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3 years ago

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The company enters a lease agreement requiring lease payments with a present value of $14 million. will this lease agreement aff

ect the debt to equity ratio differently if the lease is recorded as an operating lease versus a capital lease?

1 answer:

wariber [46]3 years ago

5 0

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A company that produces pleasure boats has decided to expand one of its lines. Current facilities are insufficient to handle the

Irina-Kira [14]

Answer:

A. Lowest Total Cost:

A. 315,550 or more

B. Lowest total cost of annual volume of 120 boats

C. C

Explanation:

The lowest total cost among the three alternatives is b.

If the company goes for new location it will have to incur fixed cost of $270,000 and variable cost per boat will be $600.

If the company Subcontracts then Total cost per boat is $2,620

If a company goes for expanding existing facility then it will incur fixed cost of $57,000 and variable cost will be $1,030 per boat.

If company produces 315,000 or more boats then it will have lowest possible cost for the boat.

For an output of 120 bots the best possible alternative is option C. The fixed cost will be $475 per boat ($57,000 / 120 boats)

The total cost will be $1,505 ($475 + $1,030)

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3 years ago

2. Shoplifting is a very serious problem for retail store owners, with millions of dollars of merchandise stolen each year. Obvi

topjm [15]

It could invade the privacy of the shopper when trying things on. All of the actions the customer does is being recorded, not to mention the customer has no idea who exactly is monitoring the cameras, and how many people have access to it. It could become a serious problem.

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3 years ago

For most companies, the web ______ the threat that new competitors will enter the market by ______ traditional barriers to entry

Andrei [34K]

Answer: b. Increases, decreasing

Explanation: For most companies, the web increases the threat that new competitors will enter the market by decreasing traditional barriers to entry. Traditional barriers to entry include

a. Economies of scale

b. Product differentiation

c. Capital requirements

d. Switching costs

e. Access to distribution channels

f. Cost disadvantages

g. Government policy

thus, by reducing some of these barriers to entry the Web increases the threat of new competition.

7 0

3 years ago

Type the correct answer in the box. Spell all words correctly.

notka56 [123]

Answer:

Doubtful

Explanation:

The company will record the uncollectible $5,670 of its accounts receivable as a debit to uncollectible accounts expense and a credit to the DOUBTFUL account.

This is evident in the fact that the bad debt allowance method has three main principles which are:

1. Calculate uncollectible receivables

2. Debit bad debt expense and credit allowance for doubtful accounts in the journal entry

3. Debit allowance for doubtful accounts and credit the corresponding receivables account when it is time to write off the account.

8 0

3 years ago

Burton Corp. is growing quickly. Dividends are expected to grow at a rate of 28 percent for the next three years, with the growt

horrorfan [7]

Answer:

current share price = $70.53

Explanation:

Share Price:

A share price is the amount it would cost to buy one share in a company.

Formula:

share price = future dividends * Present value of discount factor(16%, time period)

As the company just paid a dividend of $3.45 and dividends are expected to grow at a rate of 28 percent for the next three years so

Dividend for 1st year = (3.45*1.28) = $4.416

Dividend for 2nd year = (4.416*1.28) = $5.65248

Dividend for 3rd year = (5.65248*1.28) = $7.2351744

Now we need to calculate the value for 3rd year.

Formula:

Value after 3rd year = (Dividend for year 3*growth rate) / (required rate-growth rate)

Therefore by putting the values in the above formula, we get

Value after 3rd year = (7.2351744 * 1.074) / (0.16 - 0.074)

Value after 3rd year = $90.35555007

Therefore by putting the values in the share price formula, we get

current share price = 4.416 / 1.16 + 5.65248 / 1.16^2 + 7.2351744/1.16^3 + 90.35555007 / 1.16^3

current share price = $70.53

4 0

3 years ago