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joja [24]
3 years ago
13

Suppose a firm estimates its WACC to be 10%. Should the WACC be used to evaluate all of its potential projects, even if they var

y in risk? If not, what might be "reasonable" costs of capital for average-, high-, and low-risk projects?
Business
1 answer:
Mademuasel [1]3 years ago
6 0

Answer:

The WACC will be 10% for average risk

below when the risk is low

and above 10% when the risk is higher than average

as the cost of capital (required return from the stockholders) will increase pushing the WACC higher

Explanation:

As the WACC is composed by the cost of debt and the cost of equity a higher risk will require a better return for the investor thus, the equity proportion that determinates the WACC will change along the project risk.

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What is the difference between federal and private loans.
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Answer:

federal loans are provided by the government and private loans are provided by banks, credit unions, and other financial institutions.

Explanation:

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3 years ago
Venetian Company has two production departments, Fabricating and Assembling. At a department managers meeting, the controller us
olchik [2.2K]

Answer:

Fabricating Department = $136470=   53000 +total 49100 of $1.7 per direct labor hours

Assembling Department = $$ 90,410= 43000 +total 43100  of $ 1.10 per direct labor hours

Explanation:            

<em>When a fixed line intersects a vertical axis at the point of total budgeted cost line represents total cost of the activity . From this we can calculate the following.</em>

                                                          Fabricating            Assembling

Total Cost for 46100 DLH            $131,370                    $93,710

Fixed Costs                                     (53000)                     (43,000)

Variable Costs                               78370                        50,710

Variable Cost Per hour                78370 / 46100          50,710  / 46100

                                                      = $ 1.7                        = $1.10

                                                    Fabricating            Assembling

Total DLH                                        49100                   43100

Variable Cost Per hour                  $ 1.7                          $1.10

Variable Costs                                $ 83470                 $ 47410

Fixed Costs                                     53000                     43,000

Total Budgeted Cost                      136470                    $ 90,410

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Answer:

trial balance

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B. Consider an outright acquisition.

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