Answer:
To achieve its purpose, the Commission's core functions are the following: implement measures to increase market transparency; implement measures to develop public awareness of the provisions of the Act; investigate and evaluate alleged anti-competitive conduct; conduct formal inquiry in respect of the general state of ...
Explanation:
It is a structure which regulates the markets and monopolies in the country. It generally aims in preventing monopoly growth. It benefited by balancing the act of economic transformation that will benefit all South Africans through ownership, the participation of small and medium enterprises and employment.
If you double the thickness of a wall built from a homogeneous material, the rate of heat loss for a given temperature difference across the thickness will __________.
Answer:
Become one of two equal parts its original value
Explanation:
Generally, heat flow from a higher temperature region to a lower temperature region. In a homogeneous material, the thickness and the thermal conductivity of the material show thermal resistance. Since homogeneous materials have the same composition of materials, conductivity would be 1/resistance. So when you double the thickness of a wall built from a homogeneous material, the rate of heat loss for a given temperature difference across the thickness will be 1/2 its original value.
.
4. What have been some of the causes of the changing busi-
ness environment in recent decades?
Answer:
The answer is below
Explanation:
Some of the causes of the changing business environment in recent decades are:
1. the commencement and development of technology
2. the economy
3. societal components
4. deregulation of several industries
5. Regional differences
6. the rise in white-collar workers, women, and older people in the workforce
7. a complex and varying level of workforce
8. rise in the number of small businesses.
Let’s say Bob wants to offer an insurance package to his employees that will cover any outpatient surgery charges, tooth sealants, and glasses. His total annual cost for providing these insurance plans will be $
per employee for the year.
Let’s assume that Schmidt wants to cover his employees’ expenses in case of disability. He also wants to ensure that the family of an employee is provided for in the event of an employee’s loss of life. The total annual cost for providing these insurance plans will be $
per employee.
Answer: its 480$ per person
Explanation:
just got 100
Assume that a company is financed 75% with equity and 25% with debt. A decrease in the corporate tax rate of the firm will cause its weighted average cost of capital (WACC) to:_____.
1. Rise.
2. Fall.
3. Stay constant
4. More information is needed
Answer:1. Rise.
Explanation:
The weighted average cost of capital (WACC) is an evaluation of a firm's cost of capital in which every category of capital is proportionately weighted.
Weighted average cost of capital is computed as:
WACC =( Weightage of Equity x Cost of Equity )+ Weightage of Debt x Cost of Debt x(1- Tax Rate )
A decrease in the corporate tax rate of the firm will cause its weighted average cost of capital (WACC) to rise due to an increase in the cost of debt.
hence, the correct option is 1. Rise.
hi! the answer is 1. rise :))
Why would you choose a job over a career?
Answer:
A job can be just going to work to earn a paycheck. A career means that each of your jobs, experiences, and training programs is helping you advance in pay or responsibility. The real difference between a job and a career is your attitude. People who want a career are always thinking about their long-term goals.
Explanation:
Sorry if this isn't right love, I tried:(
Trent has worked for the same company in Maryland for the past ten years. He was recently offered a position at a different company in Australia and has decided to take the job because it offers better pay, more responsibility, and his cost of living expenses will be lower. Employees like Trent who move from country to country in seek of a job are examples of
Answer:
Labor mobility.
Explanation:
Migration refers to the movement of a group of people from one geographical region (location) to another geographical destination in search of better living conditions, work or social amenities.
Migration selectivity can be defined as the likelihood or tendency that a subset (part) of a group of people are going to move (migrate) out of a particular geographical location or area.
Some of the factors that influence migration selectivity are income level, age, education, gender etc.
Job mobility can be defined as the ease with which employees are able to move from one geographical location to another or within an economy with respect to job opportunities.
Simply stated, job mobility is the movement of employees based on geographical and occupational factors.
Hence, employees like Trent who move from country to country in seek of a job are examples of labor mobility.
