Answer:
The correct answer is 35%.
Explanation:
According to the scenario, the computation of the given data are as follows:
We can calculate the Weighted average contribution margin ratio by using following formula:
weighted-average contribution margin ratio = (Contribution margin ratio × Sales of sporting goods) + (Contribution margin ratio × Sales of sporting gears)
= ( 30 × 75% ) + ( 50 × 25%)
= 22.5% + 12.5%
= 35%
A: The four types of economic utility are form, time, place and possession. "Utility" in this context refers to the value, or usefulness, that a purchaser receives in return for exchanging his money for a company's goods or services.
Answer:
cost of equity is 11.60 %
Explanation:
Given data
cost of capital = 10.9 percent
tax rate = 35 percent
earnings = $21,800
bonds outstanding = $25,000
rate = 6 %
to find out
cost of equity
solution
we will find first value of unlevered
value of unlevered = earning ( 1 - tax rate ) / cost of capital
value of unlevered = 21800 ( 1 - 0.35 ) / 0.109 = $130000
so
value of unlevered will be for firm = 130000 × bond outstanding × tax rate
value of unlevered will be for firm = 130000 × 25000 × 35%
value of unlevered will be for firm = $138750
so value of firm will be = bond outstanding + equity
so equity will be = 138750 - 25000
equity = $113750
so now
cost of equity will be = cost of capital + ( cost of capital - rate) (bonds / equity ) ( 1 - tax rate )
cost of equity will be = 10.9%+ ( 10.9 % - 6%) (25000 / 113750 ) ( 1-0.35)
so cost of equity = 11.60 %
Answer:
$227,591.04
Explanation:
The computation of the interest expense is shown below;
The interest expense on the face value
= $2,750,000 × 10% × 6 months ÷ 12 months
= $137,500
And, the interest expense on the sale value
= $2,973,100 × 8% × 6 months ÷ 12 months
= $118,924
Now the closing balance would be
= $2,973,100 - $137,500 - $118,924
= $2,716,676
Now the interest on the same is
= $2,716,676 × 8% × 6 months ÷ 12 months
= $108,667.04
Now the interest expense is
= $108,667.04 + $118,924
= $227,591.04
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