Answer:
14.06%
Explanation:
The computation of the company WACC is shown below:
Particulars After tax Market value Weights WACC
(cost % × weights)
Common stock 16.75% $27,280,000 0.79 13.25%
(440,000 shares × $62)
Preferred stock 3.66% $1,804,000 0.05 0.19%
(22,000 shares × $82)
Debt 3.95% $5,400,000 0.16 0.62%
(5,000 shares × $1,000 × 108%)
Total $34,484,000 1
WACC 14.06%
Working note
Cost of common equity is
= Risk free rate of return + Beta × market risk premium
= 5.2% + 1.05 × 11%
= 5.2% + 11.55%
= 16.75%
Cost of preferred stock is
= Annual dividend ÷ Market price per share
= 0.03 ÷ $82
= 3.65%
And, the cost of debt is calculated by using the RATE formula i.e
= RATE(NPER,PMT,-PV,FV)
= RATE(30 × 2, $1,000 × 7.2% ÷ 2, -$1,080, $1,000)
After calculated this, the rate of interest should be multiplied by 2 and then applied the tax rate of (1 - 0.40)
So, the rate is 3.95%
Roger purchased a stock for $16 a share. The stock paid a $1 annual dividend and increased in price by $2 a year for the following three years. What is the arithmetic average annual capital gain
Answer:
The answer is 11.2%
Explanation:
Cost of acquisition: $16 per share
Annual dividend: $1
The stock increases by $2 every year for 3 years. Therefore, we have:
First year is $16 per share
Second year is $18 per share
Third year is $20 per share.
The arithmetic average annual capital gain will be
($2/$16 + $2/$18 + $2/$20)/3
(0.125 + 0.111 + 0.1) / 3
0.336/3
0.112
Expressed as a percentage:
= 11.2%
Tracy Company, a manufacturer of air conditioners, sold 200 units to Thomas Company on November 17, 2021. The units have a list price of $450 each, but Thomas was given a 30% trade discount. The terms of the sale were 3/10, n/30. Required: 1. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on November 26, 2021, assuming that the gross method of accounting for cash discounts is used. 2. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on December 15, 2021, assuming that the gross method of accounting for cash discounts is used.
Answer and Explanation:
The Journal entries is shown below:-
1. a. Tracy Company Dr, $63,000 ($450 × 70% × 200)
To Sales $63,000
(Being sales is recorded)
b. Cash Dr, $61,110 ($63,000 - ($63,000 × 3%)
Sales discount $1,890 Dr, ($63,000 × 3%)
To Tracy Company $63,000
(Being cash and sales discount is recorded)
2. a Tracy Company Dr, $63,000 ($450 × 70% × 200)
To Sales $63,000
(Being sales is recorded)
b. No Journal entry is required
c. Cash Dr, $63000
To Tracy Company $63,000
(Being cash is recorded)
For many types of service organizations such as hospitals, banks and airlines, the primary cost of operations is:
Answer:
This question is incomplete, the options are missing. The options are the following:
a) Labour costs.
b) Coping with obsolescence that results from the rapid pace of technological change.
c) Insurance and legal expenses.
d) Establishing and maintaining a presence on the Internet.
And the correct answer is the option A: Labour costs.
Explanation:
To begin with, most of those organizations that work in the services industry tend to have not so many costs as the ones that work for the production industry where the companies have to deal with so many commodities, materials and more. Therefore that, althought that the services companies still have to deal with marketing expenses like publicity and others like insuraces, the most important cost for the companies in the services industry are the labour costs due the big amount of employees that those kind of companies hire in the market.
Barry Cuda currently has $35,000 in his Roth IRA which has been earning 7%. Barry is planning on depositing $5500 annually for the next 40 years into this IRA. Assuming Barry's IRA continues earning 7% annually, what will Barry's IRA be worth at the end of 40 years?
Answer:
Total worth of worth of investment= $1,622,099.14
Explanation:
The total amount available in his account would be determined as follows:
The value of the existing current amount in 40 years time
FV = PV × (1+r)^ n
FV- future value
PV- current amount in account
r- interest rate
n- number of years
FV = 35,000 × (1.07)^(40=
FV= 524,106.02
The value of the new annual deposit of 5,500 in 40 years time
This represents an annuity. An annuity is series of constant but equal amount occurring for a certain number of years .
