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3 years ago

Sales price $6.74 per unit

Business

1 answer:

stiks02 [169]3 years ago

7 0

Answer:

Margin of safety = 3190.922902 units rounded off to 3191 units

Explanation:

Margin of safety is the cushion or extra number of units that the business sells over the break even point in units. The break even point is the point where total revenue equals total cost and the business earns no profit or no loss. To calculate the margin of safety in units, we deduct the break even number of units from the budgeted number of units or sales.

Margin of safety = Budgeted units - Break even number of units

First we need to calculate the break even in units. The formula for break even in units is,

Break even in units = Fixed cost / (Selling price per unit - Variable cost per unit)

Break even in units = 9376 / (6.74 - 2.33)

Break even in units = 2126.077098 rounded off to 2126 units

Margin of safety = 5317 - 2126.077098

Margin of safety = 3190.922902 units rounded off to 3191 units

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You are given the following information for Watson Power Co. Assume the company’s tax rate is 23 percent. Debt: 8,000 5.7 percen

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Answer:

the company's WACC is 10.04%

Explanation:

Weighted Average Cost of Capital (WACC) is the minimum return that a project must offer before it can be accepted. It shows the risk of the company.

Capital Source Market Value Weight Cost Total Weight

Debt $8,400,000 27.71% 4.389 % 1.22%

Common stock $24,190,000 71.17% 12.2% 8.68%

Preferred stock $1,400,000 4.12% 3.5% 0.14%

Total $ 33,990,000 100.00% 10.04%

Calculation of Market Value and Cost of Debt

Market Value = 8,000×($1,000×105%) = $8,400,000

Cost of Debt = interest × (1 - tax rate)

= 5.7% × ( 1-0.23)

= 4.389 %

Calculation of Market Value and Cost of Common stock

Market Value = 410,000× $59 = $24,190,000

Cost of Common stock = Risk free Rate + Beta × Market Premium

= 4.5% + 1.10× 7%

= 12.2%

Calculation of Market Value and Cost of Common stock

Market Value = 17,500× $80 = $1,400,000

Cost of Preferred stock = 3.5%

7 0

3 years ago

Unistar Inc., is an FMCG company that produces a wide range of offerings such as grocery items and personal care products. If Un

Mila [183]

Answer:

b) Descriptive

Explanation:

Descriptive research -

It refers to the questions of the research , designing the data and researching and analyzing the topic , is called the descriptive research .

it is also known as the observational research method .

From the data of the question , the Unistar Inc , need to opt for a descriptive research .

6 0

3 years ago

Mountain Teas wants to raise $14.9 million to open a new production facility. The company estimates the issue costs for legal an

ololo11 [35]

Answer:

612,936 shares

Explanation:

The computation of the number of shares of stock must be sold is shown below:

Before that we have to compute

Required sales proceeds net of spread is

= (Raise amount + estimated cost for legal and accounting fees) ÷ (1 - spread rate)

= ($14.9 million + $582,000) ÷ (1 - 0.0815)

= ($1,5482,000) ÷ (1 - 0.0815)

= $16,855,743.06

So, shares to be sold is

= $16,855,743.06 ÷ $27.50

= 612,936 shares

8 0

3 years ago

"The average monthly rent for a two-bedroom apartment in City A is $820 with a standard deviation of $86. The average monthly re

kicyunya [14]

Answer:

Explanation:

We shall apply the concept of coefficient of variation to know the consistency of data

coefficient of variation

= standard deviation / mean or average

In case of City A

coefficient of variation = 86 / 820

= .1048

In case of City B

coefficient of variation = 75 / 790

= .0949

Since it is less for city B , rent for this city is more consistence or with less of variation

So the conclusion is false.

6 0

3 years ago

You have been elected to the governing board of your church. At the first meeting you attend, mention is made of building a new

tigry1 [53]

Answer:

1. Cash in hand and at bank balance

2. Is there land and buildings available

3. Are there any accumulated debt owed by the church

4. Collections or record of church document.

Explanation:

1. Cash in hand and at bank balance. This an example of a current asset. The first question is how much does the church have as cash and bank balance. The reason is to ascertain whether the fund will be sufficient for the new building project.

2. Land and Buildings availability. This is a fixed asset. The board would enquire whether there is an already existing building or land with which to begin the building project.

3. Debt or loan owed by the church. Loan forms part of liability in a balance sheet. Another question to be asked is whether the church is indebted to a bank or financial institution. This will determine whether or not to continue with the building project.

4. Record of church document. Does the church have any existing document with which to support the new building? This is pertinent as to begin or abandon the plan to build a new church.

3 0

3 years ago