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Margaret [11]
3 years ago
5

the required return on the stock of moe's pizza is 12.1 percent and after tax required return on the company's debt is 3.79 perc

ent. the company's market value capital structure consists of 73 percent equity. the company is considering a new project that is less risky than current operations and it feels the risk adjustment factor is minus 2.2 percent. the tax rate is 40 percent. what is the required return for the new project
Business
1 answer:
Lana71 [14]3 years ago
5 0

Answer:

7.65%

Explanation:

required return = (percent of stock x required return on stock) + (after tax cost of debt  x percent of debt) - adjustment factor

Percent of debt = 100 - 73 = 27%

(12.1 x 0.73) + (3.79 x 0.27) - 2.2 = 7.65%

You might be interested in
PRODUCT MIX DECISION, SINGLE CONSTRAINT
Helga [31]

Answer:

1.. Unit produce 20,000 ​deluxe units per year

Units sold $33.33

Total contribution margin $500,000

2. Basic 50,000 units

Standard 2,000 units

Deluxe 12,000 units

$470,000

Explanation:

1. Calculation to determine How many of each type of unit should be produced and sold to maximize the company's contribution margin? What is the total contribution margin for your selection?

BASIC STANDARD DELUXE

Price $9 $30 $35

Less Variable cost 6 20 10

=Contribution margin (A) 3 10 25

Machine hours (B) 0.1 0.5 0.75

Contribution margin per

machine hours (A/B) $30 $20 $33.33

Unit produce=(15,000/0.75)

Unit produce=20,000 deluxe units per year.

In order to maximize the company's contribution margin the company should sell deluxe unit with contribution margin of the amount of $ 33.33 per machine hour

Total contribution margin= 20,000 units,*$25

Total contribution margin= $500,000.

Therefore The amount of unit that should be produced is 20,000 units and $33.33 will be sold to maximize the company's contribution margin while the the total contribution margin for your selection is $500,000

2. Calculation to determine product mix would you recommend, and what would be the total contribution margin

The product mix to recommend will be:

Basic 50,000 units

Standard 2,000 units

Deluxe 12,000 units

Calculation to determine Total contribution margin

Total contribution margin= ($3 × 50,000) + ($25 × 12,000) + ($10 × 2,000)

Total contribution margin=$150,000+$300,000+$20,000

Total contribution margin = $470,000

Therefore Total contribution margin is$470,000

4 0
2 years ago
Hosung Company's Cash account shows a balance of $801.65 as of August 31 of this year. The balance on the bank statement on that
Sergio039 [100]

Answer:

$603.65

Explanation:

The correct and accurate cash balance need to be calculated. This is done by preparing a Bank Reconciliation Statement.

Bank Reconciliation Statement.

Balance as per Bank Statement                                                $1,383.00

Add Outstanding Lodgments                                                          $0  

Less Unpresented Checks ($260.50 + $425.10 + $331.00)   ($1,016,60)

Add Error on Bank Statement                                                     $237.25

Balance as per Cash Book                                                          $603.65

therefore,

the adjusted ledger balance of cash as of August 31 is $603.65

5 0
3 years ago
The following information was taken from the 2021 financial statements of Waterway Industries: Bonds payable, January 1, 2021 $
zalisa [80]

Answer:

the amount reported as proceeds from bond issuance is $4,509,000

Explanation:

The computation of the amount reported as proceeds from bond issuance is as follows

Total Bond Issued during 2021

= Bonds payable, December 31, 2021 - Bonds payable, January 1, 2021 + Bond Payable retired

= $4,830,000 - $809,000 + $807,000

= $4,828,000

Now

Bond issued for cash is

= Total bond issued - Bonds issued in exchange for Equipment

= $4,828,000 - $319,000

= $4,509,000

Hence, the amount reported as proceeds from bond issuance is $4,509,000

4 0
2 years ago
Shadee Corp. expects to sell 550 sun visors in May and 380 in June. Each visor sells for $12. Shadee’s beginning and ending fini
djyliett [7]

Answer:

August = $5, 472

September = $5,419

Explanation:

Shadee Corporation

Cash Receipt Budget

For the month of August & September

August September

Sales Volume 460 470

Price per unit 12 12

Total Sales $5,520 $5,640

60% Cash Sales $3,312 $3,384

Credit Sales:

54% collected in the month of sales

$1,192 $1,218

37% collected in the following month

$968 (1) $817

Total budgeted cash receipt

$5,472 $5,419

Note: (1)

37% of July's credit sale will be collected in the month of August. Therefore,

July's total sales = 545 × 12 = $6540

60% of them is cash = $3,924

Remaining is credit = $2,616

37% of credit sales = $2,616 × 37% = $968

7 0
3 years ago
A group of cotton growers in North Georgia and North Alabama pooled their resources to build a cotton gin and storage area for t
GaryK [48]

Answer:

The correct answer is letter "B": Joint venture.

Explanation:

In a Joint Venture, two or more businesses agree to contribute to capital and resources for a common project. Usually, developers, manufacturers, and service providers agree to form a joint venture. If successful, those parties split the profit based on the value of their respective contribution to the joint venture.

5 0
2 years ago
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