You need to answer all questions about the case "IKEA Entering India, Finally" Make sure that your submission (paper) should reflect a deep understanding of the content of international expansion and global economy (see Chapter 13). Your paper should have 3 to 4 pages (except for a cover page and references) for this assignment. An electronic document will be required. Format your paper according to APA style. Use double-spacing, Times New Roman, 12-point font with a 1-inch margin
Answer:
oiuytrertyhj
Explanation:
The Dark Chocolate Division of Yummy Snacks, Inc. had the following operating results last year: Sales (150,000 pounds of chocolate) $ 60,000 Variable expenses 37,500 Contribution margin 22,500 Fixed expenses 12,000 Profit $ 10,500 Assume that the Dark Chocolate Division is currently operating at its capacity of 150,000 pounds of chocolate. Also assume again that the Peanut Butter Division wants to purchase an additional 20,000 pounds of chocolate from Dark Chocolate. Under these conditions, what amount per pound of chocolate would Dark Chocolate have to charge Peanut Butter in order to maintain its current profit
Answer:
the amount per pound of chocolate that should be charged is $0.40 per pound
Explanation:
The computation of the amount per pound that should be charged is shown below:
= Sales revenue ÷ units
= $60,000 ÷ 150,000 units
= $0.40
Hence, the amount per pound of chocolate that should be charged is $0.40 per pound
We simply applied the above formula so that the correct amount could come by dividing the units from the sales revenue
Following are four separate dividend scenarios. a. On April 1, 2020, Meriter Corporation declared a cash dividend of $5.00 per share on its 12,800 outstanding shares of common stock ($1 par). The dividend is payable on April 21, 2020, to stockholders of record on April 14, 2020. b. Axe Co. has issued and outstanding 400 shares of $100 par, cumulative, 5% preferred stock and 8,000 shares of $5 par common stock. Dividends are in arrears for the past year (not including the current year). On December 15, 2020, the board of directors of Axe Co. declared dividends of $10,000 to be paid to shareholders at the end of its fiscal year. c. Siri Corp. holds 400 shares of Mobile Co. common stock, purchased at the beginning of the year for $30 a share (carrying value on February 1, 2020). On February 1, 2020, Siri Corp. declared a property dividend of 180 shares of Mobile Co. common stock when the shares were selling at $28 per share. d. Treck Corporation declared a common stock dividend of $18,000 on April 1, 2020. Treck Corporation announced to shareholders that 70% of the dividend amount was a return of capital.
Question Completion:
Record the dividend declarations.
Answer:
Separate Dividend Scenarios
a. Meriter Corporation
April 1, 2020
Debit Cash Dividend $64,000
Credit Dividends Payable $64,000
To record the declaration of a cash dividend of $5.00 per share on its 12,800 outstanding shares of common stock, payable on April 21, 2020, to stockholders of record on April 14, 2020.
b. Axe Co.
December 15, 2020
Debit Cash Dividend:
Cumulative Preferred Stock $4,000
Common Stock $6,000
Credit Dividends Payable $10,000
To record the declaration of dividend to cumulative preferred and common stockholders.
c. Siri Corp.
February 1, 2020
Debit Property Dividend $5,400
Credit Mobile Co. Investment $5,400
To record the declaration of property dividend of 180 shares of Mobile Co. common stock.
d. Treck Corporation
April 1, 2020
Debit Common stock dividend $5,400
Debit Common stock $12,600
Credit Retained Earnings $18,000
To record the declaration of stock dividend and 70% in return of capital.
Explanation:
1. Data and Analysis:
a. Meriter Corporation
April 1, 2020 Cash Dividend $64,000 Dividends Payable $64,000
a cash dividend of $5.00 per share on its 12,800 outstanding shares of common stock, payable on April 21, 2020, to stockholders of record on April 14, 2020.
b. Axe Co.
December 15, 2020
Cash Dividend $10,000 Dividends Payable $10,000
Preferred stockholders $4,000 Common stockholders $6,000
Preferred stock = $40,000 (400 shares * $100)
Cumulative preferred dividend = $2,000 (5% of $40,000)
2019 Cumulative preferred dividend = $2,000
Total preferred dividend = $4,000
Common stock dividend = $6,000 ($10,000 - $4,000)
c. Siri Corp.
February 1, 2020
Property Dividend $5,400 Mobile Co. Investment $5,400
d. Treck Corporation
April 1, 2020
Common stock dividend $5,400 Common stock $12,600 Retained Earnings $18,000
70% of the dividend amount was a return of capital.
Consider the money market drawn with the value of money on the vertical axis. If money demand is unchanged and the price level rises, then a. the money supply must have increased, perhaps because the Fed bought bonds. b. the money supply must have decreased, perhaps because the Fed bought bonds. c. the money supply must have increased, perhaps because the Fed sold bonds. d. the money supply must have decreased, perhaps because the Fed sold bonds.
