Answer:
$573,941.22
Explanation:
Use WACC formula to find the cost of capital for discounting the given cashflows;
WACC = wE*rE + wD*rd (1-tax)
whereby;
wE = weight of equity
rE = cost of equity
wD = weight of debt
rd (1-tax) = aftertax cost of debt
WACC = (0.58*0.153) + (0.42 *0.054)
= 0.08874 + 0.02268
= 0.1114 or 11.14%
Find the present value of the growing perpetual cashflows which will be equivalent to the maximum initial outlay of the project needed to avoid a negative NPV;
PV = CF/ (WACC - g)
Cashflow; CF = $49,600
WACC = 11.14%
growth rate ; g = 2.5%
PV = 49,600/ (0.1114 - 0.025)
PV = 573,941.22
Therefore, maximum amount the firm can initially invest in this project to avoid a negative net present value is $573,941.22
Answer: B
I think we can straight away get rid of answer choice c. From there, we can choose from either choice a or b. For repeatedly expressed, he hasn't been there enough times to prove it is repeatedly expressed, so I believe the main reason why he has a positive attitude is favorable outcome that he will receive the same treatment again.
Answer:
Debit Cash account (with the amount received)
Credit Accounts receivables (with the amount received)
Explanation:
Revenue is not recorded until the recognition criteria for the recognition of revenue has been met and this includes;
- the corresponding cost incurred in generating revenue can be reliably measured
- the goods or service has been delivered
Given that the service was performed in May, when half of the fee was received in April, the required entries then was
Debit Cash account
Credit Unearned revenue (with the amount received being half payment)
when the service was performed in May,revenue was earned
Debit Unearned revenue (with the amount received being half payment)
Debit Accounts receivable (with the amount yet to be received being half payment)
Credit Revenue (with the amount agreed for the service)
In June when the final payment is received,
Debit Cash account (with the amount received)
Credit Accounts receivables (with the amount received)
Answer: Option (B)
Explanation:
Condition subsequent clause is referred to as an exit clause from the existing contract. This agreement in between the parties tends to include languages that loosens or frees one of individuals from the agreement or the deal. This tends to mostly occur when the conditional outcome or result takes place. The conditional subsequent relieves an individual or a party from all the obligations.
Answer:
No, Hines is not guilty of unlawful price descrimination
Explanation:
Hines actions has not meet the criteria for price discrimination which include giving different prices based on gender, race or religion and never prevented the resale of product and the product package for sale never indicated the inclusion of free demonstrator and free advertising material.
