Answer: Sunk Cost
Explanation:
A sunk cost is an expense which a company or entity has already incurred and which cannot be recovered and so should not be considered when making decisions regarding incremental benefits or costs to an investment.
The $48 had already been incurred to produce the defective units and cannot be recovered so it is a sunk cost that should not be considered moving forward.
Answer:
The present value of the future earnings is $51,981,214.36
Explanation:
The present value of the earning can be calculated by discounting the earnings for the next five years along with calculating the terminal value of earnings at the end of the five years when the growth rate in earnings becomes constant and discounting it back to the present value.
Taking the value in millions,
Present Value = 1 * (1+0.3) / (1+0.08) + 1 * (1+0.3)^2 / (1+0.08)^2 +
1 * (1+0.3)^3 / (1+0.08)^3 + 1 * (1+0.3)^4 / (1+0.08)^4 + 1 * (1+0.3)^5 / (1+0.08)^5 + [( 1 * (1+0.3)^5 * (1+0.02) / (0.08 - 0.02)) / (1+0.08)^5]
Present value = $51.98121436 million or $51,981,214.36
Answer:
The value of a right is $1
Explanation:
10 rights are needed to buy 1 share at the price of $19
Value of total rights = $29 - $19 =$10
Value of a right = 
= $1
Answer:
0.74
Explanation:
Jones corporation reported a current assets of $196,000
The current liabilities is $138,500
The current assets consists of $61,000 cash , account receivable= $42,100, inventory= $92,900
Therefore the quick ratio can be calculated as follows
= cash + account receivables
= $61,000 + $42,100
= $103,100
$103,100/$138,500
= 0.74
Hence the acid test(quick ) ratio is 0.74