Answer:
A
Explanation:
If price level increases, it means that there is an increase in the supply of money in the economy.
It is an expansionary monetary policy that would lead to an increase in money supply. Buying bonds is a form of expansionary monetary policy because it increases the supply of money in the economy
Monetary policy are policies taken by the central bank of a country to shift aggregate demand.
There are two types of monetary policy :
Expansionary monetary policy : these are polices taken in order to increase money supply. When money supply increases, aggregate demand increases. reducing interest rate and open market purchase are ways of carrying out expansionary monetary policy
Contractionary monetary policy : these are policies taken to reduce money supply. When money supply decreases, aggregate demand falls. Increasing interest rate and open market sales are ways of carrying out contractionary monetary policy
Goals of monetary policy include
• financial market stability
• economic growth
• high employment
• price stability
SegR-6268 Corporation has two divisions, East and West. The following information was taken from last year's income statement segmented by division:
East Division West Division
Sales $3,400,000 $2,100,000
Contribution margin $1,500,000 $900,000
Divisional segment margin $1,000,000 $300,000
Net operating income last year for SegR-1882 Corporation was $550,000. In last year's income statement segmented by division, what were SegR-6268's total common fixed expenses?
Answer: $750,000
Explanation:
Total Fixed expenses is the difference between the segment margin and the net income.
The common fixed cost would therefore be:
=Combined segment margin - Net income for the corporation
= (1,000,000 + 300,000) - 550,000
= 1,300,000 - 550,000
= $750,000
ompany paid $48,000 cash to purchase raw materials. The recognition of this event will: Multiple Choice not affect total assets, will decrease net income, and will decrease cash flow. decrease total assets, total equity, and net income. not affect total assets, total equity, or net income. decrease total assets, net income, and net cash flow from investing activities.
Answer:
The recognition of this event will:
not affect total assets, will decrease net income, and will decrease cash flow.
Explanation:
a) Data and Analysis:
Balance Sheet Effect:
Raw materials inventory (Assets) +$48,000
Cash (Assets) -$48,000
Net effect = $0
Income Statement Effect:
Purchase of raw materials (Cost of production) +$48,000
Net income will decrease by cost of $48,000
Statement of Cash Flows (Operating Activities)
Purchase of raw materials (Cash outflow) -$48,000
Expected cash flows: FireRock Wheel Corp is evaluating a project in which there is a 40 percent probability of revenues totaling $4 million and a 60 percent probability of revenues totaling $2 million per year. Its cash expenses will be $1.0 million while depreciation expense will be $300,000. What is the expected free cash flow from taking the project if the marginal tax rate for the firm is 25 percent
Answer:
$1,425,000
Explanation:
Calculation to determine the expected free cash flow
Expected revenue$2,800,000
[(40%*$4 million)+(60%*$2 million)]
Less Cash Expenses $1,000,000
Less Depreciation Expense $300,000
EBIT$1,500,000
($2,800,000-$1,000,000-$300,000)
Tax $375,000
(25%*$1,500,000)
Net Income $1,125,000
($1,500,000-$375,000)
Add Depreciation Expense $300,000
Free Cash Flow $1,425,000
($1,125,000+$300,000)
Therefore the expected free cash flow is $1,425,000
Liu Zhang operates Lawson Consulting, which began operations on June 1. On June 30, the company’s records show the following accounts and amounts for the month of June.
Cash $ 6,500 Service revenue $ 12,900
Accounts receivable 4,800 Equipment 6,800
Accounts payable 3,800 Rent expense 2,300
L. Zhang, Withdrawals 1,800 Wages expense 8,000
Need an income statement for june
Answer:
Lawson Consulting
LAWSON CONSULTING
Income Statement for the month ended June 30
Service revenue $ 12,900
Rent expense 2,300
Wages expense 8,000 10,300
Net income $2,600
Explanation:
a) Data and Calculations:
Cash $ 6,500
Accounts receivable 4,800
Equipment 6,800
Accounts payable 3,800
L. Zhang, Withdrawals 1,800
Service revenue $ 12,900
Rent expense 2,300
Wages expense 8,000
b) The income statement for the month of June summarizes Lawson's revenue and expenses, giving rise to a net income of $2,600. On the statement, the financial profitability of the business is determined. Only temporary accounts from the list of account balances are used to prepare the statement.
