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
Setler79 [48]
3 years ago
15

Ted is trying to decide what cost of capital he should assign to a project. Which one of the following should be his primary con

sideration in this decision? Answer a. Amount of debt used to finance the projectb. Use, or lack thereof, of preferred stock to finance the projectc. Mix of funds used to finance the projectd. Risk level of the projecte. Length of the project's life
Business
1 answer:
MrMuchimi3 years ago
5 0

Answer:

c. Mix of funds used to finance the project.

Explanation:

Most of the time businesses don't have the required funds to invest in projects especially capital intensive projects. So businesses raise long term finance from various sources, for example, from capital markets through issuance of shares/stocks and from debt sources through raising long term loans and debt instruments like bonds.

Now each source of finance has a different cost to the business depending upon the likely risks associated with each source of finance and nature of business itself. Therefore, businesses strive to assign such a cost of capital that primarily recovers the cost of finance and generate surplus wealth for the business. So the decision of what cost of capital should be assigned to a project primarily depends upon the the mix of funds used.

Secondly, risk level of the project might somehow effect the required rate of return expected by shareholders and/or debt providers but may not be the primary consideration in this decision.

You might be interested in
Your company has sales of $ 93,600 this year and cost of goods sold of $ 64,700. You forecast sales to increase to $ 117, 400 ne
Gre4nikov [31]

Answer:

COGS= $81,146.88

Explanation:

Giving the following information:

Your company has sales of $93,600 this year and the cost of goods sold of $64,700. You forecast sales to increase to $ 117, 400 next year.

First, we need to calculate the percentual participation of cost of goods sold:

%COGS= 64,700/93,600= 0.6912= 69.12%

<u>Now, using the same percentage, we calculate the cost of goods sold for the estimated new sales:</u>

COGS= 117,400*0.6912= $81,146.88

3 0
3 years ago
Listening involves understanding what is heard true false ?
8090 [49]

Answer:

true

Explanation:

8 0
3 years ago
Doctors Clinic orders 1,000 bandages from Emergency Supplies Company but fails to specify the sizes. The bandages are delivered
dalvyx [7]

Answer:see how long they have to measure it

Explanation:

5 0
3 years ago
John owns a second home in Palm Springs, California. During the year he rented the home for $4,000 for 36 days and used the hous
tekilochka [14]

Answer:

Option (C) is correct.

Explanation:

Total expenses:

= mortgage interest + property tax + utilities and maintenance + Depreciation expense

= $5,000 + $600 +  $900 + $3,500

= $10,000

Proportionate rental expenses = Total expenses × \frac{36\ days}{(36 + 14) days}

Proportionate rental expenses = 10,000 × \frac{36\ days}{(36 + 14) days}

= $7,200

Rental Loss = Rental Income - Proportionate rental expenses

                   = $4,000 - $7,200

                   = -($3,200)

7 0
3 years ago
Given the following information, calculate the loan-to-value ratio of this commercial loan: estimated net operating income in th
tatyana61 [14]

Answer:

b. 0.77

Explanation:

The formula to compute the loan to value ratio is shown below:

= Loan amount ÷ Purchase price

= $1,000,000 ÷ $1,300,000

= 0.77

It shows a relationship between the loan amount and the purchase price so that the accurate ratio can come

All other information that is given is not relevant as it is related to the debt yield ratio. Hence, ignored it

7 0
3 years ago
Other questions:
  • A firm's _____ resources are also known as labor. economic human intangible financial natural
    13·1 answer
  • There are arguments for and against the alternative exchange rate regimes. a) List the advantages of the flexible exchange rate
    5·1 answer
  • In a particular labor market, the demand for labor is given by W = 20 – (1 / 100)L, and the supply of labor is given by W = 4 +
    15·1 answer
  • You own shares in a start-up internet company. If large swings in the stock market increase financial investors' concerns about
    12·1 answer
  • Some organizations rely upon a formal group authorized and responsible for reviewing, evaluating, approving, delaying, or reject
    7·1 answer
  • Which of the following statements about bribery is most accurate? Question 49 options: Bribes, kickbacks, and payoffs offered to
    10·1 answer
  • Hygfgfngfjgfjggfjffgfjgfjfgtjdftr6j
    11·2 answers
  • Select the items that describe a consumer.
    15·2 answers
  • the ceo of what company stepped down this week, after having co-founded the business and led it from 2006-2008 and from 2015-202
    11·1 answer
  • If a contract provides a set amount of income for two or more persons with the income stopping upon the first death of the insur
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!