1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Over [174]
3 years ago
10

Westchester Corp. is considering two equally risky, mutually exclusive projects, both of which have normal cash flows. Project A

has an IRR of 11%, while Project B's IRR is 14%. When the WACC is 8%, the projects have the same NPV. Given this information, which of the following statements is CORRECT?a. If the WACC is 9%, Project A's NPV will be higher than Project B's. b. If the WACC is greater than 14%, Project A's IRR will exceed Project B's. c. If the WACC is 13%, Project A's NPV will be higher than Project B's. d. If the WACC is 9%, Project B's NPV will be higher than Project A's. e. If the WACC is 6%, Project B's NPV will be higher than Project A's.
Business
1 answer:
inn [45]3 years ago
5 0

Answer:

d. If the WACC is 9%, Project B's NPV will be higher than Project A's.

Explanation:

The internal rate of return is the return in which the NPV is zero i.e cash inflows equal to the initial investment

While the WACC refers to the cost of capital by considering the capital structure i.e cost of equity, cost of preferred stock and cost of debt by taking their weightage

Now if the WACC is 9% so project B NPV would be higher as compared to project A as we can see that project B IRR is greater than the project A IRR

Therefore option d is correct

You might be interested in
A food manufacturer reports the following for two of its divisions for a recent year.
hram777 [196]

Answer:

1. 13.8% and 14.6%

2. 13.6% and 16.5%

3. 1.01 times and 0.88 times

Explanation:

The computations are shown below:

1. Return on investment = Operating Income ÷ Average invested Assets

where, average invested assets would be

= (Invested assets, beginning + Invested assets, ending) ÷ 2

For Beverage Division, it would be

= $366 ÷ {($2,696 + $2,610) ÷ 2}

= $366 ÷ $2,653

= 13.8%

For Cheese Division, it would be

= $651 ÷ {($4,489 + $4,417) ÷ 2}

= $651 ÷ $4,453

= 14.6%

2. Profit margin = (Operating income ÷ sales) × 100

For Beverage Division, it would be

= ($366 ÷ $2,698) × 100

= 13.6%

For Cheese Division, it would be

= ($651 ÷ $3,942) × 100

= 16.5%

3. Investment turnover = Sales ÷ Average Operating Assets

For Beverage Division, it would be

= $2,698 ÷ {($2,696 + $2,610) ÷ 2}

= $2,698 ÷ $2,653

= 1.01 times

For Cheese Division, it would be

= $3,942 ÷ {($4,489 + $4,417) ÷ 2}

= $3,942 ÷ $4,453

= 0.88 times

7 0
3 years ago
The term ssr/ss total is also called the select one:
GaryK [48]

Answer : coefficient of determination.

In the regression analysis results on MS excel the SSR/ SS total is called as " coefficient of determination"

6 0
3 years ago
Grouper Corporation’s April 30 inventory was destroyed by fire. January 1 inventory was $160,600, and purchases for January thro
Katen [24]

Answer:

$165,670

Explanation:

Cost of goods sold = Sales revenue (1 - Gross profit)

                                = $669,900 × (1 - 0.30)

                                = $669,900 × 0.70

                                = $468,930

Estimated ending inventory destroyed in fire:

= Beginning inventory + Purchase - cost of goods sold

= $160,600 + $474,000 - $468,930

= $165,670

6 0
3 years ago
Gabe Industries sells two​ products, Basic models and Deluxe models. Basic models sell for $ 44 per unit with variable costs of
12345 [234]

Answer:

The correct answer is B.

Explanation:

Giving the following information:

Basic models sell for $ 44 per unit with variable costs of $ 25 per unit. Deluxe models sell for $ 52 per unit with variable costs of $ 25 per unit. Total fixed costs for the company are $1,323. Gabe Industries typically sells three Basic models for every Deluxe model.

First, we need to calculate the weighted sales participation:

Basic= 3/4= 0.75

Deluxe= 1/4= 0.25

Now, we need to calculate the weighted average selling price and variable cost:

weighted average selling price= (selling price* weighted sales participation)= (44*0.75 + 52*0.25)= 46

weighted average variable cost= (variable cost* weighted sales participation)= (25*0.75 + 25*0.25)= 25

Now, we can calculate the break-even point in units:

Break-even point (units)= Total fixed costs / (weighted average selling price - weighted average variable expense)

Break-even point= 1,323/ (46 - 25)= 63 units

4 0
3 years ago
Peer group analysis can be performed byA) management choosing a set of firms that are similar in size or sales, or who compete i
ANTONII [103]

Answer:

D) Only a and b relate to peer group analysis.

Explanation:

Peer group analysis allows investors to see how a certain fund performs over various periods compared to other funds within the same investment strategy. Based on this information both management choosing a set of firms that are similar in size or sales, or who compete in the same market as well as using the average ratios of this peer group, which would then be used as the benchmark, are related to the peer group analysis.

I hope this answered your question. If you have any more questions feel free to ask away at Brainly.

7 0
3 years ago
Other questions:
  • Publisher problem: Full court press inc buts slick paper in 1525 pound rolls for textbook paper. Annual demand is 1800 rolls. Th
    15·1 answer
  • Delta inc. moved its entire production operation to the country of xondervan, where the company was free to dump pollutants to t
    11·1 answer
  • ​if, when a firm doubles all its​ inputs, its average cost of production​ increases, then production displays
    6·1 answer
  • Albend Holmes wants to deposit $4,500 in a bank account that pays 8.25 percent annually. How many years will it take for his inv
    7·1 answer
  • A new mall will be constructed in a large city. Why are business owners most likely viewing a topography map before construction
    5·1 answer
  • HELP ASAP!! The question is “add your income from lines 1-5 and add it here since lines 2-5 dont apply to you your total income
    8·1 answer
  • A laptop computer that you want to purchase was originally priced at $1225. You will receive a 20% student discount, and the sal
    13·1 answer
  • The owners of Carpo Inc., a watch company, also own a steel company and a leather goods manufacturing company. This relieves the
    7·1 answer
  • Baxter Publishing sought to reduce expenditures related to the printing of books in its trade and educational market and contrac
    11·1 answer
  • If Gross Domestic Product was $17 trillion in 2008 and $16 trillion in 2009. Which of the following actions would Congress be mo
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!