1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Nutka1998 [239]
3 years ago
12

Control Inc. has no debt and a total market value of $100,000. EBIT are projected to be 6,000 if economic conditions are normal.

If there is an expansion in the economy, then EBIT will be 30% higher. If there is a recession, then EBIT will be 60% lower. Control Inc. is considering a $40,000 debt issue with a 5% interest rate. The proceeds will be used to repurchase shares of stock. Currently there are 2500 shares outstanding. Ignore taxes.
1. Calculate earning per share for the case of strong expansion period before any debt is issued:

3.12

3.95

4.82

5.18

6.02
Business
1 answer:
Zinaida [17]3 years ago
5 0

Answer:

$3.12

Explanation:

For expansion:

EBT = EBIT - Interest

       = [6,000 + (30% × 6,000)] - $0

      = $7,800

Net income = EBT - Tax

                   = $7,800 - $0

                   = $7,800

Earning per share for the case of strong expansion period before any debt is issued:

= Net income ÷ Number of shares outstanding

= $7,800 ÷ 2,500

= $3.12

You might be interested in
What is the future value of $375 at an interest rate of 3 percent one year from today? a. $371.75 b. $393.33 c. $386.25 d. none
IgorLugansk [536]
The future value of a current investment is calculated through the equation,
    F = P x (1 + i)^n

where F is the present value, F is the future value, i is the nominal interest rate, and n is the number of years.

Substituting the known values,
   F = ($375)(1 + 0.03)^1 = $386.25

Hence, the answer to this item is letter C. 
3 0
3 years ago
AAA Manufacturing​ Inc, makes a product with the following costs per​ unit: Direct materials $150 Direct labor $90 Manufacturing
Ivenika [448]

Answer:

Results are below.

Explanation:

Giving the following information:

Direct materials $150

Direct labor $90

Manufacturing overhead​ (variable) $60

Manufacturing overhead​ (fixed) $120

<u>The absorption costing metho</u>d includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.

<u>The variable costing method i</u>ncorporates all variable production costs (direct material, direct labor, and variable overhead).

Variable costing:

Unitary production cost= 150 + 90 + 60= $300

Absorption costing:

Unitary production cost= 300 + 120= $420

5 0
3 years ago
Eric, a ghost writer, conducted market research and discovered a niche market in writing scripts for corporate online videos. He
cupoosta [38]

Answer:

What is the best way to get his service to his target customers?

Explanation:

8 0
3 years ago
Assume the market for oranges is perfectly competitive. If the demand for oranges​ increases, will the market supply additional​
DiKsa [7]

Answer:

The correct answer is option B.

Explanation:

The market for oranges is perfectly competitive. An increase in the demand for oranges will cause the demand curve to move to the right. This rightward shift in the demand curve will cause the equilibrium price and quantity to increase.

At higher price, the producers will supply more oranges, because they will earn more profits. The supply of product is positively related to its price. So at higher price of oranges, more quantity will be supplied.

5 0
3 years ago
Jon is considering providing substantial funding to a new startup company called Ampére located in Spain. The company is plannin
Ket [755]

Answer:

c) Sociocultural

Explanation:

The attidudes of Spanish consumers towards autonomous cars are mainly influenced by sociological and cultural factors, in other words, they belong the sociocultural dimension of PESTEL.

Some of these factors may be: opennes to experience, education level of the population, demographic structure, income distribution, prevailing ideas or ideology in the populace, and so on.

These are the factors that Jon should look closely to in order to determine as objectively as possible the consumer attidue towards autonomous cars, so that he can decide whether or not to start this type of business.

4 0
3 years ago
Other questions:
  • A large health care organization has committed to promoting a just culture when adverse events and near misses take place. which
    7·1 answer
  • "For a firm to maximize total profits through price discrimination, it should
    5·1 answer
  • Edna is a 25-year-old employee who is thinking about opening a retirement account. When she checked, she found that her employer
    7·1 answer
  • Tonya lives in a beautiful, well-maintained neighborhood, except for her
    10·1 answer
  • QUESTION 23
    14·1 answer
  • 0. Sarah takes home $33,000 per year from her job as a computer repairperson. Her only debt obligations are a car loan payment o
    11·1 answer
  • What is a publicly traded company? a company that is subsidized with public funds a company that makes trading cards a private c
    15·2 answers
  • What is a commission?
    7·2 answers
  • When a consumer borrows money, the lender will ask the borrower to sign:
    10·1 answer
  • A firm that is threatened by the potential entry of competitors into a market builds excess production capacity. this is an exam
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!