A firm is considering whether to finance a new project with debt or equity. Will the choice of financing affect the WACC the firm uses to discount the project?

Answers

Answer 1

Answer:

Yes. The resulting WACC after the finance choice will be affect investment evaluation and hence discount of the project.

Explanation:

The Weighted Average Cost of Capital or WACC is the return that is required by the providers of long term sources of finance.

WACC is used to evaluated Capital Investment Projects against their Return. A project will be accepted if it gives a return greater than the WACC (Cost of Capital).

So the finance used on the project will greatly alter the existing WACC and the resulting WACC will later be used to evaluate the Investment or Project. This will as well affect discount of the cash flow from the project.


Related Questions

Client files should not be visible and/or accessible to other clients. They must be in lockable cabinets or lockable rooms.
a. True
b. False

Answers

Answer:

a. True

Explanation:

Client files should be kept securely in an environment that is safe while ensuring that its confidentiality is safeguarded against unauthorized people. Moreover, the files should not be accessible by other clients or personnel that are not authorized to do so.

The Principle of confidentiality in this scenario implies that client files are secured in a lockable cabinets or lockable room in order to avoid unauthorized use or disclosure which consists of either modifying the file or making copies.

Determine if the numerical value describes a parameter or a statistic.
A recent poll of 1887 corporate executives showed that the average price of their cars is $44,200.

Answers

Answer:

Sample Statistic

Explanation:

The given statement is "A recent poll of 1887 corporate executives showed that the average price of their cars is $44,200".

We need to determine if the numerical value describes a parameter or a statistic.

The average price of their cars is $44,200. It is a sample point of the data. It shows only an attribute of car. Hence, the numerical value describes a statistic.

The Franklins can claim a recovery rebate credit of $________ for Cristina on their 2020 tax return. g

Answers

Answer:

The Franklins can claim a recovery rebate credit of $__1,200______ for Cristina on their 2020 tax return.

Explanation:

The CARES Act provided economic relief payments, called "Economic Impact Payments" or stimulus payments, valued at $1,200 per eligible adult, based on household adjusted gross income (AGI), plus $500 for each additional qualifying dependent under 17 years of age.  According to the Act, these payments will continue through Dec. 31, 2020, and the Franklins will not be able to claim a recovery if Cristina is above 17 years.  The amount can still be claimed by all eligible taxpayers in 2021 when filing their 2020 tax returns.

In general, which forecasting time frame best identifies seasonal effects ?

a. Short-term forecasts
b. Quick-time forecasts
c. Long range forecasts
d. Medium term forecasts
e. Rapid change forecasts

Answers

The correct answer is D

For bonds issued 2019, the taxpayer must amortize bond premium using which of the following methods?

a. Straight-Line Method
b. Constant Yield Method
c. Activity Depreciation Method
d. Double Declining Balance

Answers

Answer:

For bonds issued 2019, the taxpayer must amortize bond premium using  the following method:

a. Straight-Line Method.

Explanation:

The premium paid by the taxpayer for a bond represents part of the cost basis of the bond.  The bond premium can be tax-deductible at a rate spread out (amortized) over the bond's lifespan.  The straight-line method for bond premium amortization is considered to be a simpler method than the effective interest amortization method.  While the straight-line amortization divides the bond's total premium over the remaining payment periods, the effective interest, which is more complicated, computes some unique values at all points during the amortization process.

What challenges may arise if a U.S. project manager moves to a foreign country to manage a project for 5 years

Answers

Answer and Explanation:

The challenges that occurs is as follows;

1. Adaption of an outside atmosphere

2. Language related problem

3. Every person have different kind of understanding skills that is difficult also it must be adopted for explaining the project to the other people

So as per the given statement, the above represent the challenges that arise in the case when the project manager shifted to a foreign country for managing a project of 5 years

Gamble Corporation had beginning inventory $100,000, cost of goods purchased $700,000, and ending inventory $140,000. What was Gamble's inventory turnover

Answers

Answer:

Inventory turnover= 5.5

Explanation:

First, we need to calculate the cost of goods sold using the following formula:

COGS= beginning finished inventory + cost of goods purchased - ending finished inventory

COGS= 100,000 + 700,000 - 140,000

COGS= 660,000

Now, the inventory turnover:

Inventory turnover= Cost of goods sold/ average inventory

Average inventory= (beginning inventory + ending inventory) / 2

Average inventory= (100,000 + 140,000)/2= 120,000

Inventory turnover= 660,000 / 120,000

Inventory turnover= 5.5

Which of the following accurately characterizes the function of the U.S. Circuit Courts?A. The Circuit Courts are responsible for hearing appeals sent to them by the District Court system.B. The Circuit Courts are responsible for trying both criminal and civil cases.C. The Circuit Courts are responsible for reviewing cases decided by the Supreme Court.D. The Circuit Courts are responsible for overseeing all of the federal court system.

