Answer:
common stock = $80,308
Explanation:
assets = liabilities + equity
current balance:
$260,881 = $150,673 + $110,208
$110,208 = common stock + retained earnings = $57,508 + $52,700
next year:
net income = $44,200
dividends = $12,000
assets = $260,881 + $55,000 = $315,881
liabilities = $150,673
equity = $315,881 - $150,673 = $165,208
retained earnings = $52,700 + $44,200 - $12,000 = $84,900
common stock = $165,208 - $84,900 = $80,308
Keith, an employee of Sunbeam, Inc., has gross salary for May of $15,000. The entire amount is under the OASDI limit of $118,500 and thus subject to FICA. He is also subject to federal income tax at a rate of 20%. Which of the following is a part of the journal entry to record the disbursement of his net pay? (Assume a FICAOASDI Tax of 6.2% and FICAMedicare Tax of 1.45%.) (Round the final answer to the nearest dollar.)
Answer:
there are no options listed, but the journal entry to record Keith's salary should be:
May 31, wages expense
Dr Wages expense 15,000
Dr FICA taxes expense 1,147.50
Dr FUTA taxes expense 900
Cr Federal income taxes withheld payable 3,000
Cr FICA OASDI taxes withheld payable 930
Cr FICA Medicare taxes withheld payable 217.50
Cr FICA OASDI taxes payable 930
Cr FICA Medicare taxes payable 217.50
Cr Wages payable 10,852.50
I didn't include SUTA taxes or any other discount (e.g. health insurance, IRA contributions, union contributions, etc.) because sometimes they do not exist, but the previous ones always exist.
Determine the present values if $5,000 is received in the future (i.e., at the end of each indicated time period) in each of the following situations:
percent for ten years
percent for seven years
percent for four years
Assume you are planning to invest $5,000 each year for six years and will earn 10 percent per year. Determine the future value of this annuity if your first $5,000 is invested at the end of the first year.
Determine the present value now of an investment of $3,000 made one year from now and an additional $3,000 made two years from now if the annual discount rate is 4 percent.
What is the present value of a loan that calls for the payment of $500 per year for six years if the discount rate is 10 percent and the first payment will be made one year from now? How would your answer change if the $500 per year occurred for ten years?
Determine the annual payment on a $500,000, 12 percent business loan from a commercial bank that is to be amortized over a five-year period.
Determine the annual payment on a $15,000 loan that is to be amortized over a four-year period and carries a 10 percent interest rate. Also prepare a loan amortization schedule for this loan.
Assume a bank loan requires an interest payment of $85 per year and a principal payment of $1,000 at the end of the loan's eight-year life.
At what amount could this loan be sold for to another bank if loans of similar quality carried an 8.5 percent interest rate? That is, what would be the present value of this loan?
Now, if interest rates on other similar-quality loans are 10 percent, what would be the present value of this loan?
What would be the present value of the loan if the interest rate is 8 percent on similar-quality loans?
Answer:
1)
the %s were missing so I looked for a similar question:
we must use the present value formula:
present value = future value / (1 + interest rate)ⁿ
5% ⇒ $5,000 / 1.05¹⁰ = $3,069.57
7% ⇒ $5,000 / 1.07⁷ = $3,113.75
9% ⇒ $5,000 / 1.09⁴ = $3,542.13
2)
we can use the future value of an annuity formula:
future value = annual payment x annuity factor
FV = $5,000 x 7.7156 (FV annuity factor, 10%, 6 years) = $38,578
3)
PV = $3,000/1.04 + $3,000/1.04² = $2,884.62 + $2,773.67 = $5,658.29
4)
present value of an annuity = $500 x 4.3553 (PV annuity factor, 10%, 6 periods) = $2,177.65
present value of an annuity = $500 x 6.1446 (PV annuity factor, 10%, 10 periods) = $3,072.30
5)
annual payment = present value / annuity factor = $500,000 / 3.6048 (PV annuity factor, 12%, 5 years) = $138,703.95
6)
annual payment = present value / annuity factor = $15,000 / 3.1699 (PV annuity factor, 10%, 4 years) = $4,732.01
7)
the value of the loan = PV of the principal + PV of the interest payments
PV of the principal = $1,000 / 1.085⁸ = $520.67
PV of interest payments = $85 x 5.63918 (PV annuity factor, 8.5%, 8 periods) = $479.33
market value of the debt = $1,000
8)
the value of the loan = PV of the principal + PV of the interest payments
PV of the principal = $1,000 / 1.085¹⁰ = $442.29
PV of interest payments = $85 x 5.3349 (PV annuity factor, 10%, 8 periods) = $453.47
market value of the debt = $895.76
9)
the value of the loan = PV of the principal + PV of the interest payments
PV of the principal = $1,000 / 1.08⁸ = $540.27
PV of interest payments = $85 x 5.7466 (PV annuity factor, 8.5%, 8 periods) = $488.46
market value of the debt = $1,028.73
Suppose you earn $40,000 per year and pay taxes based on marginal tax rates. The first tax bracket, which taxes at 10 percent, ranges from $0 to $20,000. The second tax bracket, which taxes at 25 percent, ranges from $20,001 to $80,000. How much do you pay in total taxes
Answer: $7,000
Explanation:
given data:
income yearly = $40,000
tax rate = 10% for first $20,000
25% for next $21,000 - $80,000
solution:
tax payable for first $20,000
this is gotten by multiplyomg the tax rate with the first $20,000 income earned.
= 0.1 * $20,000
= $2,000
tax payable for next 21,000 - $80,000
= 0.25 * $20,000
= $5,000
total tax payable = $2,000 + $5,000
= $7,000
Sloan Transmissions inc.,has the following estimates for its new gear assembly project: price=$2,200 per unit., variable cost= $440 per unit., fixed costs = $1.6 million., quantity = 90,000 units. suppose the company believes all of its estimates are accurate only to
Answer:
Best case
Price 2,640
Variable cost per unit 352
Fixed cost 1.28 million
Quantity 108,000 units
Worst case
Price 1,760
Variable cost per unit 528
Fixed cost 1.92 million
Quantity 72,000 units
Explanation:
Based on the information given in the best case expenses would be 20% lower while the incomes will be 20% higher.
Calculation for the price
Price = 2,200 ×(1+0.20)
Price=2,200×1.2
Price = 2,640
Calculation for Variable cost per unit
Variable cost per unit = 440× (1-0.20)
Variable cost per unit=440×0.80
Variable cost per unit= 352
Calculation for fixed cost
Fixed cost = 1.60 million ×(1-0.20)
Fixed cost=1.60 million× 0.80
Fixed cost= 1.28 million
Calculation for the Quantity
Quantity = 90,000 × (1+0.20)
Quantity =90,000×1.2
Quantity=108,000units
Therefore, Best case will be:
Price 2,640
Variable cost per unit 352
Fixed cost 1.28 million
Quantity 108,000units
Based on the information given in the worst case expenses would be 20% higher while incomes would be 20% lower.
Calculation for the price
Price = 2,200 × (1-0.20) = 1080
Price=2,200 ×0.8
Price=1,760
Calculation for the Variable cost per unit
Variable cost per unit = 440 × (1+0.20)
Variable cost per unit=440× 1.2
Variable cost per unit= 528
Calculation for Fixed cost
Fixed cost = 1.60 million × (1+0.20)
Fixed cost=1.60 million×1.2
Fixed cost= 1.92 million
Calculation for the Quatity
Quantity = 90,000 ×(1-0.20)
Quantity=90,000×0.8
Quantity= 72,000 units
Therefore Worst case will be:
Price 1,760
Variable cost per unit 528
Fixed cost 1.92 million
Quantity 72,000 units
A company has a capital project with before-tax cash inflows in real dollars that are expected to be $200,000 within 2 years. The inflation rate is expected to be 6% each year during that period. What is the before-tax cash inflow expressed in nominal dollars
The before-tax cash inflow expressed in nominal dollars is $224,720
Using this formula
Before-tax cash inflow=Before-tax cash inflows in real dollars*(1+Inflation rate)*(1+Inflation rate)
Let plug in the formula
Before-tax cash inflow=$200,000*(1+.06)*(1+0.06)
Before-tax cash inflow=$200,000*1.06*1.06
Before-tax cash inflow=$212,000*1.06
Before-tax cash inflow=$224,720
Inconclusion the before-tax cash inflow expressed in nominal dollars is $224,720
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how will a new front desk manager address a problem of lateness in a hotel.
