Answer:
1. Operating plan.
2. Operating plan.
3. Financial plan.
4. Dividend policy.
5. B and C.
Explanation:
1. Operating plan: provides detailed implementation guidance for a firm's operations, as well as a forecast of the company's expected future free cash flows.
2. Operating plan: provides the inputs necessary for a risk management evaluation using sensitivity analysis, scenario analysis, or simulations.
3. Financial plan: Is based on knowledge of the amount of funds necessary to compensate the firm's shareholders, and the mix of debt and equity capital used to finance the firm.
4. Dividend policy: sets forth specific targets for cash or share distributions to the firm's shareholders.
Capital structure: describes specific targets for the mix of debt and equity used to finance a firm.
Financial planning can be defined as the process of estimating the amount of capital required for the smooth operations of the business and determine how to achieve the firm's set goals and objectives.
Hence, the following statements are true about financial planning;
I. Once a firm's forecasted financial statements are prepared, the firm must determine how much capital it will need to support these plans.
II. Management must monitor operations after implementing a financial plan to detect deviations from the plan and adjust accordingly.
Answer:
$1
Explanation:
The marginal cost refers to the cost of producing one additional unit or serving one more customer.
In this case, we have to determine the additional cost of Jacob ordering a burrito instead of a taco. As Mason chose the tacos and they agreed to split the lunch bill evenly, if Jacob decides to eat the tacos, the cost for each of them is:
$3+$3=$6/2= $3
If Jacob decides to eat the burrito:
$3+$5= $8/2= $4
So, the marginal cost to Jacob ordering a burrito is:
$4-$3= $1
Answer:
Explanation:
The partnership agreement is silent about the payment of salaries and the division of profits and losses.
Profits should be divided based on capital invested by each
The capital investment by Gillie, Taft and Dall is 60000 : 120000 : 60000 Distribution has to be in ratio of 1:2:1
Total profits are 120,000, 1:2:1 ratio
The distribution will be Gillie $30,000, Taft $60,000 and Dall $30,000.
Answer:
WACC = Ke(E/V) + Kd(D/V)(1-T) + Kp(P/V)
WACC = 15(60/100) + 5(30/100)(1-0.3) + 10(10/100)
WACC = 9 + 1.05 + 1
WACC = 11.05%
Explanation:
Weighted average cost of capital is a function of cost of common stock and the proportion of common stock in the capital structure plus after-tax cost of debt and proportion of debt in the capital structure plus cost of preferred stock and the proportion of preferred stock in the capital structure. Ke = Cost of equity or common stock, kd = cost of debt and kp = cost of preferred stock.
