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3 years ago

Which statement is false?

Business

1 answer:

Llana [10]3 years ago

5 0

Answer:

The statement which is false is the no matter that whether perpetual inventory system or periodic system is used by company, but all the companies require to evaluate inventory quantities at the end of the accounting period.

Explanation:

The statement is false because the companies does not require to determine or assess the inventory quantities at each accounting period.

Therefore, the correct option is C.

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after his presentation, Tao was asked a lot of questions About many different slides. Since he had over 45 slides, It was time c

sveticcg [70]

C. Would be the best way to go

7 0

3 years ago

Read 2 more answers

Gomez runs a small pottery firm. He hires one helper at $12,000 per year, pays annual rent of $5,000 for his shop, and spends $2

bearhunter [10]

Answer: Accounting profit = $35000, Economic profit = $13000

Explanation:

Accounting profit = Revenue - Explicit cost

Accounting profit = Revenue - Cost of Help - Rent - Cost of materials

Accounting profit = $72000 - $12000 - $5000 - $20000

Accounting profit = $35000

Economic profit = Revenue - Explicit cost - Implicit Cost

Economic profit = Revenue - Cost of Help - Rent - Cost of materials - Renting equipment - working for competitors - talent

Economic profit = $72000 - $12000 - $5000 - $20000 - $4000 - $15000 - $3000

Economic profit = $13000

5 0

4 years ago

Primara Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours

Gnoma [55]

Answer:

1. The fixed portion of the predetermined overhead rate for the year is $10,000 per direct labor hour.

2. The fixed overhead budget variance is $4,000 unfavourable and the fixed overhead volume variance is $10,000 favourable.

Explanation:

In order to calculate the the fixed portion of the predetermined overhead rate for the year we would have to use the following formula:

predetermined overhead rate for the year=<u>Total fixed overhead cost year</u>

Budgeted direct labor-hours

=$ 250,000/25,000

=$10,000

1. The fixed portion of the predetermined overhead rate for the year is $10,000 per direct labor hour.

In order to calculate the fixed overhead budget variance, we use the following formula:

2. fixed overhead budget variance=Actual fixed overhead cost for the year- budgeted fixed overhead cost for the year

=$ 254,000-$ 250,000

=$4,000 unfavourable

In order to calculate the fixed overhead volume variance, we use the following formula:

fixed overhead volume variance=budgeted fixed overhead cost for the year-fixed overhead appliead to work in process

=$ 250,000-(26,000×10)

=$10,000 favourable

5 0

3 years ago

U.S. Steel is considering a plant expansion to produce austenitic, precipitation hardened, duplex, and martensitic stainless ste

kirza4 [7]

Answer:

$5.5228 million

$5,522,800

Explanation:

First, calculate the present value of all cash outflows

Present value of cash outflow = Initial Cost + ( Year 1 cost x Discount factor 15%, 1 year ) + ( Annual Cost x Annuity factor 15%, 10 years )

Where

Initial cost = $13 million

Year 1 cost = $10 million

Discount factor 15%, 1 year = 1 / ( 1 + 15% )^1 = 0.8696

Annual Cost = $1.2 million

Annuity factor 15%, 10 years = 1 - ( 1 + 15% )^-10 / 15% = 5.019

Placing value sin the formula

Present value of cash outflow = $13 million + ( $10 million x 0.8696 ) + ( $1.2 million x 5.019 )

Present value of cash outflow = $13 million + $8.696 million + $6.0228 million

Present value of cash outflow = $27.7188 million

Now use the following formula to calculate the annual revenue required to recover its investment plus a return of 15% per year

Present value of Annual revenue = Annual Revenue x Annuity factor 15%, 10 years

Annual Revenue = Present value of Annual revenue / Annuity factor 15%, 10 years

Where

Present value of Annual revenue = $27.7188 million

Annuity factor 15%, 10 years = 1 - ( 1 + 15% )^-10 / 15% = 5.019

Placing value sin the formula

Annual Revenue = $27.7188 million / 5.019

Annual Revenue = $5.5228 million

Annual Revenue = $5,522,800

8 0

3 years ago

Titan Mining Corporation has 6.3 million shares of common stock outstanding, 220,000 shares of 3.6 percent preferred stock outst

Shkiper50 [21]

The firm’s market value capital structure is $503,910,000.

The rate the firm should use to discount the project’s cash flows is 9.33%.

We will begin by finding the market value of each type of financing. We find:

Market value of debt = MVD = 105,000*($1,000)*(1.07) = $25,750,000

Market value of preferred cost = MVP = 220,000*($83) = $18,260,000

Market value of equity = MVE = 6,300,000*($73) = $459,900,000

And the total market value of the firm is:

V = $25,750,000 + 18,260,000+ 459,900,000

V = $503,910,000

So, the market value weights of the company's financing are:

D/V = $25,750,000/$503,910,000 = 0.0511

P/V = $18,260,000/$503,910,000 = 0.0362

E/V = $459,900,000/$503,910,000 = 0.9127

For projects equally as risky as the firm itself, the WACC should be used as the discount rate.

First, we can find the cost of equity using the CAPM. The cost of equity is:

RE = .031 + 1.15(.071)

RE = 0.1030, or 10.03%

The cost of debt is the YTM of the bonds, so:

P0 = $1,070 = $26.50(PVIFAR%,34) + $1,000(PVIFR%,34)

R = 2.228%

YTM = 2.228% × 2

YTM = 4.46%

And the aftertax cost of debt is:

RD = (1 - .22)(.0446)

RD = .0348, or 3.48%

The cost of preferred stock is:

RP = $3.60/$73

RP = .0493, or 4.93%

Now we can calculate the WACC as:

WACC = 0.0511(.0348) + 0.0362(.0493) + 0.9127(.1003)

WACC =0.0933, or 9.33%

Hence, The firm’s market value capital structure is $503,910,000.

The rate the firm should use to discount the project’s cash flows is 9.33%.

Learn more about equity valuation:

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7 0

2 years ago