Answer and Explanation:
The computation is shown below:
a. Marpor's value without leverage is
But before that first we have to calculate the required rate of return which is
The Required rate of return = Risk Free rate of return + Beta × market risk premium
= 5% + 1.1 × (15% - 5%)
= 16%
Now without leverage is
= Free cash flows generates ÷ required rate of return
= $16,000,000 ÷ 16%
= $100,000,000
b. And, with the new leverage is
= (Free cash flows with debt ÷ required rate of return) + (Tax rate × increase of debt)
= ($15,000,000 ÷ 0.16) + (0.35 × $40,000,000)
= $93,750,000 + $14,000,000
= $107,750,000
Answer:
The correct answer is "financial information; economic entity; user groups; legal, economic political and social environment"
Explanation:
The four major elements of financial accounting are:
1. financial information: includes items such as management discussion, analysis, and reports.
2. economic entity: An economic entity is company actions that are separate from its owners and other entities, such as corporations and governmental organizations.
3. user groups: request business information of an economic entity. Investors and financial analysts are user groups.
4. legal, economic political and social environment: influences the financial reporting process.
Answer: Option (A) is correct.
Explanation:
It was given that consumer prefers Adidas to puma brand soccer cleats but he buys puma brand soccer cleats. This is only because of the price theory and rational consumer choice. We know that a rational consumer will choose a product with a lower price. Both puma and Adidas brand soccer cleats are substitutes, thus, if the price of puma cleats is lower than the Adidas cleats then he should prefer puma brand soccer cleats.
Answer:
C. the MC curve passes through the minimum point of the ATC curve.
Explanation:
Marginal cost is the cost of producing additional unit, it is upward sloping as generally the cost that is additional as it tends to increase with increase in output.
Whereas Average Total Cost is a U shaped curve, it basically starts from a high point and then tends to decrease as the increase in number of units with constant fixed cost tends to decrease the average, but ultimately after it reaches its lowest point it tends to increase because now to produce units, there is extra cost required.
The Marginal Cost Curve touches the Average Total Cost curve at its lowest.
Answer:
b) perceived superior value
Explanation:
The coffee company is providing perceived superior value as it provides consumers with a unique coffee drinking experience and a loyalty rewards program. I hope my answer helps you
