Answer:
A. spend more money on services and jobs for citizens.
Explanation:
During an economic emergency like the Great Depression, governments are most likely that use fiscal policy to spend more money on services and jobs for citizens.
What is fiscal policy?The utilization of expenditures of government to control the economy refers to fiscal policy. It is used by the government to encourage long-term economic growth and to eliminate poverty by improving the standard of living.
During the time of the great depression, there was an economic crisis that led to reducing the jobs in the market. So to improve the consequences of the great depression government increased spending.
These increased spending will be implemented in the development of better infrastructure and industries to provide better facilities to citizens along with more opportunities for jobs.
Therefore, option A spending more money on services and jobs for citizens is appropriate.
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What is a key factor you should consider when determining asset allocation
and diversification?
A. Real estate holdings
B. Avoiding similar investments
C. Rate of return
D. Portfolio size
SUBMIT
A key factor you should consider when determining asset allocation and diversification is Real estate holdings. Thus, option A is appropriate.
Real estate is a type of property that includes both unimproved land and improvements including buildings, furnishings, roads, buildings, and utility systems. Ownership of the land, improvements, and natural resources like minerals, plants, animals, water, etc. is conferred by property rights.
When you make a real agent investment, you are actually buying a physical, observable piece of land or property. Purchasing shares of a firm gives you a claim to a portion of the business itself; this is very different from investing in equities. Each sort of investment carries different risks.
A real estate agent is a qualified individual who acts as a buyer's or seller's agent in real estate deals.
Thus, option A is correct.
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in preparation of standard cost we consider what situation macroeconomics or microeconomics???
When preparing standard costs, we primarily consider microeconomics, which is the study of the behavior of individual consumers, firms, and industries. Standard cost is the estimated cost of producing a unit of product or service, based on historical data and budgeted costs.
It is used as a benchmark to compare actual costs with expected costs and to analyze the variances between them. In order to determine standard costs, we need to consider the cost of each individual input such as direct materials, direct labor, and overheads. This analysis is done at the microeconomic level because it involves the behavior and decision-making of individual firms and their interactions with suppliers, customers, and competitors.
The macroeconomic factors such as inflation, interest rates, and unemployment rates may also have an impact on the cost of production but these are generally outside the scope of standard cost analysis. Therefore, while macroeconomics can indirectly influence the cost of production, the focus of standard cost analysis remains on the microeconomic factors that affect the cost of individual inputs.
Overall, standard cost preparation involves a detailed microeconomic analysis to determine the estimated cost of producing a product or service, which is then compared with the actual costs to identify any variances and improve the cost efficiency of the firm.
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13) Consider the following information for a particular economy. Total population = 60 million Number of employed 30 million Total labour force = 40 million Natural rate of unemployment = 12% a) Find the total unemployment rate b) Calculate the cyclical unemployment rate
Answer:
Explanation:
a) Find the total unemployment rate
Total labour force = 40 million
Number of employed = 30 million
Number of unemployed = 40 - 30 = 10 million
Unemployment rate = (unemployed / Labour force) × 100
Unemployment rate = (10 million / 40 million) × 100 = 25%
b) Calculate the cyclical unemployment rate
Cyclical unemployment rate = Unemployment rate - natural rate of unemployment
Unemployment rate = 25%
Natural rate of unemployment = 12%
Cyclical unemployment rate = 25 - 12 = 13%
Match the word to the correct definition. 1. alignment the horizontal placement of text on the page 2. shortcut a special combination of keys that tells the computer to perform a command 3. columns using your mouse to drag across text; this causes the text and background to change color and become selected 4. highlight vertical sections of text separated by blank space
Answer:
1432 is the order
Explanation:
hope this helps
Answer: 1432 is the order.
Hope this helps you! :^}
Paul’s grocery received 1,000 pounds of onion at $0.11 per pound. On the average, 3% of the onions will spoil before selling. Find the selling price per pound to obtain a makeup rate of 180% based on cost.
The selling price per pound for onions to obtain a makeup rate of 180% based on cost is $2.0350.
