Lonergan Company occasionally uses its accounts receivable to obtain immediate cash. At the end of June 2021, the company had accounts receivable of $1,060,000. Lonergan needs approximately $640,000 to capitalize on a unique investment opportunity. On July 1, 2021, a local bank offers Lonergan the following two alternatives:________.
a. Borrow $640,000, sign a note payable, and assign the entire receivable balance as collateral. At the end of each month, a remittance will be made to the bank that equals the amount of receivables collected plus 9% interest on the unpaid balance of the note at the beginning of the period.
b. Transfer $690,000 of specific receivables to the bank without recourse. The bank will charge a 2% factoring fee on the amount of receivables transferred. The bank will collect the receivables directly from customers. The sale criteria are met.
Required:
1. Prepare the journal entries that would be recorded on July 1 for
a. alternative a.
b. alternative b
2. Assuming that 80% of all June 30 receivables are collected during July, prepare the necessary journal entries to record the collection and the remittance to the bank for
a. alternative a
b. alternative b.
Answers
Answer:
Please see attached detailed solution to the above question
Explanation:
Please find attached journal entries prepared the two alternatives.
Related Questions
Cameroon Corp. manufactures and sells electric staplers for $16 each. If 10,000 units were sold in December, and management forecasts 4% growth in sales each month, the number of units of electric stapler sales budgeted for March should be:_______
Answers
Answer:
= $173,056
Explanation:
The computation of the number of units of electric stapler sales budgeted for March is shown below:-
February = 10,000 + (4% × 10,000)
= 10,400
March = 10,400 + (4% × 10,400)
= 10816
and finally
The Budget sale for stapler for the month of March = 10,816 × 16
= $173,056
On January 1, a company purchased a five-year insurance policy for $3,300 with coverage starting immediately. If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end, the adjusting entry at the end of the first year is:_______.
a. Debit Insurance Expense. $660, credit Prepaid Insurance, $660.
b. Debit Prepaid Insurance, $660; credit Insurance Expense, $660.
c. Debit Insurance Expense, $660; credit Prepaid Insurance, $2,640.
d. Debit Prepaid Insurance, $3,300; credit Cash, $3,300.
Answers
Answer:
a. Debit Insurance Expense. $660, credit Prepaid Insurance, $660.
Explanation:
The adjusting entry is shown below:
Insurance expense Dr $660 ($3,300 ÷ 5 years)
To Prepaid insurance
(Being the insurance expense is recorded)
here we debited the insurance expense as it increased the expense and credited the prepaid insurance as it decreased the assets
Therefore the option a is correct
Bonds often pay a coupon twice a year. For the valuation of bonds that make semiannual payments, the number of periods doubles, whereas the amount of cash flow decreases by half. Using the values of cash flows and number of periods, the valuation model is adjusted accordingly. Assume that a $1,000,000 par value, semiannual coupon U.S. Treasury note with three years to maturity (YTM) has a coupon rate of 3%. The yield to maturity of the bond is 7.70%. Using this information and ignoring the other costs involved, calculate the value of the Treasury note: $1,051,447.12 $876,205.93 $744,775.04 $552,009.74
Answers
Answer:
$876,205.93
Explanation:
Calculation for the value of the Treasury note
FV= 1,000,000
N=3*2
N=6
PMT=3%*1,000,000/2
PMT=30,000/2
PMT= 15,000
I/Y=7.7/2
I/Y= 3.85
Using financial calculator to find the present value of the treasury note
Present Value = $876,205.93
Therefore the present value of the treasury note will be $876,205.93
Crane Company identifies three activities in its manufacturing process: machine setups, machining, and inspections. Estimated annual overhead cost for each activity is $140,000, $240,000, and $54,000, respectively. The cost driver for each activity and the estimated annual usage are number of setups 2,000, machine hours 24,000, and number of inspections 1,200. Compute the overhead rate for each activity. Machine setups $ per setup Machining $ per machine hour Inspections $ per inspection
Answers
Answer:
1. $70 per set up
2. $10 per machine hour
3. $45 per inspection
Explanation:
With regards to the above,
Compute the overhead rate for
1. Machine set ups
= Estimated annual overhead cost / Estimated annual Number of setups
Estimated annual overhead costs = $140,000
Estimated annual Number of setups = 2,000
= $140,000 / 2,000
= $70 per set up
2. Machining
= Estimated annual overhead costs / Estimated annual Machine hours
Estimated annual overhead costs = $240,000
Estimated annual Machine hours = 24,000
= $240,000 / 24,000
= $10 per machine hours
3. Inspection
= Estimated annual overhead costs / Estimated annual number of inspections
Estimated annual overhead costs = $54,000
Estimated annual number of inspections = 1,200
= $54,000 / 1,200
= $45 per inspection
Automatic Transmissions, Inc., has the following estimates for its new gear assembly project: price = $1,130 per unit; variable cost = $350 per unit; fixed costs = $4.86 million; quantity = 76,000 units. Suppose the company believes all of its estimates are accurate only to within ±16 percent. What values should the company use for the four variables given here when it performs its best-case and worst-case scenario analysis?
