On january 1, 2018, jackie corp. purchased 30% of the voting common stock of rob co., paying $2,000,000. jackie properly accounts for this investment using the equity method. at the time of the investment, rob's total stockholders' equity was $3,000,000. jackie gathered the following information about rob's assets and liabilities whose book values and fair values differed:
buildings - 10 year life book value $1,000,000 fair value $1,500,000
equipment - 5 years life book value $2,500,000 fair value $3,000,000
franchises 10 year life book value $0 fair value $ 500,000
any excess of cost over fair value was attributed to goodwill, which has not been impaired.
rob co. reported net income of $300,000 for 2008, and paid dividends of $100,000 during that year.

what is the amount of excess amortization expense for jackie corp's investment in rob co. for the first year?
(a) $0.
(b) $30,000.
(c) $40,000.
(d) $55,000.
(e) $60,000.

The cost of capital: introduction the cost of capital: introduction companies issue bonds, preferred stock, and common equity to aise capital to invest in capital budgeting projects. capital is』necessary factor of production and like any other factor, it has a cost. this cost is equal to the select the applicable security. the rates of return that investors require on bonds, preferred stocks, and common equity represent the costs of those securities to the firm. companies estimate the required returns on their securities, calculate a weighted average of the costs of their different types of capital, and use this average cost for capital budgeting purposes. required return on rate: when calculating om operations when the firm's primary financial objective is to select shareholder value. to do this, companies invest in projects that earnselect their cost of capital. so, the cost of capital is often referred to as the -select -select and accruals, which a se spontaneously we hted average cost of capital wa c our concern is with capital that must be provided by select- 쑤 interest-bearing debt preferred stock and common equity. capital budgeting projects are undertaken, are not included as part of total invested capital because they do not come directly from investors. which of the following would be included in the caculation of total invested capital? choose the response that is most correct a. notes payable b. taxes payable c retained earnings d. responses a and c would be included in the calculation of total invested capital. e. none of the above would be included in the cakulation of total invested capital.

Which of the following is an example of a positive externality? a. promoting generic drugs would benefit people. b. a lower inflation rate would benefit most consumers. c. compulsory flu shots for all students prevents the spread of illness in the general public. d. singapore has adopted a comprehensive savings plan for all workers known as the central provident fund.

Brandt enterprises is considering a new project that has a cost of $1,000,000, and the cfo set up the following simple decision tree to show its three most likely scenarios. the firm could arrange with its work force and suppliers to cease operations at the end of year 1 should it choose to do so, but to obtain this abandonment option, it would have to make a payment to those parties. how much is the option to abandon worth to the firm?