Answer:
they are the interface between the brand and the customer
Explanation:
Based on the information provided within the question it can be said that the personnel in SuperCuts are the interface between the brand and the customer. The personnel are the ones that interact on a daily basis with the shoppers and provide all the information that they need regarding the SuperCut's brand in order to generate sales.
Consumers have become more selective and better informed about their purchases. This macro-environmental force strongly impacts this industry.
a. True
b. False
Answer:
a. True
Explanation:
The macro-enviromental forces that impact an industry are: demographic, economic, political, ecological, socio-cultural, and technological.
In this case, we can see the socio-cultural macro-enviromental force at play, and perhaps also the demographic macro-enviromental force.
If consumers have become more selective and better informed about their purchases, it is most likely because they have change their culture or social status. Such a change in consumer behaviour can have great impact on an industry: it can boost some goods, while make other decline or disappear.
Such a change can also respond to demographic shift: for example, as consumers age, they tend to become more selective, so a good that used to be favored by a young population, might not be so anymore when that young population grows older.
Westchester Corp. is considering two equally risky, mutually exclusive projects, both of which have normal cash flows. Project A has an IRR of 11%, while Project B's IRR is 14%. When the WACC is 8%, the projects have the same NPV. Given this information, which of the following statements is CORRECT?a. If the WACC is 9%, Project A's NPV will be higher than Project B's. b. If the WACC is greater than 14%, Project A's IRR will exceed Project B's. c. If the WACC is 13%, Project A's NPV will be higher than Project B's. d. If the WACC is 9%, Project B's NPV will be higher than Project A's. e. If the WACC is 6%, Project B's NPV will be higher than Project A's.
Answer:
d. If the WACC is 9%, Project B's NPV will be higher than Project A's.
Explanation:
The internal rate of return is the return in which the NPV is zero i.e cash inflows equal to the initial investment
While the WACC refers to the cost of capital by considering the capital structure i.e cost of equity, cost of preferred stock and cost of debt by taking their weightage
Now if the WACC is 9% so project B NPV would be higher as compared to project A as we can see that project B IRR is greater than the project A IRR
Therefore option d is correct
Garcia Company has 10,400 units of its product that were produced last year at a total cost of $156,000. The units were damaged in a rainstorm because the warehouse where they were stored developed a leak in the roof. Garcia can sell the units as is for $3 each or it can repair the units at a total cost of $18,400 and then sell them for $7 each. Calculate the incremental net income if the units are repaired
Answer:
$23,200
Explanation:
Alternative 1 Alternative 2 Incremental
no repairs repair units revenue
sales revenue $31,200 $0 ($31,200)
repair costs $0 -$18,400 ($18,400)
revenue from $0 $72,800 $72,800
selling repaired units
total $23,200
Incremental revenues refer to the extra or additional revenues generated by a business activity or transaction. In this case, repairing and then selling the damaged units would increase income by $23,200.
A company purchased a commercial dishwasher by paying cash of $5,300. The dishwasher's fair value on the date of the purchase was $5,700. The company incurred $320 in transportation costs, $210 installation fees, and paid a $230 fine for illegal parking while the dishwasher was being delivered. For what amount will the company record the dishwasher
Answer:
$5,830
Explanation:
Relevant data provided
Cash paid = $5,300
Transportation cost = $320
Installation fees = $210
The computation of the amount that will record the dishwasher is shown below:-
Total cost = Cash paid + Transportation cost + Installation fees
= $5,300 + $320 + $210
= $5,830
Therefore for computing the total cost we simply applied the above formula and ignore all other values as they are not relevant.
7. A fast-food chain plans to expand by opening several new restaurants. The chain operates two types of
restaurants, drive-through and full-service. A drive-through restaurant costs RM 100.000 to construct,
requires 5 employees, and has an expected annual revenue of RM 200.000. A full service restaurant
costs RM 150.000 to construct, requires 15 employees, and has an expected annual revenue of RM
500,000. The chain has RM 2,400,000 in capital available for expansion. Labor contracts require that
they hire no more than 210 employees, and licensing restrictions require that they open no more than
20 new restaurants.
