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Evgesh-ka [11]
2 years ago
11

Marston Manufacturing Company has two divisions, L and H. Division L is the company’s low-risk division and would have a weighte

d average cost of capital of 8% if it was operated as an independent company. Division H is the company’s high-risk division and would have a weighted average cost of capital of 14% if it was operated as an independent company. Because the two divisions are the same size, the company has a composite weighted average cost of capital of 11%. Division H is considering a project with an expected return of 12%. Should Marston Manufacturing Company accept or reject the project? Reject the project Accept the project On what grounds do you base your accept–reject decision? Division H’s project should be accepted, as its return is greater than the risk-based cost of capital for the division. Division H’s project should be rejected since its return is less than the risk-based cost of capital for the division.
Business
1 answer:
uysha [10]2 years ago
3 0

Answer:

Should Marston Manufacturing Company accept or reject the project?

Marston C Company should reject the project because its expected return is lower than Division H's cost of capital.

Since the divisions' risk is so different, and probably their projects are also very different, the company should use different costs of capital to accept of reject the projects based on each division's cost of capital.

Imagine another situation where Division L is evaluating a project that yields 10%. If they used the company's WACC, then they should reject the project, but if they used the division's cost of capital, then they should accept the project (in this case I would recommend accepting it).

Explanation:

Division H's risk = 14%

Division L's risk = 8%

WACC = 11%

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Answer:

Benefit In kind

Explanation:

The reason is that this is the amount that the employee Christopher earned all because of his job. If he was not an employee he wouldn't have earned this if he was not recruited by the company. So from tax purposes this gift will be treated as a benefit in kind which will be included in its annual salary as an employment income for calculating his tax.

7 0
3 years ago
In a market analysis, the _____ is considered a good indicator of the potential of the market. It is derived by dividing the per
schepotkina [342]

Complete/Correct Question:

In a market analysis, the _____ is considered a good indicator of the potential of the market. It is derived by dividing the percentage

of users in a demographic segment by the percentage of the population in the same segment and then multiplying the quotient by

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A. cost per media (CPM)

B. quantitative advantage

C. index number

D. average frequency

Answer:

C, Index number

Explanation:

Index number in market analysis is a figure that compares the price or quantity of goods to standard value. Index number is a economic data figure.

A standard value is more often than not always equal to 100, which leaves the index number at 100 times the ratio as against the base value.

Index number helps market analysis by indicating the good or bad potential of a market, thereby helping economists to understand the said market.

I hope this helps.

4 0
3 years ago
Stine Company uses a job order cost system. On May 1, the company has a balance in Work in Process Inventory of $3,510 and two j
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Preparation of   journal entries

Stine Company Journal entries

1. May 31

Dr Work in process inventory $11,610

Dr Manufacturing overhead $900

Cr Raw materials inventory  $12,510

(To record requisition slips)

2.  May 31

Dr Work in process inventory $13,400

Dr Manufacturing overhead $1,590

Cr Factory labor  $14,990

(To record the time tickets)

3. May 31

Dr Work in process $9,112

($13,400*68%)  

Cr Manufacturing overhead  $9,112

(To record assignment of manufacturing overhead to jobs)

4. May 31

Dr  Finished goods inventory $8,648

Cr Work in process inventory  $8,648

[( $2,150+$2,970+$2,100+($2100*68%)]

(To record the completion of Job No. 429)

Learn more here:

brainly.com/question/22684358

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2 years ago
When analyzing the Production Possibility Curve, what is the value of a good given up in order to produce more of another good?
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Answer:

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4 0
3 years ago
The Dot Corporation has changed its year-end from a calendar year-end to August 31. The income for its short period from January
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Answer:

$10,527

Step by step Explanation:

Ist January to 31 August is 8 months

Therefore;

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7,500 + 6,250 + 2,040 = 15,790

Short period = 15,790 x 8/12 = $10,526.673.

Therefore The tax for this short period is $10,526.673 approximately $10,527

3 0
3 years ago
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