Answer: 21.63%
Explanation:
The firm's cost of equity capital will be calculated thus:
Market value of assets = $50000
Debt = $12500
Cost of debt = 7%
Unlevered cost of equity = 18%
Then, we'll calculate equity which will be calculated as:
= Market value of assets - Debt
= $50000 - $12500
= $37500
Then, the cost of equity capital will be:
= Unlevered cost of equity + [(Debt/equity) x (Unlevered cost of equity - Cost of debt)]
= 18% + [($12500/$37500) x (18% - 7%)]
= 18% + [0.33 x 11%]
= 18% + 3.63%
= 21.63%
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Answer:
Simple rate of return on Investment = 6.34%
Explanation:
As per the data given in the question,
Initial investment = $804,600
Realisable value = $22,400
Net cash flow = $804,600 - $22,400
= $782,200
Annual income:
Net income = Cash savings - Depreciation
= $139,000 - $89,400
= $49,600
Simple rate of return on Investment = Net income ÷ Net cash flow
= $49,600 ÷ $782,200
= 0.0634
= 6.34%
Answer: pull marketing strategy
Explanation: In simple words, pull marketing strategy refers to the strategy in which the producer tries to create demand for the product by using promotional tools. Under this strategy, the firm focus to make customer seek a product unlike push strategy in which the firm focuses on pushing the product to people.
In the given case, WEE be is using TV medium to promote its product hence they are using pull marketing strategy.
Answer:
The journal entry to correct the error is a debit of $375 on the supplies expense account and a corresponding credit of $375 to the cash account.
Explanation:
A journal entry in accounting is a detailed record of all the financial transactions made during a certain period in time. The records are always used for reconciliation and transfer to more permanent account such as a ledger. A journal usually consists of; the specific dates when transaction was made, a description of the transaction and the amounts involved. A journal entry typically utilizes the double digit entry of book keeping. The double-entry system usually involves two columns of recording the amounts involved, namely; debit and credit.
The purchase of supplies using cash affects two major accounts, namely; cash account and the supplies expense account. In our case, a purchase of $375 on supplies increases the supplies expense account while cash account is decreased. To record this, we debit the supplies expense by $375 and credit the cash account by $375. This can be represented in a table as follows;
Account Debit Credit
Supplies expense $375
Cash $375