Answers
Answer and Explanation:
The computation is shown below:
Situations Unit sales Unit price Unit variable cost Fixed cost
Base 76,000 $1,130 $350 $4.86 million
Best 88,160 $1,311 $294 $4.0824 million
(76,000 × 1.16) ($1,130 × 1.16) ($350 × 0.84) ($4.86 × 0.84)
Worst 63,840 $949 $406 $5.6376 million
(76,000 × 0.84) ($1,130 × 0.84) ($350 × 1.16) ($4.86 × 1.16)
The values should the company use for the four variables given here when it performs its best-case and worst-case scenario analysis :
Situations Unit sales Unit price Unit variable cost Fixed cost
Base 76,000 $1,130 $350 $4.86 million
Best 88,160 $1,311 $294 $4.0824 million
(76,000 × 1.16) ($1,130 × 1.16) ($350 × 0.84) ($4.86 × 0.84)
Worst 63,840 $949 $406 $5.6376 million
(76,000 × 0.84) ($1,130 × 0.84) ($350 × 1.16) ($4.86 × 1.16)
Learn more ;
https://brainly.com/question/13984921?referrer=searchResults
State the method of acknolwdgement
Answers
Explanation:
A page of acknowledgements is usually included at the beginning of a Final Year Project, immediately after the Table of Contents.
Acknowledgements enable you to thank all those who have helped in carrying out the research. Careful thought needs to be given concerning those whose help should be acknowledged and in what order. The general advice is to express your appreciation in a concise manner and to avoid strong emotive language.
Note that personal pronouns such as 'I, my, me …' are nearly always used in the acknowledgements while in the rest of the project such personal pronouns are generally avoided.
The following list includes those people who are often acknowledged.
Note however that every project is different and you need to tailor your acknowledgements to suit your particular situation.
Main supervisor
Second supervisor
Other academic staff in your department
Technical or support staff in your department
Academic staff from other departments
Other institutions, organizations or companies
Past students
Family *
Friends *
The stock of Ernst Electric has a beta of .87. The market risk premium is 8.6 percent and the risk-free rate is 3.7 percent. What is the expected return on Ernst Electric stock
Answers
Answer:
12.3%
Explanation:
The stock Ernst electric has beta of 0.87 percent
The market risk premium is 8.6 percent
The risk free rate is 3.7 percent
Therefore the expected return can be calculated as follows
= risk free rate + risk premium
= 3.7 % + 8.6%
= 12.3 %
Hence the expected rate of return on Ernst electric stock is 12.3%
Iverson Company purchased a delivery truck for $45,000 on January 1, 2018. The truck was assigned an estimated useful life of 5 years and has a residual value of $10,000. Compute depreciation expense using the double-declining-balance method for the years 2018 and 2019.
Answers
Answer:
Results are below.
Explanation:
Giving the following information:
Purchase price= $45,000
Useful life= 5 years
Salvage value= $10,000
To calculate the annual depreciation under the double-declining balance method, we need to use the following formula:
Annual depreciation= 2*[(book value)/estimated life (years)]
2018:
Annual depreciation= 2[(45,000 - 10,000) / 5]
Annual depreciation= 14,000
2019:
Annual depreciation= 2*[(35,000 - 14,000)/5]
Annual depreciation= $8,400
The depreciation expense using the double-declining-balance method in 2018 is $18,000 and in 2019 is $10,800.
The double-declining balance method is an accelerated depreciation method when compared with other deprecation methods.
