A sole proprietorship has the single owner of the business and the main goal of the owner is to increase the value of his capital invested in the business which is also called as Equity.
The objective of maximization include the maximization of net income given the current resources of the firm
A proprietorship has only one owner so there is no need to decrease long-term debt to reduce the risk to the owner.
The proprietor wants to earn more income and he will have to pay more taxes so the goal is not to minimize the tax impact on the proprietor.
Similarly, the goal is also not to minimize the reliance on fixed costs.
Hence the correct answer is:
Maximize the market value of the equity
Answer:
$217,100
Explanation:
total selling expenses = sales commission + sales manager's salary + shipping expense + advertising expenses + miscellaneous selling expenses
sales commissions = 50,000
advertising expenses = 65,000
shipping expenses = 10,000
sales manager's salary= 80,000
miscellaneous selling expenses = 10,000 + 2100
Answer:
11.07%
Explanation:
The formula to compute WACC is shown below:
= Weightage of debt × cost of debt × ( 1- tax rate) + (Weightage of common stock) × (cost of common stock)
= (0.25 × 8%) × ( 1 - 34%) + (0.75 × 13%)
= 1.32% + 9.75%
= 11.07%
We simply multiply the weighatge with its capital structure so that the correct weightage cost of capital can come.
Answer:
Interest expense $ 11.15
Explanation:
As the bank uses the average daily balance excluding new purchases we should use that amount to solve for the interest expense.
The rate is one and a half percent therefore, 1.5% --> 0.015
principal x rate = interest
$743 x 0.015 = $ 11.145
