Answer:
The company's cost of capital will be "13%".
Explanation:
The given values are:
Risk free rate
= 5
Beta
= 1.25
Market risk premium
= 8
Now,
⇒ 
On substituting the estimated values, we get
⇒ 
⇒ 
The total value will be:
= 
= $
As we know,
⇒ 
⇒ 
⇒ 
⇒ 
Note: % = percent
Answer:
II. Increasing the interest rate;
III. Increasing the time period;
Explanation:
these two factors will increase the future value of a lump sum investment.
This can be explained as -
Suppose, a sum of $ 1,000 invested for 10 years @ 5 %, it will result in $ 1,628.89.
Now, if we increase the time period to 11 years, it will result in 1,710.34 And now if we increase the rate of interest to 6 %, it will result in $ 1,898.30
Answer:
The direct materials cost variance is $25,900 unfavorable
Explanation:
The formula to compute the direct materials cost variance is shown below:
Direct material cost variance = Standard cost - Actual cost
where,
Standard cost = Number of pounds used for direct material × direct material pound per unit
= 7,000 pounds × $11
= $77,000
And, the actual total material cost is $102,900
Now put these values to the above formula
So, the value would equal to
= $77,000 - $102,900
= $25,900 unfavorable
Answer:
$200,000
Explanation:
In the given case, The distribution which is treated as a dividend is equal to the current E&P i.e $200,000 because the distributions are paid first by current E&P and when it is consumed then the balance of accumulated E&P got reduced.
So, it also consider the current E&P as a dividend
All other information which is given is not relevant. Hence, ignored it
