Answer:
<em>Warranty expense should be recorded in the period when the warranty service is performed.</em>
Explanation:
When the product is sold, a product guarantee liability and warranty cost should be reported if it is possible that consumers may make claims under the warranty and the amount can be calculated.
Those two provisions are part of the Financial Accounting Standards Statement No. 5 of the FASB, Accounting for Contingencies.
He is exercising coercive power. Coercive power<span> is the ability to influence someone's decision making by taking something away as punishment or threatening punishment if the person does not follow instructions. It can be a severe way to get staff members to follow along with a company plan, but it can be necessary in some cases.</span>
Answer:
B. Holly's statement is normative, but Ben's is positive.
Explanation:
Positive statements are based on objective deduction of what is, or was. It is based on facts. Ben's comment "an increase in the tax on beer will raise its price", is an example of positive statement.
Normative statements are subjective and based on individual values and judgement. In her statement Holly appears to be biased against drinking much. She says "taxes should be increased on beer because college students drink too much." Is a normative statement.
Answer: 9.7%
Explanation:
Given Data
Rf = Risk free return = 6%,
Rpm = Risk premium = 4%,
Beta = 0.9
Wd = Debt = 20%
rd = cost of debt = 8%
We = equity = 80%
Re = Rf + Beta (Rpm)
= 0.06 +0.9 (0.04)
= 0.096 * 100
= 9.6%
Unlevered Equity Cost ;
ReU= Wd × rd + We × re
= 0.20 × 8% + 0.80 × 9.6%
= 9.28%
Levered Equity Cost:
New Debt = 60%,
New Equity = 40%,
New rd = 9%
ReL = ReU + (ReU - rd) (D ÷ E)
= 9.28% + (9.28% - 9%) (0.60 ÷ 0.40)
= 0.097 * 100
= 9.7%
