Answer:
The correct answer to the following question is option E) 9.06% .
Explanation:
Here the cost of equity given is - 11.8%
Pre tax cost of debt- 6.9%
Tax rate- 35%
So the after tax cost of debt - 6.9% x 65%
= 4.485%
The debt to equity ratio - .6
So the weight of debt - .6 / ( 1 + .06 )
= .375
Weight of equity - 1 / ( 1 + .06 )
= .625
Weighted average cost of capital =
Debts cost x weight of debt + Equity cost x weight of equity
= 4.485 x .375 + 11.8 x .625
= 1.681875 + 7.735
= 9.06%
Answer:
It will make annual deposits for $ 4,056.202
Explanation:
His goal is a future value of 1,000,000 in 35 years.
we will deduct from this the future value of his other investment:
<u>IRA</u>
Principal 6,960.00
time 35.00
rate 0.08300
Amount 113,397.95
<u>Market account</u>
Principal 4,310.00
time 35.00
rate 0.05250
Amount 25,837.53
<u>Proceeds required from the fund:</u>
1,000,000 - 113,397.95 - 25,837.53 = 860,764.52
Now we calculate the PMT:
PV $860,764.52
time 34 years
(we must notice it will beging this investment next year, so at 31 years old)
rate 0.0934
C $ 4,056.202
This is True.
Being an entrepreneur means starting a business venture by placing a new product on the market and then profiting from it.<span />
Answer:
Compound interest is better than simple interest
Explanation:
Compound interest is better than simple interest especially when it comes to investing. Funds grow at a faster rate in compound interest than simple interest.
Simple interest is the interest on only the principal while compound interest is the interest on principal and on the previous accumulated interest (that is, interest on interest).
The formula for simple interest is:
P x r x t
Where P is the principal
r is the interest rate
t in the time.
For compound interest:
A=P(1+r/n)^nt.
A is the amount after compounding.
P is the principal.
r is the interest rate
n is the number of times interest compounds(adds up) per year
t is the number of years.
Answer:
Option (D) is correct.
Explanation:
Calculation of total manufacturing overhead:-
4000 units manufacturing overhead:
= Production volume × Manufacturing overhead
= 4,000 × $94
= $376,000
5000 units manufacturing overhead:
= Production volume × Manufacturing overhead
= 5,000 × $77.60
= $388,000
Variable cost per unit:


= 12
Fixed cost = Total cost - variable cost
= $388,000 - 5,000 × 12
= $388,000 - $60,000
= $328,000
So total monthly fixed manufacturing cost is $328,000.