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zvonat [6]
2 years ago
10

Sallie's Sandwiches​Sallie's Sandwichesis financed using 20% debt at a cost of 8%. Sallie projects combined free cash flows and

interest tax savings of $2 million in Year 1, $4 million in Year 2, $5 million in Year 3, and $117 million in Year 4. (The Year 4 value includes the combinedhorizon values of FCF and tax shields.) All cash flows are expected to grow at a 3% constant rate after Year 4. Sallie'sbeta is 2.0, and its tax rate is 34%. The risk-free rate is 8%, and the market risk premium is 4%. Using the data for Sallie's Sandwiches andthe compressed adjusted present value model, what is the total value (in millions)? Group of answer choices$72.37 $73.99 $74.49 $75.81 $76.45 Quizlet
Business
1 answer:
JulijaS [17]2 years ago
8 0

Answer:

$76.45

Explanation:

Sallie Sandwiches used hybrid financing which means debt and equity both are used to finance business. The company's cost of financing will be;

Cost of debt : 8% + [ 2.0 * 4%] = 16%

Cost of financing : [0.2 * 8%] + [0.8 * 16%] = 14.4%

NPV discounted at 14.4% is $76.45

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Answer:

the correct answer is C

Explanation:

As described in the chapter case, which of the following constitutes a managerial element of the UPS tracking system?

C) The decision to use automation

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3 years ago
In a recent speech, the governor of your state announced: "one of the biggest causes of juvenile delinquency in this state is th
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<span>A flaw in the governor's reasoning is that a lot of people in that age bracket who are already juvenile delinquents aren't going to stop doing bad things just because they might get paid more at a job. Those people may just not want to have a job and would rather enjoy their youth causing trouble before they have to "settle" into a career.</span>
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3 years ago
Why would a firm spend over 2 million dollars for a 30-second ad on a television during the super bowl
KatRina [158]

Answer:

cause many people will see it

Explanation:

becoz many pipo will be watching TV during that time that's why it costed that much coz many will see it

7 0
3 years ago
Read 2 more answers
Bookmark question for later Which of the following are NOT costs that are relevant to the "total cost to own" of a car? a. Fuel
harina [27]

The statement that are NOT costs that are relevant to the "total cost to own" of a car is: f. None of the above.

<h3>What is total cost?</h3>

Total cost is the cost generated or cost incurred for producing a product or the expenses incurred for owing a product such as car.

Total cost formula is:

Total cost=Fixed cost+ Variables cost

If a person own a car it is important to know that all the following are the total cost that will be relevant to the cost of owing a car are:

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  • Financing
  • Repair costs
  • Insurance
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Inconclusion the statement that are NOT costs that are relevant to the "total cost to own" of a car is: f. None of the above.

Learn more about total cost here:brainly.com/question/5168855

7 0
2 years ago
Wexpro, Inc., produces several products from processing 1 ton of clypton, a rare mineral. Material and processing costs total $5
beks73 [17]

Answer:

1. What is the financial advantage (disadvantage) of further processing product X15?

  • financial advantage of further processing X15 =  $10,206

2. Should product X15 be processed further or sold at the split-off point?

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Explanation:

processing costs for every batch of X15 (6,300 units) = $54,000 x 1/4 = $13,500

production cost per unit $13,500 / 6,300 = $2.14286 = $2.14 per X15

contribution margin per unit without further processing = $17 - $2.14 = $14.86

costs of further processing $8,700, per unit = $8,700 / 6,300 = $1.38

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contribution margin with further processing = $20 - $3.52 = $16.48

total financial advantage of further processing X15 = ($16.48 - $14.86) x 6,300 = $10,206

3 0
3 years ago
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