Depreciation expense = (2 x cost of the asset) / useful life of the asset
Deprecation expense in 2018
(2 x $45,000) / 5 = $18,000
Deprecation expense in 2019
Book value in 2019 = cost of the asset - deprecation expense
$45,000 - $18,000 = $27,000
Deprecation expense = (2 x $27,000) / 5 = $10,800
A similar question was answered here: https://brainly.com/question/16502007?referrer=searchResults
In 2019, Elaine paid $2,960 of tuition and $1,040 for books for her dependent son to attend State University this past fall as a freshman. Elaine files a joint return with her husband. What is the maximum American opportunity tax credit that Elaine can claim for the tuition payment and books in each of the following alternative situations? (Leave no answer blank. Enter zero if applicable.) rev: 02_29_2020_QC_CS-202942 a. Elaine’s AGI is $103,250.
Answers
Answer:
$2,500
Explanation:
Elaine can deduct the first $2,000 and then [($4,000 - $2,000) x 25%] = $2,500 (maximum available deduction). Since Elaine files her taxes with her husband and their combined AGI is less than $160,000, then she can claim the full annual credit. The AOTC starts to phase out when the combined AGI is higher than $160,000 and phases out completed when it reaches $180,000.
Which of the following scenarios is consistent with the Laffer curve?
a. An increase in the tax rate always increases tax revenue .
b. The tax rate is 1 percent, and tax revenue is very high.
c. The tax rate is 99 percent, and tax revenue is very high.
d. A decrease in the tax rate always increases tax revenue .
Answers
Answer:
No option is correct.
a. An increase in the tax rate always increases tax revenue. ⇒ FALSE, if tax rates increase beyond the optimal level, instead of increasing total revenue they will decrease it. b. The tax rate is 1 percent, and tax revenue is very high. ⇒ FALSE, very low tax rates will result in very low government revenue. c. The tax rate is 99 percent, and tax revenue is very high. ⇒ FALSE, very high tax rates will result in very low government revenue. d. A decrease in the tax rate always increases tax revenue. ⇒ FALSE, if tax rates decrease beyond the optimal level, instead of increasing total revenue they will decrease it.Explanation:
According to Arthur Laffer, a direct and sometimes inverse relationship exists between tax rates and government revenue. Sometimes a lower tax rate can result in higher government revenue. But that is not always the case. Sometimes an increase in the tax rate can increase government revenue. The optimal tax rate (T*) is equal to the tax rate that will allow the government to collect the highest amount of revenue. Any lower or higher tax rate will decrease government revenue.
A company offers ID theft protection using leads obtained from client banks. Three employees each work 40 hours a week on the leads. These employees are each paid $25 per hour. Each employee identifies an average of 3,000 potential leads a week. There are no duplications in these three lists. Material costs are $1,000 per week, and overhead costs are $9,000 per week. An average of 4 percent of the potential leads actually sign up for the service, paying a one-time fee of $70. Consider the output as the fees generated. a) What are the labor hours productivity and the multifactor productivity for this operation
Answers
Answer:
Output = 4%*3000 * $70 * 3
Output = $25,200
Labor hours productivity = Output / Labor hour
Where Labor hour = 3 * 40 hours = 120 hours
Labor hours productivity = $25,200 / 120 hours
Labor hours productivity = $210 per labor hour
Multi factor productivity for this operation = Output / Multi factor input
Where Multi factor input = 120*$25 + $1,000 + $9,000 = $13,000
Multi factor productivity for this operation = $25,200 / $13,000
Multi factor productivity for this operation = 1.938462
Multi factor productivity for this operation = 1.94
examples when demand may have got out of a hand?
Answers
Answer:
Recall, that we represent economic laws and theory using models; in this case we can use a demand schedule or a demand curve to illustrate the Law of Demand. The demand schedule shows the combinations of price and quantity demanded of apples in a table format. The graphical representation of the demand schedule is called the demand curve
When graphing the demand curve, price goes on the vertical axis and quantity demanded goes on the horizontal axis. A helpful hint when labeling the axes is to remember that since P is a tall letter, it goes on the vertical axis. Another hint when graphing the demand curve is to remember that demand descends.
The demand curve reflects our marginal benefit and thus our willingness to pay for additional amounts of a good. It makes sense that our marginal benefit, or willingness to pay for a good, would decline as we consume additional units because we get less additional satisfaction from each successive unit consumed. For example, at lunch time you decide to buy pizza by-the-piece. You'd be willing to pay a lot for that first piece to satisfy your hunger. But what about the second piece? Perhaps a little less. If we keep considering each additional piece, we might ask what the 3rd, 4th or 5th piece is worth to you. By that point, you'd be willing to pay less, perhaps much less. The law of demand and our models illustrate this behavior.
