Answer:
total economic cost = $25,211.58
total accounting cost = $24,800
Explanation:
the total economic cost of leasing the vehicle includes the lease costs (monthly lease payments) plus the payment for excess miles (8,000 miles x 10 cents) plus the opportunity cost of the money withdrawn for the security deposit ($1,000 x 1.09⁴):
total economic cost = ($500 x 4 x 12) + (8,000 x $0.10) + ($1,000 x 1.09⁴) = $24,000 + $800 + $411.58 = $25,211.58
total accounting cost = ($500 x 4 x 12) + (8,000 x $0.10) = $24,000
Matthew can recover nothing because he was able to sell the land to someone else. Matthew has already sold his land as the part of his real estate to another person for $31,000 and Mathew could not recover anything from the first contract because Betty could not pay for the real estate price<span>. Although he has lost $4,000, he will not have any problem with the first contract with Betty.</span>
If he doesn't want to sit in an office or a laboratory, he could study teaching. Either deal with early education, or study something like languages or history or geography and either deal with working in the field, or with teaching others in the classroom. The possibilities are endless.<span />
Answer:
WACC for A: 9.05%
WACC for B: 9.50%
WACC for C: 12.20%
WACC for D: 12.65%
Explanation:
WACC for a division will be equal: Percentage of Debt in capital employed by the Division x Cost of Debt + Percentage of Equity in capital employed by the Division x Cost of equity = 50% x 6% + 50% x ( Risk free rate + Beta of each Division x Risk premium) = 3% + 50% x ( 4% + beta of each Division x Risk premium)
Risk premium for the 4 Divisions is equal to (Cost of equity for the whole firm - Risk free rate) / beta = 9%
Thus WACC for a division will be equal: 3% + 50% x ( 4% + beta of each Division x 9%).
Substitute beta of each Division from A to D provided in the question, we have: WACC for A: 9.05%; WACC for B: 9.5%; WACC for C: 12.2%; WACC for D: 12.65%.
The answer to the question is D
