Answer:
$11,895,000
Explanation:
Expected annual earnings before tax = $21,000,000
Debt issue = $30,000,000
Interest rate = 9%
Annual Interest expenses = $30,000,000 × 9%
= $2,700,000
EBT = EBIT - Interest expenses
= $21,000,000 - $2,700,000
= $18,300,000
Net income = $18,300,000 × (1 - 35%)
= $11,895,000
Cash flows available to equity holders after recapitalization will be $11,895,000.
Answer:
The correct answer is flex-plans.
Explanation:
These plans allow employees to choose the benefits they prefer or want, instead of being selected by the organization's administration. In this way the employee adapts the benefits package to his needs. For example, an employee in the manufacturing area who has great concern for his well-being or health, might prefer the benefit of additional life insurance.
In short there are many alternative benefits for which they can opt.
The precise advantages of these plans and consequently the reasons why they are becoming increasingly popular are:
1. They allow employees to make relevant decisions about their individual finances and balance requirements with benefit plans.
2. Plans help organizations control costs, especially health. This is because managers can define the maximum amount they will use in each benefit. In other words, flexible payment plans often produce savings for organizations.
3. These plans become instruments to control and keep employees.
For employees, flexibility can be attractive, since in this way they can design their benefits and coverage levels based on their own requirements, therefore, in this sense, benefit plans become an advantage for them.
Answer:
D. Net income of $150,000
Explanation:
$705,000 + X - $30,000 = $825,000
X = $150,000
Answer:
Assets will be overstated and Net Income understated
Explanation:
The effect on the balance sheet and income statement
<u>Balance Sheet :</u>
Inventory will be overstated
Inventory belongs to the Current Asset group
Meaning Assets will be overstated
<u>Income Statement :</u>
Inventory will be overstated
This reduces cost of sales with an amount greater
Meaning Profits will be overstated
Conclusion
The effect on the balance sheet and income statement would be : Assets will be overstated and Net Income understated.
