balance sheet appeared as follows: percent. a. What is Crawford's weighted average cost of capital? c. Crawford is considering a new business opportunity involving the acquisition of a trucking firm. What do you think the firm should do to select an appropriate cost of capital for evaluating this acquisition? a. What is Crawford's weighted average cost of capital? □% (Round to two decimal places.)

Answers

Answer 1

A. WACC = 0.1278. B. New WACC = 0.1156. C. Consider industry risks, asset risks, financing structure, market conditions, and synergies to determine an appropriate cost of capital for the trucking firm acquisition.

To calculate Crawford's weighted average fee of capital (WACC), we want to determine the percentage of each aspect in the general capital structure and multiply it by using its respective fee.

A. To calculate the WACC:

Calculate the percentage of equity: Common equity / Total debt and fairness = $19,015,000 / $30,285,000 = 0.6272

Calculate the percentage of debt: Long-term debt / Total debt and equity = $11,270,000 / $30,285,000 = 0.3728

Calculate the cost of equity: Market go back on equity = 17%

Calculate the price of debt: Yield to maturity on bonds = 8%

Calculate the tax fee: 28%

Using the WACC method: WACC = (Proportion of Equity * Cost of Equity) + (Proportion of Debt * Cost of Debt * (1 - Tax Rate))

WACC = (0.6272 * 17%) + (0.3728 * 8% * (1 - 28%))

WACC =  0.127846528.

WACC = 0.1278 (rounded to four decimal places).

b. If the inventory rate rises to 1.5 times the ebook fee and the fee of fairness falls to 15%, we will recalculate the WACC for the use of the brand-new value of fairness at the same time as retaining the fee of debt and tax price identical.

New WACC = (0.6272 * 15%) + (0.3728 * 8% * (1 - 28%))

New WACC = 0.115552128.

New WACC = 0.1156 (rounded to four decimal places).

c. To pick out the right price of capital for comparing the purchase of the trucking company, Crawford ought to bear in mind the unique risks and traits of the trucking enterprise. Factors such as industry hazard, asset threat, and financing structure of the acquisition have to be analyzed to determine an appropriate value of capital.

Additionally, marketplace situations and capability synergies with the present commercial enterprise have to additionally be taken into account. Conducting a radical analysis of the trucking industry and the specific acquisition possibility will help in figuring out the suitable value of capital for evaluation.

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The correct question is:

"​(Weighted average cost of capital​) Crawford Enterprises is a publicly held company located in​ Arnold, Kansas. The firm began as a small tool and die shop but grew over its​ 35-year life to become a leading supplier of metal fabrication equipment used in the farm tractor industry. At the close of​ 2019, the​ firm's balance sheet appeared as​ follows:

Cash 460,000

Accounts receivable 3,910,000

Inventories 8,200,000 Long-term debt 11,270,000

Net property, plant, and equipment 17,715,000 Common equity 19,015,000

Total assets 30,285,000 Total debt and equity 30,285,000

At present the​ firm's common stock is selling for a price equal to its book​ value, and the​ firm's bonds are selling at par.​Crawford's managers estimate that the market requires a return of 17 percent on its common​ stock, the​ firm's bonds command a yield to maturity of 8 ​percent, and the firm faces a tax rate of 28 percent.

a. What is​ Crawford's weighted average cost of​ capital?

b. If​ Crawford's stock price were to rise such that it sold at 1.5 times book​ value, causing the cost of equity to fall to 15​percent, what would the​ firm's cost of capital be​ (assuming the cost of debt and tax rate do not​ change)?

c. Crawford is considering a new business opportunity involving the acquisition of a trucking firm. What do you think the firm should do to select an appropriate cost of capital for evaluating this​ acquisition?"


Related Questions

According to the video, what tasks do Librarians perform? Check all that apply.
A. supervising staff
B. writing stories
C. coordinating storytelling sessions
D. speaking at public events
E. dealing with angry customers
F. classifying materials

Answers

Answer: C and F

Explanation:

Answer:

Its I believe a,c, and f

Explanation:

your welcome

What is inflation?

