Answer: Option A
Explanation: In simple words, baseline can be define as the level of some activity that can be considered as the average or normal performance level and be set as a criteria for future purposes. It is seen as an expected performance that will occur every time activity will be performed.
A baseline is a fixed reference point which is not changed occasionally. A base line works as a core factor in planning process as all the objectives will be set according to the baseline determined.
Hence the correct option is A.
Answer:
The stock A is most valuable as the fair value of Stock A is $100 which is more than the fair value of Stock B ( $83.33) and Stock C ($34.28).
Explanation:
to calculate the fair price of the stocks, we will use the DDM or dividend discount model. The DDM bases the value of a stock on the present value of the expected future dividends from the stock.
Let r be the discount rate which is 10%.
a.
The stock is like a perpetuity as it pays a constant dividend after equal intervals of time and for an indefinite period.
The price of this stock can be calculated as,
Price or P0 = Dividend / r
P0 = 10 / 0.1 = $100
b.
The constant growth model of DDM can be used to calculate the price of this stock as its dividends are growing at a constant rate forever.
P0 = D1 / r - g
Where,
- D1 is the dividend for the next period
- r is the cost of equity or discount rate
- g is the growth rate in dividends
P0 = 5 / (0.1 - 0.04)
P0 = $83.33
c.
The price of this stock can be calculated using the present of dividends.
P0 = 5 / (1+0.1) + 5 * (1+0.2) / (1+0.1)^2 + 5 * (1+0.2)^2 / (1+0.1)^3 +
5 * (1+0.2)^3 / (1+0.1)^4 + 5 * (1+0.2)^4 / (1+0.1)^5 + 5 * (1+0.2)^5 / (1+0.1)^6
P0 = $34.28
Answer:
The adjustment to record bad debts for the period will be:
Debit Bad debt expense ($20,000 - $3,000) $17,000
Credit Allowance for doubtful accounts $17,000
<em>(Bad debt expense required)</em>
Explanation:
Bicylce Company adopts the aging of accounts receivable method. The aging of accounts receivable is a criterion for apportioning the balance in the accounts receivable into different buckets (aging), for example: Not due, 1 - 30 days, 30 - 60 days, over 60 days, based on historical information and assigning a credit loss percentage to each bucket.
Since the Allowance for Doubtful Accounts has a $3,000 credit, to calculate the required bad debt expense, we need to back out this amount from the amount that is deemed uncollectible, that is $20,000 - $3,000 = $17,000.
Answer:
The correct answer is option A
a. cure the defect.
Explanation:
A problem that can be corrected based on the agreed terms and conditions by a seller or buyer is a curable defect.
Answer:
D) $150,000
Explanation:
Insurance proceeds that are not reinvested in replacing damaged property are taxed. Apparently Prime corporation didn't reinvest into replacing the property, so this transaction should be taxed as a property sale. Prime received $400,000 for the building with a $350,000 basis which results in a net gain = $50,000.
The other $100,000 were given as replacement income and therefore should be taxed as such.
So the total taxable amount = $50,000 + $100,000 = $150,000
