Answer: The answer is Trend extrapolation
Explanation:
Answer:
$30.07
Explanation:
Rocky river company uses target pricing
The production volume is 602,000 units
The market price is $34 per unit
The total assets is $13,900,000
The desired operating income is 17% of the total assets
= 17/100 × 13,900,000
= 0.17×13,900,000
= 2,363,000
The first step is to calculate the sales value
= 602,000 ×34
= 20,468,000
The total cost can be calculated as follows
= Sales value-desired operating income
= 20,468,000-2,363,000
= 18,105,000
Therefore the target full product cost per unit can be calculated as follows
= Total cost/production volume
= 18,105,000/602,000
= $30.07
Hence the full target product cost per unit is $30.07
Answer:
sorry, i just want the points.
Explanation:
Answer:
8.20%
Explanation:
Debt equity ratio = 0.95
or
Debt = 0.95 × equity
Cost of equity, ke = 11% or 0.11
Pretax cost of debt, kd = 7% or 0.07
Tax rate = 24% or 0.24
Therefore;
WACC = {Weight of equity × ke } + {Weight of debt × kd × (1-Tax rate)}
It is to be noted that ;
Weight of equity = Equity ÷ (Debt + Equity)
= Equity ÷ ( 0.95×Equity + Equity)
=1 ÷ 1.95
=0.513
Also,
Weight of debt = Debt ÷ ( Debt + Equity)
=0.95 × Equity ÷ ( 0.95 × Equity + Equity)
= 0.95 ÷ 1.95
=0.487
Hence,
WACC = {0.513 × 0.11} + {0.487 × 0.07 × (1-0.24)}
= {0.05643} + {0.03409 × 0.76}
= 0.0823384
or
0.0823384 × 100%
=8.23384
=8.20%