Answer:
8.45%
Explanation:
The formula used to calculate WACC is:
WACC = {[total equity/(total debt + equity)] x cost of equity} + {[total debt/(total debt + equity)] x cost of debt x (1 - tax rate)}
first we have to calculate the cost of equity:
cost of equity = risk free rate + (beta x market risk premium) = 4% + (1.2 x 7.5%) = 4% + 9% = 13%
now, WACC:
WACC = {[880/(880+880)] x 13%} + {[880/(880+880)] x 6% x (1 - 35%)} = (0.5 x 13%) + (0.5 x 6% x 0.65) = 6.5% + 1.95% = 8.45%
WACC = weighted average cost of capital is the rate at which the company effectively finances its assets
Answer:
d. $1,080,000
Explanation:
Contribution per unit = Selling price per unit - Variable cost per unit
Contribution per unit = Selling price per unit - ( Direct Materials + Direct Labor + Variable Manufacturing Overhead + Variable Selling )
Contribution per unit = $160 - ($22 + $15+ $12 + $3)
Contribution per unit = $160 - $52
Contribution per unit = $108 per unit
Contribution margin for the next year = $108 per unit * 10,000
Contribution margin for the next year = $1,080,000
In a commercial bank's t-account, reserves and outstanding loans are recorded as assets.
In economic accounting, "reserve" usually has a credit balance and may talk over with part of shareholders' fairness, a liability for envisioned claims, or contra-asset for uncollectible debts. A reserve can seem in any part of shareholders' fairness besides for contributed or simple proportion capital.
Reserves are a part of income or gain that has been allotted for a selected reason. Reserves are usually installed to shop for fixed property, pay bonuses, pay an anticipated prison settlement, pay for upkeep & protection and pay off debt.
Reserves – additionally called retained income – are portions of a commercial enterprise's profits that have been set aside to strengthen the enterprise's economic function.
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Answer:
D
Explanation:
Focus strategy is said to be pursued when a company recognizes a relatively narrow market segment or a particular buyer group where competition is weakest and then tailored its production and product offerings towards this niche in order to serve the particular target or niche extremely well with the aim of earning a huge return on investment.
Focus strategy is pursued when a company recognizes that the differences in need of one market segment to another and then produce or deliver goods and services that serve the needs and requirements of this particular competitive segment
Answer:
Cappuccino machines should be produced in Atlanta and coffee makers in Fort Worth. The Fort Worth facility would need to operate 100 hours per week and the Atlanta facility would need to operate 140 hours per week.
Total costs associated to operating the facilities = ($2,400 x 100) + ($600 x 140) = $324,000
Explanation:
Since there is not constraint regarding the total number of labor hours that each plant can operate, then we must choose the plant that operates at the lower cost. The only restriction is total time = 7 days x 24 hours = 168 hours per week:
production costs Atlanta:
coffee maker = $600 / 160 = $3.75 per unit
cappuccino machine = $600 / 200 = $3 per unit
production costs Fort Worth:
coffee maker = $2,400 / 800 = $3 per unit
cappuccino machine = $2,400 / 200 = $6 per unit
Cappuccino machines should be produced in Atlanta and coffee makers in Fort Worth. The Fort Worth facility would need to operate 100 hours per week and the Atlanta facility would need to operate 140 hours per week.
