Answer:
Yes, Alaska should pay 1 billion new sol for the acquisition.
Maximum price = 1.616 billion new sol.
Explanation:
Asking price by Estoya = 1 billion new sol.
However, estimating the value of Estoya considering the cash flows in years 1 and 2 to Alaska is as follows.
Year 1 cash flow (figures in millions)
- Cash flow (which will grown by 5% yearly) = 500 * 1.05 = 525
- In USD (exchange rate in year 1 = $.29), 525 = 525 * $.29 = $152.25.
Year 2 cash flow (figures in millions)
- Cash flow = 525 * 1.05 = 551.25
- Resale value = 1,200 (i.e 1.2 billion)
- Total year 2 cash flow = 1,751.25
- In USD (exchange rate in year 2 = $.27), 1,751.25 = 1,751.25 * $.27 = $472.84.
Given a discount rate of 18%, the present value of the cash flows
=
= 129.03 + 339.59
= $468.62.
Therefore, the maximum amount Alaska Inc. should pay for the Company is the local currency equivalent of $468.62 in today's price
= 468.62/0.29
= 1.616 billion new sol.
Because this amount (the fair value) is higher that the 1 billion new sol the company intends to pay, Alaska should pay the 1 billion new sol.
Answer:
$178,000
Explanation:
The computation of the total stockholders' equity is shown below:
= Share capital + additional paid in capital - deficit balance in retained earnings
where,
Share capital = 19,000 shares × $3 = $57,000
Additional paid in capital = 19,000 shares × $11 = $209,000
And, the deficit balance in Retained Earnings is $88,000
Now put these values to the above formula
So, the value would be equal to
= $57,000 + $209,000 - $88,000
= $178,000
Answer: Management by objectives (MOB)
Explanation:
Management by objectives also known as management by results is a management method which helps to improve the performance of an organization by defining clearly the objectives that are agreed on by the management and employees.
Management by Objectives is a personnel management technique where managers and employees work together to set, record and monitor goals of an organization for a specific period of time. Organizational goals and planning flow from top to the bottom.
Electronic Profiling is your answer. I hope I helped:)
Answer:
B: $1,500 is recognized this year, $ 9,000 next year and $ 7,500 in last year of contract.
Explanation:
Steven has adopted the accrual method in recording its revenue.
Accrual is an accounting concept which means expenses and revenues are recorded by a business when they are incurred not when cash is received or paid.
Accrual basis of accounting gives more accurate and true results as compare to cash basis accounting.
The payment received in September of $ 18,000 was the income for 24 months so it was wrong to record the whole amount as an income in September.
In the first year 2 months of income is recorded for November and December ($ 18,000÷24 = $750 per month) $750 × 2 = $1500.
In the second year 12 months revenue will be recognized ($750 per month × 12 = $ 9,000)
In the last year 10 month remained out of 24 months so the income recognized was ( $750 × 10 = $ 7,500)