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Nitella [24]
2 years ago
11

Problem 14-04 Stock Repurchase A firm has 5 million shares outstanding with a market price of $15 per share. The firm has $15 mi

llion in extra cash (short-term investments) that it plans to use in a stock repurchase; the firm has no other financial investments or any debt. What is the firm's value of operations after the repurchase
Business
1 answer:
Charra [1.4K]2 years ago
5 0

Answer:

$60 million

Explanation:

The computation of the value of operations after the repurchase is shown below:-

Total corporate value = Value of operation + marketable securities

(5 × $15 million) = Value of operation + $15  million

$75 million = Value of operation + $15  million

Value of operation = $75 million - $15  million

= $60 million

We simply applied the above formula so that the firm's value of operations after the repurchase could come

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Cost Behavior Prepare income statement in two formats Farnsworth Drycleaners has capacity to clean up to 7,500 garments per mont
Lemur [1.5K]

Answer:

(1)

Fees revenues 42,600

Total expenses 1.92 x 4260  = 8179.2

<em>Net income 34,420.8</em>

<em>(2)</em>

Fees revenues 42,600

Variable cost  2,982

Contribution Margin 39,618

Fixed Cost 14,400

Net Income 25,218

Explanation:

(1)

We multiply by the garment cleaned

10 x 4,260 = 42,600

0.7 x 4,260 = 2982

and distribute the fixed cost among the normal capacity

14,400 / 7,500 = 1.92 fixed cost per garment cleaned

.7 + 1.92 = 2.62 cost per garment

(2)

We do not include the fixed cost in the unit cost, we subtact them completely as an expense.

8 0
3 years ago
You are the newly appointed sales manager of the Rock Computer Tablets Company and have been charged with the task of increasing
OverLord2011 [107]

Answer:

The correct answer is:

increase prices (B)      

Explanation:

Price elasticity of demand (PED) is the measure of how the quantity of goods demanded change, as the selling of the good change. Mathematically, it is represented as the percentage change in the quantity of good demanded divided by the percentage change in the price of the good.

Price elasticity of demand can be; greater than one, less than one, equal to one, zero, or infinite.

If price elasticity of demand is less than one, it is said to be elastic, meaning that the demand for a product is sensitive to the change in price, and an increase in price will cause a reduction in revenue by the seller, while a reduction in price results to an increase in the quantity demanded, hence increasing revenue. For example, an increase in the price of chicken, may cause consumers to go for turkey instead, leading to a reduction in the demand for chicken.

A price elasticity of demand of less than one is termed inelastic, and an increase in the price of the product does not cause a significant drop in the quantity of the goods demanded, and this is the case seen in our example, so increasing the price of the good will increase the revenue.

When PED is equal to one, it is said to be unit elastic, and it means that the quantity demanded varies proportionately with change in price. For example if the price of a product increases by 50%, and 50% of its regular buyers switch to another brand.

A price elasticity of demand of zero is said to be perfectly inelastic, and it means that the demand for a good does not change at all, irrespective of the change in price.

Finally, a PED equal to infinity (∞) is said to be perfectly elastic, and consumers will only buy the product at only one price and nothing more.

5 0
3 years ago
"what is south korea's opportunity cost of producing one digital camera"
dalvyx [7]
"what is south korea's opportunity cost of producing one digital camera?"

A: 20lbs of wheat.
7 0
3 years ago
Fiona and her fellow Green Committee members are working on a proposal for improving recycling at school. What might they do to
Rus_ich [418]
They could probably make it into a game, "Whoever recycles the most gets a trip/prize??" Honestly, the only way to get kids to do things is rewards.. its the difficult truth.
7 0
3 years ago
Read 2 more answers
Internal service funds are intended to operate on taxes or other financing sources authorized by the legally enacted revenue bud
EastWind [94]

Answer:

False

Explanation:

In internal service fund are funds used in governmental accounting to track goods or services shifted between departments on a cost reimbursement basis are not operated on taxes or on financial sources. An example of an internal service fund the maintenance of department that provides equipment maintenance services to other departments and

Governmental funds on the other hand are those funds through which most governmental functions are accounted for. The acquisition, use, and balances of the government's expendable financial resources and the related current liabilities-except those accounted for in proprietary funds-are accounted for through governmental funds (general, special revenue, capital projects, debt service, and permanent funds).

3 0
3 years ago
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