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Tomtit [17]
3 years ago
14

Finore Manufacturing has the following amounts on its 12/31/14 balance sheet. Cash $150 Other current assets 397 Property, plant

, & equipment, net of depreciation 538 Current liabilities 324 Total Liabilities 504 What was Finore Manufacturing’s equity as on December 31, 2014?
Business
1 answer:
Tresset [83]3 years ago
8 0

Answer:

$581

Explanation:

The accounting equation gives the relationship between elements of the balance sheet as

Assets = Liabilities + Equity

Given that for Finore Manufacturing on 12/31/14, it's balance sheet

Cash = $150

Other current assets = $397

Property, plant, & equipment, net of depreciation = $538

Current liabilities = $324

Total Liabilities = $504

Hence, total assets = $150 + $397 + $538

= $1085

Finore Manufacturing’s equity as on December 31, 2014

= $1085 - $504

= $581

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The Market Outlet has a beta of 1.38 and a cost of equity of 14.945 percent. The risk-free rate of return is 4.25 percent. What
evablogger [386]

Answer:

The discount rate assign to a new project with a Beta of 1.25 is 13.94%

Explanation:

The applicable formula is the Capital Asset Pricing Model formula of Miller and Modgliani  quoted below:

Ke = Rf + (Market risk premium x Beta)

Currently Ke=14.945%

Beta =1.38

Risk free rate of return (Rf) is 4.25%

Market risk premium is the unknown

14.945%=4.25%+(Market Risk Premium)*1.38

14.945%-4.25%=Market Risk Premium*1.38

10.70% =Market Risk Premium*1.38

10.70%/1.38=Market Risk Premium

Market Risk Premium =7.75%

However, the new project cost of equity has to be determined due to having a different Beta factor of 1.25(a different risk appetite)

Using the above formula, we have

Ke=4.25%+(7.75% *1.25)

Ke =13.94%

7 0
3 years ago
The set of marketing tools a firm uses to implement its marketing strategy is called the ________.
Naily [24]

Answer:

<u>Marketing mix.</u>

Explanation:

Marketing mix is ​​defined as a set of elements that make up marketing actions in an organization. According to Kotler, the purpose of the marketing mix is ​​to help the company achieve its goals in the market by using a set of marketing tools.

There are several models developed to represent the marketing mix, but the most used by organizations is represented by four essential pillars for the development of any marketing strategy, which are the 4P's of marketing: <u>product, price, place and promotion</u>. For each variable there are distinct and relevant activities:

  1. Product: Differentiation of design, packaging, brand. Warranty Policy
  2. Price: Discounts and terms of payment and financing.  
  3. Place: Store, distribution channel, logistics.
  4. Promotion: Advertising, promotions.
8 0
3 years ago
The Bell Weather Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 1
SOVA2 [1]

Answer:

$287.01

Explanation:

The 2 stage dividend discount model would be used to determine the current value of the stock.

first stage

Present value in year 1 = (1.6 x 1.16) / 1.071 = 1.73

Present value in year 2 = (1.6 x 1.16²) / 1.071² = 1.88

Present value in year 3 = (1.6 x 1.16³) / 1.071³ =2.03

Present value in year 4 = (1.6 x 1.16^4) / 1.071^4 = 2.20

second stage

[ (1.6 x 1.16^4) x (1.06) ] / (0.071 - 0.06) = 279.17

Value of the stock = 1.73 + 1.88 + 2.03 + 2.20 + 279.17 = $287.01

4 0
2 years ago
Shen has plans to go to an opera and already has a $100 nonrefundable, nonexchangeable, and nontransferable ticket. Now Valerie,
iren [92.7K]

Answer:

3. Correctly ignored a sunk cost

Explanation:

Sunk costs refer to those costs which have been incurred in the past, which are non recoverable and which have no current or future benefits.

Sunk costs are considered as irrelevant for decision making process as they do not relate to current period and have no future implications. For example, research and development expenditure incurred in the past represents a sunk cost.

In the given case, the ticket for opera was already purchased for $100 which can now neither be recovered nor transferred. Thus this cost is irrelevant for decision making as expenditure has already been made. When Shen decided to go for a party instead of the concert, Shen has correctly ignored a sunk cost.

7 0
3 years ago
A company builds a new plant and finances its construction by issuing stock. Which ratio is least likely to be affected, all els
Marta_Voda [28]

Answer:

a. Current ratio

Explanation:

Current Ratio is the least likely to be affected

The  Current Ratio is given as

Current Ratio = [ Current assets ] ÷ [ Current liabilities  ]

Now,

Building a new plant is a fixed asset for the company.

Thus, It will add to the Fixed assets

Since,

The Formula for current ratio is independent of the fixed assets

Therefore,

It will be least affected.

While,

Debt to equity ratio = [ Debt ] ÷ [ Equity ]

Debt to asset ratio= [ Total Debt ] ÷ [ Total Assets ]

Net fixed assets to total assets = [ Net fixed assets ] ÷ [ Total assets ]

in all the above relations, fixed asset will change the value of the total assets.

Hence,

They all will be affected

7 0
3 years ago
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