Answer:
$42
Explanation:
Data provided as per the requirement of contribution margin per hour of machine time is here below:-
Unit Contribution Margin = $21
Machine Time required by fancy lamp = 0.50 hours
The computation of contribution margin per hour of machine time is shown below:-
Contribution Margin Per Hour of machine time = Unit Contribution Margin ÷ Machine Time required by fancy lamp
= $21 ÷ 0.50 hours
= $42
Therefore for computing the contribution margin per hour of machine time we simply divide the unit contribution margin by machine time required by fancy lamb.
Answer:
D) 12.9%
Explanation:
WACC formula;
WACC = wE*rE + wD*rD(1-tax)
whereby,
wE = weight of equity = 2/3 or 66.67%
rE = cost of equity = 16%
wD = weight of debt = 1/3 or 33.33%
rD = pretax cost of debt = 9%
WACC = (0.6667*0.16 ) + [0.3333*0.09(1-0.35) ]
= 0.1067 + 0.0195
= 0.1262 or 12.62%
Therefore, the after-tax WACC will be closest to 12.9%
Answer:
a. $8.0 million; $1.22 million
Explanation:
The computation is shown below:
As we know that
Basic earnings power = EBIT ÷ total assets
So,
EBIT = Basic earnings power × total assets
= 0.20 × 40 million
= $8 million
Now
Times interest earned = EBIT ÷ interest expense
So,
Interest expense = EBIT ÷ Times interest earned
= $8 million ÷ 6.55
= $1.22 million