Answer:
d. decrease the firm's WACC.
Explanation:
As per WACC formula
WACC = ( Weight of Common Equity x Cost of Common Equity ) + ( Weight of Common Debt x Cost of Common Debt x ( 1 - Tax rate ) ) + ( Weight of Preferred Equity x Cost of Preferred Equity )
By assuming the values to prove the answer
Weights
Common equity = 55%
Preferred Equity = 15%
Debt = 30%
Costs
Common equity = 15%
Preferred Equity = 8%
Debt = 12%
Tax rate is 15%
Placing values in the formula
WACC = ( 55% x 15% ) + ( 30% x 12% x ( 1 - 15% ) ) + ( 15% x 8% )
WACC = 8.25% + 3.06% + 1.2% = 12.51%
Keeping others values constant, Now increase the Tax rate to 25% and placing vlaues in the formula
WACC = ( 55% x 15% ) + ( 30% x 12% x ( 1 - 25% ) ) + ( 15% x 8% )
WACC = 8.25% + 2.7 + 1.2% = 12.15%
Hence the WACC is decreased from 12.51% to 12.15% when the tax rate is increased from 15% to 25% keeping other values constant.
Answer: $7,575
Explanation:
Based on the information given in the question, the amount of the estimated average income for a proposed investment will be calculated as:
= Expected total income yield / Number of years
= $30300/4
= $7,575
Therefore, the amount of the estimated average income for the proposed investment is $7575.
Explanation:
The management of people in an organization is a constant and dynamic process that must be well structured, as it is the employees of the organization who will assist in the achievement of organizational goals and objectives.
Therefore, this process of recruiting, training, evaluating and paying employees must be well established in the organization as a fundamental process for organizational success. Each stage of the personnel management process is essential, and must always be organized, evaluated and monitored, so that there is continuous improvement in a company in all its systems. Through effective people management, there is greater motivation, greater productivity and greater organizational positioning.
Answer:
The answer is $221
Explanation:
LIFO means Last in First out i.e the inventory that was bought last will be sold out first.
Opening balance:
November 1: 5 units at $19 each
Purchased:
November 2: 10 units at $21 each
Purchased:
November 6: 6 units at $24 each
Sold:
November 8: 10 units at $54 each
Total number of units bought plus Beginning inventory = 5 + 10 + 6 = 21 units
Therefore, number of units remaining at November 8 after sales is 21 - 10
=11 units.
So according to LIFO, we have:
6 units at $21 = $126
5units at $19 = $95
$95 + $126
=$221
Answer:
$500;$810
Explanation:
Based on the information given we were told that he painted his office and replaced the door at a cost of the amount of $500 which means that Travis has the amount of $500 in deductible direct expenses
Calculation for deductible indirect expenses.
First step is to calculate the utilities
Utilities= $3,000 x (240/2,400)
Utilities= $3,000 x 10%
Utilities= $300
Second step is to calculate the property taxes
Property taxes= $1,500 x 10%
Property taxes= $150
Third step is to calculate the mortgage interest
Mortgage interest= $3,600 x 10%
Mortgage interest= $360
Now let calculate the deductible indirect expenses.
Deductible indirect expenses=$300+$150+$360
Deductible indirect expenses=$810
Therefore Travis has $500 in deductible direct expenses and $810 in deductible indirect expenses.
