Ghost, inc., has no debt outstanding and a total market value of $273,600. earnings before interest and taxes, ebit, are projected to be $43,000 if economic conditions are normal. if there is strong expansion in the economy, then ebit will be 17 percent higher. if there is a recession, then ebit will be 28 percent lower. the company is considering a $145,000 debt issue with an interest rate of 6 percent. the proceeds will be used to repurchase shares of stock. there are currently 7,600 shares outstanding. ignore taxes for questions a and b. assume the company has a market-to-book ratio of 1.0 and the stock price remains constant. a-1. calculate return on equity (roe) under each of the three economic scenarios before any debt is issued.

Doogan corporation makes a product with the following standard costs: standard quantity or hours standard price or rate direct materials 2.0 grams $ 7.00 per gram direct labor 1.6 hours $ 12.00 per hour variable overhead 1.6 hours $ 6.00 per hour the company produced 5,000 units in january using 10,340 grams of direct material and 2,320 direct labor-hours. during the month, the company purchased 10,910 grams of the direct material at $7.30 per gram. the actual direct labor rate was $12.85 per hour and the actual variable overhead rate was $5.80 per hour. the company applies variable overhead on the basis of direct labor-hours. the direct materials purchases variance is computed when the materials are purchased. the materials quantity variance for january is: