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Dahasolnce [82]
4 years ago
15

The shareholders need to earn 20%. The firm can borrow at 5%. The risk free rate is 2%. The tax rate is 40%. Find the weighted a

verage cost of capital.
Business
1 answer:
lbvjy [14]4 years ago
3 0

Answer:

11.5%

Explanation:

The computation of the weighted average cost of capital is shown below:

= Weightage of debt × cost of debt × ( 1- tax rate) + (Weightage of  common stock) × (cost of common stock)

= (0.50 × 5%) × ( 1 - 40%) +  (0.50 × 20%)

= 1.5% + 10%

= 11.5%

Basically we multiplied the weightage of capital structure with its cost so that the weighted average cost of capital could come

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Han Products manufactures 22,000 units of part S-6 each year for use on its production line. At this level of activity, the cost
balu736 [363]

Answer:

Profit decrease = $6,000

Explanation:

As per the data given in the question,

a)

Calculation for buying and making product :

Particulars                Per unit Differential cost           22,000 units

                                    Make          Buy                             Make         Buy

Cost of buying                            $44.50                                         $979,000

Cost of making :

Direct material           $5.60                                          $123,000

Direct labor              $6.00                                           $132,000

Variable manufacturing

overhead                  $3.6                                              $79,200

Fixed manufacturing

overhead                  $4                                               $88,000

                          ($12 × 1 ÷ 4)

Opportunity cost                                                          $551,600

Total cost                $19.2    $44.50                             $973,800  $979,000

b) As we can see that the Profit is decrease by $6,000 in case of outside supplier offer accepted  by taking the difference between the making and buying cost i.e

=  $979,000-$973,800

= $6,000

5 0
3 years ago
When evaluating a balance sheet, the two primary questions are ________?
Brilliant_brown [7]

In terms of evaluating balance sheet, the two primary questions that are being formulated are the following;

-          The assets are financially secure or stable

-          The firm has assets that are sufficient and are short term in means of having debts that are only short and temporary.

4 0
4 years ago
How can we control the quality in the tourism industry?
laila [671]

Answer:

Avoid mainstream and/or iconic destinations. ...

Make “second city” tourism a habit. ...

Highlight lesser known places. ...

Travel as slowly as possible. ...

Travel in smaller groups. ...

Make sure people in your photos have given consent.

5 0
3 years ago
What information about the competition would an entrepreneur want to open a house-cleaning business that was based upon a price-
stellarik [79]

Answer:

The information regarding the competition that an entrepreneur would like to have to establish a business based on a price competition with other companies would be, precisely, the price at which they offer their products or services, as well as the price at which they get the inputs they use.

Thus, through this information, the entrepreneur could establish a business plan taking into account the profit margins of his competition, evaluating lowering the margins of his venture in order to capture a large market share, removing it from the competition.

4 0
3 years ago
Cat's Coaster Company uses cork in all of the protective drink coasters that it manufactures. If Cat's enters into an agreement
Tema [17]

Answer:

The correct answer is a requirements contract.

Explanation:

Contract requirements are those essential for a contract to simply be born into legal life, regardless of whether or not it does so with validity or effectiveness. Therefore, they refer to a mere question of fact that could respond to the question: is there a contract? Such requirements are: the expression of will, the existence of an object and a cause. Once these three requirements are met, the previous question can be answered affirmatively. Otherwise there is no contract, the event has not occurred. As the Civil Code does not contain norms related to this question of existence, the courts generally sanction the omission of any of the indicated requirements declaring the contract null.

7 0
4 years ago
Read 2 more answers
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