The market consensus is that Analog Electronic Corporation has an ROE of 9% and a beta of 1.70. It plans to maintain indefinitely its traditional plowback ratio of 2/3. This year's earnings were $3.6 per share. The annual dividend was just paid. The consensus estimate of the coming year's market return is 15%, and T-bills currently offer a 5% return.
Required:
a. Find the price at which Analog stock should sell.
b. Calculate the P/E ratio.
c. Calculate the present value of growth opportunities.
d. Suppose your research convinces you Analog will announce momentarily that it will immediately reduce its plowback ratio to 1/3. Find the intrinsic value of the stock.
Answer:
a $7.95
b. $2.21
c $16.36
d, $13.01
Explanation:
according to the constant dividend growth model
price = [d0 (1+g)] / (r - g)
d0 = recently paid dividend
Dividend = payout ratio x earnings
payout ratio = 1 - plowback rate
1 - 2/3 = 1/3
1/3 x 3.6 = $1.2
r = cost of equity
According to the capital asset price model: Expected rate of return = risk free + beta x (market rate of return - risk free rate of return)
5% + 1.7(15 - 5) = 22%
g = growth rate
g = plowback rate x ROE
2/3 X 9 = 6%
1. [1.2 x 1.06] / (0.22 - 0.06) = 1.272/ 0.16 = $7.95
2.
The price to earning ratio is a financial metric used to value a company. it compares the price of a stock to the earnings of the stock. the lower the metric is, the higher the valuation of the firm
price to earning ratio = market value per share / earnings
$7.95 / $3.6 = $2.21
c. present value of growth opportunities = earnings / cost of equity
3.6 / 0.22 = $16.36
d.
price = [d0 (1+g)] / (r - g)
d0 = recently paid dividend
Dividend = payout ratio x earnings
payout ratio = 1 - plowback rate
1 - 1/3 = 2/3
2/3 x 3.6 = $2.40
r = cost of equity = 22%
g = plowback rate x ROE
1/3 X 9 = 3%
[2.4 x 1.03] / (0.22 - 0.03) = 2.472/ 0.19 = $13.01
Sheffield Corp. developed the following data for the current year: Beginning work in process inventory $ 216000 Direct materials used 208000 Actual overhead 176000 Overhead applied 184000 Cost of goods manufactured 990000 Total manufacturing costs 926000 How much is Sheffield Corp.'s direct labor cost for the year?
Answer:
$534,000
Explanation:
Given that;
Direct materials used = $208,000
Overhead applied = $184,000
Total manufacturing costs = $926,000
We know that the total manufacturing cost is calculated as seen below.
Total manufacturing cost
= Direct materials used + Direct labor + Allocated overhead
$926,000 = $208,000 + Direct labor + $184,000
Direct labor = $926,000 - $208,000 - $184,000
Direct labor = $534,000
Therefore, Sheffield Corp's direct labor cost for the year is $534,000
A company uses the weighted average method for inventory costing. At the beginning of a period the production department had 54,000 units in beginning Work in Process inventory which were 33% complete; the department completed and transferred 168,000 units. At the end of the period, 15,000 units were in the ending Work in Process inventory and are 68% complete. Compute the number of equivalent units produced by the department.
It is an accounting question
Answer:
Latana Company
Classified Balance Sheet
As of the first month of operation
Assets
Current assets:
Cash $49,500
Short-term investments 10,000
Notes receivable 5,000
Supplies 900 $65,400
Long-term assets:
Land 15,000
Equipment 10,000 $25,000
Total assets $90,400
Liabilities and Equity
Current liabilities:
Accounts payable $400
Long-term liabilities:
Notes payable $15,000
Total liabilities $15,400
Stockholders' equity:
Common stock $750
Additional Paid-in Capital 74,250 $75,000
Total liabilities and equity $90,400
Explanation:
a) Data and Calculations:
Latana Company
Trial Balance
As of the first month of operation
Account Titles Debit Credit
Cash $49,500
Short-term investments 10,000
Notes receivable 5,000
Supplies 900
Land 15,000
Equipment 10,000
Accounts payable $400
Notes payable 15,000
Common stock 750
Additional Paid-in Capital 74,250
Total $90,400 $90,400
Whitmer Inc. sells to customers all over the U.S., and all receipts come in to its headquarters in New York City. The firm's average accounts receivable balance is $2.5 million, and they are financed by a bank loan at an 11% annual interest rate. The firm is considering setting up a regional lockbox system to speed up collections, and it believes this would reduce receivables by 20%. If the annual cost of the system is $15,000, what pre-tax net annual savings would be realized
Answer:
$40,000
Explanation:
Average accounts receivables = $2,500,000. Loan amount is also $2,500,000.