Answers

Answer:

A.

Explanation:

There are thirteen Circuit Courts in the U.S.Judicial system. The name 'circuit courts' is labelled due to the circuit process of judges across the geographical area.

The function of the U.S. Circuit Courts include that it hears the cases sent from the district court or the lower courts. They tend to hear cases that questions whether constitutional laws are applied correctly or not, or whether the laws applied by the district court is constitutional or not. The Circuit court are restricted hears certain civil and criminal cases only. They can take appeals that involves only certain limited amount of compensation, or felony cases.

Therefore, option A is correct.

Milhouse is a franchisee of Krusty Burger, LLC Their contract gives Krusty Burger the right to control virtually all aspects of Milhouse’s op­eration, including the hiring of employees. One of the employees, Nelson commits a tort against Ralph, one of Milhouse’s customers. Ralph files a suit against Krusty Burger. Krusty Burger is most likely

Answers

Answer:

risks liability under the doctrine of respondeat superior.

Explanation:

A franchise is a seperate business that uses the parent business brand.

The parent company can give in addition to the brand support in training, provision of some inventory, hiring, and so on.

According to the contract signed between them Krusty burger controls all aspects of the Milhouse operations, so they are a respondeat superior.

This means they are responsible for the actions of Milhouse because of their level of involvement in the franchise operations.

In the given scenario Nelson commits a tort against Ralph, one of Milhouse’s customers. Ralph files a suit against Krusty Burger.

Krusty burger will be liable because they are a respondeat superior

Jacob works as a salesperson at a cosmetics showroom. The other day, Jacob worked with a customer who was checking out a product. Jacob,
sensing the customer's interest in the product, mentioned a gift that comes with the product. This information motivated the customer to make
the purchase. Which closing technlque did Jacob use in this scenario?
OA. opinions count close
OB. assumptlve close
OC. something for nothing close
OD. Impending event close
OE. Sollciting
tions close

Answers

Answer:

C. something for nothing close

Explanation:

The something for nothing closing strategy means adding something additional for free. In this case, Jacob was able to close the sale because he offered a free gift to the customer. Of course nothing is free, the cost of the gift is included in the price of the cosmetic, but the customer will evaluate the situation with the free gift or without the free gift.

Answer:

c) something for nothing close

Explanation:

Budgeted fixed manufacturing cost was $890,000 for 40,000 units or 100,000 hours, Actual fixed overhead totaled $910,000. The standard fixed production overhead cost per direct-labor hour was: _________$

Answers

Answer:

Estimated fixed overhead= $8.9 per direct labor hour

Explanation:

Estimated overhead cost= $890,000

Standard hours allowed= 100,000 hours

To calculate the fixed estimated overhead per standard hour, we need to use the following formula:

Predetermined fixed manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined fixed manufacturing overhead rate= 890,000 / 100,000

Predetermined fixed manufacturing overhead rate= $8.9 per direct labor hour

Louise purchased her primary residence for $240,000. As part of the closing procedure, she paid $2,300 in a loan origination fee, $750 to a lawyer to review the purchase contract and other closing papers, $150 for a property survey, and $800 for title insurance. She also gave the real estate agent a $75 gift basket in appreciation for his hard work. What is Louise's basis in the residence

Answers

Answer:

$241,700

Explanation:

Luoise's basis in her house = purchase price + any costs associated and necessary to complete the purchase process = $240,000 (price of the house) + $750 (lawyer's fees) + $150 (property survey) + $800 (title insurance) = $241,700

In order to determine a house's basis, you must assume that you are purchasing the house using cash, no fees directly related to a mortgage are included, nor gifts to real estate agents.

An investor views a high debt-to-equity ratio and low times-interest-earns ratio as favorable signs of a company's ability to meet its long-term obligations. True False

Answers

Answer:

False

Explanation:

Instead the reverse is the case. A high times-interest-earned ratio and a low debt-to-equity ratio is viewed by an investor as favorable signs of a company's ability to meet its long-term obligations.  When the two measures are combined and they look favorable, investors are attracted to invest in the said company.  So companies should work to ensure that the times-interest-earned ratio is high enough to be attractive to investors.

If this game is played only once, then the most likely outcome is that a. both firms produce a good quality product. b. both firms produce a poor quality product. c. Acme produces a good quality product and Pinnacle produces a poor quality product. d. Acme produces a poor quality product and Pinnacle produces a good quality product.

Answers

Answer:

a. both firms produce a good quality product.

