Answer:
The correct answer is: 8.72%
Explanation:
Cost of debt K d = I (1 – t) + (-pi)/n
(SV + RV)/2
= 80(1 – 0.40) + (-75)/25
(1,000 + 1,075)/2
= 0.043 or 4.3%
Cost of equity K e = R f + b (R m – R f)
R m – R f = 5.5% = market risk premium
R f = risk free rate = 4.5%
B = beta = 1.2
K e = 4.5% + 1.2(5.5%)
= 11.1%
WACC = W d * K d + We * K e
= 35% * 4.3% + 65% * 11.1%
= 1.505 + 7.215
= 8.72%
Answer:
Net Income for the Period is $41,018.
Explanation:
Emery Mining Inc.
Statement of Profit or Loss
Revenue $150,000
Operating Costs (75,500)
Depreciation (10,200)
Earnings Before Interest and Tax $64,300
Interest Expense (16,500*7.25%) (1,196)
Earnings Before Tax $63,104
Tax (35%) (22,086)
Earnings After Tax OR Net Income $41,018
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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.
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