Answer:
25.3%
Explanation:
The expected return can be determined using the capital asset pricing model
The expected return = risk free return + (risk premium x beta)
11.5% + (1.15 x 12%) = 25.3%
The purchase would be recorded a Debit Buildings; credit Notes Payable
<h3><u>
Explanation:</u></h3>
Any entry that helps in increasing asset value or accounts that are a associated with the expenses or helps in decreasing an equity account or liability refers to debit. An accounting entry that helps in increasing the equity account or liability and decreasing asset or expense account refers to credit.
In the given example, Bostel decides to expand the warehouse size and decides to purchase new building. Thus the value of asset is increased as the building is an asset to the company. The building is purchased by borrowing loans from a bank. Thus this amount increases the expense account or in other words increase the liability of the company. Hence the entry should be Debit Buildings; credit Notes Payable.
