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inessss [21]
3 years ago
8

Each of the following factors affects the weighted average cost of capital (WACC) equation. Which of the following factors are o

utside a firm’s control? Check all that apply.
The general level of stock prices

The effect of the tax rate on the cost of debt in the weighted average cost of capital equation

The firm’s capital budgeting decision rules
Business
1 answer:
Volgvan3 years ago
7 0

Answer: The correct answers are "The general level of stock prices" and "The effect of the tax rate on the cost of debt in the weighted average cost of capital equation".

Explanation: The general level of stock prices and the effect of the tax rate on the cost of debt in the weighted average cost of capital equation are outside from firm's control because although companies have knowledge of the market, the general level of stock prices is not controlled by them, but by the market. And the effect of the tax rate is not controlled by companies because the tax rate is set by the state.

You might be interested in
Goals and objectives should be set ________.Multiple Choiceat the beginning of marketing planningat the end of the situation ana
storchak [24]

Answer:

Option D. After completion of market research, situation analysis, and competitor analysis

Explanation:

The reason is that the company always sets objectives and goals when it analyzes the business environment, the way competitor would react, product demand, etc and all these things come from market research, situation analysis, competitor analysis, position analysis, capability analysis, etc. This gives a clear picture where the organization must head towards. So after completion of these analysis and research, company is able to set goals.

Always remember that the company sets its goals before marketing planning (Option A) and after situation analysis (Option B) because it helps define what number of sales we need which formulates the marketing planning.

Option C is incorrect because strategies are set after the objectives and goals are set because the strategies are always alligned with the objectives and goals.

Option E is incorrect because Goals and Objectives are set always after the SWOT and PESTLE analysis not during these studies.

Here the only only option with broader meaning is option D which also includes the Option A and Option B.

3 0
3 years ago
Sanborn Industries has the following overhead costs and cost drivers. Direct labor hours are estimated at 100,000 for the year.
Nana76 [90]

Answer:

d) 34.17

Explanation:

we must first calculate the total overhead expenses = $120,000 (ordering and receiving) + $297,000 (machine setup) + $1,500,000 (machining) + $1,200,000 (assembly parts) + $300,000 (inspection) = $3,417,000

since overhead is applied based on direct labor hours, then the predetermined overhead rate = total overhead expenses / total direct labor hours = $3,417,000 / 100,000 labor hours = $34.17 per labor hour

8 0
3 years ago
On June 30, 2018, the High Five Surfboard Company had outstanding accounts receivable of $600,000. On July 1, 2018, the company
attashe74 [19]

Answer:

The Journal entry is as follows:

On July 1,

Cash A/c                                  Dr. $439,200

Finance charge Expense A/c Dr. $10,800

To Financing arrangement A/c                       $450,000

(To record the amount of borrowings)

Workings:

Finance charge expense = ($600,000 × 1.8%)

                                          = $10,800

So, cash account = $450,000 - $10,800

                             = $439,200

4 0
3 years ago
Complete the following sentence as it
stira [4]
B. secrecy; communication
4 0
3 years ago
On January 1, Year 1. a company issues $100.000 of 8% bonds maturing in 10 years when the market rate of interest is 9%. The bon
Margarita [4]

Answer:

b) The company will incur a loss

Explanation:

The market rate at the time of issue = 9%, while coupon rate = 8%, it says bonds provide lesser return when compared to the market rate.  

At end of year 2 market rate drops to 6% which is lower than the Bond's coupon rate. Which means the bond's providing high return when compared to the market. So, company to retire the bonds need to pay more than the par value.

As company should retire these bonds more than par value, the company incur a loss.

Option 'B is correct

The company incur a loss

5 0
3 years ago
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