The debt coverage ratio is used to show the NOI can drop before it stops paying the property's debts. Typically, lenders look for a minimum DCR of 1.20.
The ratio of operational revenue available for debt servicing for interest, principal, and lease payments is called the debt service coverage ratio (DSCR), also referred to as the "debt coverage ratio" (DCR). It is a widely used yardstick for evaluating how well-equipped a person or business is to generate enough cash flow to pay off its debt (including lease) obligations.
The easier it is to get a loan, the greater this ratio is. The expression can be used to represent a minimal ratio that is acceptable to a lender or a loan requirement in commercial banking. In some situations, breaking a DSCR covenant qualifies as a default.
In general, it is calculated by:
DSCR = Net Operating Income/Debt Service
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A decrease in the size of a tax is most likely to increase tax revenue in a market with?.
A decrease in the size of a tax is most likely to increase tax revenue in a market with a) elastic demand and elastic supply.
In the field of business, an elastic demand can be described as the increase of demand for a certain product that occurs in the market due to the change that might be occurring in the price of the product. If we decrease the size of the tax, then this means that the elastic demand will increase which will lead to an increase in tax revenue due to elastic demand.
An elastic supply can be described as an increase in the supply of a product. When the tax is decreased for a product, its demand will increase which will cause the elastic supply to become larger. When the elastic supply increases, the tax revenue from that product will increase.
Although a part of your question is missing, you might be referring to this question:
A decrease in the size of a tax is most likely to increase tax revenue in a market with
a) elastic demand and elastic supply.
b) elastic demand and inelastic supply.
c) inelastic demand and elastic supply.
d) inelastic demand and inelastic supply.
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do you think the company is doing enough to limit the well-known risks and costs associated with high expatriate failure rates? is there anything else it might do?
The company is doing enough to limit the well known risk and costs associated with high expatriate failure rate.
Failure rate:
Failure rate refers the frequency with which an engineered system or component fails, expressed in failures per unit of time.
Given,
Here we need to find that the company is doing enough to limit the well-known risks and costs associated with high expatriate failure rates.
Here we think that the company is doing good enough and using their human resources fullest capacity to find potential prospects/managers to be able to successful in their host countries.
And they only select potential prospects/managers that have the ability to work cross functionally internationally/domestically and able to manage while abroad.
So, once the employee is overseas, they help with the expenses such as child’s school tuition, tax equalization, cultural training, and subsidized housing.
Then they will also increase their salaries from two to four times the employee’s salary.
Through this they also make sure that once they completed their overseas task, they are able to come back and readjusting to their old life after extended time in different culture.
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alberto company uses the lower-of-cost-or-market method, on an individual-item basis, in pricing its inventory items. the inventory at december 31, 2019, consists of products d, e, f, g, h, and i. relevant per-unit data for these products appear below. item d item e item f item g item h item i quantity on hand 18 15 10 25 15 30 original cost $75 $80 $80 $80 $50 $36 replacement cost $120 $72 $70 $30 $70 $30 based upon data, what is the balance of merchandise inventory account before application of lcm principle? example of answer: 4000 (no comma, space, decimal point, or $ sign) question 23 options:
The inventory value prior to LCM implementation is $7,180.
An entity uses LCM (lower of cost or market value) when valuing the closing inventory for a time period to reflect the inventory at a lower cost in accordance with the accounting norms applied.
1) Inventory value calculation prior to LCM adoption:
Particulars Item D Item E Item F Item G Item H Item I Total
Quantity (Q) 18 15 10 25 15 30 113
Cost (C) $75 $80 $80 $80 $50 $36
Value (Q * C) $1350 $1200 $800 $2000 $750 $1080 $7180
As a result, the inventory value prior to LCM implementation is $7,180.
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a new project has an initial cost of $172,000. the equipment will be depreciated on a straight-line basis to a book value of $65,000 at the end of the four-year life of the project. the projected net income each year is $15,300, $18,100, $23,400, and $15,200, respectively. what is the average accounting return? multiple choice
The average Accounting return is 15.19%.
