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3 years ago

What does it mean if your net assets increase

2 answers:

5 0

When a company earns income, it becomes larger because net assets have increased. Even if a portion of the profits is later distributed to shareholders as a dividend, the company has grown in size as a result of its own operations.

jeyben [28]3 years ago

5 0

Answer: When a company earns income

Explanation: the value of a company's assets minus its liabilities. It is calculated ((Total Fixed Assets + Total Current Assets) – (Total Current Liabilities + Total Long Term Liabilities)).

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Which of the following statements is false? Marginal cost will equal average total cost when average total cost is at its lowest

andrew11 [14]

Answer:

Marginal cost will equal average total cost when marginal cost is at its lowest point.

Explanation:

The marginal cost curve always intersects the average total cost curve at its lowest point because the marginal cost of making the next unit of output will always affect the average total cost. As a result, so long as marginal cost is less than average total cost, average total cost will fall.

When marginal cost is below average total cost, average total cost will be falling, and when marginal cost is above average total cost, average total cost will be rising. A further m is most productively efficient at the lowest average total cost, which is also where average total cost (ATC) = marginal cost (MC).

6 0

4 years ago

Read 2 more answers

A firm has $5 million in retained earnings. The market price of the firm's common stock is $55. The firm recently paid a dividen

tresset_1 [31]

Answer:

Cost of external equity financing 16.64%

Explanation:

Cost of external equity financing=Div*(1+g)/P (1-F) + g

F = the percentage flotation cost=4%

Div=Dividend in the current period=$3.7

g=growth=9%

P=Market price of the stock= $55

Cost of external equity financing=3.7*(1+0.09)/(55*(1-0.04))+0.09=0.166383=16.64%

5 0

3 years ago

Read 2 more answers

Bacon Company makes four products in a single facility. These products have the following unit product costs: Products A B C D D

vredina [299]

Answer:

minutes of grinding= 60,468 minutes

Explanation:

Giving the following information:

Grinding minutes per unit:

Product A= 3.80

Product B= 5.30

Product C= 4.30

Product D= 3.40

Monthly demand in units:

Product A= 4,260

Product B= 4,260

Product C= 3,260

Product D= 2,260

A total of 54,900 minutes is available per month on these machines.

minutes of grinding= Total product A + Total product B + Total product C + Total product D

minutes of grinding=4260*3.80 + 4260*5.3 + 3260*4.3 + 2260*3.4= 60,468 minutes

8 0

3 years ago

Find the Net Pay: hours worked--27 1/4, $5.15 an hour, Federal tax--$6.19, Social Security--$10.74, Other--$6.37

Kobotan [32]

Calculate for the total earnings gained from working by multiplying the number of hours worked and the hourly wage.

E = (27.25 hours)($5.15 /hour) = $140.3375

The total taxes and items that need to be paid is,

T = $6.19 + $10.74 + $6.37 = $23.3

Subtracting from the total earnings the latter,

NP = $140.3375 - $23.3 = $117.04

Answer is the third choice, $117.04.

4 0

4 years ago

Wet for the Summer, Inc., manufactures filters for swimming pools. The company is deciding whether to implement a new technology

lubasha [3.4K]

Answer:

$131,283

Explanation:

Upstate Price = Present Value of Cash Flows if Demand is High / Value of Project = $14.3 million / $12.9 million = 1.10853

Downstate Price = Present Value of Cash Flows if Demand is Low / Value of Project = $8 million / $12.9 million = 0.62016

<em>Now, the computation of Probability of Demand being High</em>

Risk Free Rate = (Probability of Rise) * (U-1) + (1 - Probability of Rise) * (d-1)

0.06 = (Probability of Rise) * (1.10853 - 1) + (1 - Probability of Rise) * (0.62016 - 1)

0.06 = (Probability of Rise) * 0.10853 + (1 - Probability of Rise)*(-0.37984)

0.06 = 0.10853 Probability of Rise + 0.37984 Probability of Rise - 0.37984

0.06 + 0.37984 = 0.10853 Probability of Rise + 0.37984 Probability of Rise

0.43984 = 0.10853 + 0.37984 Probability of Rise

0.43984 = 0.48837 Probability of Rise

Probability of Rise = 0.43984 / 0.48837

Probability of Rise = 0.9006286217417122

Probability of Rise = 0.9006

Probability of Fall = 1 - 0.9006

Probability of Fall = 0.0994

Value of the option to abandon = Probability of Fall * (Selling Price - Cash Flow if Demand is Low)/(1 + Risk Free rate)

Value of the option to abandon = 0.0994 * ($9,400,000-$8,000,000) / (1 + 0.06)

Value of the option to abandon = 0.0994 * $1,400,000/1.06

Value of the option to abandon = $139,160 / 1.06

Value of the option to abandon = $131283.0188679245

Value of the option to abandon = $131,283

4 0

3 years ago