Answer:
0.1631 ; 16.31%
Explanation:
Given:
Cost of capital = 14% = 0.14
Debt to equity ratio = 60% = 0.6
Cost of debt = 9% = 0.09
Tax rate = 23% = 0.23
Cost of equity : cost of capital + debt - to - equity ratio * (1 - tax rate) * (cost of capital - cost of debt)
Cost of equity = 0.14 + 0.60 × (1 - 0.23) × (0.14 - .09)
Cost of equity :
0.14 + 0.60 * 0.77 * 0.05
0.14 + 0.0231
= 0.1631 ; 0.1631 * 100% = 16.31%
Answer : The amount needed to spend to save $170 is, $32.3
Explanation :
As we are given that an online buying club requires an annual fee of $170 and a 19% discount on purchases.
Now we have to determine the amount needed to spend to save $170.
As, for every $100 the discount will be = $19
So, for every $170 the discount will be = 
= $32.3
Thus, the amount needed to spend to save $170 is, $32.3
Answer:
For seller = $196.44
For buyer = $4583.56
Explanation:
Data provided in the question:
Taxes for the year = $4,780
Date of closing = January 16
since the day of closing belongs to the buyer therefore the seller owns the tax for 15 days only
Per day tax = [ Taxes for the year ] ÷ 365
= $4,780 ÷ 365
= $13.095 per day
Hence,
Proration will be
for seller = $13.095 per day × 15 days
= $196.44
For buyer = $4,780 - $196.44
= $4583.56
Answer:
C) 4.2 years
Explanation:
The computation of the payback period is as follows;
As we know that
Payback Period = Initial cost ÷ Annual net cash flow
Here
Initial cost = $278000
Annual net cash flow = Incremental after tax + Depreciation per year
where,
Depreciation per year = (Original cost - Salvage value) ÷ Estimated Life
= ($278,000 - $30,000) ÷ 8 years
= $31,000
Annual net cash flow is
= $35000 + $31000
= $66000
So,
Payback Period is
= $278000 ÷ $66000
= 4.2 Years
Answer:
Service
Explanation:
A service is any intangible offering that involves a deed, performance, or effort that cannot be physically possessed by the service takers.
