<span>When you buy a bond, you're lending your money to a company or a government (the bond issuer) for a set period of time (the term). The term can be anywhere from a year or less to as long as 30 years. In return, the issuer pays you interest. On the date the bond becomes due (the maturity date), the issuer is supposed to pay back the face value of the bond to you in full.</span>
As the output is increased or decreased, these (B) fixed costs remain unchanged.
<h3>
What are fixed costs?</h3>
- Fixed costs, also known as indirect costs or overhead costs in accounting and economics, are corporate expenses that are independent of the volume of goods or services generated by the business.
- They are usually recurrent, such as monthly interest or rent.
- These expenses are frequently capital expenses.
<h3>Explanation -</h3>
- Dependent refers to a variable that changes when other factors change.
- Fixed cost refers to a cost that doesn't change when the number of goods produced increases or decreases.
- Opportunity cost refers to the benefit that you would have received from the option that was not chosen.
- Marginal cost refers to the change in the cost when you produce an additional unit.
- According to this definition and as the statement refers to a cost that doesn't change.
Therefore, as the output is increased or decreased, these (B) fixed costs remain unchanged.
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Complete question:
If a company rents a warehouse, it must pay rent for the warehouse whether it is full of inventory or completely vacant. Other examples include executives' salaries, interest expenses, depreciation, and insurance expenses. As the output is increased or decreased, these _______ costs remain unchanged.
a. dependent
b. fixed
c. opportunity
d. marginal
No because they aren't Fair
Answer: 12.5%
Explanation:
Amount that will be raised with Equity = 65% * 5,700,000 = $3,705,000
This is more than the retained earnings so new equity will have to be issued at cost of 16%
Amount raised by debt = 35% * 5,700,000 = $1,995,000
Less than $2 million so cost of debt is 10%
WACC = cost of equity * weight of equity + weight of debt * cost of debt * ( 1 - tax rate)
= (16% * 65% ) + (35% * 10% * (1 - 40% tax))
= 12.5%
