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ziro4ka [17]
2 years ago
7

The Upper Tier has a current debt-equity ratio of .52 and a target debt-equity ratio of .45. The cost of floating equity is 9.5

percent and the flotation cost of debt is 6.6 percent. What should the firm use as their weighted average flotation cost?
Business
1 answer:
Zielflug [23.3K]2 years ago
6 0

Answer: 8.60%

Explanation:

Given the following :

Current debt-equity ratio = 0.52

Target debt-equity ratio = 0.45

Cost of floating equity = 9.5%

Floatation cost of debt = 6.6%

The Weighted average cost is calculated by finding the Weighted average cost of both debt and equity.

1 + 0.45 = 1.45

Weight of debt= 0.45/ 1.45 =0.31034

Weight * cost of debt

0.31034 × 6.6% = 2.0482758

Weight of equity = 1/1.45 = 0.6896551

Weight * cost of equity

0.6896551 × 9.5% = 6.5517241

Sum of both

(6.55 + 2.05) % = 8.60%

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Answer:

B. Each​ product, or​ job, uses the department to a different extent.

Explanation:

Departmental overhead rates uses a standard charge that is based on produced units attributed to a department.

Costs are applied with high precision.

When this model is used, the standard rate is multiplied by the number of units produced in the department, so there is no over allocation of resources.

For example if we consider the hours a machine operates. With a standard rate of $10 per hour, machine operation of 6 hours will give $10* 6 hours= $60

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1 year ago
Suppose that you are trying to choose which of two IT projects to accept. Your company employs three primary selection criteria
kirza4 [7]

Answer:

The explanation of this question is given below in the explanation section.

Explanation:

 In this question, it is asked about to select one project among two given project based on the evaluation criteria. These evaluation criteria include:

  1. Proven technology
  2. Ease of transition
  3. Projected cost saving  

  Based on my analysis, I will select the project cairso because It has high transition and high projected cost saving.

The analysis of these project is shown in attached picture with this solution.

               

3 0
1 year ago
In​ 2019, Forever​ Young, Inc. sold land for $ 110 comma 000 ​cash, purchased equipment for $ 18 comma 000 cash and issued bonds
True [87]

Answer:

The Net cash provided by investing activities​ is <u>$172,000</u>.

Hence, the correct option is <u>B. $ 172 comma 000.</u>

Explanation:

Given:

In​ 2019, Forever​ Young, Inc. sold land for $ 110,000 ​cash, purchased equipment for $ 18,000 cash and issued bonds for $ 80,000 cash.

Now, to find the Net cash activities.

Land sold of cash = $110,000.

Equipment purchased of cash = $18,000.

Bonds issued of cash = $80,000.

Now, to get the Net cash activities we put formula:

<u><em>Net cash activities = Land sold - Equipment purchased + Bonds issued</em></u>

                               =110,000-18,000+80,000\\\\=110,000+62,000\\\\=172,000.

Therefore, the Net cash provided by investing activities​ is $172,000.

Hence, the correct option is <u>B. $ 172 comma 000.</u>

6 0
2 years ago
The bonus rates for each salesperson are determined by sales amounts using the following scale:__________.
Mariana [72]

Answer:

=IF(C5>35000,IF(C5>25000<35000,IF(C5<25000,0.05*C5),0.04*C5),0.02*C5)

Explanation:

The formula to be placed in cell C8 is provided below :

=IF(C5>35000,IF(C5>25000<35000,IF(C5<25000,0.05*C5),0.04*C5),0.02*C5)

The cell will calculate the bonus according to the given data, the given data is placed in the cell using IF formula. The formula starts with = and then writing IF then applying all the terms.

7 0
2 years ago
Shellhammer Company's inventory records show the following data for the month of September: Units Unit Cost Inventory, September
Pie

Answer:

Shellhammer Company

Ending inventory = $712

Cost of goods sold = $2,492

Explanation:

a) Data and Calculations:

Date                     Item          Units           Unit Cost     Total Cost

September 1    Inventory           100           $3.34          $334.00

September 8   Purchases        450             3.50          1,575.00

September 18 Purchases        350              3.70          1,295.00

September 30 Total                900                            $3,204.00

Ending inventory                     200

Cost of goods sold                 700

Weighted Average cost = Total cost of goods available for sale/Total units available for sale

= $3,204/900 = $3.56

Value of Ending Inventory = $3.56 * 200 = $712

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b) The weighted average inventory costing, under the period inventory system, used by Shellhammer is an assumption that the costs attributable to ending inventory and cost of goods sold are determined from the average cost per unit and that these the average cost is ascertained at the end of the period.  Therefore, the cost of beginning inventory and purchases are accumulated and divided by the units of goods available for sale.

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