Answer:
The unlevered value of the firm is $869325.15
Explanation:
For computing the value of unlevered firm, the following formula should be used which is shown below:
Value of levered firm = Earning before interest and taxes × (1 - tax rate) ÷ cost of equity
where,
Earnings before income and taxes are $218,000
Cost of equity is 16.3%
And, the tax rate is 35%
Now put these values on the above formula
So, the value would be equals to
= $218,000 × (1 - 0.35) ÷ 16.3%
= $141,700 ÷ 16.3%
= $869325.15
The other terms like bonds and the annual coupon should not be considered in the computation part because we have to calculate for unlevered firm which only includes equity and the bond is a debt security. Thus, it is irrelevant.
Hence, the unlevered value of the firm is $869325.15
Answer:
Contribution margin per unit= $12.85
Explanation:
Giving the following information:
Direct materials$ 7.05
Direct labor$ 4.20
Variable manufacturing overhead$ 1.55
Sales commissions $ 1.15
Variable administrative expense$ 0.40
<u>To calculate the contribution margin, we need to use the following formula:</u>
Contribution margin per unit= selling price - total unitary variable cost
Contribution margin per unit= 27.2 - (7.05 + 4.2 + 1.55 + 1.15 + 0.4)
Contribution margin per unit= $12.85
Answer:
A royalty is a fee that the franchisee has to pay the franchiser for trading under its name.
Explanation:
A franchise operation is when one party (franchiser) allows another party (franchisee) access to it’s proprietary knowledge, trademark and processes in order to allow the party to sell a product or provide a service under the business’s name. A common example of a franchise operation are KFC outlets across the globe.
A royalty fee is a fee that the franchisee has to pay the franchiser on a common basis such as quarterly or annually for trading under its name. It is generally calculated as a percentage of gross sales. In this case the royalty fee would be 5% of gross sales.
A recession is when the inflation rate is low.. prices are falling dramatically in the market
Answer: Import Quota
Explanation:
A quota is defined as a government-imposed limit that is placed on trade whether import or export so as to control goods and services that enter or leave the country. we have different typos of quota but we will talk about the
Import Quotas --- To reduce competition faced by local products, government places import quotas on import goods so as to prevent the flood of foreign goods in the market which most times are cheaper than local goods as they are mostly produced with cheaper labor than the domestic products .
