A company that is continually using up its cash is considered to have a high

Which method of evaluating capital investment proposals uses the concept of present value to compute a rate of return?

77julia77 [94]

The method of evaluating capital investment proposals that uses the concept of present value to compute a rate of return would be: internal rate of return
the internal rate of return method of evaluation analyze the present value of all cash flows from all investments.
This method is most commonly used to determine whether a potential investment will be profitable or not.

6 0

3 years ago

On January 2, 2020, All Good Company purchased 6,000 shares of the stock of Big Bad Company, and DID obtain significant influenc

Yuri [45]

Answer:

$155,000

Explanation:

Calculation to determine the book value of the investment that should be reported at year end by All Good Company

Initial investment (6,000* $10.00 per share) $60,000

Add: Net income ($450,000*30%) $135,000

Less: Dividend ($40,000)

Ending balance of investment $155,000

($60,000+$135,000-$40,000)

Therefore the book value of the investment that should be reported at year end by All Good Company is $155,000

8 0

2 years ago

On a total product curve with labor on the horizontal axis, the inflection point represents the quantity of labor where

emmainna [20.7K]

The appropriate response is the marginal product of labor is at its most elevated. In financial aspects, the marginal product of labor (MPL) is the adjustment in yield that outcomes from utilizing an additional unit of work. The minimal result of an element of generation is by and large characterized as the adjustment in yield-related with an adjustment in that component, holding different contributions to creation steady.

3 0

3 years ago

Use the following information to prepare a multistep income statement and a classified balance sheet for Eller Equipment Co. for

Kryger [21]

Answer:

Eller Equipment Co.

Income statement

Particular Amount($) Amount ($)

Sales revenue 940,000

Less: Cost of good sold (595,000)

Gross margin 345,000

Operating expenses

Salaries expenses 122,000

Operating expenses 65,000

Warranty expenses 9,200

Un-collectible account expenses 45,000

Depreciation expenses 3,000

Total operating expenses (244,200)

Operating income 100,800

Non-operating expenses

Interest revenue 6,200

Interest expenses (36,000)

Gain on sale of equipment 19,000

Total non-operating items (10,800)

Net Income $90,000

Balance Sheet

Assets Amount$

Current Assets

Cash 41,000

Accounts receivable 108,000

Less: Allowance for doubtful (19,000) 89,000

accounts

Merchandise inventory 101,000

Interest receivable 3600

Prepaid rent 38,000

Supplies 6,500

Notes receivable 32,500

Total current assets 311,600

Property Plant and Equipment

Equipment 243,000

Less: Accumulated depreciation (66,000) 177,000

Land 95,000

Total property plant and equipment 272,000

Total Assets 583,600

Liabilities and Stockholder Equity

Current liabilities

Account payable 55,000

Unearned revenue 47,000

Warranties payable 6,500

Interest payable 6,000

Salaries payable 68,000

Total current liabilities 182,500

Long-term liabilities

Notes payable 160,000

Total long-term liabilities 160,000

Stockholders equity

Common stock 110,000

Retained earning 131,100

Total stockholders equity 241,100

Total liabilities and stockholders equity $583,600

Workings

Retained earning = Beginning retained earning + Net income - Dividend

= 61,100 + 90,000 - 20,000

= 131,100

5 0

3 years ago

Micron owns 35% of Martok. Martok pays a total of $47,000 in cash dividends for the period. Micron's entry to record the dividen

creativ13 [48]

Answer:

1. Option (A) is correct.

2. Option (C) is correct.

Explanation:

1. Micron's entry to record the dividend transaction is as follows:

Cash A/c Dr. $16,450

To Long - Term Investments $16,450

(In this case, since the holding interest is more than 20%, Equity method is used)

workings:

Dividend = $47,000 × 35%

= $16,450

2. The entry to record the receipt of dividend would be:

Cash A/c Dr. $12,000

To Dividend Revenue A/c $12,000

(To record the receipt of dividend)

Workings:

Dividend = 3,000 shares × $4 per share

= $12,000

4 0

3 years ago