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UNO [17]
3 years ago
12

The 10-year bond of Crown Electronics is selling at $960 each. The bond has a coupon rate of 8% and par value of $1,000. The fir

m will incur a $20 flotation cost for each bond issued. If the firm's tax rate is 40%, what is the after tax-cost of the firm's debt
Business
1 answer:
stich3 [128]3 years ago
6 0

Answer: 5.36%

Explanation:

The after-tax cost of debt refers to the interest that is paid on debt which is then less the income tax savings as a result of the deductible interest expenses.

When calculating the after-tax cost of debt, the effective tax rate of a company should be subtracted from 1, after which the difference will be multiplied by the cost of debt. This will therefore be:

= Rate (10,8% × 1000, -960 + 20, 1000) × (1-40%)

=5.36%

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The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $55,000. The machine would
Marysya12 [62]
The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $55,000. The machine would replace an old piece of equipment that costs $15,000 per year to operate. The new machine would cost $7,000 per year to operate. The old machine currently in use could be sold now for a salvage value of $26,000. The new machine would have a useful life of 10 years with no salvage value Required: 1 What is the annual depreciation expense associated with the new bottling machine? 2 What is the annual incremental net operating income provided by the new bottling machine? 3. What is the amount of the initial investment associated with this project that should be used for calculating the simple rate of return? 4. What is the simple rate of return on the new bottling machine? (Round your answer to 1 decimal place le. 0.123 should be considered as 12.3%.) 1 2. 3 Depreciation expense Incremental net operating income Initial Investment Simple rate of return

The management of ballard microbrew is considering the purchase of an automated bottling machine for $55,000. the machine would replace an old piece of equipment that costs $15,000 per year to operate. the new machine would cost $7,000 per year to operate. the old machine currently in use could be sold now for a salvage value of $26,000. the new machine would have a useful life of 10 years with no salvage value. required: 1. what is the annual depreciation expense associated with the new bottling machine? 2. what is the annual incremental net operating income provided by the new bottling machine? 3. what is the amount of the initial investment associated with this project that should be used for calculating the simple rate of return? 4. what is the simple rate of return on the new bottling machine? (round your answer to 1 decimal place i. e. 0.123 should be considered as 12.3%.)

Anyways goodluck!!
8 0
3 years ago
Question 9 of 10
trasher [3.6K]
I’ll say the answer is B
6 0
3 years ago
Discuss why South Africa as a country has a scarcity of skilled workers, and how this can be changed more especially in terms of
FromTheMoon [43]

South Africa, as a country still experiences a scarcity of skilled workers.  This should not be, given the country's population size.

<h3>What is the scarcity of skilled workers?</h3>

The scarcity of skilled workers means that South African companies cannot attract the manpower they need to power the South African industry and economy.

However, this scarcity can become a thing of the past if many more South African companies can start investing in the education sector by giving out scholarships, grants, and endowing academic chairs in the universities.

This was how the economy of the United States was enabled to flourish until today.  South African companies can emulate their footsteps.

Thus, South Africa, given its enormous population, has no business experiencing a scarcity of skilled workers.

Learn more about the scarcity of skilled workers at brainly.com/question/1787954

5 0
2 years ago
A consumer's weekly income is $300 and the consumer buys 5 bars of chocolate per week. When income increases to $330, the consum
ioda

Answer:

The correct answer is option E.

Explanation:

Income elasticity of demand measures the change in quantity demanded of a product because of a change in the income of the consumer. It is calculated as a ratio of change in quantity demanded and change in income.  

At the income level of $300, the consumers buy 5 bars of chocolate. When the income increases to $330, the consumer buys 6 bars of chocolate.  

The income elasticity of demand is  

= \frac{\Delta Q}{\Delta Y}

= \frac{\frac{6-5}{5} }{\frac{330-300}{300} }

= \frac{\frac{1}{5} }{\frac{30}{300} }

= \frac{0.2}{0.1}

= 2

Since the income elasticity of demand is positive, this implies that chocolate is a normal good.

7 0
3 years ago
Stock a has a beta of 1.2, and stock b has a beta of 1. the returns of stock a are ______ sensitive to changes in the market tha
Eddi Din [679]

Answer:

The returns of Stock A are 20% more sensitive to changes in the market than the returns of Stock B.

<h3>Explanation:</h3>
  • We are given that the beta of Stock A is 1.2.
  • The markets have a beta of 1.0. Since Stock B has a beta of 1, the beta of Stock B is equal to the market beta.
  • In other words, it would move in sync with the market. Stock A's beta of 1.2 would mean that the stock has a higher beta implying the stock is 20% more volatile than the market.

To learn more about it, refer

to brainly.com/question/25534066

#SPJ4

3 0
2 years ago
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