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nikdorinn [45]
4 years ago
8

If a firm uses the same company cost of capital for evaluating all projects, which situation(s) will likely occur? I) The firm w

ill reject good low-risk projects; II) The firm will accept poor high-risk projects; III) The firm will correctly accept projects with average risk
Business
1 answer:
kicyunya [14]4 years ago
6 0

Answer:

I) The firm will reject good low-risk projects

II) The firm will accept poor high-risk projects

Explanation:

<h2>Cost of Capital:</h2>
  • The required return on the existing firm assets. It is based on the risk of assets.
  • The risk of firm’s overall assets is equal to the weighted average risks of firm’s debt, preferred stock and common equity.
  • The cost of capital of a firm equals the weighted average of the cost of debt, the cost of preferred stock, and the cost of common equity

Each project has different risk profiles, using one cost of capital for project evaluation might provide misleading results and the investor or company may end up accepting high risk projects or may reject low risk good projects.

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Lean manufacturing means designing green products and packaging that minimize resource use, can be recycled or reused, and are g
EleoNora [17]

Answer:

True.

Explanation:

Lean manufacturing is a production method in which companies focus on reducing wastage of available resources and maximize productivity of manufacturing process. This process includes introducing activities to minimize harm to environment by draining harmful waste, using environmental friendly products and minimize usage of raw material. Lean manufacturing focuses to improve the product quality to provide greater value to customers.

8 0
3 years ago
Read 2 more answers
A 60-day note receivable dated June 17 has a maturity date of
antoniya [11.8K]

Answer:

the maturity date is August 12

Explanation:

The computation of the maturity date of 60 day note receivable dated on June 17 is as follows

Here we have to determine the 60 days from June 17

So in June, the remaining days left would be = (30 - 17) = 13

31 days in July

And, the rest of the days i.e. 12 days in August

So, the maturity date is August 12

Hence, the same would be considered

and, the same is relevant

7 0
3 years ago
The fair value of the plant and equipment was $60,000 more than its recorded carrying amount. The fair values and carrying amoun
Savatey [412]

Answer:

$20,000

Explanation:

The question is missing some parts:

Penn Corp. paid $300,000 for the outstanding common stock of Star Co. At that time, Star had the following condensed balance sheet:

Carrying amounts

  • Current assets $40,000
  • Plant and equipment, net $380,000
  • Liabilities $200,000
  • Stockholders' equity $220,000

After a company is acquired, the parent company (the buyer) must record all the assets and liabilities at fair market value. In this case, the fair market value was higher than the carrying value by $60,000, therefore, the value of Penn's P,P&E must increase from $380,000 to $440,000. So total assets = $480,000, liabilities = $200,000, so equity = $480,000 - $200,000 = $280,000.

Since Goodwill represents the amount of money paid in excess of equity value, then Goodwill = $300,000 - $280,000 = $20,000

6 0
4 years ago
Carl won 23,672 dollars that will be paid to him in full 6 years from now. Unfortunately, he needs cash right now to pay his cre
dusya [7]

Answer:

$17,664

Explanation:

The amount of money that Carl father has to pay for his monetary prize occur in the future is shown below:

Present value = Amount paid × (P/F, 5%,6)

Present value = $23,672 × 0.7462153966

= $17,664

hence, the amount that willing to pay is $17,664 and the same is to be considered

We simply applied the above formula so that the correct value could come

7 0
3 years ago
Why is it important for businesses to recognize secondary stakeholder groups?
arsen [322]
The answer to this question is letter e, they have legitimacy and can exert power. For the secondary stake holders in business are also considered to be important for they have the ability to control those around them in the are of business as they hold a power in which they could use to control them. Another factor is that they are valid and vital in the area of business to keep it from going.
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3 years ago
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