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vekshin1
3 years ago
13

Carriage Inc., a steel manufacturing company, is planning to buy a new plant. The internal rate of return provided by the new pl

ant is 6%. The cost of capital for Carriage Inc. is 8%. Based on the given scenario, which of the following statements is true in the context of internal rate of return?a.Carriage Inc. should invest in the new plant because the project will earn more than zero IRR from the project.b.Carriage Inc. should not invest in the new plant because the IRR of the project is less than its cost of capital.c.Carriage Inc. should not invest in the new plant because IRR is not a reliable model for making capital investment decisions.d.Carriage Inc. should invest in the new plant because IRR is the true or actual simple rate of return that is earned by the initial investment.
Business
1 answer:
harina [27]3 years ago
5 0

Answer:

Carriage Inc. should not invest in the new plant because the IRR of the project is less than its cost of capital.

Explanation:

The investment should NOT be made in the new plant because its internal rate of return is lower than Carriage's cost of capital.

In simple language since the return (IRR) that will be gotten from the new plant is LOWER than the cost (cost of capital), then the company is not making a profit if it invests in this new plant.

Generally, as a decision rule, a company should only invest when the IRR is higher than (or equal to) its cost of capital.

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a. non-sampling risk.

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7 0
3 years ago
The Marshall Company has a process costing system. All materials are added when the process is first begun. At the beginning of
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Answer:

The equivalent units of of materials in September = 62,400 units

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<em>Equivalent units are useful to apportion cost between work in progress and completed units. They are notional whole units which represent incomplete work</em>

Equivalent Units = Degree of work completed (%) × inventory units

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Completed unit        58,500      58,500× 100%  =     58,500

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The equivalent units of of materials in September = 62,400 units

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When businesses raise the price of a needed product or service after a natural disaster, this is known as price gouging. Price gouging is something that businesses do after a natural disaster when they know consumers are going to need a specific product or service so they raise the price because they know people are going to buy it anyways. An example of this is when they raise gas prices after a natural disaster, knowing people still need gas.

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Find out more on Routine purchases at brainly.com/question/26242633

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