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Iteru [2.4K]
3 years ago
7

A state provides a city with a grant of $500,000 for a special "meals for the homeless" program. The city will receive payment f

rom the state within 30 days of incurring eligible expenditures for the program. The city's policy is to consider "available" any amounts collected no more than 60 days into its next fiscal year. When should the city recognize revenues under this grant?
Business
1 answer:
alina1380 [7]3 years ago
8 0

Answer:

When it incurs expenditures under the grant

Explanation:

According to the revenue recognition principle, the revenue is recognized when it is earned plus in this question the matching principle is also applied that refers that when revenue is recognized so at the same time the expenditure should also be recorded i.e on same period the revenue and the expenditure should be matched.

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For homemade: I chose this because I would like to try something new and make different flavors, if it is a success.

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Valley Orchards just paid a dividend of $1.2 per share on its stock. The dividends are expected to grow at a constant rate of 3.
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7 0
3 years ago
A company just paid a $2 dividend per share. The dividend growth rate is expected to be constant at 10% for 2 years, after which
Olin [163]

Answer:

Do =  $2.00

D1= Do(1+g)1 =  $2(1+0.1)1 = $2.20

D2= Do(1+g)2 = $2(1+0.1)2 = $2.42

PHASE 1

V1 = D1/1+ke + D2/(1+ke)2  

V1 = 2.20/(1+0.11) + 2.42/(1+0.11)2  

V1 = $1.9820 + $1.9641

V1 = $3.9461

PHASE 2

V2 = DN(1+g)/ (Ke-g )(1+k e)n                                                                                                                                                                                                                                        V2 = $2.42(1+0.03)/(0.11-0.03)(1+0.11)2      

V2 = $2.4926/$0.0649

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The current stock price is calculated as follows:

Po = V1 + V2

Po = $3.9461 + $38.4068

Po = $42.35

Explanation: This question relates to valuation of shares with 2-phase growth model.  The value of shares in the first phase will be determined by discounting the dividend for the 2 years by cost of equity. The dividends for year 1 and year 2 were obtained by subjecting the current dividend paid (Do) to growth rate.  

Moreso, the value of shares for the second phase was calculated by considering the last dividend paid(D2) and then subject it to the new growth rate. The adjusted dividend was then capitalized at the appropriate discount rate of the company.

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Answer: Production and consumption occur simultaneously

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