5. Reconciling the government-wide statement of net position and the statement of Net

10-12WACC Empire Electric Company (EEC) uses only debt and common equity. It can borrow unlimited amounts at an interest rate of r, = 9% as long as it finances at its target capital structure, which calls for 35% debt and 65% common equity. Its last dividend (D) was$2.20, its expected constant growth rate is 6%, and its common stock sells for $26. EEČ's tax rate is 40%. Two projects are available: Project A has a rate of return of 12% and Project B's return is 11%. These two projects are equally risky and about as risky as the firm's existing assets. à. What is its cost of common eguity? b. What is the WACC? Which projects should Empire accept?

CORPORATE VALUATION Scampini Technologies is expected to generate $25 million in free cash flow next year, and FCF is expected to grow at a constant rate of 4% per year indefinitely. Scampini has no debt or preferred stock, and its WACC is 10%. If Scampini has40 million shares of stock outstanding, what is the stock's value per share?9-5

COST OF COMMON EQUITY AND WACC Palencia Paints Corporation has a target capital structure of 35% debt and 65% common equity, with no preferred stock. Its before-tax cost of debt is 8%, and its marginal tax rate is 40%. The current stock price is P = $22.00. The last dividend was D, = $2.25, and it is expected to grow at a 5% constant rate. What is its cost of common equity and its WACC?10-8

5. Which of the following is not a characteristic of a Code of Ethics: a) Provision of a standard for member's conduct b) Penalties for non-compliance c) Provision of a set of work practices d) Provision of a basis for public confidence e) None of the above

1. Assume that Business Solutions does not acquire additional office equipment or computer equipment in 2022. Com for the year ended December 31, 2022, for Depreciation expense-Office equipment and for Depreciation expense- equipment (assume use of the straight-line method). 2. Given the assumptions in part 1, what is the book value of both the office equipment and the computer equipment a 31, 2022? 3. Compute the three-month total asset turnover for Business Solutions as of March 31, 2022.

Phi, a U.S. firm, acquired 100 percent of Stu's outstanding stock at book value on January 1, 2016, forS112,000. Stu is a New Zealand based company, and its functional currency is the U.S. dollar. The exchange rate for New Zealand dollars (NZ$) was $0.70 when Phi acquired its interest. Stu's stakeholders' equity un January 1, 2016. consisted of NZ$150,000 capital stock and NZ$10.000 retained earnings. The adjusted trial balance for Stu at December 31, 20l6, is as follows: ADDITIO11. Prepaid expenses (supplies) of NZS18.000 were uu latul when Phi acquired Slu. Olher uperating expetsesinclade NZS8,000 of these supplies that were used in 2016. The remaining NZ$10,00X) of supplics is onband at year erd. 2. The N7$1200,000 cost of sales eonsists of NZS50,000 inventory on hand at Jamiary 1. 2016, and NZS100,000in purchuses during (he year, less NZS30,000 encting inventury that was acquired when tbe exchange rulewas $0.66. 3. The NZ$60,000) of equipment consists of NZ 50,000 included in the business combination and NZ$10,000 purchased daring 2011, when the exchange rare was $0.68. A depreciation rate of 20 percent is applicable to all equipment for 2016. 4. Exchange rates for 2016 ure summarized as follows:

Required: 1. Compute the gross margin ratio (both with and without services revenue) and net profit margin ratio. 2. Compute the current ratio and acid-test ratio. 3. Compute the debt ratio and equity ratio. 4. What percent of its assets are current? What percent are long term?

Conoy 2018, a government department entered into a contract with Consultant Co Pty Ltd for the provision of services by Robert Black, an technician who is nominated in the contract. The contract specifies that Robert Is required to develop a product for use in the department's IT system in accordance with functionali specifications provided by the department. The contract specifies a fixed amount by way of payment to Consultant Co for the development of the product that is required to be produced within 12months of commencement of the contract. The contract is for the performance of a specific task that produces an outcome or result, with Robert maintaining a high level of discretion and flexibility as to how the work ought to be performed. Payment is not made until the work is performed, although installments are payable upon the achievement of particular milestones. Discuss the tax implications of the personal services income (PSI) legislation to the above arrangement, (500 words)

(a) Calculate the following ratios for McCrea plc in 2019. (1) Return on Capital Employed (ROCE) (ii) Operating profit margin (iii) Inventories' turnover period (iv) Settlement period for trade receivables (v) Current ratio (vi) Acid test ratio (vii) Gearing ratio (viii) Interest cover ratio (ix) Earnings Per Share (EPS)

1. With respect to the enhanced CCA rules, which of the following statements is correct? a A The enhanced CCA rules apply to all CCA Classes. a B The enhanced CCA rules neverapply when an asset is acquired in a non-arm’slength transaction. a C The enhanced CCA rules areexceed the cost of acquisitions.applicable when the amounts deducted for disposals q D The enhanced CCA rules require that, prior to the calculation of CCA, one-half of· the net additions for the year must be added to the UCC balance.