Data are given in the question
Initial cost=$172,000
Book Value=$172,000
Projected net income each year is $15,300, $18,100, $23,400, and $15,200
Average Accounting return can be calculated by dividing the Average Project Net Income by the Average Book Value Investment
AAR = Average Project Net Income / Average Book Value Investment
Average Project Net Income=Total Income/ No of years
=($15,300+ $18,100 +$23,400+15,200)/ 4
$72,000 / 4 years
= $18,000
Average book value of investment = $172,000 + ($65,000/2) = $118,500
AAR=$118,500/$18,000
AAR=15.19%
So Average Average Accounting return is 15.19%.
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At the end of the year 2 accounting period, deyoung company determined that the market value of its inventory was $79,800. The historical cost of this inventory was $81,400. Defazio uses the perpetual inventory method. Assuming the amount is material, how will the entry necessary to reduce the inventory to the lower of cost or market affect the elements of the company’s financial statements?.
The entry required to reduce inventory to the lower cost or market affects the financial statements of the company by decreasing total assets, gross margin, and net income of the company.
This can be explained using the concept of Perpetual Inventory. Perpetual inventory system may be defined as the method of estimating and calculating the inventory of the country on a regular basis. This estimation is done by keeping a tract of all the electronic records rather than checking the physical records. The value of any good within the market can change with time and this value needs to be tracked because the goods kept in the inventory for longer time can show a change in value. If the value increases then it results in the profit of company but if the value decreases then it may lead to loss of the company. The method of perpetual inventory keeps record of all these variations in prices of goods.
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one major objective in setting standards is to a.set them low so employees will not be stressed or pressured. b.set them to actual costs. c.set them high to push employees to work harder and faster. d.motivate employees to achieve efficient operations.
Direct labor time variances are unfavorable when actual hours exceed standard hours. Each of Douglas Industries' 5,500 units required 2.5 standard hours of production time.
What does it mean to use the terms "standard hours allowed" or "standard quantity allowed"?"Standard hours allowed" and "standard quantity allowed" refer to the following: the actual output in units divided by the permissible standard input. In a standard costing system, overhead is added to work in progress by: dividing the period's output in standard hours by the rate that has been predetermined.
What are the three things you need to think about to make sure your customers are happy?Customer understanding, service, and technology are the three main factors influencing modern customer satisfaction. You can create real customer loyalty and provide positive, consistent customer experiences by utilizing these factors.
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In which market model do firms rely on product differentiation to distinguish themselves from the competition?.
"Monopolistic Competition" is the market model where firms rely on product differentiation to distinguish themselves from the competition. The answer can also be "Monopolistically Competitive."
Businesses operating in monopolistically competitive markets differentiate their products and services with the belief that their offerings are superior to or incomparable to those of their rivals.
Despite the fact that businesses significantly rely on product differentiation, there are many small buyers and too many sellers because there are no barriers to entry. However, if a company can successfully differentiate its products in a monopolistic competition market, it will get a significant number of loyal clients and potentially become very profitable.
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crest toothpaste offers new whitening toothpaste one year, a new gel swirl design the next year, and an improved cleaning formula the year after. crest toothpaste does this because it is
A firm engaging in monopolistic competition in an effort to preserve its economic profit.
What is meant by economic profit?This difference between the proceeds from the sale of a product and the prices of all inputs utilized, or any opportunity costs, is known as an economic gains or losses. Opportunity expenses or explicit costs are subtracted from earned revenues to determine economic profit.
What is an example of economic profit?Let's imagine a business sells plush animals and makes $10,000 in revenue. There are $5,000 in explicit costs and $2,000 in implicit costs to make them. We can calculate the economic gain of creating these toys as $1 million ($10,000 - $7 million - $2,000) using the calculation above.