Movement, whether upward or downward, of economic activity

Monetary value of final goods and services produced within a country for a specific time period.

The rate at which the price level of goods and services rises.

A measurement used by economics to measures average prices of a market basket of consumer goods and services.

Answers

What is inflation?

Monetary value of final goods and services produced within a country for a specific time period.

Which statement most accurately describes a conflict of commitment? It involves a monetary gain by one party over another party. It occurs when outside activities interfere with one’s responsibilities to an employer. It occurs when an institution does not follow the financial rules from a funding source. It can only occur between an institution and an outside organization.

Answers

Answer:

It occurs when outside activities interfere with one's responsibilities to an employer

Explanation:

Conflict of commitment occurs when the commitment of an employer to a defined terms of employment is shared with other engagements, either personal or with other parties which could lead to a decline in efficiency due to loss of maximum concentration.

This may not necessarily involve monetary gain but has a whole lot of ways through which it can affect productivity as concentration is shared.

It is always good to define activities that constitute conflict of commitment right from the time of forming an employment contract so that an employee can be guided with it.

is matthew mark luke and john jewish

Answers

Mark and John were jewish but luke was greek

economic problem you face as an individual​

Answers

Answer:

I'm spending WAY too much money on my favorite snack which are purple Doritos. / The Dorito company is having a huge shortage of my favorite snack which are the purple Doritos and I don't know what to do!

Explanation:

Remember what economics is when you are asked this question. Economics basically are along the lines of distribution and consumption of goods could mean internationally or it could just mean in your state. If you have a favorite snack that you like to buy from stores whenever you go to them, you buying and taking that snack is basic economics, you have a demand for that product because you like it so much, and they (owners of the snack) have a supply of that demand so you then spend money (currency) in order to get that demand or snack which is basic economics. A problem in this scenario would be you spending too much money on your favorite snack, or the supplier of that snack is having a shortage and you can't buy your favorite snack as much as you want.

Hope this helps.

Answer:

The imbalance between production, distribution and consumption generates various phenomena that affect the economy; some of them are unemployment, shortages, overproduction, devaluation, inflation, indebtedness and damage to the environment.

Explanation:

a buyer and seller agree upon an option to purchase, with a 60-day option period. when should the parties agree upon the purchase price?

Answers

The parties, a buyer and seller, should agree upon the purchase price before entering into the option to purchase agreement, during the negotiation process.

The parties should agree upon the purchase price of a property when they enter into an option-to-purchase agreement with a 60-day option period.

What is an option to purchase?

An option to purchase is a contract between a buyer and a seller that grants the buyer the right to purchase the property at a set price within a specified timeframe, typically for a small fee. During the option period, the buyer has the opportunity to investigate the property further before making a final decision on whether or not to purchase it. When the parties agree upon an option to purchase, the terms and conditions of the purchase, such as the purchase price, are established in the agreement. Therefore, the parties should agree upon the purchase price when they enter into an option-to-purchase agreement with a 60-day option period, to ensure that the terms of the purchase are clearly defined and agreed upon by both parties.

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things we need to normalize:

Answers

Women having body hair

Answer:

Being part of the LGBTQ community

Tea Party is a purveyor of fine teas from all over the world. The manager at Tea Party noticed that when the new variety of tea arrived the sales of black tea, the most popular item, started to decline. Which of the following explains Tea Party's experience of brand cannibalization? 19. 20. 21. 22. 23 . A tea manufacturer introduces a new brand of tea that has the unintended result of promoting the sales of an existing brand of another manufacturer. b. A tea manufacturer introduces a new brand of tea that eats into the sales of an existing tea brand in its product mix Ос. A tea manufacturer introduces a new brand of tea that eats into the sales of an existing brand of another manufacturer 24 25. 26. 27. A tea manufacturer introduces a new but inferior brand of tea to promote the sales of an existing tea brand in its product mi

Answers

Tea Party's experience of brand cannibalization is: A tea manufacturer introduces a new brand of tea that eats into the sales of an existing tea brand in its product mix.

