Answer:
a) $231,468.30
b) $209,259.56
c) 9.59%
Explanation:
a) to calculate FV, n=6,I=10, pv=0 and pmt=30000
b) to calculate effect of inflation On FV
N=6, I =6 (nominal interest less inflation), pv=0 and pmt=30000
c) [(231468.30-209259.56)/231468.30]x100
Answer:
WACC - new project = 6.408% rounded off to 6.41%
Explanation:
The WACC or weighted average cost of capital is the cost of a firm's capital structure. The capital structure can consist of one or more of the following components namely debt, preferred stock and common equity. The WACC is calculated as follows,
WACC = wD * rD * (1 - tax rate) + wP * rP + wE * rE
Where,
- w represents the weight of each component
- r represents the cost of each component
- D, P and E represents debt, preferred stock and common equity
- rD * (1 - tax rate) is the after tax cost of debt
We first need to calculate the WACC of the company and then adjust it for the new project.
WACC = 35% * 3.28% + 65% * 10.4%
WACC = 7.908%
As the new project is less risky and has an adjustment factor of -1.5%, the required rate of return for the new project will be,
WACC - new project = 7.908% - 1.5%
WACC - new project = 6.408% rounded off to 6.41%
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Answer:
D. Plan your trips to avoid rush hour traffic
Answer:
Adjusting Entries
Date Accounts titles and Explanation Debit Credit
1. Supplies expense $500
Supplies expense $500
2. Insurance expense $300
Prepaid Insurance $300
3. Depreciation expense $
70
Accumulated depreciation $70
- equipment
4. Unearned service revenue $500
Service revenue $500
5. Accounts receivable $200
Service revenue $200
6. Interest expense $90
Interest payable $90
7. Salaries and wages expense $1,700
Salaries and wages payable $1,700
