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SCORPION-xisa [38]
3 years ago
8

As a financial analyst, you are tasked with evaluating a capital-budgeting project. You were instructed to use the IRR method, a

nd you need to determine an appropriate hurdle rate. The risk-free rate is 4%, and the expected market rate of return is 11%. Your company has a beta of 0.67, and the project that you are evaluating is considered to have risk equal to the average project that the company has accepted in the past. According to CAPM, the appropriate hurdle rate would be
Business
1 answer:
ozzi3 years ago
5 0

Answer:

Ke 0.08690 = 8.69%

Explanation:

<u>The capital assets price model formula(CAPM) is as follows:</u>

Ke= r_f + \beta (r_m-r_f)  

risk free       = 4% = 4/100 = 0.04

market rate = 11% = 11/100 = 0. 11

premium market: (market rate - risk free) = (0.11-0.04) = 0.07

Beta(non diversifiable risk) 0.67

Ke= 0.04 + 0.67 (0.07)  

Ke 0.08690

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The difference between an inventor and an entrepreneur is that, an inventor develops new services and goods but he does not have them to the market. An entrepreneur risks resources may it be human, capital or natural in order to bring to the market improved and new products.

The risk which is incurred between entrepreneur and inventor is that, entrepreneur undergoes huge financial risks because a lot of money is being invested while inventor has low financial risk since there is no big investment which is being required.


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3 years ago
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The Consumer Electronics Show (CES) reports that the HP Spectre laptop computer starts at $994.00 for a base configuration. The
e-lub [12.9K]

Answer: $1312.41

Explanation:

The following information can be depicted from the question:

Cost of HP Spectre laptop = $1353

Credit terms = 3/15, net 30

Therefore, since discount allowed is 3%, the complement of the discount rate will be:

= 100% - 3%

= 97%

Therefore, amount needed to pay will be:

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= $1353 × 97%

= $1353 × 0.97

= $1312.41

Therefore, the amount needed to pay is $1312.41

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2 years ago
The merger of two firms producing personal computers is an example of a __________ merger. Group of answer choices
jasenka [17]

Answer:

Horizontal merger

Explanation:

The merger of two firms producing personal computers is an example of a horizontal merger

A horizontal merger is a merger or business collaboration that happens between firms that operate in the same industry. The products being sold are similar and in the same market

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3 years ago
A company has a discount on a forward contract for an asset. How is the discount recognized over the life of the contract?
exis [7]

Answer: It is charged to accumulated other comprehensive income.

Explanation:

The discount is recognized over the life of the contract when it is charged to accumulate other comprehensive income.

5 0
2 years ago
After a firm has determined its position in the global market, it will typically seek to meet the needs of global markets by ___
elixir [45]

After a firm has determined its position in the global market, it will typically seek to meet the needs of global markets by tailoring its marketing mix to the needs of consumers in individual markets.

<h3>What is global market?</h3>

Global market involves planning, producing, placing, and promoting a business' products or services in the worldwide market.

It is not limited to specific geographic locations but rather involves the exchange of good, services, and labor anywhere.

Examples of global markets are :

  • Fast-moving consumer goods
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  • Banking,
  • Fast food companies

Hence, a firm will typically seek to meet the needs of global markets by tailoring its marketing mix to the needs of consumers in individual markets.

Learn more about global market here : brainly.com/question/20860719

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2 years ago
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