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noname [10]
2 years ago
9

LPM’s weighted average cost of capital (WACC) is 13 percent if the firm does not have to issue new common equity; if new common

equity is needed, its WACC is 16 percent. If LPM expects to generate $80,000 in retained earnings this year, which project(s) should be purchased? Assume that the projects are independent and indivisible.

Business
1 answer:
erica [24]2 years ago
6 0

Answer:

Projects D and E should be purchased.

Explanation:

since the firm's capital structure is 60% debt and 40% equity, it can pursue up to 2 projects. Only projects D, E and F have an internal rate of return higher than the company's WACC, so project G is discarded immediately.

Since projects D and E have a higher IRR, they should be selected.

  • project D: $70,000, IRR = 18%, debt = $42,000, equity = $28,000
  • project E: $85,000, IRR = 15%, debt = $51,000, equity = $34,000
  • total equity invested = $62,000

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Jamison Paints makes and sells paint to home improvement stores. Jamison's only plant can produce up to 12 million cans of paint
Olin [163]

Answer:

Jamison's current total cost of making and selling 10 million cans of paint is $75,000,000 and the current cost per can of paint is $7.5

Explanation:

For computing the current total cost, we need to apply the formula which is shown below:

Total cost = Fixed cost + variable cost

where,

Fixed cost = $15,000,000

And, the variable cost = Annual production × variable cost per plant

                                     = 10,000,000 × $6

                                     = $60,000,000

Now put these values to the above formula  

So, the value would equal to

= $15,000,000 + $60,000,000

= $75,000,000

Now the current cost per can of paint would be

= (Total cost) ÷ (Annual production)

= ($75,000,000) ÷ (10,000,000)

= $7.5 per can of paint

3 0
2 years ago
Greg’s Golf Carts produces two models: Model 24 has sales of 500 units with a contribution margin of $40 each; Model 26 has sale
Dmitry [639]

Answer:

$5,000 increase

Explanation:

Data provided as per the question is below:-

Contribution margin = $50

Increase units = 100

The computation of profit is shown below:-

Model 24 Sales Increase By 100 units

Profit will increase = Contribution margin × Increase units

= $50 × 100 units

= $5,000 increase

Therefore for computing the profit increase we simply multiply the contribution margin with increase units.

5 0
3 years ago
What do you think about the value of trend watching for supporting marketing decision-making? Would it be relevant in your busin
Katena32 [7]

Answer: TREND WATCHING HELPS MARKETERS TO PREPARE AND PREVENT THE RECURRENCE OF NEGATIVE IMPACTS ON THE BUSINESS.

TREND WATCHING IS RELEVANT IN BUSINESS.

TO PREVENT AND PREPARE FOR POSSIBLE MARKET RISKS.

Explanation:Trend watch is a process through which an analysis is carried out to understand the existing situations in a business Environment and make adequate preparation or take steps aimed at controlling any possible risk .

Trend watch is very relevant as it prevents a business entity from losses and it helps Businesses to prepare for and control possible risks,most Marketing Organisations usually do trend watching in order to improve overall performance and profits.

6 0
2 years ago
While doing an online search for a music venue, Darcy ran across a performance of Lady Gaga that featured her hair neatly wrappe
horrorfan [7]

Answer:

The correct answer is (c)

Explanation:

Product placement is a type of promoting wherein obvious goods are underlined in a video creation that attracts a huge group of viewers. It is also called embedded marketing and is found in films, TV programs, individual recordings, radio and live exhibitions. In return for item publicity organisations may pay the production house in money, products, or administrations.

3 0
3 years ago
Critical Thinking Questions Mauricio, a project manager at a reputed firm, has been assigned to handle a new project that the fi
patriot [66]

Answer:

These are the options for the question:

a. Gantter

b. Apptivo

c. Microsoft Project

d. Smartsheet

And this is the correct answer:

a. Gantter

Explanation:

Gantter is online, cloud-based, and very complete, it would be the best option for Mauricio. Smartsheet is also cloud-based but is a bit more simple, and it is not as well-reviewed.

Apptivo and Microsoft Project are not cloud-based, instead, they have to be downloaded, thus, would not meet the first requirement that Maurio is looking for.

7 0
3 years ago
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