Their job is to find a verdict
The answer in the space provided, the answer is the numeric
keypad on the right side of the keyboard as this is what Lisa needs to use for
she may be able to input as much as many numbers possible as this is one of her
roles as an accountant.
Answer:
$232,500
Explanation:
The computation of the amount of expected cash outflows for selling and admin expenses is shown below:
Utilities expense $2,500
Administrative salaries $100,000
Sales commission ($800,000 × 5%) $40,000
Advertising $20,000
Rent on administrative building $60,000
Miscellaneous administrative expenses $10,000
Total budgeted cash sales and administrative expenses $232,500
We added those expenses which affect the cash balance i.e decrease in cash balance so that the correct amount could arrive
All other items are not relevant. hence,ignored it
Answer:
a) the fire and all the events that are related to it should decrease Roybus's stock by $5.50
b) The market is pretty quick to adjust to bad news, specially when they are single isolated events. There is a minimum chance that you might be able to make some money by selling your stocks to someone that hasn't heard about the fire and its negative consequences (not a regular trader or outside the market), but it would be extremely rare for it to happen. When such extraordinary events happen, it is common for stocks to be traded after market hours, so when the market opens the next day, the price will already be adjusted.
Explanation:
the total decrease in Roybus's market value = ($175,000,000 / 1.126) + ($61,000,000 / 1.126²) = $155,417,407 + $48,111,960 = $203,529,367
the decrease will negatively affect stock price by -$203,529,367 / 37,000,000 stocks = -$5.50 per stock
