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1 year ago

He wacc is the appropriate discount rate for use with projects but should be adjusted for higher risk ones

1 answer:

8 0

The WACC is the appropriate discount rate for use with average projects but should be adjusted upward for higher-risk ones.

Securities analysts may use WACC when evaluating the value of investment opportunities. For example, in discounted cash flow analysis, as a discount rate for future cash flows, he can apply WACC to derive the net present value of the firm.

Using the WACC discount rate makes the present value of investment appear higher than it actually is.

Businesses typically use the weighted average cost of capital (WACC) as the discount rate. This is to take into account the rate of return expected by shareholders. DCF has limitations. Primarily, it relies on estimates of future cash flows that may be inaccurate.

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Jill earns a salary of $425.00 per week, plus a commission of 20% on all sales. Last week she sold $1,123 worth of goods. How mu

ch4aika [34]

To find 20% of the value of the goods,
1,123 x 20% (this is the same as 1,123 x 0.2)
= 224.6

Add the salary and the commission,
425.00 + 224.6
= 649.60

Therefore Jill was paid $649.60 last week

4 0

3 years ago

Read 2 more answers

Assume the perpetual inventory system is used unless stated otherwise. Accounting for inventory using the perpetual inventory sy

ira [324]

Answer:

1-3 Attached inventory record schedule based on FIFO, LIFO and WEIGHTED AVERAGE method

4. COST OF GOODS SOLD

FIFO $6,070

LIFO $6,165

WA $6,080

5. GROSS PROFIT

FIFO $5,235

LIFO $5,140

WA $5,225

6. FIFO method maximizes gross profit

Explanation:

Schedule for Inventory record is attached based on FIFO, LIFO and Weighted Average method.

FIFO - (First in, First out) this inventory method sells older inventory before the company sells the newly acquired.

LIFO - (Last in, First out) this inventory method sells the latest acquired inventory rather than the older one.

Weighted Average- This inventory method uses inventory cost by dividing total amount of inventory over total units sold.

4. COST OF GOODS SOLD

FIFO

August 3 45 x $35 = $1,575

August 21 5 x $35 = $175

80 x $54 = 4,320

TOTAL $6,070

LIFO

August 3 45 x $35 = $1,575

August 21 85 x $54 = $4,590

TOTAL $6,165

Weighted Average

August 3 45 x $35 = $1,575

August 21 85 x $53 = 4,505

TOTAL $6,080

5. Gross Profit

Total sales is $11,305 (45 x $85 = $3,825 + 85 x $88 = 7,480)

FIFO

Total sales - Cost Of Goods Sold = Gross profit

$11,305 - $6,070 = $5,235

LIFO

Total sales - Cost Of Goods Sold = Gross profit

$11,305 - $6,165 = $5,140

Weighted Average

Total sales - Cost Of Goods Sold = Gross profit

$11,305 - $6,080 = $5,225

6. FIFO maximizes gross profit profit among the 3 methods. It yields the highest profit for the month of August in the amount of $5,235

5 0

4 years ago

A company’s financial records at the end of the year including the following amounts: Cash $ 71,100 Accounts receivable 29,100 S

galben [10]

Answer:

The amount of total stockholders' equity that would be reported on the Balance Sheet at the end of the year is $105,300

Explanation:

In order to calculate the amount of total stockholders' equity that would be reported on the Balance Sheet at the end of the year we would have to use the following formula:

Total assets is equal to=Cash+AR+Supplies

Therefore, total stockholders' equity=($71,100+$29,100+$5,100)

total stockholders' equity=$105,300

The amount of total stockholders' equity that would be reported on the Balance Sheet at the end of the year is $105,300

3 0

3 years ago

After developing a computer locking system, Caffrey Computer Corp. worked out a licensing deal with Chicago Desktop (a potential

Vika [28.1K]

Answer:

<u>A Strategic Alliance</u>

Explanation:

A Strategic Alliance refers to a combined effort or activities of two firms so as to strengthen their market position and yet at the same time maintain their individual separate corporate existence.

It represents a mutually beneficial agreement between two corporate firms under which, terms are less binding and stringent than a joint venture.

The purpose behind such an alliance could be, expansion, product line improvement or together gain a competitive advantage.

Such an alliance helps both businesses achieve a common goal driven by mutual assistance and pooling of resources.

In the given case, the tie up between Caffery computer corp. and Chicago desktop to sell computer locking systems alongside computers, would be termed a strategic alliance, since such an arrangement would benefit both, reduce competition for each with collective gain w.r.t market share.

3 0

3 years ago

The economic principle that people are motivated by something to take a particular course of action.

nikklg [1K]

Costs vs. Benefits is the economic principle that people are motivated by something to take a particular course of action. Hence, option A is correct.

<h3>What is Breakeven analysis?</h3>

A financial accounting method or technique called breakeven analysis is used to calculate the number of units a business needs to sell at a given price in order to cover all of its costs.

It is a notion that enables entrepreneurs or financial professionals to figure out and know what they must sell either monthly or annually in order to be able to meet the costs of operating the firm.

Thus, option A is correct.

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7 0

2 years ago

He wacc is the appropriate discount rate for use with ______ projects but should be adjusted ______ for higher risk ones

He wacc is the appropriate discount rate for use with projects but should be adjusted for higher risk ones