FV= A×( (1+r) -1)/r
FV - future value
R - interests rate
n- number of years
A- annual deposit
FV = 5,500 × ((1+0.07)^40 -1)/0.07
FV= 1,097,993.12
Total worth of worth of investment
= 524,106.02 + 1,097,993.12 = 1,622,099.14
Total worth of worth of investment= $1,622,099.14
Rainbow Paints Inc. is a leading paints company in Pakistan. In June 2019, the higher management of the company deliberated and decided upon the production targets for the year 2020. The procurement department was directed to order the supplies of required chemicals and raw materials from Chinese company i.e. XingPe Chemicals for the target production. The supplies were expected to arrive in January-February 2020 but unexpected situation halted the normal operations in China due to the spread of a novel virus. The situation created panic at Rainbow Paints Inc. as lack of supplies meant falling short of the targets and plunging in losses. The supplier was contacted but they were of the view that they cannot send the supplies as per the contract due to the lockdown. Now, conflict aroused between the parties as Rainbow Paints Inc. wanted the raw materials which the XingPi Chemicals cannot process due to restrictions from their respective government. It resulted in losses for Rainbow Paints Inc. Rainbow Paints Inc. decided to consult an International arbitrator for the resolution of the dispute. During negotiations, the Rainbow Paints Inc. maintained that they faced losses due to lack of supplies which did not reach them at the promised time. So, the supplier must not only compensate for it but also return their payments. While XingPe Chemicals insisted that they couldn’t move ahead due to unexpected and unavoidable pandemic situation, so the losses must be shared. They also reiterated the resolve to provide supplies in the future without any delays if the situation permits. They insisted on keeping the contract intact while finding a middle ground for the current dispute. Requirement: After analyzing the case, Identify the approaches to negotiation maintained by both the parties in conflict i.e. Rainbow Paints Inc. and XingPi Chemicals and explain them as per the scenario.
Answer and Explanation:
According to the given situation, The Strategic Negotiation or Distributive Negotiation is also known as Win-lose strategy, was introduced by Rainbow Paints Inc. They say they should be liable for the losses, and they will refund the advance payment. Therefore they support a hard-line strategy.
XingPe Chemicals embraces a resolution of the conflict on this subject. So, they are required to handle the part of loss and want to compensate for the remaining loss by a rainbow. They are justifying to wait on pandemic grounds which is a matter of force measure. They do promise to honor all future contracts.
Enrollment at Bayside College keeps going up, despite tuition and fee hikes to help cover the cost of new wind turbines installed on campus. These turbines generate enough power to serve the campus buildings and to sell to local business establishments. After reading about corporate social responsibility. you conclude:_________.
a. new technology such as wind turbines is a huge capital investment for a college. The effort demonstrates the high cost of environmental programs
b. although it is a trendy social cause, this effort is not showing good long-term social responsibility toward the students who will end up with sizeable future debt
c. this is a demonstration of corporate philanthropy
d. students are willing to pay the extra tuition in the short term because they believe that the means (the use of innovative technology) will justify the end (a better environment.
Answer:
a. new technology such as wind turbines is a huge capital investment for a college. The effort demonstrates the high cost of environmental programs
Explanation:
Corporate social responsibility is defined as integration of social and environmental concerns in the business activities of an organisation.
The business entity is accountable to its stakeholders and the public.
In the given scenario the wind turbines generate enough power to serve the campus buildings and to sell to local business establishments.
However enrollment keeps going up because cost of the new turbines need to be covered.
This demonstrates new technology such as wind turbines is a huge capital investment for a college. The effort demonstrates the high cost of environmental programs
A put on XYZ stock with a strike price of $40 is priced at $2.00 per share, while a call with a strike price of $40 is priced at $3.50. What is the maximum per-share loss to the writer of the uncovered put and the maximum per-share gain to the writer of the uncovered call
Answer:
Loss = $38
Gain = $3.5
Explanation:
The calculation of maximum per-share loss and maximum per-share gain is shown below:-
Maximum loss = Exercise price - Premium received
= $40 - $2
= $38
So, the maximum per share loss is $38
Maximum gain = Premium received
= $3.5
So, the maximum per share gain is $3.5
We simply applied the above formulas to determine each part
Reno contributed $104,000 in cash plus equipment valued at $27,000 to the RD Partnership. The journal entry to record the transaction for the partnership is:
Answer:
Debit cash $104,000; debit equipment $27,000; credit Reno, Capital $131,000.
Explanation:
In this scenario, Reno contributed $104,000 in cash plus equipment valued at $27,000 to the RD Partnership. The journal entry to record the transaction for the partnership is debit cash $104,000; debit equipment $27,000; credit Reno, capital $131,000.
In Financial accounting, debit refers to an entry made which would either increase an expense or asset account; therefore, decreasing an equity or liability account. Credit refers to an entry made which would either increase an equity or liability account; therefore, decreasing an expense or asset account.
Generally, debit is an accounting entry which is made to the left of an account while credit is an accounting entry which is made to the right of an account. The standard rule is that, when a credit decreases an account, the opposite account should be increased with a debit.
Hence, in this case the RD Partnership will debit the cash received, $104,000 plus equipment valued at $27,000. Also, the opposite account or receivable account (Reno, capital) would be credited with $131,000 ($104,000+$27,000 = $131,000).
On January 1, 2016, the Excel Delivery Company purchased a delivery van for $33,000. At the end of its five-year service life, it is estimated that the van will be worth $3,000. During the five-year period, the company expects to drive the van 100,000 miles.
Required:
Calculate annual depreciation for the five-year life of the van using each of the following methods. (Do not round intermediate calculations.)
1. Straight line
2. Sum of the years digits
3. Double declining balance
4, Units of production using miles driven as a measure of output and the following actual mileage:
Year Miles
2016 22,000
2017 24,000
2018 15,000
2019 20,000
2020 21,000
Answer:
1. Straight line
years 2016 to 2020 = $6,000
2. Sum of the years digits
2016 = $10,000
2017 = $8,000
2018 = $6,000
2019 = $4,000
2020 = $2,000
3. Double declining balance
2016 = $13,200
2017 = $7,920
2018 = $4,752
2019 = $2,852
2020 = $1,276
4, Units of production using miles driven
2016 = $6,600
2017 = $7,200
2018 = $4,500
2019 = $6,000
2020 = $5,700
Explanation:
purchase cost $33,000
useful life 5 years, salvage value $3,000
expected use 100,000 miles
1. Straight line
($33,000 - $3,000) / 5 = $6,000
2. Sum of the years digits
year 1 = 5/15 x $30,000 = $10,000
year 2 = 4/15 x $30,000 = $8,000
year 3 = 3/15 x $30,000 = $6,000
year 4 = 2/15 x $30,000 = $4,000
year 5 = 1/15 x $30,000 = $2,000
3. Double declining balance
year 1 = 2 x 1/5 x $33,000 = $13,200
year 2 = 2 x 1/5 x $19,800 = $7,920
year 3 = 2 x 1/5 x $11,880 = $4,752
year 4 = 2 x 1/5 x $7,128 = $2,851.20 ≈ $2,852
year 5 = $4,276 - $3,000 = $1,276
4, Units of production using miles driven
depreciation expense per mile = ($33,000 - $3,000) / 100,000 = $0.30
Year Miles
2016 22,000 x $0.30 = $6,600
2017 24,000 x $0.30 = $7,200
2018 15,000 x $0.30 = $4,500
2019 20,000 x $0.30 = $6,000
2020 (21,000 - 2,000) x $0.30 = $5,700
Future deductible amounts would be caused by Select one: a. Estimated Expenses and Prepaid Expenses b. Estimated Expenses, but not Prepaid Expenses c. Prepaid Expenses, but not Estimated Expenses d. Neither Estimated Expenses nor Prepaid Expenses
Answer:
The correct answer is:
Estimated Expenses, but not Prepaid Expenses (b.)
