The market value of Charter Cruise Company's equity is $15 million and the market value of its debt is $5 million. If the required rate of return on the equity is 20% and that on its debt is 8%, calculate the company's cost of capital. Assume no taxes.
Answers
The cost of capital for Charter Cruise Company is 17%.
To calculate this, first, we need to calculate the proportion of equity and debt in the company. The market value of equity is $15 million and the market value of debt is $5 million, so the proportion of equity is 75% ($15 million / ($15 million + $5 million) = 75%) and the proportion of debt is 25% ($5 million / ($15 million + $5 million) = 25%).
Now we can calculate the cost of capital. The cost of capital is calculated by taking the weighted average of the cost of equity and the cost of debt. The weighted average is calculated by multiplying the cost of equity (20%) and the proportion of equity (75%) and adding it to the cost of debt (8%) multiplied by the proportion of debt (25%).
So the cost of capital for Charter Cruise Company is 17% (20% * 75% + 8% * 25% = 17%).
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Related Questions
You should write down everything a speaker says when you take notes.
Please select the best answer from the choices provided
T
F
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Why is Rent to Own a Rip Off?
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One of the first tasks to accomplish when developing a presentation is to _____.
A. Understanding the needs of your audience
B. Gathering content for an effective review
C. Reading the slides aloud for the audience to interpret them
D. Developing effective slides
E. Applying the story line approach
Answers
A. Understanding the needs of your audience is one of the first tasks to accomplish when developing a presentation.
A presentation is a means of conveying information, ideas, or messages to an audience in a structured and engaging manner. It involves presenting content using various mediums such as visual aids, spoken words, and interactive elements to effectively communicate and engage with the audience. Presentations can be delivered in various settings, including business meetings, conferences, educational settings, and public speaking events. The goal of a presentation is to inform, persuade, inspire, or entertain the audience, and it typically involves careful planning, organizing content, and delivering it in a clear and compelling manner.
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Under the Restatement of Torts 402 A definition of products liability, strict liability only applies if the defective and unreasonably dangerous product is sold by a ____ seller. purposeful negligent informal merchant
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Under the Restatement of Torts 402A, strict liability only applies if the defective and unreasonably dangerous product is sold by a merchant seller.
Under the Restatement of Torts 402A, strict liability is a legal doctrine that holds manufacturers, distributors, and sellers accountable for selling defective and unreasonably dangerous products. However, strict liability applies specifically to merchant sellers, which refers to individuals or entities engaged in the business of selling such products. The rationale behind this requirement is that merchants have a greater ability to prevent and control the distribution of defective products compared to non-merchants or occasional sellers. By imposing strict liability on merchant sellers, the legal system aims to protect consumers and ensure accountability within the supply chain of products.
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what occurs during the process monitoring step of business process management? multiple choice analysts use flowcharts and other tools to depict workflow. activities are examined and divided into their individual components. the business process execution language engine is run. managers track the individual components of the process as well as the process as a whole so that the performance of the engine can be measured.
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The process monitoring step of business process management involves using flowcharts to visualize the workflow, examining activities as individual components, running the BPEL engine to execute the process, and tracking performance to measure the effectiveness of the process.
During the process monitoring step of business process management, several activities take place to ensure efficient workflow and performance. These activities include:
1. Analysts use flowcharts and other tools to depict the workflow: Flowcharts visually represent the steps and interactions within a business process. This helps analysts understand the process and identify any inefficiencies or bottlenecks.
2. Activities are examined and divided into individual components: Analysts break down the process into its individual components to gain a deeper understanding of each activity. This allows for better identification and analysis of potential issues.
3. The business process execution language (BPEL) engine is run: The BPEL engine is a software component that executes the defined business process. During process monitoring, the engine is run to execute the process and track its progress.
4. Managers track individual components and the process as a whole: Managers monitor the performance of both individual components and the overall process. This allows them to measure the effectiveness and efficiency of the process and identify areas for improvement.
