When a sales manager determines that her staff is not making sufficient progress toward meeting monthly sales quotas and develop
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Based on the costs of acquisition of Walmart by Amazon, the total transaction costs would come to B. $22,002.
<h3 /><h3>What are the total transaction costs?</h3>Equity financing cost:
= 5.5% x 241,350.75
= $13,274.29
Debt financing cost:
= 1.5% x 241,350.75
= $3,260.26
Other transaction costs:
= $3,000
Target debt redemption premium:
= 70,242 x 3%
= $2,107.26
The total transaction costs are:
= 13,274.29 + 3,260.26 + 3,000 + 2,107.26
= $22,002
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Answer:
Machine B EAC is $17,705.78 more than Machine A EAC.
Explanation:
First find the present values of the cost of both machines.
Machine A:
= 200,000 + (15,000 * Present value of annuity interest factor, 15%, 8 years)
= 200,000 + ( 15,000 * 4.4873)
= $267,309.50
Machine B
= 300,000 + (17,500 * Present value of annuity interest factor, 15%, 10 years)
= 300,000 + 17,500 * 5.0188
= $387,829
Equivalent Annual cost Machine A:
= [(NPV * Required return) / 1 - (1 + Required return) ^–Number of Periods
=[(267,309.50 * 15%) / 1 - 1.15⁻⁸
= $59,569.95
Equivalent Annual cost Machine B:
= (387,829 * 15%) / (1 - 1.15⁻¹⁰)
= $77,275.73
Difference:
= 77,275.73 - 59,569.95
= $17,705.78
