Answer:
E. A shift to the right of the demand curve
Explanation:
Demand curve can shift to the right if income of consumers increase or price of commodity falls generally. In this case the price fell due to lower production cost. The scenario is broad enough to cause demand to shift to the right.
Answer:
- False
- True
- True
- False
- False
- False
- True
- True
- True
- False
Explanation:
This is because Job shop operations are smaller than line flow operations
This is because line flow operations require more specific more specific tools
This is because high volume of a specific type of product
This is because in job shop the production of variety of products require a higher number of labor content
Job shop operations are more flexible than line flow operations
operations are measured by degree of customization in job shops
Job shops are not usually involved in mass productions
Job shops posses higher skilled labors because of the customization involved with job shops
Line flow operations are more cost effective because they produce in large quantities
There is mass production in lie flow operation
Answer:
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Explanation:
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Answer:
a.
WACC = 0.07961 or 7.961% rounded off to 7.96%
b.
After tax cost of debt = 0.0474 or 4.74%
Explanation:
a.
The weighted average cost of capital or WACC is the cost of a firm's capital structure. To calculate the WACC, we multiply the weight of each component of the capital structure by the cost of that component. The components of capital structure can be one or all of the following namely debt, preferred stock and common stock.
The formula for WACC is,
WACC = wD * rD * (1-tax rate) + wP * rP + wE * rE
Where,
- w represents the weight of each component
- r represents the cost of each component
- D, P and E represents debt, preferred stock and common stock respectively
WACC = 0.15 * 0.06 * (1 - 0.21) + 0.1 * 0.05 + 0.75 * 0.09
WACC = 0.07961 or 7.961% rounded off to 7.96%
b.
The after tax cost of debt is calculated by multiplying the cost of debt by (1 - tax rate) to adjust for the tax advantage provided by debt as interest payments on debt are tax deductible.
After tax cost of debt = 0.06 * (1 - 0.21)
After tax cost of debt = 0.0474 or 4.74%
