Answer:
a. re > rs > WACC > rd.
Explanation:
Re represents cost of equity
Rs represents cost of retained earnings
WACC represents Weighted average cost of capital
Rd represents cost of debt
Basically the cost of equity is highest as there is no assured return on such equity investment.
Cost of retained earnings is less than cost of equity because amount invested is already in hands of company, although belonging to equity holders, thus is higher than total weighted cost of capital.
WACC is the cost after providing weights to every source of capital it is lower then equity, higher than debt because of average.
Cost of debt is lowest because of tax benefit from it.
Answer:
Balance sheet:
Accounts receivable
Cash
Common stock
Land
Supplies
Wages payable
Income statement:
Fees earned
Supplies expense
Utilities expense
Wages expense
Explanation:
Accounts receivable, cash, land, and supplies are assets while wages payable is a liability while common stock is owner's equity, all of which are balance sheet items.
Besides, fees earned are a revenue item while utilities , suplplies and wages expenses would appear in the income statement.
Answer:
Holding period return = 4.94%
Explanation:
Given that :
Allan purchased 800 shares of stock on margin for $31
And He sold it at the rate of $33.50 after five months.
Initial Margin requirement = 65%
Maintenance Margin = 30%
Interest Rate on Margin loan = 7.5%
The Holding period return can therefore be calculated by the formula:
Holding period return = (sale price - purchase price - interest paid )/Purchase price
where ;
31 × 800 = 24800
Interest for five month = 5/12
Holding period return = (33.50-31)×800 - (7.5% ×24800× 5/12) / 24800
Holding period return = (2000-775)/24800
Holding period return = 0.0494
Holding period return = 4.94%
Answer:
Option D Allowance for noncollectable Accounts.
Explanation:
The bad debt recovery recording is a two step process.
Step 1 Reverse the entry of bad debt with the amount received
Dr Trade Receivable $40,000
Cr Bad debts $40,000
Step 2 Now record the receipt of amount as a reduction in trade receivable and increase in cash asset.
Dr Cash $40,000
Cr Trade Receivables $40,000
The only account unconsidered here was Allowance for the noncollectable account.
Answer:
The EAR you earn from the match is 100%.
Explanation:
Since a full 5 percent match will be received if 5 percent of your salary is invested, this implies that 100% will be earned by you from the match up to 5%.
For example, if 5 percent of your salary that you put in is $200, the East Coast Yachts will match the $200. This indicates that effective annual return (EAR) earned by you from the match is 100%.
Therefore, the EAR you earn from the match is 100%.
