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Sedaia [141]
2 years ago
12

When you're in a worksheet for capital budgeting, how do you apply the discount rate to cash flow so you can discount the future

cash flows?
Business
1 answer:
Reil [10]2 years ago
3 0

Worksheet for capital budgeting, a way to observe the bargain charge to coins glide so you can bargain the future coins flows: one plus the bargain price raised to the range of years inside the future, then divide trash glide.

Capital budgeting is the technique that an enterprise makes use of to determine which proposed fixed asset purchases it needs to take delivery of, and which should be declined. This technique is used to create a quantitative view of each proposed fixed asset funding, thereby giving a rational foundation for creating a judgment.

Capital budgeting is the method a business undertakes to assess capacity for main tasks or investments. creation of a brand new plant or a huge investment in an outside mission are examples of tasks that would require capital budgeting earlier than they're authorized or rejected.

Capital budgeting, and investment appraisal, in corporate finance, is the planning process used to decide whether or not a corporation's long-term investments which include new equipment, an alternative of machinery.

Learn more about Capital budgetin here: brainly.com/question/24347956

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For an activity classified as a hobby, the expenses are categorized as follows:
wlad13 [49]

Answer:

Option C is correct.

The correct sequence is (2), (3), (1)

Explanation:

(2) Amounts deductible under other Code sections without regard to the nature of the activity, such as property taxes and home mortgage interest. should be deducted first

(3) Amounts deductible under other Code sections if the activity had been engaged in for profit, but only if those amounts do not affect adjusted basis (e.g., maintenance, utilities, and supplies). are deducted next

(1)Deductions affecting adjusted basis (e.g., depreciation) are taken next. At any point where the expenses exceed income,   the deduction is limited to the remaining income.

5 0
3 years ago
Describe an advertisement you've seen that uses a desire-based marketing message. what desire does this ad appeal to? tip: this
nadezda [96]
<span>I once saw an advertisement for a weight loss supplement. The persons in the ad seemed to change significantly after using the product. Apart from their appearance, everything seemed to be going better for them. Being that I struggle myself with weight issues that ad activated my desire to get slimmer and change things in my life too. I wanted that supplement at all cost.</span>
6 0
4 years ago
During which of the following Project Schedule Management processes does the team estimate the number of work periods that will
lyudmila [28]

Answer:

Work Breakdown Structures

Explanation:

A Work Breakdown Structure is the process of breaking down the work into smaller, more manageable components. The elements at the lowest level of the Work Breakdown Structures are called tasks.

Furthermore, A work-breakdown structure in project management and systems engineering, <u>is a deliverable-oriented breakdown of a project into smaller components.</u> A work breakdown structure is a key project deliverable that <u>organizes the team's work into manageable sections.</u>

Hence, the estimate the number of work periods that will be required to complete a schedule activity, usually expressed as workdays or work weeks, will be in a work breakdown structure.

3 0
3 years ago
Spencer corp.'s attorney estimates that the company will ultimately have to pay between $250,000 and $500,000 relating to curren
Naddika [18.5K]

Spencer corp.'s attorney calculates that the company will ultimately control to pay between $250,000 and $500,000 relating to current litigation. spencer should accrue a contingent liability and loss of: $250,000.

<h3>What is contingent liability?</h3>

Liabilities that may be incurred by a company dependent on the result of an uncertain future event, such as the result of an ongoing lawsuit, are known as contingent liabilities. When they are both probable and reasonably estimable as a "contingency" or "worst case" financial consequence, these obligations are not recorded in a company's records and are not displayed on the balance sheet.

The kind and size of the contingent liabilities may be described in a footnote to the balance sheet. It is feasible to categories a loss's possibility as remote, improbable, or probable. It can be known, reasonably estimable, or not reasonably estimable whether a loss can be estimated. It might or might not happen.

Hence, Spencer corp.'s attorney calculates that the company will ultimately control to pay between $250,000 and $500,000 relating to current litigation. spencer should accrue a contingent liability and loss of: $250,000.

To learn more about contingent liability refer to:

brainly.com/question/17371330

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7 0
2 years ago
If Wild Widgets, Inc., were an all-equity company, it would have a beta of 0.9. The company has a target debt-equity ratio of .4
Veronika [31]

Answer:

a. 6.5%

b. 13.06%

c. 10.91%

Explanation:

a.

Cost of debt of a bond is yield to maturity. Yield to maturity is the rate of return that a investor actually receives or a borrows actually pays on a bond. It is long term return or payment which is expressed in annual term.

Formula for yield to maturity is as follow

Yield to maturity = [ C + ( F - P ) / n ] / [ (F + P ) / 2 ]

By placing values in the formula

Assuming the bond face value is $1,000

Yield to maturity = [ (1000x7.2) + ( 1,000 - $1,090 ) / 20 ] / [ ( 1,000 + $1,090 ) / 2 ]

Yield to maturity = [ $72 + ( 1,000 - $1,090 ) / 20 ] / $1,045

Yield to maturity = [ $72 - $4.5 ] / $1,045

Yield to maturity = $67.5 / $1,045

Yield to maturity = 6.5%

So, the cost of Debt is 6.5%

b.

As 0.9 is the unlevered beta, We need Levered beta due to restructuring of capital.

Beta Levered = Beta Unlevered x ( 1 + ( 1 - tax rate ) x Debt / Equity)

Beta Levered = 0.9 x ( 1 + ( 1 - 0.35 ) x 0.4 )

Beta Levered = 1.134

Cost of equity can be calculated using CAPM

CAPM calculated the expected return on an equity investment based on the risk free rate, market premium and risk beta of the investment.

Formula for CAPM is as follow

Expected return = Risk free Rate + Beta ( Market premium)

As we know the Risk premium is the difference of market return and risk free rate.

Expected return = Risk free Rate + Beta ( Market Return - Risk free Rate )

Ra = Rf + β ( Rm - Rf )

Ra = 4.1% + 1.134 ( 12% - 4.1% )

Ra = 13.06%

Cost of Equity is 13.06%

c.

WACC is the average cost of capital of the firm based on the weightage of the debt and weightage of the equity multiplied to their respective costs.

According to WACC formula

WACC = ( Cost of equity x Weightage of equity )+ ( Cost of debt ( 1- t) x Weightage of debt )

Placing the values in formula

If the debt to equity 0.4  the equity value should be 1 and total capital is 1.4 ( 1 + 0.4 )

WACC = ( 13.06% x 1 / 1.4 )+ ( 6.5% ( 1- 0.35) x 0.4 / 1.4 ) = 9.71% + 1.2% = 10.91%

WACC is 10.91%

4 0
3 years ago
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