Answer:
The correct answer is option D.
Explanation:
Sunk costs can be defined as those costs which already been incurred and cannot be recovered anymore. These costs are excluded from business decision making.
It is can be referred to as a cost that is no longer relevant.
The $8 paid for a ticket, after the person starts watching the movie is a sunk cost as it cannot be recovered anymore.
Sunk costs are contrasted to relevant cost which is yet to be incurred in the future. Cost pf machinery, equipment, etc are examples of sunk cost.
Answer:
The answer is: A) breached
Explanation:
Evelyn breached her contract with Hill & Dale because she failed to perform her duties. In order for the contract to end, both parties must fulfill their duties or both parties must agree to cancel the contract. Any party involved in a contract can sue for damages, so Hill & Dale are entitled to sue Evelyn for compensatory damages.
Answer:
Bad debts expense Debit $ 600
Allowance for Uncollectible expenses Credit $ 600
Explanation:
The allowance for uncollectible accounts is estimated usually on the basis of a percentage of credit sales. The data in the question indicates that the estimated losses from uncollectible accounts is $ 1,000.
The unadjusted balance is $ 400, so the adjusting entry is for the balancing amount, i.e. $ 600. It is debited to bad debts and credited to allowance for uncollectible accounts.
Answer:
$710.84 million
Explanation:
Net income = $35 million
Depreciation = $20 million
Capital expenditures = $7 million
Tax rate = 21%
D/E ratio = 0.4
Growth rate = 6%
Equity beta = 1.25
So, firm's asset beta = Equity beta/(1 + D/E*(1-T))
= 1.25/(1 + 0.4*(1-0.21))
= 0.94985
So, Free Cash Flow to the Firm= NI + Depreciation - Capital expenditures
= 35 + 20 - 7
= $48 million
Risk free rate Rf = 5%
Market risk premium = 7.5%
So, firm cost of capital using CAPM is Rf + Beta*(MRP)
Kc = 5 + 0.94985*7.5
Kc = 12.1239
So, Firms value using constant dividend growth model:
FV = FCF*(1+g)/(Kc-g)
FV = 48*1.06 / 0.121239-0.06
FV = 50.88 / 0.061239
FV = 830.8430901876255
FV = $830.84 million
Debt = $120 million
Market Value of equity = FV - Debt
Market Value of equity = $830.84 million - $120 million
Market Value of equity = $710.84 million
Answer:
Limited natural resources such as infertile land and lack of coastal access can limit economic growth for a country.
Explanation:
Natural resources are a source of wealth for the country. Mineral such oil and precious stones have made nations wealthy.
Land is a factor of production. Lack of fertile lands will make a nation dependent on imports for its food security. Access to coastal areas facilitates cheaper and fast international trade. Landlocked countries use harbor of other nations for global business. Goods and services from landlocked counties may be more expensive as a result of high transport costs.
