Answer:
WACC 13.85600%
Explanation:
First we calculate Eastern Pizza CAPM:
risk free = 0.08
market rate = 0.12
premium market = (market rate - risk free) 0.04
beta(non diversifiable risk) = 2
Ke 0.16000
Then we solve for WACC
Ke 0.16000
Equity weight 0.8
Kd 0.08
Debt Weight 0.2
t 0.34
WACC 13.85600%
The company will use the data on eastern Pizza to evualuate project presented to it. Also, it will consider the new tax rate to determinate the tax shield.
Answer:
$13,400
Explanation:
Data provided in the question:
Tax basis of marketable securities = $79,600
Amount for which securities sold to daughter = $60,000
Amount for which daughter sold the securities = $93,000
Now,
Mrs. Beld disallowed loss on the related party sale to her daughter
= Tax basis of marketable securities - Amount for which securities sold to daughter
= $79,600 - $60,000
= $19,600
Realized gain by her daughter = $93,000 - $60,000
= $33,000
Therefore,
The daughter's gain recognized on sale
= Realized gain by her daughter - Mrs. Beld disallowed loss
= $33,000 - $19,600
= $13,400
Answer:
c. Ending inventory will be lower if Blake uses weighted average than if FIFO were used
Explanation:
To check which answer is correct, we simply evaluate each option step by step.
<u>Option A</u>
Gross margin is the difference between selling price and cost.
Under FIFO gross margin is $14. (32 -18 =14)
Under LIFO gross margin is $13. (32-19 = 13)
Thus statement is incorrect as gross margin is higher if FIFO is used.
<u />
<u>Option B</u>
If FIFO is used, the dollar amount of ending inventory will be $19 as ending inventory will contain product purchased later that is at $19. In contrast, if LIFO is used, the dollar amount of ending inventory will be $18. Thus the statement becomes incorrect that it will be the same.
<u />
<u>Option C</u>
The ending inventory under FIFO is $19.
The ending inventory under LIFO is $18
The endng inventory under AVCO or weighted average will be, 18+19 / 2 = 18.5
Thus the statement is correct as the ending inventory under weighted average $18.5 is lower than ending inventory under FIFO $19. So, C is the correct Answer.
Answer:
See explain
Explanation:
There are 4 factors of production, land labor entreprenuership and capital.
The land of the jewellery shop would be the actual land that the store is on itself. The labor of the shop would be any of the work that any employees are doing. The capital would be any goods or machinery that is used in the store like cash registers, or bulletproof glass to protect their belongings, or any tools that the store uses to help make their jewellery etc. The last and final factor entrepreneurship might be for example the owner of the store, who manages the other 3 factors to bring a profit to the store.
