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2 years ago

Given the following information, determine if one of the brands is a better buy.

2 answers:

8 0

Your answer is:
B. Brand A is the better buy.
Why?
This is because if you divide 33.18 by 14 you get 2.37. If you do the same with Brand B, you get 2.40

adelina 88 [10]2 years ago

4 0

It is B. Brand A is the better buy.

I got it in the test

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Faris currently has a capital structure of 40 percent debt and 60 percent equity, but is considering a new product that will be

Gala2k [10]

Answer:

11.41%

Explanation:

Unlevered beta for new division:

= Levered beta ÷ [1 + (1 - tax) × D/E]

= 1.6 ÷ [1 + (1 - 40%) × (40 ÷ 60) ]

= 1.14

Beta for Faris's new division:

= Unlevered beta × [(1 + (1 - tax) × D/E]

= 1.14 × [1 + (1 - 40%) × (70 ÷ 30)]

= 2.74

Using CAPM,

Cost of equity, re = Rf + (beta × MRP)

= 8% + (2.74 × 5%)

= 21.71%

WACC:

= (wd × rd) + (we × re )

= (70% × 7%) + (30% × 21.71% )

= 11.41%

5 0

2 years ago

On Kyle Thomason’s $400,000.00 loan, the lender charges a 2-point service charge. In this situation, how much will Kyle have to

bearhunter [10]

Answer:

The answer is C

Explanation:

This is an interest expense.

In accounting, the rule is as follows:

Debit side increases asset and expenses while credit side decreases liability, shareholders' equity and sales or revenue.

Credit side decreases asset and expenses while credit side increases liability, shareholders' equity and sales or revenue.

2 points on $400,000 means the interest charge is 2 percent on $400,000.

So we have 0.02 x $400,000

$8,000.

It will be a debit side because it is an increase in expense.

6 0

2 years ago

Read 2 more answers

Farris Corporation, which has only one product, has provided the following data concerning its most recent month of operations:

noname [10]

Answer:

The net operating income for the month under variable costing is $11,550

Explanation:

In order to calculate The net operating income for the month under variable costing for Farron Corporation we would have to make the following calculations:

According to the given data:

i) Direct Material=$32

ii) Direct labor=$74

iii) Variable manufacturing overhead= $20

Hence, Variable costing unit product cost (i + ii + iii)= $126

A) Sales ($168 per unit * 9250 units sold)=$1,554,000

B) Less variable expenses:

Variable cost of goods sold

($126 per unit * 9250 units sold)=$1,165,500

Variable selling and administrative

($24 per unit × 9250 units) $222,000 $1,387,500

C) Contribution margin (A – B)=$166,500

D) Less : fixed expenses

Fixed manufacturing overhead= $144,750

Fixed selling and administrative $10,200 $154,950

E) Net operating Income ( C-D)=$11,550

The net operating income for the month under variable costing is $11,550

4 0

2 years ago

Oddo's Pizza is a restaurant that recently implemented a new system to identify and gather information about its regular custome

Vlad1618 [11]

Answer:

I hate this answers yours

3 0

2 years ago

Spartan Corporation, a U.S. corporation, reported $2 million of pretax income from its business operations in Spartania, which w

AVprozaik [17]

Answer:

A. = (15% X $2M) + (21% X $2M) = $720,000. Since there is no mechanism for mitigating double taxation, the branch profit will be taxed on the to tax rate of 15% and 21% which is $300,000 and $420,000.

B. The total tax for $2m branch profit if US corporations can remove foreign based profit from US taxation will be just the 15% x $2m = $300,000.

C.If they are allowed to take deductions for foreign income taxes, the total tax on the $2m branch profit will be (21% -15%) x $2m = $120,000.

Explanation:

D.1. If credit are allowed for foreign income tax paid, total tax will be ($2m - $300,000 been foreign tax paid) x 21% = $357,000

D.2.

If the charge foreign income taxes at 30% and US corporations can claim refundable credit for foreign income tax paid on foreign source income = ($2m - $300,000 been the foreign income tax paid) = $1 700,000 x 30% = $510,000

6 0

2 years ago