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3 years ago

You are given the following information for Lightning Power Co. Assume the company's tax rate is 35 percent.

Business

1 answer:

olga55 [171]3 years ago

5 0

Answer:

The company's WACC is 9.14%

Explanation:

cost of preferred stock

= (dividend on preferred stock)/(current market price)

= [$100*4%]/$72

= 5.56%

total finance = debt + equity + preferred stock

= (8,000*$1,060) + (310,000*$57) + (15,000*$72)

= $8,480,000 + $17,670,000 + $1,080,000

= $27,230,000

weight of debt = debt/total finance

= $8,480,000/$27,230,000

= 0.31

weight on equity = equity/total finace

= $1.080.000/$27,230,000

= 0.04

WACC

= (weight of debt*after tax cost of debt) + (weight on equity*cost of equity)

= (0.31*0.0393) + (0.65-0.1185) + (0.04*0.0556)

= 9.14%

Therefore, The company's WACC is 9.14%

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Economic Ordering Quantity (EOQ). The Gentry Garden Center sells 100,000 bags of lawn fertilizer annually. The optimal safety st

GalinKa [24]

Answer:

1. Annual demand ( D) = 100,000 bags

Ordering cost per order (Co) = $15

Holding cost per item per annum (H) = 15% x $2 = $0.30

EOQ = √2DCo

EOQ = √2 x 100,000 x $15

0.30

EOQ = 3,162 units

2. Maximum inventory

= Safety stock + EOQ

= 1,500 + 3,162

= 4,662 units

3. Average inventory

= EOQ/2

= 3,162

= 1,581 units

4. Number of order

= Annual demand

EOQ

= 100,000

3,162

= 32 times

Explanation:

EOQ is the square root of 2 multiplied by annual demand and ordering cost per order divided by holding cost per item per annum.

Maximum inventory is the aggregate of safety stock and EOQ.

Average inventory is economic order quantity divided by 2

Number of order is the ratio of annual demand to economic order quantity.

3 0

3 years ago

The expected average rate of return for a proposed investment of $500,000 in a fixed asset, with a useful life of four years, st

Natalka [10]

Answer: 48%

Explanation:

Based on the information given, the average rate of return will be:

= (Average return) / (Average Investment) x 100

where, average return will be:

= ($240000 × 4)/4

= $240000

Then, annual averay rate of return will be:

= $240000/$500000 × 100

= 48%

6 0

3 years ago

During the great depression of the 1930s, u.s. real gdp fell by about ____ percent, in comparison to the ______ percent decline

leva [86]

27, 3.7 is the correct answer....

4 0

3 years ago

Suppose that the last four months of sales were 8, 10, 15, and 9 units, respectively. Suppose further that the last four forecas

Wewaii [24]

Answer:

Explanation:

Data provided in the question:

Sales for the last four months :

8, 10, 15, and 9 units

Last four forecast of sales:

9, 11, 8 and 12 units

Now,

The mean absolute deviation (MAD) value of these forecast will be calculated as:

MAD = [ ∑|Sales - Forecast sales| ] ÷ [ Total number of forecast ]

MAD = [ |8 - 9| + |10 - 11| + |15 - 8| + |9 - 12| ] ÷ 4

MAD = [ 1 + 1 + 7 + 3 ] ÷ 4

MAD = 12 ÷ 4

MAD = 3

4 0

3 years ago

Sarah’s marketing team was beginning the process of developing a new product to expand their current product line and/or mix. At

vlada-n [284]

Answer: New-product strategy

Explanation:

Based on the information given in the question, Sarah and her team were at the new product strategy stage of the new product development process.

This is a strategy that is used to develop a new product. The strategy helps to answer questions such as who will benefit from the products, the goals of the company and other necessary details.

5 0

3 years ago