1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
SpyIntel [72]
3 years ago
12

A company with a WACC of 8.5% is considering two possible investments. Project A will return 10% and be financed using equity co

sting 9.5%. Project B will return 8% and be financed using debt costing 6%. Which project should the company undertake
Business
1 answer:
Ivenika [448]3 years ago
3 0

Answer:

The Company should undertake project A.

Explanation:

The finance of projects is usually done through pooling of funds, that is using <em>various sources</em> of finance. The WACC represents the return required by providers of this finance and also shows the risk of the company.

A company will always<em> accept projects</em> that provide a return higher that their weighted average cost of capital (risk) and r<em>eject any project</em> offering a return below the WACC.

Conclusion :

The Company should undertake project A as this gives a return higher than the WACC of 8.5%.

You might be interested in
Select the correct answer. Clarence has an interview with the General Manager of a hotel for the position of a restaurant manage
STALIN [3.7K]
B because it shows their serious
3 0
3 years ago
Read 2 more answers
You are evaluating your company’s segmentation approach and discover an important missing condition. They have measured their ta
zysi [14]

Answer:

Profitability

Explanation:

It is not enough that our target market is reachable, stable, cost-effective, and measurable. We also need to measure how profitable the market is. We know that our major aim of doing business is to make profit, therefore the profitability of the market must be measured as well.

6 0
3 years ago
Read 2 more answers
Jon needed to purchase new tires for his SUV. He consulted Consumer Reports to see how the various brands were rated. Jon consul
ololo11 [35]

Answer:

Independent sources of information

Explanation:

Magazines, consumer groups, and government agencies all represent independent sources of information.

7 0
4 years ago
Frank, the CEO of an American production company, negotiated an opportunity with a television provider in India. After the negot
In-s [12.5K]

Answer:

The contract would be described as <em>International Contract.</em>

Explanation:

<em>International Contracts: </em>International contracts refers to a legally binding agreement between parties based in different countries, in which they are obligated to do or not do certain things. International contracts may be written in a formal way such as the example of Frank contracting an Indian television provider.

Consequently, Frank and the Indian television provider having entered into a contract, are governed by international contract law unless they agree to abide by the laws of one of the US and India.

Moreover, <em>International sales contracts </em>are governed by the <em>United Nations Convention on Contracts for the International Sale of Goods (CISG) from 1980.</em>

8 0
3 years ago
Read 2 more answers
What is the name of the most powerful can opener?
kirill115 [55]
 <span>OXO Good Grips Locking Can Opener with Lid Catch!</span>
8 0
3 years ago
Read 2 more answers
Other questions:
  • When a monopoly increases its output and sales,
    13·1 answer
  • Which statement best describes how an informational interview differs from a job interview
    7·2 answers
  • Which definition is the correct definition of "risk-based financing"?
    5·1 answer
  • You have two alternatives to consider to produce a part. The first alternative requires an initial investment of $50,000, produc
    14·1 answer
  • suppose that a commercial bank wants to buy treasury bills. these instruments pay $500 in one year and are currently selling for
    10·1 answer
  • Wooten &amp; McMahon Enterprises produces a product with the following per-unit costs: Direct materials $13.00 Direct labor 8.80
    11·1 answer
  • Suppose the currency-to-deposit ratio is 0.25, the excess reserve-to-deposit ratio is 0.05, and the required reserve ratio is 0.
    5·1 answer
  • Ann and Bob form Robin Corporation. Ann transfers property worth $420,000 (basis of $150,000) for 70 shares in Robin Corporation
    10·1 answer
  • Because it is needed for the schedule of expected cash collections, the annual master budget file includes the.
    9·1 answer
  • Compared to the other classifications of consumer products, shopping products are:_________
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!