Explanation:
An estimated expense is a forecast of the amount of costs that will be incurred in future, to fulfil a transaction. An example might be an amount forecasted to cover a warranty cost for a purchased product under warranty in case a fault develops. Estimated expenses are not debited at the time of projection, but at a certain time in the future, hence they are called Future deductible amounts. On the other hand, Prepaid Expense is a type of expenditure that has not been recorded yet by a company as an expense, but the amount has been paid in advance for the good or service, even though the product has not been consumed at the time of payment.
Harold Manufacturing produces denim clothing. This year, it produced 5,260 denim jackets at a manufacturing cost of $42 each. These jackets were damaged in the warehouse during storage Management investigated the matter and identified three alternatives for these jackets.
1. Jackets can be sold to a second-hand clothing shop for $8.00 each
2. Jackets can be disassembled at a cost of $31,800 and sold to a recycler for $12.00 each.
3. Jackets can be reworked and turned into good jackets. However, with the damage, management estimates it will be able to assemble the good parts of the 5,260 jackets into only 3,050 jackets. The remaining pieces of fabric will be discarded. The cost of reworking the jackets will be $102,200, but the ackets can then be sold for their regular price of $45.00 each.
Required:
Calculate the incremental income.
Answer:
Incremental net income = $42,080
Explanation:
Note the the income would be that which result from the alternative action with the highest net income Note that the manufacturing cost of $12 per unit is not relevant for the purpose of this decision and hence would not form part of the analysis
$
Option one: Outright sale
Sales from disposal = 5,260× 8 42,080
Option 2: disassembling
Revenue $12 × 5,260 = 63120
Cost of disassembling ( 31,800)
Net income 31,320
Option 3: Reworking
Sales revenue ($45.00× 3,050) 137250
Cost of reworking (102,200)
Net income 35,050
The outright option gives the highest net income hence should be considered.
Incremental net income = $42,080
Alternative 2
Explanation:
In its first month of operations, Cheyenne Corp. made three purchases of merchandise in the following sequence: (1) 185 units at $5, (2) 570 units at $6, and (3) 130 units at $7.
Assuming there are 260 units on hand, compute the cost of the ending inventory under the (a) FIFO method and (b) LIFO method. Cheyenne uses a periodic inventory system.
FIFO
(a) Cost of the ending inventory $_________.
LIFO
(b) Cost of the ending inventory $_________.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Purchases:
(1) 185 units at $5
(2) 570 units at $6
(3) 130 units at $7
Ending inventory in units= 260
To calculate the ending inventory under the FIFO (first-in, first-out) method, we need to use the cost if the last units incorporated into inventory:
Ending inventory cost= 130*7 + 130*6= $1,690
To calculate the ending inventory under the LIFO (last-in, first-out) method, we need to use the cost if the firsts units incorporated into inventory:
Ending inventory cost= 185*5 + 75*6= $1,375
Which one of these is not a smart way to negotiate? Make counteroffers by phone or in person, so you can use your powers of persuasion Go in knowing the maximum you’re willing to pay Learn about the seller’s needs and try to accommodate them Add a personal letter to your offer
Answer:
Add a personal letter to your offer.
Explanation:
Negotiation is when an agreement or a compromise is reached by parties involved in a deal in order to avoid issues or argument. People negotiate for different reasons such as beating down a price , resolve a problem or dispute among parties, create a new thing in which parties involved are not able to do , or agree on how to share limited resource like money, assets etc.
Negotiation is a skill(soft)which can be learnt by people hence become a strong negotiator. These soft skills include communication, persuasion and ability to strategize . With regards to the above, the odd among the given option is add a personal letter to your offer.
The one of among the options that is not a smart way to negotiate is addition of a personal letter to your offer.
