Answer: A. Debit card
<span>Among Debit card, Credit card, Cash advance and Payday Loan, a debit card typically has the lowest fees or cost to use. </span>A debit card is a plastic payment card used<span> instead of cash when making purchases. Unlike in a credit </span>card<span>, the money comes directly from the user's bank account when performing a transaction. </span>
Credit cards, cash advance and a payday loan are the same in the sense that they extend a line of credit to their users. Users are then charged with an interest higher than the fee charged in using debit cards. <span>
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Answer:
Using the current capital structure
Ke = Rf + β(Risk premium)
Ke = 5 + 1.60(6)
Ke = 5 + 9.60
Ke = 14.60
Weighted cost of equity
= 14.60(20/100)
= 2.92%
Using the new debt-equity ratio
Ke = 5 + 1.60(6)
Ke = 5 + 9.6
Ke = 14.60%
Weighted cost of equity
Ke = 14.60(60/100)
Ke = 8.76%
Difference in cost of equity
= 2.92% - 8.76%
= -5.8%
Explanation:
There is need to calculate the cost of equity based on capital asset pricing model where Rf represents risk-free rate, Rp denotes risk-premium and β refers to beta. Then, we will calculate the weighted cost of equity by multiplying cost of equity by the proportion of equity in the capital structure. We will also calculate the new weighted cost of equity by multiplying the cost of equity the new proportion of equity in the capital structure. Finally, we will deduct the new weighted cost of equity from the old weighted cost of equity.
Answer:
<em>1</em><em>. </em><em>Economies of scale.</em>
<em>2</em><em>. </em><em>Capital requirements</em><em>.</em>
<em>3</em><em>. </em><em>Product differentiation. </em>
Answer:
Joel is behaving in a totally unprofessional & unethical manner
Explanation:
As assistant controller, Joel Kimmel's job specification & responsibility includes financial statement preparation & combination, putting of internal controls in place, detailed analysis & reporting of cost variance, acts as the go-between with external auditors amongst other such responsibilities.
As such, when Joel discovered the cost discrepancy during the reconciliation, it was actually his responsibility to call the bank's attention to the variance. This is something that clearly falls under his job specification & can be considered as neglect of duty. Joel's decision defeats the very purpose of bank reconciliation, which is to correct any such discrepancy & to the ensure the rectification of transactions. Most importantly, the decision Joel plans to take is very unethical & is against standard accounting practices
We can therefore, say that Joel's decision is thoroughly unethical & unprofessional
Answer:
a) safety stock = z-score x √lead time x standard deviation of demand
z-score for 99.9% = 3.29053
√lead time = √7 = 2.6458
standard deviation of demand = 3
safety stock = 3.29053 x 2.6458 x 3 = 26.12 ≈ 26 soaps
reorder point = lead time demand + safety stock = (7 x 16) + 26 = 138 soaps
EOQ = √[(2 x S x D) / H]
S = order cost = $10
D = annual demand = 16 x 365 = 5,840
H = $0.05
EOQ = √[(2 x $10 x 5,840) / $0.05] = 1,528.40 ≈ 1,528 soaps
b) total order costs per year = (5,840 / 1,528) x $10 = $38.22
total holding costs = (1,528 / 2) x $0.05 = $38.20
total annual ordering and holding costs = $76.42
