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2 years ago

Adamson Corporation is considering four average-risk projects with the following costs and rates of return:

Business

1 answer:

Jlenok [28]2 years ago

7 0

Answer:

a. Cost of debt = Interest * (1 - Tax rate)

= 10%*(1 - 0.30)

= 7%

Cost of preferred stock = Dividend/ Issue price

= 5/48

= 10.42%

Cost of common stock (Cost of retained earnings) = (D1/P0) + g

= (4/33) + 0.07

= 0.12 + 0.07

= 0.19

= 19%

b. Fund Cost Weight Cost * Weight

Debt 7% 0.15 1.05%

Preferred stock 10.42% 0.10 1.042%

Retained earnings 19% 0.75 14.25%

WACC 16.342%

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Zhang Company reported Cost of goods sold of $835,000, beginning Inventory of $37,200 and ending Inventory of $46,300. The avera

Lilit [14]

Answer:

Average inventory= $41,750

Explanation:

Giving the following information:

Beginning Inventory= $37,200

Ending Inventory= $46,300

To calculate the average inventory, we need to use the following formula:

Average inventory= (beginning inventory + ending inventory) / 2

Average inventory= (37,200 + 46,300) / 2

Average inventory= $41,750

6 0

3 years ago

Explain why each of the following statements is a rationale for conducting active or passive policy: Economic circumstances can

Vladimir79 [104]

Answer:

The rationale for conducting active policy is the interest of Congress to alter the state of the economy through a deliberate change in established policies.

But in the case of Passive policy, the government permits the status quo.

Active policy relies on the government to enforce it while passive policy does not need the government's interference to work in stabilizing the economy.

Explanation:

The following statements applies passive policy because the economy is expected to stabilize on it's own without the deliberate act of congress influencing it:

Economic circumstances can change dramatically between the time that an economic downturn begins and the time when policy actions have an effect on the economy.
Fluctuations in economic output have been less severe since World War II.

The following statements is a rationale for conducting active policy since the government's intervention is required:

Economists are not very accurate forecasters.
Increases in government spending generate increases in economic output.

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3 years ago

Firms that are _______ recognize that including a strong social orientation in business is a sound strategy that is in the best

ruslelena [56]

Answer:

Socially responsible

Explanation:

The term social responsibility refers to give back to the society in which its operates. A firm being socially responsible means that it has an obligation to act for the benefit of society at large.

Being socially responsible helps both the society at large and also the firm. It helps the firm in the sense that it changes the orientation or give a good impression of the firm to the society and also helps the organisation to gain a bigger and larger customer base.

To the society, social responsibility of the a firm provides some basic needs that will improve the well being of the society.

Example of social responsibility by firms may include, organizing seminars that helps the society to gain more knowledge about a particular phenomenal, construction of health care centers, roads and making the environment more beautified.

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3 years ago

The gross earnings of the factory workers for Larkin Company during the month of January are $91,000. The employer's payroll tax

cestrela7 [59]

Answer:

Explanation:

The journal entry is shown below:

(a) Factory Labor/Expenses A/c Dr $103,800

To Factory wages payable $91,000

To Employer payroll taxes payable $7,700

To Fringe benefits payable $5,100

(Being labor expenses are recorded)

(b) Direct labor A/c Dr $87192 ($103,800 × 84%)

Indirect labor A/c Dr $16,608 ($103,800 × 16%)

To Factory Labor $103,800

(Being factor labor is assigned)

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3 years ago

You are 18 years old, opening your first savings account, and are considering three options: BANK A is not FDIC insured, has an

leonid [27]

Answer:bank b

Explanation:

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3 years ago