Answer: B) Conservative Financial Policy
Explanation:
A Conservative Financial policy refers to a situation where an entity usually finances their permanent working capital with long term debt in part or in it's entirety.
It is stated that Bradford Maintainance uses long-term sources of funds to finance its assets which would point to a Conservative Financial Policy.
Answer:
The gain on sale of asset is of $800
Explanation:
The depreciation of the asset is computed as:
Annual depreciation = Original Cost - Estimated residual value / Useful life of the asset
= $40,000 - $6,000 / 5
= $34,000 / 5
= $6,800 per year
So, the depreciation for 2 years will be $13,600 ($6,800 + $6,800).
After 2 years, the value of the asset will be:
= Cost - Depreciation for 2 years
= $40,000 - $13,600
= $26,400
Now, we will compute the gain or loss on sale as:
Gain or loss on sale = The value of asset after 2 years - Sale value
= $26,400 - $25,600
= $800 (Gain).
So, there is gain of $800 on sale of the assets after 2 years.
Answer:
A. 0.75
Explanation:
The computation of the capacity utilization rate is shown below:
= Actual output ÷ best operating level output
= 300 units ÷ 400 units
= 0.75
It shows a ratio between the actual output and the best operating level output through which the accurate rate can come.
Moreover, it also shows a relationship between the actual output and the best operating level output
Answer:
Stock-split
Explanation:
A stock-split means that the existing price of one share of Nathan will be divided into two such that the two new shares will be exactly equal to one old share. Once that is done, small investors will be more comfortable buying the shares at a cheaper price.
Whether before or after the stock-split. A given amount invested will give an investor the same percentage ownership in the same company. It has only made Nathan's shares look cheaper to attract small investors while the market capitalization (overall value) of Nathan remains the same.
Answer:
The firm should decrease output, because the market price is $5, which is lower than the marginal cost of producing one more unit of output: $6.
However, the average total cost of producing output in this market is $4, so the firm should only produce up to the point where this cost is still $4, so that it can make a profit of $1 in the market.