1. Digital Design Corporation has an after-tax cost of debt capital of 7 percent, a cost of preferred stock of 9 percent, a cost of equity capital of 11 percent, and a weighted average cost of capital of 8.5 percent. In raising additional capital, the company intends to maintain its current capital structure. In order… Read More

1. In early 2013, Virgin Atlantic must pay the tax authority $45,000 on the income it earned in 2012. This amount was reported on the company’s financial statements as of 31 December 2012 as: A. income tax expense. B. a deferred tax liability. C. taxes payable.   2. What does the change in valuation allowance… Read More

1. Which of the following items will cause a company to report a lower amount of amortization expense of intangible assets in the first year after acquisition? A. A higher amortization rate. B. A lower residual value. C. A longer useful life.   2. Stonebridge Inc. sells an intangible asset with a historical acquisition of… Read More

1. Which of the following inventory valuation methods is not permitted by IFRS? A. FIFO B. LIFO C. Weighted average cost   2. Jackson Enterprises uses the FIFO inventory valuation method. The company bought 400 generators at a price of $300 each on January 5, 2012. 300 of these generators were sold off at a… Read More