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diamong [38]
3 years ago
15

16. Which of the following statements about capital budgeting is correct? A. The timing of cash flows is irrelevant in capital b

udgeting B. A company should use the same discount rate for all of its projects regardless of their risk C. Interest expense on an outstanding loan is a relevant cost for capital budgeting D. Proceeds forgone because a company used a building in a new project, rather than selling the building, is a relevant cost for capital budgeting
Business
1 answer:
Elden [556K]3 years ago
5 0
I think C is the answer, however I am unsure.
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Dollar Co. sold merchandise to Pound Co. on account, $25,500, terms 2/15, net 45. The Pound Co. paid the invoice within the disc
Scorpion4ik [409]

Answer:

c. $24,990

Explanation:

The Term 2/15 net 45 mean 2% cash discount is offered if the payment is made within 15 days otherwise the credit period is 45 days. There is no after 15 days of sale.

Amount of Sale = $25,500

Discount Rate = 2%

The Pound Co. paid the invoice within the discount period. They are eligible to receive the 2% discount on sale value.

Discount Amount = $25,500 x 2% = $510

Net Sales amount in this transaction = $25,500 - $510

Net Sales amount in this transaction = $24,990

8 0
3 years ago
Wilma, Betty, and Fred are partners who share income and losses in a 5:3:2 ratio. Wilma decides to retire from the partnership w
Hoochie [10]

Answer:

<u>debited</u>

Explanation:

Partnership refers to a mutual agreement wherein two or more individuals agree carry out a business and to share profits and losses in a specified ratio or as per the clauses of the partnership deed.

When partners retire, the balances standing to the credit of their capital accounts needs to be settled or paid off.

As per the given information, Wilma is paid $45000 in cash. The journal entry in this case would be:

Wilma's Capital A/C                                    Dr.  $45000

    To Cash A/C                                                                $45000

For the remaining balance, Wilma shall be paid in cash as follows,

Wilma's Capital A/C                                    Dr. $5000

     To Cash A/c                                                            $5000

(Being settlement of a retiring partner's capital account being recorded)

3 0
2 years ago
Which of the following most accurately describes one of the powers of stock holdiers
Lunna [17]

Answer:

The powers of stockholders are to be given discounts on the company's products.

5 0
3 years ago
Note whether the following phenomena would be consistent with or a violation of the efficient market hypothesis.
denis-greek [22]

Answer:

D) Stock prices of companies that announce increased earning in January tend to outperform the market in February.    

Explanation:

The above is consistent with the Efficient Market Hypothesis. All others are a direct contravention.

<em>The efficient market hypothesis (EMH), also known as the efficient market theory, is a hypothesis that states that the prices of shares contain all information and that consistent alpha generation is impossible.</em>

According to the hypothesis, stocks always trade at their fair value on exchanges, making it impossible for investors to purchase undervalued stocks or sell stocks for inflated prices.

This means that it should not be possible to outperform the overall market through professional stock selection or market timing.

The only way according to EMH that an investor can obtain better returns is by purchasing riskier investments.  

By implication, this also means that it is not possible to "beat the market" consistently on a risk-adjusted basis since market prices should only react to new information.  

You would note that in the option D, earning (which is a key driver for demand of stock) is announced in one month. The natural reaction would be for the demand for that stock to surge in the next month.

4 0
3 years ago
Which of the following statements is false regarding audit reporting?
Mnenie [13.5K]

Answer:

None      

Explanation:

In simple words, audit reporting or auditing refers to the process under which an independent third part, licensed by the regulatory body, examines the financial statements of an organisation to check if such statements depicts fair information and are made as per the regulatory standards.

The auditor if satisfied gives the positive assurance and if not then he or she can ask for further information or can directly report the statements to the regulatory bodies.

8 0
3 years ago
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