Answer:
B. <u>the weighted average cost of capital is minimized </u>
Explanation:
As per the traditional capital structure theory, as a firm employs more and more debt in it's capital structure, the financial leverage increases and since debt being a cheaper source of finance than equity with interest paid on debt being a tax deductible expense, the overall cost of capital initially falls.
As the firm further keeps increasing the proportion of debt, such debt raises the expectations of equity stockholders which raises the cost of equity and thus the overall cost of capital begins to rise.
An optimal capital structure under the theory refers to the one at which, overall cost of capital or the weighted average cost of capital of the firm is the lowest and value of the firm is the highest.
Accounting is the process of recording financial transactions pertaining to a business.
Answer:
C. Making final decisions on whom to hire
Explanation:
Human resources (HR) manager is someone responsible for the planning, directing, and coordination the administrative functions of an organization. The responsibility of a HR manager are:
- Responsible for the recruiting of new company staffs.
- They are involved in strategic planning within the organization.
- They serve as a link between the management of an organization and its employees.
- Determining salaries of employees.
- Responsible for induction and training of staffs.
Answer:
The profit margin is 12.4%
Explanation:
Profit margin is used to measure the amount of profit. It is the amount by which the money gotten from sells exceed the cost in a business. It is the ratio of net income to net sales
Net sales = Sales revenue - (sales discounts + sales returns and allowances
)
Net sales = $312000 - ($4000 + $2000) = $312000 - $6000 = $306000
Net income = Net sales - cost of goods sold - operating expenses
Net income = $306000 - $184000 - $84000 = $38000
Profit margin = Net income / net sales
Profit margin = $38000/$306000 = 0.124 = 12.4%.
Answer:
Lack of innovation.
Explanation:
Any business is subject to certain market conditions that will determine its success, and the most important ones are:
- the markets at which they participate, e.g. size of the markets, niche products vs convenience, etc.
- free enterprise (free market economy) which allows private parties (producers and consumers) to allocate resources at their convenience, and much more efficiently than command economies.
- competition will limit your supplier power and increases the consumers' buying power. Generally the more competition, the harder it is to make economic profits.