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LenaWriter [7]
3 years ago
12

Which of the following is NOT a capital component when calculating the weighted average cost of capital (WACC) for use in capita

l budgeting? a. Retained earnings. b. Preferred stock. c. Accounts payable. d. Long-term debt. e. Common stock.
Business
1 answer:
slavikrds [6]3 years ago
6 0

Answer:

c. Accounts payable.

Explanation:

The capital structure is a mix of debt and the equity

And, the formula to compute the weighted average cost of capital is shown below:

= Weightage of debt × cost of debt × ( 1- tax rate) + (Weightage of preferred stock) × (cost of preferred stock) + (Weightage of  common stock) × (cost of common stock)

Since the account payable is the current liabilities and therefore it is not use for computing the WACC.

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DeLong Corporation was organized on January 1, 2017. It is authorized to issue 14,500 shares of 8%, $100 par value preferred sto
Valentin [98]

Answer and Explanation:

According to the scenario, computation of the given data are as follow:

Journal entries

On Jan. 10

Cash A/c ($6 × 84,500)       Dr.    $507,000

 To Common stock A/c    ($3 ×84,500)          $253,500

 To Paid in capital in excess of stated value common stock A/c  $253,500      

On Mar. 1

Cash A/c($110 × 5,150) A/c       Dr.      $566,500

     To Preferred stock A/c ($100 × 5150)       $515,000

    To Paid in capital in excess of par –preferred stock A/c    $51,500

 (Being the issuance of the preferred stock is recorded)

On April 1

Land A/c            Dr.       $81500

    To Common stock A/c ($3 × 23,500)  $70,500

    To Paid in capital in excess of stated value common stock A/c    $11,000

 (Being the issuance of the common stock is recorded)

On May 1

Cash A/c ($5 × 84,000)           Dr.       $420,000

    To Common stock A/C($3 × 84,000)        $252,000

    To Paid in capital in excess of stated value common stock A/c      $168,000

 (Being the issuance of the common stock is recorded)

On Aug. 1

Organizational expenses A/c             Dr.      $39,500

     To Common stock A/c ($3 × 10,000)       $30,000

     To Paid in capital in excess of stated value common stock A/c      $9,500

 (Being the issuance of the common stock is recorded)

On Sep 1

Cash A/c ($7 × 11,500)      Dr.      $80,500

       To Common stock ($3 × 11,500)         $34,500

        To Paid in capital in excess of stated value common stock A/c   $46,000

 (Being the issuance of the common stock is recorded)

On Nov 1

Cash A/c ($111 × 2,000)      Dr.      $222,000

       To Preferred stock A/c ($100 × 2,000)       $200,000

       To Paid in capital in excess of par-preferred stock A/c        $22,000

 (Being the issuance of the preferred stock is recorded)

3 0
3 years ago
The following cost behavior patterns describe anticipated manufacturing costs for 2013: raw material, $7.60/unit; direct labor,
Advocard [28]

Answer: The answer is as follows:

Explanation:

Given that,

Raw material = $7.60/unit

Direct labor = $10.60/unit

Manufacturing overhead = $8.60/unit

(1) Unit cost under variable costing = Raw material + Direct labor + variable Manufacturing overhead

= 7.6 + 10.6 + 8.6

= 26.8

(2) Unit cost under absorption costing = Raw material + Direct labor + variable Manufacturing overhead + fixed Manufacturing overhead

= 7.6 + 10.6 + 8.6 + 8.6

= 35.4

5 0
3 years ago
Joe is currently in consumer equilibrium by consuming cheese and crackers, such that the last cracker consumed yielded 8 utils a
Ludmilka [50]

Joe should decrease his consumption of crackers and his marginal utility from crackers will  increase and also  increase his consumption of cheese and his marginal utility from cheese will decrease .

<h3>What happens to marginal utility when consumption decreases?</h3>

According to the Law of Diminishing Marginal Utility, the additional utility derived from increasing consumption declines with each additional increase in consumption level.

What happens to marginal utility when consumption increases?

According to the law of declining marginal utility, when consumption rises, the marginal utility gained from each extra unit decreases, all other things being equal.

Why does marginal utility decrease as more is consumed?

  • Consumers will only purchase more of a specific good if the price drops since they get less satisfaction from consuming more units of that good.
  • Thus, the law of diminishing marginal value contributes to the understanding of the law of demand.

Learn more about marginal utility brainly.com/question/15149015

#SPJ4

4 0
2 years ago
the life isnurance policy in which dealth benefits last a lifetime but premiums are all paid after a specified time period is an
rusak2 [61]

The life insurance policy in which death benefits last a lifetime but premiums are all paid after a specified time period is a limited-pay whole life policy.

5 0
2 years ago
In one of the case studies in the textbook, Cy Chesterly was the vice president in charge of sales for one of the largest machin
Aleonysh [2.5K]

Answer:

Chesterly used to provide special deals to company customers and used to receive bribery from these customer in return.

Explanation:

The company products and services were sold by Chesterly to its customers at a discounted price because both the Chesterly and its customer had agreed that Chesterly will receive a share of return from its customers. This was against the fiduciary duty of Directors and resulted in loss of profits to company which was not in the best interests of shareholders or in other words the director Chesterly committed fraud.

4 0
3 years ago
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