Answer:
The correct answer is A.
Explanation:
Giving the following information:
The cost of producing 40,000 parts is $120,000, which includes fixed costs of $60,000 and variable costs of $60,000. The company can buy the part from an outside supplier for $3.00 per unit and avoid 30% of the fixed costs.
Make in-house= 120,000
Buy= 3*40,000 + (60,000*0.7)= 162,000
Total difference= 42,000
Nothing stops the government from producing things that people don't need or want.
Answer:
Alternative A Alternative B Net Income (B-A)
Revenues $149,400 $186,500 $37,100
Costs $102,900 $123,800 $20,900
Net income $46,500 $62,7000 $16,200
Project B has incremental revenue of $37,100, cost $20,900 and net income $16,200.
Explanation:
Net income is amount of earning that a company of individual maker after deducting all the expense from the revenue for a specific period of time. Net income can be calculated by subtracting all the related expenses from the revenue / income for the period.
Answer:
$86.13
Explanation:
The computation of the current share price is shown below:
Given that
Dividend just Paid (D0) is $3.10
and Required Return (R ) 13%
Now
Dividend Paid in 1st year = $3.10 (1.25) = $3.875
Dividend Paid in 2ndyear = $3.875 (1.25) = $4.844
Dividend Paid in3rd year = $4.844 (1.25) = $6.055
Dividend Paid in 4th year = $6.055 (1.07) = $6.47
Now
Stock Price in 3rd year (P3) = D4 ÷ (R - g)
= $6.47 ÷ (0.13- 0.07)
= $107.83
Now the Current Share Price(P0) is
Current Share Price (P0) = $3.875 ÷ (1.13) + $4.844 ÷ (1.13)^2 + $6.055 ÷ (1.13)^3 + $107.83 ÷ (1.13)^3
= $3.42 +$3.79 + $4.19 + $74.73
= $86.13
Answer:
WACC = Ke(E/V) + Kd(D/V)(1 - T)
WACC = 11.28(0.50) + 8.0(0.5)(1 - 0.40)
WACC = 5.64 + 2.40
WACC = 8.0%
The correct answer is B
Explanation:
WACC equals cost of equity multiplied by proportion of equity in the capital structure plus after-tax cost of debt multiplied by proportion of debt in the capital structure. The proportion of equity and debt in the capital structure are 50% respectively. Ke refers to cost of equity, Kd denotes before tax cost of debt, T represents tax rate, E/V denotes proportion of equity in the capital structure and D/V represents proportion of debt in the capital structure.