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3 years ago

The capital structure weights used in computing a firm's weighted average cost of capital:_________.

Business

1 answer:

neonofarm [45]3 years ago

7 0

Answer:

B. Are based on the market values of the firm's debt and equity securities.

Explanation:

The capital structure weights do not normally remain constant, since retained earnings, an essential component of equity capital, would keep changing from year to year, thereby changing the overall capital structure and the respective weights. Weighted Average Cost of Capital (WACC) is the overall costs of capital and is based on your current capital structure.

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On January 1, 2020, Pina Corporation sold a building that cost $263,240 and that had accumulated depreciation of $101,140 on the

Firlakuza [10]

Answer:

Gain from sale = $23,067

Explanation:

the none interest bearing note must be recorded at present value:

present value of the note = face value / (1 + r)ⁿ

face value = $253,240
r = 11%
n = 3

PV = $253,240 / (1 + 11%)³ = $185,167

the note receivable must be recorded at $253,240, but $68,073 will be recorded as interest revenue.

the journal entry for the transaction should be:

January 1, 2020, sale of a building:

Dr Notes receivable 253,240

Dr Accumulated depreciation 101,140

Cr Building 263,240

Cr Interest revenue 68,073

Cr Gain from sale 23,067

8 0

3 years ago

During the initiation phase, what does project selection help to do

Strike441 [17]

Answer:

During the initiation phase, what does project selection help to do?

The initiation phase entails the starting point of the project, project selection comes in after the scope, objectives and how it would be delivered has been defined thoroughly. Project selection helps to make decision to know when the project would be ready for delivery, also the format of execution would be known, furthermore, any deviation from the initiation would be detected early and corrected if there is any

Explanation:

5 0

3 years ago

Nathan manages a website that sells bicycles. He's using a Google Ads Display campaign to drive purchases in that segment, and c

lana66690 [7]

Complete Question:

Nathan manages a website that sells bicycles. He's using a Google Ads Display campaign to drive purchases in that segment, and chooses In-Market audiences as his targeting option. What's the advantage In-Market audiences gives Nathan in reaching his marketing goals?

Reaches users based on their lifestyles, interests, and passions.
Shows ads to users based on a combination of declared and inferred data.
Connects him with audiences most interested in what he has to offer.
Finds users that are similar to an original remarketing list.

Answer:

The advantage In-Market audiences gives Nathan in reaching his marketing goals is Connects him with audiences most interested in what he has to offer.

Explanation:

The advantage of a target reach lies in Nathan's ability to connect him to the motorcycle sales on the website.

He will accelerate sales in that category with the Google Advertising Show plan.

With specific segments which identify users based on their demonstrated consumer behaviour and purpose, you can connect with people who are most interested in what you can give.

5 0

3 years ago

LO 4.5Why are the overhead costs first accumulated in the manufacturing overhead account instead of in the work in process inven

vivado [14]

Answer Explanation:

For the manufacturing overhead occurs during the manufacturing process but unlike wages, the actual values are unknow thus, we cannot anticipate in a guarantee amount. Hence, the cost accounting works as follows:

It will stablish a predetermined overhead rate which will be charged against WIP based on another factor which can be measure (like working hours, machine hours, among others)

Then, during the period as the actual cost occurs they will be charged into manufacturing overhead account.

At the end of the period, we will be able to determinate the actual cost and adjust COGS, WIP and FINISHED GOOD if needed to represent the actual cost of the inventory produced.

3 0

3 years ago

Empire Electric Company (EEC) uses only debt and common equity. It can borrow unlimited amounts at an interest rate of rd = 9%,

solniwko [45]

Answer:

cost of common equity = 14.46%

WACC = 11.29%

accept = Project A

Explanation:

Cost of common equity is the return that is required by Holders of Common Stock.

The available details can be used to calculate the cost of common equity using the Dividend Growth Model as follows :

Cost of common equity = (Next year`s Dividend / Current Market Price of a Stock) + Expected Growth

= ($2.20/$26)+6%

= 14.46%

WACC is the minimum return that a project must offer before it can be accepted.It shows the risk of the company.

Cost of Debt = Market Interest Rate × (1 - tax rate)

= 9.00% × (1-0.40)

= 5.40%

Capital Source Weight Cost Total

Debt 35% 5.40% 1.89%

Common Equity 65% 14.46% 9.40%

Total 100% 19.86% 11.29%

Therefore WACC is 11.29%

When evaluating projects, Compare the Project`s Internal Rate of Return (IRR) to the WACC.

<u>Project A</u>

IRR 12% > WACC 11.29%

Therefore Accept

<u>Project B/S</u>

IRR 11% < WACC 11.29%

Therefore Do Not Accept

3 0

3 years ago