Production Nd shipping is my best guess! Since it made a point that they ship all over the world
Hope I helped :) - beanz
Answer:
d. decrease the firm's WACC.
Explanation:
As per WACC formula
WACC = ( Weight of Common Equity x Cost of Common Equity ) + ( Weight of Common Debt x Cost of Common Debt x ( 1 - Tax rate ) ) + ( Weight of Preferred Equity x Cost of Preferred Equity )
By assuming the values to prove the answer
Weights
Common equity = 55%
Preferred Equity = 15%
Debt = 30%
Costs
Common equity = 15%
Preferred Equity = 8%
Debt = 12%
Tax rate is 15%
Placing values in the formula
WACC = ( 55% x 15% ) + ( 30% x 12% x ( 1 - 15% ) ) + ( 15% x 8% )
WACC = 8.25% + 3.06% + 1.2% = 12.51%
Keeping others values constant, Now increase the Tax rate to 25% and placing vlaues in the formula
WACC = ( 55% x 15% ) + ( 30% x 12% x ( 1 - 25% ) ) + ( 15% x 8% )
WACC = 8.25% + 2.7 + 1.2% = 12.15%
Hence the WACC is decreased from 12.51% to 12.15% when the tax rate is increased from 15% to 25% keeping other values constant.
Answer:
True
Explanation:
Off balance sheet items are transactions that generate fees for the business (such as guarantees), and to hedge against future loss (such as futures investments).
Meaning assets and liabilities that are deferred or contingent to business success.
<u>TC</u> Units
$64,500 (High) 2,470
} $30,700 } 2000
$33,800( Low) 470
<u>VC</u><u> </u><u>per</u><u> </u><u>Unit</u><u> </u><u>=</u><u> </u><u> </u> 30 700 ÷ 2000 = $15.35
when 470 units are sold,( substitute vc per unit = 15.35)
TC = FC + VC
33, 800 = FC + ( 15.35× 470)
FC = $ 26 586
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Learn more about persuasive here:
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