Answer:
They will have a system like a lot book where they would take in the visitors details and then Mark in or out and time of arrival and leaving
Hope this helps :)
Explanation:
Alexander has been accepted as a freshman at a college two hundred miles from his home for the fall semester. Alexander's wealthy uncle, Michael, decides to give Alexander a car for Christmas. In November, Michael makes a contract with Jackson Auto Sales to purchase a new car for $18,000 to be delivered to Alexander just before the Christmas holidays, in mid-December. The title to the car is to be in Alexander's name. Michael pays the full purchase price, calls Alexander and tells him about the gift, and takes off for a six-month vacation in Europe. Is Alexander an intended third party beneficiary of the contract between Michael and Jackson Auto Sales
Answer:
Yes.
Alexander is an intended third party beneficiary of the contract between Michael and Jackson Auto Sales.
Explanation:
In the law of contracts, Alexander becomes a third-party beneficiary of the contract between Michael and Jackson Auto Sales, and he has the right to sue in the contract notwithstanding that he was not an active party to the contract. Some of the factors that may be present to show that a Alexander is an intended beneficiary are: (1) the contract's performance is rendered directly to Alexander; (2) Alexander has rights to control the details of the performance; or (3) there is an express designation in the contract, e.g. the title to the car is in Alexander's name.
A stock is bought for $24.00 and sold for $26.00 one year later, immediately after it has paid a dividend of $1.50. What is the capital gain rate for this transaction?
Answer:
8.33%
Explanation:
A stock is bought for $23.00
The stock is sold for $26 after one year
The dividend paid is $1.50
Therefore, the capital gain rate can be calculated as follows
Capital gain= P1-Po/Po
= 26-24/24
= 2/24
= 0.0833 ×100
= 8.33%
Hence the capital gain rate for this transaction is 8.33%
Question 2 options: Assume that in short-run equilibrium, a particular monopolistically competitive restaurant (Applebee's) charges $12 for each order of Chicken Parmesan and sells 52 orders per day. The average total cost (ATC) for those 52 orders is $10. Enter your answers below to the nearest whole number. How much revenue will the firm take in each day
Answer:
104
Explanation:
Facial Cosmetics provides plastic surgery primarily to hide the appearance of unwanted scars and other blemishes. During 2021, the company provides services of $402,000 on account. Of this amount, $52,000 remains uncollected at the end of the year. An aging schedule as of December 31, 2021, is provided below.
Age Group Amount Estimated Percent
Receivable Uncollectible
Not yet due $ 32,000 4 %
0-30 days past due 10,200 6 %
31–60 days past due 7,200 12 %
More than 60 days past due 2,600 30 %
Total $ 52,000
Required:
1. Calculate the allowance for uncollectible accounts.
2. Record the December 31, 2021, adjustment, assuming the balance of Allowance for Uncollectible Accounts before adjustment is $400 (debit).
3. On April 3, 2022, a customer’s account balance of $500 is written off as uncollectible. Record the write-off.
4. On July 17, 2022, the customer whose account was written off in requirement 3 unexpectedly pays $100 of the amount but does not expect to pay any additional amounts. Record the cash collection.
Answer: Please see explanation for answers
Explanation:
Age Group Amount Estimated Percent Estimated Amount
Receivable Uncollectible Uncollectible
Not yet due $ 32,000 4 % $1,280
0-30 days past due 10,200 6 % $612
31–60 days past due 7,200 12 % $864
More than 60 days past due 2,600 30 % $780
Total $ 52,000 $3536
Calculation
1) Estimated Amount Uncollectible = Amount Receivable x Estimated Percent Uncollectible =
4% x 32,000= $1,280
6% x 10,200=$612
12% x 7,200=$864
30% x2600=$780
Total = $3,536
The allowance for uncollectible accounts = $3,536
2) Journal to Record the December 31, 2021, adjustment for a debit of $400
Estimated Amount Uncollectible =$3,536
Adjusted = $3536 + debit $400=$3,936
Date Account Debit Credit
Dec 31, 2021, Bad debts Expense $3,936
Allowance for uncollectible accounts $3,936
3) Journal to Record the write-off of $500
Date Account Debit Credit
April 3, 2022, Allowance for uncollectible
accounts $500
Accounts receivable $500
4a)Journal to reinstate the account previously wrtten off On July 17, 2022
Date Account Debit Credit
July 17, 2022, Accounts receivable $100
Allowance for uncollectible accounts $100
4b)Journal to record collection of cash
Date Account Debit Credit
July 17, 2022, Cash $100
Accounts receivable $100
A Journal Entry refers to simply a summary of the debits and also credits of the transaction entry to the Journal. When A Journal entries are important to the transaction because they allow us to sort our transactions into manageable data.
Age Group Amount Estimated Percent Estimated Amount
Receivable Uncollectible Uncollectible
Not yet due $ 32,000 4 % $1,280
0-30 days past due 10,200 6 % $612
31–60 days past due 7,200 12 % $864
More than 60 days past due 2,600 30 % $780
Total $ 52,000 $3536
The formula apply Then we Estimated the Amount Uncollectible is =
Amount Receivable x Estimated Percent *Uncollectible =
4% x 32,000= $1,280
6% x 10,200= $612
12% x 7,200= $864
30% x2600= $780
Then the Total is = $3,536
The allowance for uncollectible accounts = $3,536
Journal Entry
2) Journal to Record the December 31, 2021, adjustment for a debit of $400
Estimated Amount Uncollectible =$3,536
Adjusted = $3536 + debit $400=$3,936
Date Account Debit Credit
Dec 31, 2021, Bad debts Expense $3,936
Allowance for uncollectible accounts $3,936
3) Journal to Record the write-off of $500
Date Account Debit Credit
April 3, 2022, Allowance for uncollectible
accounts $500
Accounts receivable $500
4a)Journal to reinstate the account previously written off On July 17, 2022
Date Account Debit Credit
July 17, 2022, Accounts receivable $100
Allowance for uncollectible accounts $100
4b)Journal entry to the record collection of cash
Date Account Debit Credit
July 17, 2022, Cash $100
Accounts receivable $100
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Mountain Ski Corp. was set up to take large risks and is willing to take the greatest risk possible. Lakeway Train Co. is more typical of the average corporation and is risk-averse.
Projects Returns: Expected Value Standard Deviation
A $ 310,000 $ 173,000
B 676,000 413,000
C 163,000 120,000
D 134,000 101,000
a-1. Compute the coefficients of variation. (Round your answers to 3 decimal places.)
a-2. Which of the following four projects should Mountain Ski Corp.
A. Project B
B. Project A
C. Project C
D. Project D
Answer:
B. Project A
Explanation:
Coefficient of variation=standard deviation/expected return value
Project A:
Coefficient of variation=$173,000/$310,000= 0.558
Project B:
Coefficient of variation=$413,000/$676,000= 0.611
Project C:
Coefficient of variation=$120,000/$163,000=0.736
Project D:
Coefficient of variation=$101,000/$134,000=0.754
The Project A has the lowest rate of risk per unit of return, hence, it is the preferred choice of investment
Advantages of the corporate form include all of the following except: A. shares can be purchased in small amounts. B. ownership interests are transferrable. C. easy to raise capital. D. legal liability of its owners is unlimited.
