Answer:
$2.58 per machine hour
Explanation:
The computation of the fabrication activity cost pool activity rate is
= ($461,000 × 15%) + ($123,000 × 15%) + ($207,000 × 20%) ÷ 50,000 machine hours
= ($69,150 + $18,450 + $41,400) ÷ 50,000 machine hours
= $2.58 per machine hour
Answer:
Changes in stock prices are impossible to predict from public information.
Explanation:
Efficient market hypothesis states that in an efficient market asset prices tend to reflect all available information. As new information comes to light asset prices adjust accordingly.
Three forms of EMH exist weak, strong, and semi-strong.
The changes in asset price based on all bailable information is unpredictable, so it is impossible to outperform the market by expert selection of stock or market timing.
The only way to get higher returns is to get riskier investments as one cannot consistently predict performance of assets.
Answer:
The average annual growth rate of dividends for this firm is 90.05%
Explanation:
In order to calculate the average annual growth rate of dividends for this firm we would to have to use the following formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.
7=1*(1+r/100)^3
(7/1)^(1/3)=(1+r/100)
(1+r/100)=1.9005
r=(1.9005-1)*100
=90.05%(Approx).
The average annual growth rate of dividends for this firm is 90.05%
Answer:
Expected return on equity is 11.33%
Explanation:
Using Weighted Average Cost Capital without tax formula, overall rate of return is given by the formula:
WACC=(Ke*E/V)+(Kd*D/V)
Kd is the cost of debt at 6%
Ke is the cost of equity at 12%
D/E=1/2 which means debt is 1 and equity is 2
D/V=debt/debt+equity=1/1+2=1/3
E/V=equity/debt+equity=2/1+2=2/3
WACC=(12%*2/3)+(6%*1/3)
WACC=10%
If the firm reduces debt-equity ratio to 1/3,1 is for debt 3 is for equity
D/V=debt/debt+equity=1/1+3=1/4
E/V=equity/debt+equity=3/1+3=3/4
WACC=10%
10%=(Ke*3/4)+(6%*1/4)
10%=(Ke*3/4)+1.5%
10%-1.5%=Ke*3/4
8.5%=Ke*3/4
8.5%=3Ke/4
8.5%*4=3 Ke
34%=3 Ke
Ke=34%/3
Ke=11.33%
Answer:
The correct answer is C.
Explanation:
Giving the following information:
Don's Copy Shop bought equipment for $450,000 on January 1, 2017. Don estimated the useful life to be 3 years with no salvage value, and the straight-line method of depreciation will be used. On January 1, 2018, Don decides that the business will use the equipment for a total of 5 years.
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (450,000/3)= 150,000
Accumulated depreciation= 150,000
New depreciation= 300,000/4= $75,000