Explanation:

There are two companies Acme and Pinnacle that can either make good or poor products, which generate a table of four possible outcomes, that is, either they both make good products or not or either company makes good or poor products.

Assuming this was a game that was played once, the table drawn shows that the first outcome is that both companies make good products with a profit margin of $6 million.

A corporation purchases 20 000 shares of its own $20 par common stock for $35 per share, recording it at cost. What will be the effect on total stockholders' equity?A. Increase by $400,000.B. Increase by $700,000.C. Decrease by $400,000.D. Decrease by $700,000.

Answers

Answer:

D. Decrease by $700,000.

Explanation:

The computation of the effect on the total stockholder equity is as follows

Given that

Number of shares is 20,000

Per share $35 recorded at a cost

Own shares at par is $20

As we know that if we purchased our own stock so it would be called as a treasury stock and the same is to be deducted from the shareholder equity as it is a contra equity account that reduce the equity balance

Now the effect would be

= 20,000 shares × $35

= $700,000

Hence, it is decreased by $700,000

Tanner takes out a loan today and repays the loan with eight level annual payments, with the first payment one year from today. The payments are calculated based on an annual effective interest rate of 4.75%. The principal portion of the fifth payment is 699.68.
Calculate the total amount of interest paid on this loan.
a) 1239
b) 1647
c) 1820
d) 2924

Answers

Answer:

Total interest = 1239.12

Explanation:

Assume;

Loan amount = P

Annual payment = X

P[1st payment] = X/[1+0475]⁸

P[1st payment] = X/[1.0475]⁸  

P[5th payment] = X/[1+0.0475]⁴

P[5th payment] = X/[1.0475]⁴

P[5th payment] = 699.68

So,

X = 699.68[1.0475]⁴

X = 842.39

P = (842.39/0.0475)(1 – 1/1.0475⁸)

P = 5,500  (Approx)

Total interest = [842.39 x 8] - 5,500

Total interest = 1239.12

The return on total assets is computed by dividing net sales by average total assets. net income by ending total assets. net income by average total assets. net sales by ending total assets.

Answers

Answer:

The return on total assets is computed by dividing net income by ending total assets

Explanation:

Here in this question, we are interested in knowing the mathematical formula that can be used to calculate the return on total assists

Mathematically, to calculate the return on total assets, two factors are needed.

These factors are;

i) Company’s net income

ii) Company’s assets total value

By using a specific period of time ( quarterly, annually etc); we can divide i by ii

So what we mean here is that;

Return on total assets = Net income of a company over a specific time period divided by the total asset value of the company over that specific period of time

You own Bond B and are concerned about interest rates increasing soon. You have chosen Bond H to hedge your B risk. The greater H's dv01:__________.a) the more of it you need to buyb) the more of it you need to sell shortc) the less of it you need to buyd) the less of it you need to sell short

Answers

Answer:

The greater H's dv01:__________

c) the less of it you need to buy.

Explanation:

The dollar (or money) duration or DV01 is the dollar value per 01 (100 basis points) of a bond.  It measures a bond’s interest rate risk in nominal or dollar-amount terms.  Dollar (money) duration assumes that bonds have fixed rates with fixed interval payments.   It is a linear approximation of how a bond's value will change in response to changes in interest rates.

Fontaine and Monroe are forming a partnership. Fontaine invests a building that has a market value of $250,000; the partnership assumes responsibility for a $75,000 note secured by a mortgage on the property. Monroe invests $100,000 in cash and equipment that has a market value of $55,000. For the partnership, the amounts recorded for total assets and for total capital account are:

Answers

Answer:

Total assets = $405,000

Total capital = $330,000

Explanation:

Capital = Assets - Liabilities

= $250,000 - 75,000

= $175,000

Therefore, the capital is $175,000

Particulars    Assets    Liabilities   Capital

Building       250,000     75,000     175,000

Cash             100,000           -           100,000

Equipment    55,000            -            55,000

Total              405,000    75,000     330,000

During a sprint retrospective, a potentially shippable product is reviewed and tested.

a. True
b. False

Answers

Answer:

A. True

Explanation:

the Sprint Retrospective provide the opportunity so that Scrum Team can have the room for inspection of itself and also have enough time to draw a plan that will bring improvement as far as next spring is concerned. After Sprint Review then Retrospective follow.It should be noted that During a sprint retrospective, a potentially shippable product is reviewed and tested.

Which one of these investments pools the funds of many investors, hires a professional money manager to manage those funds, and offers diversification to investors

Answers

Answer: Mutual Fund

Explanation:

You included no options however this should be the correct answer.

Mutual funds work by pooling the investments of many different investors and then hiring a professional to manage these funds such that the investors can make profits.

