Answer:
C. 11.05%
Explanation:
The computation of the cost of capital under the proposed leveraging is shown below;
cost of capital is
=Debt÷ value of leverged firm × ((unlevered cost of capital × (1 - tax rate))
=800 ÷ 1600 × ((13% + (13%) × (1 - 30%)))
= 11.0500%
hence, the cost of capital is 11.05%
Answer: $1,203.49
Explanation:
The equal contributions will be an annuity. The $3,500 already there will also grow at 6% for 3 years. Expression is;
8,000 = ( 3,500 * ( 1 + 6%)^3) + Contribution * Future value interest factor of annuity, 3 years, 6%
8,000 = 4,168.56 + Contribution * 3.1836
Contribution = (8,000 - 4,168.56) / 3.1836
Contribution = $1,203.49
Answer: Fundamental attributional error.
Explanation:
Frank is making a fundamental attributional error when judging the cause of Anna's inability to meet sales target. Frank is blaming her failure based on her character rather than on the real reason which is the attractive sales offer of their competitors. Fundamental attributional error is an error which arises from judging a person's action based on their character without considering other possible external causes.
