EBK CONTEMPORARY ENGINEERING ECONOMICS
6th Edition
ISBN: 8220101336736
Author: Park
Publisher: PEARSON
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Question
Chapter 2, Problem 1P
a.
To determine
The company’s current assets, current liabilities, working capital and shareholders’ equity using the given balance sheet.
a.
Expert Solution
Explanation of Solution
The current asset is calculated as follows.
The current asset is $580,000.
The current liabilities is calculated as follows.
The current liabilities is $230,000.
The working capital is calculated as follows.
The working capital is $350,000.
The shareholders equity is calculated as follows.
The shareholders equity is $520,000.
b.
To determine
The earnings per share when the company has a net income of $500,000.
b.
Expert Solution
Explanation of Solution
The price earning per share is calculated as follows.
The price earning per share is $50.
c.
To determine
The market price of the stock when the company issues common stock.
c.
Expert Solution
Explanation of Solution
The capital surplus value is calculated as follows.
The capital surplus value is $50.
The market price of the stock is calculated as follow.
The market price of the stock is $30.
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Chapter 2 Solutions
EBK CONTEMPORARY ENGINEERING ECONOMICS
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