Interest rate is 11%. So, interest paid = $2,500,000*0.11 = $275,000
If the system reduces receivables by 20%,then current receivables = $2,500,000*0.8 = $2,000,000. So, loan amount = $2,000,000
Interest payable = $2,000,000*0.11 = $220,000
Cost of system = $15,000
Net annual savings = Interest payable without system - Interest payable after system installed - Cost of system
Net annual savings = $275,000 - $220,000 - $15,000
Net annual savings = $40,000
Amigo Software, Inc., has total assets of $800,000, current liabilities of $150,000, and long-term liabilities of $120,000. There is $65,000 in preferred stock outstanding. Thirty thousand shares of common stock have been issued.
Required:
a. Compute book value (net worth) per share.
b. If there is $48,000 in earnings available to common stockholders and the firm’s stock has a P/E of 20 times earnings per share, what is the current price of the stock?
c. What is the ratio of market value per share to book value per share? (Round to two places to the right of the decimal point.)
Answer and Explanation:
a. The book value per share is
But before that the net worth is
= Total assets - current liabilities - long term liabilities - preferred stock
= $800,000 - $150,000 - $120,000 - $65,000
= $465,000
Now the book value per share is
= $465,000 ÷ 30,000 shares
= $15.50
b. The current price of the stock is
= $48,000 ÷ 30,000
= $1.60
Now the market value is
= $1.60 × 20
= $32
c. The ratio of market value per share to book value per share is
= $32 ÷ $15.50
= 2.06
Emerald Co. uses a perpetual inventory system and records purchases of merchandise at net cost. The company recently purchased 200 compact discs for the price of $6,000 and terms of 2/10, n/30. Half of these discs had been mislabeled and were returned immediately to the supplier. Record the journal entry to record payment of this invoice after the discount period has expired. Use Journal Entry format.
Answer:
Credit to cash for $3,000
Explanation:
Based on the information given the appropiate the journal entry to record payment of this invoice after the discount period has expired is: CREDIT TO CASH FOR $3,000 which is calculated as (1/2*$6,000).
Credit to cash for $3,000
(To record payment of invoice after the discount period has expired)
Demand for workers in some industry declines. These workers are reluctant to have a cut in their nominal wage. However, a. inflation will raise their real wage and so increase the number of available workers. b. inflation will raise their real wage and so decrease the number of available workers c. inflation will reduce their real wage and so increase the number of available workers. d. inflation will reduce their real wage and so decrease the number of available workers.
Answer:
d. inflation will reduce their real wage and so decrease the number of available workers.
Explanation:
In the case when the demand for workers in some industries declines and they have to cut in nominal wages, so there would be increase in the wage bill of the industry because of this the price of the products will increased that also increase the inflation.
In the case when the inflation is rise, the real wage would fall as there would be declining in the purchasing power of money
So, the option d is correct
RM Company, a manufacturer, has provided the following information pertaining to its recent year of operation:
Net income $390,000
Accounts payable increased $33,000
Prepaid rent decreased $14,500
Depreciation expense was $44,000
Accounts receivable increased $43,000
Gain on sale of a building was $15,500
Wages payable decreased $30,000
Unearned revenue increased $53,000
Using the indirect method, how much was RM's net cash provided by operating activities?
a. $259,000.
b. $327,000.
c. $347,000.
d. $358,000.
Answer:
RM Company
Using the indirect method, RM's net cash provided by operating activities is:
= $446,000.
