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spayn [35]
3 years ago
13

Firm X has total earnings of $49,000, a market value per share of $64, a book value per share of $38, and has 25,000 shares outs

tanding. Firm Y has total earnings of $34,000, a market value per share of $21, a book value per share of $12, and has 22,000 shares outstanding. Assume Firm X acquires Firm Y by paying cash for all the shares outstanding at a merger premium of $2 per share. Also assume neither firm has any debt before or after the merger. What is the value of the total equity of the combined firm, XY, if the purchase method of accounting is used
Business
1 answer:
sveticcg [70]3 years ago
6 0

Answer:

$1,456,000

Explanation:

Calculation to determine the value of the total equity of the combined firm, XY, if the purchase method of accounting is used

First step is to calculate the Assets from Firm X

Assets from Firm X = 25,000 ( $38 )

Assets from Firm X= $950,000 (book value)

Second step is to calculate the Assets from Firm Y

Assets from Firm Y = 22,000 ( $21 )

Assets from Firm Y = $462,000 (Market value)

Third step is to calculate the Goodwill

Goodwill = 22,000 ($21 + 2 ) - $462,000

Goodwill= $44,000

Now let calculate the the total equity of the combined firm, XY,

Total equity of XY = $950,000 + $462,000 + $44,000

Total equity of XY = $1,456,000

Therefore the value of the total equity of the combined firm, XY, if the purchase method of accounting is used will be $1,456,000

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Your grandparents deposit $2,000 each year on your birthday, starting the day you are born, in an account that pays 7% interest
OverLord2011 [107]

Answer:

The money you will have is $98020.

Explanation:

It is given that grandparents deposit $2,000 each year on birthday and the account pays 7% interest compounded annually also the time is 21 years.

we will use the compound interest formula  A=P (1 + \frac{r}{100})^{t}.

For the first birthday the amount after 21 yr will be:

A=2000(1+\frac{7}{100})^{21}

Similarly for the second birthday amount after 20yr will be:

A=2000(1+\frac{7}{100})^{20}

likewise, the last compound will be:

A=2000(1+\frac{7}{100})^1

The total value of such compounding would be :

\text {Total amount}=2000(1+\frac{7}{100})^{21}+2000(1+\frac{7}{100})^{20}...2000(1+\frac{7}{100})^{1}

\text {Total amount}=2000[(1+\frac{7}{100})^{21}+(1+\frac{7}{100})^{20}...(1+\frac{7}{100})^{1}]

\text{Total amount} \approx 2000(48.01)

\text{Total amount} \approx 96020

The total amount just after your grandparents make their​ deposit  is:

≈($96020+2000)

≈$98020

Hence, the money you will have is $98020.

4 0
3 years ago
By how much did the pace of tuition hikes exceed the 2013 average rate of inflation?
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MissTica

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dimulka [17.4K]

Answer:

scarcity.

Explanation:

Scarcity can be defined as an economical problem that gives the relationship between non-renewable (limited) resources and the limitless wants and needs of consumers.

Basically, it's very important that producers of goods and services make decisions that would help them on how to efficiently allocate scarce or limited resources, in order to meet the unending requirements, wants and needs of consumers.

In Economics, an example of scarcity is that most of the resources used for the manufacturing of finished goods and services are nonrenewable, and as a result, the wants and needs of the end users or consumers are limited. Thus, economists would advise that economies should decide on what to produce, how to produce, when to produce and for whom to produce due to the finite and limited nature of resources i.e the concept of scarcity.

3 0
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Firefly Inc. sold land for $225,000 cash. The land had been purchased five years earlier for $275,000. The loss on the sale was
solmaris [256]

Answer:

$225,000

Explanation:

The cash flow statement is divided into three categories investing, operating and financing. The investing activity refers to those activities which deal in buying and selling for long term asset in cash. The buying is cash outflow while the selling is a cash inflow.  So the amount reported under the investing activity is $225,000 as cash inflow.

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