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Dafna11 [192]
3 years ago
15

Blossom Furniture Company started construction of a combination office and warehouse building for its own use at an estimated co

st of $11,000,000 on January 1, 2020. Blossom expected to complete the building by December 31, 2020. Blossom has the following debt obligations outstanding during the construction period. Construction loan-12% interest, payable semiannually, issued December 31, 2019 $4,400,000 Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2021 3,080,000 Long-term loan-11% interest, payable on January 1 of each year. Principal payable on January 1, 2024 2,200,000Assume that Headland completed the office and warehouse building on December 31, 2017, as planned at a total cost of $5,197,700, and the weighted-average amount of accumulated expenditures was $3,781,600. Compute the avoidable interest on this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% for computational purposes and round final answers to 0 decimal places, e.g. 5,275.)Avoidable Interest $Compute the depreciation expense for the year ended December 31, 2018. Headland elected to depreciate the building on a straight-line basis and determined that the asset has a useful life of 30 years and a salvage value of $298,200. (Round answer to 0 decimal places, e.g. 5,275.)Depreciation Expense $
Business
1 answer:
motikmotik3 years ago
6 0

Answer:

weighted average rate: 11.14%

capitalize interest (avoidable interest) 421,270.24‬ dollars

Explanation:

construction related loan:

4,400,000 12%  =     528,000

general use:

3,080,000 10%  =    308,000

<u>2,200,000</u> 11%  =   <u>  242,000</u>

9,680,000  1,078,000

weighted-average rate: 1,078,000 / 9,680,000 = 0.111363636 = 11.14%

capitalize interest:

weighted-average amount of accumulated expenditures x w/a rate:

3,781,600 x 11.14% = 421,270.24‬

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Answer:

c. 100 days of the filing of the complaint.

Explanation:

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Therefore in the given case, the option c is correct as it is mentioned the 100 days and the same is to be considered

6 0
3 years ago
Which of the following statements is true of financial leverage
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uppose your firm has decided to use a divisional WACC approach to analyze projects. The firm currently has four divisions, A thr
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Answer:

WACC for A: 9.05%

WACC for B: 9.50%

WACC for C: 12.20%

WACC for D: 12.65%

Explanation:

WACC for a division will be equal: Percentage of Debt in capital employed by the Division x Cost of Debt + Percentage of Equity in capital employed by the Division x Cost of equity = 50% x 6% + 50% x ( Risk free rate + Beta of each Division x Risk premium) = 3% + 50% x ( 4% + beta of each Division x Risk premium)

Risk premium for the 4 Divisions is equal to (Cost of equity for the whole firm - Risk free rate) / beta = 9%

Thus WACC for a division will be equal:  3% + 50% x ( 4% + beta of each Division x 9%).

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7 0
3 years ago
The degree of operating leverage can be measured by​ ________. A. multiplying the contribution margin by sales revenue B. dividi
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Answer:

Option C is the answer

Explanation:

The degree of operating leverage is measured by dividing the contribution margin by operating income.

The degree of operating leverage (DOL) is the ratio of contribution margin to operating income. It measures how much the operating income of a company will change in response to a change in sales. A Companies that have higher proportion of fixed costs to variable cost will have greater levels of operating leverage.

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Available Options Are:

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Option A. A climate of caring will pervade.

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When the people in a society start acting socially responsible which means that they value every single life on earth because acting socially means sustainability which says that the future generation needs must not be compromised in meeting current generation needs. Hence when everyone will be thinking as a socially responsible person then their will be a climate of care and every life matter would be understood by every single person on earth.

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