Answer:
Explanation:
Question 27
If Wheat Company had used the FIFO inventory method, income before income taxes would have been $75,000 higher in the current year. As inventory is an asset to the company. Therefore the $75,000 in inventory would have increased the company's asset and increasing the income before taxes.
Question 28
Other things held constant, which of the following will NOT affect the current ratio, assuming an initial Not yet current ratio greater than 1.0?
C. Accounts receivable are collected in cash.
Current ratio measures a company's ability to pay short-term obligations as at when due. It indicates that a company can manage its debts and other payable when their current assets is well managed.
It is calculated as Current Asset/ Current Liability. A ratio of 1 and above is the best meaning that a company an manage its debts obligations well.
Answer:
a. The stock's price one year from now is expected to be 5% above the current price.
Explanation:
Under gordon model:
If we calculate the value of the stock for the year after that:
to calculate the value of the increase we divide next year over current year.
We have demostrate that next year stock should increase by 1 + growth so statement c is correct.
Answer:
Yield to maturity is 6.6%
Explanation:
Yield to maturity is the annual rate of return that an investor receives if a bond bond is held until the maturity.
Face value = F = $1,000
Assuming Coupon payments are made annually
Coupon payment = $1,000 x 8% = $80
Selling price = P = $1,100
Number of payment = n = 13 years
Yield to maturity = [ C + ( F - P ) / n ] / [ (F + P ) / 2 ]
Yield to maturity = [ $80 + ( 1000 - 1100 ) / 13 ] / [ (1,000 + 1100 ) / 2 ]
Yield to maturity = [ $80 - 7.7 ] / 1100 = $72.3 /1100 = 0.066 = 6.6%
Answer:
The correct answer is option D.
Explanation:
Academic book publishers hire editors, designers, and production and marketing managers who help prepare books for publication.
These employees work on several books simultaneously so a change in quantity demanded of books published in a year.
Since the number of people employed is fixed and does not change with the quantity of output. The cost incurred on these workers will be fixed cost. So the salaries and benefits of people in these people will be included in fixed costs and total costs. But since it does not change with change in the output it will not be included in variable costs.