What is the selling price per pound for onions?Total Cost = Quantity * Cost per pound
Total Cost = 1,000 pounds * $0.11/pound
Total Cost = $110
Spoilage Quantity = 3% of Quantity
Spoilage Quantity = 3% of 1,000 pounds
Spoilage Quantity = 0.03 * 1,000 pounds
Spoilage Quantity = 30 pounds
Effective Quantity = Quantity - Spoilage Quantity
Effective Quantity = 1,000 pounds - 30 pounds
Effective Quantity = 970 pounds
Makeup Rate = 180%
Selling Price per pound:
= (Total Cost * Makeup Rate) / Effective Quantity
= ($110 * 1.80) / 970 pounds
= $2.03505/pound.
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Weakness of cardinal and ordinal utility
Cardinal utility is the utility that is quantified and measured numerically. In contrast, ordinal utility is a type of utility that is non-measurable and only identifies the preference order of the consumer.
The following are some of the limitations or weaknesses of the cardinal and ordinal utility approach:Weaknesses of Cardinal Utility:Cardinal utility has certain limitations, such as the following:It's impossible to determine the precise value of the utility. In cardinal utility, consumer satisfaction or happiness is measured in terms of units. However, it is difficult to assign a precise numerical value to utility because it is subjective and varies from person to person.
It assumes that the consumer is rational and can measure satisfaction. Cardinal utility analysis assumes that consumers are rational and can assign a value to their happiness, which may not be the case in practice. Consumers may have irrational preferences, and their satisfaction may be influenced by various psychological factors, making it difficult to measure or assign a value to it.
The law of diminishing marginal utility may not hold true. The concept of the law of diminishing marginal utility states that as we consume more units of a commodity, the marginal utility decreases, but this may not be the case in practice.
Weaknesses of Ordinal Utility:Ordinal utility has several limitations, including the following:It doesn't account for the intensity of preference. Ordinal utility only assesses the preference order of the goods, not the intensity of preference, which may differ from one consumer to another.It fails to establish the degree of satisfaction.
The ordinal utility approach only identifies the order of preference; it does not provide any information on the degree of satisfaction or happiness obtained from a commodity.There is no numerical value for the utility of a commodity. Ordinal utility cannot assign a numerical value to utility because it is a non-measurable concept.
Therefore, it is difficult to evaluate the level of satisfaction for each commodity, making it difficult to conduct mathematical analysis or quantitative analysis.
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What do think is really behind Cliff’s desire to quit his job?
Nobody questions why Cliff’s Loman is speeding off with his automobile at the conclusion of Arthur Cliff’s play job Death of a Salesman. To leave his family with 20,000 dollars in insurance money, he crashes his automobile and then commits sui-cide.
Cliff’s Loman killed himself. He was aware that not everyone had the same chances to succeed. What does it mean to live in a culture that makes many promises but keeps none of them job? That query was present in Cliff’s mind while he penned Death of a Salesman. The play explores the fight for achievement and disillusionment with the American Dream.
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Which type of market is the least likely to have an official currency? closed economy command economy traditional economy mixed market economy
Answer:
It is called "traditional economy" to the set of ideas, systems and economic planning of a basic and customary cut, where decisions are made through a hierarchical structure where the group leader decides based on what he considers as his own and correct , based on religious, traditional or common sense issues.
This type of economy, characteristic of the totalitarian regimes of old, is not used today. Traces of this type of organization are only found in tribal societies in Africa and Asia.
The type of market is the least likely to have an official currency is traditional economy.
What is traditional economy?A traditional economy is an economic system that is rooted in a culture, tradition and needs rather than being centred on profit motive.
The traditional economy is known to be original economic system in which it has factors that helps in shaping the services and goods in terms what the economy produces.
The factors that may influence traditional economy are :
CustomsBeliefsTraditionsCultureHence, the type of market is the least likely to have an official currency is traditional economy.
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The benefits or reviewing procedures for ordering products and services
Answer:
They provide more detail and utility than a basic expense record. ...
They're the foundation of a reliable purchasing process. ...
