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2 years ago

An all-equity firm is considering the following projects:

Business

1 answer:

FromTheMoon [43]2 years ago

4 0

Answer:

Projects Y and Z

b. Projects W and Z

c. Projects W and Y

Explanation:

CAPM equation : Expected return = Risk free rate + Beta x (Expected market return - Risk free rate)

W = 4% + [0.85 x (11% - 4%)] = 9.95%

X = 4% + (0.92 x 7%) = 10.44%

Y = 4% + (1.09 x 7%) = 11.63%

Z = 4% + (1.35 x 7%) = 13.45%

Projects Y and Z have an expected return greater than 11%

b. Projects W and Z should be accepted because its expected return is higher than the IRR

c. Project W would be incorrectly rejected because the expected rate of return is less than the overall cost of capital (i.e. 9.95 is less than 11). But its expected rate of return is greater than the IRR

Y would be incorrectly accepted because its expected rate of return is greater than the overall cost of capital but its expected rate of return is less than the IRR

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Mark's initial revenue was $450 (150lb)($3) and his new revenue was $500 (100lb)($5). Since Mark's revenue increased when the price if apples rose, the demand for Mark's gourmet applies must be inelastic. Elastic, because even though there was a change in price, the change in price wasn't substantial.

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2 years ago

Read 2 more answers

Harrelson Company manufactures pizza sauce through two production departments: Cooking and Canning. In each process, materials a

Marina CMI [18]

Answer:

Both the department entries are posted.

Explanation:

Harrelson Company

General Journal

Date Account Titles and Explanation Debit Credit

April 30 Work In Process Cooking 22,800

Work In Process Canning 10,900

Direct Materials Inventory 33700

(To record materials used)

30 Work In Process Cooking 9,430

Work In Process Canning 7,230

Direct Labor 16,660

(To assign factory labor to production)

30 Work In Process Cooking 33,800

Work In Process Canning 28,100

Manufacturing Overhead 61900

(To assign overhead to production)

30 Work In Process Canning 55,900

Work In Process Cooking 55,900

(To record costs transferred in) Assuming Canning is the second department and cooking is the first. So costs are transferred from the first to the second department.

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2 years ago

The ABC Company had its highest level of production in May when they produced 4,000 units at a total cost of $110,000 and its lo

lukranit [14]

Answer:

Fixed cost= $50,000

Explanation:

The high low method is the process by which highest level of activity ND lowest level of activity are comapred along with total cost at each level. Fixed and variable cost can be calculated using equations.

Variable cost= (Highest activity cost- Lowest activity cost)/(Highest activity unit- Lowest activity unit)

Variable cost= (110,000-87,500)/ (4,000-2,500)

Variable cost= 22,500/ 1,500= $15 per unit

Fixed cost= High activity cost- (Variable cost* High activity units)

Fixed cost= 110,000- (15*4,000)

Fixed cost= 110,000- 60,000

Fixed cost= $50,000

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2 years ago

A good measure of average should be:

ella [17]

Answer:b

Explanation:

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2 years ago

Archer, in Chicago, wrote to Ganze in New York City offering to purchase her antique car. When she received the letter, Ganze ma

olya-2409 [2.1K]

Answer:

Explanation:

<em>Remember, </em>in business law, as long as both parties did not sign a contractual document, the purchase is not legal.

In this case, it could be observed that Ganze only "mailed an acceptance" not a signed document between both parties agreeing on the purchase of her antique car.

Also, the fact that she quickly sent a telegram letting Archer know that she is rejecting the offer, shows that she acted in good fate to withdraw her acceptance on time.

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2 years ago