Answer:
The correct answer is D. The Tradeoff Theory suggests that a firm should choose a debt level where the tax savings from increasing leverage are just offset by the increased probability of incurring the costs of financial distress.
Explanation:
The trade-off theory of capital structure states that companies choose their leverage ratio to maximize benefits and minimize costs. The classic version of the hypothesis goes back to Kraus and Litzenberg, who observed a balance between the risk of loss of welfare from impending bankruptcy and the tax benefits of outside capital. In the trade-off theory, debt and equity financing are calculated in such a way that the present value of the tax shield is as large as possible and the present value of the costs of “financial distress” is possibly small.
Answer:
amortization on discount on BP 400
Explanation:
When there is a difference between the face value and the issuance proceeds from the bond a premium or discount is created.
When the proceeds are above, there will be a premium and the interest expense will be lower thant the actual cash outlay on the bond.
When theface value is above the proceeds, there is a discount.and expenses are higher than cash payment to bondholders.
In this case the expense is higher so there is a discount.
Answer:
Please see the answer below:
Explanation:
(a)
Debit: Accumulated Depreciation $53,990
Credit: Delivery Equipment $53,990
To record disposal of delivery equipment.
(b)
Debit: Accumulated Depreciation $37,080
Debit: Loss $16,910
Credit: Delivery Equipment $53,990
To record Loss on disposal of Delivery Equipment.
Answer:
B. Because cash equivalents are less liquid than cash, they must be reported separately from the Cash account
Explanation:
The <em><u>combined amount of cash and cash equivalents</u></em> will be reported on the balance sheet as the first line item in the section with the heading current assets.
These cash equivalents are short-term, highly liquid investments with a maturity date that was 3 months or less at the time of purchase.
In other words, there is very little risk of collecting the full amount being reported.
Answer:Email helps with a lot of things , emails can help companies keep track of things such as documentary , reciepts,checks and more.
Explanation:
