Answer:
Project Payback Period = 3.27 years
Explanation:
Cash inflow = $1,225
n= 8
Initial cost= $4,000
Project payback = ?
Year Cash Flow Cumulative Cash Flow
0 -4000 -4000
1 1225 -2775
2 1225 -1550
3 1225 -325
4 1225 900
5 1225 2125
6 1225 3350
7 1225 4575
8 1225 5800
Total = $5800
Payback Period = 3 years + 325/1225
=3.27 years
Payback period is the length of time required for an investment to recover its initial outlay. In this case, it took 3.27 years to recover the initial cost of $1,225.
Answer:
$50,000
Explanation:
The theatre should record the securities at the date of donation for $50,000 because for donated securities, they are usually recorded at the fair value upon receipt. Also, for contribution - which is a gift, usually measured at the fair value when received to the not for profit organization , same applies to securities.
<span>If a product is to be properly commercialized, there must be integration between finance and marketing.</span>
The minimum price that this order could be offered is at cost. Since there are no cost figures in this question, this is the best answer I can give.
You would need to at least sell the item for the amount of money it cost you to make, assemble, and ship the product.
Answer:
The Correct Answer is C.
the trade-off theory posits that a firm would reach it's optimal capital structure if the tax savings from additional borrowing results in lower financial distress costs.
Explanation:
The combination of debt and equity used by a company to finance its operations and growth is referred to as it's <em>capital structure</em>. Debt comes in the form of bond issues or loans, while equity may come in the form of common stock, preferred stock, or retained earnings.
A company capital structure is affected by cost of capital. The higher the cost of borrowing the less the present value of the firm’s future cash flows, discounted by the Weighted Average Cost of Capital (WACC) and vice versa.
The weighted average cost of capital (WACC) is arrived at by calculating a firm's cost of capital in which each category of capital and proportionately weighing them. Categories of capital include including common stock, preferred stock, bonds, and any other long-term debt, are included in a WACC calculation.
Thus, the primary objective of the office of the finance manager should be to find the optimal capital structure that will result in the lowest WACC and the maximum value of the company (shareholder wealth).
Why?
The <em><u>optimal capital structure</u></em> is estimated by calculating the mix of debt and equity that minimizes the weighted average cost of capital (WACC) of a company while maximizing its market value.
Thus when additional borrowing results in lower financial distress costs, the firm achieves the potential to reach it's Optimal Capital Structure.
Cheers!