Answer:
Option (C) is correct.
Explanation:
We have to use MM proposition that cost of equity will change itself in such a manner so that it can take care of its debt.
Cost of equity:
= WACC of all equity firm + (WACC of all equity - Cost of debt ) × (Debt -to-equity ratio)
At the beginning, when there was no debt,
WACC = cost of equity = 12 %
Levered cost of equity:
= 12% + ( 12% - 6%) × 0.5
= 15%
Therefore, Rearden's levered cost of equity would be closest to 15%.
Answer:
The organization structure is not clearly defined, Managers are performing duties in various departments at a time.
Explanation:
San Consulting is one of the finest consulting firm in the Greater Accra Region. The firm is always a first choice for individuals who want to pursue their career in business. The Organizational structure of San Consulting is not clearly defined. San's profits are falling because management practices are not according to the other competitive organizations. The managers working at San are facing excess workload and pressure for their work. Their job descriptions is not clearly defined and they are forced to work in multiple departments at the same time due to which they are losing focus on their own work.
Questions 1: Planning, organizing, leading and controlling
Question 2: The organizational structure needs to be set and every employee should have their defined job role so they are able to complete work with efficiency.
Question 3: The profits of San consulting will rise as there will be less duplication of work and every employee will be able to focus on their own task and will work with efficiency.
Question 4: Matrix. The matrix organizational structure is not suited in this organization. The right organizational structure for San consulting will be Functional Structure.
Question 5:
(i) The profits for San Consulting will decline
(ii) The profit will rise because employee will focus more on their specific tasks.
1B. Yes agree. The managers need to focus on the external environment as well to identify the opportunities and threats present which can stimulate changes for the organization.
Answer:
keep producing in the short run but exit the industry or go out of business in the long run
Explanation:
A perfect competition is characterised by many buyers and sellers of homogeneous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.
In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.
Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.
A firm should shut down in the short run if price is less than average variable cost. But since the diner's price is greater than average variable cost, it should continue production.
A firm should exit the industry in the long run if price is less than average total cost. the diner's price is less than average total cost, so it should shut down in the long run
Answer:
Luke's net tax due or refund is $2,900
Explanation:
In order to calculate Luke's net tax due or refund we would have to make the following calculation:
Luke's net tax due or refund=Luke's non refundable credit+income taxes withheld from his salary
Luke's non refundable credit=non refundable personal tax credit-gross tax liability
Luke's non refundable credit=$2,400-$1,800
Luke's non refundable credit=$600
Therefore, Luke's net tax due or refund=$600+$2,300
Luke's net tax due or refund=$2,900
Luke's net tax due or refund is $2,900
