A portion of a document that can be formatted differently and separately from the rest of the document is a _______

The debt has an interest rate of 8.50% (short term) and 10.50% (long term). The expected rate of return on the company's shares

viva [34]

Answer:

Re = 16.02%

Explanation:

current stock price 36 x 7,660,000 = 275,760,000

cost of equity = 17.5%

current short term debt = 141,600,000

cost of short term debt = 8.5%

current long term debt = 210,600,000

cost of long term debt = 10.5%

total financing = 627,960,000

equity = 275,760,000 / 627,960,000 = 0.4391
short term debt = 141,600,000 / 627,960,000 = 0.2255
long term debt = 210,600,000 / 627,960,000 = 0.3354

WACC = (0.4391 x 0.175) + (0.2255 x 0.085 x 0.75) + (0.3354 x 0.105 x 0.75) = 0.0768 + 0.0144 + 0.0264 = 0.1176 or 11.76%

under the new structure:

total financing = 627,960,000

equity = 325,760,000 / 627,960,000 = 0.5188
short term debt = 141,600,000 / 627,960,000 = 0.2255
long term debt = 160,600,000 / 627,960,000 = 0.2557

assuming WACC remains unchanged:

0.1176 = (0.5188 x Re) + (0.2255 x 0.085 x 0.75) + (0.2557 x 0.105 x 0.75) = (0.5188 x Re) + 0.0144 + 0.0201 = (0.5188 x Re) + 0.0345

0.5188 x Re = 0.1176 - 0.0345 = 0.0831

Re = 0.0831 / 0.5188 = 0.1602 or 16.02%

4 0

3 years ago

Dallas Company uses a job order costing system. The company's executives estimated that direct labor would be $3,360,000 (240,00

mixer [17]

Answer:

Option (C) is correct.

Explanation:

Given that,

Estimated overhead cost = $1,540,000

Estimated direct labors (in dollars) = $3,360,000

Estimated direct labor hours = 240,000

Actual overhead cost = $1,240,000

Predetermined overhead rate:

= Estimated overhead cost ÷ Estimated direct labor hours

= $1,540,000 ÷ 240,000

= $6.42 per direct labor hour

6 0

3 years ago

EB12.

mina [271]

Answer:

The question is incomplete. The complete question is given below:

Selling Price per unit Variable cost per unit

Product

Trunk Switch $60.00 $28.00

Gas door $75.00 $33.00

Glove Box $40.00 $22.00

Answer Trunk 240 units, Gas 240 units and Box 60 units

Explanation:

The break-even point is the activity level where the total revenue of a business exactly equals its cost. At the break-even point, <em>the total profit made will be zero</em>. This analysis enables a firm to determine ahead the number of units to must be produced, customers that must served in order to cover its fixed costs.

Calculation

A break-even point can be calculated as follows:

For single-product scenario:

Break-even point (in units)= Total general fixed cost for the period/ (selling price-variable cost )

Multiple-products scenario= Total general fixed cost for the period/Average contribution per unit

Total general fixed costs are period costs which remain unchanged within a given activity level and cannot be traced to be incurred for a particular product.

Trunk Gas Box

$ $ $

Selling price 60 75 40

Variable cost (28) (33) (22)

Contribution per unit 32 42 18

Cont. from a mix (sp×unit) 128 168 18

Average cont. per mix = (128+168+18)/(4+4+1)= $34.89

Break-even point (in units)= $18,840/$34.89

= 540 units

Total units to be sold to break even is 540 units. This will be distributed across the three products using the sales mix as follows:

Trunk = 4/9× 540 units= 240 units

Gas = 4/9 × 540 = 240 units

Box = 1/9 *540 = 60 units

3 0

3 years ago

A company understated its ending inventory balance by $5,000 in 2018. What impact will this error have on cost of goods sold and

madreJ [45]

Answer:

COGS overstated for 5,000

Explanation:

<em>The COGS will be overstated for the same ammount,</em> that is because of the inventory identity.

$$$Beginning Inventory + Purchase = Ending Inventory + COGS$

If ending Inventory has a problem, it will be transferred to COGS as well to equalize the formula

If ending Inventory is understated it means their alue is less than it's real value,

$$$Beginning Inventory + Purchase \neq Ending Inventory (Real Inventory - Understimation) + COGS$

so to balance the formula COGS need to be overstated.

$$$Beginning Inventory + Purchase = Ending Inventory (Real Inventory - Understimation) + COGS(Real COGS + EI error)$

3 0

3 years ago

Which of these is not a typical option for dealing with a risk?

Viefleur [7K]

Risk management is an on-going process, and is a combination of proactive management directed activities within a programme that are intended to accommodate the possibility of failures.

6 0

3 years ago

A portion of a document that can be formatted differently and separately from the rest of the document is a ________.