Answer:
The Journal entry is as follows:
Depletion expense - Coal Deposit A/c Dr. $280,000
To Accumulated depletion -Coal Deposit $280,000
(To record the depletion expense for the current year)
Workings:
Depletion per ton = (cost - Salvage) ÷ Total units of production
= ($900,000 - $100,000) ÷ 200,000
= $4 per ton
Depletion expense = Tonnage tons mined current year × Depletion per ton
= 70,000 tons × $4
= $280,000
Answer:
Option 3. Assigns a property right to pollute the atmosphere
Explanation:
It makes a cap on the pollution and the permits are transferable so that it assign how much to pollutes means assigning property rights to the firms to pollute.
Everyone is not required to reduce pollution if the firm can buy permits to pollute.
Answer:
10.85 percent
Explanation:
Return on equity = 0.045 × 1.60 ×(1 + 0.60) = 0.1152
Sustainable growth = [0.1152 × (1 - 0.15)]/{1 - [.1152 × (1 - 0.15)]} = 10.85 percent
The sustainable growth rate is the rate of growth that a company can expect to see in the long term. Often referred to as G, the sustainable growth rate can be calculated by multiplying a company’s earnings retention rate by its return on equity. The growth rate can be calculated on a historical basis and averaged in order to determine the company’s average growth rate since its inception.
The sustainable growth rate is an indicator of what stage a company is in, during its life cycle. Understanding where a company is in its life cycle is important.
Answer:
Value of company = $982.16
Explanation:
The free cash flow is the cash generated by a company that is not retained and reinvested. It is the cash flow available to all providers of capital . It is available to pay dividend or finance other project
The value of the company would be the present value of its free cash flow discounted at the weighted average cost of capital.
Value of company )year 4= 85/(0.12-0.065) = 1,545.45
Value of company (in year 0) = 1,545.45× 1.12^(-4)= 982.16
Value of company = $982.16 millions
Answer:
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Explanation:
