Answer:
cost of capital 16%
Explanation:
SML formula:
r_f = 3%
β = 1.3
r_m = 13%
0.03 + 1.3(0.13-0.03)
firm's required return = .16 = 16%
Answer:
d. $1,200
Explanation:
The computation of the interest expense is shown below:
= Principal × rate of interest × number of days ÷ (total number of days in a year)
= $80,000× 6% × (90 days ÷ 360 days)
= $1,200
We simply apply the simple interest formula
Since the number of days and the total number of days are given so we considered the same for the computation part.
Answer:
$23,740
Explanation:
Given that,
Sales = $103,000
Fixed expenses for the month = $36,000
Contribution margin ratio = 58%
Net operating income:
= (Contribution margin ratio × Sales) - Fixed expenses for the month
= (0.58 × $103,000) - $36,000
= $59,740 - $36,000
= $23,740
Therefore, the best estimate of the company's net operating income in a month when sales are $103,000 is $23,740.