They improve organisation for multiple projects and processes. ...
They provide clear and highly detailed levels of communication to all parties.
Explanation:
Assume that one year ago, you bought 340 shares of a mutual fund for $36 a share, you received a capital gain distribution of $0.55 per share during the past 12 months, and the market value of the fund is now $40 a share.
a. Calculate the total return for your $12,240 investment.
The total return on this mutual fund investment is $12,427.
Total return on investment refers to the total profit or loss on an investment, including any capital appreciation and dividends or distributions received.
Here's how to calculate the total return on a mutual fund investment:
Step 1: Calculate the total initial investment by multiplying the number of shares by the purchase price per share. For this investment, the total initial investment is: 340 shares x $36/share = $12,240.
Step 2: Add any capital gain distributions received during the investment period. In this case, the capital gain distribution per share is $0.55, so the total capital gain distribution received is: 340 shares x $0.55/share = $187.
Step 3: Calculate the current market value of the investment by multiplying the number of shares by the current market price per share.
In this case, the current market value is: 340 shares x $40/share = $13,600.
Step 4: Add any dividends or interest payments received during the investment period, if applicable.
If no dividends or interest payments were received, skip this step.
Step 5: Calculate the total return by adding the initial investment, capital gain distributions, and dividends or interest payments (if applicable), and then subtracting any fees or commissions paid during the investment period.
In this case, the total return is: $12,240 + $187 = $12,427.
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a(n) takes advantage of file transport methods, such as e-mail, to spread on its own. group of answer choices encryption virus macro virus script virus worm
In order to spread on its own, a worm uses file transit techniques like email.
Can email be used to spread worms?A worm is a type of malware that can replicate itself and spread quickly within a network by exploiting security holes. It can spread by flash drives, email attachments, texts, file-sharing applications, social media platforms, network shares, and software bugs.
What method does a worm employ in order to spread?A worm makes several copies of itself that it then spreads over a network or internet connection. Any servers and computers that connect to the infected device via a network or the internet will catch the infection from these copies if they are not safeguarded.
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On December 31, 2020, Oriole Company sold for $153000 an old machine having an original cost of $266000 and a book value of $113000. The terms of the sale were as follows: $40000 down payment $56500 payable on December 31 each of the next two years The agreement of sale made no mention of interest; however, 7% would be a fair rate for this type of transaction. What should be the amount of the notes receivable net of the unamortized discount on December 31, 2020 rounded to the nearest dollar? (The present value of an ordinary annuity of 1 at 7% for 2 years is 1.80802.)
Answer:
$102,153.13
Explanation:
Amount payable on December 31 each of the next two years = $56,500
The PV of ordinary annuity of ($1,7%,2 years) is 1.80802
The amount of the notes receivable net of the unamortized discount = Amount Payable * PV($1, 7%, 2)
= $56,500 * 1.80802
= $102,153.13
So, the amount of the notes receivable net of the unamortized discount on December 31, 2020 will be $102,153.13.
Agan Interior Design provides home and office decorating assistance to its customers. In normal operation, an average of 2.9 customers arrive each hour. One design consultant is available to answer customer questions and make product recommendations. The consultant averages 10 minutes with each customer.
A. Compute the operating characteristics of the customer waiting line, assuming Poisson arrivals and exponential service times. If required, round your answers to four decimal places.
Lq =
L =
Wq = hours
W = hours
Pw =
B. Service goals dictate that an arriving customer should not wait for service more than an average of 6 minutes. Is this goal being met? If not, what action do you recommend? Yes or No
C. If the consultant can reduce the average time spent per customer to 8 minutes, what is the mean service rate? If required, round your answer to one decimal place.
------ customer per hour
Will the service goal be met? Yes or No
A. Operating characteristics:
Lq ≈ 0.5017, L ≈ 0.9377, Wq ≈ 0.1730 hours, W ≈ 0.5063 hours, Pw ≈ 0.4833
B. Service goal: Not met. Action recommended.
C. Mean service rate: 7.5 customers/hour.
If the consultant can reduce the average time spent per customer to 8 minutes, then the average time a customer spends in the system will be 0.33 hours (20 minutes).
