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A company's weighted average cost of capital:_______.

Lemur [1.5K]

Answer:

The correct answer is D. Is the return investors require on the total assets of the firm.

Explanation:

The Weighted Average Capital Cost (WACC) is a financial measure, which has the purpose of encompassing in a single figure expressed in percentage terms, the cost of the different sources of financing that a company will use to fund a specific project.

To calculate the WACC, it is necessary to know the amounts, interest rates and tax effects of each of the selected sources of financing, so it is worth taking the time to analyze different combinations of these sources and take the one that provides the lower figure .

Comparatively, without going into the detail of the project evaluation, "the WACC must be less than the profitability of the project to be funded" or expressed in another order, "the project performance must be greater than the WACC."

4 0

3 years ago

In 5-10 sentences, answer the Question; What is a Market Economy?

Ulleksa [173]

Answer:

A market economy is an economic system in which the decisions regarding investment, production and distribution are guided by the price signals created by the forces of supply and demand. The major characteristic of a market economy is the existence of factor markets that play a dominant role in the allocation of capital and the factors of production.Market economies range from minimally regulated free-market and laissez-faire systems where state activity is restricted to providing public goods and services and safeguarding private ownership, to interventionist forms where the government plays an active role in correcting market failures and promoting social welfare. State-directed or dirigist economies are those where the state plays a directive role in guiding the overall development of the market through industrial policies or indicative planning—which guides yet does not substitute the market for economic planning—a form sometimes referred to as a mixed economy.

8 0

3 years ago

One of the elements of the Fraud Triangle focuses on how easy or hard it is for the internal control system to prevent any fraud

olga55 [171]

Answer: Opportunity

Explanation:

1. Opportunity - Given the fact that employees are granted access to very important documents, this might provide them the opportunity to commit theft. Employees who occupy top positions have access to classified information of the company which when manipulated can result to disastrous consequences. It now be holds on the employers of labour or the internal control system, to limit access to such information so as to make it hard for such fraud to be committed.

The procedures used by auditors to provide evidence are in two phases namely; the planning phase and execution phase.

1. The procedure for the planning phase is - Designing Appropriate Procedures : The evidence in this case could be a red flag noticed in the account records. The person who tried to commit the fraud could change figures in places that may not be noticeable.

2. The procedure for the execution phase involves - Implementing Appropriate Procedures : The evidence could be seen as an error. This error most likely results in wasteful spending.

8 0

3 years ago

The company's wacc is 10. 5%. what is the irr of the better project? (hint: the better project may or may not be the one with th

Simora [160]

The better Project is Project S having a NPV of $17.968 and IRR of 12.10 %

IRR:

An approach to capital budgeting that is used to assess the profitability of a project is the discounted payback time. Internal rate of return is one of these capital planning strategies (IRR).
This rate of return corresponds to the point at which a project's net present value equals zero. Since it does not account for any outside forces, such as inflation, they call it internal.

The calculator's capabilities will be utilized to determine the IRR,

Project S

CF0 = (1,000)
CF1 = 882.62 & F01 = 1
CF2 = 250 & F02 = 1
CF3 = 15 & F03 = 1
CF4 = 5 & F04 = 1
I = 10.5%
[NPV] [CPT]
The NPV is $17.968
[IRR] [CPT]
The IRR will come as 12.10%
Project L
CF0 = (1,000)
CF1 = 0 & F01 = 1
CF2 = 260 & F02 = 1
CF3 = 420 & F03 = 1
CF4 = 732.87 & F04 = 1
I = 10.5%
[NPV] [CPT]
The NPV is $15.78
[IRR] [CPT]
The IRR will come as 11.03%
The better Project is Project S having a NPV of $17.968 and IRR of 12.10%

Learn more about IRR here brainly.com/question/7920964

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7 0

2 years ago

Pierce Corporation exchanged old equipment for new equipment. The original cost of the old equipment was $120,000, and its accum

ololo11 [35]

Answer:

new equipment 50,000 debit

accumulated depreciation 40,000 debit

loss at disposal: 30,000 debit

old equipment 120,000 credit

--to record trade of equipment--

Explanation:

Let's break the transactions into small parts:

We need to remove the old equipment from accounting along with their accumulated depreciation so:

accumulated depreciation 40,000 debit

old equipment 120,000 credit

Then, we debit the new equipment at fair value:

new equipment 50,000 debit

Last, assuming the trade has commercial substance: we recognize the gain or loss on sale:

book value of traded equipment: 80,000

fair value of new equipment: 50,000

loss at disposal: 30,000

<u>Thus, the journal entry will be as follows:</u>

new equipment 50,000 debit

accumulated depreciation 40,000 debit

loss at disposal: 30,000 debit

old equipment 120,000 credit

4 0

3 years ago