Jeremy is an effective leader who is capable of helping his subordinates complete their tasks. However, he is considered intimid
1 answer:
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Answer:
correct option is b. $92
Explanation:
given data
earn return = 15%
assets = $50,000,000
Fixed costs = $30,000,000
golf played = 500,000 rounds
Variable costs = $17 per round
solution
we know total cost = fixed cost + variable cost
here variable cost = 500,000 × 17 per unit = 8,500,000
so total cost = 30,000,000 + 8,500,000
total cost = $38,500,000
and
return on investment is = 50,000,000 × 15%
return on investment is = $7,500,000
so desired sales is here
desired sale = $38,500,000 + $7,500,000
desired sale = $46,000,000
so target selling price =
target selling price = 92
so correct option is b. $92
Answer:
1. Debt
2. 8.75%
3. 8.85%
4. 6.195%
Explanation:
For computing the tax adjustment, the Debt capital component is taken
The normal formula to compute WACC is shown below:
= Weightage of debt × cost of debt × ( 1- tax rate) + (Weightage of preferred stock) × (cost of preferred stock) + (Weightage of common stock) × (cost of common stock)
The computation of the pre-tax cost of debt and after-tax cost of debt is shown below:
1. The after tax cost of debt would be
= Pretax cost of debt × ( 1 - tax rate)
= 12.50% × ( 1 - 0.30)
= 8.75%
The NPER represents the time period.
Given that,
Present value = $1,382.73
Assuming figure - Future value or Face value = $1,000
PMT = 1,000 × 13% = $130
NPER = 20 years
The formula is shown below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after solving this,
3. The pretax cost of debt is 8.85%
4. And, the after tax cost of debt would be
= Pretax cost of debt × ( 1 - tax rate)
= 8.85% × ( 1 - 0.30)
= 6.195%
