Paradise Travels is an all-equity firm that has 6,000 shares of stock outstanding at a market price of $34 a share. The firm's management has decided to issue $40,000 worth of debt and use the funds to repurchase shares of the outstanding stock. The interest rate on the debt will be 7 percent. What are the earnings per share at the break-even level of earnings before interest and taxes? Ignore taxes.

Answer:

$50 / hr

Explanation:

The law of comparative advantage states that an entity should be able to produce its goods and services at a lower opportunity cost compared others in the same line of business so as to have an edge in the market.

Looking at the scenario ,if Ashley can type 120 words in a minute and also earn $100 / hr as an attorney , the opportunity cost of settling for the attorney work is the income earned through typing.

The law states that goods and services should be produced at a cost lower to the opportunity cost. To Ashley , the cost of hiring Benjamin should not be more than half of her hourly income as Benjamin production rate is half of hers.

Answer:

20,000 ; $117.5 million; $2,350,000; $1678500; $1,078,500

Explanation:

Given the following :

Number of common stock shares owned = 50,000

outstanding shares = 2.5 million

Additional shares = 1 million

Market value of stock before rights offering = $35

Net stock price for existing shareholders ($5 discount) = $(35 - 5) = $30

A.) If you exercise your preemptive rights, how many of the new shares can you purchase?

Number of stocks / (outstanding shares ÷ additional shares)

[(50,000) ÷ (2.5 ÷1)] = 50,000/2.5 = 20,000

B.) b.What is the market value of the firm after the rights offering?

(Outstanding shares * market price) + ( additional shares * discount price)

(2.5million * $35) + (1 million * $30)

$87.5 + $30 = $117.5 million

C.) What is your total investment in the firm after the rights offering?

(stock shares held before offering * market price) + ( new shares that can be purchased * discount price)

(50,000 * $35) + (20,000 * $30)

1750000 + $600,000 = $2,350,000

D.)

Number of common stock shares *new market value after Issuance

New Market value after Issuance :

Market value of firm after offering / (outstanding + additional shares)

$117,500,000 / (2.5+1)million

$117,500,000 / 3,500,000

= $33.57

50,000 * $33.57 = $1678500

11)

Revenue from right sale :

Number of right shares * discount price

20,000 * $30 = $600,000

Value of proceed :

$1678500 - $600,000 = $1,078,500

Answer:

$1,200

Explanation:

The reason is that out of $5,200, $4,000 is the amount that Penelope receives as capital asset proceeds as this $4,000 reduces the insurance policy worth by $4,000. Hence it is insurance policy proceeds and is exempt from tax. The remainder $1,200 is interest earnings per year which must be included in the gross income for current year as it is taxable income.

Answer and Explanation:

The computation is shown below:

a. The price and P/E ratio is

Price = Current year dividend ÷ (Required rate of return - growth rate)

where,

Growth rate is

= ROE × plowback ratio

= 20% × 0.30

= 6%

And, the current year dividend is ×

= $2 × (1 - 0.30)

= $1.4

So, the price is

= $1.4 ÷ (0.14 - 0.06)

= $17.50

Now the P/E ratio is

= $17.50  ÷ 2

= 8.75

b)  For the present value of growth opportunities, the formula and the computation is

= Price of the stock - earnings ÷ required rate of return

= $17.50 - $2 ÷ 0.14

= 3.21

c)  The P/E ratio and the present value of growth opportunities is

But before that we need to find out the price which is

Price = Current year dividend ÷ (Required rate of return - growth rate)

where,

Growth rate is

= ROE × plowback ratio

= 20% × 0.20

= 4%

And, the current year dividend is

= $2 × (1 - 0.20)

= $1.6

So, the price is

= $1.6 ÷ (0.14 - 0.04)

= $16

Now the P/E ratio is

= $16  ÷ 2

= 8

And, the growth opportunities is

= Price of the stock - earnings ÷ required rate of return

= $16 - $2 ÷ 0.14

= 1.72

Answer:

1 and 2

Explanation:

A flexible budget is a budget in which there is a change in the volume or the change in activity so that it becomes so sophisticated

While on the other hand under the static budget the values would remain the same

So at the time of selection for activity levels, it should be within relevant change and expediency matter H

Hence, the first two statements are correct

Answer and Explanation:

The balance category is shown below:-

Current assets are those assets that are converted into cash within one year for example inventory, accounts receivable, etc.

Fixed assets are those assets that are to be considered as to be long term that is 3 years, 5 years, etc. For example land, building, machinery, etc.

