Answer:
Correct option is B.
<u> The weight of debt for WACC purposes is 23.08%</u>
Explanation:
Amount of debt = 2 million x 0.90
= 1.80 million
Amount of equity = 2 million x 3
= 6 million
Weight of debt = amount of debt/ (amount of debt + amount of equity)
= 1.80 million / ( 6 million + 1.80 million)
=23.08%
Answer:
It is more profitable to upgrade the calculators.
Explanation:
Giving the following information:
The Tolar Corporation has 500 obsolete desk calculators that are carried in inventory at a total cost of $720,000. If these calculators are upgraded at a total cost of $140,000, they can be sold for a total of $200,000. As an alternative, the calculators can be sold in their present condition for $50,000.
We need to determine whether it is more convenient to upgrade the calculators or sell them as they are.
Upgrade:
Effect on income= 200,000 - 720,000 - 140,000= -$660,000
Not upgrade:
Effect on income= 50,000 - 720,000= -$670,000
It is more profitable to upgrade the calculators.
Answer:
False
Explanation:
The general purpose of idea generation is to come up with the largest amount of possible ideas, it doesn't matter how crazy they might seem.
The purpose of succeeding stages will be to funnel the ideas and only work and develop the most promising ones.
Answer:
NPV= $31,808.91
Explanation:
Giving the following information:
Io= -$150,000.
The operating costs:
Year 1= $5,000
Year 2= $6,000
Year 3= $7,000
The benefits:
Year 1= $80,000
Year 2= $90,000
Year 3= $70,000
To calculate the Net Present Value (NPV) we need to use the following formula:
NPV= -Io + ∑[Cf/(1+i)^n]
Cf= cash flow
Io= -150,000
Cf1= 80,000 - 5,000= 75,000/1.04= $72,115.39
Cf2= 90,000 - 6,000= 84,000/1.04^2=$77,662.72
Cf3= 70,000 - 7,000= 63,000/1.04^3= $56,006.77
NPV= $31,808.91
