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4 years ago

The primary weakness of EBITminusEPS analysis is that

Business

1 answer:

STatiana [176]4 years ago

3 0

Answer:

D. it ignores the implicit cost of debt financing.

Explanation:

EBIT-EPS analysis is a technique used to determine the optimal capital structure in which the value of earnings per share (EPS) has the highest amount for a given amount of earnings before interest and taxes (EBIT).

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You should complete job applications in pencil so you can erase your mistakes.

Anna11 [10]

Answer: Yes

Explanation:

8 0

3 years ago

Read 2 more answers

Ed runs an auto repair business out of the garage attached to his personal residence. How should he account for each of the foll

soldi70 [24.7K]

Answer:

a. Cash received from repair services, $28,000. Repair business

b. Interest paid on his home mortgage, $7,300.Personal expenses

c. Power jack hoist purchased at a cost of $12,000. Repair business

d. Electricity bills, $3,600. (Ed does not have separate electricity service to the garage.)Personal expenses

e. Checks received from customers that were returned by his bank, $1,600. Repair business

The bank charged Ed’s account $35 for processing the bad checks.Repair business

f. Telephone bill for phone in the garage, $420. (Ed has a separately listed phone in his house.)Repair business

g. Advertising in the local newspaper, $800.Repair business

h.Interest paid on home furniture loan, $600.Personal expenses

Explanation:

Under the entity concept, Ed must segregate the income and expenses associated with his auto repair business from those that are personal. The importance of this segregation is that all trade or business expenses are deductible for adjusted gross income, while most personal expenditures are not deductible.

7 0

3 years ago

The position that is in charge of keeping track of how caucus members are planning to vote and communicating leadership position

Andru [333]

In the given statement above, the one responsible of these duties and the roles that is played above are the Majority and the Minority Whips in the Senate as they are responsible of having to keep tract vote on the upcoming bills and communicating to the leaders in regards with legislative votes.

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3 years ago

Universal Foods issued 10% bonds, dated January 1, with a face amount of $260 million on January 1, 2018. The bonds mature on De

kondaur [170]

Answer:

The bonds were issued at $220,879,628.13

This is lower than the face value to compensate for the lower coupon payment.

cash 220,879,628.13 debit

discount on BP 39,120,371.87 debit

bonds payable 260,000,000 credit

--to record the issuance of the bonds--

Interest expense 13,252,777.69 debit

Discoun on BP 252,777.69 credit

cash 13,000,000 credit

--to record the first interest payment--

Interest expense 13,267,944.35 debit

Discount on BP 267,944.35 credit

Cash 13,000,000 credit

--to record second interest payment--

Interest expense 13,539,156.67 debit

Discount on BP 539,156.67 credit

cash 13,000,000.00 credit

--to record Dec 31st, 2025 payment--

Explanation:

To determinate the price we will solve for the present value of the coupon payment and maturity at the market rate of %12

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

Coupon payment:

260,000,000 x 10% x 1/2 =13,000,000.000

time 20 years x 2 payment per year 40

yield to maturity 12% / 2 = 6%

$13000000 \times \frac{1-(1+0.06)^{-40} }{0.06} = PV\\$

PV $195,601,859.3298

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity 260,000,000.00

time 40.00

rate 0.06

$\frac{260000000}{(1 + 0.06)^{40} } = PV$

PV 25,277,768.80

PV c $195,601,859.3298

PV m $25,277,768.8042

Total $220,879,628.1340

For the journal entries, we will multiply this current market price of the bonds by the market rate (YTM) the difference between this and the actual cash obligation generate by the bond is the amortization of the discount.

first interest payment

$220,879,628.13 x 6% = 13,252,777.69

less actual cash outlay: 13,000,000

amortization 252,777.69

second interest payment

($220,879,628.13- $252,777.69) x 6% = 13,267,944.35

less actual cash outlay: 13,000,000.00

amortization 267,944.35

December 31st, 2025:

This will be payment 14th

after building the schedule until that date we got:

8 0

3 years ago

Private placements can be advantageous, compared to public issue, because: I. Private placements are cheaper to market than publ

Maurinko [17]

Answer:

Private placements

Explanation:

private placements are cheaper to market than public issues

8 0

3 years ago