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miv72 [106K]
3 years ago
8

Book Values versus Market Values In preparing a balance sheet, why do you think standard accounting practice focuses on historic

al cost rather than market value
Business
1 answer:
Pachacha [2.7K]3 years ago
6 0

Answer:

Historical costs is objectively and precisely measured, whereas market values can be difficult to estimate, and different analysts would come up with different

values.

Explanation:

In preparing a balance sheet it is customary for a company to value the assets and other items based on historical costs rather than market values.

For example if an asset is purchased at $20,000, this value will reflect in the balance sheet in subsequent years. Or future calculation will be based on this.

Let's say yearly depreciation is $1,000 then after on year the value will be $19,000, after two years $18,000 and so on.

This is more object than market value which varies at any one time.

Market value for an item will vary depending on location and the market.

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GHJ Inc. is investing in a major capital budgeting project that will require the expenditure of​ $16 million. The money will be
lorasvet [3.4K]

Answer:

13.75%

Explanation:

Data provided in the question:

Total expenditure = $16 million

Debt = $2 million

Preferred​ stock = $4 million

Common stock = $10 million

After-tax cost of debt =​ 7% = 0.07

Cost of preferred stock =​ 9% = 0.09

Cost of retained earnings =​ 14%

Cost of new common stock =​ 17%

Now,

Weight of debt = $2 million ÷ $16 million

= 0.125

Weight Cost of preferred stock = $4 million ÷ $16 million

= 0.25

Weight Cost of new common stock = $10 million ÷ $16 million

= 0.625

The weighted average cost of capital for this​ project

= ( 0.07 × 0.125 ) + ( 0.09 × 0.25 ) + ( 0.17 × 0.625)

= 0.00875 + 0.0225 + 0.10625

= 0.1375

or

= 0.1375 × 100%

= 13.75%

5 0
4 years ago
The Alpine House, Inc., is a large retailer of snow skis. The company assembled the information shown below for the quarter ende
White raven [17]

Answer:idk I’m sorry bud

Explanation:

6 0
3 years ago
Most people are very willing to help out others with job leads and advice, because at one point, someone helped them
Mariana [72]

Answer:

Yes I agree with you!

Explanation:

7 0
3 years ago
The process of posting is the transfer of debits and credits from the a.ledger to the journal. b.journal to the ledger. c.T acco
antiseptic1488 [7]

Answer:

The correct answer is letter "B": journal to the ledger.

Explanation:

The activity in which accountants transfer information from the journals to the general ledger is called posting. By posting, only the balances are transferred to the general ledger, not individual transactions. There are no set intervals in which postings should be made. It depends on how often the activities of the company requests it.

6 0
3 years ago
Carlos has applied for a project manager position, but he is sight impaired to a serious degree from a childhood illness. He mus
soldier1979 [14.2K]

a. Yes, but only if the service dog is an undue hardship for AMPCO

b. Yes, the ADA applies only once someone is an employee (not in the hiring stage)

c. Yes, because Carlos cannot perform the essential functions of his position

d. No, the ADA requires AMPCO to allow the service dog regardless of the particular circumstances

e. No, because that would be a violation of Title VII

No, the ADA requires AMPCO to allow the service dog regardless of the particular circumstances

Answer: Option D.

<u>Explanation:</u>

According to the ADA act which stands for American disability act, it is illegal to refuse a well qualified person for a particular post just because on the basis of his disability.

The ADA act the american disability act prohibits any public or any private company or businesses from discriminating against people just because of their disability. Employees do not require any kind of documentation for their service dog.

7 0
4 years ago
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