That statement is false
In business, the amount of equity could be changed through either of these two ways:
- The first one is by buying out the shares that the company released. People would have more equity/ownership in the company if they hold more shares.
- If the majority shareholders in the company have agreed to sacrifice the percentage of their ownership and granted it to someone else.
Answer:
$5,456
Explanation:
A relevant cost can be defined as the cost that are said to be in form of a future cash cost that is relevant and important to a particular decision.
The relevant cost:
Current market cost 880 liters × Current market $6.20 per liter
= $5,456.
Therefore the relevant cost of the 880 liters of the raw material when deciding how much to bid on the special order will be $5,456
Answer:
The optimal production plan gives a total costs of $417,672 for the periods Feb to May
In Feb we will have to hire 26 workers to close the gap between demand and production from our 100 existing workers
In March however, we will have to lay them off (26 workers) to keep our production in line with demand.
In April, we are constrained to 100 workers, thus requiring that we run overtime. The overtime requirement is between 3,060 hours to max of 5,000 hours. Note that inspire of the hours chosen, demand for April still won't be fulfilled.
The best option will be the one that gives us last backlog because of the costs of backorder being extremely costly.
5,000 overtime hours in April is the best option .
In May, we are constrained to our 100 workers, meaning we will fulfill our back orders and also retain inventory in hand of 7,760 units.
The 3 pages attached show how the cost is worked out and the presentation as well.
Answer:
The current share price is $74.62.
Explanation:
The constant growth model of the DDM requires is used to estimate the fair price per share of a stock based on the expected dividends that it will pay in future when these dividends are growing at a constant rate. The formula for this model is,
Price today = D1 / r - g
Where,
D1 is the dividend in year 1
r is the required rate of return
g is the growth rate in dividends
However as the company will pay dividends from year 10. Thus, the D10 will 14.
The value of the stock at year 9 will be,
Price at year 9 = 14 / (0.125 - 0.06)
Price at year 9 = $215.38
We will discount this by the required rate of return to calculate the present value.
Present price per share = [(14 / (0.125 - 0.06)) / (1+0.125)^9]
Present prie per share = $74.617
Option C -Operating Cash Flow = Current Liabilities / Operating Cash Flow s not a correct way of calculating a liquidity ratio.
Liquidity ratios are a measure of a company's ability to settle its short-term payments. A company has the ability to quickly exchange its revenues and is using them to pay his obligations is dictated by its liquidity ratios. The potential to pay back debts and keep engaged on installments is simpler the better the ratio. Since this can vary by industry, and current ratio of 1.0 usually signals that a group's debt do not exceeding its liquid assets. In enterprises in which there is a quicker product changeover and/or shorter payment cycles, ratings below 1.0 may be acceptable.
Absolute liquidity ratio =(Cash + Marketable Securities)÷ Current Liability.
Learn more about Liquidity ratios here:
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