Answer:
WACC = 12.040%
Explanation:
WACC represents weighted average cost of all sources of financing. In the question there are three sources of finance 1) Equity 2) Preferred Stock 3) Debt.
1) Equity: The firm intends to raise $ 320,000 from equity out of total financing of $ 570,000 e.g. 56% of total financing comes from Equity. Thus multiplying the cost of equity 14.7% (given) with ratio of equity financing, we get to weighted average cost of equity of 8.253%.
2) Debt: The firm is raising $ 230,000 from debt e.g. 40% of total financing. The proportion of debt is multiplied by post tax cost of debt as the interest expense is deductible expense for tax purposes in most of the jurisdiction. Therefore we reduce the cost of debt with element of (1 - tax rate), thus we get to 8.325% = 11.1 (1 - 25%) as total cost of debt. In order to get weighted average cost of debt we multiply this post tax cost of debt with ratio of debt financing 40%, thus weighted average cost of debt is 8.325 * 40% = 3.359%
3) Preferred Stock: The firm is also raising finance from preferred stock having cost of 12.2%. Proportion of financing from preferred stock is 4% in total mix of financing, thus weighted average cost of preferred stock is 12.2% * 4% = 0.428%.
Now adding weighted average cost of all three sources of funding, we get WACC: 8.253% + 3.359% + 0.428% = 12.040%
Answer:
Direct material quantity variance= $1,400 unfavorable
Explanation:
Giving the following information:
Direct material standard: 4 square feet at $2.80 per square foot
Direct material purchased: 34,000 square feet at $3.20 per square foot
Direct material consumed: 32,900 square feet
Manufacturing activity: 8,100 units completed
We need to use the following formula:
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Standard quantity= 8,100 units*4= 32,400 feet
Actual quantity= 32,900
Direct material quantity variance= (32,400 - 32,900)*2.8= 1,400 unfavorable
Answer:
We can first order the data from smallest value to largest value:
461
549
745
1500
1800
2000
3750
4795
68000
a) The mean is 9289, and the median is 1800
b) The data does have an outlier, which is 68000, because it is more that three standards deviations away from the mean, excluding this value, our new mean is 1950 and our new median is 1650. We can see that the greatest change in value was for the mean.
c) the median is more appropriate because the median is less sensitive to outliers. The mean can be easily swayed by outliers in either way, and this can give an erroneous impression of the data.
Answer:
28%
Explanation:
let X = the percentage of ownership of Clor Confectionery
the investment account balance = $150,150 - X$20,500 + X75,650 = $165,550
$150,150 + X$55,150 = $165,550
X$55,150 = $15,400
X = $15,400 / $55,150 = 0.2792 = 27.92% ≈ 28%
