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3 years ago

Theâ€‹ after-tax cost of debt is higher than theâ€‹ before-tax cost of debt. True or False

Business

1 answer:

olasank [31]3 years ago

5 0

Answer:

False

Explanation:

The after cost of debt is always lower than the before tax cost of debt. For example, a company borrows $1,000,000 and pays 7% interest per year. This results in $70,000 in interest expense before taxes = $1,000,000 x 7% = $70,000.

The after tax cost of the debt = $1,000,000 x 7% x (1 - tax rate) = $1,000,000 x 7% x (1 - 21%) = $1,000,000 x 7% x 0.79 = $55,300

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arasota Company obtained land by issuing 3,380 shares of its $12 par value common stock. The land was recently appraised at $146

likoan [24]

Answer:

Dr Land $146,440

Cr Common stock (3,380 shares×$12 par value) $40,560

Cr Paid in Capital in excess of Par common stock $105,880

Explanation:

Arasota Company Journal entry

Dr Land $146,440

Cr Common stock (3,380 shares×$12 par value) $40,560

Cr Paid in Capital in excess of Par common stock $105,880

4 0

3 years ago

What is the maximum income to qualify for financial aid 2020

Nata [24]

Currently, the FAFSA protects dependent student income up to $6,660. For parents, the allowance depends on the number of people in the household and the number of students in college. For 2019-2020, the income protection allowance for a married couple with two children in college is $25,400.

8 0

3 years ago

In order to avoid project delays, project managers confronted with a resource overload will seek to delay some of the noncritica

Westkost [7]

Answer: True

Explanation:

When a project manager is confronted with resource overload, an activity that is not on the critical path can be delayed in order not to unnecessarily delay the project. The non-critcal activities can be delayed than an amount no longer than the slack period. This levels demand for that worker.

3 0

3 years ago

Which concept is NOT basic to definition of economics?

olga2289 [7]

Answer:

No Consistir en el valor total de la producción corriente de bienes y servicios finales dentro del territorio nacional durante un período de tiempo que, generalmente, es un año .

Explanation:

Si no te sirve me dice

5 0

2 years ago

Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $39.8 million ca

Phantasy [73]

Answer:

A a) Journal Entry for Precision Castparts

Debit Bank $39.8 million Credit Note Payable $39.8 million

b) Journal Entry for Midwest bank

Debit Note Receivable $39.8 million Credit Bank $39.8 million

B a) Journal Entry for Precision Castparts

Debit Interest Expense $796,000 Credit Interest Payable $796,000

b) Journal Entry for Midwest bank

Debit Interest Receivable $796,000 Credit Interest Income $796,000

C a) Journal Entry for Precision Castparts

Debit Note Payable $39.8 million Debit Interest Payable $796,000 Debit interest Expense $2,388,000 Credit Bank $42,984,000

b) Journal Entry for Midwest bank

Debit Bank $42,984,000 Credit Note Receivable $39.8 million Credit Interest Receivable $796,000 Debit interest Income $2,388,000

Explanation:

Interest up to 31 Dec 2021

Interest = 39,800,000*8% = $3,184,000*3/12 =$796,000

8 0

3 years ago