The investors will then own shares in the mutual fund which is equivalent to their investment. Mutual funds offers the advantage of diversification to its investors who will be able to invest in many diverse industries with a relatively low amount of money.

Which rule of disclosure operates when the seller is responsible for giving the buyer any information needed to make a reasonable judgment about whether to purchase the product which the buyer could not reasonably be expected to know unless informed by the seller

Answers

Answer:

Fairness rule

Explanation:

In the fairness rule, the seller is responsible for the information given by him to a buyer in order to make a reasonable judgement whether to buy a product or not until informed by the seller. It is the responsibility of the seller to give all the necessary information to the buyer so that he is able to take the decision regarding the purchase

What is the coupon rate for a bond with 3 years until maturity, a price of $1,053.46, and a yield to maturity of 6%

Answers

Answer:

8%

Explanation:

we can use the approximate yield to maturity formula to calculate the coupon rate:

YTM = {coupon + [(face value - market value) / n]} / [(face value + market value) / 2]

0.06 = {coupon + [(1,000 - 1,053.46) / 3]} / [(1,000 + 1,053.46) / 2]

0.06 x 1,026.73 = coupon - 17.82

61.6038 + 17.82 = coupon

79.42 = coupon

since this is just an approximation, I would guess that the coupon rate is 8%, instead of 7.94%

Suppose you receive the following end-of-year cash bonuses at work: end of year 2: $4,000 end of year 4: $6,000 end of year 6: $10,000 end of year 8: $12,000 If you invest your bonuses and earn 12% on your investments, how much will you have at the end of year 12

Answers

Answer:

the amount that have at the end of year 12 is $65,899.63

Explanation:

The computation of the amount that have at the end of year 12 is shown below:

Future value = Present value × (1 + Interest rate)^number of periods

= $4000 × (1 + 12%)^10 + $6,000 × (1 + 12%)^8+ $10,000 × (1 + 12%)^6 + $12,000 × (1 + 12%)^4

= $65,899.63

hence, the amount that have at the end of year 12 is $65,899.63

We simply applied the above formula so that the correct value could come

And, the same is to be considered

Match each retail term with the correct definition

Answers

Answer:

what retall terms

Explanation:

Assume you are about to graduate. How would you apply marketing principles to your job search? In what ways would you be able to create, communicate, and deliver value as a potential employee, and what would that value be, exactly? How would you prove that you can deliver that value? Explain your answers.​

Answers

Answer:

Are try my best if I can able are do when are graduate are happy

How successful is ABC Company relative to the industry average and leaders in the small specialty retail store industry? Write two paragraphs or more. Include ratios found in the IBIS database to support your conclusion.

Answers

Answer: The first ratio, which is the current ratio have them sitting at 5.5 when the average for 2016-2017 was 1.7

Explanation:

From doing three ratios, ABC are doing well above average when it comes to the ratios carried out. The first ratio, which is the current ratio have them sitting at 5.5 when the average for 2016-2017 was 1.7 this doesn't mean they are worth meeting up with their target yet but it would require more loans and them building on what they currently have. This ratio informs them on their stand on taking more loans or not.

With an average of 2.0 in the 2016-2017 year, they are at a 1.2. The lower this ratio is the more debt they can put themselves in and not have to worry about if they could pay it off or not

Suppose that a certain country has an MPC of 0.8 and a real GDP of $400 billion. If its investment spending decreases by $5 billion, what will be its new level of real GDP

Answers

Answer: $375 billion.

Explanation:

Using the MPC, one can calculate a multiplier that shows how much GDP changes when there is a change in investment.

Multiplier = 1 / ( 1 - MPC)

= 1 / (1 - 0.8)

= 1 / (0.2)

= 5

Change in GDP = change in investment spending * multiplier

= -5 billion * 5

= -$25 billion

New level of GDP = 400 - 25

= $375 billion.

Marta is CEO of a large financial company. She is always open to the opinions of her employees and tries to make a decision based on the reasonably available options. This BEST displays the _____ dimension of trustworthy leadership. a. Openness b. competence c. loyalty d. integrity

Answers

Answer: A; Openness

Hope that helps! <3

A partner invests into a partnership a building with an original cost of $180,000 and accumulated depreciation of $80,000. This building has a $140,000 fair value. As a result of the investment, the partner's capital account will be credited for Group of answer choices

Answers

Answer:

a. $140,000

Explanation:

Options are "a. $140,000 , b. $100,000, c. $180,000 , d. $240,000 "

Capital Account = Fair value of the asset (i.e. Partner's investment is valued on fair value)

Date    Account          Debit       Credit

           Building        $140,000

               Partner's capital         $140,000

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