Statement that does not describes Advantages of the corporate form is D: legal liability of its owners is unlimited.
A corporation serves as a business set up whereby the legal entity is been separated from from its owners.Advantages of this setting is that shares can be purchased in small amounts and it allows transfer of ownership interests and it is very easy to raise capital in this setting.Therefore, option D is correct.
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. In the step-by-step deployment of MIS in a business, which (and why) of the following will you consider as a Foundation Step for Stock broker.
a. Enterprise Resource Planning Module
b. Supply Chain Management Module
c. Customer Relationship Management Module
Answer:
C
Explanation:
Customer Relationship Management Module
Hope it helps
When work activities are too complex to standardize through extensive training for employees, companies need to coordinate work effort through precise job descriptions. Group of answer choices True False
Answer: False
Explanation:
The idea that when work activities are too complex to standardize through extensive training for employees, companies need to coordinate work effort through precise job descriptions is wrong.
Rather, When work activities are too complex to standardize through the goals or the processes, what such companies due to coordinate woke activities is by training their employees or hiring people that have previous knowledge on the work.
Burke's Corner currently sells blue jeans and T-shirts. Management is considering adding fleece tops to its inventory to provide a cooler weather option. The tops would sell for $53 each with expected sales of 4,300 tops annually. By adding the fleece tops, management feels the firm will sell an additional 285 pairs of jeans at $65 a pair and 420 fewer T-shirts at $26 each. The variable cost per unit is $36 on the jeans, $16 on the T-shirts, and $31 on the fleece tops. With the new item, the depreciation expense is $33,000 a year and the fixed costs are $76,000 annually. The tax rate is 35 percent. What is the project's operating cash flow?
Answer: $26,282.25
Explanation:
The operating cash-flow will be the amount of cash the company got from sales less the amount they would have to pay on taxes.
Cash from tops
= (Sales price - Variable costs) * quantity
= ( 53 - 31) * 4,300
= $94,600
Cash from jeans
= ( 65 - 36) * 285
= $8,265
Cash from jeans
= (26 - 16) * -420
= -$4,200
As this deals with cash, a tax adjusted depreciation will need to be added back because it is a non cash expense and fixed costs will have to be deducted.
Pre-tax operating cash-flow = 94,600 + 8,265 - 4,200 - 76,000
= $22,665
Post-tax Project Operating cash-flow
= $22,665 * ( 1 - 0.35) + (depreciation * tax)
= $22,665 * ( 1 - 0.35) + (33,000 * 0.35)
= $14,732.25 + 11,550
= $26,282.25
Which contingency of power are unions mainly applying by going on strike at a critical time in the company's business cycle
Answer:
Centrality
Explanation:
By going on strike at a critical time in business cycle the contingency of power is centrality. Centrality is the degree and nature of power of interdependence that exists between between the the person holding power and others. Centrality determines the number of people who are affected by the decisions made by the person holding power.
