Answer:
Explanation:
The consumption function C = 100 + 0.75Y represents the relationship between consumption and disposable income, where C is consumption and Y is disposable income. The equation tells us that for every dollar of disposable income, consumers will spend 75 cents on consumption.
The equilibrium level of output is determined by the intersection of the aggregate demand (AD) and aggregate supply (AS) curves. The AD curve can be derived by adding together the planned consumption, planned investment, planned government spending and planned net exports. In this case, we have:
AD = C + I + G + NX = C + 300 + 600
The aggregate demand equation becomes AD = 100 + 0.75Y + 300 + 600
The aggregate supply equation represents the relationship between the quantity of goods and services produced and the price level, assuming a fixed level of technology and input prices. For this problem, we are assuming that aggregate supply is perfectly inelastic, meaning it does not change with price level.
Given that G = 600 and T = 400, disposable income will be Y = T + Tr(Y-T) = 400 + 0.8(Y-400)
Therefore, we have the equations:
AD = 100 + 0.75Y + 300 + 600
Y = 400 + 0.8(Y-400)
We can now solve for Y by substituting the second equation into the first:
100 + 0.75(400 + 0.8(Y-400)) + 300 + 600 = Y
Solving for Y, we find that the equilibrium level of output is Y = 2200.
In a Keynesian cross diagram, this point would be represented by the intersection of the AD and AS curve.
If government spending (G) and Tax (T) rises by 200, the AD curve shifts to the right. This means that the aggregate demand for goods and services is increasing, which causes an increase in the equilibrium output. The new equilibrium output (Y) will be greater than 2200 and can be found by solving for the new AD function. With the new AD function, the new output Y can be found by using the same steps that you have done above.
It's worth noting that in the above scenario, We are assuming that the aggregate supply is perfectly inelastic, this means that the price level is constant, if the aggregate supply is elastic, then an increase in AD will also lead to an increase in price level, this is known as inflation, which will affect the value of Y.
The decision to start a business and the decision to attend college:___________
a. are the same in that each decision involves the same costs and benefits and the same opportunity costs
b. are different in that in starting a business, you should mainly consider the cost-benefit principle, whereas in attending college, you should mainly consider the opportunity cost principle
c. are similar in that in both cases, you will want to consider the cost-benefit principle and the opportunity cost principle
d. are different in that in starting a business, you should mainly consider the opportunity cost principle, whereas in attending college, you should mainly consider the cost-benefit principle
Answer:
c. are similar in that in both cases, you will want to consider the cost-benefit principle and the opportunity cost principle.
Explanation:
Opportunity cost also known as the alternative forgone, can be defined as the value, profit or benefits given up by an individual or organization in order to choose or acquire something deemed significant at the time.
Simply stated, it is the cost of not enjoying the benefits, profits or value associated with the alternative forgone or best alternative choice available.
Similarly, cost-benefit analysis is used to examine and compare the cost associated with a project or task and the benefits derived from it.
Hence, the decision to start a business and the decision to attend college are similar in that in both cases, you will want to consider the cost-benefit principle and the opportunity cost principle
The decision to start a business and the decision to attend college is similar in that in both cases, you will want to consider the cost-benefit principle and the opportunity cost principle.
The following information should be considered:
In the case of cost-benefit principle, the additional benefit that received should be more than the extra cost i.e. incurred. While on the other hand, the opportunity cost is considered as the benefit but not received due to not choosing the next best alternative.Therefore we can conclude that the correct option is c.
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Type the correct answer in the box. Spell all words correctly.
What is the advantage of employing more than one sales channel?
Employing more than one sales channel is useful to lessen the ______ that arise from dependence on specific clients or markets.
