Answer:
7%
Explanation:
Calculation for the implicit interest rate on the note
First step is to calculate the PV factor
PV factor=$81,630/100,000
PV factor = 0.81630
Last Step is to find the implicit interest rate by using the PV table for 3 years to find the factor that matches the PV factor of 0.81630
Hence the factor that matches the PV factor of 0.81630 can be found or see in the 7% column which means that the implicit interest rate will be 7%
Therefore the implicit interest rate on the note will be 7%
The correct answer is routine problem solving. Routine
problem solving is being defined as having to associate at least one arithmetic
operations or even a ratio in regards to solving problems that are likely to be
practical in nature or in the environment.
The United States government was correct in interfering with the growth of Standard Oil. Not only was the company taking advantage of existing situations, but eventually it would have controlled the oil market entirely. If Standard Oil was able to gain control of the market for a long period of time, consumers could have had to pay extremely high prices for the oil that they needed, limiting their purchase of other goods. Or Sample response: The United States government should not have interfered with the growth of Standard Oil. Because the company had managed to reduce production costs, it was able to offer very low prices to consumers. This benefited many Americans. Without the company's production benefits, citizens were not able to take advantage of this infrastructure.
Given, Operating income = 7,200
Fixed expenses = 1800
Let the target sales be assumed to be X
Sales = 7200 + 1800 + 0.6*Sales
X = 7200 +1800 +0.6X
X-0.6X = 9000
0.4X =9000
X = 22,500
Target Sales = 22,500
Break even point = Fixed Costs/(Price -Variable cost)
Break even point = 1,800/(1-0.6) = 1,800/0.4 = 4,500
Break even point =4,500
Margin of Safety = (Target sales - break even point)/ Target Sales
Margin of Safety = (22,500-4,500)/22,500 = 18,000/22,500 = 0.8 = 80%
Margin of Safety =80%
Answer:
the firm will become more reasky as their Weighted-average cost-of-capital will change over time based on market condition but the management wil take project based on obsolete information
Thus, the WACC of the company will increase without the management notice this because, lender will use higher rate to make up for the change of failling Also, the shares wil trade at a lower value as is not maximizing the value of the firm.
Explanation:
