Answer:
Total Manufacturing Cost $81,100
Explanation:
The computation of the manufacturing cost incurred is shown below:
Wages of Production workers: = $30,500
Raw Material $42,000
Material handling $2,700
Factory rent $3,200
Factory Insurance $500
Depreciation on Factory Equipment $2,200
Total Manufacturing Cost $81,100
We simply added the above items
Answer:
Dealer Market
Explanation:
In a dealer market, multiple dealers give out their various prices on the sales and purchases of their specific and particular security of instrument. It is a financial tool for dealers in the market. The dealer market becomes more efficient for financial securities because it provides superior mechanism which should be protected.
It enables buyers and sellers to buy and sell independently through the market makers, known as dealers.
Foreign exchange and bonds are found in the dealer market.
In the secondary market, securities are traded by investors while in the primary market, they are created.
Answer:
Project A
Years Cashflows Discount factor Present values
0 250,000 1 -250,000
1-10 45,100 6.144 277,094.40
Sum of all present value=NPV=27,094.40
IRR (by using trial and error method) = 12.4696%
Note: Discount factor for the year 1-10 is calculated by using annuity formula i.e [1-(1+10%)]/10% = 6.144
Project B
Years Cashflows Discount factor Present values
0 (350,000) 1 (350,000)
1 72,500 0.91 65,975
2 65,500 0.83 54,365
3 73,800 0.75 55,350
4 71,500 0.68 48,620
5 69,800 0.62 43,276
6 75,500 0.56 42,280
7 31,000 0.51 15,810
8 47,500 0.47 22,325
9 55,500 0.42 23,310
10 29,200 0.38 11,096
Sum of all present values=NPV=32,407
IRR(by using trial and error method=12.4186%
On the basis of NPV project B is better because it gives higher NPV than project A. Whereas, Project A is better than project B on the basis of IRR because project A has slightly higher IRR than project B.
b)The conflict between both the investment appraisal technique is likely due to different cash flow patterns of both the project. In such situation decision should be based on NPV because this is an absolute measure
Answer:
Economic exposure.
Explanation:
Economic exposure is also known as operating exporter is known as a phenomenon where a business's cash flow is affected by currency rate fluctuations. It occurs over the long term and affects product value.
Businesses protect themselves from economic exposure by operational strategies mostly through diversification, and currency risk mitigation strategies.
In this instance Majestic Co a United States company has a competitor in Belgium and so tend to be affected by foreign exchange fluctuations of the dollar to Belgium currency.
Answer:
17%
Explanation:
To calculate this, we use the weighted average cost of capital (WACC) as follows:
Total capital = 15 + 5 = 20
Weight of equity = 15/20 = 0.75, or 75%
Weight of debt = 5/20 = 0.25, or 25%
WACC = (20% × 75%) + (8% × 25%) = 17%
Therefore, the company's cost of capital is 17%.
