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3 years ago

What is your reaction to Harriet's suggestion of using the cost of debt only?

Business

1 answer:

Ahat [919]3 years ago

8 0

Answer:

No, it is a bad idea to use only the cost of debt

Explanation:

Only using the cost of debt, is not a good idea because too much amount of borrowing could lose the confidence of the investors and it could lead to the uncertainty in the future cash flows.

Suppliers might be worried regarding the financial situation and lead to the supply disruption. Though, the debt might save the tax expenses, which could lead to the negative cash flow.

When the company does not have adequate amount of cash at hand, it could cause many disruptions of financial. WACC (Weighted Average Cost of Capital) rates need to be used as the capital costs as it weigh the used capital cost and the used debt.

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Joel and Liza are having a disagreement over one of their stock investments, which just lost 15 percent in a short period of tim

anastassius [24]

B.

It says Liza is risk tolerant, therefore it would make sense that she would hold on to these stocks as risk tolerant people often hold onto stocks in the long term.

8 0

3 years ago

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The straight-line depreciation method and the double-declining-balance depreciation method: Multiple Choice Are acceptable for t

fiasKO [112]

Answer:

The straight-line depreciation method and the double-declining-balance depreciation method:

Produce the same total depreciation over an asset's useful life.

Explanation:

The straight-line and the double-declining-balance depreciation methods are two of the four depreciation methods allowed by US generally accepted accounting principles (GAAP). The other two methods are sum of the years' digit and units of production. The straight-line method is calculated by subtracting the salvage value from the asset's cost and either dividing the depreciable amount by the number of years or applying a fixed rate on the depreciable amount. For the double-declining-balance method, 100% is divided by the number of years of the asset's useful life and then multiplying by 2 to obtain the depreciation rate. Depreciation expense is then calculated on the declining balance until the salvage value is left. This is why they produce the same depreciation over the asset's useful life.

3 0

3 years ago

How many days will it take for $1500 to earn $16 interest if it is deposited in a bank paying simple interest at the rate of 4%/

JulsSmile [24]

Answer:

97 days

Explanation:

In simple interest method, the interest is calculated by the following formula

I= P x R x T

I= interest

P = principal amount

R =interest rate

T= Time

In this case

I=$16

P=$1500$

R= 4% or 0.04%

T= time

$16= $1500 x 0.04 x Time

$16 =60 x Time

Time = 16/60

time = 0.2666 year.

time in days = 0.26666 x 365 days

=97.333 days

=97 days

8 0

3 years ago

Viet drives around and checks meters to document the amount of electricity used in homes. What Energy pathway is he a part of? E

Aloiza [94]

Answer:

he would be part of the energy distribution process

Explanation:

As Viet drives around and checks meters to document the amount of electricity used in homes since the electricity is distributed off a power line into the house and then within the house by the wiring to the lights and the electrical outlets for usage by the inhabitants.

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3 years ago

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Pup tents use 4 direct labor hours (DLH) per unit and Pop-up tents use 3 direct labor hours per unit. Compute the overhead cost

lora16 [44]

a) The computation of the single plantwide predetermined overhead rate for Tent Master is $6 per DLH ($252,000/42,000).

b) The computation of the overhead cost per unit for Pup and Pop-up Tents for Tent Master is computed as follows:

Pup Tents Pop-up Tents

Overhead cost $24 ($6 x 4) $18 ($6 x 3)

c) The computation of the product cost per unit for Pup and Pop-up Tents is as follows:

Per Unit Selling Direct Direct Overhead Product

Price Materials Labor per unit Cost / Unit

Pup tent $ 78 $ 20 $ 45 $24 $89

Pop-up tent 73 25 30 $18 $73

d) The computation of the gross profit per unit (selling price per unit minus the product cost per unit) of Pup and Pop-up Tents is as follows:

Per Unit Selling Direct Direct Overhead Product Gross Profit

Price Materials Labor per unit Cost / Unit (Loss) per unit

Pup tent $ 78 $ 20 $ 45 $24 $89 ($11) ($78 - $89)

Pop-up tent 73 25 30 $18 $73 $0 ($73 - $73)

<h3>What does a product cost?</h3>

The determination of the product cost includes the costs of direct materials, direct labor, and overhead. The overhead cost is allocated to each unit based on a predetermined overhead rate (budgeted overheads/budgeted usage) or using an activity-based costing technique.

<h3>Data and Calculations:</h3>

Budgeted overhead costs = $252,000

Budgeted direct labor hours = 42,000

<h3>Question Completion:</h3>

Tent Master produces Pup tents and Pop-up tents. The company budgets $252,000 of overhead cost and 42,000 direct labor hours. Additional information follows:

Per Unit Selling Price Direct Materials Direct Labor DL Hours

Pup tent $ 78 $ 20 $ 45 4

Pop-up tent 73 25 30 3

<h3>Required: </h3>

1. Compute a single plantwide overhead rate assuming the company allocates overhead costs based on 42,000 direct labor hours.

2. Pup tents use 4 direct labor hours (DLH) per unit and Pop-up tents use 3 direct labor hours per unit. Compute the overhead cost per unit for each product.

3. Compute the product cost per unit for each product.

4. For each product, compute the gross profit per unit (selling price per unit minus the product cost per unit).

Learn more about calculating the predetermined overhead rates at brainly.com/question/26372929

4 0

2 years ago