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
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

You might be interested in
A retail store has two options for discounting items to go on clearance.
Zarrin [17]

Answer:

Difference = 1.75 , Function = mod [ 0.15x - 5 ]

Explanation:

Discount case 1 = $5 {Each week} , Discount case 2 = 15% {Each week}

After 1st week , for item cost = 45

  • Discount in case 1 = $5 , & price = 45 - 5 = 40  
  • Discount in case 2 = 15% of 45 = 6.75 , & price = 38.25

Difference in price = 40 - 38.25 = 1.75  .It is same is difference in discount = 6.75 - 5 , ie = 1.75

Functional rule in price difference , for item with unknown price 'x' =          mod [ (x - 5) - (x - 0.15x) ] = mod [ x - 5 - x + 0.15x ] =  mod [ 0.15x - 5 ] , which is same as difference between discount '0.15x & 5'

8 0
3 years ago
What does it mean for a decision maker to maximize value? Select one: a. to make the decision to be as clear and logical as poss
Irina-Kira [14]

Answer: Option D

       

Explanation: In simple words, value maximization in decision making refers to the concept in which the decision makers tries to make a decision through which both the parties involved gets maximum benefit.

Thus, he takes into consideration the concerns of both the parties without any bias and tries to make the best outcome out of it.

Hence from the above we can conclude that the correct option D.

7 0
3 years ago
A company manufacturing shirts for a department store decide to create a new style of cotton shirt company would most likely pro
Neko [114]
The answer would be: "be less costly to create"
4 0
3 years ago
Read 2 more answers
After 10 years, some shares of stock originally purchased for $500 total were sold for $900 total. what was the yield on the inv
vampirchik [111]

Answer:

The statement is true

Explanation:

3 0
2 years ago
A municipal dealer places an order for $100,000 of new issue G.O. bonds, M '45 with the syndicate manager. The bonds will be pla
professor190 [17]

Answer:

The options for the question is:

A. pre-sale net

B. syndicate group net

C. designated net

D. member takedown

Explanation:

The answer is D. member takedown

The priority accorded to the order by the manager will be treated as member takedown orders, and if there is sufficient interest in the issue, the order would not be filled because of the other orders with higher priority being filled first.

When an order is placed with the syndicate by a member for an "accumulation account" that is being managed by that member, it is strange in that the bonds are not being sold to the general public.

The syndicate member must disclose to the manager when the order is placed; the manager will then disclose any of these orders that have been filled to the other syndicate members when the account is closed; and the manager will fill these orders last- meaning they get priority after pre-sales, group, and designated orders.

8 0
4 years ago
Other questions:
  • We can measure the complexity of an algorithm that solves a computational problem by determining the number of ________ for an i
    11·2 answers
  • Wright ​Services, Inc., has $ 8 comma 800 cash on hand on August 1. The company requires a minimum cash balance of $ 7 comma 400
    13·1 answer
  • I need help please thank you
    14·1 answer
  • 4x+2/2 -(-2x) <br>Like ansa it now​
    6·1 answer
  • Here is some pricing information for a pair of jeans from different countries. Country Price of a pair of jeans Actual Exchange
    9·1 answer
  • Every motor vehicle registered in a foreign jurisdiction and every motorcycle registered in this state must be equipped with a m
    9·1 answer
  • Which of the following is not a characteristic of a general partnership?
    15·2 answers
  • Suppose that Dr. Reilly owns a medical clinic and he enters into a contract to buy 500 tablets of Gensol from Pharzime. The Gens
    7·1 answer
  • The union and management agreement that allows non-union people to be hired but requires that they join the union after a probat
    9·1 answer
  • The use of government taxes and spending to alter macroeconomic outcomes is known as?
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!