A company has 825 shares of $50 par value preferred stock outstanding, and the call price of its preferred stock is $63 per share. It also has 17,000 shares of common stock outstanding, and the total value of its stockholders' equity is $626,575. The company's book value per common share equals:
Answer:
Book Value Per Common Share = $33.80
Explanation:
Book Value Per Common Share = Stockholders' equity - Shares * Call Price per shares) / Shares of common stock outstanding
= ($626,575 - 825*63) / 17000
= ($626,575 - $51,975) / 17,000
= $574,600 / 17,000
= $33.80
You are going to form a portfolio with stocks A & B with the following information: Stock Expected Return Standard Deviation wi A 10% 30% 0.2 B 20% 40% 0.8 What is the portfolio’s standard deviation
Answer:
portfolio's standard deviation = 0.3256
Explanation:
Stock Expected Return Standard Deviation Wi
A 10% 30% 0.2
B 20% 40% 0.8
covariance = [(10% - 10%) x (20% - 20%)] / (2 - 1) = 0
portfolio's standard deviation = (stock A's Wi² x variance) + (stock B's Wi² x variance) + (2 x covariance x weight A x weight B)
portfolio's standard deviation = √{(0.2² x 0.09) + (0.8² x 0.16) + 0} = √(0.0036 + 0.1024) = √0.106 = 0.3256
he sales of the Garland Corporation are projected to grow exponentially for the years between 2010 and 2015 from $110 million to $160 million. (a) Find a model giving the sales of Garland Corporation in year t between 2010 (t
Answer:
between 2010 and 2015 he only grown $50.
Explanation:
That why he come from $110 to $160. In the middle of the years he only grown $50.
I hope it help you understand.
A model that gives the sales of Garland Corporation in year t between 2010 and 2015 is [tex]S = S_{o}e^{0.075t}[/tex]
What is the model that represents the expoential growth of sales?The equation that can be used to represent exponential functions is:
[tex]S = S_{o}e^{rt}[/tex]
Where:
s = future sales value [tex]S_{o}[/tex] = present sales value r = rate of growth t = number of years,r = (In 160 / 110) /5
r = 0.075
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Danny owns two companies where he has recently made changes. The margin of safety ratio for Company X is 42% and the margin of safety ratio for Company Y is 25%. What does this imply about the two companies?
Answer: Company X could lose more business before it will begin experiencing financial difficulties when it is being compared to company Y
Explanation:
Margin of safety ratio simply helps to understand the extent to which there'll be drop in sales before a company will begins to make a loss.
Since the margin of safety ratio for Company X is 42% and the margin of safety ratio for Company Y is 25%, it means that Company X could lose more business before it begins experiencing financial difficulties when it is compared to company Y.
Another term for "food poisoning" is?
Answer:
botulism. salmonella.
Explanation:
Technology helps managers to monitor and control business activities and includes each of the following except:
a. Reduced processing errors
b. Less extensive testing of records
c. New evidence of processing
d. Separation of duties
Answer:
Correct Answer:
b. Less extensive testing of records
Explanation:
Technology which is the use of machines or electronical devices to make work easier is applied in most organizations by organizational managers. Unfortunately, less extensive testing of records is not one of its uses but rather detailed and extensive testing in order to check if there is any error in the records.
In trial balance, which accounts with normal balance is recorded at the credit side?
You consider undertaking the research project. It will increase sales by $100K per year starting next year and its life is 10 years. The maintenance cost is $50K and the depreciation of the equipment is 20K per year. The tax rate is 40% and there are no changes in net operating working capital. What is the annual operating cash flow from the project? A. $10,000 B. $18,000 C. $38,000 D. $30.000
Answer: C. $38,000
Explanation:
The Operating cashflow for a project will be the net income earned from it less any taxes but including depreciation.
In formula form;
Operating cash flow = EBIT - tax paid + depreciation
Earnings Before Interest and Tax
= Sales - Expenses
= 100,000 - 50,000 - 20,000
= $30,000
Tax paid
= EBT * 40%
= 30,000 * 40%
= $12,000
Operating cash flow = EBIT - tax paid + depreciation
= 30,000 - 12,000 + 20,000
= $38,000
Note; Depreciation is added back because it is a non-cash expense.
Prepare journal entries to record the following four separate issuances of stock. A corporation issued 7,000 shares of $20 par value common stock for $168,000 cash. A corporation issued 3,500 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $34,000. The stock has a $1 per share stated value. A corporation issued 3,500 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $34,000. The stock has no stated value. A corporation issued 1,750 shares of $25 par value preferred stock for $77,750 cash.
