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xxMikexx [17]
3 years ago
12

Tulloch Manufacturing has a target debt–equity ratio of .64. Its cost of equity is 14.6 percent, and its pretax cost of debt is

9.6 percent. If the tax rate is 34 percent, what is the company’s WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) WACC 11.38 %
Business
1 answer:
malfutka [58]3 years ago
3 0

Answer:

The company’s WACC is 11.38%

Explanation:

After tax cost of debt = 9.6*(1 - 0.34)

                                    = 6.336%

Debt-equity ratio = Debt/Equity

debt = 0.64*Equity

Let equity be $x

debt = $0.64x

Total = $1.64x

WACC = Respective costs*Respective weights

           = (6.336*0.64x/1.64x) + (14.6/1.64x)

           = 11.38%

Therefore, The company’s WACC is 11.38%

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A company regularly purchases cleaning supplies from a vendor and orders relatively consistent amounts of the same products on e
zvonat [6]

Answer: Straight Rebuy

Explanation: There are 3 major types of buying situations

1. New Task

2. Modify Rebuy

3. Straight Rebuy

Straight rebuy is a buying situation in which the buyer routinely reorders something without any modifications.

8 0
3 years ago
Ryan's Sparkling Jewels estimated its payroll for the coming year to be $84,000. Its workers' compensation
jarptica [38.1K]

Ryan's Sparkling Jewels estimated its payroll for the coming year to be $84,000. Its workers' compensation insurance premium rate of 0.6% is paid at the beginning of each quarter required: Calculate the estimated cost of workers' compensation insurance for the year.

Answer:

$504 per year

$126 per quarter

Explanation:

workers' compensation insurance = payroll x insurance rate.

$84,000 x 0.6%

$84,000 x 0.006 = $504 per year

$504 ÷ 4 = $126 per quarter

5 0
3 years ago
1. Purposeful behavior suggests that: A. everyone will make identical choices. B. resource availability exceeds economic wants.
White raven [17]
The answer is C. Purose full behavior states that people make decisions with a desired outcome in mind, taking all the losses and benefits into consideration.
5 0
3 years ago
Dunay Corporation is considering investing $750,000 in a project. The life of the project would be 11 years. The project would r
photoshop1234 [79]

Answer:

The Net Present Value is - $20324

Explanation:    

We can use our financial calculator to work out the NPV using the cashflows from the different periods and using the discount rate given. Which is 18%.

We have 11 periods. Starting off with CF 0. ( CF = cashflow ) We will work in Thousands to make it easier to read and compute. $ ' 000

CF 0 Machine Investment (750) Working Capital Investment (25) Total=(775)

CF 1 160 inflow

CF 2 160 inflow

CF 3 160 inflow

CF 4 160 inflow

CF 5 160 inflow

CF 6 160 inflow

CF 7 160 inflow

CF 8 160 inflow

CF 9 160 inflow

CF 10 160 inflow

CF 11 160 inflow. 35 salvage value from machine. Working capital 25. Total Cashlow = 220

We now use our financial calculator and input these amounts into the calculator.

We start of by entering the data and hitting ENT and do so for every Cash flow. At the end we press 2nd function CFI on our calculator. We then enter the discount rate of 18%. and press down button to get to NPV and then press COMP.

We get an answer of -20,32400407

We now need to put the amount into thousands. Thus = -20324,004

rounded to the nearest dollar we get - $ 20324

7 0
3 years ago
The index weighting that results in portfolio weights shifting away from securities that have increased in relative value toward
Sliva [168]

Answer: B. Fundamental weighting.

Explanation:

A fundamentally weighted index refers to a type of equity index whereby the components that are chosen based on the fundamental criteria like the dividend rates, book value, revenue, dividend rates, etc.

Fundamental weighting is the index weighting which results in portfolio weights shifting away from securities that have increased in relative value toward securities that have fallen in relative value whenever the portfolio is rebalanced.

3 0
3 years ago
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