Brand cannibalization occurs when a company's new product decreases sales of the company's existing products.

In this case, the Tea Party's experience of brand cannibalization happened because the introduction of a new variety of tea caused the sales of black tea, which was the most popular item, to decline.

Therefore, the explanation that best describes this experience is: A tea manufacturer introduces a new brand of tea that eats into the sales of an existing tea brand in its product mix.

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The NASAA Statement of Policy on Dishonest or Unethical Business Practices of Broker-Dealers and Agents includes prohibitions against certain practices designed to manipulate market prices of securities. An activity that would fall within the spectrum of the prohibitions would be A) front running B) wash trades C) guaranteeing customers against loss D) churning customer accounts

Answers

Answer:

B) wash trades

Explanation:

In the case when the wash trades are performed so it consists the simultaneous or near-simultaneous i.e. selling and the repurchase of the similar security for the motive of producing the trading activity due to which price rise. This is the form of how the market manipulates. The other options i.e. given in the question is not considered the market manipulation

Therefore the option B is correct

which one of the following statements is false regarding money a. it is a means of deferred payment b. it is the answer to all problems c. it is a store of value d. it is a medium of exchange

Answers

The false statement regarding money is "b. it is the answer to all problems." While money can be a useful tool for facilitating transactions and providing a store of value, it is not a panacea that can solve all problems.

Money is a social construct that is subject to economic, political, and social forces, and its effectiveness can be affected by factors such as inflation, interest rates, and government policies. It is important to recognize that while money can be a valuable resource, it is not a solution to every problem.Money is a medium of exchange that is widely accepted in transactions for goods and services. It is a social and economic construct that facilitates the exchange of value between parties. Money can take various forms, such as cash, coins, bank deposits, or digital currencies, and it typically functions as a store of value and a means of deferred payment.

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A writer, an illustrator, a publisher and an agent would form a
a. Functional team
b. Cross-functional team
C. Management team
d. Corporate team

Answers

Answer:

B. Cross-functional team

Explanation:

A writer, an illustrator, a publisher, and an agent would form a Cross-functional team. The correct option is B.

What are cross-functional skills?

A Cross-Functional Candidate, according to Glassdoor, is a candidate with jack-of-all-trades abilities. In other words, a candidate with cross-functional skills is someone who is proficient in one or more related technologies or skills while also being knowledgeable in other technologies or skills.

Working cross-functionally, also referred to as working with teams other than your own, will inevitably occur at some point in your career. And doing it well can inspire innovative ideas, enhance your ability to interact with others, and improve your workplace's culture, productivity, and happiness.

Thus, the ideal selection is option B.

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When can a mixed economy develop?

Answers

A mixed economy can develop when a country experiences a combination of market-based mechanisms and government intervention in its economic activities.

It occurs when the government regulates certain aspects of the economy, such as taxation, trade, and labor laws, while leaving other aspects, such as consumer choice and private investment, to be determined by the market.

This type of economy balances the benefits of capitalism, such as competition and innovation, with the stability and social welfare provided by government intervention. It aims to create a more stable and equitable economy by ensuring that resources are distributed fairly, while still allowing for growth and prosperity.

In short, a mixed economy can develop when a country seeks to balance the benefits of a market-based system with the stability and social welfare provided by government intervention.

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What is improved oven? in your own words.

Answers

Answer:

improved oven means improved cooking

Use this formula to help solve the problem.
• gross income = total of all incomes added together
Given the following information, what does the gross income for the month equal?
Cash = $700, Checks = $200, Credit Card Charges = $400

a. $700
b. $1100
c. $1300
d. $400

Answers

Answer:

C.$1300.................:)

Answer:

1,300

Explanation:

just added the numbers

To achieve the highest efficiencies, a company decides to manufacture its products in Thailand, but does all final assembly of the products in China. The company is focusing on the ______ implication for international business.
Multiple choice question.
a. late-mover
b. location
c. policy
d. first-mover

Answers

The company is focusing on the Location implication for international business. The Correct option is B.

