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S_A_V [24]
2 years ago
5

FARO Technologies, whose products include portable 3D measurement equipment, recently had 36 million shares outstanding trading

at $25 a share. Suppose the company announces its intention to raise $390 million by selling new shares. b. How large a loss in dollar terms will existing FARO shareholders experience on the announcement date, based on studies that show losses are 30% of the size of the new issue
Business
1 answer:
erma4kov [3.2K]2 years ago
6 0

Answer:

A. $117 million

B.13%

C. $21.75

Explanation:

B. Calculation to determine How large a loss in dollar terms will existing FARO shareholders experience on the announcement date

Expected Loss= 390*30%

Expected Loss= $117 millions

Therefore How large a loss in dollar terms will existing FARO shareholders experience on the announcement date will be $117 millions

B. Calculation to determine What percentage of the value of FARO’s existing equity prior to the announcement is this expected gain or loss

First step is to calculate the Existing Shares Value

Existing Shares Value =36*$25

Existing Shares Value= $900 millions

Now let calculate the Expected Loss %

Expected Loss % = $ 117/$ 900

Expected Loss % = 13%

Therefore the percentage of the value of FARO’s existing equity prior to the announcement is this expected gain or loss will be 13%

C. Calculation to determine At what price should FARO expect its existing shares to sell immediately after the announcement

Price Per Share: $ 25*(1 - 0.13)

Price Per Share$25*0.87

Price Per Share: $21.75

Therefore what price should FARO expect its existing shares to sell immediately after the announcement is $21.75

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Jacoby Company received an offer from an exporter for 25,400 units of product at $18 per unit. The acceptance of the offer will
OlgaM077 [116]

Answer:

Differential income from the special order= $127,000

Explanation:

A company should accept a special order where the order generates additional contribution. i.e where the special order sales exceeds all relevant cost.

The relevant cost for decision to accept the special order are  

I Incremental Revenue from the special order  

2. incremental variable cost

Contribution per unit = 18-13=5

Total contribution from special order = contribution per unit × units

                                                      = 5× 25,400=$127,000

Differential income from the special order= $127,000

Note that whether or not the special order is accepted the fixed manufacturing and fixed operating expenses of would be incurred either way. Therefore , they are not relevant for the decision

6 0
2 years ago
Equipment was purchased for $161500. Freight charges amounted to $5500 and there was a cost of $10000 for building a foundation
NISA [10]

Answer:

$27,800

Explanation:

Straight line depreciation expense = (Cost of asset - Salvage value) / useful life

Cost of asset = $161500 + $5500 +  10000 =$177,000

$177,000 - $38000 = $139,000 / 5 =$27,800

depreciation expense each year would be $27,800

4 0
2 years ago
4. Study Question #4 Ch 7. Why are developing nations concerned with commodity price stabilization? Check all that apply. Improv
iragen [17]

Answer:

Developing nations are concerned with commodity price stabilization because of the following reasons

  1. There are high price elasticity of supply and demand for many commodities
  2. Developing economies are often highly dependent on the export of just one or a few commodities.

Explanation:

In recent decades there has been growing concern about the sharp fluctuations of primary product prices, the effects of those fluctuations on particular groups of producers and particular countries, and the measures which might be taken to reduce or offset the fluctuations.

Producing countries have been dominated by proposals for stabilizing world prices of commodities, in particular via the establishment of a “Common Fund” within the framework of UNCTAD's Integrated Program for Commodities.

However, developing nations are concerned with commodity price stabilization because of the two reasons provided above which could result in inflation and deflation.

7 0
3 years ago
Accounts Receivable has a balance of $ 4 comma 000$4,000​, and the Allowance for Bad Debts has a credit balance of $ 450$450. Th
Darya [45]

Answer:

What is the net realizable value of Accounts Receivable after a $ 140$140 account receivable is written​ off? is $3550

Explanation:

Account receivable 4000      

Allowance bad debts 450      

       

       

Net realizable =(400-140)-(450-140)

       

                 =3860-310

                          =3550    

5 0
3 years ago
What are the four challenges associated with telecommuting mentioned in the article​
OlgaM077 [116]

Answer:

It decreases the interaction of humans. It also blurs work and personal life. It also create difficulties in demonstrating workload. It enables technology to get in the way.

Explanation:

Generally, the applications of telecommunication and devices are accompanied by both positive and negative effects. It makes communication easy and transfer of information efficient. There are also negative effects of the use of telecommunication as outlined in the answer section above.

8 0
3 years ago
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