What is the formula for wacc?

Different budgeting periods and explain each one

RideAnS [48]

Budgeting period is an allocation of time to plan for your money and how or where it's gonna be used. There are two types of budgeting period: Short term and Long term.

Short-term Budgeting period

This budgeting period covers from 6 months to a year, depending on the nature of the business. For seasonal businesses, it should cover at least one seasonal cycle. For wholesale and retail businesses, 6 month is enough.

Long-term Budgeting Period

This covers more than a year of operating. It focuses on the futuristic performance of a business or company. Factors used are market trends, economic growth, inflation rates and industrial production. These factors help foresee profit or problems that may arise. Consequently, this will also help you in your present decisions.

5 0

3 years ago

Big Trail Running Company has started to produce running apparel in addition to the trail running shoes that they have manufactu

Andrew [12]

Answer:

Option (C) is correct.

Explanation:

For Machining department,

Manufacturing overhead rate:

= Estimated Overhead cost ÷ Amount of allocation base

= [$1,000,000 ÷ (130,000 + 70,000) machine hours]

= $1,000,000 ÷ 200,000 machine hours

= $5.00 per machine hour

For Finishing department,

Manufacturing overhead rate:

= Estimated Overhead cost ÷ Amount of allocation base

= [$100,000 ÷ (9,000 + 71,000) direct labor hours]

= $100,000 ÷ 80,000 direct labor hours

= $1.25 per labor hour

8 0

3 years ago

An investor company owns 30% of the common stock of an investee company. The investor has significant influence over the investe

MAVERICK [17]

Answer:

Income for investee during the year ended December 31th 2019: $ 17,200

Explanation:

Purchase value 525,000

Equity proportion: 1,500,000 30% = (450,000)

Goodwill 75,000

Transactions during the year:

income 60,000 x 30% = 18,000

dividends 15,000 x 30% = (4,500)

unrealized profit 2018:

30,000 = cost (1.25)

30,000 / 1.25 = 24,000

gross profit 6,000

unrealized gain: 6,000 x 30% = (1,800)

unrealized profit 2019:

40,000 = cost (1.25)

40,000/1.25 = cost

cost = 32,000

gross profit: 40,000 - 32,000 = 8,000

proportion of unrealized gain:

8,000 x 30% = (2,400)

profit for 2018 realized 1,800

net adjustment 600

income from investee:

18,000 - 600 (net unrealized gain) = 17,200

6 0

2 years ago

Canyon Buff Corp. is considering the purchase of a new piece of equipment which would cost $11,000. This equipment will have a f

Furkat [3]

Answer:

Tax shield on depreciation = 600

Explanation:

given data

new piece of equipment = $11,000

salvage value = $1,000

marginal tax rate = 30%

average tax rate = 20%

time period = 5 year

to find out

net effect of annual depreciation on the free cash flow

solution

we know here cost of asset and Salvage value so we get depreciation cost

depreciation cost is = 11000 - 1000 = 10000

and

annual depreciation = 2000

so that Tax shield on depreciation will be

Tax shield on depreciation = 2000 × 30%

Tax shield on depreciation = 600

5 0

3 years ago

Your book describes the increase in the money supply as being analogous to giving people more money. If the output of goods and

SOVA2 [1]

Answer:

Purchasing power parity (PPP): The principle suggests that if the purchasing powers are the same in two different countries, their exchange rates would be in equilibrium.

Happening: When inflation occurs in the US and it occurs more rapidly than in other nations, the currency, the dollar, will be less attractive to other nations. This means that the dollar's exchange rate with the currency of another nation will increase.

Explanation:

Suppose the rate of exchange between pound and dollar is 1 pound= 1.5 dollar before inflation. When inflation happens it may be 1 pound= 2 dollars.

If it has greater buying power, the currency will be demanded more. The US dollar was more requested before inflation, as 1 pound is spent on buying just $1.5. When inflation occurs, the dollar's buying power goes down and it gets less needed. 1 pound is already being spent on that time but to buy more dollars, 2 dollars.

4 0

3 years ago