Answer:
I will choose Project B
Payback period of Project A is 4.2 years
Explanation:
IRR shows the percentage rate at which the net present value of the cash flows are zero. The more IRR rate of the project the more beneficial it is.
IRR
Project A = 31%
Project B = 38%
In this Question the IRR of Project B is higher so, it will be more beneficial and I will select it based on IRR ignoring all other factors.
Payback period of Project A is 4.2 years means 4 years, 2 months and 12 days.
Answer:
c. Common Stock $50,000 and Paid-in Capital in Excess of Par Value $20,000.
Explanation:
The journal entry for issuance of the common stock for cash is shown below:
Cash A/c Dr $70,000
To Common stock $50,000 (5,000 shares × $10)
To Additional paid in capital A/c - Common stock A/c $20,000
(Being the common stock is issued for cash)
While recording this entry it increased the assets so the cash account is debited while at the same time it also increased the common stock for $50,000 and the additional paid in capital in excess of par value i.e $20,000 so both these account are credited
Answer:
involve an immediate cash outlay in order to obtain a future return
require a great deal of analysis prior to acceptance
Explanation:
A capital budgeting decision refers to an investment and the financial commitement. If we considered a project so here the business is making the financial commitment and at the same time it invest in the longer period that have an influence on the future projects
So it is an instant cash outflow for gaining a future return and also have a great deal before accepting it
Answer:
$91 favorable
Explanation:
Variable overhead rate variance = (Standard variable overhead rate - Actual variable overhead rate) * Actual hour worked
Therefore, we have:
Variable overhead rate variance = ($8.00 - $7.90) * 910 = $91 favorable
Note: the variable overhead rate variance is said to be favorable becasue standard variable overhead rate is geater than the actual variable overhead rate.
