1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
mariarad [96]
3 years ago
5

A firm is considering two projects. Project Peso requires an initial investment of $100,000. The Internal Rate of Return for Pro

ject Peso is 10.6%. Project Quasi requires an initial investment of $90,000. The Internal Rate of Return for Project Quasi is 12.6%. The WACC is 9%. The two projects are independent. What decision should the firm make
Business
1 answer:
Fofino [41]3 years ago
6 0

Answer:

to accept both the projects i.e. Project Peso and Project Quasi

Explanation:

As we can see in the given case, that the weighted average cost of capital on the projects is 9% while on the other hand, Perso and Quasi both have the internal rate of return 10.6% and 12.6% i.e. above 9% so based on this, the decision that should firm make is to accept both the projects i.e. Project Peso and Project Quasi

The same would be relevant

You might be interested in
Charu Khanna received a Form 1099-B showing the following stock transactions and basis during 2019 Stock Date Purchased Date Sol
AysviL [449]

Answer:

Charu Khanna

The Net capital loss is:

= $2,000.

Explanation:

a) Stock Transactions and Data during 2019:

Stock                                  Date      Date Sold  Sales Price ($) Cost Basis ($)

                                      Purchased

4,000 shares Green Co. 06/04/07 08/05/19       12,000              3,000

500 shares Gold Co.        02/12/17 09/05/19      54,000            62,000

5,000 shares Blue Co.   02/04/08  10/08/19       18,000            22,000

100 shares Orange Co.     11/15/18   07/12/19       19,000            18,000

Total                                                                   $103,000       $105,000

Net capital loss:

Long-term capital loss = $3,000

Short-term capital gain = $1,000

Net capital loss =            $2,000 ($3,000 - $1,000)

8 0
3 years ago
An investor is in a 30% combined federal plus state tax bracket. If corporate bonds offer 9% yields, what yield must municipals
Mkey [24]

Answer:

after tax yield on corporate bonds  = 6.3 %

Explanation:

given data

federal plus state tax bracket = 30%

corporate bonds  yields = 9%

solution

we get here yield that must municipals offer for the investor is express as

after tax yield on corporate bonds = corporate bonds  yields × ( 1 - federal plus state tax bracket  )   ......................1

put here value and we will get

after tax yield on corporate bonds = 9% × ( 1 - 30% )

after tax yield on corporate bonds = 0.09 × ( 1 - 0.30 )

after tax yield on corporate bonds  = 0.063

after tax yield on corporate bonds  = 6.3 %

7 0
3 years ago
Arena, Inc. uses the direct method to prepare its statement merchandise inventory of cash flows. Use the following information r
Svet_ta [14]

Answer:

D. $184,400

Explanation:

Please see attachment

7 0
3 years ago
Given the following information, determine the beta coefficient for Stock L that is consistent with equilibrium: = 9.25%; rRF =
Ainat [17]

Answer:

The beta coefficient for Stock L that is consistent with equilibrium

Explanation:

According to Capital Asset Pricing Model, the formula to compute expected rate of return is equals to

Expected rate of return = Risk free rate of return + Beta × (Market risk - risk free rate of return)

where,

rRF = risk free rate of return

rM = market risk

Stock L that is consistent with equilibrium is expected rate of return which equals to = 9.25%

So,

9.25% = 3.6% + Beta × (8.5% - 3.6%)

9.25% = 3.6% + 4.9% Beta

9.25% - 3.6% = 4.9% Beta

5.65% = 4.9% Beta

Beta = 5.65% ÷ 4.9% = 1.15

Hence, the beta coefficient for Stock L that is consistent with equilibrium is 1.15

8 0
3 years ago
Which of the following statements is true of a linear cost​ function? A. It presents total cost as an intercept. B. It presents
mixer [17]

Answer:

Option B It presents variable cost as a slope coefficient

Explanation:

The reason is that the total cost function is:

Y = a + bx

The total cost in this case is Y, a is fixed cost as an intercept, b is variable cost represented as an slope and coefficient and x is level of activity which is independent of Y.

So the right answer is option B.

8 0
3 years ago
Other questions:
  • Classify each statement as true or false by dragging it into the corresponding category.
    6·1 answer
  • The publisher of an economics textbook finds that, when the book's price is lowered from $70 to $60, sales rise from 10,000 to 1
    10·1 answer
  • Rennie Norquist is a recent law school graduate. She is employed at Dillard Dobbs Dooley & Duncan, LLP, a 200 lawyer firm. R
    15·1 answer
  • How can you change your name
    15·2 answers
  • What is the maximum fine for a willful or repeat OSHA violation?​ a. ​up to $12,600 per day b. ​up to 10% above $126,000 c. ​$70
    8·1 answer
  • The Coffee Cup Company had a credit balance of $500 in interest payable at the beginning of the period, and a credit balance of
    13·1 answer
  • If total revenue rises as a result of a decrease in the price of a given good, it follows that demand is
    5·1 answer
  • Which of the following is true of business locations?
    14·1 answer
  • A company is a devout follower of Confucian ethics. Hence, it hires people who live by similar principles. What is most likely t
    13·1 answer
  • ANSWER FAST please !!!
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!