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allsm [11]
3 years ago
8

On July 1, 2010, Ellison Company granted Sam Wine, an employee, an option to buy 400 shares of Ellison Co. stock for $30 per sha

re, the option exercisable for 5 years from date of grant. Using a fair value option pricing model, total compensation expense is determined to be $1,800. Wine exercised his option on October 1, 2010 and sold his 400 shares on December 1, 2010. Quoted market prices of Ellison Co. stock in 2010 were:
July 1 $30 per share
October 1 $36 per share
December 1 $40 per share

The service period is for three years beginning January 1, 2010. As a result of the option granted to Wine, using the fair value method, Ellison should recognize compensation expense on its books in the amount of

a. $1,800.
b. $600.
c. $450.
d. $0.
Business
1 answer:
gregori [183]3 years ago
3 0

Answer:

Ellison Company should recognize compensation expense on its books in the amount of $600

Explanation:

Solution

The transaction in the books of Ellison Company during the period of July 1st 2010 to December 31st 2010

On July 1st the share value was $30 *400 =  12000

On October 1st 2010 sold at $ 36 * 400 =  14400

The gain on this transaction was = $2,400          

31st July 2010, less compensation expenses =$ 1,800    

The fair vale to be recorded as a gain = $ 600

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True or False. Within an Agent Handler group, if the handler with the highest priority is unavailable, the agent will fall back
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Answer:

True

Explanation:

Given that, according to Configuring ePolicy Orchestrator of Agent Handlers Group, Handler priority helps to inform the agents which handler to approach with first.

However, in situations whereby the handler with the highest priority is unavailable, the agent falls back to the next handler in the list.

Hence, in a situation like this, the correct answer is TRUE

4 0
3 years ago
Which sentence describes market conditions at the equilibrium, or market clearing, price? A Supply is greater than demand. B Dem
eduard

<span>D There is no supply or demand.</span>
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3 years ago
Exercise 11-6 Net present value LO P3 A new operating system for an existing machine is expected to cost $520,000 and have a use
Citrus2011 [14]

Answer:

NPV of investment 1: $509,131

NPV of investment 2: $269,513

Explanation:

initial investment -$520,000

6 year useful life, depreciation per year = ($520,000 - $10,000) / 6 = $85,000

free cash flow per year = $150,000 + $85,000 = $235,000

free cash flow last year = $235,00 + $10,000 = $245,000

NPV = -$520,000 + $235,000/1.1 + $235,000/1.1² + $235,000/1.1³ + $235,000/1.1⁴ + $235,000/1.1⁵ + $245,000/1.1⁶ = -$520,000 + $213,636 + $194,215 + $176,559 + $160,508 + $145,917 + $138,296 = $509,131

initial investment -$380,000

8 year useful life, depreciation per year = ($380,000 - $20,000) / 6 = $60,000

free cash flow per year = $60,000 + $60,000 = $120,000

free cash flow last year = $120,00 + $20,000 = $140,000

NPV = -$380,000 + $120,000/1.1 + $120,000/1.1² + $120,000/1.1³ + $120,000/1.1⁴ + $120,000/1.1⁵ + $120,000/1.1⁶ + $120,000/1.1⁷ + $140,000/1.1⁸= -$380,000 + $109,091 + $99,174 + $90,158 + $81,962 + $74,501 + $67,737 + $61,579 + $65,311 = $269,513

5 0
3 years ago
A buyer with a 15-year, $250,000 loan at a 5.5% interest rate has a monthly principal and interest payment totaling $2,042.71. W
lorasvet [3.4K]

<u>Given:</u>

Loan amount = $250000

Interest rate = 5.5%

Interest payment = $2042.71

<u>To find:</u>

Total amount of interest

<u>Solution:</u>

The total number of months in 15 years = 15\times12=180\text{ years }

Total monthly payments will be 180\times \$2042.71 = \$367687.8

So, the total pay-backs will be $3,67,687.8

Total interest paid will be as follows,

\text{Total interest paid = Total pay-backs - Loan amount}

On plugging-in the values in the above formula we get,

\Rightarrow \$3,67,687.8-\$250,000=\$1,17,687.80

Therefore, the total amount of interest that the borrower will pay over the course of the loan is $1,17,687.80.

8 0
3 years ago
Prompt<br> What should you do after writing something?
finlep [7]

Answer:

revise, edit, cite sources.

Explanation:

8 0
3 years ago
Read 2 more answers
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