The company’s decision to manufacture its products in Thailand but do all final assembly of the products in China is an example of how location affects international business.

Location refers to the physical location of the manufacturing facilities, offices, and other facilities of a company. It is one of the most critical factors that affect the success of a company’s operations.

The decision of where to locate manufacturing facilities or offices depends on various factors such as labor costs, the availability of resources, the proximity to customers, and government regulations.

A company that wants to achieve the highest efficiencies will typically choose a location that provides access to low-cost labor, raw materials, and other resources while ensuring proximity to customers.

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Why is it called Chick-Fil-A when a Fil-A (filet) is normally cooked with beef???

Answers

Because most of their food consists of chicken? They barely have any beef on their menu
It is a cleaver marketing strategy. One of Chick-Fil-A’s missions is to encourage people to eat chicken instead of meat, so a funny twist they thought they should include is a name spin. Like you have stated, a Filet is normally a steak, but Chick-Fil-A spiced it up a little bit and changed the context behind it to fit their brand of boneless chicken :)

When choosing an enterprise system, organizations can choose between a cloud system and a(n) _____________ system.

Answers

When choosing an enterprise system, organizations can choose between a cloud system and a distributed system.

What does a Distributed system means?

A distributed system means collection of independent and loosely coupled computers that work together to provide a unified service. The different components may be located in different physical locations and can communicate with each other over a network.

Its distributed nature allows it to scale more easily and handle larger workloads than a centralized system. It is often more fault-tolerant which means failure in one component of the system does not necessarily bring down the entire system.

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Which profession do you prefer ro choose for your career?Engineer or Architect? Why?​

Answers

Answer:

Architects

Explanation:

In my opinion,

Architects create new design concepts that push how modern day construction is executed.Architecture is one of the few professions that is never static.” Recently, architects have become more and more concerned with environmental and socially responsible building practices and materials.

Money you pay up front to reduce the amount you will owe is called a
A. fixed loan
B. late payment
C. down payment
D. short-term loan

Answers

Answer:

down payment

Explanation:

A down payment is money paid upfront in a financial transaction, such as the purchase of a home or car. Buyers often take out loans to finance the remainder of the purchase price.

Answer:

down payment

Explanation:

if the market interest rate is greater than the contractual interest rate, bonds will sell

Answers

Answer:

When the market rate of interest on bonds is higher than the contract rate, the bonds will sell at a discount.

thank you mark me as the brainlist i need you help to complete my this rank

The per diem employee makes $110.00. He works 25 days in the month. What is his gross pay?

Answers

To calculate the gross pay of the per diem employee, we need to multiply his daily rate by the number of days he worked in the month.

Daily pay = $110.00

Number of days worked = 25

Gross pay = Daily pay x Number of days worked

Gross pay = $110.00 x 25

Gross pay = $2,750.00

Therefore, the gross pay of the per diem employee is $2,750.00.

a merchandise inventory evaluated at the end of a fiscal period. a. true b. false

Answers

A merchandise inventory evaluated at the end of a fiscal period" is true.  Merchandise inventory is typically evaluated at the end of a fiscal period in order to calculate the cost of goods sold and determine the company's financial performance during that period.

Merchandise inventory evaluated at the end of a fiscal period because inventory can be such a large and important part of a retailer's total assets, even companies that use a perpetual system often conduct a physical inventory count at the end of each accounting period to check that their records are accurate. Merchandise inventory is the cost of finished goods (COGS) that a retailer or wholesaler has available to sell to its customers during a given accounting period.

