Answer:
Explanation:
a) actual cost method:-
=deductions × percentage
= 345 + 205 + 85% (2800 + 275 + 180 + 1890 +3600 +4125 )
=550 + 10939.5
=11489.5 = 11490
Note :- fines are not taken.
b) automatic mileage method:-
=total number of business miles × standard rate
=32200×0.58 +345+205
=19226
Answer:
0.73
Explanation:
Given that
WACC = 11%
Tax rate = 34%
Cost of equity = 14.9 %
Cost of debt = 8.6%
Recall that
WACC = (cost of equity × % of equity) + (cost of debt × % of debt) + ( 1 - tax rate)
We are to find
Cost of debt and cost of equity
Let
Cost of debt be x
Cost of equity be (1 - x)
Thus,
0.11 = (1 - x)(0.149) + (x)(0.086)(1 - 0.34)
x = 0.4228
Therefore,
Debt-equity ratio
= Cost of debt/cost of equity
= 0.4228/(1 - 0.4228)
= 0.73
Answer:
SO expected return on Mkt Portfolio Rm = 10.75%
Explanation:
market degree of risk aversion A = 3
Var = 0.0225 = SD^2
Rf = 4%
What is expected return on Mkt Portfolio ie Rm??
According to CAPM, Rm-Rf = A*SD^2
where SD is Std Dev (Recall SD^2 = Variance)
A is market degree of risk aversion
So we have Rm-4% = 3*0.0225
ie Rm = 4% + 3*0.0225 = 10.75%
SO expected return on Mkt Portfolio Rm = 10.75%
Answer: c) $7,535
Explanation:
The Collection Float refers to the time that it takes for a deposited check to become available to the account owner after the check has been deposited.
The Average amount is calculated thus;
= No. of payments * Clearing days * average value of payment
= 138 * 1.3 * 42
= $7,535
