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Sliva [168]
3 years ago
7

Victor Rumsfeld Inc.'s dividend policy is under review by its board. Its projected capital budget is $2,000,000, its target capi

tal structure is 60% debt and 40% equity, and its forecasted net income is $300,000. If the company follows a residual dividend policy, what total dividends, if any, will it pay out? Select the correct answer.
Business
1 answer:
melomori [17]3 years ago
3 0

Answer:

The multiple choices are

a.  $240,000

b. $228,000

c. $216,600

d.$205,770

e. $0

The correct option is E,$0

Explanation:

The funding required from equity is 40% of the projected capital budget of $2000,000 which is expected to be from the profit attributable to stockholders since new issue of shares is not contemplated.

In other words, dividends payable to shareholders is the net income less their counter funding of the project which is computed below:

residual dividends=net income-(equity%*capital outlay)

residual dividends=$300,000-(40%*$2000,000)

                               =$300,000-$800,000=$0

In essence the $300,000 is not even enough as funds expected from equity less alone paying excess as dividend

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Answer: $3.10

Explanation:

The actual price per pound of direct materials purchased in June will be calculated as follows:

Let the actual price be represented by x.

Material price variance is calculated as:

= (standard price-actual price) × actual quantity

-2000 = (3 × 20000) - 20000x

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20000x = 62000

x = 62000/20000

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Therefore, the actual price per pound of direct material bought in June is $3.10

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For​ 2018, Rest-Well Bedding uses​ machine-hours as the only overhead​ cost-allocation base. The direct cost rate is​ $6.00 per
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Answer:

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