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he gilbert instrument corporation is considering replacing the wood steamer it currently uses to shape guitar sides. the steamer has 6 years of remaining life. if kept, the steamer will have depreciation expenses of $650 for 5 years and $325 for the sixth year. its current book value is $3,575, and it can be sold on an internet auction site for $4,215 at this time. if the old steamer is not replaced, it can be sold for $800 at the end of its useful life. gilbert is considering purchasing the side steamer 3000, a higher-end steamer, which costs $11,600 and has an estimated useful life of 6 years with an estimated salvage value of $1,300. this steamer falls into the macrs 5-years class, so the applicable depreciation rates are 20.00%, 32.00%, 19.20%, 11.52%, 11.52%, and 5.76%. the new steamer is faster and allows for an output expansion, so sales would rise by $2,000 per year; the new machine's much greater efficiency would reduce operating expenses by $1,700 per year. to support the greater sales, the new machine would require that inventories increase by $2,900, but accounts payable would simultaneously increase by $700. gilbert's marginal federal-plus-state tax rate is 25%, and the project cost of capital is 15%. what is the npv of the project? do not round intermediate calculations. round your answer to the nearest dollar.
The correct answer is yes, we should replace the old steamer and Net Present Value of the Project is $1,330.
Calculation of Initial Investment
Initial Investment = Cost of New Machine + Investment of Net Working Capital - After-Tax Salvage Value of Old Machine today
Cost of New Machine = $13,000
Investment in Net Working Capital = Increase in Inventory - Increase in Accounts Payble = $2,900 - $700 = $2,200
Salvage Value of Old Machine today = $4,150
Current Book Value of Old Machine = $3,575
After-Tax Salvage Value of Old Machine today = Salvage Value - (Salvage Value - Current Book Value) * Tax rate = $4,150 - ($4,150 - $3,575) * 40%
= $4,150 - $230 = $3,920
Initial Investment = Cost of New Machine + Investment in Net Working Capital - After-Tax Salvage Value of Old Machine today
= $13,000 + $2,200 - $3,920 = $11,280
Calculation of Additional Terminal Cash Flow in Year 6
Additional Terminal Cash Flow in Year 6 = After-Tax Salvage Value of New Machine + Recovery of Investment in Net Working Capital - Loss of After-Tax Salvage Value of Old Machine
After-Tax Salvage Value of New Machine = Salvage Value of New Machine* (1 - Tax Rate) = $1,300 * ( 1 - 0.40) = $780
After-Tax Salvage Value of Old Machine = Salvage Value of Old Machine * ( 1- Tax Rate) = $800 * ( 1 - 0.40) = $480
Additional Terminal Cash Flow in Year 6 = After-Tax Salvage Value of New Machine + Recovery of Investment in Net Working Capital - Loss of After-Tax Salvage Value of Old Machine = $780 + $2,200 - $480=$2,500
Net Incremental Cash Flow in Year 6 = Incremental Operating Cash Flow in Year 6 + Additional Terminal Cash Flow= $2,329.52 + $2,500
= $4,829.52
Calculation of Net Present Value of Replacement Project
Net Present Value = Present Value of Annual Net Incremental Cash Flow - Initial Investment = $12,610.44 - $11,280 = $1,330.44 = $1,330 (rounded off)
Since the Replacement Project will result in Positive NPV, therefore we should replace the Old Steamer.
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when griffiths sold his house to hippen, griffiths orally agreed to buy the house back at the selling price if hippen should happen to move within the next three years. two years later, hippen was transferred to miami and tried to sell the house back to griffiths, but griffiths refused. hippen sued for breach of contract, but griffiths claimed there was never an enforceable contract. who wins?
Griffiths wins. The purchase - or repurchase - of a house is a classic interest in land, and any such promise must be written to be enforceable.
The statute of frauds is a not unusual place regulation idea that calls for written contracts for sure agreements to be binding. The statute applies to land income and maximum purchases of products over $500. There are huge exceptions, which includes oral contracts wherein paintings has already started. As mentioned via way of means of the National Telecommunications Information Administration (NTIA), digital signatures aren't legally legitimate while signing: Wills and testamentary trusts. State statutes governing divorce, adoption or different own circle of relative's regulation. Court orders or legit courtroom docket documents.
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the target capital structure of a firm is the capital structure that a. minimizes the operating risk of the firm's assets. b. maximizes the tax shield created
The target capital structure of a firm is the capital structure that tends to maximize the price of the firm's stock.
So, the correct option is E.