For better understanding, let's explain what negotiation means
Negotiation is simply defined as a continuous working together of two or more parties in order to reach an agreement that is mutually satisfactory especially to both buyer and seller or an others. There are three phases to negotiation which are planning and preparation, Settlement and Documentation.Negotiating Tactics includes bidding war, brinksmanship, one party away, bogey--tactic, bluffing, defense in depth, flinching, Highball/Lowball and others. Personal letter is not inclusive.From the above, we can therefore say that the answer that The one of among the options that is not a smart way to negotiate is addition of a personal letter to your offer is correct
Learn more about negotiation from:
https://brainly.com/question/9169212
Consider a fast food café of your choice. Apply 4 V’s of Operation. Describe each V as ‘High’, ‘Low’ or ‘Moderate’ with one liner reason.\
Answer:
The classification of the particular question is outlined in the following segment including its clarification.
Explanation:
For both the data analysis, the "Jack throughout the Box" Fast foodservice Business throughout Florida, the US should be regarded. The 4Vs including its cafe's business seem to be about the volume, variety, differences, as well as accessibility including its brand operational activities. The 4V high meaning is large, small to medium-sized in terminology.
Volume: The amount including its corporation that has made the drinks sector profitable in designed to offer the sector people good of profits. In such a product, the need for another quantity is strong regarding the market pricing and therefore profits.Variety: Again for F and B platforms the range of foods the company has seems to be of significant importance. Taking into consideration the need for other sales on either the road carrier as well as selecting the enterprise must have ample choices in their beverages.Variation: Variations throughout the numerous perspectives including its deal in the reduced variety establishments need modifications that fit the Florida information of the product. For a company like Jack throughout the Box, this varying want is medium through business objectives.Visibility: The visibility of something like the company for something like the coffee shop on the roadside that is created to give the company's productivity. The prominence including its company is important for its somewhat cafe, which then in terms of improvement is taken into consideration to have been medium.Norred Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 7.05 Direct labor $ 3.70 Variable manufacturing overhead $ 1.60 Fixed manufacturing overhead $ 121,500 Sales commissions $ 1.50 Variable administrative expense $ 0.45 Fixed selling and administrative expense $ 44,550 If 8,000 units are produced, the total amount of indirect manufacturing cost incurred is closest to:
Answer:
$134,300
Explanation:
From the question above, we are required to total amount of indirect manufacturing costs that was incurred by Norred corporation with the information that was provided
The first step is to calculate the total variable manufacturing overhead costs
= Variable manufacturing overhead × Units produced
= $1.60 per unit × 8,000 units
= $12,800
Therefore, the total amount of indirect manufacturing costs can be calculated as follows
= Total variable manufacturing costs + Fixed manufacturing overhead
= $12,800 + $121,500
= $134,300
Hence the total amount of indirect manufacturing costs is closest to $134,300
What information is needed to set up sales tax in QuickBooks Online for a client who only does business in their home state? Select the 4 options you think apply.
Answer:
The answer is below
Explanation:
While different state has different requirements and rates for reporting sales tax. Sales tax items are simply used to know specific rates charged to your customers and the tax authority vendor to which you remit the sales tax.
Hence the information that is needed to set up sales tax in QuickBooks Online for a client who only does business in their home state includes the following: information that is needed to set up sales tax in QuickBooks Online for a client who only does business in their home state includes the following:
1. The company's address
2. Start date of the current tax period.
3. Estimated periodic time to file a tax return
4. Start date of collecting sales tax for the agency
5. Tax rates authority charges.
6. Sales tax item.
7. Sales tax name for the sales tax item
You have just purchased a new warehouse. To finance the purchase, you’ve arranged for a 30-year mortgage for 80 percent of the $3,200,000 purchase price. The monthly payment on this loan will be $17,300.
a. What is the APR on this loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).)
b. What is the EAR on this loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).)
Answer:
a) 7.2%
b) 7.46%
Explanation:
the loan's principal = $3,200,000 x 80% = $2,560,000
first monthly payment = $17,300 x 360 payments = $6,228,000
total interests charged = $6,228,000 - $2,560,000 = $3,668,000
using a financial calculator:
n = 360
payment = -17,300
present value = 2,560,000
monthly APR = 0.6% x 12 months = 7.2%
effective annual rate = (1 + i/n)ⁿ - 1 = (1 + 0.072/30)³⁰ - 1 = 7.46%
Calculate the average and marginal tax rates in the following table. (Hint: Enter your answers as decimals and do not round when computing tax rates. For example, 8.25% should be entered as "8.25" and not "0.825")
Total Taxable Income Total Tax Due Average Tax Rate Marginal Tax Rate
(Dollars) (Dollars) (Percentage) (Percentage)
0 0 0 0
2,000 130
10,000 650
20,000 1,300
100,000 6,500
The tax rates shown in this table are:________.
