Answer:
The WACC is 11.64%
Explanation:
The weighted average cost of capital or WACC is the cost to firm of raising its total capital based on its capital structure. The capital structure of the firm can contain debt, preferred stock and common stock. The WACC take the weight of each component as a proportion of total value of assets and multiply it by the rate of return or cost of each component.
WACC = wD * rD * (1-tax rate) + wE *rE
Where,
- wD and wE represent the weights of debt and equity as a proportion of total assets
- rD and rE are the cost of debt and cost of equity
- We multiply rD by (-tax rate) because we take after tax cost of debt for WACC calculation
Weight of debt = 2000000 / (2000000 + 3000000) = 2/5 or 0.4
Weight of equity is = 1 - 0.4 = 0.6
WACC = 0.4 * 0.06 * (1-0.4) + 0.6 * 0.17
WACC = 0.1164 or 11.64%
Answer:
A. Cash Budget
Explanation:
Cash budget is a form of budget showing the estimated cash flow for a business operation over a given period of time. Its important because it shows or rather indicates whether or not a business or an organization has enough cash for it's operations. It shows the inflows and outflows for a specified amount of time for a given business. It helps avoid shortage of cash in periods where company experiences high amount of expenses. Garry would look to develop a cash budget as it would help him in understanding and organizing his finances.
Answer: d) both B and C
Explanation: Nash equilibrium is a concept within game theory where the optimal outcome of a game is where there is no incentive to deviate from their initial strategy.
Because if Sarah hit Tom, they will both experience a loss of 10 points
Also, not telling gets Tom a loss of 5 but Sarah will gain 5.
This will keep both of them in a nash equilibrium.
Answer:
if benifits outweigh the costs
Explanation:
its that 1
Answer:
C. average total cost.
C. zero economic profits.
If demand shifts to the left (decreases), the last firm that entered "earns negative economic profits and so exits the market".
Explanation:
When many firms produces same product with different cost structures, their average total cost of unit cost is used to determining which firms enter the market first because by definition, average total cost or unit cost is equal to total cost divided by the number of units of a goods manufactured by the producer. It is also equal to the sum of average variable costs and average fixed costs. It may be time dependent. So, the lesser the cost of production per unit quantity, the higher the volume produced and the fasters the product enters market.
The last firm to enter earns "zero economic profits" because obviously, the market must have been fully saturated with the products and as at the time the products enters, the satisfaction might have been dropping and people may not buy as before. Other reason for zero economic profits is that such firm products will surely have higher unit cost which will eventually translate to higher price of the products and no one will leave cheaper products of same quality and satisfaction for the one higher price.
If demand shifts to the left (decreases), the last firm that entered "earns negative economic profits and so exits the market" - there are many reasons for a decreasing demands ranging from diminishing satisfaction derived from the products, and so on, the last firm will definitely suffered negative economic profits because the capital involved in cost of production will not even be recovered not to even talk of the profits from the business and this in turn weaken the manufactured from producing more of the products since the goal is not achieved and the products exit market.