Answer:
$15000.
Explanation:
The worth of stock that the investor sold = $80000
The fall in the market value of the stock = $65000
Since the value of the stock falls to $65000. thus, the SMA in the account can be calculated by eliminating the decreased amount from the stock value. Therefore, the SMA in the account will be 80000-65000 = $15000
Answer:
B) Debit Retained Earnings $36,000; credit Common Stock Dividend Distributable $30,000; credit Paid-In Capital in Excess of Par Value, Common Stock $6,000.
Explanation:
The journal entry is as follows:
Account Debit Credit
Retained Earnings $36,000
Common Stock Dividend Distributable $30,000
Paid in Capital in Excess of Par Value $6,000
For this question you can use the CAPM formula:
E(rs) = risk free + (market return - risk free rate)*(beta)
=4.5% + (10.8% - 4.5%) * 1.3
= 4.5% + 8.19%
= 12.69%
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Answer:
Depreciation amount has to be added back to the annual income because it is a non cash expense.
Project 22A
Depreciation = 242,000 / 6 years
= $40,333.33
Annual income = 40,333.33 + 16,890
= $57,223.33
IRR using Excel is:
= 11%
Project 23A
Annual income = 20,710 + 271,500 / 9 years
= $50,876.67
IRR = 12%
Project 24A
Annual income = 15,700 + 283,000 / 7 years
= $56,128.57
IRR = 9%
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<em>Note: Look at the formula bar to see how IRR was calculated. </em>
