Shear-It, Inc

question 44

Multiple Choice

Shear-it, Inc., produces paper shredders.Shear-it is considering a new shredder design for home offices.The marketing vice president believes that a basic unit in a variety of attractive colors could be sold for $70.Shear-it requires that all new products yield 30% profit.What is the target cost of the new shredder?

• A) $21
• B) $91
• C) $49
• D) $100
• E) $63.70

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Definitions:

Paid-In Capital

The amount of capital provided by shareholders to a company in exchange for shares of stock, representing the funds contributed by investors during the issuance of shares.

Stockholders' Equity

Stockholders' Equity represents the owners' claim after all liabilities have been deducted from total assets. It's also known as shareholders' equity or equity.

Par Value

A nominal or face value assigned to a share of stock by the company's charter, unrelated to the market value.

Paid-In Capital

The amount of money that a company has received from shareholders in exchange for stock, exceeding the par value of the shares.