A. To compute the operating characteristics of the customer waiting line:
Arrival rate (λ) = 2.9 customers/hour
Service rate (μ) = 60 minutes / 10 minutes per customer = 6 customers/hour
Average number of customers in the queue (Lq):
Lq = (λ^2) / (μ * (μ - λ)) ≈ 0.5017
Average number of customers in the system (L):
L = λ / (μ - λ) ≈ 0.9377
Average waiting time in the queue (Wq):
Wq = Lq / λ ≈ 0.1730 hours (approximately 10.38 minutes)
Average waiting time in the system (W):
W = Wq + (1 / μ) ≈ 0.5063 hours (approximately 30.38 minutes)
Probability of a customer waiting in the queue (Pw):
Pw = λ / μ ≈ 0.4833
B. The service goal is that an arriving customer should not wait for service more than an average of 6 minutes. However, the average waiting time in the system (W) is approximately 30.38 minutes, exceeding the goal. Therefore, the service goal is not being met.
Action recommendation: To meet the service goal, I would recommend taking the following actions:
Increase staffing: Hire additional design consultants to handle customer questions and product recommendations.
Improve efficiency: Streamline processes and provide training to the consultant to reduce the time spent with each customer.
Appointment scheduling: Implement a system for customers to schedule appointments, ensuring dedicated time slots for each customer and minimizing waiting times.
Self-service options: Provide self-service resources or online tools where customers can access basic information and make preliminary decisions, reducing the need for extensive consultations.
C. If the consultant can reduce the average time spent per customer to 8 minutes, the mean service rate can be calculated as follows:
Mean service rate (μ) = 60 minutes / 8 minutes per customer ≈ 7.5 customers/hour
Will the service goal be met? Yes
If the consultant can reduce the average time spent per customer to 8 minutes, then the average time a customer spends in the system will be 0.33 hours (20 minutes). This is less than the service goal of 6 minutes, so the goal will be met.
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1. What marketing concepts do players learn while enjoying a game of Monopoly?
2). What value does Monopoly create for its customers?
Please help! Thxs!
Some of the marketing concepts that players learn while enjoying a game of Monopoly are:
Product positioningBrandingMarket segmentationAdvertisingWhat are some marketing concepts players enjoying in a game of Monopoly?
Product positioning: Players must decide how to position their properties in order to attract the most visitors and generate the most revenue. This mirrors the concept of product positioning in marketing, where companies must decide how to position their products to appeal to their target market.
Branding: Players can create a brand image for their properties by choosing specific colors and names, which can help to differentiate their properties from others and make them more desirable to potential visitors. This is similar to the concept of branding in marketing, where companies create a brand image to differentiate their products from competitors and make them more appealing to consumers.
Advertising: Players can use advertising to promote their properties and attract visitors. This is similar to the concept of advertising in marketing, where companies use various forms of advertising to promote their products and increase awareness.
Market segmentation: Players can decide to focus on specific segments of the market, such as the luxury market or the budget market, in order to generate the most revenue. This is similar to the concept of market segmentation in marketing, where companies divide the market into specific segments and target specific groups of consumers with tailored products and marketing strategies.
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Ming is visiting her company's headquarters in Germany, which has a highly assertive culture. She is likely to observe her coworkers
Answer:
D: using competitive language when evaluating ideas
Explanation:
Choices seem to be ...
A: using subtle, indirect language in meetings.
B: allowing silence to linger in meetings.
C: expressing respect for others but letting issues go unresolved.
D: using competitive language when evaluating ideas.
E: expressing themselves in controlled, measured ways.
__
"Assertive" meaning "showing a confident or forceful personality", we don't expect subtle, or controlled language; nor do we expect lingering silence or unresolved issues. We expect choice D to be most likely.
Using these data from the comparative balance sheet of Sunta Fe Spice Company, perform horizontal analysis. (Round percentages to 0 decimal place, e.g. 17%.)
