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3 years ago

In the short run, increasing marginal costs always imply increasing average total costs. a. Trueb. False

Business

1 answer:

Vinvika [58]3 years ago

8 0

Answer:

The answer is A. True.

Explanation:

Marginal Cost is the cost of producing one more product unit.

Marginal Cost = Average Total Cost / Average Goods Output

Therefore, in the short run, an increase in Marginal Cost implies a similar increase in Average Total Cost.

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Kilian Company's inventory balance at the end of the year does not include $10,000 of inventory that was stored in a separate wa

gizmo_the_mogwai [7]

Answer:

Understated net income by $10,000

Explanation:

Since closing stock of goods are added in general equation, of sales, that is in T shape account it is credited along with sales revenue, and that the closing stock increases the revenue.

In the given case closing stock is understated by $10,000.

Accordingly, Gross profit is also understated by $10,000.

For this the equation is:

Gross Profit = Sales - Cost of goods sold

Cost of goods sold = Opening Units + Purchases - Closing

Gross Profit = Sales - (Opening Units + Purchases - Closing)

Opening brackets will change the sign for each value

Gross profit = Sales - Opening units - Purchases + Closing units

Thus, Closing units are added and after all deductions, net income is computed and thus, net income is understated in current year by $10,000.

5 0

3 years ago

Here, the rod has a diameter d of 16 centimeters. The length from point A to point B, LAB, is 2 meters, and the length from poin

pantera1 [17]

Answer:

6/7 kN

Explanation: See attached file

7 0

3 years ago

Brandy enterprises discarded a computer that was fully depreciated and had no residual value. as a result of this transaction,

xeze [42]

The likely result of having to have a discarded computer that was fully depreciated and the residual value is discarded as it is not present, the transaction will likely cause a loss equal in regards to the residual value that may be recognized.

6 0

3 years ago

Barton Industries expects that its target capital structure for raising funds in the future for its capital budget will consist

iris [78.8K]

Answer:

a. With New Stock = 8.307%

b. With Old stock = 7.971%

Explanation:

The weighted average cost of capital (WACC) defines the cost rate that blends the capital structure cost including equity, debt, and preferred stock.

Requirement A

If it uses retained earnings as its source of common equity,

Given,

The weight of the combination of the capital structure is -

$W_{d}$ = 40% = 0.40; $W_{p}$ = 5% = 0.05; $W_{e}$ = 55% = 0.55

For cost of debt, we have to find cost of debt after tax, $R_{d}(1 - t)$ =

6.9% x (1 - 0.40) = 4.14%

Cost of preferred stock, $R_{p}$ = 6.4%

Cost of new Equity, $R_{e}$ = 11.51%

We know, the weighted average cost of capital (WACC) =

$W_{d}$ x $R_{d}$ + $W_{p}$ x $R_{p}$ + $W_{e}$ x $R_{e}$

= (0.40 x 4.14%) + (0.05 x 6.4%) + (0.55 x 11.51%)

= 1.656% + 0.32% + 6.3305%

= 8.307%

Requirement B

If it has to issue new common stock, the weighted average cost of capital (WACC) = $W_{d}$ x $R_{d}$ + $W_{p}$ x $R_{p}$ + $W_{s}$ x $R_{s}$

Given,

The weight of the combination of the capital structure is -

$W_{d}$ = 40% = 0.40; $W_{p}$ = 5% = 0.05; $W_{e}$ = 55% = 0.55

For cost of debt, we have to find cost of debt after tax, $R_{d}(1 - t)$ =

6.9% x (1 - 0.40) = 4.14%

Cost of preferred stock, $R_{p}$ = 6.4%

Cost of new Equity, $R_{s}$ = 10.9%

Therefore, putting the value in the equation,

WACC = (0.40 x 4.14%) + (0.05 x 6.4%) + (0.55 x 10.9%)

WACC = 1.656% + 0.32% + 5.995%

WACC = 7.971%

4 0

3 years ago

On january 1, 2017 hillop, inc. had total assets of $370,000. during the year, the company purchased new machinery worth $8

makvit [3.9K]

<span>asset turnover ratio is the ratio of the value of a company's sales or revenues generated relative to the value of its assets. The Asset Turnover ratio can often be used as an indicator of the efficiency with which a company is deploying its assets in generating revenue. Given that the sales is 60k and the value of the asset is 370k, the ratio is simply the sales / value of assets which is 60/(370-88).</span>

5 0

3 years ago