The capital structure that a company is aiming to acquire is referred to as its target capital structure. To put it another way, "target capital structure" refers to the proportion of debt, preferred stock, and common equity that is anticipated to maximize a company's stock price. The creation of a target capital structure has as its goal the maximization of a company's market value.
In doing so, the board of directors and senior executives seek to identify the financial strategies that can raise a company's share price. Industry leverage, profitability, firm size, growth prospects, asset tangibility, anticipated inflation, and stock market return are the main variables influencing capital structure decisions that need to be looked into.
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The question is incomplete. So, the complete question is:
The target capital structure of a firm is the capital structure that:
A. minimizes the default risk of long-term debt.
B. minimizes the operating risk of the firm's assets.
C. maximizes the dividends paid to common stockholders.
D. maximizes the tax shield created by debt.
E. maximizes the price of the firm's stock.
b. how much overhead would be applied to production if 9,000 hours were used in the department during the month? if required, round your calculations to two decimal places and your final answer to the nearest dollar. $fill in the blank d28714fb4fabfc5 1
$49500 overhead applied to production if 9,000 hours were used in the department during the month. Here , is the full attached questions.
Direct labor hours = 9,000 ,10,000 , 11,000
Variable factory overhead cost ( $4.5)
4.5*9000= 40500
4.5*10000=45000
4.5*11000=49500
A flexible budget plan is one where expenditure adjusts or flexes in response to volume or movement changes.
A flexible expenditure strategy is more valuable and complex than a static one. (The static plan amounts remain constant. They remain unchanged from the amounts accumulated at the time the static expenditure plan was established and approved.)
The flexible budget plan will flex because the spending will include a variable rate for each unit of activity rather than a single fixed aggregate sum for costs that vary with volume or movement. Simply put, the flexible spending plan is becoming a more valuable tool for determining an administrator's effectiveness.
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omar hires petra, a real estate broker, to act as his agent to sell his land for $150,000. oil is discovered beneath the land, causing its market value to increase considerably. the agency agreement is likely
Omar hires Petra, a real estate broker, as an agent to sell his land for $150,000. Oil was discovered underground, greatly increasing its market value. The agency contract may be automatically terminated.
A tacit agency terminates certain circumstances where there is good reason to believe that one or both parties do not wish to continue the relationship. An agency shall terminate rights when either party dies or becomes incompetent, or if the purpose of the agency becomes unlawful.
If the law changes before the offer is accepted, the law will terminate the offer as it will become a void contract. In case the object of the offer is destroyed before it is accepted, this also means the termination of the offer.
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sail-awsail-away corporation makes sailboards, which are distributed by tropical marketing company to uv sports stores inc., which sells them to consumers. wen is injured while using a sail-away board that he bought from uv sports. in a product liability suit based on strict liability, wen may recover from:
In a product liability suit based on strict liability, Wen may recover from Sail-Away, Tropic, or UV Sports.
What is liability?Responsibility usually means that you are responsible for something, and it can also mean that you owe product money or services. For example, a homeowner's tax liability could be an amount owed to the city in property taxes or income taxes owed to the federal government. You can calculate a company's liability using the following formula: Liabilities = Assets – Equity. To determine the total amount of liabilities, find the sum of assets and equity on the balance sheet. According to the Strict Liability Rule, the law requires people to pay damages even if they were not at fault. In other words, people have to pay compensation to victims even if they take all necessary precautions.To learn more about liability from the given link :
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finance managers spend the majority of their time managing multiple choice equity financing. long-term financial needs. cash flow. short-term financial needs.
Finance managers spend the majority of their time handling long-term financial needs.
Financial management is the business function dealing with profitability, expenses, cash, and credit in order for the "organization to have the resources to carry out its aim as satisfactorily as feasible," with the latter commonly described as maximizing the firm's value for stockholders.
Financial managers (FM) are specialist experts who report directly to senior management, typically the financial director (FD); the function is viewed as 'Staff' rather than 'Line.' Financial management is primarily focused with short-term working capital management, with an emphasis on current assets and current obligations, as well as managing variations in foreign currency and product cycles, which is often accomplished through hedging. The function also includes the efficient and effective handling of funds on a daily basis.
