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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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Razor Inc. manufactures industrial components. One of its products used as a subcomponent in auto manufacturing is Fluoro2211. T

Neko [114]

Answer:

Total contribution margin= $1,884,180

Explanation:

Giving the following information:

Direct Materials 150

Direct Labor 28

Variable Manufacturing Overhead 25

Variable Selling 16

Sales in units= 10,130

Selling price= $420

Direct material cost= 150*1.1= $165

First, we need to calculate the unitary contribution margin:

Unitary contribution margin= selling price - total unitary variable cost

Unitary contribution margin= 420 - (28 + 25 + 16 + 165)

Unitary contribution margin= $186

Now, the total contribution margin:

Total contribution margin= 10,130*186

Total contribution margin= $1,884,180

3 0

2 years ago

Jane Hernandez owns and operates a women’s clothing shop. Her product mix

natulia [17]

Answer: Our group will suggest strategy of Contraction of product mix

Explanation:

Our group will suggest a contraction of the product mix strategy. As per this strategy, we can eliminate one or more product lines or product items from the product mix. This will contract our product mix. The products like medical uniforms and women jeans which are having no sale and are not profitable now can be eliminated.

A company can target the customer for those products which are still in the product mix.

8 0

2 years ago

A Soviet interpretation of this poster would claim that

andrew-mc [135]

A Soviet interpretation of this poster would claim that

Americans are practicing economic imperialism
so correct option i conclude is A
hope it helps

8 0

3 years ago

Read 2 more answers

____ includes all elements existing outside the boundary of the organization that have the potential to affect the organization.

arsen [322]

Answer:

Explanation:

Organizational environment

6 0

3 years ago

Maxwell Feed & Seed is considering a project that has the following cash flow data. What is the project's IRR? Note that a p

Kay [80]

Answer:

13.31%

Explanation:

some information is missing:

Year Cash flows

0 −$1,100

1 $450

2 $470

3 $490

the easiest way to calculate the IRR is by using a financial calculator, IRR = 13.31%

but if we don't have one at hand, the IRR is the discount rate at which a project's NPV = 0

1,100 = 450/(1 + r) + 470/(1 + r)² + 490/(1 + r)³

to simplify the formula we must use trial and error:

since we already know the real IRR, I will start with a close number like 10%

1,100 = 450/(1 + 0.1) + 470/(1 + 0.1)² + 490/(1 + 0.1)³

1,100 = 409.09 + 388.43 + 368.14

1,100 ≠ 1,165.66

since the NPV is still positive, we must increase the discount rate. following the example we can use 12%

1,100 = 450/(1 + 0.12) + 470/(1 + 0.12)² + 490/(1 + 0.12)³

1,100 = 401.79 + 374.68 + 348.77

1,100 ≠ 1,125.24

we must increase the discount rate even more to 13%

1,100 = 450/(1 + 0.13) + 470/(1 + 0.13)² + 490/(1 + 0.13)³

1,100 = 398.23 + 368.08 + 339.59

1,100 ≠ 1,105.90

we keep increasing the discount rate to 14%

1,100 = 450/(1 + 0.14) + 470/(1 + 0.14)² + 490/(1 + 0.14)³

1,100 = 394.74 + 361.65 + 330.74

1,100 ≠ 1,087.13

since now the NPV is negative, the discount rate must be between 13-14%

we continue this way until we finally reach 13.31%

4 0

3 years ago