True or False: If the marginal tax rate is equal to the average tax rate, then the average tax rate must remain the same.
A. True
B. False
Sean, Yvette, and Bob are the only voters in a small society and are considering whether to publicly finance a project.
Indicate in the following table what each individuals vote would be and whether the public project will be funded
Name Marginal Cost Marginal Benefit Vote
Sean $100 $108
Yvette $100 $12
Bob $100 $125
Total $300 $245
If this same project were taking place in the private sector, a firm ________ fund the project.
In private markets, decisions to provide goods or services to the market are generally made if marginal benefits ________ marginal costs. in comparison, the decisions to provide goods and services by governments are made through _______. as a result, governments may approve projects whose costs _________ their benefits.
Answer:
1. a. Average Tax rate = 130/2,000 = 6.5%
Marginal Tax Rate = (130 - 0)/ (2,000 - 0) = 6.5%
b. Average Tax rate = 650/10,000 = 6.5%
Marginal Tax Rate = [tex]\frac{650-130}{10,000-2,000}[/tex] = 6.5%
c. Average Tax rate = 1,300/20,000 = 6.5%
Marginal Tax Rate = [tex]\frac{1,300-650}{20,000-10,000}[/tex] = 6.5%
d. Average Tax rate = 6,500/100,000 = 6.5%
Marginal Tax Rate = [tex]\frac{6,500-1,300}{100,000-20,000}[/tex] = 6.5%
2. The tax rates shown in this table are: Proportional
Proportional Taxes take the same percentage of income across all income groups.
3. A. True
4. Sean and Bob would both vote yes as the Marginal Benefit of the project exceeds their marginal cost but project will not be funded in the end as the Total Marginal Cost exceeds Total Marginal benefit. Sean and Bob may want to pay but Yvette will not.
5. If this same project were taking place in the private sector, a firm would not fund the project.
6. In private markets, decisions to provide goods or services to the market are generally made if marginal benefits exceed marginal costs
7. As a result, governments may approve projects whose costs exceed their benefits.
On September 1, the company acquired five acres of land with a building that will be used as a warehouse. Tristar paid $120,000 in cash for the property. According to appraisals, the land had a fair value of $85,400 and the building had a fair value of $54,600. On September 1, Tristar signed a $42,000 noninterest-bearing note to purchase equipment. The $42,000 payment is due on September 1, 2022. Assume that 9% is a reasonable interest rate. On September 15, a truck was donated to the corporation. Similar trucks were selling for $2,700. On September 18, the company paid its lawyer $4,000 for organizing the corporation. On October 10, Tristar purchased maintenance equipment for cash. The purchase price was $17,000 and $600 in freight charges also were paid. On December 2, Tristar acquired various items of office equipment. The company was short of cash and could not pay the $5,700 normal cash price. The supplier agreed to accept 200 shares of the company's no-par common stock in exchange for the equipment. The fair value of the stock is not readily determinable. On December 10, the company acquired a tract of land at a cost of $22,000. It paid $3,000 down and signed a 11% note with both principal and interest due in one year. Eleven percent is an appropriate rate of interest for this note.
Required:
Prepare journal entries to record each of the above transactions.
