Answer:
WACC - new project = 6.408% rounded off to 6.41%
Explanation:
The WACC or weighted average cost of capital is the cost of a firm's capital structure. The capital structure can consist of one or more of the following components namely debt, preferred stock and common equity. The WACC is calculated as follows,
WACC = wD * rD * (1 - tax rate) + wP * rP + wE * rE
Where,
- w represents the weight of each component
- r represents the cost of each component
- D, P and E represents debt, preferred stock and common equity
- rD * (1 - tax rate) is the after tax cost of debt
We first need to calculate the WACC of the company and then adjust it for the new project.
WACC = 35% * 3.28% + 65% * 10.4%
WACC = 7.908%
As the new project is less risky and has an adjustment factor of -1.5%, the required rate of return for the new project will be,
WACC - new project = 7.908% - 1.5%
WACC - new project = 6.408% rounded off to 6.41%
Answer:
B. Line extension
Explanation:
Product Line Extension
This involves the use of an already established brand name, in this case, cool whip for a new item (orange flavored cool whip) in the same product category. It's the production of a new product that is a little different to a company's existing products. The differences the new product usually has from the existing products may be in the line of new flavour, colors, product size, added ingredients and so on.
A popular example of this is Coke and Pepsi releasing Diet Coke and Pepsi respectively. Adding a new product to their existing range of products.
Type of employment, indicator for chronic illness, drug, or alcohol use these variables are likely useful to add to the regression to control for important omitted variables.
What is sleep pattern?
The word sleep pattern, commonly referred to as a sleep-wake pattern, refers to a person's schedule for going to bed and getting up as well as their napping habits. The frequency and length of sleep disruptions may also be part of the sleep pattern.
Type of employment, Chronic illness and drug/alcohol use they ought to be included in regression since they disturb sleep patterns.
As a result, option (a) Type of employment. (b) Indicator for chronic illness. (c) Drug or alcohol use is correct.
Learn more about on sleep pattern, here:
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Most purchase agreements are contingent upon a satisfactory home inspection and mortgage financing approval. There are other types of contingencies as well, in addition to the most common ones mentioned above.
Answer:
Option C, Condensing the firm's cash inflows into fewer years without lowering the total amount of those inflows, is the right answer.
Explanation:
Option “c” is the correct answer because the value of the internal rate of return can be increased by condensing the cash inflow of the firm without decreasing the total inflows. However, if the value of the IRR or internal rate of return is greater or more than the discount rate of the project then it will add the value of project. If the internal rate of return is lower than the discount rate of the project then it will destroy the value of the project. Therefore, in the given case the option "C” is more accurate to increase the value of the internal rate of return.