Reference no: EM13870739
It is true that the change in shareholders’ equity during a year is equal to the change in net assets in that year. This equation is important because:
a. net income is the change in shareholders’ equity that is due to distributions of capital
b. net income is the change in shareholders’ equity that is due to contributions of capital
c. GAAP defines net income implicitly, based on the change in shareholders’ equity
d. GAAP defines net income explicitly, based on the change in shareholders’ equity
|
What is the expected return for the project
: What is the expected return for the project? If the required rate of return is 13%, should they proceed with the project? Why? Does this mean Project B is automatically eliminated from consideration?
|
|
Using constant growth valuation formula-what is net income
: Blue Company has 12,000,000 in sales. COGS are 40% of sales. Operating costs are $1,200,000plus depreciation expense of $80,000 and interest expense $80,000. Tax rate is 40%. They have 1,000,000 shares of stock outstanding. What is their net income? ..
|
|
Which security is considered more risky
: Security A has a 9% expected return, 65% standard deviation. Security B has a 7% return, 50% standard deviation. Using standard deviation data alone, which security is considered more risky? You are looking at investing in SML Industries stock. Risk ..
|
|
What is the cost of equity
: Johnson Tire Distributors has an unlevered cost of capital of 13 percent, a tax rate of 34 percent, and expected earnings before interest and taxes of $1,700. The company has $3,200 in bonds outstanding that have a 6 percent coupon and pay interest a..
|
|
Change in shareholders equity during year
: It is true that the change in shareholders’ equity during a year is equal to the change in net assets in that year. This equation is important because:
|
|
What is the firms weighted average cost of capital
: A firm has debt of $90,000, equity of $140,000, a leveraged value of $100,000, a cost of debt of 6%, a cost of equity of 12%, and a tax rate of 40%. What is the firm's weighted average cost of capital?
|
|
Project that has initial after-tax outlay or after-tax cost
: Geronimo, Inc. is considering a project that has an initial after-tax outlay or after-tax cost of $190,000. The respective future cash inflows from its four-year project for years 1 through 4 are: $50,000, $40,000, $70,000 and $45,000. Geronimo uses ..
|
|
Uses the net present value method and has a discount rate
: Dweller, Inc. is considering a four-year project that has an initial after-tax outlay or after-tax cost of $110,000. The future cash inflows from its project are $30,000, $25,000, $50,000 and $40,000 for years 1, 2, 3 and 4, respectively. Dweller use..
|
|
What is the payback period without discounting cash flows
: Consider the following four-year project. The initial after-tax outlay or after-tax cost is $1,000,000. The future after-tax cash inflows for years 1, 2, 3 and 4 are: $400,000, $300,000, $200,000 and $200,000, respectively. What is the payback period..
|