Answer:
They need to put into the account a total of $67,290 to ensure that they will have $ 100,000 in 9 years.
Explanation:
We have to calculate the present value of the sum needed in 9 years ($100,000), with a annual fixed interest rate of 4.5%.
This can be calculated as:
They need to put into the account a total of $67,290 to ensure that they will have $ 100,000 in 9 years.
Cost of equity capital is closest to: 16 percent
Solution:
WACC is covered on page 120 Corporate Finance, under Capital Structure.
Using the standard equation for WACC = %wt Equity x cost of equity (re) + %wt Debt x cost of debt (rd).
Since there is a 20% tax rate for the firm, the cost of borrowing is reduced by that amount. So the cost of debt is 4%, not 5%.
Plug the formula: 10% = 50% x re + 50% x 4%
The formula ( i.e. 0.1+(0.1-0.05)(1)(1-0.2)) in CFAI reading is questionable.
The calculation is 0.1+(0.1-0.05*(1-0.2))*(1)=16%
Answer:
Fixed costs= $31,312
Explanation:
Giving the following information:
January 30,000 $61,946
February 40,000 $74,500
March 37,500 $65,900
April 39,000 $68,750
May 42,300 $74,000
June 35,000 $64,500
T<u>o calculate the fixed costs under the high-low method, we need to use the following formulas:</u>
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (74,500 - 61,946) / (42,300 - 30,000)
Variable cost per unit= $1.021
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 74,500 - (1.021*42,300)
Fixed costs= $31,312
Fixed costs= LAC - (Variable cost per unit* LAU)
Fixed costs= 61,946 - (1.021*30,000)
Fixed costs= $31,316
Price elasticity of demand, is the degree to which the effective desire for something changes as its price changes. In general, people desire things less as those things become more expensive
Answer:
$4,850
Explanation:
If the total invoice price is $5,000 and the company pays within the discount period, then the net price = $5,000 x (1 - 3%) = $4,850
the journal entries should be as follows:
Day 1, merchandise is purchased with 3/10, n/30 terms:
Dr Merchandise inventory 5,000
Cr Accounts payable 5,000
Day 10, the invoice is paid:
Dr Accounts payable 5,000
Cr Cash 4,850
Cr Purchase discounts 150
