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
Serga [27]
2 years ago
7

Based on market values, Gubler's Gym has an equity multiplier of 1.45 times. Shareholders require a return of 10.87 percent on t

he company's stock and a pretax return of 4.83 percent on the company's debt. The company is evaluating a new project that has the same risk as the company itself. The project will generate annual aftertax cash flows of $275,000 per year for 6 years. The tax rate is 35 percent. What is the most the company would be willing to spend today on the project
Business
1 answer:
Paul [167]2 years ago
6 0

Answer:

The most the company would be willing to spend today on the project is

$1,253,529

Explanation:

In order to calculate What is the most the company would be willing to spend today on the project we woule require to calculate first the cost of capital as follows:

cost of capital=(1-1/1.45)*4.83%*(1-35%)+(1/1.45)*10.87%

cost of capital=0.01498*0.65+0.0749=0.084637=8.4637%

Therefore, Maximum amount to be spent=$275,000/8.4637%*(1-1/(1+8.4637%)^6)=$1,504,124.98

Maximum amount to be spent=$1,253,529

The most the company would be willing to spend today on the project is

$1,253,529

You might be interested in
All of the following statements regarding accounting treatments for liabilities under U.S. GAAP and IFRS are true except:_______
mihalych1998 [28]

Answer:

A) Accounting for bonds and notes under US GAAP and IFRS is similar.

Explanation:

US GAAP and IFRS do not have the same accounting guideline for bond issue cost:

Under US GAAP, bonds payable is recorded at face value while premiums or discounts are recorded separately. While under IFRS, bonds payable is recorded using the carrying value, and amortization or premiums or discounts is done by using the effective-interest method.

5 0
2 years ago
Need answer like, fast.
grigory [225]

Answer:

D

Explanation:

7 0
3 years ago
Amounts withheld from each employee for social security and medicare vary by state.
satela [25.4K]

It is False.

No matter which states the employee lives, the amounts withheld from each employee for social security and medicare do not vary by state. The present tax rate for social security for employers and employees is 6.2% and the present current rate of medicare is 1.45% for both the employer and employee.

Employers are typically required to withhold Social Security and Medicare taxes from an employee's paycheck and pay the employer's share of those taxes.

The Social Security Tax and the Medicare Tax have different rates, and only the Social Security tax has a salary cap. The base salary ceiling is the maximum taxable salary in the year. Determine the withholding amount for Social Security and Medicare contributions by multiplying each payment by the employee's tax rate.

To learn more about social security and medicare from given link

brainly.com/question/19277833

#SPJ4

3 0
1 year ago
The Internet provides marketers and consumers with opportunities for much greater interaction and ________ than other marketing
fredd [130]

Answer:

Letter E is correct. <u>Individualization.</u>

Explanation:

We live in the information age. The internet is a tool that has revolutionized the way individuals communicate, including companies' relationships with their target audience.

Through the internet, organizations have been able to achieve direct customer interaction and individualization that enables them to create personalization and rapid communication, as well as lasting relationships, through the marketing strategy of delivering relevant content as well as advertising that generates identification and engagement and value. for the brand.

Digital presence is a low cost and extremely relevant strategy to assist in processes such as market segmentation, results measurement, competitiveness reach, offer personalization, and customer attraction and loyalty.

4 0
3 years ago
The ohio state studies and the leadership grid are associated with the ____ approach to leadership.
dsp73

The Ohio state studies and the leadership grid are associated with the behavioral approach to leadership.

<h3>What is meant by the behavioral approach?</h3>

Since human conduct is taught, it is possible to unlearn any behavior and replace it with another behavior. The observable and quantifiable characteristics of human behavior are the main focus of behaviorism. As a result, learnt behaviors can be undone when they become unacceptable.

Relationship behaviors aid followers in feeling at ease with one another, with themselves, and with their surroundings. The behavioral approach's main goal is to clarify how leaders mix these two types of actions to affect followers' efforts to accomplish a goal.

According to the behavior approach, all behaviors are acquired and are predicated on the same core precepts and outcomes.

These are linked to actions taken voluntarily by individuals and include environmental factors that are relevant to the action and are under the control of the individual.

To learn more about behavioral approach refer to:

brainly.com/question/15038015

#SPJ4

4 0
2 years ago
Other questions:
  • How are the FAFSA, SAR, and EFC related?
    5·1 answer
  • MC Qu. 122 Marian Corporation has two... Marian Corporation has two separate divisions that operate as profit centers. The follo
    11·1 answer
  • Which of the following is an example of an investment commodity? A. A rare painting B. Shares in a company C. Microfinancing D.
    11·1 answer
  • Roughly what portion of u.s. total health spending is paid for by private and public insurance?
    9·1 answer
  • According to mercantilism the accumulation of national wealth depended on the
    8·2 answers
  • Prepare a statement of cash flows. Also assume the following:
    14·1 answer
  • How to calculate cost of sales and gross profit​
    13·1 answer
  • What is the difference between a shortage and scarcity?.
    5·1 answer
  • The ability to connect to the internet through a modem using the same wires that transmit cable television was an example of a _
    5·1 answer
  • 3 reason why loading and unloading a school bus is dangerous?
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!