SMART is an acronym that means specific, measurable, achievable, relevant. The answer is D.
Answer:
D. Dividends Payable
Explanation:
On the day dividends are declared, the amount declared is debited to the retained earnings accounts and credited to the dividend payable accounts. The dividends have not yet been paid, meaning the money is still with the company. For this reason, the cash account.
A dividend is not an expense, so there can never be a dividend expense account.
Answer:
$0
Explanation:
The amount of revenue realized from the sale=
(number of shares purchase × cost) - (number of shares sold ×cost)
(1000×10) - (500×20)
= $(10000 - 10000)
= $0
Answer:
The production of the clocks should be continued, as buy option will increase the cost for the company by 48,000
Explanation:
Current escenario
100 DM x 1,200 = 120,000
140 DL x 1,200 = 168,000
80 VO x 1,200 = 96,000
Fixed Cost 150 x 1,200 = 180,000
Total cost = 564,000
420 x 1,200 = 504,000
60% fixed cost unavoudable 180,00 = 108,000
Total Cost 612,000
make 564,000
buy (612,000)
total cost saving (48,000)
This answer requires that we fill in the blanks
- The net present value (NPV) method estimates how much a potential project will contribute to shareholder wealth
- The larger the NPV, the more value the project adds; and added value means a higher stock price.
- The NPV calculation assumes that cash inflows can be reinvested at the project's risk-adjusted WACC
- When the firm is considering independent projects, if the project's NPV exceeds zero the firm should accept the project.
- When the firm is considering mutually exclusive projects, the firm should accept the project with the higher positive NPV.
What is the NPV?
In order to get the NPV we have to make the following calculations for the projects A and B.
This is calculated as
Project A
-900 + 620/1.08 + 395/1.08² + 200/1.08³ + 250/1.08⁴
= $355. 237
For the project B
We would have to perform similar calculation
Hence we would have
-900 + 620/1.08 + 395/1.08² + 200/1.08³ + 250/1.08⁴
= 378.98
From the calculations that we have done above, we can see that the value for project B is greater hence we have to choose project B.
Read more on NPV here:
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