(a) How many restaurants of each type should the chain open in order to maximize the expected
revenue? [1 point)
≤
Explanation:
Drive through Full Service
Annual revenue 200,000 500,000
Cost 100,000 150,000
Income 100,000 350,000
Employee 5 15
Income / employee 20,000 23,333.33
Using simultaneous equation ,
Let X represent the drive through service ,and Y represent the full service restaurant
Budget = 100,000x + 150,000y ≤ 2,400,000 (equation 1)
Employer = 5x + 15y ≤ 210 (equation 2)
(Divide equation 1 by 10 ,000)
10x+ 15y ≤ 240 (equation 3)
Using elimination method, multiply equation 2 by -2
10x +15y ≤240
-10x - 30y ≤-420
-15y ≤ -180
y≤ -180/-15
y = 12
substitute y = 12 in equation 3
10x + 15y≤240
10x +180 ≤240
10x≤240-180
10x≤60
x≤6
12 1,800,000 180
6 600,000 30
6 drive through services and 12 full services should be opened.
6 Drive through 12 full service 20
Cost 600,000 1,800,000 2,400,000
Employees 30 180
Net income 600,000 4,200,000
Tropetech Inc. has an expected net operating profit after taxes, EBIT(1 – T), of $2,400 million in the coming year. In addition, the firm is expected to have net capital expenditures of $360 million, and net operating working capital (NOWC) is expected to increase by $45 million. How much free cash flow (FCF) is Tropetech Inc. expected to generate over the next year?
Answer:
FCF = $1,995 million
Explanation:
DATA
EBIT(1-T) = $2,400 million
Net Capital Expenditure = $360 million
Net operating working capital (NOWC) = $45 million
Free cash flow (FCF) expected to generate over next year can be calculated as
FCF = EBIT(1-T) - Capital Expenditure - Net operating working capital (NOWC)
FCF = $2,400 million - $360 million - $45million
FCF = $1,995 million
Boatler Used Cadillac Co. requires $890,000 in financing over the next two years. The firm can borrow the funds for two years at 11 percent interest per year. Ms. Boatler decides to do forecasting and predicts that if she utilizes short-term financing instead, she will pay 7.25 percent interest in the first year and 12.55 percent interest in the second year. Assume interest is paid in full at the end of each year.
A. Determine the lot al two-year interest cost under each plan.
Interest Cost
Long term fixed-rate plan
Short term variable-rate
B. Which plan is less costly?
1. Long term fixed-rate plan
2. Short-term variable-rate plan
Answer:
A. Total two-year interest cost under long term fixed-rate plan is $195,800; while total two-year interest cost under short term variable-rate is $176,220.
B. Short-term variable-rate plan is less costly.
Explanation:
A. Determine the total two-year interest cost under each plan.
This can be determined for each of the plan as follows:
For Long term fixed-rate plan
Total two-year interest cost under long term fixed-rate plan = Amount required * Interest rate per year * Number of years = $890,000 * 11% * 2 = $195,800
For Short term variable-rate
First year interest cost under short term variable-rate = Amount required * First year interest rate = $890,000 * 7.25% = $64,525
Second year interest cost under short term variable-rate = Amount required * Second year interest rate = $890,000 * 12.55% = $111,695
Total two-year interest cost under short term variable-rate = First year interest cost + Second year interest cost = $64,525 + $111,695 = $176,220
Therefore, we have:
Interest Cost
Long term fixed-rate plan $195,800
Short term variable-rate $176,220
B. Which plan is less costly?
Since the total two-year interest cost under short term variable-rate of $176,220 is less than $195,8000 total two-year interest cost under long term fixed-rate plan, the Short-term variable-rate plan is therefore less costly.
The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.80 on December 31, 20Y2.
Marshall Inc.
Comparative Retained Earnings Statement
For the Years Ended December 31, 20Y2 and 20Y1
1 20Y2 20Y1
2 Retained earnings, January 1 $3,704,000.00 $3,264,000.00
3 Net income 600,000.00 550,000.00
4 Total $4,304,000.00 $3,814,000.00
5 Dividends:
6 On preferred stock $10,000.00 $10,000.00
7 On common stock 100,000.00 100,000.00
8 Total dividends $110,000.00 $110,000.00
9 Retained earnings, December 31 $4,194,000.00 $3,704,000.00
Marshall Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
1 20Y2 20Y1
2 Sales $10,850,000.00 $10,000,000.00
3 Cost of goods sold 6,000,000.00 5,450,000.00
4 Gross profit $4,850,000.00 $4,550,000.00
5 Selling expenses $2,170,000.00 $2,000,000.00
6 Administrative expenses 1,627,500.00 1,500,000.00
7 Total operating expenses $3,797,500.00 $3,500,000.00
8 Income from operations $1,052,500.00 $1,050,000.00
9 Other revenue 99,500.00 20,000.00
10 $1,152,000.00 $1,070,000.00
11 Other expense (interest) 132,000.00 120,000.00
12 Income before income tax $1,020,000.00 $950,000.00
13 Income tax expense 420,000.00 400,000.00
14 Net income $600,000.00 $550,000.00
Marshall Inc.
