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3 years ago

List 2 advantages and 2 disadvantages of budgeting.

Business

1 answer:

likoan [24]3 years ago

7 0

<h3>Two advantages of budgeting;</h3>

i. Manage your money effectively.

ii. Monitor performance.

<h3 /><h3 /><h3>Two disadvantages of budgeting;</h3>

i. Time required.

ii. Gaming the system.

iii. Blame of outcomes.

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Consider the following information for Evenflow Power Co., Debt: 5,000 6.5 percent coupon bonds outstanding, $1,000 par value, 1

melamori03 [73]

Answer:

Explanation:

We solve for the cost of debt by solving for the discount rate which makes the future coupon payment and maturity of the bond equal to 1,020

This is solved using excel or a financial calculator

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 32.50

time 34

$32.5 \times \frac{1-(1+0.03153274)^{-34} }{0.0315327401919093} = PV\\$

PV $672.0015

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity 1,000.00

time 34.00

$\frac{1000}{(1 + 0.03153274)^{34} } = PV$

PV 348.00

PV c $672.0015

PV m $347.9985

Total $1,020.0000

<u>annual cost of debt:</u>

0.031532 x 2 = 0.063064 = 6.31%

<u>debt outstanding:</u>

5,000 bonds x $ 1,000 x 102/100 = 5,100,000

<u>equity</u>:

105,000 shares x $59 each = 6,195,000

For the equity we solve using CAMP

$Ke= r_f + \beta (r_m-r_f)$

risk free = 0.05

market rate = 0.09

premium market = (market rate - risk free) 0.085

beta(non diversifiable risk) = 1.17

$Ke= 0.05 + 1.17 (0.085)$

Now we solve for the WACC

$WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})$

D 5,100,000

E 6,195,000

V 11,295,000

Equity weight 0.5485

Debt Weight 0.4515

Ke 0.14945

Kd 0.0631

t 0.34

$WACC = 0.14945(0.5485) + 0.0631(1-0.34)(0.4515)$

7 0

3 years ago

Norwegian Cruise Lines controls the availability of prices by offering deals to specific groups of buyers based on all of the fo

Maksim231197 [3]

Answer:D( competition)

Explanation:

Competition can not really determine the availability of prices by offering deals to specific buyer because his competitor might not be more than his company price.

5 0

4 years ago

Calculate the fair present values of the following bonds, all of which pay interest semiannually, have a face value of $1,000, h

Mila [183]

Answer:

the bonds' current market value = PV of face value + PV of coupon payments

a. The bond has a 6 percent coupon rate.

PV of face value = $1,000 / (1 + 5%)²⁴ = $310.07

PV of coupon payments = 30 x 13.799 (PV annuity factor, 5%, 24 periods) = $413.97

bond's market value = $724.04

b. The bond has a 8 percent coupon rate.

PV of face value = $1,000 / (1 + 5%)²⁴ = $310.07

PV of coupon payments = 40 x 13.799 (PV annuity factor, 5%, 24 periods) = $551.96

bond's market value = $862.03

3 0

3 years ago

Barney, a manager, is very conventional, resistant to change, habitual, and does not accept new ideas very easily. This implies

xxMikexx [17]

Answer:

This implies or states to low openness to experience

Explanation:

Low openness to experience, it is related to people who are mostly dedicated to work they do and make sure that their tasks or work through to the end.

So, in this case, Barney, who is the manager is very resistant to adapt the change, very conventional and does not accept the new ideas so easily. This states that the manager, is very low for experiencing the openness or to the new ideas.

4 0

4 years ago

A long-distance hiker is trying to choose the most energy-dense 250-calorie snack for her hike. which should she take?

attashe74 [19]

<span>As food energy is measured in caloric value, if each snack contains 250 calories they will all provide the same amount of calories, and which snack ihas the most readily digestible and available energy shoul be the focus. Fruit provides both short term energy in the form of available sugars, and long term energy in the form of slower to digest fiber.</span>

7 0

3 years ago