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Novay_Z [31]
3 years ago
11

Marine Expeditors has three divisions. Division A is the core of the business and represents 80 percent of the firm's operations

. Division B is involved only with contractual short-term projects and therefore has about ten percent less risk than Division A. Division C develops and markets new products and is about ten percent riskier than Division A and about equal in size to Division B. The manager of Division A has suggested that the operations of his division be increased by 10 percent next year. The proposed project should probably be assigned a required return that is equal to _____ percent of the firm's weighted average cost of capital.
Business
1 answer:
siniylev [52]3 years ago
8 0

Answer: 100%

Explanation:

The Weighted Average Cost of Capital calculates the required return needed to fund any of the company's projects because it shows the cost of capital of raising funds for that project.

The cost does not increase or decrease based on the proportion of a business that a department is as any department/ project will incur that cost. The cost of the new project will therefore be the same as the company WACC.

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Explanation:

B

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4 years ago
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Deffense [45]

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Communication

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5 0
3 years ago
Consider two stocks, A and B. Stock A has an expected return of 10% and a beta of 1.2. Stock B has an expected return of 14% and
barxatty [35]

Answer:

B; it offers an expected excess return of 1.8%

Explanation:

Here are the options :

A; it offers an expected excess return of .2%A; it offers an expected excess return of 2.2%B; it offers an expected excess return of 1.8%B; it offers an expected return of 2.4%

to determine which stock is the better buy, we have to calculate the expected return of the stocks using CAPM

According to the capital asset price model: Expected rate of return = risk free + beta x (market rate of return - risk free rate of return)

Stock A = 5% + 1.2(9% - 5%) = 9.8%

Stock B = 5% + 1.8(9% - 5%) = 12.20%

The next step is to determine the excess return

stated expected return - calculated expected return = excess return

Stock A's excess return = 10% - 9.8% - 0.2%

Stock B's excess return = 14 - 12.20 = 1.8%

Security B would be considered because it has a higher excess return

8 0
3 years ago
If Joe to Go decides that a joint venture has too much risk and franchising does not provide enough financial payoff, what strat
Temka [501]

<u>Answer:</u>

<em>It chooses (D) Direct investment exporting  strategy</em>

<em></em>

<u>Explanation:</u>

Countries in a few decades have made significant forward jumps towards a comprehensive domain, which has contributed incredibly to making worldwide business dealings free from restrictions. In the overall marvel of Globalization, outside direct speculation (FDI) is quickly turning into a significant factor in the commercial development of firms and nations.

For any firm to create and develop it needs to extend its exercises all around, and to accomplish that target; there are diverse market section modes accessible to the firm going from FDI.

5 0
3 years ago
Read 2 more answers
The four types of entrepreneur described by Arthur Cole were the Innovator, the Organization Builder, the Over-Optimistic Promot
devlian [24]

The four types of entrepreneur described by Arthur Cole were the Innovator, the Organization Builder, the Over-Optimistic Promoter, and the Calculating Investor.

Answer is A) Investor.

6 0
3 years ago
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