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Hitman42 [59]
3 years ago
8

Which one of the following represents the minimum rate of return a firm must earn on its assets if it is to maintain the current

value of its securities?
A. Pretax cost of debt
B. Weighted average cost of capital
C. Cost of equity
D. Aftertax cost of debt
Business
1 answer:
FinnZ [79.3K]3 years ago
5 0

Answer:

B. Weighted average cost of capital

Explanation:

The Weighted average cost of capital is abbreviated as the WACC. It is the weighted average of cost of common equity, cost of preferred equity and aftertax cost of debt. For a company to have a breakeven in returns, they need to earn a minimum rate of return on its assets which is equivalent to the weighted average cost of capital(WACC) making choice B correct.

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Aldo Redondo drives his own car on company business. His employer reimburses him for such travel at the rate of 36 cents per mil
STALIN [3.7K]

Answer:

10,185 miles

Explanation:

The computation of the break even miles is shown below:

As we know that

Break even units is

= (Fixed cost) ÷ (Selling price per unit - variable cost per unit)

= ($2,200) ÷ (36 cents per mile - 14.4 cents per mie)

= $2,200 ÷ 21.6 cents per mile

= $2,200 ÷ 0.216

= 10,185 miles

We simply applied the above formula so that the break even point in units could come and the same is to be considered

3 0
3 years ago
Generally, the ________ sample procedure for inferences about two population means provides better precision than the _______ sa
Art [367]
Generally, the matched sample procedure for inferences about two population means provides better precision which is independent sample approach.
Inference can be referred as steps in reasoning which involves moving to a conclusion from premises. The inference is divided into three kinds which are, abduction, deduction, and induction. The deduction is an inference which derives a logical conclusion from premises which are as assumed to be true.
6 0
3 years ago
2. Select the correct sentence for errors in the preceding report. 1. Sales salaries, promotional expenses, corporate office ins
Sever21 [200]

Answer:

1

Explanation:

Manufacturing Overhead sometimes also referred as Factory Overhead includes only those costs which are directly traceable to the production of a product i-e, Direct labor and Material Costs.

5 0
3 years ago
Two different manufacturing processes are being considered for making a new product. The first process is less capital-intensive
baherus [9]

Answer:

700 units

Explanation:

FC1 : Fixed Costs from process 1

VC1 : Variable cost per unit from process 1

FC2 : Fixed Costs from process 2

VC2 : Variable cost per unit from process 2

FC1 = $50,000

VC1 = $700 per unit

FC2 = $400,000

VC2 = $200 per unit

To calculate the break-even (quantity) point we must equate the TC1 (Total cost of process 1) to TC2 (Total cost of process 2)

TC1 = TC2

FC1 + VC1(y) = FC2 + VC2(y)      where y is the break-even units

50,000 + 700y = 400,000 + 200y

500y = 350,000

y = 350,000 / 500

y = 700 Units

7 0
3 years ago
Read 2 more answers
A company pays a constant 6.5 dividend on stock. The dividend will maintain for the next 12 years and cease forever. The require
zalisa [80]

Answer:

$46.31

Explanation:

Calculation to determine the current share price

Using this formula

Current share price=6.5*Present value of annuity factor(9.1%,12)

Present value of annuity=Annuity*[1-(1+interest rate)^-time period]/rate

Let plug in the formula

Current share price=6.5*[1-(1+0.091)^-12]/0.091

Current share price=6.5*[1-(1.091)^-12]/0.091

Current share price=6.5*7.124793

Current share price=$46.31

Therefore the current share price will be $46.31

6 0
3 years ago
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