The last step in preparing the operating budget is to estimate
a. current sales.
b. operating expenses.
c. variable costs.
d. R&D costs.
ANSWER: b
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Perry Investments bought 2,000 shares of Able, Inc. common stock on January 1, 2017, for $20,000 and 2,000 shares of Baker, Inc. common stock on July 1, 2017 for $24,000. Baker paid $2,400 of previously declared dividends to Perry on December 31, 2017. At the end of 2017, the fair value of the Able stock was $18,000 and the fair value of the Baker stock was $28,000. The stocks were purchased for short-term speculation prior to the effective date of the change in accounting rules for equity investments. Perry owns 10% of each company. Perry should record the receipt of the Baker dividend as
A.
| DR Cash | 240 | ? |
| CR Investment in Baker | ? | 240 |
B.
| DR Cash | 240 | ? |
| CR Dividend income | ? | 240 |
C.
| DR Dividends receivable | 240 | ? |
| CR Dividend income | ? | 240 |
D.
| DR Cash | 240 | ? |
| CR Dividends receivable | ? | 240 |
According to the text, small companies and individuals may choose to manufacture prototypes in China because Chinese factories can manufacture in ______ batches at ______ costs.
a. multiple; moderate b. small; low c. frequent; high d. large; low
The free cash flow valuation model can be used to determine the value of an entire company as the present value of its expected free cash flows discounted at the firm's weighted average cost of capital
Indicate whether the statement is true or false
Which of the following is NOT a component of GDP?
A) Consumer sector B) Business investment sector C) Government sector D) Healthcare sector