Answer:
1. $33.33 million
2. $40.00 million
Explanation:
The computation of the value of Milton Industries with leverage is shown below:-
Value of Milton Industries without leverage is
= Free cash flow ÷ unlevered cost of capital
= $5 million ÷ 0.15
= $33.33 million
Value of Milton Industries with leverage is
= Value of Milton Industries without leverage + Tax × Debt
= $33.33 million + 0.35 × $19.05 million
= $40.00 million
Therefore we have applied the above formula.
Answer:
False
Explanation:
Due to the fact that the same amount of training is needed in each of the industries, wages would be the same. If wages were higher in the air craft industry, their would be an excess supply of labour in the airline industry. This would pull the wages in the airline industry down until the same wages are earned in both industries
Answer:
The potential of additional regional currencies such as the euro is very important, and for this reason, many economists support the idea. In fact, John Maynard Keynes, one of the most influential economists in history, once proposed not a regional common currency, but a common global currency.
The potential lies in the fact that regional currencies allow to coordinate a common monetary policy in several countries. This common policy means that several countries now have the same interest rates, the same rate of inflation, and the same currency itself, and all these commonalities facilitate the exchange of goods and services.
While the Euro has had drawbacks since its inception, the Euro has survived, and is now one of the strongest curriencies in the world.
If you support the concept, should those currencies be tied to regional economic blocs?
I support the concept, and I agree that they should be tied to regional economic bloc. It would not be very effective to adopt a common currency for countries that are not economically integrated in other areas.
Answer:
Explanation:
There are primarily two types of costs, i.e. variable costs and the fixed costs. The variable cost is the cost which changes when the level of production changes, whereas the fixed cost is the cost which remains constant whether the level of output changes or not.
The variable costs also include indirect products, indirect labor and manufacturing equipment, and the fixed costs include taxes and depreciation costs.
The period cost is that cost which is related to the selling and admin expenses plus it is not capitalized.
Whereas the product cost is a mix of direct labor, direct material and the manufacturing overhead
So, the categorization is shown below:
1. Hamburger buns in a Wendy's outlet. = variable and product cost
2. Advertising by a dental office. = Fixed and period cost
3. Apples processed and canned by Del Monte. = variable and product cost
4. Shipping canned apples from a Del Monte plant to customers. = variable and period cost
5. Insurance on a Bausch & Lomb factory producing contact lenses. = fixed and product cost
6. Insurance on IBM's corporate headquarters.= fixed and period cost
<span>In the example of the Magnira Corporation, the fruits are turned into jellies, jams, and marmalades an example of raw materials. Raw materials are basic, unprocessed materials that are used to manufacture goods. Raw materials are often referred to as commodities.</span>
