What will be the effect on the income statement if a firm buys a new processing plant through a new loan?
What will be an ideal response?
Answer: The effect on the income statement will be in the form of a depreciation expense for the first year on the new processing plant.
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Assume that a company received $1,200 in advance for one year membership fee in the fitness center. The entry that would be made to record the recognition of revenue at the end of first month is:
a. Revenue 1,200 Cash 1,200 b. Cash 100 Revenue 100 c. Unearned revenue 100 Revenue 100 d. Revenue 100 Unearned revenue 100
If an instrument is acquired as part of a corporate purchase of assets, the holder will have the rights of an HDC.
Answer the following statement true (T) or false (F)
Even though a company sets a limit on the number of shares it will sell, before selling any of them, the company must receive authorization to market the shares from the Securities and Exchange Commission (SEC)
Indicate whether the statement is true or false.
Birdman, Inc. is currently considering an eight-year project that has an initial outlay or cost of $80,000. The future cash inflows from its project for years 1 through 8 are the same at $30,000. Birdman has a discount rate of 13%
Because of concerns about funds being short to finance all good projects, Birdman wants to compute the profitability index (PI) for each project. What is the PI for Birdman's current project? A) About 1.50 B) About 1.60 C) About 1.70 D) About 1.80