-level costs* 2,800 ($8,400 * 1/3)

Total relevant costs = $19,400 (to make)

Relevant cost to buy:

Offer from Russo Container company = $2.70 per container

Total cost from outside supplier = $24,500 ($2.70 * 9,100)

3 0

3 years ago

Type the correct answer in the box. Spell all words correctly.

Vinvika [58]

Answer:

Being debt-free within 15 years is an example of a long-term goal.

Explanation:

One main characteristic of a long-term goal is that it involves a planning horizon that is more than 5 years during which some thoughts are paid to the goal, and the means of achieving it are marshalled out, and rigorously pursued. Long-terms goals are best broken into manageable, short-term, and medium-term goals to enable the decision-maker to accomplish her goal. The future is always uncertain, to achieve a long-term goal you must remain motivated.

3 0

3 years ago

Ferkil Corporation manufacturers a single product that has a selling price of $20.00 per unit. Fixed expenses total $63,000 per

pshichka [43]

Answer:

Break-even point= 11,500 units

Explanation:

Giving the following information:

Selling price= $20.00 per unit.

Fixed expenses= $63,000 per year.

Break-even point= 9,000 units to break even.

Desired profit= $17,500

First, we need to calculate the unitary variable cost:

Break-even point= fixed costs/ contribution margin

9,000= 63,000 / (20 - unitary variable cost)

9,000*20 - 9,000x= 63,000

180,000 - 63,000= 9,000x

117,000/9,000=x

13= unitary variable cost

Now, we can calculate the number of units:

Break-even point= (fixed costs + desired profit) / contribution margin

Break-even point= (63,000 + 17,500) / (20 - 13)

Break-even point= 11,500 units

3 0

3 years ago