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federal tax is withheld from employee earnings in ________

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Which of the following statements is true?A) Managerial accounting for companies in the US is governed by GAAP.B) Managerial accounting statements are prepared to go to parties outside the company.C) Managerial accounting is more future oriented than financial accounting.D) The results of both managerial and financial accounting are reported only in currency.

Which of the following statements is CORRECT?a. If a firm has enough retained earnings to fund its capital budget, then there is no need to estimate a cost of equity when determining the WACC.b. The component cost of preferred stock is expressed as rp(1 - T). This follows because preferred stock dividends are treated as fixed charges, and as such they can be deducted by the issuer for tax purposes.c. A cost should be assigned to retained earnings due to the opportunity cost principle, which refers to the fact that the firm's stockholders could themselves earn a return on earnings if they were paid out rather than retained and reinvested.d. Suppose a firm has been losing money and thus is not paying taxes, and this situation is expected to persist into the foreseeable future. In this case, the firm's before-tax and after-tax costs of debt will both be equal to the interest rate on the firm's currently outstanding debt, which was issued during the past 5 years.e. No cost should be assigned to retained earnings because the firm does not have to pay anything to raise them-they are generated as cash flows by operating assets that were raised in the past, hence they are "free."

Nachman Corporation forecasts that if all of its existing financial policies are adhered to, its proposed capital budget would be so large that it would have to issue new common stock. Since new stock has a higher cost than of retained earnings, Nachman would like to avoid issuing new stock. Which of the following actions would REDUCE its need to issue new common stock?a. Increase the proposed capital budget.b. Reduce the percentage of debt in the target capital structure.c. Increase the dividend payout ratio for the upcoming year.d. Reduce the amount of short term bank debt in order to increase the current ratio.e. Increase the percentage of debt in the target capital structure.

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