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SVEN [57.7K]
3 years ago
5

Suppose Acme Industries correctly estimates its WACC at a given point in time and then uses that same cost of capital to evaluat

e all projects for the next 10 years, then the firm will most likely ___.
Business
1 answer:
slamgirl [31]3 years ago
4 0

Answer:

the firm will become more reasky as their Weighted-average cost-of-capital will change over time based on market condition but the management wil take project based on obsolete information

Thus, the WACC of the company will increase without the management notice this because, lender will use higher rate to make up for the change of failling Also, the shares wil trade at a lower value as is not maximizing the value of the firm.

Explanation:

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Over the years, O'Brien Corporation's stockholders have provided $20,000,000 of capital. The firm now has 1,000,000 shares of co
mixer [17]

Options:

A. $18,500,000

B. $19,000,000

C. $19,500,000

D. $20,000,000

E. $20,500,000

Answer: C. $19,500,000.

Explanation:MVA(MARKET VALUE ADDED) is a measurement that is used to describe the difference between the market value to a company and the capital contributed by both the shareholders and the bondholders.

WHEN THE MARKET VALUE ADDED IS HIGH IT SIGNIFIES THAT THE COMPANY IS GENERATING ENOUGH MONEY TO COVER THE COST OF CAPITAL.

MVA= (market value-stockholders contribution).

Market value =$39.5*1000000shares

= $39,500,000

MVA= $39,500,000-$20,000000

MVA=$19,500,000.

8 0
4 years ago
Check Laura won $5,000,000 in the state lottery, which she has elected to receive at the end of each month over the next 30 year
Svetllana [295]

Option 'C' is correct  

<u>Explanation:</u>

Present value of an ordinary annuity of $1

The present value of an annuity is the current value of future payments from an annuity, given a specified rate of return or discount rate.

\text { Annuity amount }=\$ 5,000,000 / \mathrm{PVAF}(7 \% / 12,360 \text { periods })

The future estimation of cash is determined by utilizing a rebate rate. The markdown rate alludes to a financing cost or an accepted pace of profit for different speculations. The littlest markdown rate utilized in these figurings is the hazard free pace of return. U.S. Treasury bonds are commonly viewed as the nearest thing to a hazard-free venture, so their arrival is regularly utilized for this reason.

6 0
4 years ago
If a student chooses to study linguistics at a college, what has that student chosen?​
Firdavs [7]

When a student chooses to study linguistics at a college then has to choose an academic major subject.

<h3></h3><h3>What is an academic major?</h3>

An academic major is referred to as a specialization an individual to choose in which he is looking for expertise or career during the college duration.

These major subjects reflect that the student will gain knowledge and developed skills by reading the subject and can utilize it in the future. This will also help to determine the interest of an individual.

Learn more about academic major, here:

brainly.com/question/26093373

#SPJ1

8 0
2 years ago
Herb Huskie currently has an ROI of 16%, average operating assets of $1,500,000 and NOI of $240,000. The minimum required rate o
yanalaym [24]

Answer:

c. No, the new project would have a ROI of 12%

Explanation:

Given that

NOI from new project = $30,000

Investment for a new project = $250,000

Using residual income the Huskie make this investment is shown below:-

Lower than current = NOI from new project ÷ Average operating Assets or Investments

= $30,000 ÷ $250,000

= 12%

No, the new project would have a ROI of 12%

4 0
4 years ago
For most people, almost two-thirds of each work day is taken up by work and sleep. Please select the best answer from the choice
laiz [17]

Answer:

it's true

Explanation:

<em>if</em><em> </em><em>by</em><em> </em><em> </em><em>T</em><em> </em><em>and</em><em> </em><em>F</em><em> </em><em>you</em><em> </em><em> </em><em>mean</em><em> </em><em> </em><em>true</em><em> </em><em> </em><em>or</em><em> </em><em>false</em><em> </em><em>then</em><em> </em><em> </em><em>it's</em><em> </em><em> </em><em>definitely</em><em> </em><em> </em><em>true</em><em> </em>

8 0
3 years ago
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