Comparative Balance Sheet December 31, 20Y2 and 20Y1
1 20Y2 20Y1
2 Assets
3 Current assets:
4 Cash $1,050,000.00 $950,000.00
5 Marketable securities 301,000.00 420,000.00
6 Accounts receivable (net) 585,000.00 500,000.00
7 Inventories 420,000.00 380,000.00
8 Prepaid expenses 108,000.00 20,000.00
9 Total current assets $2,464,000.00 $2,270,000.00
10 Long-term investments 800,000.00 800,000.00
11 Property, plant, and equipment (net) 5,760,000.00 5,184,000.00
12 Total assets $9,024,000.00 $8,254,000.00
13 Liabilities
14 Current liabilities $880,000.00 $800,000.00
15 Long-term liabilities:
16 Mortgage note payable, 6% $200,000.00 $0.00
17 Bonds payable, 4% 3,000,000.00 3,000,000.00
18 Total long-term liabilities $3,200,000.00 $3,000,000.00
19 Total liabilities $4,080,000.00 $3,800,000.00
20 Stockholders' Equity
21 Preferred 4% stock, $5 par $250,000.00 $250,000.00
22 Common stock, $5 par 500,000.00 500,000.00
23 Retained earnings 4,194,000.00 3,704,000.00
24 Total stockholders' equity $4,944,000.00 $4,454,000.00
25 Total liabilities and stockholders' equity $9,024,000.00 $8,254,000.00
Determine the following measures for 20Y2 round to one decimal place, including percentages, except for pre-share amounts):
1. Working Capital
2. Current ratio
3. Quick ratio
4. Accounts receivable turnover
5. Number of days' sales in receivables
6. Inventory turnover
7. Number of days' sales in inventory
8. Ratio of fixed assets to long-term liabilities
9. Ratio of liabilities to stockholders' equity
10. Times interest earned
11. Asset turnover
12. Return on total assets
13. Return on stockholders' equity
14. Return on common stockholders' equity
15. Earnings per share on common stock
16. Price-earnings ratio
17. Dividends per share of common stock
18. Dividend yield
Answer:
Marshall Inc.
Ratios:
1. Working Capital = Current assets - Current liabilities
= $2,464,000 - 880,000 = $1,584,000
2. Current ratio = Current Assets/Current Liabilities
= $2,464,000/880,000 = 2.8 : 1
3. Quick ratio = (Current Assets - Inventory)/Current Liabilities
= ($2,464,000 - 420,000)/880,000
= $2,044,000/880,000 = 2.3 : 1
4. Accounts receivable turnover = Average Accounts Receivable / Net Sales
= $542,500/10,850,000 = 0.05 times
Average receivables = ($585,000 + 500,000)/2 = $542,500
5. Number of days' sales in receivables = Days in the year/Accounts receivable turnover
= 365/0.05 = 7,300 days
6. Inventory turnover = Cost of goods sold / Average Inventory
= $6,000,000/400,000 = 15 times
Average Inventory = (Beginning inventory + Ending inventory) / 2
= ($420,000 + 380,000)/2 = $400,000
7. Number of days' sales in inventory = Number of days in a year divided by Inventory turnover ratio = 365 /15 = 24.3 days
8. Ratio of fixed assets to long-term liabilities = Fixed Assets/Long-term Liabilities = $5,760,000/3,200,000 = 1.8 : 1
9. Ratio of liabilities to stockholders' equity = Total Liabilities/Stockholders' equity = $4,080,000 / $4,944,000 = 0.83 or 80%
10. Times interest earned = Earnings before Interest and Taxes / Interest Expense = $1,152,000/132,000 = 8.7 times
11. Asset turnover = Sales Revenue / Average Total Assets
= $6,000,000/$8,639,000 = 0.7 or 70%
Average Total Assets = Beginning total assets + Ending total assets, all divided by 2
= ($9,024,000 + 8,254,000)/2 = $8,639,000
12. Return on total assets = EBIT/Average Total Assets
= $1,152,000/$8,639,000 = 13%
13. Return on stockholders' equity = Earnings after tax/Shareholders' equity = $600,000/$4,944,000 x 100 = 12%
14. Return on common stockholders' equity = EAT/Common Shareholders' Equity = $600,000 - 10,000/($4,944,000 - 250,000) x 100
= 12.6%
15. Earnings per share (EPS) on common stock = Net Income divided by the number of outstanding common shares = $600,000/100,000 = $6 per share.
