Answer:
B) Project B has below-average risk and an IRR = 8.5 percent.
Explanation:
Since the evaluation is based on IRR, use IRR rule that says you accept a project if its IRR > Cost of capital(WACC in this case)
Project A's IRR of 9% is < 10% WACC for average risk projects hence reject it.
Project B's IRR of 8.5% is > 8% WACC for below- average risk projects hence accept it.
Project C's IRR of 11% is < 12% WACC for above- average risk projects hence reject it.
Answer:
$12,900
Explanation:
Calculation for the amount of accounts receivable written off during the year
Beginning Balance $5,600
Add Bad debt expense $12,000
(2% x $600,000)
Less End-of-year balance ($4,700)
Accounts receivable written off $12,900
($5,600+$12,000+$4,700)
Therefore the amount of accounts receivable written off during the year will be $12,900
Answer:
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Explanation:
Answer:
- 34 coupons.
- $33.75
Explanation:
The coupons are the interest payments the bond makes.
1. The bond has a term of 17 years and coupons are to be paid semi-annually.
This means that for every year, 2 coupon payments will be made.
In 17 years therefore:
= 17 * 2
= 34 coupons
2. The interest on this bond is 6.75% in a year. The coupon is however, semi-annual. Payment per coupon will therefore be half of the yearly rate:
= 6.75% * 1,000 * 1/2
= $33.75