Increase or (Decrease)
December 31, 2017 December 31, 2016 Increase or (Decrease) Amount Percentage
Accounts receivable $ 375,000 $ 300,000 $ __________ ___________ %
Inventory 780,000 600,000 ____________ ___________ %
Total assets 3,220,000 2,800,000 __________ __________ %
Answer:
75000,25%;
18000, 30%.
420000, 15%.
Explanation:
From the question above we are given the following parameters Accounts receivable for year 2017 = $ 375,000,
Inventory for the year 2017 = 780,000 and the Total assets for the year 2017 = 3,220,000.
Accounts receivable for year 2016 = $ 300,000, inventory for the year 2016 = 600,000 and the Total assets for the year 2016 = 2,800,000.
Therefore, we have the following simple arithmetic(which is subtraction between the variables in the two years) to determine the solution to the question:
(375,000 - 300,000) = 75,000 = 25%(increase).
(780,000 - 600,000) = 180,000 = 30%(Increase).
(3,220,000 - 2,800,00) = 420,000 = 15%(increase).
Answer:
25%30%15%Explanation:
Accounts receivables
December 31 2017 = $375000
December 31 2016 = $300000
difference = $75000 ( 25%) { increase}
Inventory
December 31 2017 = 780000
December 31 2016 = 600000
difference = 180000 ( 30% ) { increase}
Total assets
December 31 2017 = 3220000
December 31 2016 = 2800000
difference = 420000 ( 15% ) { increase }
who is prime minister of Nepal
Casey Motors recently reported the following information:
Net income - $475,000
Thx rate 25%
Interest expense - $200,000,
Total invested capital employed - 9 million
After-tax cost of capital - 10%.
What is the company's EVA?
Company's Economic value added amount is (-$275,000)
Let understand that Economic Value Added is basically, an estimate of the company's economic profit
The formulae for deriving Economic Value Added = \(NOPAT - {Cost of Capital * Capital employed}\)
Let understand that NOPAT means Net operating profit after tax. NOPAT = EBIT (1 - Tax)
Suppose EBIT = x
EBIT - Interest - Tax = Net Income
(x - 200,000) - 0.25*(x - 200000) = 475,000
x - 200,000 = 475,000/0.75
x = 833333.33
Now, EBIT = $833,333.33
Then we calculate NOPAT = EBIT (1 - Tax)
NOPAT = 833,333.33 * (1 - 0.25)
NOPAT = $625,000
Then, we calculate Economic Value Added
EVA = $625,000 - 0.10*$9,00,0000
EVA = $625,000 - $900,000
EVA = ($275,000)
In conclusion, the amount of the Company's Economic value added is a negative of $275,000.
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Answer:
275,000.025
Explanation:
1. EBT =NI/(1-TR)=475,000/0.75 =633,333.3
2.EBIT=EBT+ interest expense =633,333.3+200,000=833,333.3
3.EVA=EBIT(1-TR)- (WACC* Total invested capital)=833,333.3*0.75 -(0.1
*9,000,000)=624,999.975-900,000=275,000.025
Remark: WACC is an after-tax cost of capital
how might the use of a stakeholder management tool like the power interest grid or the stakeholder assessment matrix differ by methodology chosen?
Depending on the chosen technique, the process for using a stakeholder management tool, such as the Power Interest Grid or Stakeholder Assessment Matrix, can vary.
According to their power (influence) and interest (degree of involvement) in a project or organization, stakeholders are evaluated using the Power Interest Grid.
On a matrix with four quadrants, stakeholders are represented as high power, high interest, high power, low interest, low power, low interest, and low power, low interest.
A project's or organization's stakeholders are rated according to their level of influence and impact by the Stakeholder Assessment Matrix.
It is crucial to select a methodology that fits the particular requirements of the project or organization, taking into account the level of analysis that will be needed, the data that is at hand, and the intended results.
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According to Dr. Ridel's Levels of Critical Thinking in Chapter 1, what level of critical thinking applies to your current status? Discuss how you will use the "8-Step process to critical thinking" in your personal and professional life. Provide examples to support your answers.
