Answer:
d. To find a project's IRR, we must solve for the discount rate that causes the PV of the inflows to equal the PV of the project's costs
Explanation:
The internal rate of return, will be the rate at which the net present value of a project is zero.
net present value = present value fo the cash inflow - investment
using the IRR on the cash inflow we have a present value equal to the investment made, which makes the net present value equal to zero.
Therefore, the IRR is the maximun rate the project can yield
Answer:
d. Debit advertising expense $350, credit accounts payable $350
Explanation:
The advertising expense should be recognized when the economic event occurs, in this case recibing the bill, independently of its payment. This is done with a debit because expenses increase by debits. The credit account is a liability: account payable, which represents an increased on liabilities.
Answer:
a.
WACC = 0.07961 or 7.961% rounded off to 7.96%
b.
After tax cost of debt = 0.0474 or 4.74%
Explanation:
a.
The weighted average cost of capital or WACC is the cost of a firm's capital structure. To calculate the WACC, we multiply the weight of each component of the capital structure by the cost of that component. The components of capital structure can be one or all of the following namely debt, preferred stock and common stock.
The formula for WACC is,
WACC = wD * rD * (1-tax rate) + wP * rP + wE * rE
Where,
- w represents the weight of each component
- r represents the cost of each component
- D, P and E represents debt, preferred stock and common stock respectively
WACC = 0.15 * 0.06 * (1 - 0.21) + 0.1 * 0.05 + 0.75 * 0.09
WACC = 0.07961 or 7.961% rounded off to 7.96%
b.
The after tax cost of debt is calculated by multiplying the cost of debt by (1 - tax rate) to adjust for the tax advantage provided by debt as interest payments on debt are tax deductible.
After tax cost of debt = 0.06 * (1 - 0.21)
After tax cost of debt = 0.0474 or 4.74%
Answer:
Pure project
Explanation:
A pure project management structure is one in which a team works full time on a project and the project manager of such project has full control of the project with very little control/interference from the top management levels.
This lesser interference from top management levels the more control and flexibility of the project managers towards accomplishing the project.
Cheers.
Well 50% of 50,000 is 25,000 so I’d say make sure your cars don’t go above 15,000 a Year cause Car(s)
