Answer:
A private limited firm refers to a corporation. A corporation’s internal sources of financing are mostly limited to its retained profits, and money realized from the sale of its assets. In case of the given example, because the company does not have enough cash on hand, it will have to rely on several external sources of financing. The most important source of procuring financing for the company is a bank loan. Thus, the company can raise money from institutions such as banks or other creditors in the form of loans. The company will need to repay loans in the future, and therefore the company will record this as a liability in its accounts. However, these ways of procuring money would help the company arrange $15,000 in order to purchase the fabric and other accessories.
The sources of financing will remain the same even in the case of a sole proprietorship; that is, retained earnings or loans from external sources such as banks. However, in the case of a public limited company, the answer would change. In the case of a public limited business, it has another option of raising financing through the issue of common or equity shares.
Answer:
Following is the classification of the costs associated with each of these activities that is prevention cost, appraisal cost, internal failure cost, or external failure cost.
(a) Product testing - Appraisal Cost
(b) Product recall - External Failures
(c) Product design - Prevention cost
(d) Quality circle - Prevention cost
(e) Inspection of goods - Appraisal Cost
Explantion cost:
Appraisal costs are costs incurred to detect defects in the poduct produce. Prevention cost are cost incurred to prevent detects in the product produce.
Internal failure costs are costs incurred to remove defects found before the customer receives the product or service. External failure costs are costs incurred to remove defects found after the customer receives the product or service.
C. Opening a bank.
Because your opening up an bank account, therefore you not using any kind of money, or credit. UNTIL you put something inside the account.
<span>You are given an annual dividend of $2.10 for the fifteen years that you plan on holding it. Also, after 15 years, you are given to sell the stock for $32.25. You are asked to find the present value of a share for this company if you want a 10% return. You have to mind that the future stock for 15 years is $32.25. You are not only going to mind the present value of the annuity at $2.10 but also the $32.25.
With the interest of r = 10% and number of years of n = 15, we get
PVIFA = 7.6061.
For annuity we have,
$2.10 * 7.60608 = $15.973
For $32.35 with r = 10% and n = 15
PVIF = 0.239392
Thus for the present value of selling price,
$32.25 * 0.239392 = $7.720
Thus the present value of the share
P = $15.973 + $7.720
P = $23.693
</span>
Answer:
e. $42,857.14
Explanation:
The computation of the break-even level of earnings before interest and taxes between these two options is shown below:
(EBIT) ÷ (Number of shares) = (EBIT - Interest) ÷ Number of shares
(EBIT) ÷ (75,000 shares) = (EBIT - $20,000) ÷$40,000
40,000 × EBIT = 75,000 × EBIT - $1,500,000,000
35,000 × EBIT = $1,500,000,000
After solving this,
The EBIT would be $42,857.14
The interest expense
= $320,000 × 6.25%
= $20,000
