Divine Paper, a United States-based company, processes wood pulp into paper products in fixed-asset intensive facilities. It has a large ratio of property, plant, and equipment to total assets and a high debt-equity ratios. Which of the following is/are true?
a. Divine Paper carries higher levels of risk than an electrical utility.
b. Divine Paper does not have the regulated, monopoly status of an electrical utility.
c. Sales of Divine Paper are more sensitive to changes in the level of business activity than those of an electric utility.
d. The higher risk of Divine Paper, relative to an electric utility, raises its borrowing costs and decreases its reliance on debt financing.
e. all of the above
E
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The Refining Department of Crystal Cane Sugar, Inc. had 56,000 tons of sugar to account for in December. Of the 56,000 tons, 40,000 tons were completed and transferred to the Boiling Department, and the remaining 16,000 tons were 60% complete. The materials required for production are added at the beginning of the process. Conversion costs are added equally throughout the refining process. The weighted-average method is used. Calculate the total equivalent units of production for conversion costs.
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A. Type B B. Type D C. Type A D. Type C
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