A company is considering the purchase of a new machine for $55,000. Management predicts that the machine can produce sales of $1
1 answer:
You might be interested in
Paulie's opportunity cost of producing one cup of ice cream is 8.5 t-shirts.
<h3>What is the opportunity cost?</h3>The potential benefits that a person, investor, or business forgo while choosing between two possibilities are known as opportunity costs. Opportunity costs can be easily disregarded since they are by nature invisible. Understanding the potential opportunities missed when a business or individual chooses one investment over another is necessary for making wiser decisions.
To accurately calculate opportunity costs, it is necessary to balance the benefits and drawbacks of each option.
Opportunity costs have a value that can assist individuals and organizations in making more profitable choices.
Here, the opportunity cost for Paulie for ice cream will be calculated by dividing 17 by 2 Thi will be:
= 17 / 2
= 8.5 t-shirts
Therefore Paulie's opportunity cost of producing one cup of ice cream is 8.5 t-shirts
Learn more about opportunity cost on:
#SPJ1
Answer:
Cost of capital=11.18%
Explanation:
First We will calculate the Equity of firm:
Equity= Number of share* Book value per share
Equity= 10,000* $25
Equity= $250,000
Long-term debt=$300,000
Expected rate of return=15%=0.15
Current yield to maturity (rdebt)=8%=0.08.
Value of firm=Equity+Long-term debt
Value of firm= $250,000+$300,000
Value of firm= $550,000
Formula:
Cost of capital=11.18%