Cost Management
Cost Management
8th Edition
ISBN: 9781259917028
Author: BLOCHER, Edward
Publisher: Mcgraw-hill Education,
Question
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Chapter 17, Problem 73P

1.

To determine

Prepare a spreadsheet that produces a cost-of-quality.

2.

To determine

Prepare histogram that shows total COQ using spreadsheet.

3.

To determine

Prepare a written evaluation to discuss the distribution of quality costs and change in distribution that are detected to accompany the reports that are prepared in part (1) and (2).

4.

To determine

Explain whether the firm should implement the given proposal and give reason.

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Stark Corp is in the process of acquiring another business. In light of the acquisition, shareholders are currently re-evaluating the appropriateness of the firm's capital structure (the types of and relative levels of debt and equity). The two proposals being contemplated are detailed below:     Proposal 1 Proposal 2 Estimated earnings before interest and taxes (EBIT) $   450,000 $   450,000 Long term debt 1,000,000 2,000,000 Market value of equity 1,000,000 500,000 Interest rate on long term debt 10% 10% Tax rate 25% 25%   Required Calculate the estimated return on equity (ROE) under the two proposals. (ROE = net income after taxes / market value of equity; net income after taxes = (EBIT - interest on long-term debt) × (1 - tax rate)).
I need guidance with this financial accounting problem using the right financial principles.
Atlas corporations price earnings ratio??
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