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Alenkasestr [34]
3 years ago
11

Old Town Industries has three divisions. Division X has been in existence the longest and has the most stable sales. Division Y

has been in existence for five years and is slightly less risky than the overall firm. Division Z is the research and development side of the business. Given this, the firm should probably :a. require the highest rate of return from Division X since it hos been in existence the longest b. assign the highest cost of capital to Division Z because it is most likely the riskiest of the three divisions c. use the firm's WACC as the cost of capital for Division Z as it provides analysis for the entire firm.d. use the fim's WACC as the cost of capital for Divisions e. allocate captal funds evenly amongst the divisions to maintain the current capital structure of the firm A and B because they are part of the revenue-producing operations of the firm.
Business
1 answer:
Mekhanik [1.2K]3 years ago
7 0

Answer:

b. assign the highest cost of capital to Division Z because it is most likely the riskiest of the three division.

Explanation:

The Old Town Industries will assign highest cost of capital to Division Z because it is research and development side of business. The research will incur high cost to the company. Only the research cost which meets certain conditions it will be capitalized as development costs. This Division Z is riskiest and incurs a large amount of expense for planned search of new technologies.

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A 2 percent increase in the price of milk causes a 6 percent reduction in the quantity demanded of chocolate syrup. What is the
scoray [572]

Answer: the cross-price of elasticity of demand for chocolate syrup with respect to the price of milk would be :

e = % ΔQ chocolate syrup / %ΔP of milk

e = -4% / 2%

e = -2 %

Explanation:

7 0
2 years ago
From the 1970s through the 1990s, the relative price of a college education has increased greatly. During the same time period,
Gala2k [10]

Answer:

C) the demand curve for a college education has shifted rightward

Explanation:

If college enrollment has also increased, it means the demand for college education has increased. The demand curve for a college education has shifted rightward.

I hope my answer helps you

3 0
3 years ago
Luxury Dwellings Inc. is a condominium-building company that is based in the country of Veritas. Itsells high-priced homes to co
meriva

Answer:

A) international

Explanation:

Luxury Dwellings knows that their clients are wealthy individuals from their home country Veritas and specially from foreign countries. That is why they are not worried about local economic conditions and about varying costs. Since their brand if highly recognized overseas, they are more worried about satisfying their international clients.

This is very common in vacation destinations, including some in the US, like Miami. Many luxury real estate companies located in Miami carry out marketing campaigns in European, Asian and Latin countries more than in domestic markets.

7 0
3 years ago
Seeking to obtain as high a financial return on their investments (ROI) as possible, firms will often set __________ goals
Llana [10]

Answer:

Profit

Explanation:

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It should be noted that Seeking to obtain as high a financial return on their investments (ROI) as possible, firms will often set profit goals.

7 0
3 years ago
The combination of debt financing and equity financing that maximizes a firm's value is known as its:
ohaa [14]

Answer:

optimal capital structure

Explanation:

optimal capital structure can be regarded as a combination of

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5 0
3 years ago
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