Answer:
how to write it inthe morning and evening so much more than happy
All employees at a factory are receiving a large bonus if there are no reported injuries for 6months. As a result, some employees are hiding their injuries so that they do not cause others to lose their bonus.
What are the reasons for the negative consequences of this bonus scheme? Modify the
scheme to solve the problem.
Answer:
In simple words, first of all the conditions given in the bonus structure are not at all justified as a labor might get injured due to an accident, one should believe that every individuals keeps full diligence during work to save herself or himself from injury.
Therefore, the company should change the bonus conditions overall like paying for the damages to the inured labor like fifty repent salary with leave in case severe injuries.
Question 1 You recently inherited investments from a relative. What resource should you use to validate the permissibility of the investments?
Liquidity is the resource that you would have to use to validate the permissibility of the investments.
What is meant by the permissibility of the investments?The investments that the Employer has designated as acceptable for using Trust assets for investment and that the Trustee has approved are referred to as Permissible Investments. In the Service Agreement, a list of the Plan's permitted investments must be included.
A financial asset is an investment in finance if it is purchased with the expectation that it will increase income or be sold at a profit at a later date.
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US REFERENCE: SO 9
5. Given an organisation in a different province or country, describe the way in which performance
would be adapted.
Answer:
Adapting performance in an organization in a different province or country would require an understanding of the local culture, customs, laws, and regulations. The organization would need to take into account the linguistic and communication barriers that may exist, and may need to provide additional training. Performance metrics would also need to be reviewed and adjusted to reflect the unique challenges and opportunities of the specific geographic location. Additionally, the organization would need to build relationships with local stakeholders, such as customers, suppliers, and government officials, to ensure and maintain its success in the new market. A comprehensive market analysis and strategy development would need to be undertaken to ensure that the organization is positioning itself for success and anticipating local challenges. Finally, the organization may need to adjust its policies and procedures to align with local laws and regulations and to refreflect on theect the cultural norms of the new market. Overall, it is important for the organization to remain adaptable and flexible to maintain success in a new market.
Explanation:
1. Critical thinking requires setting high standards for yourself. True or false
Answer:
True
Explanation:
NEED HELP ASAP
In the circular flow diagram with government, what does the government provide directly to firms?
A. expenditures
B. factors of production
C. taxes
D. goods and services
In the circular flow diagram, the government provides goods and services directly to firms. The correct option is D.
In the circular flow diagram, the government provides goods and services directly to firms. This is represented by the flow of resources from the government sector to the business sector.
The government plays a significant role in the economy by providing public goods and services that are necessary for the functioning of the society as a whole.
Public goods include infrastructure projects like roads, bridges, and public utilities, as well as services such as defense, law enforcement, and education.
These goods and services are not typically provided by private firms, so the government steps in to ensure their provision.
By supplying goods and services directly to firms, the government facilitates the production process and supports the overall functioning of the economy.
This enables businesses to operate efficiently and effectively, contributing to economic growth and development.
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what can cause money supply to change by less than than the amount
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What do you feel are the advantages of tracking and managing the gross profit margin percentage in your business?
Tracking and managing the gross profit margin percentage empowers businesses to assess financial performance, control costs, set prices effectively, benchmark against competitors, make informed decisions, and ensure financial stability and growth.
Tracking and managing the gross profit margin percentage in a business offers several advantages:
Financial Performance Analysis: The gross profit margin percentage provides a clear picture of a company's financial performance by measuring the profitability of its core operations. It indicates how effectively the company is generating revenue and managing its direct costs. By tracking this metric over time, businesses can assess their profitability trends and make informed decisions to improve their financial health.
Cost Control and Pricing Strategy: Monitoring the gross profit margin percentage helps in evaluating and controlling costs associated with production or service delivery. By understanding the direct costs and their impact on profitability, businesses can identify areas where cost reductions or efficiencies can be implemented. Additionally, the gross profit margin percentage can guide pricing decisions, as businesses need to set prices that not only cover costs but also generate sufficient gross profit to support operations and growth.