Explanation:
a) Data and Calculations:
Net income $390,000
Accounts payable increased $33,000
Prepaid rent decreased $14,500
Depreciation expense was $44,000
Accounts receivable increased $43,000
Gain on sale of a building was $15,500
Wages payable decreased $30,000
Unearned revenue increased $53,000
Operating Activities:
Net income $390,000
Adjustment with non-cash items:
Depreciation expense was 44,000
Gain on sale of a building was (15,500)
Working capital changes:
Accounts payable increased 33,000
Prepaid rent decreased 14,500
Unearned revenue increased 53,000
Accounts receivable increased (43,000)
Wages payable decreased (30,000)
Net cash provided by operating
activities $446,000
Tariq and Noelle work in the sales department at CTI Telecommunications. Tariq is the star salesman of the department and makes it his mission to motivate the rest of the team when sales numbers are down or when there are problems interacting with other departments. Meanwhile, Noelle consistently ranks in the middle or near the bottom in terms of sales, and she often gets distracted by calls from her teenage son. She also spends more time than she should socializing with friends in other departments. However, everyone, including the bosses, loves Noelle because of her true-blue loyalty to the company and her team. What else is most likely true of Noelle
Answer:
D. She volunteers to do the mundane tasks others avoid, and she does things like buying birthday cards for co-workers and organizing parties.
Explanation:
Noelle is an average perfomer so she is open for doing mundane task also she is not worried for star performance. in addition to this, she spends more time with some one as compared by having socializing. moreover, she is having a good skills and does not give priority to perform better as compared with others
So here the second last option is correct
The following selected amounts are reported on the year-end unadjusted trial balance report for a company that uses the percent of sales method to determine its bad debts expense. Accounts receivable $ 433,000 Debit Allowance for Doubtful Accounts 1,370 Debit Net Sales 2,220,000 Credit All sales are made on credit. Based on past experience, the company estimates 1.0% of credit sales to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense
Answer:
Journal Entry:
Debit Bad Debts $23,370
Credit Allowance for Doubtful Accounts $23,370
To record bad debts expense and bring the balance of Allowance to $22,000 (credit)
Explanation:
a) Data and Calculations:
Accounts receivable $ 433,000
Debit Allowance for Doubtful Accounts 1,370 Debit
Net Sales 2,220,000
Estimated uncollectible = 1.0% of credit sales
= $2,220,000 * 1% = $22,000
Adjusting entry analysis:
Bad Debts $23,370
Allowance for Doubtful Accounts $23,370
Dreary Credit Agency processes credit applications. The labor standard at Dreary is $15 per hour, 8 hours per day (per employee). During the last pay period (10 business days), Dreary's 25 credit agents worked 1,920 hours and processed 2,500 applications. The total labor cost for the agents during this period was $29,184. What was Dreary's direct labor efficiency variance for this last pay period
Answer:
See below
Explanation:
Given the above, we will calculate first the standard hours allowed for actual work using the formula below
Standard hours allowed for actual work
= Total number of applications × Number of standard
= 2.500 × 8 hours × 10
= 2,000 hours
Therefore, the labor efficiency variance
= (Actual hours worked - Standard hours allowed for actual work) × Standard rate
= (1,920 - 2,000 ) × $15
= -$1,200
The labor efficiency variance is $1,200 favorable
If the four-firm concentration ratio for industry X is 60, Multiple Choice the four largest firms account for 60 percent of total sales. each of the four largest firms accounts for 15 percent of total sales. the four largest firms account for 60 percent of total advertising expenditures. the industry is monopolistically competitive, but on the threshold of being an oligopoly.
Answer:
The four largest firms account for 60 percent of total sales.
Explanation:
The four firm concentration ratio calculates the concentration ratio of the 4 largest firms in an industry.
IF the concentration ratio is 60, it means that the 4 largest firms account for 60% of the sales
If the proportion of women is greater at Temple University than at Villanova then Title IX says Group of answer choices Temple University should spend a higher percentage of its athletic budget on women’s sports. Temple University should spend a greater amount of money on women’s sports. nothing because Title IX is based on the number of female athletes not the budget. both schools should spend 50 percent of their athletic budgets on women’s sports.