In conclusion, the process monitoring step of business process management involves using flowcharts to visualize the workflow, examining activities as individual components, running the BPEL engine to execute the process, and tracking performance to measure the effectiveness of the process.
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Anna recently moved to Boston in order for her husband Joe to begin a new job as an economics professor at Harvard. Anna is an experienced surgeon who is currently interviewing with several different hospitals in Boston. Anna is currently: * 10 points A. seasonally unemployed. B. structurally unemployed. C. cyclically unemployed. D. counted as employed since she is likely to receive a job offer soon. E. frictionally unemployed.
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Answer:
uh
Explanation:
If someone stole from you ... and you stole it back ... would you technically still be stealing it ? .
if time=money is an ATM a time machine . (0¿0)
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Answer:
yes that would still be stealing unless you where taking back what they stole from you but if you take a random thing that wasn't yours to begin with that would be stealing
Answer:
No you are simply taking back what was yours however, like Charleheighstidham, said if you take something of theirs then you are stealing
Time is abstract money not literal money so no to that but it would be awesome if atm machines were time machines
Explanation:
develop a complete disaster recovery plan to be submitted to the executive board of your company.
Answers
Action plan for the company "KYROS" that has just suffered a catastrophe (fire):
The company having caught fire and having lost most of the work equipment decides to reopen by executing an action plan, the proposals are:- Rebuild all the walls and affected areas.
- Placing electrical panels in strategic areas.
- Placing water sprinklers in the ceiling to be activated in an emergency.
- Do not overload the use of industrial machines.
- Production should be in batches, with breaks in each batch for the equipment to rest.
What is an action plan?It is a writing, diagram or list of steps that people establish in order to execute actions and achieve the desired objectives and goals.
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The Platter Valley factory of Bybee Industries manufactures field boots. The cost of each boot includes direct materials, direct labor, and manufacturing (factory) overhead. The firm traces all direct costs to products, and it assigns overhead cost to products based on direct labor hours. The company budgeted $10,125 variable factory overhead cost and 2,250 direct labor hours to manufacture 4,500 pairs of boots in March. The factory used 4,200 direct labor hours in March to manufacture 4,300 pairs of boots and spent $17,300 on variable overhead during the month. For March, the Platter Valley factory of Bybee Industries budgeted $90,000 for fixed factory overhead cost. Its practical capacity is 2,250 direct labor hours per month (to manufacture 4,500 pairs of boots). The factory used 4,200 direct labor hours in March to manufacture 4,300 pairs of boots. The actual fixed overhead cost incurred for the month was $93,500.Compute the factory overhead flexible-budget variance, the factory overhead spending variance, and the efficiency variance for variable factory overhead for March and state whether each variance is favorable (F) or unfavorable (U).
Answers
The factory overhead flexible-budget variance is unfavorable by $1,600, the factory overhead spending variance is unfavorable by $74,150, and the variable factory overhead efficiency variance is favorable by $8,775.
To compute the variances, we need to first determine the budgeted factory overhead rate per direct labor hour
Budgeted variable overhead rate = Budgeted variable factory overhead cost / Budgeted direct labor hours
Budgeted variable overhead rate = $10,125 / 2,250 hours
Budgeted variable overhead rate = $4.50 per direct labor hour
Factory overhead flexible-budget variance
Actual variable overhead - Flexible budget variable overhead
= $17,300 - ($4.50 x 4,200)
= $17,300 - $18,900
= -$1,600 (U)
Factory overhead spending variance
Flexible budget variable overhead - Actual fixed overhead
= ($4.50 x 4,300) - $93,500
= $19,350 - $93,500
= -$74,150 (U)
Variable factory overhead efficiency variance
Budgeted variable overhead rate x (Actual hours - Budgeted hours)
= $4.50 x (4,200 - 2,250)
= $4.50 x 1,950
= $8,775 (F)
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Can you explain the rate of inflation?
