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2 years ago

Garrett Company provided the following information:

Business

1 answer:

uysha [10]2 years ago

3 0

Answer:

Overall operating profit will decrease by $25,000

Price is $32.5

Explanation:

A product should be shut down if doing so would make the savings in fixed costs associated with the product to exceed the lost contribution. Other wise , the product should remain.

In a shut down decision , the following relevant cash flows should be considered:

1. Lost contribution from the product to be shut down

2. Savings in fixed directly attributable to the product under consideration.

Lost contribution from products 2

(15-10)× 20,000 (100,000)

Savings in direct fixed cos <u> 75,000</u>

Net loss from the drop of product 2 <u> (25,000)</u>

Overall operating profit will decrease by $25,000

Mark up is the proportion of cost as profit

Price = cost + (mark-up %× cost

Price = 25 + (30%× 25) = 32.5

Price is $32.5

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Vande Velde Company made three investments during 2017. Where will Vande Velde report these investments in the fair value hierar

Debora [2.8K]

Answer:

a. level 3

b.level 1

c. level 2

Explanation:

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2 years ago

ExxonMobil has historically had a very low debt-to-equity ratio within the oil industry, but it recently issued $12 billion in n

Galina-37 [17]

Answer:

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Explanation:

In order to calculate the WACC before bond issuance , we would have to calculate first the cost of equity using capital asset pricing model .

So Using CAPM we have Rf + Beta x Market risk premium

= 0.5% + 0.85 * 4%

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Therefore WACC before bond issuance = (Cost of equity x weight of equity + cost of debt (1-tax) x weight of debt)

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In order to calculate the WACC after bond issuance we make the following calculation:

WACC after bond issuance = (Cost of equity x weight of equity + cost of debt (1-tax) x weight of debt)

= (3.9% x 0.9) + (2% x 0.1)

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2 years ago

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Andrej [43]

Answer:

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Explanation:

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2 years ago

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Answer:

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3 years ago

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