Answer: Weighted Average Cost of Capital
Explanation:
The Weighted Average Cost of capital for a company refers to rate a company pays on the various capital methods it employs to fund its operations such as common and preferred stock as well as debt.
This rate is used to evaluate the attractiveness of economic ventures and projects because the company needs the rate of return on the project to be at least higher than the company WACC so that the company may be able to pay off its capital holders.
Standards because it represents how someone acts or how people want them to act
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To find the fixed cost, we need add all costs that do not change with the number of haircuts. These are the salaries of the barbers and the manager bonus, the advertisement fees, rent and the magazines. We also have the standard part of the utility payment, the 170$. Those add up to:
6*1310+520+280+980+20+170=9830$. We also have regarding the variable costs:
The utilities variable part are included since they depend on haircuts, barber supplies and the base rate of each barber per haircut. Hence those are:
(5.90+0.38+0.27 per haircut)=6.55$ per haircut