Explanation:
Rode Company estimates bad debt expense at 1% of credit sales. The company reported accounts receivable of $100,000 and a pre-adjustment credit balance in its allowance for uncollectible accounts account of $2,000 at the end of the current year. During the current year, Rode’s credit sales were $2,000,000. What is the amount of the company’s bad debt expense for the current year?
Answers
Answer:
$20,000
Explanation:
Calculation for the amount of the company’s bad debt expense for the current year
Using this formula
Bad debt expense = Credit Sales Amount × Estimated percentage uncollectible
Let plug in the formula
Bad debt expense = $2,000,000 × 1%
Bad debt expense =$20,000
Therefore the amount of the company’s bad debt expense for the current year will be $20,000
g 3d. Suppose that both countries start off with a capital stock per worker of 1. What are the levels of income per worker and consumption per worker?
Answers
Answer:
Explanation:
Where is the main question?
Vella owns and operates an illegal gambling establishment. In connection with this activity, he has the following expenses during the year:
Rent $41,500
Bribes 62,250
Travel expenses 4,150
Utilities 24,900
Wages 356,750
Payroll taxes 20,750
Property insurance 2,075
Illegal kickbacks 37,350
Required:
What are Vella's total deductible expenses for tax purposes?
Answers
Answer and Explanation:
The total deductible expense is for tax purpose is shown below:
The income that is earned from gambling and winning lotteries via legal or illegal the same is to taxable
Also the nonrecorded and illegal expenses would be ignored
The following expenses should be considered as deductible
(1) Rent paid of $41,500
(2) Travel expenses $4,150
(3) Utilities of $24,900
(4) Wages $356,750
(5) Payroll Taxes $20,750
(6) Property insurance $2075
Bribes and illegal kickbacks are not taxable
To what three different audiences might you have to give a presentation? How would the presentation differ for each? Which one would be the most challeng- ing for you?
Answers
Answer:
Please see explanation below.
Explanation:
°To what three different audiences might you have to give a presentation.
Answer:
• Senior manager
• Project manager
• Team leader.
° How would the presentation differ for each.
• Senior manager. The senior manager will be presented with existing IT structures in a brief manner. In addition to being given the short description of the previous IT system, a short explanation of the newly built and improvement on these existing systems will as well be presented to the senior manager.
• Project manager. A project manager would be presented with detailed description of the project. This is because the project manager must have first knowledge of the whole project and will be held accountable for the success or failure of the project. He would also be giving reports to the senior managers.
• Team leader. The details of the current process as the project progresses will be shared with the team leader.
° Which one will be the most challenging for you.
The most challenging for me will be the project manager because he would have to be presented with a well detailed and thorough description of the whole project. More so, further details of the cost expended on the system will be shared with the project manager.
Structural unemployment is sometimes said to result from a mismatch between the job skills that employers want and the job skills that workers have. To explore this idea, consider an economy with two industries: auto manufacturing and aircraft manufacturing. Assume that workers in these two industries require similar amounts of training, and they can choose which industry to train for at the beginning of their careers. True or False: Wages in the auto manufacturing industry would be less than those in the aircraft manufacturing industry.
Answers
Answer:
False
Explanation:
Due to the fact that the same amount of training is needed in each of the industries, wages would be the same. If wages were higher in the air craft industry, their would be an excess supply of labour in the airline industry. This would pull the wages in the airline industry down until the same wages are earned in both industries
For a country A, the GDP growth rate is 8 percent and inflation is 4 percent. If the velocity of money remains constant, what is the change in real money balances
Answers
Answer:
The change in the real money balance is 12%
Explanation:
As per gievn data
GDP growth rate = 8%
Inflation = 4%
The real money change is as follow
Equation
Delta M + Delta V = Delta P + Delta Y
Where
Delta M = Real money change = ?
Delta V = Change in velocity = 0
Delta P = Inflation rate = 4%
Delta Y = GDP growth rate = 8%
Placing values in the above equation
Delta M + 0 = 4% + 8%
Delta M = 12%
Hence the money balance will increase by 12%.
Given the following information, calculate the loan-to-value ratio of this commercial loan: estimated net operating income in the first year: $150,000; debt service in the first year: $100,000; loan amount: $1,000,000; purchase price: $1,300,000.
