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e-lub [12.9K]
3 years ago
14

Company cost of capital Quark Productions ("Give your loved one a quark today.") uses its company cost of capital to evaluate al

l projects. Will it underestimate or overestimate the value of high-risk projects?
Business
1 answer:
skad [1K]3 years ago
8 0

Quark Productions is <u>more likely to overestimate</u> the value of high-risk projects using its company's cost of capital unless it is using the weighted cost of capital.

The company's cost of capital should change to reflect the high-risk nature of each project. Again, the estimation of high-risk projects does not work with a single figure (cost of capital). Quark Production should evaluate high-risk projects separately, using reflective costs of capital.

Thus, if Quark Productions uses a <em>single company's </em><em>cost of capital</em> to evaluate all projects, there will be an overestimation of the values of the high-risk projects.

Learn more: brainly.com/question/15060368

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Mid City Products Inc. (MCP), developed standard costs for direct material and direct labor. In 2017, MCP estimated the followin
Tasya [4]

Answer:

See below

Explanation:

The below shows the calculation of variance

Budgeted direct labor (per unit) 0.60

Units 2,000

Budgeted direct total labor (hrs) 1,200

Actual hours 1,160

Standard rate $17

Direct labor efficiency variance

The direct labor efficiency variance

= (Budgeted hours - Actual hours) × Standard rate

= (1,200 - 1,160) × $18

= $720 favourable

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To create strong partnering relationships, marketing channel members must develop mutual trust, openly communicate, have common
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6 0
3 years ago
Gabriel put $6000 in a 2-year CD paying 4% interest, compounded monthly. After 2 years, he withdrew all his money. What was the
NeTakaya
First, we calculate for the effective annual interest given the interest in the scenario. 
                          ieff = (1 + i/m)^m - 1
Substituting the values,
                          ieff = (1 + 0.04/12)^12 - 1 = 0.0407
The effective interest is equal to 4.07%. 

The future amount after 2 years,
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5 0
4 years ago
Read 2 more answers
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