Answer:
no option is correct, the correct answer is $12,630
Explanation:
after tax salvage value of old machine = $12,000 - [($12,000 - $15,000) x 21%] = $12,000 - (-$3,000 x 21%) = $12,000 - -$630 = $12,630
the tax shield generated by this loss (market value is lower than book value) = $630
the cash received form the sale = $12,000
the combined effect = $12,000 + $630 = $12,630
Answer:
The three would be used in Tax Computation
Explanation: continuous
Answer:
Kent net income is $10,560.00
Trent net loss is -$5,280.00
Explanation:
It would be more appropriate to show the reconstructed income statements for both companies using spreadsheet.
The point is that Trent variable cost per unit is $180 and by lowering price per unit to $150 in order to lure away customers from Kent,Trent would incur losses as found in the revised income statements attached.
Answer:
The expected return on stock is 30%
Explanation:
Growth rate = Return on Equity * Retention ratio
Growth rate = Return on Equity * (1- Payout ratio)
Growth rate = 25% * (1 - 0.40)
Growth rate = 0.25 * 0.60
Growth rate = 0.15
Growth rate = 15%
Hence, Expected return = Dividend return + Growth rate
Expected return = 15% + 15%
Expected return = 30%
Therefore, the expected return on stock is 30%