Answer and Explanation:
The Journal entries is shown below:-
1. Land Dr, $73,200 (($85,400 ÷ (85,400 + 54,600)) × $120,000)
Building Dr, $46,800 ($54,600 ÷ (85,400 + 54,600)) × $120,000
To Cash $120,000
(Being cash paid is recorded)
2. Equipment Dr, $38,532.06 ($42,000 × 0.91743)
Discount on Note Payable Dr, $3,4687.94 ($3,780 × 0.91743)
To Note Payable $42,000
(Being equipment is recorded)
3. Truck Dr, $2,700
To Sales revenue $2,700
(Being truck is recorded)
4. Organisation cost Exp enses Dr, $4,000
To Cash $4,000
(Being cash paid is recorded)
5. Maintenance Equipment Dr, $17,600
To Cash $17,600
(Being cash paid is recorded)
6. Office Equipment Dr, $5,700
To Common Stock $5,700
(Being office equipment is recorded)
7. Land Dr, $22,000
To Cash $3,000
To Note Payable $19,000
(Being cash paid is recorded)
Take It All Away has a cost of equity of 10.81 percent, a pretax cost of debt of 5.45 percent, and a tax rate of 35 percent. The company's capital structure consists of 77 percent debt on a book value basis, but debt is 37 percent of the company's value on a market value basis. What is the company's WACC
Answer:
8.12%
Explanation:
The computation of the weighted average cost of capital is shown below:
= Cost of equity × weight of equity + pretax cost of debt × (1 - tax rate) × weight of debt
= 10.81% × 0.63 + 5.45% × (1 - 0.35) × 0.37
= 6.81% + 1.31%
= 8.12%
We simply applied the above formula by considerin the capital structure with its weight so that the correct percentage could come
The Grange is a firm in a monopolistically competitive market that sells farm implements. The firm collected the data below to determine the profit-maximizing price and quantity at which to sell. Using the data, what is the profit-maximizing price and quantity at which the Grange company should sell its product?
Quantity Price Total Revenue Marginal Revenue Total Cost Marginal Cost
2 $21 $42 $21 $0 $30
4 $18 $72 $15 $64 $2
6 $16 $96 $2 $72 $4
8 $14 $112 $8 $88 $8
10 $12 $120 $4 $108 $10
2 $10 $120 $0 $32 $12
4 $8 $112 $4 $160 $14
Answer:
The profit-maximizing price is $14, and the profit-maximizing quantity is 8.
Explanation:
This is because for a monopolistically competitive firm, the profit-maximizing quantity occurs where marginal revenue equals marginal cost. What the firm does is looking for the point in the demand curve that is exactly above the marginal cost-marignal revenue intersection, and charges the corresponding price and quantity.
We can see that for the quantity of 8, and the price of $14, both marginal revenue and marginal cost are $8, meaning that these are the quantity and price that are profit-maximizing.
"Value proposition in simple terms is the consideration of the value the product delivers against the ______________ necessary to obtain and use it. "
Answer:
Price
Explanation:
The value proposition refers to the promise made to the customers about what they wil get when they buy the product. This value proposition is determined by analizing the benefits the customers get and the costs they have to be able to get the product. So, according to that, the answer is that "Value proposition in simple terms is the consideration of the value the product delivers against the price necessary to obtain and use it" because the price would be the cost the customer has to pay to purchase the product.
two firms, A and B, each currently emit 100 tons of chemicals into the air. THe government has decided to reuce the pollution and from now on will require
Answer:
Option A = 20 fewer tons of pollution into the air, and Firm B will emit 100 fewer tons of pollution into the air.
Explanation:
The information or data required to decode or solve the above Question is given below;
(1). "It costs Firm A $200 for each ton of pollution that it eliminates before it is emitted into the air, and it costs Firm B $100 for each ton of pollution that it eliminates before it is emitted into the air."
DEDUCTION: We can see that Firm A in (1) above uses more money that is $200 than firm B which is $100 to eliminate each ton of pollution.
(2). "Both firms, A and B, each currently emit 100 tons of chemicals into the air."
DEDUCTION: Both firms emit the same amount of pollution.
(3)." The government gives each firm 40 pollution permits, which it can either use or sell to the other firm"
So, from (1) we can deduce that A is more likely to buy the 40 pollution permit of B to make firm A to be 40 + 40 = 80 pollution permit.
Thus, A will emit 20 fewer tons of pollution while B will emit 100 tons.
A _______ structure provides an organization with the most flexibility, but easier to operate. functional product matrix geographic product team
Answer:
product team.
Explanation:
A product team structure can be defined as a team whose main objectives are to develop problems and solutions for a product line.
