Answer:
b. have the same level of risk as the firm's current operations.
Explanation:
According to the M&M's model of capital structure, two entities operating in the same type of business with similar business risks (e.g proportion of variable costs to fixed costs, operating profits) have the same total value irrespective of their capital structures. This means that in order for WACC to be relevant for discounting purposes of a new project it's important that the new project and the firm's risks are same (at least the business risks).
Secondly, having same level of risk also means that the project will have a similar operating income generated by it's assets, hence when the return of two projects is similar the cost of finance/business will also be similar therefore the new project must share same level of risk in order for WACC to be used as a discount rate.
Answer:
A. $5,560
Explanation:
The computation of the total interest revenue is shown below:
= Five-year payments received of note payable - present value of note payable
where,
Five-year payments received of note payable = Annual year payment received × number of years
= $5,009 × 5 years
= $25,045
And, the present value of the note payable is $19,485
Now put these values to the above formula
So, the value would equal to
= $25,045 - $19,485
= $5,560
Answer and Explanation:
The adjusting entry is as follows:
Supplies expense Dr $2,200
To Supplies $2,200
(being the supplies expense is recorded)
Here the supplies expense is debited as it increased the expenses and credited the supplies as it decreased the assets
The computation is
= Opening supplies + purchased - closing supplies
= $1,500 + $2,900 - $2,200
= $2,200
Answer:
PV=1,175
Explanation:
this question can be solved thinking as if we have a perpetuity, it is a future infinite payments, but in this particular case we have those payments (dividends) increasing over the time, so we can apply the next formula:
where PV is the present value of the future payments, i is the interest rate and k is the annual increasing, so applying to this data we have:
Answer: c. it failed to take advantage of opportunities presented by Moore's Law.
Explanation:
Moore's law is states that the number of transistors in a dense integrated circuit doubles roughly every two years.
The observation got its name after Gordon Moore, the co-founder of Fairchild Semiconductor and CEO of Intel, whose paper in 1965 showed a pattern of doubling every year in the number of transistors per integrated circuit, and he predicted that this rate of growth would continue for at least another decade.
In 1975, he reviewed the forecast to doubling every two years, at a compound annual growth rate of 41.4percent.
Apple were able to take over the portable music market because they made they products such as the ipods, the iPhone, the iPad, and the MacBook smaller and very effective to use. This qualities endeared the Apple products to the consumer market, making apple products to swiftly replace the Sony portable players.
