Answer:
No, it is a bad idea to use only the cost of debt
Explanation:
Only using the cost of debt, is not a good idea because too much amount of borrowing could lose the confidence of the investors and it could lead to the uncertainty in the future cash flows.
Suppliers might be worried regarding the financial situation and lead to the supply disruption. Though, the debt might save the tax expenses, which could lead to the negative cash flow.
When the company does not have adequate amount of cash at hand, it could cause many disruptions of financial. WACC (Weighted Average Cost of Capital) rates need to be used as the capital costs as it weigh the used capital cost and the used debt.
Answer:
If the company reworks the units, income will increase by $7,600 (55,100 - 47,500).
Explanation:
Giving the following information:
Number of units= 19,000
Sold as-is:
Selling price= $2.5
Rework:
Selling price= $7.7
<u>Incremental </u>income= $4.8
<u>First, we will calculate the effect on income of both options:</u>
Sold as-is:
Effect on income= 2.5*19,000= $47,500
Rework:
Effect on income= 19,000*(7.7 - 4.8)
Effect on income= $55,100
If the company reworks the units, income will increase by $7,600 (55,100 - 47,500).
Answer:
A) Enterprise systems implementations should include personnel from different departments.
Explanation:
An organizational structure can be defined as the process which typically involves dividing an organization into various functional units.
A functional (departmental) organizational structure is a type of structure used to organize staffs by dividing them into various departments based on their skill set, roles or functions and knowledge.
These departments which are vertically structured may include, finance, IT, sales and marketing, research and development, customer service etc. Also, the various departments are headed by a functional manager who are saddled with the responsibility of overseeing, managing and reporting to the executive management.
The employees in companies engaged in a single line of business are generally referred to as silos because they work independently, collaborate and communicate with their colleagues in a vertical style i.e exclusively with each other.
Hence, the formula for success of an enterprise system is that, all enterprise systems implementations should include personnel or employees from different departments such as accounting, marketing, human resources, customer relationship, procurement, etc.
Answer:
C. The price level has risen.
Explanation:
GDP deflator = (Nominal GDP ÷ Real GDP) × 100
GDP deflator of 2017=(10,000 ÷ 9,500) × 100
= 105.263158
GDP deflator of 2018
= (12,000 ÷ 10,500) × 100
=114.285714
Inflation = (Consumer price index of 2018 - Consumer price index of 2017) ÷ CPI of 2017) × 100
=((114.285714 - 105.263158) ÷ 105.263158) × 100
=8.57142819
=8.57%
From 2017 to 2018 the price level increased by 8.57%
Answer:
Beta= 1.26
Explanation:
<u>First, we will calculate the proportion of the portfolio of each security:</u>
Security A= 600/1,000= 0.6
Security B= 400/1,000= 0.4
<u>Now, the beta of the portfolio:</u>
Beta= (proportion of investment A*beta A) + (proportion of investment B*beta B)
Beta= (0.6*1.5) + (0.4*0.9)
Beta= 1.26