Answer:
Kd = 7%
Ke = D1 + g
Po(1 - FC)
Ke = $2 + 0.09
$40(1 - 0.15)
Ke = $2 + 0.09
$34
Ke = 0.1488 = 14.88%
WACC = Ke(E/V) + Kd(D/V)(1-T)
WACC = 14.88(60/100) + 7(40/100)(1 - 0.40)
WACC = 8.928 + 1.68
WACC = 10.6%
Explanation:
In this case before-tax cost of debt is given. Cost of equity is expected dividend divided by current market price after flotation cost plus growth rate. WACC is calculated as cost of equity multiplied by the proportion of equity in the capital structure plus after-tax cost of debt multiplied by proportion of debt in the capital structure.
Answer:
If volume reaches 500 units, net income will be: $715
Explanation:
When volume of sales was at 400 units:
Selling price per unit = Sales Revenue/400 = $1,600/400 = $4
Variable Cost per unit = Variable Cost/400 = $700/400 = $1.75
If volume reaches 500 units:
Total Sales Revenue = $4 x 500 = $2,000
Variable Cost = $1.75 x 500 = $875
Fixed Cost will not change = $410
Net income = Total Sales Revenue - Variable Cost - Fixed Cost = $2,000 - $875 - $410 = $715
Answer:
Total work in process = $12,900
Explanation:
Provided information,
Cost incurred during the month on this order
Direct Materials = $2,100
Direct Labor = $3,600
Provided overheads are 200% of the direct labor cost = $3,600 
200% = $7,200
Thus month end balance of work in process = $2,100 + $3,600 + $7,200
Total work in process = $12,900
Note: additional information regarding expenses to be incurred is to be ignored, and the above value is the value of work in process.
Total work in process = $12,900
Explanation:
The journal entries are shown below:
On October 12
Purchases ($47,500 x 0.99) $47,025
To Account Payable $47,025
(Being the purchase of merchandise is recorded)
On October 12
Freight In $670
To Cash $670
(Being the freight charges is recorded)
On October 31
Account Payable $47,025
To Interest Expense $475
To Cash $47,500
(Being the payment for purchases is recorded)
Account Receivable $31,400
to Sales Revenue $31,400
(To record the sales on account)
On October 31
Cost of Goods Sold $20,550
Ending Inventory $59,145
To Beginning Inventory $32,000
To Purchases $47,025
To Freight In $670
(Being recording the adjusting entry is made)
Jenna puts $100 in a savings account in 2016 and sees a 3% increase in her account without depositing additional money is an example of earning interest.
The interest rate that investment is earning for you is known as earned interest. For instance, if you invest $1,000 in an investment that yields 10% annually, your interest earnings for that year will be 10%, or $100.
A sum that a business receives from interest-bearing bank accounts or other investments. In the accounting period in which the interest is earned, the sum should be recorded as Interest Revenues, Interest Income, or Investment Revenues.
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