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Vikki [24]
2 years ago
10

If a firm's marginal tax rate is increased, this would, other things held constant, lower the cost of debt used to calculate its

WACC. True False
Business
1 answer:
enot [183]2 years ago
8 0

Answer:

The answer is "True".

Explanation:

The marginal rate is indeed the extra income tax about any dollar earned as income. Its annual tax rate is the total tax paid divided by the total earnings. This marginal rate of 10% will impose a tax of 10 cents on every following income spent. that's why the given statement is true because the cost of debt = k\times (1-t)   and its t value will increase the cost of the decrease.

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The typical risks of a cost leadership strategy include: a. the inability to balance high differentiation and low price. b. exce
vichka [17]

Answer: The correct answer is "b. production and distribution processes becoming obsolete.".

Explanation: The typical risks of a cost leadership strategy include production and distribution processes becoming obsolete because to maintain cost leadership, the production and distribution processes must always be in constant observation to modify if necessary in order to maintain competitiveness and not remain stuck attached to a production and distribution model that as a consequence of innovations in the competition may become obsolete.

8 0
2 years ago
Read 2 more answers
If 7000 dollars is invested in a bank account at an interest rate of 7 per cent per year, Find the amount in the bank after 14 y
Harlamova29_29 [7]

Answer:

1. Interest compounded annually = $18,049.74

2. Interest compounded quarterly = $18,493.77

3. Interest compounded Monthly = $18,598.16

4. Interest compounded continuously = $18,651.19

Explanation:

First let me state the formula for compound interest:

The future value of a certain amount which is compounded is the total amount (Principal + interest) on the amount of money, after compound interests have been applied, and this is shown below:

FV = PV (1+\frac{r}{n} )^{n*t}

where:

FV = Future value

PV = Present value = $7,000

r = interest rate in decimal = 0.07

n = number of compounding periods per year

t = compounding period in years = 14

For interests compounded continuously, the Future value is given as:

FV = PV × e^{r*t}

where

e is a mathematical constant which is = 2.7183

Now to calculate each on the compounding periods one after the other:

1. Interest compounded annually:

here n (number of compounding periods annually) = 1

Therefore,

FV = 7,000 × (1+\frac{0.07}{1})^{14}

FV = 7,000 × 1.07^{14} = $18,049.74

2. Interest compounded quarterly:

here, n = 3 ( there are 4 quarters in a year)

FV = 7,000 × (1+\frac{0.07}{4} )^{4*14}

FV = 7,000 × 1.0175^{56} = $18,493.77

3. Interest compounded Monthly:

here n = 12 ( 12 months in a year)

FV = 7,000 × (1+\frac{0.07}{12} )^{12*14}

FV = 7,000 × 1.005833^{168} = $18,598.16

4. Interests compounded continuously:

FV = PV × e^{0.07 * 14}

FV = 7,000 × 2.66446 = $18,651.19

3 0
3 years ago
Wu Production Company, which uses activity-based budgeting, is in the process of preparing a manufacturing overhead budget. Whic
creativ13 [48]

Answer:

Option which would likely appear on that budget will be:

Batch level costs: production setup.

Explanation:

Here the company uses activity based budgeting is a management accounting tool which new year budget is only seen by not considering the previous year records.

 Activity based budgeting which  is  a budgeting method in which firstly the overhead costs are being calculated and the the budgets gets created.

Batch-level cost is a cost which is not associated with any given specific individual units but is associated with a group of units.

For example, to set up a production run the cost incurred is associated with the batch of goods that are produced subsequently.

Another example can be be procurement costs. The expenses associated with the procurement costs include the  ordering of direct materials, paying suppliers and receiving goods.

Since all of the expenses are related to the orders placed numbers, they must be allocated not to an individual product but to group of unit.

6 0
3 years ago
As of December 31, the Stanford company has the following information. Use this information to answer questions 1 to 3. Cash $5,
Veseljchak [2.6K]

Answer:

$10,500

Explanation:

Calculation for Stanford Company's Working Capital

Using this formula

Working capital =Current Assets- Current Liabilities

Where,

Current Assets = Cash + Accounts Receivable + Inventory + Prepaid Insurance

Current Assets = ($5,000 + $15,000 + $40,000 + $3,000) = $63,000

Current Liabilities = Accounts Payable + Notes Payable in 5 Months + Salary Payable

Current Liabilities = ($15,000 + $12,500 + $25,000) = $52,500

Let plug in the formula

Working capital =$63,000-$52,500

Working capital =$10,500

Therefore the Working Capital for Stanford Company will be $10,500

5 0
3 years ago
6. Assuming the partial billing was approved for payment and the expenditure and liability (contracts payable) was recorded for
jenyasd209 [6]

Answer:

Option A, Credit to Cash, $560,000

Explanation:

As per the data given in the question,

Expenditure and liability = $700,000

Retaining percentage = 20%

Assuming the partial billing was certified for expenses and payments and liability was approved for amount $70,000. Though, Oxford has a policy not to pay 100 percent, but to retain  20 percent as a retained percentage.  

So, $700,000 - $700,000 × 20%

= $700,000 - $140,000

= $560,000

Therefore, The entry to record the approved payment and retained percentage would include:  

Option A, Credit to Cash, $560,000

8 0
3 years ago
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