Answer:
B. Investments that are not readily convertible to cash or not intended to be converted to cash in the short term
Explanation:
Long term investments are assets that a firm intends to hold onto for a period exceeding one year. They include projects, and investment vehicles are expected to generate revenue for several financial periods. Long term investments are characterized by a higher degree of risk in pursuit of greater rewards.
Examples of long term investments include bonds, stocks, plants and machinery, and real estate. Long term investments such as real estate and machinery are not easily disposed. Some are never disposed.
Complete Question:
Options:
a) labor of employees working directly on the product
b) labor of the maintenance employees
c) labor of the clerical staff
Answer:
Indirect labor includes:
b) labor of the maintenance employees
c) labor of the clerical staff (factory)
Explanation:
Indirect labor is the cost of labor for all those who contribute to the production of a product, but indirectly. These include the labor costs of equipment and factory maintenance employees, factory clerical staff, supervisors, and managers, product inspectors and quality controllers, etc. The determining factor is the level of involvement: direct or indirect or outside production. If it is direct or outside production, it is not part of indirect labor.
Answer:
Option (B) is correct.
Explanation:
Cost of Equity (Ke) = Rf + Beta ( Rp)
where,
Rf = risk free rate
Rp = Market risk premium
Hence,
Beta systematic risk
:
= 7% + 1.7 (6%)
= 7% + 10.2%
= 17.2%
Post Tax cost of debt:
= Kd ( 1 - T)
where,
Kd = cost of debt
T = tax rate
= 20% * (1-0.4)
= 12%
WACC = [ (Ke × We) + (Wd × Kd(1-T)) ]
where,
We = weight of equity
Wd = weight of debt
= [(17.2% × 0.6) + (0.4 × 20% × (1 - 0.4))]
= 10.32% + 4.80%
= 15.12%
Thta is true. Radical innovation has a significant effect on the market and on the economic activity of the firms in the market. Something that is false about radica innovation is that are evolutionary applications of novel ideas within existing paradigms and that is not true. We can say that this innovation <span>is an invention that destroys or supplants an existing business model.</span>