Answer:
The risks
Explanation:
That is what goes in the blank
Answer:
risks
Explanation:
correct on edmentum
11,400 shares of common stock outstanding at a price of $48 per share, It has also issued 300 bonds with a coupon rate of 6.7 percent paid semiannually, and 275 shares of preferred stock that sells a price of $90 per share The bonds mature in 29 years, have a Par value of $1,000, and sell at 108 percent of par. What is the capital structure weight of the common stock
Answer:
0.4485
Explanation:
Calculation to determine the capital structure weight of the common stock
First step is to calculate the Value of Common Stock
Value of Common Stock = 11,400(48)
Value of Common Stock= $547,200
Second step is to calculate Value of Preferred Stock
Value of Preferred Stock = 275(90)
Value of Preferred Stock = $24,750
Third step is to calculate the Value of Debt
Value of Debt = 1.08(2,000)(300)
Value of Debt= $648,000
Now let calculate the Weight of common stock
Weight of common stock =$547,200 /(547,200 + 24,750 + 648,000)
Weight of common stock=$547,200/$1,219,950
Weight of common stock = 0.4485
Therefore the capital structure weight of the common stock is 0.4485
Suppose a stock had an initial price of $91 per share, paid a dividend of $1.80 per share during the year, and had an ending share price of $108. a. Compute the percentage total return. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What was the dividend yield
Answer:
A. 31.65%
B. 1.98
Explanation:
A. Calculation to determine the percentage total return
Using this formula
Percentage total return= Increase in price+ Dividends÷ Initial price
Let plug in the formula
R = [($118 - 91) + 1.80] / $91
R=$28.8/$91
R = .3165*100
R=31.65%
Therefore the percentage total return is 31.65%
B. Calculation to determine the Dividend yield
Using this formula
Dividend yield= Dvidend / initial price
Let plug in the formula
Dividend yield = $1.80 / $91
Dividend yield = .0198*100
Dividend yield = 1.98%
Therefore Dividend yield is 1.98%
2. Start by creating a list of 5-10 local and remote businesses currently operating that you think would hire project
managers?
Amazon, Coinbase, HubSpot, IQVIA, PRA Health Sciences, Robert Half International, Thermo Fisher Scientific, and UnitedHealth Group are among the organizations that allow project managers to work remotely.
By decreasing risk and giving precise timings and decision points that assist guarantee projects are delivered on-time and within budget, project planning helps avoid the disappointment of failed and delayed projects. Project managers work with teams to divide a project into smaller, more manageable chunks. Project managers can better manage their teams and respond to problems by dividing the project down into a defined procedure with assigned tasks, dates, and milestones.
A local business could be a small shop, a food truck, or an office building. Because the local business owner owns the building where it is located, it differs from a chain store in another way. The majority of local businesses are often modest, family-run enterprises. Even though your business or client's office is in the same location as yours, working remotely can simply mean doing so. Working from home is hardly a glamourous lifestyle option. It's a decision to increase effectiveness and balance.
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4. What was the strengths and weakness of each contributors/authors theory/principles?
Answer:In the modern world, every firm needs to create a successful management strategy. This procedure combines planning, organisation, incentive, and control to create a productive business function that will aid in the accomplishment of goals and objectives. Scientific management, which can be observed in the operational strategies of Toyota and Apple enterprises, is one of the practical and tested methods of controlling the work of the organisation. To sustain a competitive position, it is beneficial to design a specific strategy while adhering to individual values, viewpoints, and activity techniques.
Explanation:
1. Gross margin percentage. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) 2. Net profit margin percentage. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) 3. Return on total assets. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) 4. Return on equity. (Round your percentage answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34).)
Answer:
A. 34.2%
B. 4.5%
C. 8.1%
D.10.64%
Explanation:
a) Calculation to determine Gross margin percentage
Using this formula
Gross margin percentage = Gross profit/Net Sales
Let plug in the formula
Gross margin percentage= 27000/79000
Gross margin percentage = 34.2%
b) Calculation to determine Net profit margin
Using this formula
Net profit margin = Net income/Net Sales
Let plug in the formula
Net profit margin = 3540/79000
Net profit margin = 4.5%
c) Calculation to determine Return on assets
Using this formula
Return on assets = (Net income+Interest expense)/Average total assets
Let plug in the formula
Return on assets = (3540+360)/48120
Return on assets= 8.1%
d) Calculation to determine Return on equity
Using this formula
Return on equity
= Net income/Average equity
Let plug in the formula
Return on equity = 3540/33270
Return on equity =10.64%
Hedge funds report average returns in December that are higher than their average returns in other months. This phenomenon __________. I. is called the Santa effect II. often results from over generous valuation of illiquid assets III. appears stronger for lower-liquidity funds IV. can be explained by managers' attempts to inflate assets to collect higher performance bonuses Group of answer choices g
Answer:
I, II, III, and IV
Explanation:
A hedge fund is made up of relatively liquid assets that are used to improve performance though short selling, leverage and derivatives.
There is use of complex trading techniques, risk management, and portfolio construction.
Usually a spike in returns occurs during December, this is called the Santa effect.
Managers receive an incentive fee when there is a good past performance of hedge funds.
So during December they tend to inflate the value of hedge funds.
