Answer:
A. $520 U
B.178 F
Explanation:
A.
Materials price variance = (AQ × AP) – (AQ × SP)
= $48,880 – (2,600 × $19)
=$48,880-$49,400
= $520 U
Therefore the material price variance for the month is $520U
B.
Materials quantity variance = SP(AQ – SQ*)=
$19 ($2,500 – $2,322) = $178F
Therefore the materials quantity variance for the month $178F
SQ = Standard quantity per unit × Actual output
= 8.6 × 270 = $2,322
Answer: Economic Growth, Employment opportunities, Standard of living improvement.
Explanation:
Macroeconomics is a branch of economics that deals with the structure, performance, behavior, and the decision-making of the economy as a whole. It includes the regional, national, and the global economies.
Expanding production will help the economy in the following ways:
1. Provision of employment opportunities: An increase in production will lead to more goods and services being offered. This will in turn, lead to more workers who would be needed for production.
2. Increase in standard of living: There will be an increase in the standard of living for people that were not employed before and now gainfully employed due to the expansion.
3. Economic growth: Economic growth is the increase in the goods and services in the economy. Increase in production will enhance economic growth.
The answers are the following:
a.
Brandon:
$7,000 + [($10,000/4)×3¿= $8,500
Ryan:
$7,000 + [($10,000/4)×1¿= $7,500
b.
Brandon $7,000
Ryan <span>$7,000</span>
Answer and Explanation:
The computation is shown below:
Debt = D ÷ (E + D)
= 0.8 ÷ (1 + 0.8)
= 0.4444
Now
Weight of equity = 1 - Debt
= 1 - 0.4444
= 0.5556
As per Dividend discount model
Price = Dividend in 1 year ÷ (cost of equity - growth rate)
40 = $2 ÷ (Cost of equity - 0.06)
Cost of equity = 11%
Cost of debt
K = N
Let us assume the par value be $1,000
Bond Price =∑ [(Annual Coupon) ÷ (1 + YTM)^k] + Par value ÷ (1 + YTM)^N
k=1
K =25
$804 =∑ [(7 × $1000 ÷ 100)/(1 + YTM ÷ 100)^k] + $1000 ÷ (1 + YTM ÷ 100)^25
k=1
YTM = 9
After tax cost of debt = cost of debt × (1 - tax rate)
= 9 × (1 - 0.21)
= 7.11
WACC = after tax cost of debt × W(D) + cost of equity ×W(E)
= 7.11 × 0.4444 + 11 × 0.5556
= 9.27%
As we can see that the WACC is lower than the return so it should be undertake the expansion
