1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Olenka [21]
3 years ago
12

Suppose that two firms, A and B, are considering the same project. The project is in the same risk class as firm A's overall ope

rations. The project has an IRR of 13.0 percent. Firm A has a beta of 1.2, while firm B's beta is 0.9. The risk-free rate is 4.5 percent and the market risk premium is 7.0 percent. Which firm(s) should accept the project?A) firm A onlyB) firm B onlyC) both firms A and BD) neither firm A nor BE) The answer cannot be determined without more information.
Business
1 answer:
mario62 [17]3 years ago
5 0

Answer:

Firm A should accept the project beacause it has high required rate of return which means low risk involved.

Explanation:

Rate of return = risk free return + Beta ( market risk premium)

Firm A

rate of return = 0.045 + 1.2 (0.07)

= 0.045 + 0.084

= 12.9%

Firm B ;

 rate of return = 0.045 + 0.9(0.07)

= 0.045 + 0.063

= 10.8%

You might be interested in
A tax structured so that people with the same income pay the same percentage of their income in taxes is called a (an)__________
djyliett [7]

Answer:

c. progressive tax

Explanation:

Progressive tax can be regarded as one of the tax structure whereby the tax payer that receive higher incomes in the state pay a higher share of taxes from the income they made, which is different from those that receive Lower income. It is a tax system whereby when there is increase in tax rate then the taxable amount increases too. It should be noted that the tax structured where people with the same income pay the same percentage of their income in taxes is reffered to as progressive tax. wealth/property tax is one of the example of progressive tax.

4 0
3 years ago
Read 2 more answers
If there are 10 job losers, 12 job leavers, 13 reentrants, and 12 new entrants, then there are __________ unemployed persons.
nika2105 [10]
<span>Each of these categories adds to the overall unemployment total. In this case, we would add all four values to find the total number of unemployed persons. (10+12+13+12) gives a total of 47 unemployed persons in the pool. Re-entrants and new entrants might sound like they are not unemployed, but these terms, per BLS definitions, are not yet employed so they do not leave the "unemployed" ranks.</span>
8 0
3 years ago
Exercise 5-10 Lower of cost or market LO P2 Martinez Company's ending inventory includes the following items. Product Units Cost
zysi [14]

Answer:

Martinez Company

Ending inventory is:

= $8,806.

Explanation:

a) Data and Calculations:

Product       Units   Cost per Unit   Market per Unit

Helmets       27             $ 55                   $ 59

Bats             20                 83                      77

Shoes           41               100                      96

Uniforms     45                 41                       41

Lower of cost or market value Valuation:

Product       Units   Cost per Unit   Market per Unit     LCM

Helmets       27             $ 55                   $ 59               $1,485

Bats             20                 83                      77                1,540

Shoes           41               100                      96               3,936

Uniforms     45                 41                       41                1,845

Total cost of ending inventory                                    $8,806

4 0
2 years ago
Identify which group of accounts may require adjustments at the end of the accounting period.
FrozenT [24]

Answer:unearned revenue, Supplies, prepaid rent

Explanation:

7 0
2 years ago
A company purchased land in exchange for a $25,000, 10-year note payable. The increase in the Notes Payable account would be rec
77julia77 [94]

The increase in the Notes Payable account would be recorded with a credit.

<h3>Notes payable account:</h3>

Assuming the company purchased land in exchange for a $25,000, 10-year note payable the increase in the Notes Payable account would be recorded with a credit.

The appropriate journal entry to record this transaction will be:

Journal entry

Debit Land $25,000

Credit Notes Payable $25,000

(To record note payable)

Inconclusion the increase in the Notes Payable account would be recorded with a credit.

Learn more about notes payable here:brainly.com/question/14816928

5 0
2 years ago
Other questions:
  • Crab Cakes Ltd. has 5million shares of stock outstanding at $15 per share and an issue of $10million in 10 percent, annual coupo
    13·1 answer
  • There is a 3 percent defect rate at a specific point in a production process. If an inspector is placed at this point, all the d
    12·1 answer
  • Outline the roles of double-stranded RNA (dsRNA) in eukaryotic gene regulation. Select all that apply. (A) dsRNA can inhibit gen
    7·1 answer
  • The united states has a regressive tax system. <br> a. True <br> b. False
    15·2 answers
  • what is the money an investor receives above and beyond the money initially invested called?a) saving.b)liquidity.c)return.d)inv
    5·2 answers
  • If labor productivity growth slows down in a country, this means that the growth rate in ________ has declined.
    11·1 answer
  • Capacity requirements planning helps managers reconcile __________ with __________.
    13·1 answer
  • Suppose that today’s date is April 15. A bond with a 10% coupon paid semiannually every January 15 and July 15 is listed in The
    13·1 answer
  • Two different manufacturing processes are being considered for making a new product. The first process is less​ capital-intensiv
    8·1 answer
  • What is stock? Explain in your own words.
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!