16. Price-earnings ratio = Market price of shares/EPS = $82.80/$6 = 13.8
17. Dividends per share of common stock = Dividends/Common Stock shares = $100,000/100,000 shares = $1
18. Dividend yield = Dividend per share / Market price per share = $1/$82.80 = 1.2%
Explanation:
1. Working Capital is the difference between current assets and current liabilities.
2. Current ratio is a liquidity ratio of current assets over current liabilities.
3. Quick ratio is the current ratio modified with the subtraction of inventory.
4. Accounts receivable turnover is an accounting measure that shows how quickly customers pay for the credit sales.
5. Number of days' sales in receivables measures the number of days it takes a company to collect its credit sales. It is a function of the number of days in a year divided by the accounts receivable turnover ratio.
6. Inventory turnover is a ratio showing how many times a company has sold and replaced its inventory during a given period.
7. Number of days' sales in inventory is the result of dividing the days in the period by the inventory turnover formula. It shows the number of days inventory is held before being sold.
8. Ratio of fixed assets to long-term liabilities shows how much of long-term liabilities is represented in fixed assets.
9. Ratio of liabilities to stockholders' equity is a financial leverage ratio that shows the relationship between liabilities and stockholders' equity.
10. Times interest earned (TIE) ratio measures the ability of a company to settle its debt obligations based on its current income. To calculate the TIE number, take the Earnings before interest and taxes (EBIT) and divide by the total interest expense.
11. Asset turnover is a ratio of sales over average assets, which shows company's efficiency in using assets to generate sales.
12. Return on total assets measures the percentage of earnings before interest and taxes over the average total assets. It can be obtained by multiplying profit margin with total asset turnover.
13. Return on stockholders' equity is a financial ratio that is calculated by dividing a company's earnings after taxes (EAT) by the total shareholders' equity, and then multiplying the result by 100.
14. Return on common stockholders' equity measures the ratio of earnings after taxes less Preferred Stock Dividend over the common shareholders' equity.
15. Earnings per share on common stock is the ratio of earnings divided by the number of outstanding common stock shares. It measures the earnings per share that the company has generated for the common stockholders.
16. Price-earnings ratio is a ratio of the market price of shares over the earnings per share. It is used to determine if a company's share is overvalued or undervalued.
17. Dividends per share of common stock is the dividend paid divided by the number of outstanding common stock.
18. Dividend yield is the ratio of the dividend per share over the market price per share.
If 200,000 machine‐hours are budgeted for variable overhead at a standard rate of $5/machine‐hour, but 220,000 machine‐hours were actually used at an actual rate of $6/machine‐hour, what is the variable overhead efficiency variance?
Answer:
Variable overhead efficiency variance= $100,000 unfavorable
Explanation:
Giving the following information:
200,000 machine‐hours are budgeted for variable overhead at a standard rate of $5/machine‐hour, but 220,000 machine‐hours were used.
To calculate the variable overhead efficiency variance, we need to use the following formula:
Variable overhead efficiency variance= (Standard Quantity - Actual Quantity)*Standard rate
Variable overhead efficiency variance= (200,000 - 220,000)*5
Variable overhead efficiency variance= $100,000 unfavorable
When the Variable overhead efficiency variance is = $100,000 unfavorable
What is the Efficiency variance?
Giving the following information are:
200,000 machine‐hours are budgeted for variable overhead at a standard rate of $5/machine‐hour, but [tex]220,000[/tex] machine‐hours were used. Now we calculate the variable overhead efficiency variance, Then we need to use the following formula are below mention. The variable overhead efficiency variance is= (Standard Quantity - Actual Quantity)*Standard rate. Then Variable overhead efficiency variance= [tex](200,000 - 220,000)*5[/tex]
Thus, Variable overhead efficiency variance= $100,000 unfavorable
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You are developing the project charter for a new project. Which of the following
is NOT part of the enterprise environmental factors?