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Why would an already-successful business owner conduct a marginal cost analysis for their product?
The main reason why an already-successful business owner might conduct a marginal cost analysis for their product is so that the already-successful business owner would be able to measure the additional benefits of one production activity versus its costs.
What is a marginal cost analysis?This refers to the term that is used to describe the effect of taking or having a marginal cost of a business analyzed, which would show products or activities that are already profitable and to make business decisions on this.
Hence, we can see that for a successful business, having a periodic marginal cost analysis for their product is to help them analyze the products and activities that they have that are more profitable than others.
With this in mind, one can easily see that the correct answer is that it would help measure the additional benefits of one production activity versus its costs.
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following the completion of a difficult assignment, pamela's supervisor told her that he was very pleased with her performance and her help in completing the project. the praise pamela received is an example of
Positive reinforcement is demonstrated by the compliments Pamela received.
Pamela's boss expressed his appreciation for her performance and assistance in finishing a challenging assignment to her after the project was finished.
The introduction of a pleasing or desirable stimulus after a behaviour is referred to as positive reinforcement. Reinforcing the behaviour with the desired stimulus increases the likelihood that it will happen again.
As it capitalises on the positive behaviours that have already been demonstrated and rewards the person you are working to train's innate propensities for good behavior, it is a positive parenting approach that is used for a variety of purposes and in a wide range of contexts.
In reality, according to the model developed by renowned behaviourist B. F. Skinner, positive reinforcement is just one of four types of conditioning.
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countess corporation is expected to pay an annual dividend of $3.85 on its common stock in one year. the current stock price is $67.35 per share. the company announced that it will increase its dividend by 3.10 percent annually. what is the company's cost of equity?
The current share price is $67.35. The corporation declared a 3.10 percent yearly dividend increase. The company's cost of equity is =8.82%. (Approx).
A company is a legal entity that exists apart from its owners. Corporations have many of the same rights and obligations as persons under the law. They can enter into contracts, lend and borrow money, sue and be sued, hire people, possess assets, and pay taxes. A corporation is legally distinct from its owners. Corporations have many of the same legal rights and obligations as individuals.
A key feature of a corporation is limited liability, which means that its shareholders are not personally liable for the company's debts. A company can be formed by an individual or by a group of people who share a same aim. This may not always imply making a profit.
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hailey corporation pays a constant $9.45 dividend on its stock. the company will maintain this dividend for the next 13 years and will then cease paying dividends forever. if the required return on this stock is 10.7 percent, what is the current share price? (do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
The current share price of Hailey Corporation is $64.76
Constant dividend on stock = $9.45
The required return on this stock = 10.7
Time period = 13 years
The market price for the exchange of one share of a company is known as the share price. A substantial portion of the company's ordinary shares is traded on the stock market, where investors can buy them.
Calculating the present value of the annuity
= Annuity × ( 1 - (1 + rate)^- time periods) / rate of return
= 9.45 × ( 1 - (1 + 10.7%)⁻¹³) / 10.7%
= 9.45 × 6.8529386295
= 64.76
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carlos purchased an apartment building on november 16, 2017, for $3,000,000. determine the cost recovery for 2017.
The cost recovery is $13,650. In the cost recovery method of accounting, a company only records the revenue it makes from a transaction when the client has paid enough of the invoice to cover all of the transaction's costs.
Statement demonstrating calculations
Particulars Amount
Building costs were $3,000,000.00.
Deduction for cost recovery: 3,000,000 *.00455
$13,650.00 is the cost recovery for 2017.
An expense and cost recovery system (ECRS) is a focused subset of "extract, transform, load" (ETL) that serves as a strong and adaptable set of applications, including programs, scripts, and databases designed to enhance the cash flow of businesses and organizations by automating the movement of data between cost recovery systems, electronic billing from vendors, and accounting systems.
In the cost recovery method of accounting, a company only records the revenue it makes from a transaction when the client has paid enough of the invoice to cover all of the transaction's costs.
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which of the following are not examples of defensive industries? a. food producers. b. durable goods producers. c. pharmaceutical firms. d. public utilities. e. b and c
They are not examples of producers of durable goods in defensive industries.
