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stepan [7]
2 years ago
8

Decision-Making Scenarios Scenario 1 Football season starts this weekend and Steve is excited about his school’s first game. He

has already purchased his ticket and has made plans to meet his friends there. His school team is playing their long-time rival and it should be the best game of the season. On the night before the game, Steve’s parents receive a phone call from friends visiting in a city 30 miles away. Steve’s parents have not seen these friends in years because they live in a distant state. Friday night is the only time Steve’s parents can drive to see their friends. Steve’s parents have asked him to stay home from the game to babysit his six-year-old brother. They realize Steve has made plans to go to the game but feels that he will have an opportunity to attend many more games this year. Steve’s parents will let him make the final decision. What should he do?
Business
1 answer:
pickupchik [31]2 years ago
7 0

Explanation:

Being a son, Steve should obey his parents and stay at home to babysit his six year old brother, because it is always the duty of children to give respect to their parents' decisions. Though he was super excited about the football match in which his school team was going to play against the long term rivals, but because his parents' friends had a call for meeting them after so long, they asked him to stay at home as he could have many more chances of seeing such matches.

But being a parent, I should respect my son's program of watching the football match, and take the baby with me, so that the program of both son and parents would not be disturbed.

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What is the maximum period of time that a personal services contract for temporary consultant services may be awarded?
Kisachek [45]

Answer: 1 year

Explanation: According to the Defence Federal Acquisition Regulation under 237.106, personal service contracts that apply to consulting or expert services will be limited to one year. However this will only apply to duties that are temporary (limited to 1 year, or 12 months), or non cumulative days (needs to be 130 days or more that are broken up within a year). During this time the officer contracting the service will enter into a contract, make an order, or exercise options for various services that do not exceed 1 year.

6 0
1 year ago
Feldspar Inc. is considering the capital structure for a new division. Management has been given the following cost information:
34kurt

Answer:

Option 4

Explanation:

In this question ,we have to compute the WACC which is shown below:

= Weightage of debt × cost of debt × ( 1- tax rate) + (Weightage of  common stock) × (cost of common stock)

For Option 1, it would be

= (0.3 × 10%) × ( 1 - 40%) + (0.7 × 12.5%)

= 1.8% + 8.75%

= 10.55%

For Option 2, it would be

= (0.4 × 10.5%) × ( 1 - 40%) + (0.6 × 13%)

= 2.52% + 7.8%

= 10.32%

For Option 3, it would be

= (0.5 × 11%) × ( 1 - 40%) + (0.5 × 13.5%)

= 3.3% + 6.75%

= 10.05%

For Option 4, it would be

= (0.6 × 11.7%) × ( 1 - 40%) + (0.4 × 14.2%)

= 4.212% + 5.68%

= 9.89%

For Option 5, it would be

= (0.7 × 13%) × ( 1 - 40%) + (0.3 × 15.5%)

= 5.46% + 4.65%

= 10.11%

So based on this, the management should accept option 4 as it derives the best debt asset ratio

The weightage of equity would be come

= 1 - weightage of debt

8 0
2 years ago
When the stock price follows a random walk the price today is said to be equal to the prior period price plus the expected retur
Bezzdna [24]

Answer:

e. None of the above.

Explanation:

When the stock price follows a random walk the price today is said to be equal to the prior period price plus the expected return for the period with any remaining difference to the actual return due <u>due to new information related to the stock​"</u>. This is because any new information on stock which is unrelated to stock prices will lead to an increase/decrease in the stock price over a period of time.

3 0
1 year ago
OptiLux is considering investing in an automated manufacturing system. The system requires an initial investment of $4 million,
Deffense [45]

Answer:

<u>Requirement 1:</u> $257,000 Positive

<u>Requirement 2:</u> IRR is higher than 10%

Explanation:

<u>Requirement 1:</u>

We can use the following formula, to calculate the net present value of the project:

Net Present Value = Annual Cash Inflows * Annuity Factor - Investment

Here

Annual Cash Inflow is $500,000

r is 10%

n is the life of the project which is 20 years

Annuity factor = (1- (1+r)^-n)  / r   =  (1 - (1 + 10%)^-20) / 10%  = 8.514

Investment is $4,000,000

By putting values in the above equation, we have:

Net Present Value = $500,000 * 8.514 - $4,000,000

NPV = $257,000 Positive

<u>Requirement 2:</u>

Internal rate of return gives the required rate at which NPV is zero.

Since NPV is positive at 10%, IRR will be higher than 10%.

Always remember that, increase in the discount rate decreases the NPV and vice versa.

5 0
2 years ago
g Bonds of ABC Corp. are currently priced at $932. The bonds have a face value of $1,000. Coupon payments occur twice per year.
Butoxors [25]

Answer:

a. discount bonds

Explanation:

When the Price of the Bond is less than the par value (face value) of the bond, we say that the bonds are trading at a discount.

When the Price of the Bond is greater than the par value (face value) of the bond, we say that the bonds are trading at a premium.

In this case the price is $932 and the face value is $1,000, thus the bonds are discount bonds.

7 0
2 years ago
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