Why does cash decrease when accounts receivable increases? Why would a gain on sale of long-term assets be subtracted on the cash flow statement? Why is the statement of cash flows required? How do depreciation expense and accumulated depreciation differ?
The cost of debt is merely the interest rate paid by the company on its debt. However, since interest expense is tax-deductible, the debt is calculated on an after-tax basis as follows: Cost of debt=Interest expenseTotal debt×(1−T)where:Interest expense=Int. paid on the firm’s cur...
Explain why after-tax costs are utilized when computing component costs of bonds, but not preferred and common stock. Why does customer service not increase proportionately to increases in total cost when a logistical system is being designed? Explain the three types of premiums and the...