Factors of production are inputs utilized to create goods or commodities. They include resources necessary for a business to generate profit by manufacturing products, categorized into four types: land, labor, capital, and entrepreneurship.
Answer:
P14 = $55.69545045394 rounded to $55.70
Explanation:
The dividend discount model (DDM) based on constant growth can help determine the current stock price. It assesses a stock’s price using the present value of the anticipated future dividends. The formula for determining today's price with a constant growth DDM is,
P0 = D1 / (r - g)
Where,
- D1 represents the expected dividend for Year 1 or the following year
- g denotes the constant growth rate for dividends
- r signifies the discount rate or the required rate of return
To find the stock price today, we will utilize the dividend expected in Year 1. Consequently, to compute the stock price 14 years into the future, we calculate D15. D15 can be figured out as follows,
D15 = D1 * (1+g)^14
D15 = 0.50 * (1+0.09)^14
D15 = $1.67086351362 rounded to $1.67
Now applying the DDM formula for the price,
P14 = 1.67086351362 / (0.12 - 0.09)
P14 = $55.69545045394 rounded to $55.70
Option (B) is the right choice. Explanation: Calculating the depreciable basis involves subtracting residual value from cost, which here results in $190,000 - $10,000, giving us $180,000. The usage is identified as 75,000 bolts. The first-year figures indicate the book value starts at $190,000, while 15,000 bolts were created, translating the depreciation expense into 15,000 multiplied by $2.40, equal to $36,000. Subsequently, the ending book value becomes $190,000 minus $36,000, resulting in $154,000. For Year 2, using 19,000 units leads to a depreciation expense of $45,600. The concluding book value for Year 2 becomes $108,400, while accumulated depreciation for both years culminates at $81,600.
Response:
Refer to the explanation section
Clarification:
The disparity between the inventory count recorded and the actual count suggests that the goods in stock have either been sold or lost. For the sake of ongoing operations, it is presumed they have been sold. Accordingly, the journal entry to document the sale is -
December - 31 Cost of goods sold Debit 45,000
($415,000 - $370,000)
Merchandise Inventory Credit 45,000
(To record the sale of merchandise: adjusted)
