Answer:
$87.25
Explanation:
Calculation for the effective price paid to repurchase the stock
Using this formula
Effective price = Strike Price + Price
Let plug in the formula
Effective price =$80+$7.25
Effective price =$87.25
Therefore the effective price paid to repurchase the stock will be $87.25
Answer:
68,019.13
Explanation:
this particular question can be solved, using an approach by the annuity concept, remember that an annuity is usefull for calculating the present or future value of a series of regular payments, so in this case we are asked to calculate the future value as follows:

where
is the future value of the annuity,
is the interest rate for every period payment, n is the number of payments, and P is the regular amount paid. so applying to this particular problem, we have:


Answer:
The statement that is not correct is:
- <u><em>B) A purchase of equipment is classified as a cash outflow from investing activitites.</em></u>
Explanation:
<u><em>A) Paying dividends to investors creates a cash outflow from financing activities. </em></u>
This is correct.
The financing cash flow or cash flow generated by financing activities is the cash flow that involves transactions with the banks (only the long term debt) or stake holders: financing debt, equity, and dividend.
Issuing equity of debt is a cash inflow: increases the cash of the company.
Paying dividends, such as repurchasing debt or equity are cash outlfow: decreases the cash of the company.
<u><em>B) A purchase of equipment is classified as a cash outflow from investing activities.</em></u>
<u><em></em></u>
This is not correct.
The operating cash flow is the cash that involves the operations of the company: sales (revenue), trade receivables, operating investement in building and equipments used for the operation, purchases from suppliers (inventory).
When you purchase an equipment it diminishes the cash or impact an operating account; thus, a purchase of equipment is classified as a cash ouflow from operating activities, not from investing activities.
Answer:
Effect on income= $11,140 increase
Explanation:
Giving the following information:
Contribution margin $126
The marketing manager believes that a $6,500 increase in the monthly advertising budget would result in a 140 unit increase in monthly sales.
<u>To calculate the effect on income, we need to use the following formula:</u>
Effect on income= total contribution margin increase - fixed costs increase
Effect on income= 140*126 - 6,500
Effect on income= $11,140 increase