Answer:
option (C) 11.8%
Explanation:
Debts = 30%
Preferred stock = 10%
Common stock = 60%
before-tax cost of debt = 11%
cost of preferred stock = 10.3%
cost of common stock = 14.7%
New common stock sales cost = 16%
The weighted average cost of capital for the company
marginal tax rate = 40%
= Debt × before-tax cost of debt × (1 - tax)) + (Common stock × cost of common stock ) + (Preferred stock × cost of preferred stock )
= 0.30 × 0.11 × (1 - 0.40) + (0.60 × 0.147 ) + ( 0.10 × 0.103 )
= 0.0198 + 0.0882 + 0.0103
= 0.1183
Or
= 0.1183 × 100% = 11.83% ≈ 11.8%
Hence.
The correct answer is option (C) 11.8%
To compute for the rate for the year, the formula that we
will be using would be the r = I / Pt.
Where:
r = interest rate
I = interest; to solve for the interest, we know that our
principal value is $30,000 and our future value is $42,135, just deduct the $30,000
from there, and you can get the interest. $42,135 – $30,000 = $12,135
P = principal = $30,000
t = time = 3 years
r = 12,135 / (30,000) (3)
r = 12,135 / 90,000
r = 0.1348 or 13.48%
to check, use the I = Prt then just add the Principal to get
the future value
I = Prt
= 30,000 * 0.1348 * 3
= 12,135
Future value = P + I
= 30,000 + 12,135
= 42, 135
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Answer and Explanation:
The adjusting entry is shown below:
Bad debt expense Dr $2,900 ($5,100 - $2,200)
To Allowance for doubtful accounts $2,900
(Being the bad debt expense is recorded)
Here it debited the bad debt expense as it increased the assets and the allowance for doubtful accounts is credited as it decreased the assets
Also the expense and assets contains normal debit balance
Answer:
Hie, the <em>price schedule is missing</em> from your question however the important principles are explained below.
a. The optimal order quantity
Optimum order quantity is the order level that results in minimum ordering costs and holding costs.
Optimum order quantity = √ (2 × Annual Demand × Cost per order) / holding cost per unit
b. The number of orders per year.
orders per year = Annual Demand / optimal order quantity
This calculates the number of orders to be placed during the year at the optimum order quantity.