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kozerog [31]
2 years ago
9

Superb Ltd. Is a well diversified company engaged in development of real estate, tourism and

Business
1 answer:
Fittoniya [83]2 years ago
8 0

Answer:

Since the company's debt level is very low, then it should probably issue new debt. The advantage of issuing debt is that debt is always cheaper than equity. E.g. the company issues a bond with a 10% coupon rate and the corporate tax rate is 30%. The after tax cost of debt = 10% x (1 - 30%) = 7%.

Issuing bonds with a 10% coupon rate is not something impossible, and actually the interest rate is pretty high. Some companies issue bonds at 4 or 5%. But to raise new capital offering a return on equity of 7% or less is extremely odd and difficult. Generally, the cost of equity of normal corporations tends to be about twice as higher as the cost of debt.

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You have determined that an OCF of $151,406 will result in a zero net present value for a project, which is the minimum requirem
oee [108]

Answer:

It should be accepted as the cash flow is greater than minimum

Explanation:

We should determinate if he project can generate a cashflow of 151,406 after taxes to be accepted:

market x market share = sales in units

140,000 units x 8.5% = 11,900 units

sales x contribution less fixed cost = income before taxes

11,900 x 56.11 - 387,200= 280,509

after tax 280,509 x (1 - 21%) = 221,602.11‬

project cash flow > minimum cash flow

      221,602.11      >         151,406

It should be accepted as the cash flow is greater than minimum

7 0
2 years ago
Sometimes very high ________ costs are recognized before a project begins and reducing these costs through shorter project durat
Kruka [31]

Answer:

Overhead costs

Explanation:

When high overhead costs are recognised before project starts there will be a need to manage them. Since overhead cost increase as duration of project increases, reduction in project duration will go a long way in reducing cost incurred.

Overhead costs can include wages, rent, utility bills, maintenance costs and so on. They can also be reduced when costs that are not adding value is recognised.

8 0
2 years ago
Read 2 more answers
In the United States, many agricultural products (such as corn, wheat, and rice) are subsidized. What are the benefits of subsid
timofeeve [1]

Answer:

Correct answer:

b) lower prices for consumers and producers

Explanation:

In United States of America, food is one of the fundamental things which the government guarantee its citizens. Most agricultural products are subsidized by the government both for the farmers (producer) and the citizens (consumers).

<em>The subsidy for the producer could be inform of payment of incentive, giving out agricultural implements and grants. On the other-hand, the subsidy to the consumer could be inform of reduced price of the agricultural food crops.</em>

6 0
2 years ago
marketing student is estimating the average amount of money that students at a large university spent on sporting events last ye
SCORPION-xisa [38]

Answer:

Option A

Explanation:

We can be 90% confident that the mean amount of money spent at sporting events last year by all the students at this university is between $ 217 and $ 677.

The interval offered by option A, is the same result obtained by the student on his research. By the definition the confidence interval permit us to conclude that the mean of the population would be on that interval.

7 0
2 years ago
Read 2 more answers
Arrange the types of investments in the correct order from the least risky to the most risky investment. (speculative stocks, re
jolli1 [7]

I believe the answer is:


1/Retirement plans

Especially the one that arranged by the government since it guaranteed by Federal banks

2/Property

The value would almost always increasing over time


3/A-rated bonds

A- rated bonds is score that given to the bond that have strong chance of return by credit rating company

4/Speculative stocks

If speculative stocks is scored by rating company, it would become B-rated or lower.

8 0
2 years ago
Read 2 more answers
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