This results in stronger valuation for low liquidity funds
In the Basic Solow Model without exogenous growth, if the population, and therefore the labor supply, doubles:_______
a. Steady state output per worker will fall by half.
b. Steady state output per worker will fall by more than half.
c. Steady state output per worker will fall by less than half.
d. Steady state output per worker will be unchanged.
Answer:
In the Basic Solow Model without exogenous growth, if the population, and therefore the labor supply, doubles steady state output per worker will be unchanged.
Explanation:
According to the given scenario options A, B and C are ruled out. Hence, the answer to the above question is option D. Steady state output per worker will be unchanged.
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A truck acquired at a cost of $285,000 has an estimated residual value of $14,100, has an estimated useful life of 43,000 miles, and was driven 3,900 miles during the year. Determine the following. If required, round your answer for the depreciation rate to two decimal places. (a) The depreciable cost $fill in the blank 1 (b) The depreciation rate $fill in the blank 2 per mile (c) The units-of-activity depreciation for the year
Answer:
a. $270,900
b. $6.30
c. $24,570
Explanation:
(a) The depreciable cost = $270,900
(b) The depreciation rate = $6.30
(c) The units-of-activity depreciation for the year =- $24,570
g One of the major advantages that market economies have over command economies is that a. They are more able to quickly and efficiently deal with situations that require coordination among consumers and producers. b. Market economies make better use of available information about the efficient allocation of resources and goods. c. Markets do not always work efficiently, which can lead to a misallocation of resources. d. All of the above.
Answer: They are more able to quickly and efficiently deal with situations that require coordination among consumers and producers
Explanation:
A market economy simply refers to the economy that's being regulated through the forces of demand and supply. It should also be noted that government plays a limited role in such economy.
On the other hand, command economy is one whereby the government is in charge of the production, distribution and allocation regarding goods and services.
An advantage of the market economy over the command economy is Tlyhst they are more able to quickly and efficiently deal with situations that require coordination among consumers and producers. This is because the producers and the consumers generally control the market thereby coordination is easier.
Assume you just purchased 100 shares of Apple stocks at $300. You are worrying that the competition from other tablet PC and smart phone producers will have a negative impact on Apple stock prices in 1 month. Generally speaking, you are still quite bullish on Apple stock. In order to hedge against this downside risk, you establish a protective put position by buying a put option contract with around 1-month maturity on Apple stock. However, the premium of the put option with strike price at $300 is $12, which is quite expensive. If you feel purchasing the put option with strike price at $300 and $12 premium is too expensive, what else can we do to reduce the cost of protective put position
Answer:
If you believe that the premium is too expensive, then you should try to purchase another put option with a lower strike price. This will probably reduce your potential profits, but it will also decrease the amount of money that you will pay for the put options. For example, a put option with a strike price of $290 might be worth $5.
Describe four ways in which the government creates an enabling business environment.
(4 mks)
Answer:
Provision of credit facilities at favourable rates.
Ensuring political stability and good will.
Training and educating the population to create a pool of skilled manpower.
Marketing of final products for producers.
Aubrae Company is making adjusting entries for the year ended December 31 of the current year. In developing information for the adjusting entries, the accountant learned the following:
a. A two-year insurance premium of $4,560 was paid on October 1 of the current year for coverage beginning on that date. The bookkeeper debited the full amount to Prepaid Insurance on October 1.
b. At December 31 of the current year, the following data relating to Shipping Supplies were obtained from the records and supporting documents.
Shipping on hand, January I of the current year $13,000
Purchases of shipping supplies during the current year 75,000
Shipping hand, counted on December 31 of the current year 20,000
Required:
a. Using the process illustrated in the chapter, record the adjusting entry for insurance at December 31 of the current year.
b. Using the process illustrated in the chapter, record the adjusting entry for supplies at December 31 of the current year, assuming that the shipping supplies purchased during the current year were debited in full to the account Shipping Supplies.
c. What amount should be reported on the current year’s income statement for Insurance Expense? For Shipping Supplies Expense?
d. What amount should be reported on the current year’s balance sheet for Prepaid Insurance? For Shipping Supplies?
Answer:
Aubrae Company
Adjusting Journal Entries:
a. Insurance:
Debit Insurance expense $570
Credit Prepaid Insurance $570
To record insurance expense for 3 months.
b. Shipping supplies:
Debit Shipping supplies expense $68,000
Credit Shipping supplies $68,000
To record shipping supplies expense for the year.
