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2 years ago

This is because money coming into and going out of the business affects Owner's Equity.

Business

1 answer:

kaheart [24]2 years ago

7 0

It is true that the expenses decrease and Sales increase the Owner's Equity.

Basically, owner's equity refers to the amount of the business-owner's investment in an asset after total liabilities have been deducted.

Any revenue into the business increase the owner's equity through business activities .

Any expense into the business decrease the owner's equity through business operations.

Therefore, the Option C is correct because the expenses decrease and Sales increase the Owner's Equity

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CSM Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $375,00

Shtirlitz [24]

Answer:

the company should buy and install the press because the NPV of the project is positive ($73,133.75)

Explanation:

the MACRS 5 year depreciation:

$375,000 x 20% = $75,000
$375,000 x 32% = $120,000
$375,000 x 19.2% = $72,000
$375,000 x 11.52% = $43,200
$19,800, since salvage value at year 5 is $45,000
$0 x 5.76% = $0

salvage value $45,000

total initial investment = $375,000, discount rate = 11%

cash flow year 1 = {($142,000 - $15,000 - $75,000) x (1 - 34%)} + $75,000 = $109,320
cash flow year 2 = {($142,000 - $2,000 - $120,000) x (1 - 34%)} + $120,000 = $133,200
cash flow year 3 = {($142,000 - $2,000 - $72,000) x (1 - 34%)} + $72,000 = $116,880
cash flow year 4 = {($142,000 - $2,000 - $43,200) x (1 - 34%)} + $43,200 = $107,088
cash flow year 5 = {($142,000 - $2,000 - $19,800) x (1 - 34%)} + $19,800 + $45,000 = $144,132

the NPV of the project = -$375,000 + $109,320/1.11 + $133,200/1.11² + $116,880/1.11³ + $107,088/1.11⁴ + $144,132/1.11⁵ = $73,133.75

4 0

3 years ago

5. Harris Corporation has $250 million in cash and 100 million shares outstanding, Suppose the corporate tax is 35%, and investo

Ronch [10]

Answer:

$0.875

Explanation:

The computation of the stock price that changes upon the announcement is shown below:

As it given that

The corporate tax is 35%

So there is an effective disadvantage i.e. retention

Also, the stock price would be decline by 35% of cash

i.e.

= 35% × $250 million ÷ 100 million outstanding

= $0.875

Hence, the stock price is $0.875

3 0

3 years ago

Assuming the average person works 50 weeks per year, median earnings of a college graduate are $56,850 per year compared to $33,

Drupady [299]

Answer:

a. over 100,000

b. is more than 8 times

Explanation:

Cost of four-year bachelor degree = Actual cost + opportunity cost

And

Actual cost = amount spent

opportunity cost = amount lost in not doing job just after high school

So ,

opportunity cost would be the 4 year salary of a high school graduate.

∴

Opportunity cost = 4 * yearly income of high school graduate

= $ 4 * 33900

= $ 135,600

Actual cost = 4 * yearly cost to attend college

= $ 4 * 25,290

= $ 101,160

As,

Total cost = Actual cost + opportunity cost

= $ 101,160 + 135,600

= $ 236,760

Lifetime gain in pursuing bachelor degree over high school = life time earning of bachelor - lifetime earning of high school graduate

= 2,444,500 - 1,593,300 = 851,200 $

Hence,

the expenses of obtaining a bachelor degree is worth it because the increase in lifeime earning exceeds cost. [ cost = 236,760 $ , gain = 851,200 $ ]

So,

The expense of obtaining a bachelor's degree worth it because the increase in lifetime earnings is more than 8 times the cost

5 0

3 years ago

Jager Inc. holds 30% of the outstanding voting shares of Kinson Co. and appropriately applies the equity method of accounting. A

Kazeer [188]

Answer:

$ 13,750

Explanation:

Calculation to Determine the amount of Equity in Investee Income that Jager should have reported for 2018

First step is to calculate the intercompany unrealized gain

Remaining inventory — end of year $ 50,000

Gross profit percentage ($33,600 ÷ $96,000)x 35%

Profit within remaining inventory$ 17,500

Intercompany unrealized gain$ 5,250

(Ownership percentage 30%*$ 17,500=$5,250)

Now let calculate the amount of Equity in Investee Income that

Equity in investee income:

Equity income accrual $ 30,000

($100,000 x 30%)

Less Deferral of intercompany unrealized gain ($5,250)

Less Goodwill amortization ($ 11,000)

Equity in investee income$ 13,750

($30,000-$5,250-$11,000)

Therefore the amount of Equity in Investee Income that Jager should have reported for 2018 will be $ 13,750

3 0

3 years ago

Provide an example of two companies that have built in effective co-opetition. Briefly explain the benefit of the relationship d

DanielleElmas [232]

Answer:

Microsoft and Apple, Samsung and sony.

Explanation:

Samsung electronics and sony formed an agreement in 2004 for use of shared knowledge and resources in designing flat television screens.

A strategic alliance is a collaboration or a synergy where each partner gets the benefits of the alliance. Jobs such as travel agencies, cashiers, textile workers. A strategic alliance consists of healthy behavior, long terms goals, and better customer satisfaction.

5 0

3 years ago