Answer:
A) What is Avicorp's pre-tax cost of debt?
B) If Avicorp faces a 40% tax rate, what is its after-tax cost of debt?
Explanation:
in order to calculate the pretax cost of debt, I will use a $1,000 bond
coupon rate = 5.8% x $1,000 = $58 / 2 semiannual coupons = $29
current bond price $960
years to maturity = 5 x 2 coupons = 10 periods
you can use a financial calculator or an excel spreadsheet to calculate effective annual yield, but we can also calculate it using the yield tot maturity formula:
YTM = {coupon + [(face value - market value)/n]} / [(face value + market value)/2]
YTM = {29 + [(1,000 - 960)/10]} / [(1,000 + 960)/2] = 3.367% x 2 coupons per year = 6.73%
the after tax cost of debt = 6.73% x (1 - 40%) = 6.73% x 0.6 = 4.04%
Answer:
D. Decreases from 30 to 28.5 bags
Explanation:
The computation of the economic order quantity is shown below:
=
where,
Carrying cost is $80 × 40% = $32
Annual demand = 60 bags × 12 months = 720 bag
And, the ordering cost is $20 per order
Now put these values to the above formula
So, the value would equal to
=
= 30 bags
Now the demand is decreased by 10% So, the annual demand would be
= (60 - 6) × 12 months
= 54 bags × 12 months
= 648 bags
The other things will remain the same
Now put these values to the above formula
So, the value would equal to
=
= 28.46 bags
Answer: When marginal product is increasing, total product is increasing by increasing amounts.
Explanation:
The marginal product is simply referred to as the additional output that is created due to the fact that an additional input has been placed into that particular organization or company.
The option thst is true of marginal product is option E "When marginal product is increasing, total product is increasing by increasing amounts".
We should also note that when the marginal product is reducing, but is still positive, then the total product will be increasing even though it'll now be at a decreasing rate.
Answer:
Rent expense= $30,900
Explanation:
Non-refundable fee expense for year 2016 = $10,500 / 5
Non-refundable fee expense for year 2016 = $2,100
Annual rent expenses = Monthly rental * 12 month
Annual rent expenses = $2,400 * 12
Annual rent expenses = $28,800
Rent expense for year ended June 30, 2016 = Annual rent expense + Non-refundable fee expense for the year
Rent expense = $28,800 + $2,100
Rent expense = $30,900