Answer:
13.7%
Explanation:
The weight to be placed on preferred while computing the company's weighted average cost of capital (WACC) is the market value of the preferred stock divided by the market value of the company as a whole.
market of preferred stock=5,000*$26=$130,000
Market value of the company=market value of common stock+market value of preferred stock+market value of bond
common stock market value=12,000*$39=$468,000
market value of bond=$400,000*87%=$348,000
Weight of preferred stock=$130,000
/($130,000
+$468,000+$348,000)=0.137420719
=13.7%
Answer:
The alternative that should be chosen assuming identical replacement is:
Alternative B.
Explanation:
a) Data and Calculations:
Alternatives:
A B
First Cost $5,000 $9,200
Uniform Annual Benefit $1,750 $1,850
Useful life, in years 4 8
Rate of return 7% 7%
Annuity factor 3.387 5.971
Present value of annuity $5,927.25 $11,046.35
Net cash flow $927.25 $1,846.35
b) Alternative B yields a higher return than Alternative A. Since the two alternatives are based on the same rate of return, Alternative B will bring in a higher annual benefit, even when discounted to the present value.
Answer:
The ammount due at the end of the loan adds for $27,456
Explanation:
If the payment is in full at maturity, the man must pay the principal of 26,000 plus the interest during the period of 4 years.
It is important to notice that the loan is done at simple interest, so the interest does not capitalize.
The government could decrease income tax so people have more disposable income to spend on goods and services and therefore increase AD. They could also increase government expenditure to increase AD.
(since AD=C+I+G+(X-M))
Answer:
Cash (Debit) $2,000
Sales (Credit) $2,000
Cost of Merchandise Sold (Debit) $1,250
Merchandise Inventory (Credit) $1,250
Explanation:
Cash (Debit): Cash increase because it is a Cash Sale, cash increases by debit.
Sales (Credit): to register the sale, Sales(income) increases by credit
.
Cost of Merchandise Sold (Debit): to record the cost of the merchandise sold, the costs increase by debit.
Merchandise Inventory (Credit): to record the inventory output of the merchandise sold, inventory decreases by credit.