✓
A) Lessons learned from previous projects
B) The work authorization system
C) Government and industry standards that affect your project
D) Knowledge of which departments in your company typically work on projects
Answer: A) Lessons learned from previous projects
Explanation:
Enterprise Environmental Factors (EEF) refers to all environmental factors that have a say in whether a project is successful or not. They include both internal factors such as company infrastructure, knowledge and capability (departments with the knowledge on project design and implementation) and internal project authorization systems as well as external factors such as Government standards and market conditions.
Lessons learned from previous projects, while important, are not included in this list and are not Enterprise Environmental Factors.
6. ABC Company announced today that it will begin paying annual dividends next year. The first dividend will be $0.10 a share. The following dividends will be $0.20, $0.30, $0.40, and $0.50 a share annually for the following 4 years, respectively. After that, dividends are projected to increase by 2.0 percent per year. How much are you willing to pay to buy one share of this stock today if your desired rate of return is 8.0 percent
Answer:
The amount willing to pay to buy one share is $6.92.
Explanation:
The announcement by company to pay annual dividend = $0.10
2nd year divident amount = $0.20
3rd year divident amount = $0.30
4th year divident amount = $0.40
5th-year divident amount = $0.50
The increase in dividend = 2 percent.
The desired rate of return = 8%
Value after year 5 = (D5 × Growth rate) / (Required rate-Growth rate)
=(0.5 × 1.02) / (0.08-0.02)
=8.5
Therefore, the current value = Future dividend and value × Present value of discounting factor(rate%,time period)
=0.1/1.08 + 0.2/1.08^2 + 0.3/1.08^3 + 0.4/1.08^4 + 0.5/1.08^5 + 8.5/1.08^5
=$6.92.
Rodriguez Company pays $310,000 for real estate plus $16,430 in closing costs. The real estate consists of land appraised at $215,000; land improvements appraised at $86,000; and a building appraised at $129,000.Required:1. Allocate the total cost among the three purchased assets.2. Prepare the journal entry to record the purchase.
Answer:
Required 1.
Land = $163,215
Land improvements = $65,286
Buildings = $97,929
Required 2.
Land $163,215 (debit)
Land improvements $65,286 (credit)
Buildings $97,929 (credit)
Cash $310,000 (credit)
Explanation:
Allocation of the purchase cost must be made on the bases appraisal value.
Total Appraisal Value = $215,000 + $86,000 + $129,000
= $430,000
Land = $215,000 / $430,000 × $326,430
= $163,215
Land improvements = $86,000 / $430,000 × $326,430
= $65,286
Buildings = $129,000 / $430,000 × $326,430
= $97,929
Consider the case of cell phone service. In England, there are 20 providers of cell phone service. On the other hand, in Cambodia, cell phone service is largely regulated by the government with only one firm as the sole provider of this service. Under these circumstances, it is expected that Choose one: A. England will have higher growth potential than Cambodia. B. England and Cambodia will have similar growth potential. C. England will have lower growth potential than Cambodia.
On December 31, 2018, Wintergreen, Inc., issued $150,000 of 7 percent, 10-year bonds at a price of 93.25. Wintergreen received $139,875 when it issued the bonds (or $150,000 × .9325). After recording the related entry, Bonds Payable had a balance of $150,000 and Discounts on Bonds Payable had a balance of $10,125. Wintergreen uses the straight-line bond amortization method. The first semiannual interest payment was made on June 30, 2019.Complete the necessary journal entry for June 30, 2019 by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.
Answer: Please see explanation column
Explanation:
Journal entry for June 30
Date Amount Debit Credit
June 30 Bond Interest expense $5,756
Discount on Bonds Payable $506
Cash $5,250
Calculation:
Cash = 150,000 x 7%x 6/12 = $5,250
10-year bonds pay interest semiannually indicates 20 interest periods
Straight line Amortization of the discount =$10,125/20 = $506
Bond interest expense= Interest + amortization on discount
Interest = $150,000 x 7% x 6/12 = $5,250 + 506= $5,756.
