You have to read very carefully to make sure you dont miss any mistakes
Answer:
a. 10.14%
Explanation:
WACC = wE*rE + wP*rP + wD*rD(1-tax) whereby;
w= weight of...
r = cost of..
Find the market values;
Common equity(E) = 5,000,000* 8 = 40,000,000
Preferred stock(P) = 10,000,000
Debt (D) = 100,000 *1000 *0.96 = 96,000,000
Total value = 146,000,000
Therefore;
wE= 0.2740
wP = 0.0685
wD = 0.6575
Cost of capital;
rE = 19% or 0.19
rP = 15% or 0.15
rD = 9% or 0.09
WACC = (0.2740*0.19) + (0.0685 * 0.15) + [0.6575*0.09(1-0.34)]
WACC = 0.0521 + 0.0103 + 0.0391
WACC = 0.1015 or about 10.14%
Answer:
a. a decrease in the marginal productivity of her remaining capital and an increase in the marginal productivity of her labor.
Explanation:
Diminishing returns In economics is the decrease in the marginal (incremental) output of a production process as the amount of a single factor of production is incrementally increased, while the amounts of all other factors of production stay constant.
Due to the fire outbreak, the owner will continuously try to increase her manual effort (labor) into the business, which at a point will overwhelm her remaining capital, leading to the decrease in the marginal productivity of what's left of her capital.
Answer:
you should write it just like it says
Answer:
b. $28,000 and $12,000 respectively
Explanation:
The marginal cost and marginal revenue refers to the additional cost or revenue that is generated for adding an additional unit or increasing the ouput by one unit,
In thi case, moving to Large reservoir from Medium reservoir
Marginal cost: 72,000 - 44,000 = 28,000
<em>It cost 28,000 to move to a large reservoir</em>
Marginal revenue :64,000 - 52,000 = 12,000
<em>It generates additional benefit for 12,000</em>