Answer:
Correct answer is False for economic decision making, when the inputs and outputs are fixed, the criterion to use is minimize the input
Since, both input and output are fixed, the input can’t be decreased. Each of them has to be fixed in directive to vary the association among them. (It can be fixed contribution, or fixed production or neither one of them is fixed)
Answer:
The amount of investment should be $1926.891 approximately
<u>Explanation:</u>
The following formula has been used to calculate the amount of investment
A = P(1+r/100) ^n
where: A = future value
, P = present value
, R = rate of interest
, N = time period
Hence
, applying the formula, we get,
$5500 = P (1+6/100) ^18
Hence P=$5500/ (1.06) ^18
=$1926.891(approx)
Answer: debit to Product Warranty Expense for $750
Explanation: 5% of $15000 =
5 ÷ 100 × $15000 is $750.
This is an expense and so will be a debit.
Answer:
The market value of equity should be used.
Explanation:
Their are only two methods which are book value method or market value method. The market value method is preferred because the reason is that the market value gives the more accurate numerical value that the securities of the company will give which is the required rate of return to its investors. However historic cost data is not useful because the value of stock and bonds keeps changing every second in the stock exchange and their is the risk that the WACC calculated is inaccurate which implies that the project appraised is also incorrect.
So the best way to calculate the weighted cost of capital is that we should use the fair value of the securities.