Answer:
b. $100,000
Explanation:
Based on the information given , the FIRST'S CONTRIBUTION TO CONSOLIDATED NET INCOME for 20X9 will be NET INCOME amount of $100,000 because During the year 20X9, the company reported NET INCOME of $100,000 in which they paid no dividends.
Therefore First's contribution to consolidated net income for 20X9 is $100,000
Answer:
7.67%
Explanation:
The Excel rate function can be used to determine the before-tax cost of debt as follows:
=rate(nper,pmt,-pv,fv)
nper=number of semiannual coupons in the remaining 20 years=20*2=40
pmt=semiannual coupon=$45
pv=current amrket price= $896.87
fv=face value=$1000
=rate(40,45,-896.87,1000)=5.11%
5.11% is the semiannual yield
yield to maturity=5.11%*2=10.22%
after-tax cost of debt=pretax cost debt*(1-tax rate)
tax rate=25%
after-tax cost of debt=10.22%*(1-25%)=7.67%
The correct answers are as follows:
1. The loss of US manufacturing jobs to oversea location is called OUTSOURCING.
Outsourcing refers to a situation in which a company transfer part of its production process to external suppliers rather than completing the whole process internally. This method is usually employed in order to reduce the cost of production. The most important cost of production that is always reduced by employing the method of outsourcing is labor cost, because it is one of the highest cost in the production process. Most manufacturing companies in US now take part of their manufacturing process to other countries of the world such as China, where labor cost and other production costs are drastically reduced compare to that of USA. This increases the profits realized by the companies.
2. The opposite trend that has occurred in the United States with companies like Toyota and Honda is FOREIGN COMPANIES OPENING MANUFACTURING PLANTS IN THE US AND EMPLOYING A LARGE NUMBER OF WORKERS.
In contrast to outsourcing, big car companies like Toyota and Honda are now locating their companies in the United States.These companies normally need large number of worker to keep things moving, thus, a massive number of US citizens are been employed by these companies. The companies are thus playing a key role in the US employment sector.
Answer:
effective interest rat = 0.094 or 9.41%
Explanation:
effective rate of interest is given as
borrow interest rate = 8%
compensating rate =15%
effective interest rate = \frac{8%}{1 -15%}
effective interest rat = 0.094 or 9.41%
Answer:
The weighted average cost of the firm is 13.46%
Explanation:
To calculate the weighted average cost of the firm we have to use the following formula
WACC = After tax Cost of Debt*Weight of Debt + Cost of Equity*Weight of Equity
. We have all the details so we can proceed with the formula
WACC = 10%*(1-21%)*45% + 18%*55%
= 13.455%
=13.46%. Weighted average cost of the firm
