The weighted average cost of capital is the cost approach that will produce an ending inventory value that is in between probable high and low costs (prices) using classic costing methods.
The weighted average cost of capital is the average cost of attracting investors, whether bonds or shareholders.
The computation weights the cost of capital depending on the amount of debt and equity used by the firm, providing a clear barrier rate for internal initiatives or future acquisitions.
The weighted average inventory cost is one of the approaches used in inventory valuation. It is computed by dividing the cost of products for sale by the number of units for sale. i.e The cost of the items for sale and the quantity of units for sale. Because it is based on averages, the ending inventory value is generally somewhere between high and low cost.
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The owner’s return on investment is $4,583,000
Investment definition is an asset received or invested in to build wealth and keep money from the tough earned earnings or appreciation. funding that means is generally to reap a further source of profits or benefit take advantage of the funding over a selected period of time.
Making an investment is a powerful way to put your money to work and probably build wealth. smart investing may additionally allow your money to outpace inflation and boom in value. The greater growth potential of investing is primarily because of the power of compounding and the chance-go-back tradeoff.
Within the maximum sincere feel, investing works when you buy an asset at a low rate and promote it at a higher price. This sort of go back to your investment is called a capital benefit. earning returns with the aid of selling assets for a profit—or figuring out your capital profits—is one way to make cash investing.
$550,000 ÷ 0.12 = $4,583,000
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Answer:
See below
Explanation:
a. Operating income statement for the year ended December 31, 2019
Net sales $645,000
Less: Cost of goods sold ($367,650)
Gross profit $277,350
Less: Expenses
Selling, general, administrative expenses ($142,100)
Other selling expenses ($14,600)
Advertising expense ($47,600)
Operating income $73,050
b.
Operating income $73,050
Less:
Income tax expense ($25,568)
Income from continuing operations before taxes $47,482
Loss from discontinued operations, net of savings $38,133 ($14,400)
Net income $33,082
Answer:
The required rate of return of the portfolio is 13.62%
Explanation:
The required rate of return is the minimum return that investors require to invest in a stock or portfolio. The required rate of return can be calculated using the CAPM formula for required rate of return. The formula is,
r = rRF + Beta * rpM
Where,
- rRF is the risk free rate
- beta is the stock/portfolio's beta or measure of risk
- rpM is the risk premium on market
r = 5.82% + 1.3 * 6%
r = 0.1362 or 13.62%
Answer:
B) To maximize profit, firms should produce at a level of output where price equals average variable cost
Explanation:
Firms maximize their profit by equating Marginal revenue with The Marginal cost. So, since for perfectly competitive firms, the price equals the Marginal revenue, for these firms profit is maximized by equating Price with Marginal cost not the average variable cost.
