In the year just past (Year 1 ) Kaos Corp had no debt. Today is January 1 of Year 2. Kaos is considering a plan to sell bonds worth $25B and use the proceeds to repurchase 2.5B shares (on the open market at $10/share)
If Kaos maintains this new level of debt in perpetuity, then what is the present value of the resulting interest tax shields? Assume that the debt is sold immediately, that the bonds are a perpetuity, and that interest is paid at the end of each year. Assume that the coupon rate on the bonds is 6% and that the tax rate is 15%.
A) $0.23B
B) $3.75B
C) $6.0B
D) $21.25B
E) $25B
B
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If actual direct labor hours (DLHs) are less than standard direct labor hours allowed and overhead is applied on a DLH basis, a(n)
a. favorable variable overhead spending variance exists. b. favorable variable overhead efficiency variance exists. c. favorable volume variance exists. d. unfavorable volume variance exists.
Research shows that most frauds are discovered by:
a. external auditors. b. perpetrators. c. audit committee members. d. employees and managers.
Consider the estimated aggregate demand for a company’s ski product line for the upcoming year in the following table. Calculate the inventory holding costs for the month of March using the level production strategy. Assume the regular time production cost as $200/pair of skis, the average monthly inventory holding cost as $20/pair of skis per month, and the beginning inventory for January is 8,000 units.
A. $5,000
B. $7,500
C. $10,000
D. $20,000
In the United States, the most common form of business is the _____, and the form of business that generates most of the sales and profits is the _____.
A. corporation; corporation B. corporation; proprietorship C. proprietorship; partnership D. proprietorship; corporation E. corporation; partnership