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RSB [31]
4 years ago
6

Suppose ALK Co. needs $13.8 million to build a new assembly line. The target debt-equity ratio is .48. The flotation cost for ne

w equity is 9.6 percent, but the floatation cost for debt is only 5.1 percent. What is the true cost of building the new assembly line after taking flotation costs into account
Business
1 answer:
AVprozaik [17]4 years ago
4 0

Answer:

The true cost of building the new assembly line after taking flotation costs into account is $15,022,949

Explanation:

In order to calculate the true cost of building the new assembly line after taking flotation costs into account we would have to calculate first the Weighted average flotation cost for debt and equity  as follows:

Weighted average flotation cost for debt and equity  = 0.051*(0.48/1.48) + 0.096*(1/1.48)

= 0.0814054 or 8.14054%

Therefore, Cost of building the new assembly line including flotation costs  =13,800,000/(1-0.0814054)

=$15,022,949

The true cost of building the new assembly line after taking flotation costs into account is $15,022,949

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A financial services firm routinely processes a large volume of account change requests. A Lean Six Sigma team wants to understa
Harrizon [31]

Answer:

E) 1920

Explanation:

The computation of  the maximum items in process is shown below:

=  Number of maximum target cycle time ×  normal processing rate per minute × number of minutes in one hour

= 16 hours × 2 × 60 minutes

= 1,920

Simple we multiply the all items which are given in the question, so that the accurate value can come i.e maximum target cycle time, normal processing rate per minute and the number of minutes in one hour

3 0
3 years ago
Assume Ford Motors expects a new hybrid-engine project to produce incremental cash flows of $50 million each year, and expects t
photoshop1234 [79]

Answer:

A) $560 million

Explanation:

First lets calculate the NPV of the cash stream by this investment,

PV Cash stream = Cash flow/ (r-g), where r = avg cost of capital and g = growth of the cash stream.

PV = 50 / (0.09 - 0.04)  = $1000 million

We assume that external finance issuance costs are payable as a part of initial outlay of the project and so,

Total initial outlay = 420 + 20 = $440 million

NPV of the project then,

NPV = 1000 - 440 = $560 million

Hope that helps.

8 0
3 years ago
In a _____ situation, the buying center is likely to proceed through all six steps in the buying process and involve many people
Masteriza [31]
In a NEW BUY situation, the buying center is likely to proceed through all six steps in the buying process and involve many people in the buying decision.

A new buy situation occurs when the customer buys goods or service for the first time. Because of this, the buying decision is quite involved to the extent of going through the six steps of the buying process.
8 0
3 years ago
Which of the following statements is true of entrepreneurs?
Sindrei [870]

The answer is <u>"B. Entrepreneurs often work long hours and must take on the financial responsibilities of the business."</u>


An entrepreneur is a person who, as opposed to functioning as a worker, establishes and maintains a private company, expecting every one of the dangers and prizes of the endeavor. The business visionary is generally observed as a pioneer, a wellspring of new thoughts, merchandise, administrations and business/or techniques.  

Entrepreneurs assume a key role in any economy. These are the general population who have the right stuff and activity important to foresee present and future needs and put up great new thoughts for sale to the public.  


8 0
4 years ago
Read 2 more answers
Preferred stock is a hybrid—a cross between a common stock and a bond—in the sense that it pays dividends that normally increase
shtirl [24]

Answer:

The correct answer is B. False.

Explanation:

Preferred shares are called because they have priority over common shares in the payment of dividends or upon settlement, although they are subordinated to the payment of bonds or obligations. Their conditions are negotiated directly between the issuing entity -bank- and the investor or shareholder. They are a high financial risk asset that can give high bank interest or large losses.

3 0
3 years ago
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