Explanation:
a) Data and Analysis of Adjusting Entries:
a. Insurance expense $570 Prepaid Insurance $570
($4,560/24 * 3)
b. Shipping supplies expense $68,000 Shipping supplies $68,000
Insurance Expense:
Prepaid insurance = $4,560 for 24 months
Each month equals $190
Expense for October to December = $570 ($190 * 3)
Shipping expense:
Shipping on hand, January I of the current year $13,000
Purchases of shipping supplies during the current year 75,000
Shipping hand, December 31 of the current year (20,000)
Shipping supplies used during the current year = $68,000
Egrane, Inc.'s monthly bank statement showed the ending balance of cash of $18,700. The bank reconciliation for the period showed an adjustment for a deposit in transit of $1,600, outstanding checks of $2,200, a NSF check of $900, bank service charges of $40 and the EFT from a customer in payment of the customer's account of $1,700. What is the up-to-date ending Cash balance
Answer:
Up-to-date cash balance $18,100
Explanation:
The computation of the up to date ending cash balance is shown below:
Cash balance as per bank statement $18,700
Add: Deposit-in-transit $1,600
Less: Outstanding checks -$2,200
Up-to-date cash balance $18,100
Here we add the deposits and subtracted the outstanding checks so that the up to date cash balance could come
The same would be considered
cuáles son las tres partes de una fracción
Waterway Industries is planning to sell 1000 boxes of ceramic tile, with production estimated at 670 boxes during May. Each box of tile requires 44 pounds of clay mix and a 0.75 hour of direct labor. Clay mix costs $0.40 per pound and employees of the company are paid $16 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Waterway has 4200 pounds of clay mix in beginning inventory and wants to have 3900 pounds in ending inventory. What is the total amount to be budgeted for manufacturing overhead for the month
Answer:
Allocated MOH= $8,844
Explanation:
Giving the following information:
Production= 670 boxes
Each box of tile requires 0.75 hours of direct labor.
Direct labor rate= $16 per hour.
Manufacturing overhead is applied at a rate of 110% of direct labor costs.
First, we need to determine the total direct labor costs:
Direct labor hours= 670*0.75= 502.5
Direct labor costs= 502.5*16= $8,040
To calculate the applied overhead, we need to use the following formula:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 1.1*8,040
Allocated MOH= $8,844
3. You have Birr 1,500 to invest today at 7% interest compounded annually. Find how much you will have accumulated in the account at the end of (1) 3 years, (2) 6 years, and (3) 9 years.
1-The amount accumulated at the end of 3 years is Birr 1,837.56
2-The amount accumulated at the end of 6 years is Birr 2,251.10
3-The amount accumulated at the end of 9 years is Birr 2,757.69
The formula to calculate compound interest is
A=P(1+r/n)∧nt
Where, A= final amount
P= initial Principal
r= rate of interest
t= time period
n= number of times interest applied(annually, quarterly etc)
1- P=1500 r=7% t=3 n=1
Amount=1500(1+0.07/1)∧3
=1837.56
2- P=1500 r=7% t=6 years n=1
Amount = 1500(1+0.07/1)∧6
=2251.10
3- P=1500 rate=7% time t=9 years n=1
Amount= 1500(1+0.07/1)∧9
=2757.69
Therefore Amount at the end of 3 years is 1837.56
6 years is 2251.10 and at the end of 9 years is 2757.69
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Fitz Company reports the following information.
Selected Annual Income Statement Data
Net income $373,000
Depreciation expense 45,200
Amortization expense 8,800
Gain on sale of plant assets 6,300
Selected Year-End Balance Sheet Data
Accounts receivable decrease $ 140,100
Inventory decrease 51,500
Prepaid expenses increase 6,800
Accounts payable decrease 9,700
Salaries payable increase 2,300
Use the indirect method to prepare the operating activities section of its statement of cash flows for the year ended December 31.
Answer:
operating activities section
Net income 373,000
Adjustment for non cash items :
Depreciation expense 45,200
Amortization expense 8,800
Gain on sale of plant assets (6,300)
Adjustment for Changes in Working Capital :
Accounts receivable decrease 140,100
Inventory decrease 51,500
Prepaid expenses increase (6,800)
Accounts payable decrease (9,700)
Salaries payable increase 2,300
Net Cash Provided by Operating Activities 598,100
Explanation:
The operating activities section of its statement of cash flows for the year ended December 31 has been prepared above using indirect method.
