Since there is no debt, all the capital that the company raises is in the form of common equity.
Since there is only equity (meaning the firm is a fully equity firm), the weighted average cost of capital (WACC) is nothing but the cost of equity
In this case the WACC represents the cost of equity
Therefore, cost of equity = WACC = 8%
Answer:
The fund raising committee can be organized in 3,276 different ways.
Explanation:
The committee can have the following structures:
Accounting majors Finance majors
0 5
1 4
2 3
C(10,0) x C(8,5) = (10! / 10!) x (8! / 3!5!) = 1 x 56 = 56
C(10,1) x C(8,4) = (10! / 9!1!) x (8! / 4!4!) = 10 x 70 = 700
C(10,2) x C(8,3) = (10! / 8!2!) x (8! / 5!3!) = 45 x 56 = 2,520
total possibilities = 2,520 + 700 + 56 = 3,276
Answer:
a. $75 an hour for a total of $32,250
Explanation:
The computation of the allocation rate and how much cost is to be allocated is shown below:
Fixed cost per hour = $146,200 ÷ 3,400 hours = $43
Variable cost per hour = $32
So, the total cost per hour equal to
= Fixed cost per hour + Variable cost per hour
= $43 + $32
= $75
And, the total cost allocated is
= 430 hours × $75
= $32,250
Answer:
$191,500
Explanation:
If the item is not dropped:
Loss = Sales - Variable expenses - Fixed manufacturing expenses - Fixed selling and administrative expenses
= $923,000 - $405,500 - $337,000 - $244,000
= (63,500) loss
Fixed mfg. expenses remaining:
= Fixed manufacturing expenses - Avoidable Fixed manufacturing expenses
= $337,000 - $207,500
= $129,500
Fixed selling and administrative expenses remaining:
= Fixed selling and administrative expenses - Avoidable Fixed selling and administrative expenses
= $244,000 - $118,500
= $125,500
Loss in expenses remaining if item is dropped
:
= Fixed mfg. expenses remaining + Fixed selling and administrative expenses remaining
= $129,500 + $125,500
= ($255,000)
Overall net operating income would decrease by:
= Loss in expenses remaining if item is dropped - Loss in expenses if item is not dropped
= $255,000 - $63,500
= $191,500
Raise;decrease is the answer to this question
