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%
Answer:
the equivalent units of production is 250 units
Explanation:
The computation of the equivalent units of production is units under FIFO method is shown below:
= Opening inventory balance in units + additional units - ending inventory balance units
= 25 units + 275 units - 50 units
= 250 units
hence, the equivalent units of production is 250 units
We simply applied the above formula so that the correct value could come
And, the same is to be considered
Answer: The ending balance (principal plus interest) will be $638.10
Explanation:
To calculate this we need to use the Quarterly Interest formula
CI quarterly = P (1+ (R/4)/100)^4n
CI is the compound interest payable
I is the initial principal sum of money
R is the interest rate in percentage at which interest accrued over time
n is the time period in years
For the first year the total amount plus interests is
CI = $ 100 (1 + (8/4)/100)^4x1
CI = $100 (1 + 2/100)^4
CI= $100 (1 + 0.02)^4
CI = $100* 1.0824
CI = $108.24
For the second year = $100+ $108.24= $208.24
CI = $ 208.24 * 1.0824
CI = $225.41
For the third year = $100 + $ 225.41 = $325.41
CI = $325.41 * 1.0824
CI = $352.23
For the fourth year = $100 + $ $352.23 = $452.23
CI = $452.23 * 1.0824
CI = $ 489.51
For the fifth year = $100+ $489.51 = $589.51
CI = $589.51 * 1.0824
CI = $ 638.10
When SW International declared a dividend of $20,000,000, its market value increased from $8 billion to $8.5 billion. However, it lost a chance to reinvest $20,000,000 in the research and development of a new product which would have earned a profit of $200 million. Thus, this $200 million is referred to as SW International's-T<u>his is the Opportunity cost of the S.W international</u>
<u />
Explanation:
The term opportunity cost refer to the profit that is given up to achieve another thing.
Lets consider the example in this we can analyse the fact that SW international made an alternative choice of declaring the dividend rather than utilizing the money in R&D for a new project .Thus the amount $20,000,000 is forgone in order to achieve the $ 85 million market value.
<u>Thus the $200 million is referred to as the Opportunity Cost.</u>
Savings account is what would go in the blank.