Performance Benchmarking: Comparing the gross profit margin percentage with industry standards or competitors can provide insights into a company's competitiveness and efficiency. It enables businesses to assess their relative performance in terms of profitability and identify areas for improvement. Benchmarking against industry leaders can also inspire strategies for enhancing profitability and market positioning.
Decision Making: The gross profit margin percentage is a valuable tool for making informed business decisions. It helps in evaluating the profitability of different products, services, or customer segments. By analyzing the gross profit margin percentage associated with each, businesses can identify their most profitable offerings and allocate resources accordingly. It also assists in assessing the viability of new business opportunities or expansion plans by estimating their potential impact on profitability.
Financial Stability and Growth: Tracking and managing the gross profit margin percentage contributes to the financial stability and growth of a business. A healthy and consistent gross profit margin indicates that a company is generating sufficient revenue to cover direct costs and contribute towards covering overhead expenses and generating net profit. It provides a foundation for reinvestment, expansion, and long-term sustainability.
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A company has two departments, Y and Z that incur advertising expenses of $8,000. Advertising expenses are allocated based on sales. Department Y has sales of $400,000 and Department Z has sales of $600,000. The advertising expense allocated to Departments Y and Z, respectively, are: _________
Based on the fact that advertising expenses are allocated based on sales, the advertising expenses to Departments Y and Z will be:
Department Y - $7,200Department Z - $10,800What would be the advertising cost for Department Y?This can be found as:
= Department Y sales / (Total sales) x Advertising expenses
= 400,000 / 1,000,000 x 18,000
= $7,200
What would be the advertising cost for Department Z?= 600,000 / 1,000,000 x 18,000
= $10,800
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Horford Co. has no debt. Its cost of capital is 8.9 percent. Suppose the company
converts to a debt-equity ratio of 1.0. The interest rate on the debt is 5.7 percent. Ignore
taxes for this problem.
a. What is the company's new cost of equity? (Do not round intermediate calculations
and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
b. What is its new WACC? (Do not round intermediate calculations and enter your
answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer:
A. 12.1%
B. 8.9%
Explanation:
a. Calculation for What is the company's new cost of equity
Using this formula
New cost of equity=Cost of capital+[(Cost of capital- Debt interest rate ) *(Debt-equity ratio)*(1)]
Let plug in the formula
New cost of equity=[0.089+[(0.089-0.057)*(1)*1]
New cost of equity=[0.089+0.032*(1)*1]
New cost of equity=[0.121*(1)*1]
New cost of equity=0.121*100
New cost of equity=12.1%
Therefore the company's new cost of equity will be 12.1%
b. Calculation for What is its new WACC
Particular Weight Cost Weighted cost
Equity 0.5000 *12.1% = 0.0605
Debt 0.5000 * 5.7% =0.0285
WACC =0.089*100
WACC =8.9%
(0.0605+0.0285)
Therefore the new WACC will be 8.9%
1. Some businesspeople believe that elimination agents and wholesalers reduce their operating expenses. Discuss the opportunity costs associated with eliminating intermediaries.
1. While eliminating intermediaries may result in reduced operating expenses, businesses need to weigh these savings against the associated opportunity costs. These costs may include the loss of expertise and value-added services, additional responsibilities and expenses, and reduced customer access to products.
Eliminating intermediaries such as elimination agents and wholesalers reduce operating expenses, but it also has associated opportunity costs that businesses need to consider. One of the primary costs is the loss of the expertise and value-added services that intermediaries offer to businesses and customers. Eliminating intermediaries may result in businesses taking on additional responsibilities and expenses such as marketing, distribution, and logistics.
This may result in the need for additional staff and resources to ensure that products reach customers on time. Furthermore, eliminating intermediaries may also result in reduced customer access to products, as intermediaries are often responsible for finding new markets and customer segments. In this case, businesses may need to invest additional resources to market and promote their products to reach new customers.
In conclusion, while eliminating intermediaries may result in reduced operating expenses, businesses need to weigh these savings against the associated opportunity costs. These costs may include the loss of expertise and value-added services, additional responsibilities and expenses, and reduced customer access to products.
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