Suppose you own 75 shares of Google, which pay a dividend of $0.13 per share per year. How much will you receive in dividends ov

Response:

Indeed, obtaining a loan would fulfill our eligibility to travel for an exceptional summer internship program next year.

Justification:

A loan would provide the necessary funds for purchasing a car. We can manage the down payment. This will allow us to acquire a vehicle. Thus, deciding to take the loan is a sound choice.

This will facilitate our commute for the summer internship. Immediately upon making the down payment, we will get the car and be able to enjoy its advantages. This represents a favorable type of debt.

Answer:

Option (D) is the right choice.

Explanation:

According to the Modigliani-Miller proposition, the cost of equity will adjust in a way to accommodate its debt obligations.

Cost of equity:

= WACC for an all-equity firm + (WACC for an all-equity firm - Cost of debt ) × (Debt-to-equity ratio)

Initially, when no debt was present,[ [TAG_20]]

WACC = cost of equity = 10%

The levered cost of equity:

= 10% + ( 10% - 6%) × 0.2

= 10.8%

Thus, Taggart's levered cost of equity would be approximately 11%.

The calculation for free cash flow can be summarized as follows:

Revenue 12000000

Subtract: Expense (8000000)

Subtract: Depreciation (1500000)

Earnings Before Tax 2500000

Subtract Tax (750000)

Earnings after tax 1750000

Add Depreciation 1500000

Total Cash Earnings 3250000

Subtract: Change in Working Capital (500000)

Subtract: Asset Purchase (700000)

Free Cash Flow 2050000

Therefore, Free Cash Flow can be computed in this manner.

Response:

(a) Cash flow generated from operating activities = 115,000

(b) Operating cash flow (NCOA) to current liabilities (CL):

Total current liabilities = 22000+9000 = 31000

NCOA relative to CL = 115,000/31000 = 3.71

Clarification:

Income Statement

$

Revenues 750,000

Cost of Goods Sold (470,000)

Gross profit 280,000

Salaries expenses (110,000)

Rental expenses (42,000)

Insurance costs (15,000)

Net Profit 113,000

Cash flow Statement

Net Profit 113,000

Cash flow derived from operating activities:

Increase in Accounts Receivable (54,000-49,000) (5,000)

Reduction in Inventories (66,000-60,000) 6,000

Growth in prepaid Insurance (8000-7000) (1000)

Rise in Accounts Payable (22000-18000) 4000

Decrease in wages payable (11000-9000) (2000)

Total increase in cash flow from operating activities 115,000

Answer:

Given that the hourly wage for full-time employees is $150, whereas for trainees it is $27, clients who utilize a greater proportion of full-time employees compared to trainees will be charged less or under billed for the labor or resources they have used.

Explanation:

The information presented in the question needs to be organized before providing an answer, as described:

Details                                                  Budget                Actual

Indirect costs ​                                     $250,000 ​             $400,000

Annual salary for each full-time employee ​     $200,000 ​             $250,000

Annual salary for each trainee ​             $40,000 ​               $45,000

Total work hours         ​40,000 dlh ​            50,000 dlh

In a normal costing system, actual costs are factored in.

Thus, labor hours for each group and hourly costs can be computed as shown:

Total labor hours for full-time employees = (20/30) * 50,000 = 33,333 hours

Each full-time employee's annual labor hours = 33,333/20 = 1,667 hours

Hourly rate for full-time employees = $250,000/1,667 = $150 per hour

Total labor hours for trainees = (10/30) * 50,000 =  16,667 hours

Annual labor hours for each trainee = 16,667/10 = 1,667 hours

Hourly rate for trainees = $45,000/1,667 = $27 per hour

Due to the hourly rate discrepancies, clients who make use of a larger number of full-time employees than trainees will be charged less or under billed for the labor or resources utilized.