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Gidgits Galore has been busy during this lesson continuing its expansion plans throughout the United States. After all, everyone must have a gidgit, the "must-have" gadget! Gidgits Galore has opened up stores in ten new states, hired hundreds of new employees, built two additional factories, and started an advertising campaign that has caught the US by storm! Its expansion has been featured in news magazines across the country. But Gidgits Galore has encountered a few problems and needs some advice.


Should Gidgits Galore entice much sought-after employees with generous benefits?
no
yes

Answers

Answer:

Yes

Explanation:

Edge 2021

Answer:

YES   edge 2023

Explanation:

Gidgits Galore has been busy during this lesson continuing its expansion plans throughout the United

Problem 8-23 Bank loan to take cash discount [LO8-1, 8-2] The Reynolds Corporation buys from its suppliers on terms of 2/19, net 50. Reynolds has not been utilizing the discounts offered and has been taking 50 days to pay its bills. Ms. Duke, Reynolds Corporation's vice president, has suggested that the company begin to take the discounts offered. Duke proposes that the company borrow from its bank at a stated rate of 17 percent. The bank requires a 12 percent compensating balance on these loans. Current account balances would not be available to meet any of this compensating balance requirement. a. Calculate the cost of not taking a cash discount. (Use a 360-day year. Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) Cost of not taking a cash discount b. What is the effective rate of interest on the bank loan? (Use a 360-day year. Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) Effective rate of interest

Answers

Cost of not taking a cash discount If Reynolds Corporation does not take the cash discount offered by its suppliers and takes 50 days to pay its bills, it will have to pay an additional amount to its suppliers.

The cost of not taking a cash discount can be calculated using the following formula:
Cost of not taking a cash discount = (Discount % / (100 - Discount %)) x (360 / (Pay period - Discount period))
Cost of not taking a cash discount = (2 / (100 - 2)) x (360 / (50 - 19)) = 37.06%
Therefore, the cost of not taking a cash discount is 37.06%.b) Effective rate of interest on the bank loan

The effective rate of interest is the actual interest rate that is being paid after taking into consideration the effects of compounding. It can be calculated using the following formula:
Effective rate of interest = (1 + Stated rate / m) ^ m - 1
Effective rate of interest = (1 + 17% / 1) ^ 1 - 1 = 17%
However, the bank requires a 12% compensating balance on these loans, which means that the company would have to deposit 12% of the loan amount in the bank as a compensating balance.

Therefore, the effective rate of interest would be higher. The effective rate of interest can be calculated using the following formula:
Effective rate of interest = (Interest paid / Net proceeds of loan) x (360 / n)
Interest paid = Stated rate x Loan amount
Net proceeds of loan = Loan amount - Compensating balanceLoan amount = Amount borrowed / (1 - Compensating balance %)n = Loan period in days / 360
Effective rate of interest = (17% x Amount borrowed / (1 - 12%)) / (Amount borrowed - (12% x Amount borrowed / (1 - 12%))) x (360 / (50 - 19))
Effective rate of interest = 22.95%
Therefore, the effective rate of interest on the bank loan is 22.95%.

Hence, we have calculated the cost of not taking a cash discount and the effective rate of interest on the bank loan. The cost of not taking a cash discount is 37.06% and the effective rate of interest on the bank loan is 22.95%.

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Escalation of commitment can be minimized by ensuring that: A. there are ready-made alternatives to resolve the problem. B. those who choose the decision are different from those who implement and evaluate it. C. the team leader has strong opinions about the preferred options. D. organizational goals are relatively ambiguous. E. the person who makes the decision is also responsible for terminating the project.

Answers

Escalation of commitment is a  miracle in which people come decreasingly committed to a decision that isn't working,  frequently as a result of their own  conduct so option c is correct.

