Answer:
8.76%
Explanation:
Using the CAPM formula:
Ke = Rf + Beta Factor * Risk premium
Here
Rf is 5%,
Beta Factor is 1.6
And
Risk Premium is 6%
By putting values, we have:
Ke = 5% + 1.6 * 6%
Ke = 14.6%
Now we will find new firm's cost of equity under 40% debt by simply multiplying it with the equity percentage:
Weighted Cost of Equity = 14.6% * 60% = 8.76%
Answer:
Trade-off. act of giving up one thing of value to gain another. Opportunity Cost. value of the next best alternative you could have chosen. Marginal Benefit.
Explanation:
Answer:
NPV is $28.5 million
Payback is 4.31 years
IRR is 13.25%
MIRR is 12.51%
Explanation:
The NPV,payback period,Internal rate of return and modified internal rate of return were computed in the attached spreadsheet.
Payback period=the year of the first positive cumulative cash flow+the year cumulative cash flow/the next year cash flow
the year of first positive cumulative flow is year 4
the cumulative cash flow for year 4 is $66 m
the next year cash flow is(year 5) is $210
payback=4.31
Answer:
Kindly see attached organized table for clarity.
Item cash Net income
a Purchase of Supplies of cash -$133 -
b Adjusting entry for use of supplies - -$31
c Made sales on account - $1,297
d Received cash from customer on acct $865 -
e Purchased equipment for cash -$2,528 -
f Depreciation of building to be recorded - -$610
