Shareholders' Equity = Assets – Liabilities where the rearrangement reflects the residual claim of equity owners.
Answer:
The correct answer is letter "A": Shareholder's equity is the residual value of a firm.
Explanation:
Shareholders' equity is a measure of a company's net worth. I can be calculated by subtracting the company's total liabilities from its assets. It is also understood as the <em>funds remaining after all creditors and debts are paid</em> that is why we could say it is the residual value of the firm.
Answer:
The correct option here is C) units in the beginning work in progress period which were completed , units which were started and completed, and units in ending work in progress.
Explanation:
FIFO ( First in first out ) method is used to take out the cost per unit when doing process costing, in this method it is assumed that the inventory which were not finished during the beginning of period would be first completed and then new shall be started.
To take out the equivalent cost per unit under the FIFO method we will add the units which were completed in the beginning plus units which were started and completed during the period and plus the units which are left in ending work in progress.
Answer:
A. $ 1.800
Explanation:
The total manufacturing costs for the period are:
Raw materials $ 3,000
Labor $ 4.000
Overhead costs <u>$ 2,000</u>
Total cost of goods manufactured <u>$ 9,000</u>
Units started and completed 10,000
Cost per unit $ 9,000 / 10,000 units $ 0.90 per unit
Units inventory at end of period 2,000
Inventory value at period end $ 0.90 * 2,000 = $ 1,800
Answer:
A. 5.56%
B. 13.55%
Explanation:
In this question, we are asked to calculate the equity cost using the DCF method and the SML method
A. DCF approach
cost of equity =[ D0(1+growth )/ current price] +growth
= [.40 (1+.05) / 70 ] + .05
= [ .42 / 75] + .05
= .0056 +.05
= 0.0556 same as 5.56%
B)SML approach
Cost of equity = Rf +Beta (Rm-Rf)
= 5.8+ 1.25 (12 -5.8 )
= 5.8+ 1.25 *6.2
= 5.8 + 7.75
= 13.55%
