The purchase of used equipment is a cash outflow therefore it is represented in a negative sign while on the other hand sale of investment is cash inflow so the same is presented in a positive sign




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Under the purchase accounting method, A. goodwill must be amortized straight-line over the target firm"s estimated life. B. acqu

thedesigningfairy.com: E. acquired assets are recorded at fair market value

Explanation: acquired assets are recorded at fair market value under the purchase accounting method. The method is used for mergers or combination in which one firm is considered to have acquired the assets of the other firm. It allows the purchase of a company to be made on the balance sheet of the company that acquires it at a price that reflects their fair market value. The target firm is treated as an investment and there is no pooling of assets. Supposing price paid for the purchased firm is more than its market value (of the acquired firm"s assets) the difference is recorded as goodwill (a category for intangible assets that are harder to parse out individually or measured directly) on the acquirer"s balance sheet.



A company is evaluating an investment which has an initial investment of $15,000. Expected annual net cash flows over four years

thedesigningfairy.com:

$850

Explanation:

Data provided in the question:

Initial investment = $15,000

Expected annual net cash flows over four years, R = $5,000

Return on the investment = 10% = 0.10

Present value of an annuity factor for 10% and 4 periods, PVAF = 3.1699

The present value of $1 factor for 10% and 4 periods = 0.6830

Now,

Net present value = < R × PVAF > - Initial investment

= < $5,000 × 3.1699 > - $ 15,000

= $15,849.50 - $ 15000

= $849.50 ≈ $850



thedesigningfairy.com:

supplies expense for August = $2811

Explanation:

given data

August 1 supplies on hand = $1,025

August purchased = $3,110

August 31 supplies on hand = $1,324

solution

we get here supplies expense for August that is express as

supplies expense for August = August 1 supplies on hand + August purchased - August 31 supplies on hand .............1

put here value

supplies expense for August = $1,025 + $3,110 - $1,324

supplies expense for August = $2811



The present value of growth opportunities (PVGO) is equal to: I) the difference between a stock"s price and its no-growth value

thedesigningfairy.com: I, III and IV

Explanation:

The present value of growth opportunities (PVGO) is equal to the difference between the price of a stock and its no-growth value per share.

It us also equal to zero if its return on equity equals the discount rate and us also the net present value of favorable investment opportunities.

The present value of growth opportunities (PVGO) is not equal to the stock price. Therefore, option I, III and IV are correct.





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Suppose you know that a company’s stock currently sells for $55 per share and the required return on the stock is 8 percent. Y

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