This team is responsible for implementing strategic and marketing actions to ensure functionality, the inclusion of benefits and acceptance of the product in the market, therefore it must be formed by trained professionals with a strategic vision aligned with the organizational values and objectives.
This type of team structure allows greater flexibility in the work, due to the fact that it is carried out by a multifunctional team where there is the possibility of sharing innovative ideas for the success in the development of a product.
_______________ of well-to-do individuals often put their own money into small new companies at an early stage of development, in exchange for owning some portion of the firm. Group of answer choices
Answer: C. A Network
Explanation:
One of the ways of raising capital is through the use of Angel Investors. These are usually well off individuals with excess cash for investment who look for companies to invest in at an early stage because they are trying to gain a positive return when the companies become successful.
To make their funds more substantial and their services easier to reach, Angel investors form networks to enable them achieve their mission of putting their own money into small new companies at an early stage of development, in exchange for owning some portion of the firm.
Fixed Overhead Spending and Volume Variances, Columnar and Formula Approaches
Branch Company provided the following information:
Standard fixed overhead rate
(SFOR) per direct labor hour $5.00
Actual fixed overhead $305,000
BFOH $300,000
Actual production in units 16,000
Standard hours allowed for
actual units produced (SH) 64,000
Required
Enter amounts as positive numbers and select Favorable (F) or Unfavorable(U).
Using the columnar approach, calculate the fixed overhead spending and volume variances.
1 2 3
Spending Volume
Answer:
Fixed Overheads Spending Variance = $5,000 Unfavorable(U).
Fixed Overheads Spending Variance = $20,000 Favorable (F).
Explanation:
Fixed Overheads Spending Variance = Actual Fixed Overheads - Budgeted Fixed Overheads
= $305,000 - $300,000
= $5,000 Unfavorable(U).
Fixed Overheads Spending Variance = Fixed Overheads at Actual Production - Budgeted Fixed Overheads
= ($5.00 × 64,000) - $300,000
= $320,000 - $300,000
= $20,000 Favorable (F)
Bryant Co. has $2.7 million of debt, $1 million of preferred stock, and $2.1 million of common equity. What would be its weight on preferred stock
Answer:
0.172
Explanation:
The computation of the weight on the preferred stock is shown below:
Weight on preferred stock is
= Preferred stock ÷(Debt + preferred stock + common equity)
= $1 million ÷ ($2.7 million + $1 million + $2.1 million)
= $1 million ÷ $5.8 million
= 0.172
By applying the above formula we can easily determine the weight on preferred stock
Giannitti Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the upcoming year appear below: Estimated machine-hours 72,700 Estimated variable manufacturing overhead $ 3.30 per machine-hour Estimated total fixed manufacturing overhead $ 838,730 The predetermined overhead rate for the recently completed year was closest to:
Answer:
The predetermined overhead rate for the recently completed year was closest to: $11.54 per machine-hour
Explanation:
Predetermined Overheads = Budgeted Fixed Overheads / Budgeted Activity
= $ 838,730 / 72,700
= $11.536864 or $11.54 per machine-hour.
On the cash flow statement, a realized loss on investments should be added back under Cash from Operating Activities because the realized loss decreases net assets but does not use up any cash.
a. True
b. False
Answer:
The answer is A. TRUE
Explanation:
Realized loss like depreciation or amortization are added back to the net income under the cash flow from operating activities section.
Realized gain/loss is the total amount of realized gains and losses resulting from the sale of investment or securities.
This is usually done under the indirect method of cash flow. This does not occur under the direct method of cash flow
Before telling her employees she would have to layoff half of the workforce, Alissa took them all to lunch at the most expensive restaurant in town. Alissa's attempt to handle the potential conflicts generated by her news is best described as
Answer:
Strategic
Explanation:
laying off half of the Employees means relieving them of their duties as staff of the organization. By taking them to lunch at the most expensive restaurant in town, Alissa aimed at being strategic with whatever conflict that may however occur when the employees hear of her intention. Layoffs can be demoralizing and damaging to these Employees so Alissa has to try the best way she can to be strategic as she deals with them