Sardi Incorporated is considering whether to continue to make a component or to buy it from an outside supplier. The company uses 13,600 of the components each year. The unit product cost of the component according to the company's cost accounting system is given as follows: Direct materials $ 9.40 Direct labor 6.40 Variable manufacturing overhead 2.20 Fixed manufacturing overhead 4.20 Unit product cost $ 22.20 Assume that direct labor is a variable cost. Of the fixed manufacturing overhead, 30% is avoidable if the component were bought from the outside supplier. In addition, making the component uses 3 minutes on the machine that is the company's current constraint. If the component were bought, time would be freed up for use on another product that requires 6 minutes on this machine and that has a contribution margin of $5.80 per unit. When deciding whether to make or buy the component, what cost of making the component should be compared to the price of buying the component
Answer:
See below
Explanation:
Sardi Inc.
Cost of making components
Direct materials = $9.40
Direct labor = $6.40
Variable manufacturing overhead = $2.20
Fixed manufacturing overhead = (30% × $4.20 is avoidable) = $1.26
Opportunity cost = ($5.80 per unit ÷ 6 minutes per unit) × 3 minutes = $2.90
Total cost
= $9.40 + $6.40 + $2.20 + $1.26 + $2.90
= $22.16
Therefore, the cost of making the component should be compared to the price of buying the component at $22.16
Your assignment is to research the various types of financing deals currently being offered for a hypothetical condominium you plan to buy. The following assumptions apply to this project: The purchase price of the condo you plan to buy is $200,000. The condo was recently appraised for $220,000. You plan to make a 25% down payment ($50,000) and are seeking a $150,000 mortgage. You have a job that qualifies you for that size mortgage. Your assignment is to compare the current interest rates, costs, and features associated with a 15-year fixed-rate mortgage, a 30-year fixed-rate mortgage, and an adjustable-rate mortgage. What are the current interest rates and discount points of the 15- and 30-year fixed rate mortgages
Answer:
?????
Explanation:
What’s the maximum number of conditions that can be set for a bank rule?
The maximum number of conditions that can be set for a bank rule is 5.
What is a bank rule?A bank rule is one that has been set up by the bank that will be followed in that branch. This could be with the relation of the payment, cheques, deposits, or bank charges.
There can be various numbers of charges that can be set by the bank. The central bank will be the one that will set the rate or will decrease the rate of the changes. This was to impact the bank.
As different banks may have different types of rules as well as regulations that they will use to help form the rules but the maximum number will be five.
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Kensington Corp. reports net income of $280,000 for the year ended December 31, 2020. The company recorded an unrealized loss on available-for-sale debt securities of $15,000 (after tax) for the year ended December 31, 2020 and deferred the loss. The company declared dividends of $40,000 for the year and its tax rate is 25%. The December 31, 2019, balance in accumulated other comprehensive income is $18,000 (debit balance) and the balance in retained earnings is $100,000 (credit balance). What is the ending balance in accumulated other comprehensive income and retained earnings on December 31, 2020
Answer:
Kensington Corp.
Accumulated other Retained Earnings
comprehensive income
December 31, 2020 $33,000 (DR) $340,000 (CR)
Explanation:
a) Data and Calculations:
Tax rate = 25%
Accumulated other Retained Earnings
comprehensive income
December 31, 2019 $18,000 (DR) $100,000 (CR)
Net income for 2020 280,000
Unrealized loss for 2020 15,000
Dividends for 2020 (40,000)
December 31, 2020 $33,000 (DR) $340,000 (CR)
The Feline Company has been having some difficulties estimating its manufacturing overhead costs. In the past, manufacturing overhead costs have been related to production levels. However, some production managers have indicated that the size of their production lots might also be having an impact on the amount of their monthly manufacturing overhead costs. In order to investigate this possibility, the company collected information on its monthly manufacturing overhead costs, production in units, and average production lot size for 2020.
Month Production (Units) Manufacturing Overhead Cost Average Monthly Production Lot Size
1 75,000 $ 925,800 20
2 90,000 843,875 19
3 65,000 910,125 24
4 80,000 946,000 19
5 55,000 879,000 24
6 50,000 825,000 18
7 85,000 960,000 22
8 105,000 1,053,500 25
9 102,000 1,020,000 23
10 68,000 905,000 20
11 75,000 938,000 22
12 95,000 995,000 24
Required:
(a.) Use the high-low method to estimate next month's manufacturing overhead costs, assuming the company is planning to produce 92,000 units.