Answer: Please see explanation column for answer
Explanation:
1. For shares issued in excess of par value common stock
Amount Debit Credit
Cash $168,000
Common stock at $20 ( 7000 x 20) $140,000
Paid in excess of par value common stock
(168,000 - 140,000) $28,000
2. For shares issued to Promoters at stated value
Amount Debit Credit
Organisational expenses $34,000
Common stock at $1 ( 3,500x 1) $3,500
Paid in capital in excess of stated value
common stock(34,000 - 3,500) $30, 500
3. For shares issued to Promoters at no stated value
Amount Debit Credit
Organisational expenses $34,000
Common stock at $1 no par value $34,000
4.For shares issued in excess of par value preferred stock
Amount Debit Credit
Cash $77,750
preferred stock at $25(1,750 x 25) $43,750
Paid in capital in excess of par value
Preferred stock(77,750 -43,750) $34,000
you have been given this probability distribution for the holding for the holding-period return for GM stock. what is the expected standard deviation for GM stock
Answer:
14.86%
Explanation:
For computing the standard deviation, first we have to determine the expected return and then variance which is shown below:
= (Expected return of the boom × probability of boom) + (expected return of the normal growth × probability of normal growth) + (expected return of the recession × probability of recession)
= (0.30 × 0.40) + (0.11 × 0.40) + (-0.10 × 0.20)
= 0.12 + 0.044 - 0.02
= 0.144
Now the variance would equal to the
= Probability × (Return - Expected Return) ^2
For boom:
= 0.40 × (0.30 - 0.144) ^2
= 0.0097344
For normal growth:
= 0.40 × (0.11 - 0.144) ^2
= 0.0004624
For recession:
= 0.20 × (-0.10 - 0.144) ^2
= 0.0119072
So, the total variance would be
= 0.0097344 + 0.0004624 + 0.0119072
= 0.022104
Now as we know that
Standard deviation is
[tex]\sqrt{variance} \\\\ = \sqrt{0.022104}[/tex]
= 14.86%
A company with a WACC of 8.5% is considering two possible investments. Project A will return 10% and be financed using equity costing 9.5%. Project B will return 8% and be financed using debt costing 6%. Which project should the company undertake
Answer:
The Company should undertake project A.
Explanation:
The finance of projects is usually done through pooling of funds, that is using various sources of finance. The WACC represents the return required by providers of this finance and also shows the risk of the company.
A company will always accept projects that provide a return higher that their weighted average cost of capital (risk) and reject any project offering a return below the WACC.
Conclusion :
The Company should undertake project A as this gives a return higher than the WACC of 8.5%.
Advantages of equity financing over debt financing include that: Multiple Choice equity financing does not require repayment. dividends are mandatory. stockholders' control will increase. dividends are tax deductible.
Answer: equity financing does not require repayment.
Explanation:
Equity financing simply means a method of financing which has to do with the sale of shares. Debt financing occurs when money is raised by a company through the sale of debt instruments to the investors.
It should be noted that equity financing is the opposite of debt financing. Unlike the debt financing, equity finance doesn't carry a repayment obligation. In this case, the investors purchase the shares in the company and they make money through the dividends gotten or through the eventual sale of shares.
Also, there is less risky with the equity financing as there's no fixed monthly loan payments to make and this can be of immense benefit to startup businesses.
The capital budgeting method that takes into account both the size of the original investment and the discounted cash flows is the Group of answer choices
Answer:
Option D (profitability index) is the correct choice.
Explanation:
Options aren't mentioned in the issue above. Please find the full query attachment here.
Capital budgeting seems to be the mechanism whereby the creditors assess the value of a future investment project. This corresponds to something like the timeframe by which the planned project can produce adequate income to regain the original investment.
The 3 most prevalent frameworks to contractor choosing are given below:
Payback period.Net present value.Internal rate of return.Some other choices have no relation with the specified scenario. So that the option here is just the appropriate ones.
whatis the general termfor resources used by a business to produce good or services referred to as
Answer:
Factors of Production