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3 years ago

Six differences between weighted average cost of capital and marginal cost of capital

1 answer:

4 0

WACC is the weighted average cost of capital already borrowed/invested.

Marginal cost of capital is the cost that will be incurred if one more $ of capital is raised either by equity or by debt.

So if more capital is borrowed and has a resulting higher marginal cost, the WACC increases as well.

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Judith puts $5000 into an investment account with interest compounded explain continuously. which approximate annual rate is nee

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The interest per year for $5,000 to become $9,110 after 30 years is 2.02% compounded continuously.

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3 years ago

A chemical reactor gives a fractional conversion of only 10% of the expensive limiting reactant in the feed stream. Assuming not

slavikrds [6]

Answer:

Explanation:

A) install a SEPARATION unit on the output from the reactor and feed the unreacted reagents back to the reactor feed in a RECYCLE stream.

B) Even if one had a perfect separation unit, the 65% or reactant which went to undesirable side reaction is wasted. Recycle is not effective to help poor selectivity of the reactor.

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3 years ago

Using the allowance method, is bad debt expense recognized in

mezya [45]

Using the allowance method, is bad debt expense recognized in the period in which sales related to the uncollectible account are made.

One of the most typical types of bad debt is credit card debt. Lenders issue credit cards, which let you make purchases on credit. These credit cards frequently have exorbitant interest rates that can soon become out of control.

Bad debt costs are typically listed on the income statement as a sales and general administrative expenditure. Accounts receivable on the balance sheet are reduced when bad debts are recognized, but firms still have the right to collect money if the situation changes.

Learn more about bad debts here

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1 year ago

A firm is producing 24 units of output. At the 24th unit of output, marginal revenue is $5, and marginal cost is $4; at the 25th

agasfer [191]

Answer:

False.

Explanation:

(1) Units produced = 24 units of output

At the 24th unit of output,

Marginal revenue = $5

Marginal cost = $4

MR ≠ MC

At the 25th unit of output,

Marginal revenue = $4.50

Marginal cost = $4.50

MR = MC

At the 26th unit of output,

Marginal revenue = $4

Marginal cost = $5

MR ≠ MC

A firm maximizes its profit at a point where the marginal revenue is equal to the marginal cost i.e. MR = MC.

It is clear from the above scenario that this firm doesn't stop at 24 units of output because at this point of production profit maximizing condition is not fulfilled which means MR ≠ MC.

This firm should stopped at 25 units of output where marginal revenue is equal to the marginal cost from the 25th unit of output.

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3 years ago

Strategic PlanningImagine that IBM has decided to diversify into the telecommunications business to provide online cloud-computi

rosijanka [135]

Answer:

IBM could either diversify by the strategy of market penetration, which consists in increasing the market share in a particular sector (in this case, cloud computing) through more marketing efforts.

Or it could integrate horizontally, acquiring a possible competitor that is more advanced in the cloud-computing business. Or even a start-up with good prospects, because with the amount of capital that IBM has, it could more easily expand the start-up operation as a new internal business division.

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3 years ago