1. Cash equivalents                                        Current assets

2. Bond Investment                                           Investment

3. Land not currently used in operations        Fixed assets

4. Equipment                                                   Plant assets

5. Trade marks                            ( Other assets) Intangible assets

6. Wages payable                                     Current liabilities                                         7. Bonds payable                                         Long term liabilities                      

Short - term note payable                       Current liabilities

Answer: Strict product liability

Explanation:

Strict product liability holds that all merchants sellers of defective and dangerous product are responsible for the outcome of their products regardless of who among them is at fault. The merchants bear the risk for this particular product based on how dangerous they seen to be.

Answer: A.) Contribution Margin analysis

Explanation: The contribution margin analysis could be explained as an analytical tool in accounting which helps managers in observing variation or differences in the budgeted and actual contribution margin of a product. The contribution margin is used to determine the revenue made on a product after deducting the fixed cost incurred in it's production. It is also used to evaluate the performance of individual product derived from the amount of residual profit after deducting necessary production cost.

Answer:

(B) Clinical trials of new drugs, which occur after the patent is granted and before the new drug can be marketed, often now take as long as 10 years to complete.

Explanation:

This option supports the pharmaceutical industry's claim because the research and development time of a new drug can be as long as half its patent life. Generally R&D on other industries takes a much shorter time, or at least not as much as half the patent's life.

Personally I would agree with the pharmaceutical industry if in exchange they would sell their drugs in the US at the same price as they are sold in Canada or Europe, or any other country in the world. The patent extension would benefit them and reduce the price of drugs by 80-90% in the US. I'm certain that the later would never happen, because the US is by far the largest cow milk for pharmaceutical companies because it is the only countries where the price of legal drugs is not regulated.

Answer: Defeated; two against and one in favor

Explanation:

The options to the question are:

a. Accepted; two in favor and one against

b. Defeated; two against and one in favor

c. Accepted; three in favor and none against

d. Defeated; none in favor and three against

A majority vote is a voting system whereby the person who wins is the person that has more than fifty percent of the vote.

In this question, we are told that Matt, Joe, and Teresa will share an equal portion of this cost in taxes and that the benefit of the public good is $500 for Matt, $280 for Joe, and $260 for Teresa.

In a majority vote, this proposal will most likely be defeated as there will be two against and one in favor. Joe and Teresa will be against it ane only Matt will be in support as he will receive more in benefit than the others.

Answer:

Springfield Company

The unpaid Employee Bonuses will have a journal entry as follows:

B) Debit Employee Bonus Expense $32,500; credit Bonus Payable $32,500.

Explanation:

Springfield Company had already incurred the bonus for the accounting period.  It must be recognized as an expense in the year in accordance with the accrual concept and the matching principle of generally accepted accounting principles.  These require that expenses must be recognized not on cash basis but on accrual basis and that any expense relating to an accounting period must be matched to revenue of that period.

Answer:

Kindly check Explanation

Explanation:

1st of July 2014:

No journal entry Dr.

No Journal entry Cr.

1st of September 2014:

CASH 2300 Dr.

ACCOUNTS RECEIVABLE 390 Dr.

INVENTORY 1700 Cr.

SALES REVENUE (2300/2890)×2690 - - 2140.8 Cr

UNEARNED SERVICE REVENUE (590/2890)×2690 - - - 549.2 Cr.

15th October 2014 :

CASH (2690 - 2300) - - 390 Dr.

UNEARNED SERVICE REVENUE - - 549.2 Dr.

ACCOUNTS RECEIVABLE - - - 390 Cr.

SALES REVENUE - - - 549.2 Cr.

Answer:

D. any of these

Explanation:

Competitive strategy means intentionally selecting a distinct set of tasks to produce a compelling value proposition.  Michael Porter focused on the topic of international competition. He consulted international governments on their economic strategies and led the U.S. Presidential Commission. Porter's strategies explain how a business upholds competitive advantages across the whole concerned market context.

Answer:

E. To verify that property was sold at its fair market value

Explanation:

Adequacy of consideration is an aspect of law that says a lawful agreement is made when the buyer of a good or service gives a fair price for offerings made by the seller.

The fair price may however come in different forms - property, a promise to perform an action, an act, or money.

For example if a person offers to sell a car at $3,000 and the buyer accepts this price, the agreement is said to have adequate consideration.

If a court determines that a contract does not meet fair market price of goods and services sold, it can nullify the contract

Answer:

$40.76

Explanation:

Calculation of the value of the stock today

First step is find the value of stock for each year.