To minimize escalation of commitment,  brigades should  insure that there are ready- made  druthers to resolve the problem. This will  insure that the  platoon has choices and can make a timely decision rather than sticking to the same decision indeed if it isn't working. also, it's important to  insure that those who choose the decision are different from those who  apply and  estimate it. This will  help the  platoon from  getting too attached to the decision and enable them to  estimate it objectively. Eventually, organizational  pretensions should be  easily defined to  insure that the  platoon is  concentrated on the same  objects and doesn't come too attached to one particular decision.

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i need help!!!!!!!!!!!!!!!!!!!!!!!!!!

i need help!!!!!!!!!!!!!!!!!!!!!!!!!!

Answers

D rejection please Mark brainliest

to avoid trade restrictions, a u.s. firm moves its final production process to ireland and then ships the final products to the united kingdom. this is an example of

Answers

To avoid trade restrictions, a U.S. firm moves its final production process to Ireland and then ships the final products to the United Kingdom. This is an example of a business strategy called "tariff jumping" or "offshore assembly."

Tariff jumping, also known as offshore assembly, is a strategic approach that companies use to bypass trade barriers and reduce their overall cost of production. By relocating the final production process to a country with more favorable trade policies, the U.S. firm can avoid the higher tariffs and trade restrictions it would have faced if it had exported the products directly from the United States to the United Kingdom.

This move can result in cost savings, increased competitiveness, and better market access for the firm. It is important to note that such strategies may have other implications for the company, such as increased transportation costs, different regulatory environments, and potential impact on the firm's reputation.

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In terms of marketing expenditures, companies tend to spend the most (41%) on:
A) media advertising
B) trade promotions
C) consumer promotions
D) direct marketing

Answers

According to a survey conducted by the Association of National Advertisers (ANA), companies tend to spend the most on media advertising when it comes to marketing expenditures. The survey found that 41% of total marketing expenditures are allocated towards media advertising, which includes television, radio, print, and online advertising.

This is not surprising as media advertising has traditionally been one of the most effective ways to reach a large audience and build brand awareness.

While media advertising is the largest marketing expenditure for companies, it is important to note that there are other types of marketing expenditures as well. Trade promotions and consumer promotions are also popular among companies, with 24% and 15% of total marketing expenditures, respectively. Trade promotions are marketing activities aimed at stimulating demand from wholesalers, distributors, or retailers, while consumer promotions are aimed at stimulating demand from end consumers.

Finally, direct marketing accounts for 10% of total marketing expenditures. This includes direct mail, telemarketing, and email marketing. Direct marketing allows companies to reach their target audience with personalized messages, making it a popular option for companies looking to build relationships with their customers.

Overall, while media advertising remains the largest marketing expenditure for companies, it is important for companies to consider other marketing options to effectively reach their target audience and achieve their marketing goals.

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What system did merchants in early centuries use to make commercial transactions easier

Answers

In the early centuries, merchants made use of the Mercantilism system for commercial transactions.

What is Mercantilism?

In simple terms, it is an economic theory and practice known as "mercantilism," which was prevalent in Europe from the 16th to the 18th century.

Mercantilism advocated governmental regulation of a country's economy with the goal of enhancing state power at the expense of competing for national powers.

According to the theory, a strong nation should have a sizable population because a sizable population would offer a supply of labor, a market, and soldiers.

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A savings account that pays interest every 3 months is said to have a interest period. O A. monthly O B. quarterly O C. semiannual O D. daily​

Answers

Answer:

probly A im not forsure

Explanation:

A savings account that pays interest every 3 months is said to have an interesting period quarterly. Thus the correct option is B.

What is a savings account?

A fundamental kind of financial instrument that enables you to save your money and often earn a tiny bit of interest and utilize it at the time of Your emergency fund or savings for short-term goals is referred as a Savings account.

A savings account is considered to have semi-annual interest if interest is paid every six months. A quarterly fascinating period is said to exist in a savings account that pays interest every three months.

Similarly, A savings account that receives interest payments on a monthly basis is referred to as a monthly saving account, whereas a daily saving account receives interest payments on a daily basis.

Therefore, option B is appropriate.

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