What exactly are non-consumable goods?
Nondurable consumer goods have a lifespan of minutes to three years and are purchased for immediate or almost immediate consumption. Fuel, clothing, footwear, and beverages are all common examples.
What kinds of things last?
Products that can be physically handled, can be kept in inventory, and typically last at least three years.
What are three examples of durable goods for consumers?
Appliances like washers, dryers, refrigerators, and air conditioners are examples of consumer durables; tools; televisions, computers, and other electronic devices; jewelry; trucks and cars; and furniture for the house and office.
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brinker accepts all major bank credit cards, including first savings bank's, which assesses a 4.5% charge on sales for using its card. on may 26, brinker had $5,000 in first savings bank card credit sales. what entry should brinker make on may 26 to record the deposit?
The deposit will be recorded in the journal as cash a/c debit, credit card expense a/c debit and credit sales a/c credit
A journal entry is the record of the financial transaction of a business in its financial books. The transactions of a business are recorded in a journal, which indicates the debit and credit balances. These specific journal entries can help in the authentication of transactions and also helps to know if they are supported by bills.
Charge on sales = 4.5%
Amount in savings = $5000
Credit card expense -
5,000 x 4.5%
= 225
Amount to be debited to cash -
5,000 - 225
= 4,775
The correct journal entry will be -
Cash A/c Dr. 4,775
Credit Card Expense A/c 225
To Credit Sales A/c. 5,000
( Being charged on sales for using a credit card)
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1) what will be the effects of issuing $3 billion of new debt and using the proceeds to pay a dividend on: wrigley's outstanding shares? on the price per share of wrigley's stock? (12 pts)
The number of shares outstanding will decrease if $3 billion in fresh debt is issued to purchase shares; however, the number of shares outstanding will not change if dividends are paid with this borrowed money.
Total assets less intangible assets (patents, goodwill, etc.) and liabilities equals a company's net assets value. Due to the $3 billion rise on both sides of the balance sheet, the book value does not change when the company issues new debt. The dividend payment has no impact on the shares' book value.
The amount of dividend paid per share will be deducted from the share price. The share price won't be directly impacted by repurchasing shares of business stock.
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godiva chocolatier invites consumers to stop by one of its stores for an unforgettable experience, including delectable chocolates, decorative gift collections, and unrivaled customer care. what type of retail service is godiva offering?
Godiva is offering full retail service.
Full-service retail makes an effort to manage almost every step of the purchase, from assisting the customer with product selection through payment alternatives. Full service retail stores offer a vast selection of desired goods at incredibly affordable retail pricing together with a qualified, customer-friendly and knowledgeable sales crew.
For example, Apple makes sure that all of its retail store staff members are appropriately trained to answer client inquiries. It is regarded as a pioneer in many facets of customer service since it offers consumers a wealth of information about the product, enabling them to make educated decisions. Customers receive assistance from store staff at every stage of the purchasing process.
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which of the choices best explains why this price will cause the firm to shut down instead of continuing to operate at a loss? total revenue > total variable costs total variable costs > total fixed costs total revenue < total variable costs total variable costs < total fixed costs total revenue < total fixed costs total revenue > total fixed costs
Option C. The choices best explains why this price will cause the firm to shut down instead of continuing to operate at a loss is when total revenue < total variable costs.
What is meant by total revenue?Total revenue is the overall sum of money received by a business through the sale of its products and services. Based on demand and price, it measures how successfully a company is generating revenue from its main operations.
It is determined by multiplying the amount of things sold by their price to determine a business's overall revenue. For instance, the total income would be 100 * $50, or $5,000, if Company A produced 100 widgets and sold them for $50 each.
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The cost and value of inventory increase as materials move down the supply chain. One way operations and supply chain managers counteract the negative aspect of this fact is by?.
Inventory pooling is one method operations and supply chain managers combat the unfavorable impact of this phenomenon.
