Answer:
e. The company will take on too many high-risk projects and reject too many low-risk projects.
Explanation:
By using the WACC for discounting purposes in case of the higher risk projects the net present value would be greater in such cases and also the high discount rate is applied. It is easily accepted but at the same time it also rise the organization risk
Therefore in the given case, the option e is correct and the same is to be considered
Answer:
6.88%
Explanation:
cost of equity = (next period dividend / by price) + growth rate in dividends.
cost of debt = yield to maturity x (1 - tax rate)
WACC = weight of debt x cost of debt + weight of equity x cost of equity.
cost of equity = ($0.25 / $40) + 0.07
= 0.07625
cost of debt = 0.09 x (1 - 0.4)
=0.054
WACC = ($40Billion x 0.07625) / 60billion + ($20 billion x 0.054) / $60billion
= 0.05083 + 0.018
= 0.0688 or 6.88%
It will take an approximate of 52 years to triple the initial investment.
The formula for Future value is <em>A = Pe^(rt)</em>
<u></u>
<u>Given Information</u>
Triple amount
Rate = 2.1%
Therefore, it will take an approximate of 52 years to triple the initial investment.
See similar solution here
<em>brainly.com/question/19649471</em>
Answer:
b. more higher contribution margin units are sold than lower contribution margin units.
Explanation:
Contribution margin is that percentage of sales revenue which is received after deducting the variable cost of the product. This is basically covering fixed cost.
As soon as fixed cost is covered by contributing margin the income starts arising.
Therefore, the company shall sale those which have higher contribution margin, as this will cover fixed cost more fast.
Thus, sales of goods with high contribution margin in a sales mix assures high net income.
