Answer:
Simple interest is based on the principal amount of a loan or deposit, while compound interest is based on the principal amount and the interest that accumulates on it in every period. Since simple interest is calculated only on the principal amount of a loan or deposit, it's easier to determine than compound interest
Explanation:
Answer:
d) Organizational culture
Explanation:
Organization culture is the assumptions, beliefs, values, and ways of interactions that make an organization unique. It the organization's established ways of doing things.
Organization culture will include experiences, expectations, and philosophies that guide its members. Members of an organization express culture by the way they interact internally and with the outside world. Culture incorporates customs, attitudes, written and unwritten rules of an organization.
Answer:
Residual Income = $6,000
Explanation:
Residual income is the excess income of a firm leftover the opportunity cost of capital or over the desired income.
Given,
The minimum rate of return 12%
Average operating assets = $300,000
Net operating income = $42,000
We know,
Residual Income = Net Operating Income - (Average operating assets x the minimum rate of return)
Residual Income = $42,000 - ($300,000 x 12%)
Residual Income = $42,000 - $36,000
Residual Income = $6,000
Answer:<em>True cost = 
</em>
<em>= 
</em>
<em>= $ 13,669,821.2</em>
Explanation:
Given :
Debt-Equity ratio = 0.55
Flotation cost for new equity = 6%
Flotation cost for debt = 3 %
∴ To compute the weighted flotation cost , we'll use the following formula:
Weighted Flotation cost =![\left [ \frac{1}{1+Debt-Equity ratio}\times Flotation cost of equity \right ] + \left [ \frac{Debt-Equity ratio}{1+Debt-Equity ratio}\times Flotation cost of debt \right ]](https://tex.z-dn.net/?f=%5Cleft%20%5B%20%5Cfrac%7B1%7D%7B1%2BDebt-Equity%20ratio%7D%5Ctimes%20Flotation%20cost%20of%20equity%20%5Cright%20%5D%20%2B%20%5Cleft%20%5B%20%5Cfrac%7BDebt-Equity%20ratio%7D%7B1%2BDebt-Equity%20ratio%7D%5Ctimes%20Flotation%20cost%20of%20debt%20%5Cright%20%5D)
= ![\left [ \frac{1}{1+0.55}\times 0.06 \right ] + \left [ \frac{0.55}{1+0.55}\times 0.03 \right ]](https://tex.z-dn.net/?f=%5Cleft%20%5B%20%5Cfrac%7B1%7D%7B1%2B0.55%7D%5Ctimes%200.06%20%5Cright%20%5D%20%2B%20%5Cleft%20%5B%20%5Cfrac%7B0.55%7D%7B1%2B0.55%7D%5Ctimes%200.03%20%5Cright%20%5D)
= 0.0387 + 0.0106
= 0.04934 or 4.93%
The true cost of building the new assembly line after taking flotation costs into account is evaluated using the following formula :
True cost =
=
= $ 13,669,821.2
