Answer:
The statement that correctly describes the effects of the treasury stock purchase by the company is:
C. Stockholders' equity decreases $20,800.
Explanation:
A treasury stock purchase decreases stockholders' equity because a treasury stock represents a contra account to the stockholders' equity. When the value of the treasury stock is increased through a purchase, the treasury stock account increases while the common stockholders' equity decreases by the amount paid for the purchase.
Answer:
d. Project X
Explanation:
For Project X
Year Net cash outflow Net cash inflow Balance
0 -$77,000 -$77,000
1 $28,000 -$49,000
2 $28,000 -$21,000
3 $28,000 $7,000
4 0 $7,000
Payback period = 2 + $21,000 ÷ $28,000
= 2 + 0.75
= 2.75 years
For Project Y
Year Net cash outflow Net cash inflow Balance
0 -$55,000 -$55,000
1 $2,000 -$53,000
2 $25,000 -$28000
3 $25,000 -$3,000
4 $20,000 $17,000
Payback period = 3 +3,000 ÷ 20,000
= 3 + 0.15
= 3.15 years
Project X has a lesser than 3 year payback period. So, the correct option is D
Answer:
Your family takes out a mortgage and buys a new house. - Invesment
When a household purchases a new house, it is considered an investment according to macroeconomic theory.
You use your $200 paycheck to buy stock in AT&T. - Investment.
Stock is a form of capital because it is bought with the expectation of getting a return. Buying stock is a form of investment.
Your roommate earns $100 and deposits it in his account at a bank. - Saving.
Your roommate does not need the $100 to pay for his daily expenses, and instead, saves that money at the bank. It is a form of saving as the name of the transaction implies.
You borrow $1,000 from a bank to buy a car to use in your pizza delivery business. - Investment.
You are borrowing to buy a car because you feel the car will provide you economic benefits in the future. Thus, the car is a capital asset, and a form of investment.
Answer:
Explanation: see attachment for answer and explanation
Tax deficiency:$17,000
<em>Fraud penalty: 75%x$9,500 = $7,125</em>
Total due: $24,125