AFB, Inc requires an investment in equipment of $600,000 to replace existing equipment. The
existing equipment will produce after-tax salvage value of $70,000. Net working capital
requirements are increased by $50,000.
What is the total cash outflow at time zero?
A) $580,000 B) $650,000 C) $720,000 D) $530,000
A
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In the ______ approach, change is accomplished by persuading people that a change is necessary, providing data to support the argument, and justifying the need for change.
a. normative-reeducative b. power-coercive c. empirical-rational d. environmental-adaptive
Spontaneous unsecured financing has a specific interest cost associated with it that can be at a fixed or floating rate
Indicate whether the statement is true or false
If a lease is capitalized, the present value of the lease payments is put on the firm's balance sheet as a liability.?
Answer the following statement true (T) or false (F)
Michigan-based Leo Corporation acquired 100 percent of the common stock of a British company on January 1, 20X8, for $1,100,000. The British subsidiary's net assets amounted to 500,000 pounds on the date of acquisition. On January 1, 20X8, the book values of its identifiable assets and liabilities approximated their fair values. As a result of an analysis of functional currency indicators, Leo determined that the British pound was the functional currency. On December 31, 20X8, the British subsidiary's adjusted trial balance, translated into U.S. dollars, contained $17,000 more debits than credits. The British subsidiary reported income of 33,000 pounds for 20X8 and paid a cash dividend of 8,000 pounds on October 25, 20X8. Included on the British subsidiary's income statement was
depreciation expense of 3,500 pounds. Leo uses the fully adjusted equity method of accounting for its investment in the British subsidiary and determined that goodwill in the first year had an impairment loss of 25 percent of its initial amount. Exchange rates at various dates during 20X8 follow: January 11£=$2.10 October 251£= 2.25 December 311£= 2.20 Average for 20X81£= 2.21 Based on the preceding information, what amount should Leo record as "income from subsidiary" based on the British subsidiary's reported net income? A. $69,300 B. $52,500 C. $72,600 D. $72,930