The Value of stock today will be:

First year =($3.00 / 1.15^¹)

First year=($3.00/1.15)

First year=$2.61

Second year= ($3.50 / 1.15^²)

Second year =($3.50/1.3225)

Second year =$2.65

Third year= ($4.00 / 1.15^3)

Third year=($4.00/1.520875)

Third year =$2.63

End of third year= ($50.00 / 1.15^3)

End of third year = ($50.00/1.520875)

End of third year =$32.88

Last step is to add the amount for each year up

V0= $2.61 + $2.65 + $2.63 + $32.88

V0= $40.76

Therefore the value of the stock today will be $40.76

Answer: $125,000

Explanation:

If the above transaction in the question has commercial substance, the recorded value of the new truck will be the trade in allowance of $12,000 on the old truck in addition to the $113,000 that was paid to get the new truck.

Mathematically expressed, this will be:

= $113,000 + $12,000

= $125,000

Answer: C. The culture of the organization did not support napping during a shift.

Explanation:

Many people tend to have a good rest when they are not working so they can regain their mental and physical strength when they are not on duty to be strong enough to carry out task when they on duty. Depreving them of this rest will tend to fail any program. Rest is required for success as the human system is frail at some point after long task or job being carried out.

Answer:

detects potential problems early to prevent their occurrence.

Explanation:

Six Sigma is a quality business management strategy which helps business organizations to improve the quality of processes, products and services by discovering and eliminating defects, variations or errors. It is a strategic business concept that was developed in 1986 by Motorola.

This ultimately implies that, the six sigma approach to quality control detects potential problems early to prevent their occurrence.

Under the six sigma approach, any process that doesn't provide customer satisfaction or causes challenges in an organisation's process should be eliminated from the system in order to produce quality products and services. It allows only 3.4 defective features for every million opportunities and as such expects processes to be defect free 99.99966 percent of the time.

Generally, there are two (2) main methods of achieving the six sigma approach;

1. DMAIC: define, measure, analyze, improve and control.

2. DMADV: define, measure, analyze, design and verify.

Answer:

Make no journal entry

Explanation:

A journal entry is defined as a record of a financial transaction by an entity. Economic and non economic transactions are recorded in the accounting journal to show debits and credits of the business.

In this scenario Clarion Township was approved for a grant from the federal government.

However upon notification of the approval no journal entry is to be recorded because weatherization has not started, so no expense has been incurred.

Journal entry is only made when cost is incurred or revenue is earned.

Answer:

D.

Explanation:

The Credit Alliance v. Arthur Andersen & Co. is a case that questions if an accountant should be held liable to the third party on whom it is reliable to his detriment absent privity of contract.

The Court of Appeals of New York, on July 2, 1985, affirmed that an auditor should not be held liable if they fulfill the following three requirements.

So, from the options stated in the question, one that is not included in this case is the fourth one. Thus the correct answer is option D.

Answer:

D.

social security number

Explanation:

This is because that number allows the government to keep track of your lifetime earnings and years you have worked

Answer:

Explanation:

Based on the information provided, it can be said that the most appropriate approach would be to acquire startups with talented employees and integrate these employees into the company's culture. These startup's would not only already have the talented employees that the biomedical division needs but those employees would also already have become accustomed to the team that they have been working within the startup. This would drastically increase their efficiency.

Answer:

i'm no expert but, i think first start out with ideas of the business u wanna do and keep adding on to those ideas you already have and find a business idea you know you can invest in and stick to that business so you can make money you want and supply the products people want and need so, that your making money to help yourself out in life and their getting supplies that are good and don't have harsh chemicals so, it doesn't result in you losing money. Also Natural Beauty is a good name but, i think you might like these three name ideas but, if not its okay go with the name you want since it's your business. Here are the name ideas Natural Essentials, Clear Beauty, or Organic Beauty Essentials.

Answer:

Many small business owners decide to set up an LLC for the liability protection it provides. An LLC, or limited liability company, exists separately from its owners (known as members), and the owners are therefore not personally responsible for business debts.Most states don’t allow two different business entities to have the same name. So you can’t, for example, have “Joe’s Donuts, LLC” and “Joe’s Donuts, Inc.,” even if they’re located in different cities. Many states also restrict companies from using certain words in their names, such as “bank.” If the LLC name you’ve selected is available, but you aren’t going to be filing your LLC documents right away, you may want to reserve the name. Nearly every state allows you to reserve a name by filing a form and paying a name reservation fee. The length of the reservation period, filing fees, and renewal policies vary from state to state.Almost every state requires its LLCs to name a registered agent (also sometimes called a statutory agent). A registered agent is a person who agrees to receive lawsuits, subpoenas and other official documents on behalf of the LLC and to pass them along to the appropriate person at the LLC.An LLC operating agreement is the roadmap that describes how your LLC will be run. It specifies such things as the ownership interests and voting rights of the members, how profits and losses will be allocated, how meetings will be held, how the business will be governed, the rights of the members if one of them dies or leaves the business, and the way the company will be dissolved if it goes out of business.Each state has its own form and procedure for establishing an LLC. In general, you must file articles of organization that list.After the LLC’s formation documents are filed and approved, the state will issue a certificate or other document that confirms that your LLC formally exists. Once you’ve received the certificate, you can take care of business matters like obtaining a tax ID number and business licenses and setting up a business bank account. Explanation:If your LLC does business in more than one state, you may need to register to do business in other states. To do this, you’ll need to fill out and submit paperwork that’s similar to the paperwork you filed when you formed your LLC. You’ll also need a registered agent in each state where you are authorized to do business.

Answer:

GDP stands for gross domestic product and includes the market value of all the finished and legal goods and services produced within a country during one year. While the GNP refers to gross national product and it measures the total market value of all the finished and legal goods produced by the citizens (including individuals and businesses) of a country.

Generally in developing countries, like South Africa, there are a lot of foreign multinational corporations that operate there. Their operations are included in the GDP, but since they are American, European or Asian multinational corporations, their operations are included in the GNP of their respective countries, not South African GNP.

Answer: A. selling 3,000 shares of ABC as directed by a client at a price that the agent determines, without oral or written discretionary authority

Explanation:

According to NASAA's Statement of Policy on Unethical or Dishonest Business Practices of Broker-Dealers and Agents, all of the following practices that are given in the question are unethical for an agent except selling 3,000 shares of ABC as directed by a client at a price that the agent determines, without oral or written discretionary authority.

It should be noted that it is ethical for an agent to choose the price and the time of a trade so far the client has determined the amount, asset, and the action.

Answer:

breach of express warranty

Explanation:

Since the plant manager expressly assured the buyer that the equipment had no problems and was working properly, if the equipment fails (as it did in the question), this is considered a breach of expressed warranty.

An express warranty is something specific that the seller (plant manager) tells the buyer about the product and how it should work.

Answer: develop a reentry plan for Pete prior to the completion of the overseas assignment.

Explanation:

The options to the question are:

A. develop a reentry plan for Pete prior to the completion of the overseas assignment.

B. limit communication to every-other-month status phone calls so as to not micromanage Pete.

C. save costs by avoiding a "look-see" trip for Pete and his family, given Pete's enthusiasm.

D. develop performance measures after Pete had completed his first year.

E. develop the assignment "on the fly" given the uncertainties involved.

From the question, we are informed that Sandra Stone, Vice President of International Operations for Global Apparel Corporation, was working with her subordinate, Pete Thompson, to plan for his upcoming 18-month overseas assignment to the firm's new office in Rome.

We are further told that based upon her experience with previous failed overseas assignments, she was taking steps to avoid another failure. Therefore, one of the key features of Sandra's plan for Pete was to develop a reentry plan for Pete prior to the completion of the overseas assignment. This will help to prevent another failed overseas assignment.

Answer: The answer is No, because the MB > MC

Explanation:

They are not cleaning up enough because the MB>MC. Therefore, all other options which cut across - Yes, because the MC > MB,

No, because the MB > MC,

Yes, because the MB > MC and

No, because the MC > MB are wrong.

Answer:

The total amount of dividends paid by Aria’s, Inc. is $30,000.

Explanation:

The total amount of dividends paid by Aria’s, Inc. can be obtained by adding the dividends paid to common shareholders and preferred stockholders as follows:

Annual dividend paid to cumulative preferred stockholders = Number of cumulative preferred shares * Par value of the share * Dividend rate = 1,000 * $100 * 5% = $5,000

Since Aria’s, Inc. has has not paid dividends in two years, the total dividend paid to cumulative preferred stockholders is as follows:

Total dividend paid to cumulative preferred stockholders = Annual dividend paid to cumulative preferred stockholders * 2 = $5,000 * 2 = $10,000

Dividend paid to common stockholders = Number of common shares * Common shares dividend per share = 10,000 * $2 = $20,000

Therefore, we have:

Total amount of dividends paid = Total dividend paid to cumulative preferred stockholders + Dividend paid to common stockholders = $10,000 + $20,000 = $30,000

Therefore,  the total amount of dividends paid by Aria’s, Inc. is $30,000.