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ICE Princess25 [194]
3 years ago
8

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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According to the Full Disclosure Principle, all thins that can materially affect the financial status of the firm must be disclo
Olenka [21]

Answer: True

Explanation: The full disclosure principal states that any material information, that can affect the judgement of a rational investor or other stakeholder, must be stated in the financial statement.

These disclosures can be made on press releases, supplementary reports and other such communications etc.

Hence, from the above we can conclude that the given statement is true.

8 0
3 years ago
What are the little crowns for?
Lelechka [254]
Do you have a picture or anything??
3 0
3 years ago
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Match the term or phrase with its best descriptor.Maximum sustainable yieldA. available biomass of a target speciesB. incidental
ArbitrLikvidat [17]

Answer: Option C

Explanation: The best descriptor for the term maximum sustainable yield would be "maximum catch without reducing the population of target species".  The maximum level at which the natural resources can be exploited without having any serious threats to the future is called sustainable yield. So as per this case sustainable yield is the extent of hunting a species that fulfills the requirement of today and does not threat the future needs.

7 0
3 years ago
Callaway Golf Co. leases telecommunication equipment from Photon Company. Assume the following data for equipment lease form Pho
inessss [21]

Answer:

This lease is  regarded and classified  as Capital lease.

Explanation:

This lease is  regarded and classified  as Capital lease.

Here, Callaway Golf Co. is the body financing the leased asset but the right ownership is with Photon Company.

Now; the present value of future payment is calculated as:

Present value of future payment =[PVA 6%,5 × Annual payment ]+[PVF 6%,5 × Residual value]

=[4.46511 × 31000] +[0.74726 × 15500]

= 138418.27+ 11582.53

= 150000

However the present value of minimum lease payment is equal or more than 90% fair market value ,as such we therefore conclude that this  lease is a capital lease.

3 0
3 years ago
Fred ran short on cash and borrowed​ $300 through a payday loan company. the company charged him a fee of​ $60 to borrow the​ $3
Ne4ueva [31]
<span>The answer is 1.43 % per day. Calculations: Formula for simple interest: I=PRT, where I=interest; P= borrowed amount; R=rate of interest in percentage; T=time for repayment hence; P=$300, I=$60, T=14 days, then R=? R={(I/PT) *100)}% per day={(60/300*14)*100}=1.43 % per day interest rate (R) that Fred was charged for the aforementioned loan was 1.43 % per day</span>
3 0
3 years ago
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