According to the signaling theory to explain differences in firms' capital structures, if a firm raises new capital by issuing debt rather than by issuing stock, it is a signal that the firm has very good future prospects. true false

At the beginning of the accounting period, nutrition incorporated estimated that total fixed overhead cost would be $50,600 and that sales volume would be 10,000 units. at the end of the accounting period actual fixed overhead was $56,100 and actual sales volume was 11,000 units. nutrition uses a predetermined overhead rate and a cost plus pricing model to establish its sales price. based on this information the overhead spending variance is multiple choice $5,500 favorable. $440 favorable. $5,500 unfavorable. $440 unfavorable.

On january 1, vermont corporation had 40,000 shares of $10 par value common stock issued and outstanding. all 40,000 shares has been issued in a prior period at $20.00 per share. on february 1, vermont purchased 3,750 shares of treasury stock for $24 per share and later sold the treasury shares for $21 per share on march 1. the journal entry to record the purchase of the treasury shares on february 1 would include a credit to treasury stock for $90,000 debit to treasury stock for $90,000 credit to a gain account for $112,500 debit to a loss account for $112,500

You are evaluating two different silicon wafer milling machines. the techron i costs $285,000, has a three-year life, and has pretax operating costs of $78,000 per year. the techron ii costs $495,000, has a five-year life, and has pretax operating costs of $45,000 per year. for both milling machines, use straight-line depreciation to zero over the project’s life and assume a salvage value of $55,000. if your tax rate is 24 percent and your discount rate is 11 percent, compute the eac for both machines.