Answer:
$6,000
Explanation:
The computation of the interest expense is shown below:
= Total amount borrowed × interest rate × number of months ÷ total months in a year
= $300,000 × 8% × 3 months ÷ 12 months
= $6,000
The three months is calculated from October 1 to December 31
We have to apply the simple interest formula so that the accurate amount can come.
Answer: $45,000
Explanation:
Direct costs are those that can be traced and attributed to the product being sold or manufactured by the company. They usually include direct labor and direct materials.
As this is a Cosmetics department, the direct labor will be the Department's manager's salary and the Sales commissions.
The Cost of sales will also be a direct cost as they were incurred to sell the product.
Direct Costs = Cosmetics Department manager's salary + Cosmetics Department sales commissions + Cosmetics Department cost of sales
= 4,000 + 4,000 + 37,000
= $45,000
Answer: Option D : Bond 12 sells at a premium (its price is greater than par), and its price is expected to increase over the next year.
Explanation:
Bond 12 sells at a premium (its price is greater than par), and its price is expected to increase over the next year because we can see that for larger cash flows from its higher coupons, Bond 12 would be neutral to interest rate changes, which implies that it will grow with less interest rate risk.
Answer:
e. 0.34
Explanation:
Let debt be $D
Equity be $E
Total=(D+E)
WACC = Respective cost * Respective weight
12.7 = {(D*4.8)/(D+E)} + {(15.4*E)/(D+E)}
12.7*(D+E)=4.8D+15.4E
12.7D+12.7E=4.8D+15.4E
D=(15.4-12.7)E /(12.7-4.8)
D = 2.7E / 7.9
D = 0.0341772
D = 0.34 E
Hence, debt-equity ratio=debt/equity
=0.34