Answer:
1.
Option B is the correct answer.
2.
Dividends Paid = $55 million. Thus, option C is the correct answer.
Explanation:
1.
The statement about shareholders' equity given in option A that it is the difference between the paid-in capital and retained earnings is incorrect as the retained earnings are a part of the equity of shareholders and are included in the calculation of shareholders' equity. Thus, option B is the correct answer.
2.
The Net Income earned by a company is usually treated in two ways. It is either paid out as dividends to the shareholders or is retained in the business and transferred to the retained earnings account or both. Thus, we can calculate the amount of dividends paid by the following equation.
Closing balance of retained earnings = Opening balance of retained earnings + Net Income for the period - Dividends Paid
700 = 595 + 160 - Dividends Paid
700 + Dividends Paid = 755
Dividends Paid = 755 - 700
Dividends Paid = $55 million
Answer:
b.1.08.
Explanation:
The computation of the present value index is shown below;
As we know that
Present Value Index = Present value of Net Cash Inflow ÷ Initial Cash outflow
where,
Initial investment = $420,000
And, the present value of net cash inflows are
Year Cash Flow (in $) PVF at 10% Present Value (in $)
1 180,000 0.909 163,620
2 120,000 0.826 99,120
3 100,000 0.751 75,100
4 90,000 0.683 61,470
5 90,000 0.621 55,890
TOTAL 455,200
So, the present value index is
= $455,200 ÷ $420,000
= 1.08
Answer:
C) consumption and output
Explanation:
A fiscal contraction refers to decreasing a government's deficit. A government has a deficit when it spends more than the revenue it gets from taxes. Therefore if the government wants to reduce its deficit, it will decrease public expenditure and/or increase taxes. Any of those actions will also lead to a decrease in public consumption and total economic output.
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Answer:
Owners' liability is limited to the amount they invested in the firm. Stockholders are not are responsible for any encumbrances of the firm; in particular, they cannot can be required to pay back any debts incurred by the firm.
Explanation:
<em>The phase is the definition of the term limited liability.</em>
Limited Liability is the salient feature of a corporation. It protects the shareholders and properties in the event of a dissolution. The limited liability feature has given many investors confidence to invest in companies and corporations. The risk of the investor is restricted to the level of his or her investments in the company.
Should the company collapse, shareholder's properties are protected and cannot be used to settle any debts that the assets of the company cannot pay. As such, businesses can raise capital with ease from different categories of investors.
