Answer:
Consider the following analysis.
Explanation:
<em>Journal Entries
</em>
- Income tax expense.............$4,0000,000
- Deferred tax liability (10 million - 7 million )*40%........$1,200,00
- Income tax payable (7 million * 40% )................$2,800,000
Using decimals is 4.0, 1.2, and 2.8.
Answer:
Both A and B are true.
- A. All else held constant, if a company has a beta of 1.2, then the cost of equity for this company will increase if the risk-free rate decreases.
- B. If you assume a company has debt, then an increase in the tax rate will decrease the weighted average cost of capital for the company.
Explanation:
A)
The formula to calculate the cost of equity is:
cost of equity = risk free rate of return + [Beta × (market rate of return – risk free rate of return)]
e.g. market rate 15%, risk free rate 5%:
cost of equity = 5% + [1.2 x (15% - 5%)] = 5% + 12% = 17%
if the risk free rate decreases to 3%:
cost of equity = 3% + [1.2 x (15% - 3%)] = 3% + 14.4% = 17.4%
B)
the WACC formula = (cost of equity x weight of equity) + [cost of debt x weight of debt x (1- tax rate)]
if the tax rate increases, then the WACC will decrease because (1 - tax rate) will be lower.
Answer:
The correct answer is diversify geographically.
Explanation:
Diversification is one of the strategies most used by companies when it comes to expanding their market horizon. In this sense, diversifying is synonymous with expansion, growth, investment and openness.
In general, companies that are committed to diversification seek new market niches or commercial possibilities. This may be motivated by several reasons, ranging from corporate growth opportunities to the implementation of internal restructuring plans.
Answer:
$20,340
Explanation:
The amount of cash to be recognize is the adjusted amount after considering the transactions that were omitted from the bank statement and cash book and properly recognizing the erroneous entries into the two books.
Considering the reconciling items,
Checks outstanding $ 3,300 - This has been recognized in the company's Cash account and as such need no adjustment in the company's books
NSF check 110 - This has been deducted from the company's cash book but was not honored by the bank as such, it will be added back to the company's cash book balance
Note collected by bank for the Colt Company 1,650 - This has been recognized by the bank and as such will be added to the company's cash book balance
Deposits outstanding 2,800 - This has been recognized in the company's Cash account and as such need no adjustment in the company's books.
Bank service fees 220 - This has been recognized by the bank and as such will be deducted as a charge to the company's cash book balance
Hence the amount of cash that should be reported in the balance sheet as of August 31 will be
= $18,800 + $110 + $1650 - $220
= $20,340
Answer:
12
Explanation:
Calculation to determine the marginal product of adding the 4th worker
Using this formula
MP=ΔTPΔL
Let plug in the formula
ΔTP=57−45
ΔTP=12
Therefore The marginal product of adding the 4th worker is 12 sandwiches.