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ANEK [815]
2 years ago
12

Keys Printing plans to issue a $1,000 par value, 20-year noncallable bond with a 7.00% annual coupon, paid semiannually. The com

pany's marginal tax rate is 40.00%, but Congress is considering a change in the corporate tax rate to 45.00%. By how much would the component cost of debt used to calculate the WACC change if the new tax rate was adopted? a. –0.30% b. –0.35% c. –0.36% d. –0.44%
Business
1 answer:
sveticcg [70]2 years ago
3 0

Answer:

option b) -0.35%

Explanation:

For tax rate = 40%

After after-tax cost of debt = cost of debt × ( 1 - Rate )

= 7% × ( 1 - 0.40 )

= 4.20%

For tax rate = 45%

After after-tax cost of debt = cost of debt × ( 1 - Rate )

= 7% × ( 1 - 0.45 )

= 3.85%

Therefore, the change in cost of debt = 3.85% - 4.20% = -0.35%

Hence,

Correct answer is option b) -0.35%

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Many manufacturers have quality control programs that include inspection of incoming materials for defects. Suppose a computer m
zimovet [89]

Answer:

Explanation:

There are total 5 batches and two boards are selected from each batch for inspection.

Let the boards are numbered from 1 to 5.

If the selected boards are 1 and 2, then it is represented in pair as (1, 2).

If the selected boards are 1 and 3, then it is represented in pair as (1, 3).

Similarly, other pairs can be obtained.

a) Let X be the number of defective boards observed among the two inspected.

If the boards 1 and 2 are the only defective boards in a lot of five, then

(1,2),x=2; (1,3),x=1; (1,4),x=1; (1,5),x=1;

(2,3),x=1; (2,4),x=1; (2,5),x=1;

(3,4),x=0;\ (3,5),x=0;\ (4,5),x=0.(3,4),x=0; (3,5),x=0; (4,5),x=0.

P(X=0)=  3/10 =0.3

P(X=1)={6 \over 10}=0.6P(X=1)=  6/10 =0.6

P(X=2)={1 \over 10}=0.1P(X=2)=  1/10 =0.1

b)

x                  0               1                    2

p(x)            0.3           0.6                0.1

​

​μ  X  =0⋅0.3+1⋅0.6+2⋅0.1=0.8

σ  X ² =(0−0.8)²  ⋅0.3+(1−0.8)²  ⋅0.6+(2−0.8)² ⋅0.1=0.36

μₓ=0.8, σX  =0.6

 

​

5 0
2 years ago
Apple anticipates it will sell 100,000 units in the coming year. It is considering investing in a new machine that will increase
Vilka [71]

Incomplete question. However, it would be inferred you want to know the requirements to calculate net income.

<u><em>Explanation</em></u>:

Remember, net income is total revenue minus total cost. Since Apple anticipates selling 100,000 units, if we assume the fixed cost to be $2,400 and the variable cost $34, and selling price unit is $150.

  • Total cost= 2400+ (34*100,000)= 3,400,000
  • Total Revenue= 150*100,000= $15,000,000
  • Net income= 15,000,000-3,400,000= $11,600,000

The Net income is therefore $11,600,000.

7 0
2 years ago
Hardwoods, a timber supplying company, contracted with a furniture manufacturer, taylor furniture. hardwoods owned a large plot
charle [14.2K]
A. Instead of a tornado’s striking Hardwoods’ land, the state in which Hardwoods operates passes a law making it illegal for any lumber
<span>companies to cut down trees for the purposes of selling their wood. This environmental measure causes Hardwoods to go out of business.</span>
6 0
2 years ago
Select the correct answer from each drop-down menu. Read the passage. What should Milo do? What customer service skills would he
ad-work [718]

Answer:

a. Milo should disclose all the information about the product

b. Milo is showing honesty about what the customers should expect about the product

Explanation:

a.

A customer service agent is someone who offers assistance to it's customers on behalf of the company. The agent covers issues like; answers questions about the product and guides the customers on how to use the product. Customer services has become more necessary in the recent past due to advancement in communication technology and high competition. Good customer service ensures that a company can retain and get more customers to purchase it's products. When more customers purchase a product, the sales also increase significantly. More sales translates to increased profits, which is the goal of most business organizations. Some of the customer service skills that can assist a company to achieve increased sales are;

1. Communication skills: a customer service has to be able to communicate clearly to the customers to ensure effective transfer of product information.

2. Good listening skills: they need to listen attentively and play keen attention to details to ensure that all the customer's needs are met. This enhances trust.

3. Knowledge about the product: a good agent has to have extensive knowledge about the product since customers will be expecting information about the product from the agents. An agent who seems to have little information about the product will definitely lose the customer's trust.

4. Honesty: the agent has to give the customer all the information about their product even if they will lose the customer. One needs to understand that lying to the customer in most cases takes the customers trust away. But being truthful about the product, might make one lose a customer at that moment but at least the customer will have some level of trust since the agent was honest.

In our case, Milo should disclose all the information about the cruise ship including the extra charges for bottled water. The couple might decline the offer on account of it being above their price range, but they will have some trust in Milo. This trust could make the couple interested in the cruise ship at another time when they can afford it. However, if Milo decides to keep the information away from them, the customers will feel cheated and will never trust Milo again. In this way, Milo loses the customers for life as opposed to losing the customers only once.

b.

In this case, Milo is showing honesty. By disclosing all the information about the product, Milo is being honest about what the product is going to offer and it's associated price. Honesty fosters trust in customers. When a customer fully trusts you, they would rather purchase your product at a slightly higher price than settle for a product whose qualities is not guaranteed.

8 0
2 years ago
Wanda is faced with an ethical dilemma. She knows her supervisor, the CFO, wants to accelerate the recoding of revenue to an ear
jolli1 [7]

Answer:

Wanda is most likely to refuse.

Explanation:

The stage 4 of Kohlberg's Moral Development Model is defined as the Law and Order Orientation Stage, in which doing what is dutiful is paramount. If Wanda accepted his supervisor's demands, she would be breaking a law (the GAAP), and this act would therefore go against what the Kohlberg's model proposes. She will most likely respect the law despite the conquesequences that this might have on her personal life (for example, being fired).

5 0
2 years ago
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