Answers
Answer:
0.77
Explanation:
Calculation for the loan-to-value ratio
Using this formula
Loan-to-value ratio=Loan amount/ Purchase price
Let plug in the formula
Loan-to-value ratio=1,000,000/1,300,000
Loan-to-value ratio= 0.77
Therefore the loan-to-value ratio of this commercial loan will be 0.77
The correlation between the monthly changes of the spot price and futures price of a commodity is 0.95. The standard deviations of monthly changes of the spot price and futures price are 0.25 and 0.30 respectively. Each futures contract represents 1000 units of the commodity. A company needs to purchase 50,000 units of the commodity in 1 month, and wants to use the futures contract hedge the price risk. How many futures contracts should the company long or short
Answers
Answer and Explanation:
Given that correlation between the monthly changes of the spot price and futures price of a commodity = 0.95
standard deviations of monthly changes of the spot price = 0.25
standard deviations of monthly changes of the futures price = 0.30
Futures contract =1000 units of commodity
To calculate how many futures contracts long or short if company needs to purchase 50,000 units of the commodity in 1 month using the futures contract hedge the price risk:
We calculate Hedge ratio = correlation * Spot price changes Standard deviation/ Futures contract price changes standard deviation
= 0.95 * 0.25/0.30
=0.7917
=79.17%
Calculate how many futures contracts the company should short =
50000 * 79.17%/1000
=39.58
= -39 contracts(negative shorts as from question)
Petty Cash Fund Murphy, Inc., maintains a balance of $2,200 in its petty cash fund. On December 31, Murphy's petty cash account has a balance of $223. Murphy replenishes the petty cash account to bring it back up to $2,200. Murphy classifies all petty cash transactions as miscellaneous expense. Required: What entry is made to record the replenishment of the petty cash fund? Dec. 31 (Replenish petty cash fund and recognize expenses)
Answers
Answer: Check attachment
Explanation:
Miscellaneous expenses are the small and infrequent expenses which a business incurs.
Based on the question, the miscellaneous expenses is calculated as:
= $2200 - $223
= $1977
Check the attachment for further details
Which of the following statements is correct regarding expenses.
a. Expenses increase equity.
b. Expenses are increased on the left side of their T-account because they decrease equity.
c. Expenses are reported on the left side of the accounting equation.
d. Expenses result from products or services provided to customers
Answers
Answer:
b. Expenses are increased on the left side of their T-account because they decrease equity.
Explanation:
Expenses arise during operation. The conceptual framework defines expenses as decrease in economic benefits as a result of increase in liabilities and decreases in assets. The result being a decrease in equity attributable to shareholders. Examples of expenses include depreciation, interest, utilities and wages expenses.
b. Expenses are increased on the left side of their T-account because they decrease equity.
The following information should be considered:
The expenses should represent the decrease in economic benefits due to which there is an increase in liabilities and decreases in assets. The result is a decrease in equity.Examples include depreciation, interest.Learn more: https://brainly.com/question/13981855?referrer=searchResults
During a recessionary gap due to insufficient aggregate demand, the government should ________ spending by an amount determined by the spending multiplier in an attempt to return the economy to potential GDP/full employment. g
Answers
Answer:
Increase
Explanation:
Recessionary gap is simply defined as that which happens or occurs when the current/actual is less than the needed that is below potential. It is simply when the equilibrium level of real GDP falls short of potential GDP.
Recessionary gap (expansionary FP) can be handled or fixed by increasing government spending, decrease in tax rates and Increasein transfers
Suppose that the pizza shop sells a new possible topping, sardines, but insists that eachpizza either have sardines or anchovies. How many possible varieties of pizza does theshop now offer
Answers
Answer: 3
Explanation: The pizza shop which just added sardine to its toppings now has a varieties of three (3) toppings which it serves it customers. This is made possible because a customer can order for a pizza with sardine, or anchovies or also order for a combination of both toppings. So by doing so the pizza shop offers three toppings.
CDB stock is currently priced at $85. The company will pay a dividend of $5.69 next year and investors require a return of 11.6 percent on similar stocks. What is the dividend growth rate on this stock?
Answers
Answer:
4.91%
Explanation:
CDB stock is currently priced at $85
The company will pay a dividend of $5.69
The required return is 11.6%
There for the dividend growth rate on this stock can be calculated as follows
11.6/100= (5.69/85) + growth rate
0.116= 0.0669 + growth rate
0.116 - 0.0669 = growth rate
0.0491 × 100 = growth rate
Growth rate = 4.91%
You’ve borrowed $26,838 on margin to buy shares in Company BBYT, which is now selling at $42.6 per share. You invest 1,260 shares. Your account starts at the initial margin requirement of 50%. The maintenance margin is 35%. At what price will you receive a margin call?