The method of inventory pooling is frequently employed to manage supply chain unpredictability. Naturally, a customer's decision to buy is also influenced by the products that are offered at a specific business. Therefore, a centralized inventory system with a lengthy lead time for delivery runs the danger of losing sales to clients who are concerned about the availability of their products. We investigate how inventory pooling functions when customers who are concerned about product availability cancel a given purchase if the products are not available at a particular store, assuming a supply chain with a supplier and many retailers. We investigate who should stock items by creating a model with two random variables: Poisson demand and Bernoulli consumer response to out-of-stock.
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warren corporation is interested in a three-year, 11% annual coupon bond. a broker quotes a price of $930.35. what is the yield to maturity?multiple choice10%
The yield to maturity is equal to 14.00% in a three-year, 11% annual coupon bond that a broker quotes a price of $930.35.
What is yield to maturity?The yield to maturity (YTM), book produce, or redemption yield of a bond or other fixed-interest safety, such as gilts, is an estimate of the overall rate of return expected to be earned by an investor who buys a bond at a specific market price, holds it until maturity, and receives all interest payments and the capital redemption as scheduled. It is the (theoretical) internal rate of return (IRR, overall interest rate), which is the discount rate at which the bond's current price and the present value of all bond-related cash flows (principal and coupon payments) are equal. Although market convention is more frequently followed, the YTM is frequently expressed in terms of Annual Percentage Rate (A.P.R.).
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avalon industries buys equipment for $24,000, expects to use it for ten years, and then sell it for $3,000. using the straight-line method, the company should report annual depreciation for the equipment of:
Avalon Industries buys equipment for $24,000, expects to use it for ten years, and then sells it for $3,000. Using the straight-line method, the company should report annual depreciation for the equipment of $2,100.
Depreciation expense per year = (Cost − Residual value) × (1 ÷ Useful life)
= ($24,000 − $3,000) × 1 / 10
= $2,100
Depreciation is a term used in accounting to explain two related principles: first, the actual decline in an asset's truthful value over time, consisting of the fee of manufacturing facility gauge decreasing annually as it is utilized and deteriorates; second, the accounting statements' allocation of the asset's starting cost to the usage periods (depreciation with the matching principle).
Depreciation is thus the loss in asset value and the process of reallocating, or "writing down," the cost of a tangible asset (such as equipment), over the course of the asset's useful life. For both accounting and tax reasons, businesses depreciate long-term assets. A company's or entity's balance sheet is impacted by the asset's decline in value, and its income statement is impacted by its method of accounting for the asset's depreciation, which has an impact on net income. The cost is typically divided up as depreciation expense among the intervals during which the asset is anticipated to be used.
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15.14. what is the price of a european put option on a non-dividend-paying stock when the stock price is $69, the strike price is $70, the risk-free interest rate is 5% per annum, the volatility is 35% per annum, and the time to maturity is 6 months?
An option of the European variety is one that can only be exercised at maturity. An American style option, on the other hand, can be exercised anytime prior to the maturity date. The American style option is slightly more valuable than the European one, but everything else is the same.
Pay attention to the fact that this option is already worth $6.
What is the cost of a European call option on a stock that doesn't pay dividends?A European call option with a $50 strike price on a non-dividend-paying stock costs $6.The stock price is $51, the time until maturity is one year, the continuously compounded risk-free rate for all maturities is 6%, and the price of the stock is $51.
What is the cost of a $30 strike European put option with a six-month expiration date?The exchange technique is the accompanying: buy a put option and short one stock.5.A European call with a strike price of $30 and a six-month expiration date costs $2.The price of the underlying stock is $29, and two and five-month dividends of $0.50 are anticipated.
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the amount that investors are willing to pay for each dollar of annual earnings is reflected in the: group of answer choices return on assets. return on equity. debt-equity ratio. price-earnings ratio. dupont identity.
The amount that investors are willing to pay for each dollar of annual earnings is reflected in the price earning ratio. The correct answer would be option B.
Price earning ratio is the ratio for valuing a firm that compares its current stock price to its earnings per share (EPS). The price multiple or earnings multiple are other names for the price earnings ratio.
Investors and analysts use P/E ratios to assess the comparative value of a company's equity in a comparison. It can also be used to contrast a company with its past performance or to compare broad markets over time or to one another. P/E estimates can be made either forward or on a trailing basis.
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