Answer:
The company's WACC is 9.14%
Explanation:
cost of preferred stock
= (dividend on preferred stock)/(current market price)
= [$100*4%]/$72
= 5.56%
total finance = debt + equity + preferred stock
= (8,000*$1,060) + (310,000*$57) + (15,000*$72)
= $8,480,000 + $17,670,000 + $1,080,000
= $27,230,000
weight of debt = debt/total finance
= $8,480,000/$27,230,000
= 0.31
weight on equity = equity/total finace
= $1.080.000/$27,230,000
= 0.04
WACC
= (weight of debt*after tax cost of debt) + (weight on equity*cost of equity)
= (0.31*0.0393) + (0.65-0.1185) + (0.04*0.0556)
= 9.14%
Therefore, The company's WACC is 9.14%
Answer:
lack of consumer safety
Explanation:
One of the biggest unethical practices that occur during the innovation process is lack of consumer safety. The entire idea of the innovation process is to try and create something truly functional that has not been done before and release it way before any competitor can create a similar product. In this rush to create the product, producers completely ignore many obvious faults that the product may have and/or any dangers it may pose to the consumer as long as the product works as intended.
Answer:
in this problem, we need to calculate Gomez's accounting and economic profit. To do this, let us first classify and list the explicit and implicit costs. Revenue: Sales: $85,000 Explicit costs: Cost of one helper: $18,000 Rent: $8,000 Materials: $24,000 These are the costs that require an outlay of cash. Implicit costs: Opportunity cost of funds invested in equipment: $7,000 Gomez could have invested the funds in another asset that could earn him $7,000 Opportunity cost of working as a potter in his own shop: $20,000 Gomez could have worked as a potter for a competitor that could earn him $20,000. This is the worth of Gomez's skill as a potter. Entrepreneurial talent: $4,000 This is the worth of Gomez's talent in running the business. These costs do not require an outlay of cash. These are the implicit costs. Now, we are ready to calculate both the accounting and economic profit of Gomez. a. Calculate the accounting profit for Gomez's pottery firm. $_ Accounting profit = Total Revenue − Total Explicit Costs Accounting profit = $ 85 , 000 − ( $ 18 , 000 + $ 8 , 000 + $ 24 , 000 ) Accounting profit = $ 85 , 000 − $ 50 , 000 Accounting profit = $ 35 , 000 The accounting profit is equal to $35,000. b. Now calculate Gomez's economic profit. $_ Economic profit = Total Revenue − Total Explicit and Implicit Costs Economic profit = $ 85 , 000 − ( $ 18 , 000 + $ 8 , 000 + $ 24 , 000 + $ 7 , 000 + $ 20 , 000 + $ 4 , 000 ) Economic profit = $ 85 , 000 − $ 81 , 000 Economic profit = $ 4 , 000 The economic profit is equal to $4,000.
Arianne's store is an example of a SOLE PROPRIETORSHIP.
A sole proprietorship is the simplest business form among all businesses. It doesn't have a legal entity because its debts will be personally covered by its owner. All its profit and loss will be enjoys and paid for by Arianne and the coverage of its debts is unlimited.
