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Sonbull [250]
4 years ago
9

The projected capital budget of Kandell Corporation is $1,000,000, its target capital structure is 60% debt and 40% equity, and

its forecasted net income is $550,000. If the company follows a residual dividend policy, what total dividends, if any, will it pay out?
a. $122,176
b. $128,606
c. $135,375
d. $142,500
e. $150,000
Business
2 answers:
Ira Lisetskai [31]4 years ago
8 0

Answer:

The correct answer is option (e).

Explanation:

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

Capital budget = $1,000,000

Debt = 60%

Equity = 40%

Net income = $550,000

So, we can calculate the total dividend by using following formula:

Total dividend = net income - ( Equity × Capital budget )

= $550,000 - ( 40% × $1,000,000 )

= $550,000 - $400,000

= $150,000

Stells [14]4 years ago
6 0

Answer:  e

150,000

Explanation:

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7 0
2 years ago
The expansionary phase of the business cycle is characterized by
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Answer:

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4 0
3 years ago
The Weber Company purchased a mining site for $1,750,000 on July 1. The company expects to mine ore for the next 10 years and an
AlladinOne [14]

Answer:

The correct solution is "$26,000".

Explanation:

The given values are:

Cost

= $1,750,000

Salvage value

= $150,000

First Year Extraction

= 6,500

Total Extraction

= 400,000

Now,

⇒ Depletion \ Expense = (Cost - Salvage \ value)\times (\frac{First \ Year \ Extraction}{Total \ extraction} )

On putting the values, we get

⇒                                = (1,750,000 - 150,000)\times (\frac{6,500}{400,000} )

⇒                                = 1,600,000\times 0.01625

⇒                                = 26,000 ($)  

4 0
4 years ago
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