Answer:
a. 4.94%
b. 11.48%
Explanation:
Here in this question, we are interested in calculating the pretax cost of debt and cost of equity.
We proceed as follows;
a. From the question;
The debt equity ratio = 1.15
since Equity = 1 ; Then
Total debt + Total equity = 1 + 1.15 = 2.15
Mathematically ;
WACC = Cost of equity x Weight of equity + Pretax Cost of debt x Weight of debt x (1-Tax rate)
Where WACC = 8.6%
Cost of equity = 14%
Weight of equity = 1/(total debt + total equity) = 1/(1+1.15) = 1/2.15
Pretax cost of debt = ?
Weight of debt = debt equity ratio/total cost of debt = 1.15/2.15
Tax rate = 21% = 0.21
Substituting these values, we have;
8.6% = 14% x 1/2.15 + Pretax cost of debt x 1.15/2.15 x (1-21%)
8.6% = 14% x 1/2.15 + Pretax cost of debt x 1.15/2.15 x (1-21%)
Pretax cost debt = (8.6%-6.511628%)/(1.15/2.15 x (1-21%))
Pretax cost of debt = 4.94%
b. WACC = Cost of equity x Weight of equity + After tax Cost of debt x Weight of debt
8.6% = Cost of equity x 1/2.15 + 6.1% x 1.15/2.15
Cost of equity = (8.6%-3.26279%)/(1/2.15)
Cost of equity = 11.48%
Answer: (A) Market maturity
Explanation:
The market maturity is one of the stage in the product life cycle where is basically refers to the sales growth where the product sales growth get increased and then suddenly get slows down.
The market maturity stage is basically known as the longest stage in the product life cycle. In this life cycle stage the organization reaches to the highest level during the demand cycle.
Therefore, Option (A) is correct.
Answer: To understand how businesses need money and how they can sustain themselves for a period of time to fund bills and still operate
Explanation:
Understanding the relationship between cash conversation cycle and contemporary business executive aims at knowing the business needs funds to operate and building strategic alliances, make money and propose ideas that will sustain and elevate it's strength for some time. Money is vital in running business operations, as organizations will foot bills and do some expenditure and sought out ways to earn more business.
The term which describes the shipping who directly supplies from the supplier to the end consumer rather than from the seller, saving both time and reshipping costs is "Drop Shipping."
<h3>What is drop shipping?</h3>
When a vendor creates a website & sells items that they do not maintain in stock, this practice is known as drop-shipping.
Some key features of drop shipping are-
- A third party, such as a manufacturer, another store, or a wholesaler, receives an order from the seller and ships the products straight to the customer.
- A rapidly spreading trend involves online middlemen who charge you more money by keeping the difference between both the wholesale and prices.
- Although drop-shipping is not prohibited, there is a lot of potential for issues and abuse on the part of both customers and sellers.
- Following an online purchase, the drop-shipping company sends the ordered item directly to the consumer.
- It provides both big and small businesses with a way to source goods, earn some extra cash, and free up some storage space.
To know more about drop shipping, here
brainly.com/question/13959949
#SPJ4
The answers are as follows:
1. TRUE.
Shift schedule is a practice used in manufacturing industries to increase the numbers of hours that is used in production process. The shift divides the hours in the day into specific period and assign teams that will work during each period. The shift practice is usually employed in production run in order to ensure efficient use of all resources during the production process. Production run are typically schedule into one or two shifts; which may be during the day alone or during the day and night.
2. FALSE
Hiring the needed complement will eliminate OVERTIME, not the second shift. Hiring the needed complement usually remove the need for all overtime. Hiring the needed complement will make having a second production run team possible and this second team can handle the production process that ought to be done through overtime.
3. FALSE.
It is the duty of the management to strive to DECREASE STAFF TURNOVER.
Staff turnover refers to the rate at which employees are leaving a company and new employees are been absorbed. High staff turnover will make the company to spend more money on resources and training of new staffs.
4. TRUE.
During periods of high demand, production usually increases and more workers are hired. Instead of hiring more workers, a company that has two production shifts may decide to add more workers to the first shift in order to increase the amount of work that could be done. This will result in the decrease in the number of the workers in the second shift.
5. FALSE
Increasing training hours decreases needed complement. Increasing the training hours will equip the workers with the needed knowledge which will make them more effective and productive. This will decreases the complement needed for the production process.
6. RECRUITING COST [B].
In a situation where a company has to hire more workers to the one it already has on ground as a result of increased production, then the company will have to spend extra money in the process of recruiting the needed workers.
7. DECREASE [B]
If the productive index is already at 100%, adding overtime will decreases the productivity index. This is because, overtime has a way of reducing the efficiency and the productivity of the workers, thus decreasing the amount of work done by them.
8. FALSE.
Workers training is entered in hours. The amount of training received by workers are measured in hours. The higher the training hours, the higher the amount of training which a worker has undergone and the higher will be the value of that worker to the company.
9. C
Each company is expected to have a base amount of $1,000 for each new worker that is hired. The company may decide to eliminate all other recruiting costs but this base amount can not be eliminated.
10. SEPARATION COST [C].
Separation cost are incurred when production level decreases and/ or automation level increases.
Separation cost refers to the cost that is needed to lay off an employee from an organisation. When the production level decreases or the company decide to automate their production processes, then some workers will have to be sacked and these workers have to be paid some money before they leave the company. This result in increase in the amount of money that the company will spend on separation cost.