Answer:
Temple University should spend a higher percentage of its athletic budget on women's sports
Explanation:
Title IX mentioned that the university having a high women proportion of women should have to spend a greater athletic budget percentage with respec to the women's sports if we compared to the university that have Less women proportion
So according to the given case, the first option should be considered
And the rest of the options would be incorrect
So the same would be relevant
Kyle Corporation is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 765,000 shares of stock outstanding. Under Plan II, there would be 515,000 shares of stock outstanding and $9.25 million in debt outstanding. The interest rate on the debt is 12 percent, and there are no taxes. a. Assume that EBIT is $2.6 million. Compute the EPS for both Plan I and Plan II. (Do not round intermediate calculations and round your answers to 2 decimal places, 32.16.) EPS Plan I $ Plan II $ b. Assume that EBIT is $3.1 million. Compute the EPS for both Plan I and Plan II. (Do not round intermediate calculations and round your answers to 2 decimal places, 32.16.) EPS Plan I $ Plan II $ c. What is the break-even EBIT
Solution :
Calculation of the [tex]$\text{EPS}$[/tex] for both [tex]$\text{plan I}$[/tex] and [tex]$\text{plan II}$[/tex] where EBIT is 2.6 million.
[tex]$\text{plan I}$[/tex] [tex]$\text{plan II}$[/tex]
EBIT $ 2.6 million $ 2.6 million
Less : Interest $ 1.1 million
Less
PAT $ 2.6 million $ 1.5 million
Earnings available $ 2.6 million $ 1.5 million
for share holder
No. of shares 765,000 515,00
[tex]$\text{EPS}$[/tex] = earnings available $ 3.40 $ 2.9
for share holder/no. of
shares
Hence [tex]$\text{EPS}$[/tex] under the [tex]$\text{plan I}$[/tex] is $ 3.40 and [tex]$\text{plan II}$[/tex] is $ 2.91
Calculating the [tex]$\text{EPS}$[/tex] for both plan I and [tex]$\text{plan II}$[/tex] where EBIT is $ 3.1 million
[tex]$\text{plan I}$[/tex] [tex]$\text{plan II}$[/tex]
EBIT $ 3.1 million $ 3.1 million
Less : Interest $ 1.1 million
Less
PAT $ 3.1 million $ 2.0 million
Earnings available $3.1 million $ 2.0 million
for share holder
No. of shares 765,000 515,00
[tex]$\text{EPS}$[/tex] = earnings available $ 4.05 $ 3.88
for share holder/no. of
shares
Hence, [tex]$\text{EPS}$[/tex] under the [tex]$\text{plan I}$[/tex] is [tex]$\$4.05$[/tex] and [tex]$\text{plan II}$[/tex] is [tex]$\$ 3.88$[/tex]
Calculating the breakeven EBIT
When [tex]$\text{accessing}$[/tex] the relative effectiveness leverage versus equity financing companies look for the level of the EBIT where [tex]$\text{EPS}$[/tex] remains unaffected, called the EBIT-EPS breakeven point .
To calculate the EBIT-EPS breakeven point, rearranging the [tex]$\text{EPS}$[/tex] formula:
[tex]$\text{EBIT}=\text{(EPS }\times \text{no. of common shares outstanding )}+\frac{\text{preferred share dividends}}{1-\text{tax rate}}+ \text {debt interest}$[/tex]
[tex]$=(\$4.05 \times 515,000)+0+\$1,100,000 = \$3,185,750$[/tex]
Therefore, the break even EBIT is $ 3,185,750
Identify whether the actions or scenarios would likely increase or decrease the natural rate of unemployment. You are currently in a sorting module. Turn off browse mode or quick nav, Tab to items, Space or Enter to pick up, Tab to move, Space or Enter to drop. Increases natural rate of unemployment reducing workers' collective bargaining rights extra financial benefits for the unemployed a large number of young people entering the labor force an increase in union membership Decreases natural rate of unemployment
Answer:
increases natural rate of unemployment
extra financial benefits for the unemployed
a large number of young people entering the labor force
an increase in union membership
Decreases natural rate of unemployment
reducing workers' collective bargaining rights
Explanation:
natural rate of unemployment is unemployment that exists when there is only structural and frictional unemployment in an economy
structural unemployment is an unemployment that occurs as a result of changes in the economy. These changes can be as a result of changes in technology, polices or competition . Structural unemployment tends to be permanent.
Frictional unemployment . the period of time a person is unemployed from the period he leaves his current job and the time he gets another job. Eg. when a real estate agent who leaves a job in Texas and searches for a similar, higher-paying job in California.
If the unemployed are given extra benefits, there would be less incentive to find a job, thus unemployment would increase
An increase in union membership increases bargaining power of employees. this can lead to increase in wages. increase in wages reduces demand for labour and this increases unemployment. reducing collective bargaining right has the opposite effect on unemployment
a large number of people entering the labour force increases frictional unemployment