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Anna11 [10]
3 years ago
15

Diversified Industries is a multi-product firm operating in a number of industries. Assume the firm is analyzing a new project t

hat has risks unrelated to those of the current firm's product. When computing the net present value of the new project the cash flows should be discounted using: the risk-free rate of return. the market rate of return. a rate commensurate with the risk level of the project. a rate based on a beta of one since the firm is well diversified. a rate based on the firm's current beta.
Business
1 answer:
KatRina [158]3 years ago
3 0

Answer: a rate commensurate with the risk level of the project.

Explanation:

When computing the net present value of the new project, we should note that the cash flows should be discounted using a rate that is commensurate with the risk level of the project.

Since it is a new project and it possesses risks that are unrelated to those of the current firm's product, the risk that pertains to the project level should be used in the discounting to get the net present value.

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On July 1, Raney Corporation purchases 690 shares of its $4 par value common stock for the treasury at a cash price of $9 per sh
-BARSIC- [3]

Answer:

Date      Particular                                       Dr.        Cr.

Jul-1       Treasury stock                          $6,210

             Cash                                                         $6,210

Sep-1     Cash                                          $4,840

             Treasury stock                                         $3,960

             Paid-in capital - Treasury stock              $880

Explanation:

Treasury stocks are the company's own shares which is repurchased by the company. It is recorded in treasury shares account which is an contra equity account. I can be reissued or cancelled by the company.

Purchase of Treasury Stock

Treasury Stock = 690 x $9 = $6,210

Sales of Treasury Stock

Cash Receipt = 440 x $11 = $3,300

Treasury Stock = 440 x $9 = $3,960

Paid-in capital - Treasury stock = 440 x $2 = $880

5 0
3 years ago
Cabell Products is a division of a major corporation. Last year the division had total sales of $25,320,000, net operating incom
aalyn [17]

Answer:

ROI = Net operating income        x 100

         Average operating assets

ROI = $1,924,320   x 100

         $6,000,000

ROI = 32.1%

The correct answer is C

Explanation:

ROI is the ratio of net operating income to average operating assets multiplied by 100.

3 0
3 years ago
Which phrase correctly defines the motives of a business? A. satisfying the needs of people B. helping a country's economy grow
liubo4ka [24]

Answer:

d

Explanation:

8 0
3 years ago
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Tems11 [23]
We are given the skills of each worker:

Sasha is very good at producing computer-generated graphics
Maurice is skilled at designing logos with pen and paper

To address the immediate problem, Hector's action should be to assign Maurice to do the design in a paper then pass it to Sasha for generating it on the computer. It could also be that if a client requests a paper design, Maurice does it and for computer-generated designs, Sasha will do it. 

The corrective action that he should do is let Sasha and Maurice attend trainings for their weaknesses. <span />
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3 years ago
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In 2009 tariffs were imposed on Chinese tires. The result of this tariff was a drop in imports of these tires from $13 million t
Doss [256]

Answer:

The winners were tire exporters from nations other than China, since the price of tires from these nations rose from $53.94 to $62.02, and this rise was not due to tariffs.

The losers were Chinese tire exporters, because while the price of Chinese tires also rose, it was because of the tariff, which is not income received by the exportes. Besides, the volume of imports from China also fell.

5 0
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