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3 years ago

According to ronald reagan and william

Business

1 answer:

forsale [732]3 years ago

7 0

provide revenues for the government to use for legitimate purposes.

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Biden Resorts Company currently has 0.2 million common shares of stock outstanding and the stock has a beta of 2.2. It also has

frutty [35]

Answer:

Hence, the weighted average cost of capital is 15.87%.

Explanation:

We have to find current weights,

Value of equity = Shares x Share price = 0.2 x 10 = $2 million

Face Value of Bonds FV = $1 million

Semi annual coupon P = 1 x 8% / 2 = $0.04 million

Number of coupons remaining n = 5 x 2 = 10

Semi annual yield r = 13.65% / 2 = 6.825%

Value of Debt = Px [1 - (1 + r)-n] / r + FV / (1 + r)n

= 0.04 x [1 - (1 + 0.06825)-10] / 0.06825 + 1 / (1 + 0.06825)10

= $0.8 million

Total Value = 2 + 0.8 = $2.8 million

Weight of Debt = 0.8 / 2.8 = 28.57%

Weight of Equity = 2 / 2.8 = 71.45%

Amount of Debt to be raised = Weight of debt x Capital

= 0.2857 x 7.5

= $2.14 million

Since the amount of debt to be raised is less than $2.5 million, the yield will be 13.65%

Cost of Equity = Risk Free Rate + Beta x (Market Return - Risk Free Rate)

= 3% + 2.2 x (10 - 3)

= 18.4%

The weighted average cost of capital:-

WACC = Weight of Debt x Cost of Debt x (1 -Tax Rate) + Weight of Equity x Cost of Equity

= 0.2857 x 13.65% x (1 - 0.3) + 0.7145 x 18.4%

= 15.87%

8 0

3 years ago

Cool Sky reports the following costing data on its product for its first year of operations. During this first year, the company

Monica [59]

Answer:

$91

Explanation:

Given the following information,

Direct materials per unit = $54

Direct labor per unit = $20

Variable overhead per unit = $6

Fixed overhead for the year = $462,000

For Absorption costing method, it includes all costs associated with production, including fixed and variable cost. The unit product cost is calculated using direct material, direct labor and total unitary manufacturing overhead.

Unitary cost = (Fixed overhead for the year / Units produced) + Direct materials per unit + Direct labor per unit + Variable overhead per unit

Unitary cost = ($462,000 / 42,000) + $54 + $20 + $6

Unitary cost = $11 + $54 + $20 + $6

Unitary cost = $91

Therefore, the product cost per unit is $91

5 0

3 years ago

Why is it important to carefully evaluate promotional claims?

juin [17]

b. companies always carefully test any claims that they make about a product

8 0

3 years ago

Read 2 more answers

Some investment projects require that a company increase its working capital. Under the net present value method, the investment

zzz [600]

Answer:

Both an initial cash outflow and future cash inflow

Explanation:

Net value cash flow is the different cash flows that happens at different times. It takes into account the initial cash outflow or capital investment and the amount that it would be getting in the future that is the future cash inflow.

The net present value gives us a difference between cash inflows and cash outflows in their present values over a period of time.

3 0

3 years ago

Robert Wilkins has prepared the following list of statements about process cost accounting. Identify each statement as true or f

Alex17521 [72]

Answer:

Identification of True or False Statements:

1. Process cost systems are used to apply costs to similar products that are mass-produced in a continuous fashion.

A. True

2. A process cost system is used when each finished unit is indistinguishable from another.

A. True

3. Companies that produce soft drinks, movies, and computer chips would all use process cost accounting.

A. True

4. In a process cost system, costs are tracked by individual jobs.select between

False

5.Job order costing and process costing track different manufacturing cost elements.

B. False

6. Both job order costing and process costing account for direct materials, direct labor, and manufacturing overhead.

A. True

7. Costs flow through the accounts in the same basic way for both job order costing and process costing.

A. True

8. In a process cost system, only one work in process account is used.

A. True

9. In a process cost system, costs are summarized in a job cost sheet.

B. False

10. In a process cost system, the unit cost is total manufacturing costs for the period divided by the equivalent units produced during the period.

A. True

Explanation:

A process costing system is a method of collecting and assigning manufacturing costs to the units produced. It is used by companies that produce similar or identical units of product in batches employing a consistent process. The unit cost is arrived at by averaging units produced to the total cost of the process.

5 0

3 years ago