Answer:
Should Marston Manufacturing Company accept or reject the project?
Marston C Company should reject the project because its expected return is lower than Division H's cost of capital.
Since the divisions' risk is so different, and probably their projects are also very different, the company should use different costs of capital to accept of reject the projects based on each division's cost of capital.
Imagine another situation where Division L is evaluating a project that yields 10%. If they used the company's WACC, then they should reject the project, but if they used the division's cost of capital, then they should accept the project (in this case I would recommend accepting it).
Explanation:
Division H's risk = 14%
Division L's risk = 8%
WACC = 11%
Answer:
He must consider promotions to achieve higher sales to achieve the targets. To do this he must assess whether his branch is able to handle this increased sales and that promotional cost doesn't outweighs the benefits arising from the increased sales. Jorge must also polish the sales team's behaviour with the customer and must provide its customers with a pleasant environment which increases the appetite of their customers.
Answer:
Warranty liability $2,128
Explanation:
680 phones sold x 5% x $76 per repaired phone = $2,584 total warranty liability
6 phones were repaired during the year x $76 = $456
remaining warranty liability = total estimated liability - money spent repairing phones during the year = $2,584 - $456 = $2,128
total outstanding warranty liability = $2,128
Since phone warranties last less than a year, the full amount should be recorded under current liabilities.
Answer:
All factors influencing supply other than price of the commodity.
Explanation:
Supply shifters are all factors influencing supply (other than price of the commodity) such as relative price, level of technology, cost of production, weather, future price expectations, number of producers, natural disasters, government policy and aims of the producer. These factors can shift supply either to the left or right.
