Ask question

Ask question

All categories

3 years ago

11

A firm has a cost of debt of 7.5 percent and a cost of equity of 16.2 percent. the debt-equity ratio is 0.45. there are no taxes

. what is the firm's weighted average cost of capital

1 answer:

valentina_108 [34]3 years ago

6 0

About 16.2 percent of the cost of what ?

You might be interested in

April fools day began many years ago in france. what event started it

serious [3.7K]

<span> <span>It is believed that the tradition of celebrating April fools' day began approximately in the mid sixteenth century when France (upon the directive of Pope Gregory XIII) abandoned the Julian calendar in favor of the Gregorian calendar. Use of this new calendar meant that the new year would now begin on the first day of January as opposed to the first day of April. Those who did not catch this news in time went on celebrating the beginning of the new year on April 1st and as such they were ridiculed and made the laughing stock on this account. These people would henceforth be referred to as 'April fools'.</span></span>

5 0

2 years ago

The Deer Valley Farm (DVF) produces a natural organic fertilizer, which it sells mostly to gardeners and homeowners. The annual

Marizza181 [45]

Answer:

The Deer Valley Farm (DVF)

a. Optimum load size = 7,625 containers

Maximum fertilizer level at the farm = 5,500 containers

Total minimum cost = $189,110,200

b. No. Total inventory costs will increase.

Explanation:

a) Data and Calculations:

Annual demand for fertilizer = 220,000 pounds

Annual production units = 305,000 pounds

Inventory = 85,000 pounds

Cost to transport the fertilizer to and from the plant to the farm = $620

Each container holds = 40 pounds

Annual carrying cost per pound = $0.12

Optimum load size = 305,000/40 = 7,625 containers

Maximum fertilizer level at the farm = 5,500 containers (220,000/40)

Total minimum cost = $ ($620 * 305,000) + ($0.12 * 85,000)

= $189,110,200 ($189,100,000 + 10,200)

5 0

2 years ago

A company is considering replacing an old machine, which has a market value of $75,000 and a tax basis of $50,000. The new machi

sp2606 [1]

Answer:

$90,500

Explanation:

The computation of initial cash outlay is shown below:-

initial cash outlay = New machine cost + Increase in working capital - After tax salvage value

= $145,000 + $12,000 - (($75,000 - ($75,000 - $50,000) × 0.34

= $145,000 + $12,000 - $66,500

= $90,500

Therefore for computing the initial cash outlay we simply applied the above formula.

8 0

3 years ago

When an employee says, "i really want to learn more about this new project" but has his arms crossed, his manager is likely to b

olga_2 [115]

The correct answer is "doesn't want to learn about the new project at all". Arms being crossed is often perceived as a sign of unwillingness to do something.

7 0

3 years ago

Tedder Mining has analyzed a proposed expansion project and determined that the internal rate of return is lower than the firm d

Sholpan [36]

Answer:

C) Condensing the firm's cash inflows into fewer years without lowering the total amount of those inflows.

Explanation:

When you determine the net present value of project, the longer the project, the lower the present value of its cash flows. A way to try to increase the NPV of a project is to try to shorten its life span without reducing the value of its cash flows.

This sounds much simpler than it is. Since your project should produce cash flows in a shorter time, you will have to probably shorten the time periods of some activities, e.g. building new facilities, research and development, etc.

7 0

2 years ago