At the beginning of the year, manufacturing overhead for the year was estimated to be $477,590. At the end of the year, actual d
1 answer:
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Answer:
Option (a) is correct.
Explanation:
Value of stock:
= Present value of all cash flows
= $6 × 3.9927 + $50 × 0.6806
= $23.96 + $34.03
= $57.99 or $58
Answer:
a. 1.79
b. 0.78
c. 0.30
d. 0.43
Explanation:
a. The Current Ratio checks if the company can cover it's current Liabilities with it's current assets. The formula is;
Current Ratio = Current Assets / Current Laibilities
= $305,800 / $170,000
= 1.79
b. The Quick Ratio is similar to the Current Ratio but it calculates if a company can cover it's Current Liabilities with it's liquid assets.
Quick Ratio = Current Assets - Inventory / Current Liabilities
= ($305,800 -$173,800) / $170,000
= 0.78
c. The Cash Ratio checks whether the company can pay it's current Liabilities with it's cash or cash equivalent (Treasury Securities, bank account etc) holdings. Formula is;
Cash Ratio = (Cash+Cash Equivalents) / Current Liabilities
= $50,600 / $170,000
= 0.30
d. Debt ratio shows just how much of the company's assets were acquired through the use of Debt Financing. It's formula is;
Debt Ratio = Current Liabilities + Long Term Liabilities / Total Asssets
= $170,000 +$316,000 / $1,131,800
= 0.43
