Answer:
Projects Y and Z
b. Projects W and Z
c. Projects W and Y
Explanation:
CAPM equation : Expected return = Risk free rate + Beta x (Expected market return - Risk free rate)
W = 4% + [0.85 x (11% - 4%)] = 9.95%
X = 4% + (0.92 x 7%) = 10.44%
Y = 4% + (1.09 x 7%) = 11.63%
Z = 4% + (1.35 x 7%) = 13.45%
Projects Y and Z have an expected return greater than 11%
b. Projects W and Z should be accepted because its expected return is higher than the IRR
c. Project W would be incorrectly rejected because the expected rate of return is less than the overall cost of capital (i.e. 9.95 is less than 11). But its expected rate of return is greater than the IRR
Y would be incorrectly accepted because its expected rate of return is greater than the overall cost of capital but its expected rate of return is less than the IRR
<span>I think suppliers have moved close to the headquarters in order to save costs. When suppliers set up office far from their customer, there are additional costs to it like transportation fees for both goods and manpower. Getting rid of one aspect of their production costs can help suppliers maximise profits.</span>
The lower the standard deviation of returns on a security, the higher the expected rate of return and the higher the risk.
The saying goes in investing "The higher the return, the higher the risk"
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Contracts can be discharged by performance: complete performance discharges both sides; material breach discharges the breaching party, who has a right to claim damages; substantial performance obligates the promisee to pay something for the benefit conferred but is a breach.
Answer:
C. Cash flow from operating activities has decreased relative to net income.
Explanation:
As we know that
Operating activities involves those activities that impact the after-net income working capital. This will subtract the rise in current assets and a reduction in current liabilities, while adding the decline in existing assets and a rise in current liabilities.
It will adjust some adjustments in working capital. In addition, the depreciation expenses are applied to the net profit and the loss on the selling of assets is added, while the gain on the sale of assets is deducted
Hence, the C option is correct
