1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
SSSSS [86.1K]
3 years ago
9

McFann Co. has two divisions, L and H. Division L is the company's low-risk division and would have a WACC of 8% if it were oper

ated as an independent company. Division H is the company's high-risk division and would have a WACC of 14% if it were operated as an independent company. Because the two divisons are the same size, the company has a composite WACC of 11%. Division H is considered a project with an expected return of 12%. Should McFann Co. accept or reject the prject?
A. Accept

B. Reject

On what grounds do you base your accept-reject decision?

A. Division H's project should be accepted, because its return is greater than the risk-based cost of capital for the divison.

B. Division H's project should be rejected, because its return is less than the risk-based cost of capital for the division.
Business
1 answer:
Goshia [24]3 years ago
8 0

Answer:

B. Reject

B. Division H's project should be rejected, because its return is less than the risk-based cost of capital for the division.

Explanation:

As we can see that the project H Weighted average cost of capital is 14% and the expected rate of return is 12%

So based on this its expected rate of return is less than the cost of capital i.e Weighted average cost of capital

Therefore, the project should be rejected as we compared the Weighted average cost of capital and the expected rate of return

You might be interested in
Many places of business will not take a check, but will take a credit card. True or False
luda_lava [24]
<span>True, because if they take a check, they may be cheated because the check has an expiration date, and the credit card does not

</span>
7 0
3 years ago
Please subscribe to my mom channel please<br><br>​
Alexxandr [17]

Answer:

I did it already

Explanation:

pls mark brainliest

6 0
3 years ago
Good and bad studyhabbits and an example of each?
kolbaska11 [484]
Good habits:
Be organized- Have all materials needed in study area
Bad Habits:
Do not leave harder or more challenging question for the last- knock out easier assignments early when you are fresh
3 0
3 years ago
1. If the price of the share grows as the company grows, how does buying 25 points
Simora [160]

Answer: b. An investor will be able to sell these shares for a higher price and make a profit.

Explanation:

Capital gains are a way to earn a return from owning stock in a company. They involve buying stock at a certain price and then selling the stock when the price increases. The difference between the selling and the buying prices is your capital gain.

This is the benefit to the investor here. If they buy a stock that grows with the company. They will be able to sell at a higher price eventually such that they will make a capital gain.

6 0
3 years ago
Cala Manufacturing purchases a large lot on which an old building is located as part of its plans to build a new plant. The nego
otez555 [7]
The company plays $33,500 to tear down the old buildingand $47,000 to landscapethe lot. It also pays a total of $1,540,000 in construction costs-this amount consists of $1,452,200 for the new building and $87,800 for lighting andpaving a parking areanext to the building. Prepare a single journal entry to record thesecosts incurred by Cala, all of which are paid in cash.Cost of LandPurchase price for land$280,000Purchase price for old building$110,000Demolition costs for an old building $33,500Fill and level the land$47,000Total cost of land$470,500Cost of New building and land improvementsCost of new building$1,452,200Cost of land improvements<span>$87,800</span>
3 0
4 years ago
Other questions:
  • In an episode of the Glee television series, members of the glee club sold home-baked cupcakes at school to raise money. The stu
    10·1 answer
  • How does purchase a car affect the economy?
    15·1 answer
  • Calculate the gross margin in both dollars and percentage for this swim department if net sales are $1,150,000 and cost of goods
    5·1 answer
  • A current liability is a debt that is reasonably expected to be paid a. out of cash currently on hand b. within one year c. out
    10·1 answer
  • Stock and bond markets:
    5·1 answer
  • The following information is for Ayayai Corporation as of December 31, 2017.
    12·1 answer
  • Indicate whether a change in the value of each of the following determinants of demand leads to a movement along the demand curv
    13·1 answer
  • two divisions: the Beta Division and the Alpha Division. The Beta Division has sales of $235,000, variable expenses of $132,600,
    7·2 answers
  • ____ anxiety is the feeling that unless an organization makes a change, it is going to be out of business or fail to achieve som
    10·1 answer
  • Researchers are always interested in the relationships between or among variables. When two variables are
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!