(b.) Use the high-low method to estimate next month's manufacturing overhead costs, assuming the company is planning to run a 21-lot size.
Answer:
A
Explanation:
What forces in the external environment have created opportunities or challenges for Michelle Phan? Explain.
Answer :
1. Social Media Platforms:
2. Beauty Industry Trends:
3. Economic Conditions:
4. Competition:
Pinkin Inc. needs to determine a price for a new phone model. Pinkin desires a 25% markup on the total cost of the phone. Pinkin expects to sell 30,000 phones. Additional information is as follows: Variable product cost per unit$75 Variable administrative cost per unit 50 Total fixed overhead 85,000 Total fixed administrative 65,000 Using the total cost method what price should Pinkin charge
Answer:
See below
Explanation:
Total costs = Product costs + Administrative costs
= ($75 × 30,000) + $85,000 - ($50 × 30,000) + $65,000 = $3,900,000
Total cost per unit =Total cost / Units expected to be sold= $3,900,000 /30,000 = $130
Markup per unit = Total cost per unit × Markup percentage = $130.00 × 25% = $32.5
Why did bank runs cause banks to fail?
Answer:
Another phenomenon that compounded the nation's economic woes during the Great Depression was a wave of banking panics or “bank runs,” during which large numbers of anxious people withdrew their deposits in cash, forcing banks to liquidate loans and often leading to bank failure.
Explanation:
Answer:
It caused them to fail becuase people withdrew their deposits in cash, t o liquidate loans.
Explanation:
“Bank runs” was when large numbers of anxious people withdrew their deposits in cash, forcing banks to liquidate loans , leading to bank failure.
Which option best describes financial well-being?
OA. Making the most money in the shortest amount of time
B. Using money wisely in order to support a lifestyle that can be
enjoyed for a long time
OC. Making money in order to feel morally superior to those with less
D. Amassing the most money in order to become rich and famous
Answer:
B. Using money wisely in order to support a lifestyle that can be enjoyed for a long time.
Explanation:
A is incorrect because it isn't practical. Making the most amount of money in a short time only helps you in the short run. It doesn't necessarily ensure that you have a lot of money in the long run. B is correct because it is the most practical, responsible, and wise choice. By using your money wisely, you can save up for something you really want, like a car or laptop. This also gives you security in the future because you know you have money and can dip into it in an emergency situation. C is incorrect because it's only trying to satisfy an impractical feeling. Making money just to feel morally superior to those with less doesn't mean that you're good at your job or will continue to make the same amount all the time. It mainly means that you are satisfying the need to feel better or higher up in the wealth ladder than others. D is incorrect because making money just to be rich and famous doesn't mean you're going to make smart and wise decisions using it. It also doesn't assure you that it will stay that way forever. You may need to pay rent on a mansion and lose a ton of money, therefore, dropping your rich status.
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Which of the following statements does not correctly describe an adjustment to net income when determining cash flows from operating activities using the indirect method?
A. An increase in wages payable will be added to net income.
B. An increase in prepaid expenses will be subtracted from net income.
C. An increase in income taxes payable will be subtracted from net income.
D. A gain on the sale of a depreciable asset will be subtracted from net income.
Answer:
C. An increase in income taxes payable will be subtracted from net income.
Explanation:
First and foremost, an increase in current assets such as prepaid expenses means that the company parted with cash since it has made payment in advance prior to the expenses being incurred, hence, it is a cash outflow while a decrease in the current asset has an opposite impact.
However, an increase in current liabilities means the company is owing more and has avoided a cash outflow, in essence, it is treated as cash inflow, in other words, the increase in income taxes payable is an inflow not deducted as if it is an outflow
Marigold Corporation had net income of $170000 and paid dividends to common stockholders of $51000 in 2019. The weighted average number of shares outstanding in 2019 was 34000 shares. Marigold Corporation's common stock is selling for $32 per share on the New York Stock Exchange. Marigold Corporation's price-earnings ratio is :__________
a. 4.92 times.
b. 9.14 times.
c. 6.40 times.
d. 5.00 times.
Answer:
P/E ratio = 6.40 times
Option c is the correct answer.
Explanation:
The P/E ratio or price earnings ratio measures the price that the investors are willing to pay for each $1 of earnings of the company. It is calculated as follows,
P/E ratio = Price per share / Earnings per share
We can calculate the earnings per share by dividing the net income by the number of shares outstanding.
P/E ratio = 32 / (170000 / 34000)
P/E ratio = 6.40 times