Answer:
The answers are:
A) non cash investing and financing activity
B) financing activity
C) non cash investing and financing activity
D) financing activity
E) investing activity
F) operating activity
G) operating activity
Explanation:
- operating activity: relative to the functions of a business directly related to producing and selling goods or services
- investing activity: refers to buying and selling long-term assets and other investments
- financing activity: refer to transactions with creditors or investors used to fund company operations
- non cash investing and financing activity: refer to investing and financing activities that do not directly affect cash
Answer:
$44 per case.
Explanation:
If A standard-size box requires 8 board feet of hardwood in the finished product. In addition, 2 board feet of scrap lumber are normally left from the production of one box. Hardwood costs $4.00 per board foot, plus $1.50 in transportation charges per board foot.
Then, To calculate the standard cost of direct materials for the jewelry box, we multiply the direct materials standard price of $4.00 (plus the transportation costs of 1.50 per board foot) by the direct materials standard quantity of 8 feet (8 board feet of hardwood in the finished product) per unit.
The result is a standard direct materials cost of $44 per case.
Answer:
The average rate of return for this investment is 21%
Explanation:
Average rate of return : The average rate of return shows the ratio between average net income and average initial investment.
Mathematically,
Average rate of return = Average Net income ÷ Average Initial Investment
where Average Net income = Total years of net income ÷ Number of years
= ($100,000 + $60,000 + $30,000 + $10,000 + $10,000) ÷ 5
= $42,000
And, Average Initial Investment = Initial Investment ÷ 2
= $400,000 ÷ 2
= $200,000
Now, average rate of return = $42,000 ÷ $200,000
= 21%
Thus, the average rate of return for this investment is 21%
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%
