Preferred stock on which the claims for dividends may be accumulated from year to year is called
a. participating; b. nonparticipating;
c. cumulative; d. noncumulative; e. preferred
C
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The straight-line (use) method is the most common depreciation method for financial reporting
Indicate whether the statement is true or false
Which of the following is an advantage of Google Presentations software?
A. It cannot be hacked. B. It has all the latest features of PowerPoint. C. It saves the presentations of users even if their Google account is disabled. D. It is absolutely free.
Michael received a professional baseball contract paying $7,000,000 for 5 years, Bert received a two-year contract for $16,000,000 per year. For purposes of calculations, treat these contracts as ordinary annuities
What are the present values of each contract if we assume a discount rate of 6%? It is not clear that the higher present value is the preferred contract in this situation. What other factors might you consider when determining which contract has greater value?
TexMex Food Company is considering a new salsa whose data are shown below. The equipment to be used would be depreciated by the straight-line method over its 3-year life and would have a zero salvage value, and no change in net operating working capital would be required. Revenues and other operating costs are expected to be constant over the project's 3-year life. However, this project would compete with other TexMex products and would reduce their pre-tax annual cash flows. What is the project's NPV? (Hint: Cash flows are constant in Years 1-3.) Do not round the intermediate calculations and round the final answer to the nearest whole number. ? WACC10.0% Pre-tax cash flow reduction for other products (cannibalization)-$5,000 Investment cost (depreciable basis)$80,000 Straight-line
depr. rate33.333% Annual sales revenues$66,000 Annual operating costs (excl. depr.)-$25,000 Tax rate35.0% ? A. 01,529 B. 01,094 C. 01,403 D. 01,347 E. 01,684