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Sergeeva-Olga [200]
3 years ago
7

Merith Qin, a textile company, relies on self-funding in order to sustain the promotion of its new product in the market. The co

mpany sold its newly issued stock and was able to a mass a sizable amount of money to invest. What sources of long-term funds is being used by Merith Qin in the given scenario
Business
1 answer:
Sophie [7]3 years ago
7 0

Answer:

Direct Investments from Owners

Explanation:

Self funding refers to a corporate's financing it's projects by use of it's own funds in the form of retained profits or raising money internally i.e from existing shareholders.

Issue of stock is one of the modes of raising long term finance by a corporate. The other forms being debt, preference stock or deposits. Long term finance refers to money required to finance big projects requiring heavy investments and spread over a long period of time say 5 to 10 years.

In the given case, the company sold it's newly issued stock and amassed a considerable amount of money. In this case, the stock must've been issued to existing stockholders and thus money raised from existing owners.

Hence this source of raising long term finance is direct Investment from owners i.e stockholders.

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Suppose a market basket of goods and services costs $400 in the base year and the consumer price index (cpi) is currently 125. t
Zigmanuir [339]

Suppose a market basket of goods and services costs $400 in the base year and the consumer price index (cpi) is currently 125. This indicates the price of the market basket of goods is now <u>$275</u>.

Inflation is a boom within the standard fee stage. The respectable inflation price is tracked with the aid of calculating changes in a degree called the consumer price index (CPI). The CPI tracks modifications in the cost of residing through the years. Like different financial measures it does a quite precise job of this.

The consumer price index is referred to as that index that is utilized in calculating the retail inflation within the economic system by monitoring the modifications in costs of most normally used goods and services. In other words, the patron charge index calculates the changes in the rate of a common basket of products and offerings.

The CPI tracks the change in retail fees of products and offerings which families buy for or their daily intake. To degree inflation, we estimate how a great deal CPI has accelerated in terms of percentage change over the identical length of the preceding 12 months. If expenses have fallen, it is referred to as deflation (negative inflation).

Learn  more about the consumer price index here brainly.com/question/1889164

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5 0
1 year ago
During 2018, Jerry is a self-employed therapist, and his net earned income is $187,600 from his practice. Jerry's SEP Plan, a de
DerKrebs [107]

Answer:

$55,000

Explanation:

A Simplified Employee Pension (SEP) Plan is used in the United States by employers or self-employed persons to provide retirement benefits for themselves and their employees

As stated by the Internal Revenue Service (IRS), the contributions that can be made to each employee’s SEP-IRA each year is which one is lower between 25% of compensation and the maximum of $55,000 for 2018.

We can then calculate as follow:

1. Jerry's contribution calculation = 25% × $187,600 =  46,900.

2. Maximum allowable = $55,000.

Since a defined contribution plan states that Jerry will contribute the maximum amount allowable and the maximum for 2018 is $55,000, Jerry's contribution will therefore be $55,000.

3 0
3 years ago
A firm has $76,000,000 in debt, which accounts for 43% of their total funds raised; the after-tax cost of these funds is 6.10%.
Digiron [165]

11.55% is the weighted average cost of capital for these funds

Explanation:

Firm has 76000000 in debt and 100000000 in equity. Thus the proportion of debt =

             = 76000000/(76000000 + 100000000)

             = 43.18%

and proportion of equity =  1 - 43.18%  = 56.82%

Therefore, WACC =  0.4318 * 6.1 + 0.5682 * 15.7

                               = 11.55%

7 0
3 years ago
Westfall Industries began 2018 with accounts​ receivable, inventory, and prepaid expenses totaling $ 50 comma 000 and its total
Dafna11 [192]

Answer:

The cash flows from operating activities for 2018 is $99,000.

Explanation:

Westfall Industries

Statement of cash flows (extract)

Net income                                                 $81,000

Add Loss on the sale of land                        4,000

       Depreciation expense                           8,000

       Decrease in current asset                     2,000

       Increase in current liabilities                  4,000

Cash flows from operating activities      $99,000

  • Decrease in current assets was arrived at by comparing the closing balance of $48,000 to the opening balance of $50,000.
  • Increase in current liabilities was arrived at by comparing the closing balance of $40,000 to the opening balance of $36,000.

5 0
3 years ago
Under SEC rules, internal controls over financial reporting (ICFR) are processes that provide reasonable assurance that financia
Aleksandr [31]

Answer:

C. Unauthorized acquisition or use of data or assets that could affect financial statements will be prevented or detected in a timely manner.

Explanation:

Internal Control Financial Reporting is a framework designed to help companies manage their financial reporting and achieve the greater goals of risk assessment, control, information and communication, as well as monitoring. One of the weaknesses that could characterize ICFR is its inability to assure timely prevention and detection of unauthorized acquisition or use of data.

The scheme however ensures that financial records are maintained and that transactions are prepared according to GAAP rules. ICFR ensures that misstatements are detected in financial reporting.

3 0
3 years ago
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