Answers
Answer:
the price that received a margin call is $32.77
Explanation:
The computation of the price that received a margin call is shown below:
= Borrowed amount ÷(Number of shares - ( Number of shares × Maintenance margin %))
= $26,838 ÷ (1,260 shares - (1,260 × 35%))
= $32.77
Hence, the price that received a margin call is $32.77
We simply applied the above formula and the same is to be considered
Two machines are currently in use in a process at the Dennis Kira Mfg. Co. The standards for this process are and . Machine One is currently producing with mean." and standard deviation .000". Machine Two is currently producing with mean ." and standard deviation .000". Which machine has the higher capability index? Machine One has an index of nothing (round your response to two decimal places).
Answers
Complete question :
Two machines are currently in use in a process at the Dennis Kira Mfg. Co. The standards for this process are LSL = 430" and USL = .435". Machine One is currently producing with mean = 432" and standard deviation .0005". Machine Two is currently producing with mean .4315" and standard deviation .0004". Which machine has the higher capability index? Machine One has an index of ?(round your response to two decimal places)
Answer:
Machine 1 has higher capability index
Machine 1 has capability index of 1.33
Explanation:
Given the following :
Lower specification limit (LSL) = 0.430
Upper Specification Limit (USL) = 0.435
MACHINE 1:
mean = 0.432
Standard deviation(σ) = 0.0005
MACHINE 2:
mean = 0.4315
Standard deviation = 0.0004
The Process Capability Index (Cpk) :
Min[(USL - mean) /3σ, (mean - LSL) / 3σ]
FOR MACHINE 1:
MIN[(0.435 - 0.432) /3(0.0005), (0.432 - 0.430) / 3(0.0005)]
MIN[ 2. 9167, 1.3333]
Hence, Cpk of Machine 1 = 1.33
FOR MACHINE 2:
MIN[(0.435 - 0.4315) /3(0.0004), (0.4315 - 0.430) / 3(0.0004)]
MIN[ 2, 1.25]
Hence, Cpk of Machine 2 = 1.25
Machine 1 has higher capability index
Machine 1 has capability index of 1.33
he Presley Corporation is about to go public. It currently has aftertax earnings of $7,000,000, and 2,000,000 shares are owned by the present stockholders (the Presley family). The new public issue will represent 500,000 new shares. The new shares will be priced to the public at $25 per share, with a 4 percent spread on the offering price. There will also be $250,000 in out-of-pocket costs to the corporation. a. Compute the net proceeds to the Presley Corporation. (Do not round intermediate calculations and round your answer to the nearest whole dollar.)
Answers
Answer:
Missing question is "a. Compute the net proceeds to the Presley Corporation. (Do not round intermediate calculations and round your answer to the nearest whole dollar.) Net proceeds
b. Compute the earnings per share immediately before the stock issue. (Do not round intermediate calculations and round your answer to 2 decimal places.) Earnings per share
c. Compute the earnings per share immediately after the stock issue. (Do not round intermediate calculations and round your answer to 2 decimal places.) Earnings per share "
a. Net proceeds = Shares issued * Share price*(1-0.04) - Direct cost
Net proceeds = 500,000 * $25*(1-0.04) - $250,000
Net proceeds = 500,000*$24 - $250,000
Net proceeds = $12,000,000 - $250,000
Net proceeds = $11,750,000
b. EPS = Earnings / Shares
EPS = $7,000,000 / 2,000,000 shares
EPS = $3.50 per share
c. EPS = After tax earnings / Total shares
EPS = $7,000,000 / (2,000,000 + 500,000)
EPS = $7,000,000 / 2,500,000 shares
EPS = $2.80 per shares
The yield on a three-month T-bill is 4%, the yield on a 10-year T-bond is 5.36%. the market risk premium is 10.18%. and the Allen Company has a beta of 1.25. Using the Capital Asset Pricing Model (CAPM) approach, Allen’s cost of equity is:_______
Answers
Answer: 18.09%
Explanation:
Capital Asset Pricing Model = Risk free rate + beta * Market premium
= 5.36% + 1.25 * 10.18%
= 0.18085
= 18.09%
Note: Use the yield on a 10-year T-bond as long term risk free rates take into account more volatility.
you are planning to organize a get together for alumni. as an organizer send an invitation letter to all alumni
Answers
Answer:
hehe
Explanation:
hehe