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zhenek [66]
3 years ago
10

When one uses the after-tax weighted average cost of capital (WACC) to value a levered firm, the interest tax shield is A) not a

ccounted for by the use of the WACC. B) considered by deducting the interest payment from the cash flows. C) automatically considered because the after-tax cost of debt is included within the WACC formula. D) capitalized by the levered cost of equity.
Business
1 answer:
Rus_ich [418]3 years ago
3 0

Answer:  C) automatically considered because the after-tax cost of debt is included within the WACC formula.

Explanation:

When calculating the Weighted Average Cost of Capital (WACC) for a levered firm, the interest tax shield is included because the cost of debt used is adjusted for tax as shown below:

<em>= (Weight of debt * </em><em>Cost of debt( 1 - tax rate) )</em><em> + (Weight of equity * cost of equity)</em>

As shown above, the interest tax shield is already implicit in the formula so there is no need to adjust the levered firm for an interest tax shield as this would lead to double-counting.

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Warnerwoods Company uses a perpetual inventory system.
Liono4ka [1.6K]

Answer:

gross profit under FIFO = $40,570 - $25,220 = $15,350

gross profit under LIFO = $40,570 - $26,340 = $14,230

gross profit under weighted average = $40,570 - $26,240 = $14,330

gross profit under specific id. = $40,570 - $26,070 = $14,500

Explanation:

sales revenue = (290 x $86.60) + (160 x $96.60) = $40,570

COGS under FIFO:

130 x $51.60 = $6,708

160 x $56.60 = $9,056

80 x $56.60 = $4,528

80 x $61,60 = $4,928

total COGS = $25,220

COGS under LIFO:

240 x $56.60 = $13,584

50 x $51.60 = $2,580

160 x $63.60 = $10,176

total COGS = $26,340

COGS under weighted average:

weighted average = [(130 x $51.60) + (240 x $56.60) + (100 x $61.60) + (180 x $63.60)] / 650 = $58.31

450 x $58.31 = $26,239.50 ≈ $26,240

COGS under specific method:

80 x $51.60 = $4,128

210 x $56.60 = $11,886

60 x $61.60 = $3,696

100 x $63,60 = $6,360

total COGS = $26,070

8 0
3 years ago
Karen has always been passionate about fashion, so she went to fashion school to learn more about it and opened her own clothing
Alina [70]

Answer:

intrinsic reward

Explanation:

In the context of business, it can be said that in this scenario Karen is experiencing what is known as an intrinsic reward. This term refers to rewards that come from within the individual, in other words the satisfaction that they are feeling or the way they perceive meaning in the work that they do. Which in this case the intrinsic rewards that Karen is experiencing is the deep satisfaction when doing her job and finding new styles for her store.

3 0
4 years ago
An on-premises workload consists of a single server with an Apache instance and a MySQL database. The Solutions Architect plans
kakasveta [241]

Answer:

Provision the workload in an Auto Scaling group across Availability Zones, with a minimum of two Amazon EC2 instances Use an Application Load Balancer in front of an Auto Scaling group.

Explanation:

To ensure high availability configure at least 2 EC2 instances so if one fails the other will be a backup. Also aouto scale across various regional availability groups. Worldwide Amazon has various availability stations so making the workload available across multiple regions ensure it will not be affected incase a region goes down.

8 0
4 years ago
Which of the following should not be classified as inventory in the balance sheet of a large automobile dealership?
Inga [223]

Answer:

Spark plugs, oil filters, and other parts which are intended for use by the service department in repairing and servicing customers' cars.

Explanation:

8 0
4 years ago
Who do the dolls hanging from the trees represent stamp act?
Lemur [1.5K]
The dolls are effigies that represents any person that is in any way connected to the Stamp Act. These people may be tax collector or an appointed stamp distributor or members of the royal family. This action is to show their disapproval on imposition of tax on daily papers like newspapers,documents and others alike.
3 0
3 years ago
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