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kirza4 [7]
3 years ago
8

Duval Inc. uses only equity capital, and it has two equally-sized divisions. Division A's cost of capital is 10.0%, Division B's

cost is 14.0%, and the corporate (composite) WACC is 12.0%. All of Division A's projects are equally risky, as are all of Division B's projects. However, the projects of Division A are less risky than those of Division B. Which of the following projects should the firm accept? A Division B project with a 13% return. A Division B project with a 12% return. A Division A project with an 11% return. A Division A project with a 9% return. A Division B project with an 11% return.
Business
1 answer:
saveliy_v [14]3 years ago
4 0

Answer:

A Division A project with an 11%

Explanation:

The project should be analize with the cost of capital for each division, as it is a know values it is a better choise than WACC.

For that reason, going for project of less than 14% (13% or 11%) in division b will be destroying capital

While the project in Division A for 11% means it will generate economic value to the firm as the cost is 10% and return 11%

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Mitchell has worked for a very large company for three years. During lunch one day he stood at the elevator and read the buildin
s344n2d4d5 [400]

Answer:

It is departmentalized in a functional way

Explanation:

Functional departmentalization is the type of organizational structure based on common job functions. In Mitchell's case all similar jobs, like legal or marketing, are grouped in one place or on the same floor. This type of organization provides space for further employee's specialization by putting staff in places where their skills can further develop.

8 0
3 years ago
What Is margin of safety?
skelet666 [1.2K]

Answer:

Margin of safety is a principle of investing in which an investor only purchases securities when their market price is significantly below their intrinsic value. ... Alternatively, in accounting, the margin of safety, or safety margin, refers to the difference between actual sales and break-even sales

5 0
2 years ago
Milano Gallery purchases the copyright on a painting for $420,000 on January 1. The copyright is good for 10 more years. The com
alex41 [277]

Answer:

Explanation:

The journal entries are shown below:

On January 1

Copyright A/c Dr $420,000

        To Cash A/c $420,000

(Being copyright is purchased)

On December 31

Amortization A/c Dr $42,000

          To Accumulated amortization A/c $42,000

(Being annual amortization is recorded)

The computation is shown below:

= Purchase value of copyright ÷  number of goods years

= $420,000 ÷ 10 years

= $42,000

6 0
3 years ago
"Suppose you wish to have $5,500 in 18 years. Use the present value formula to find how much you should invest now at 6% interes
Irina-Kira [14]

Answer:

The amount of investment should be $1926.891 approximately

<u>Explanation:</u>

The following formula has been used to calculate the amount of investment

A = P(1+r/100) ^n

where: A = future value , P = present value , R = rate of interest , N = time period

Hence , applying the formula, we get,

$5500 = P (1+6/100) ^18

Hence P=$5500/ (1.06) ^18

=$1926.891(approx)

7 0
3 years ago
how much of a stock's $30 price is reflected in pvgo if it expects to earn $4 per share, has an expected dividend of $2.50, and
Kruka [31]

The amount of the stock price that will be reflected in the PVGO is $10

The value of an organization's potential future growth is symbolized by the acronym PVGO, or "present value of growth opportunities." It represents the potential value for the organization by reinvesting its earnings back into the business.

Expected Dividend payment (D) = $2.50

Total Earnings (E) = $4

Rate of return (ROR) = 20%

Step 1. Using no growth rate (GR), computing the stock price (SP)

Since the growth rate is not specified, 0% is taken as the default value.

The stock price (SP) = E/ROR

= $4 / 20%

Stock price = $20.

Step 2. Computing the SP reflected in PVGO.

So, total SP with no GR

= $30 - $20

Stock price with no growth rate = $10

Hence, the $10 will be reflected in the PVGO

Learn more about PVGO:

brainly.com/question/28434542

#SPJ4

7 0
1 year ago
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