Answer:
3) Corporations use acquisition as a substitute for innovation.
Explanation:
The fastest way in which a corporation can enter a new market or develop new products is through buying existing companies that already operate in the new target markets or have developed the new products that the corporation wishes to sell.
Research and development is very costly and time consuming, and on many occasions the results aren't even good or are not as good as expected. By acquiring a smaller company that has already developed the product, then the corporation might even save money.
decision tree
Explanation
:
A decision tree is a graph of decisions and their possible consequences; it is used to create a plan to reach a goal. Decision trees are used to aid in making decisions.
Answer:
1.
- The firm increases its dividend payout ratio.
This will increase the need for external funds because with more funds going towards dividends, there will be less funds available to fund operations. The company will therefore be more probable of being in need of Additional funds.
- The firm’s inventory turnover decreases, with no effect on the sales forecast.
If the firm's inventory turnover increases, it means that the firm is taking longer to sell off inventory. This will mean that the company will have to invest more in working capital to maintain these inventory levels. This will lead to a higher probability of them needing additional funds.
2. Yes, dividends still affect a firm’s AFN even though they are paid out of after-tax earnings.
Even though they are paid after-tax, they still eat into the funds that the business can be able to set aside to fund operations. So when dividends are paid, the need for AFN increases as well.
Answer:
Bad debt expense $11,320 ($283,000 × 4%)
To Allowance for doubtful debts $11,320
(being the bad debt expense is recorded)
Explanation:
The journal entry is shown below:
Bad debt expense $11,320 ($283,000 × 4%)
To Allowance for doubtful debts $11,320
(being the bad debt expense is recorded)
For recording this given transaction, we debited the bad debt expense as it increases the expenses account and at the same time it decreases the account receivable so the allowance would be credited so that the proper posting could be done
Answer:
$17.27
Explanation:
The stock intrinsic value is calculated using dividend discounted model (DDM). The DDM is stated as below:
Stock intrinsic value = [This year dividend x (1 + Dividend growth)]/[Equity cost of capital - Dividend growth]
= [1.9 x (1 + 0%)]/[11% - 0%] = $17.27
So vlaue of NoGrowth's stock is estimated at $17.27
