Answer:
Net Accounts Receivable will be understated.
Explanation:
Any uncollectible accounts receivable are unpaid debt by customers and constitute a bad debt expense for the company. As a result of not taking into account uncollectible customer accounts, overstating accounts receivable understates a company's bad debt expense.
Answer:
Result : Incremental profit of $2,280
Explanation:
Consider the incremental costs and revenues resulting from the $5,000 increase in the monthly advertising budget.
<u>Analysis of incremental costs and revenue</u>
Sales (140×$ 130) 18,200
Less Variable expenses (140×$ 78) (10,920)
Contribution 7,280
Less Fixed Costs
Advertising (5,000)
Net Operating Income / (Loss) 2,280
Result : Incremental profit of $2,280
<u>By choosing </u><u>high-risk ventures,</u><u> stockholders steal wealth from bondholders. The incentive for underinvestment is one of </u><u>bankruptcy's</u><u> </u><u>indirect costs. </u>
- Underinvestment would typically lead to - The company rejecting profitable proposals that would unquestionably be approved if the company were fully funded by equity.
How does a company's capital structure get impacted by bankruptcy costs?
- The likelihood of bankruptcy may rise as a result of higher capital expenses and increased risk.
- The company's WACC rises over the ideal level when additional debt is added to its capital structure, raising the cost of bankruptcy even more.
Learn more about bankruptcy
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Answer:
a) The warrant are Dilutive
b) Basic EPS $2.62
c) Diluteed EPS = $2.31
Explanation:
a) The warrants are dilute because the cost of exercising the rights is lover than the market price
b) Basic Eps = Total Earning/Share Outstanding = $262,000/100,000 = $2.62
c) Diluted Eps = Earnings/(Shares outstanding+potential shares)
= $262,000/(100,000+13,500) = $2.31
Answer:
The correct answer is negative.
Explanation:
When dependent variable declines because of increase in the independent variable, it means that there is a negative or inverse relationship between the two variables. The variables here are negatively correlated.
Had the two variables changed in the same direction, it would indicate a positive or direct relationship between the two variables.
