Answer:
Trading on equity defines the increase in profit earned by the equity shareholders due to presense to financial charges.
When a company is higher the rate of interest on borrowed funds.so company should option for trading on equity.
Explanation:
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Answer:
Net cash flow from operating activities
$1,599,000
Explanation:
Pharoah Company
Cash flow from operating activities :
Net income $1,300,000
Net Cash flow from operating activities:
Add depreciation $208,000
Add accounts receivable decreased $455,000
Less accounts payable decreased ($364,000)
Net cash flow from operating activities $1,599,000
Answer: 16%
Explanation:
Interest rate on long term treasury securities is calculated below using following formula:
Interest rate = Real risk-free rate + inflation premium + default risk premium + liquidity premium + maturity risk premium
= 3% + 8% + 2% + 2% + 1%
= 16%
Interest rate on long term treasury securities is 16%.
Answer:
a) $1,000
Explanation:
Early Settlement Discount
This form of quotation is common with suppliers offering their customers deferred payment arrangement in a sale contract. Usually, under this arrangement customers are allowed to purchase goods on credit and settle their acccount at a specified later date.
However, to encourage customers to pay up their outstanding earlier than expected, suppliers do offer early settlement discount as incentives to induce prompt payment.
A quotation of 2/10, n/30
This implies that the customer is a given a 30-day period from the date of purchase within which he is expected to settle his account. However, if he does so within the next 10 days of purchase he will be given a 2% discount.
<em>Applying this to the question, the purchase date is August 1, the the latest date for which account is settle to qualify for early settlement discount will be 11 days i.e (1+10) .</em>
Since the payment will be made on August 12, no cash discount will received. Therefore, a payment of gross amount of $1,000 would be credited to the cash account.
Answer: $155,520
Explanation:
Pension Expense = Service Cost - Expected return on plan assets + Prior service cost amortization + Interest cost
Interest Cost
= Interest rate * Projected benefit obligation
= 0.09 * 728,000
= $65,520
Pension Expense = 110,000 - 30,000 + 10,000 + 65,520
= $155,520
