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3 years ago

Which of the statements correctly represents the accounting equation?

Business

1 answer:

Anna007 [38]3 years ago

6 0

Answer:

What the accounting equation tells us is that everything that a firm owns, it acutally either owes it to the owners of the firm, or to creditors.

Explanation:

This is why the accounting equation is represented as:

Assets = Liabilities + Stockholders' Equity

Where Assets represent what the firm owns, liabilities is what the firm owes to creditors, and Stockholders' Equity (or Owners' Equity) is what the firm owes to the owners.

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Lisa's opportunity cost rate is 10 percent compounded annually. how much must she deposit in an account today if she wants to re

Aleks04 [339]

Answer:

The answer would be, $21,760

Explanation:

The formula to be used is that of calculating the present value (PV) of the payment in the ordinary annuity (PMT). PMT are done annually, semi-annually, quarterly or monthly.

PV = PMT * ((1-(1/ (1+r) n))/r)

Where PV is the present value; PMT is the payment in an ordinary annuity; r is the opportunity cost rate; n is the number of years

in this case, PV= 3,200; r=10%, and n=12

To get PV, substitute the values given above and compute as shown below:

PV = 3,200*((1-(1/(1+0.10)12))/0.10)

PV= $21,760

With an opportunity cost of 10% compounded annually, Lisa will have to deposit $21,760 today if she wants to be receiving $3,200 at the end of each year for the next 12 years.

5 0

3 years ago

The debt has an interest rate of 8.50% (short term) and 10.50% (long term). The expected rate of return on the company's shares

viva [34]

Answer:

Re = 16.02%

Explanation:

current stock price 36 x 7,660,000 = 275,760,000

cost of equity = 17.5%

current short term debt = 141,600,000

cost of short term debt = 8.5%

current long term debt = 210,600,000

cost of long term debt = 10.5%

total financing = 627,960,000

equity = 275,760,000 / 627,960,000 = 0.4391
short term debt = 141,600,000 / 627,960,000 = 0.2255
long term debt = 210,600,000 / 627,960,000 = 0.3354

WACC = (0.4391 x 0.175) + (0.2255 x 0.085 x 0.75) + (0.3354 x 0.105 x 0.75) = 0.0768 + 0.0144 + 0.0264 = 0.1176 or 11.76%

under the new structure:

total financing = 627,960,000

equity = 325,760,000 / 627,960,000 = 0.5188
short term debt = 141,600,000 / 627,960,000 = 0.2255
long term debt = 160,600,000 / 627,960,000 = 0.2557

assuming WACC remains unchanged:

0.1176 = (0.5188 x Re) + (0.2255 x 0.085 x 0.75) + (0.2557 x 0.105 x 0.75) = (0.5188 x Re) + 0.0144 + 0.0201 = (0.5188 x Re) + 0.0345

0.5188 x Re = 0.1176 - 0.0345 = 0.0831

Re = 0.0831 / 0.5188 = 0.1602 or 16.02%

4 0

2 years ago

William pays $500 premium every six months for automobile insurance with collision coverage. His deductible is $750. William cau

stich3 [128]

<span>A collision coverage type of insurance only the covers the cost that is incurred due to damage to your car. It does not include the cost for the other car. Therefore you will have to pay the total of $1,100</span>

6 0

3 years ago

Read 2 more answers

The management of Brinkley Corporation is interested in using simulation to estimate the profit per unit for a new product. The

Furkat [3]

The calculated profit per unit for base-case, worst-case is, and best-case for the management of Brinkley corporation is:

$7
$3 per unit
$3 per unit

<h3>The Profit per unit for base-case:</h3>

45 - 1 1- 24 - 3 = $7

<h3>Profit per unit for worst case:</h3>

45 - 12 - 25 - 3 = $3 per unit

<h3>Profit per unit for best case:</h3>

45 - 10 - 20 - 3 = 12$ per unit

b. The mean profit per unit is given as $7.05

c. The reason the simulation approach is preferable is due to the fact that it can help to determine the probability of profit as a particular amount, unlike the what-if scenario analysis.

It can also create different scenarios for possible resources.

d. The probability of the fact that the profit per unit woul be less than 5 is 9%

Read more on risk analysis here: brainly.com/question/6955504

5 0

2 years ago

Suppose that out of the original 100 increase in government spending, 33 will be recycled back into purchases of domestically pr

serious [3.7K]

Answer:

Multiplier effect in the 4th round = 3.58

Explanation:

A change in aggregate demand can create a much greater impact in the equilibrium national income. This is known as the multiplier effect. This occurs when injections of new demand for goods and services into the circular flow of income creates further rounds of spending. For example, if the government spending was on building new affordable houses then the need for housing materials will create demand for wood, cement and other housing supplies. Thus, these businesses will see a rise in sales. Whilst they benefit through profits, their employees would benefit from wages and salaries. As their income rises, they will spend it in the economy, and so will the businesses from their profits. This additional rounds of spending is the multiplier effect.

If a 100 increase creates 33 for the second round, it is 33% (33/100 x 100) i.e. 100 x 33% = 33

This is proven since 33 x 33% = 10.89 in the third round.

Hence, the multiplier effect in the forth round = 10.89 x 33% = 3.58

7 0

3 years ago