Question 8Adams Industries has Net Income of $25,000. Adams also has a cost of equity capital of 18% and a book value of equity at the beginning of the year of $125,000,Adams can add a new division at a cost of $40,000 in new equity. The new division believes that the division will increase Net Income by $7,600.abnormal earnings be if Adams adds the new division?What will the totalO $10,100O $2,900$2.500Ⓒ$400

In this question first we will calculate the total equity after adding new division and then we will…

Answered: Question 8 Adams Industries has Net…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A firm retains earnings of $40,000. What is the total external financing needed if this company, with $120,00 O in assets, has projected a growth rate of 8 percent? Multiple Choice Zero $3,200 $30,400 $9,600 $100,00 0
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