Can you explain answer below:
#28 The Canadian subsidiary of a U.S. company reported cost of goods sold of 50,000 C$, for the current year ended December 31. The beginning inventory was 15,000 C$, and the ending inventory was 10,000 C$. Spot rates for various dates are as follows:
Date beginning inventory was acquired $1.08 = 1C$
Rate at beginning of the year $1.10 = 1C$
Weighted average rate for the year $1.12 = 1C$
Date ending inventory was acquired $1.13 = 1C$
Assuming the Canadian dollar is the functional currency of the Canadian subsidiary, the translated amount of cost of goods sold that should appear in the consolidated income statement is
Answer is C. $56,000
Answer:
$56,000
Explanation:
Data:
Cost of good sold (single) = $50,000
Weighted average rate of the year = $1.12
Cost of good sold consolidated = ???????
Solution:
In order to find the translated amount of cost of goods sold that should appear in the consolidated income statement, we will multiply the cost of goods sold given for Canadian subsidiary with the weighted average rate of the year.
Calculation:
Cost of good sold (consolidated) = $50,000 x $1.12
Cost of good sold (consolidated) = $56,000
In order to find the future worth, F, from a present amount, P, 5 years from now at an interest rate of 6 % per year, compounded quarterly, what interest rate must be used in the F/P factor, (F/P,i%,n), when n is 20 quarters
Answer:
Interest rate = 1.5%
Explanation:
Given:
Future value = F
Present value = P
Number of Year (n) = 5 year × 4 quarters = 20
Interest rate = 6 % per year = 6 / 4 = 1.5% = 0.015
Computation:
Future value = Present value[tex](1+i)^n[/tex]
F/P = (1+0.015)²⁰
F/P = 1.34685501
When n = 20 quarters
F/P = (1+i)²⁰
1.34685501 = (1+i)²⁰
i = 0.015
Interest rate = 1.5%
ABC Company has the following authorized stock: Common stock: 1.00 par value, 100,000 shares On 1/11/15, ABC Company issued 10,000 shares of common stock for $5 per share (cash). How much cash does the company receive
Answer:
Amount of cash received = $50,000
Explanation:
The authorized share capital is the total maximum amount of shares in units that a company can raised as contained in its memorandum of association.
The issued share capital is the proportion of the authorized share capital that a company has decided to offer to investors to raise capital.
The total amount of issued share capital raised would be equal to
Issued share capital = units issued × price per units
= 10,000 × $5 = $50,000
Amount of cash received = $50,000
Based on the information given the amount that the company received is $50,000.
Using this formula
Cash received=Shares of common stock× Per share
Where:
Shares of common stock=10,000 shares
Per share=$5 per share
Let plug in the formula
Cash received=10,000×$5
Cash received=$50,000
Inconclusion the amount that the company received is $50,000.
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Explain the provisions of section 302 of the Sarbanes-Oxley Act including obligations of officers; nature and scope of assertions; accounting requirements; and legal liability of officers.
Answer:
"Section 302 of the Sarbanes-Oxley Act states that the CEO and CFO are directly responsible for the accuracy, documentation and submission of all financial reports as well as the internal control structure to the SEC," according to sarbanes-oxley-101.com. So, Section 302 is essentially about the responsibilities of principal officers of the company, especially the principal executive and financial officers.
1. Obligations of officers: To certify each annual and quarterly report. To ensure that the issued financial statements and other financial information are not misleading. To ensure that the information is fairly presented.
2. Nature and Scope of Assertions:
a) That the information presented are fairly presented with no misleading statements
b) That the internal controls are in place and operating effectively
c) To asset that they are aware of all material information relating to the issuing company
d) That they have evaluated internal controls, their effectiveness, and changes in controls.
3. Accounting requirements:
a) Ensure effective internal accounting controls
b) Disclose all material financial information to auditors and audit committee
c) File periodic reports to SEC in compliance with section 13(a) and 15(d) of the SEC Act of 1934.
4. Legal liability of officers: This is covered in Section 906 of the Sarbanes-Oxley Act. The section prescribes that officers are liable for "penalties upward of $5 million in fines and 20 years in prison" for any violation of the Act.
Explanation:
The Sarbanes-Oxley Act of 2002 is a federal law which was made in response to the accounting scandals following the collapse of Worldcom and Enron. The purpose of the Act was to safeguard shareholders, employees, and the public from accounting errors and fraudulent financial practices by listed companies. According to sarbanes-oxley-101.com, the Act requires "all financial reports to include an Internal Controls Report," to prove the accuracy and adequacy of controls for ensuring that financial information is not misleading.