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]
2 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]2 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
"Macroeconomics is the part of economics concerned with individual units such as a person, a household, a firm, or an industry."
Afina-wow [57]

Answer: A. positive but incorrect.

Explanation: The statement is positive but incorrect because macroeconomics does deal with industries, and firms but it is more concerned with the general economics or large scale factors like interest rates, national productivity, national income, Gross domestic product (GDP). This in general is what micro economics entails

3 0
3 years ago
Read 2 more answers
On January 2, 2020, All Good Company purchased 6,000 shares of the stock of Big Bad Company, and DID obtain significant influenc
Yuri [45]

Answer:

$155,000

Explanation:

Calculation to determine the book value of the investment that should be reported at year end by All Good Company

Initial investment (6,000* $10.00 per share) $60,000

Add: Net income ($450,000*30%) $135,000

Less: Dividend ($40,000)

Ending balance of investment $155,000

($60,000+$135,000-$40,000)

Therefore the book value of the investment that should be reported at year end by All Good Company is $155,000

8 0
2 years ago
Suppose that while Melissa was on the coast, she also spent two days sightseeing the national parks in the area. To do the sight
natta225 [31]

Answer:

<u>$1,300</u>

Explanation:

Only the cost that are directly related to the business conference is to be deducted as Melissa's business tax. Sightseeing cost is therefore not part of her original plan. The business related cost are therefore;

  • <u>$400 for round-trip airfare to San Francisco</u>
  • <u>  $250 fee to register for the conference,</u>
  • <u>  $300 per night for three night’s lodging,</u>
  • <u>  $200 for meals, and</u>
  • <u>  $150 for cab fare.</u>

A summation of this cost would give $1,300 as the amount of the total costs that can Melissa deduct as business expenses.

5 0
3 years ago
Read 2 more answers
Which one of these is NOT collaboration?
Mazyrski [523]

Of all the items relating to collaboration, Independent practice is the odd one out as it is not one of the methods of collaboration.

See the explanation bellow

<h3>What is collaboration?</h3>

In simple terms, collaboration is a way of working with one or more persons on a project or a task, in essence, it reflects team work and team spirit encourages efficiency and good work output.

When a team consists of team members who collaborate effectively, one member can cover up for the shortcoming or the other.

Learn more about the collaboration here:

brainly.com/question/24345164

#SPJ1

7 0
1 year ago
Loan 1:
vampirchik [111]

Answer:

$10,786.88

Explanation:

The total amount paid on loan will be the sum of monthly payments and the deposit paid.

Monthly payments = $888.49 per month

Number of months = 12

Total monthly payments :  $888.49  x  12= $10,661. 88

Upfront fee( deposit) $125

Loan amount

=$10,661. 88 + $125

=$10,786.88

3 0
3 years ago
Other questions:
  • If the elasticity of demand for a company’s product is estimated to be 1.72, what would you advise the company to do if their ob
    14·1 answer
  • 25. Which of the following people will most LIKELY find the highest paying job in the workforce? *
    13·2 answers
  • . A company is authorized to issue 750,000 shares of $5 par value common stock. Prepare journal entries to record the following
    8·1 answer
  • The set of ideas, inventions, production processes, trademarks, trade secrets, and other intangible mental creations that belong
    6·1 answer
  • Service providers should refrain from asking feedback from customers to save time that can be used to provide better service qua
    15·2 answers
  • Instead of borrowing to buy something, pay cash by using a(n).
    10·2 answers
  • Suppose another firm found a way to offer IKEA’s customers (young buyers interested in stylish furniture at low cost) additional
    6·1 answer
  • What are the financial resources of netflix​
    6·1 answer
  • Michelle Hamilton and Bill Rossi decide to form a partnership. Hamilton invests $35,000 cash and accounts receivable of $30,000
    10·1 answer
  • What is the ultimate purpose of the microfoundations program?
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!