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Answer:
the more money the government loses the more they charge us
To receive a loan from the imf, a country must agree to make economic reforms. join the group of 20. agree to develop certain industries. join the world bank.
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To receive a loan from the imf, a country must agree to make economic reforms and conditions related to that loans.
What are the condition to receive a loan from IMF?To receive a loan from the IMF, a country must agree to make economic reforms.It has to follow the conditions associated with loans, debt relief and financial aid.So we can conclude that To receive a loan from the IMF, a country must agree to make economic reforms and conditions related to that loans. #SPJ4
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Answer:
A.) agree to make economic reforms.Explanation:
It is correct on Ed2022
Required:
Fill out the tables below. Show all necessary calculations, presented neatly.
Cost in total:
Production volume: 5,000 units Production volume: 5,000 units
Fixed costs $500,000 ?
Variable cost ? $560,000
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At a production volume of 5,000 units, the variable costs are $60,000. The fixed costs at a production volume of 5,000 units are also $500,000.
To fill out the tables, we need to calculate the missing values for fixed costs and variable costs at a production volume of 5,000 units. To find the fixed costs, we know that at a production volume of 5,000 units, the cost in total is $500,000. This means that the fixed costs remain constant regardless of the production volume.
To find the variable costs, we know that at a production volume of 5,000 units, the cost in total is $560,000. The variable costs vary based on the production volume. So, we need to subtract the fixed costs from the total costs to find the variable costs.
Total costs = Fixed costs + Variable costs
$560,000 = $500,000 + Variable costs
Variable costs = $560,000 - $500,000
Variable costs = $60,000
To summarize:
- Fixed costs at a production volume of 5,000 units: $500,000
- Variable costs at a production volume of 5,000 units: $60,000
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Law enforcement, government, credit bureaus, and others may be able to
access information about your purchasing habits when you:
A. use digital payment methods.
B. withdraw cash from an ATM.
C. rely on facial recognition.
D. cash a check.
Answers
Answer:A
Explanation: just got it right
2. Happy Selling Company's salaries to sales agents amounted to Php 10,000. Salaries of accountants
amounted to Php 20,000. No other expenses were incurred. How much is the company's general and
administrative expense?
Answer:
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Answer:
Please one time
Mark brainliest
Refer to exhibit 24-7. the maximum profits earned by a single-price monopolist producing good x are
Answers
Answer:
$4,500
Explanation:
hope i helped :)
Which career would organize, train, and support teachers and educational workers to help them provide better
instruction?
O distance learning coordinator
O education administrator
O instructional coordinator
O regulatory affairs specialist
Answers
Answer:
it is C instructional coordinator
Explanation:
If people are finite-lived, Ricardian equivalence can fail because lifetime wealth will change for those currently alive. people cannot predict the future. this implies taxes must be distorting. there is intragenerational redistribution.
Answers
True. Ricardian equivalence can fail due to finite lifespans, uncertainty about the future, distorting taxes, and intragenerational redistribution.
Ricardian equivalence is an economic theory that suggests that changes in government borrowing and debt levels have no effect on consumer behavior. However, it can fail in certain circumstances. Finite lifespans mean that individuals cannot predict the future accurately, leading to changes in lifetime wealth for those currently alive.
Uncertainty about the future undermines the assumption that individuals will save or adjust their consumption based on expected future taxes. Distorting taxes, such as progressive income tax, can create intertemporal and intragenerational redistribution, influencing individual consumption decisions.
These factors challenge the validity of Ricardian equivalence and suggest that taxation policies can have real effects on consumer behavior and resource allocation.
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Features of wealth definition
10
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1(a). (TRUE or FALSE?) If projects A & B are mutually exclusive and their NPVs are less than zero, accept both projects.
1(b). (TRUE or FALSE?) Internal rate of return method shows how many years take to recoup the initial investment.
1(c). (TRUE or FALSE?) Any time you consider investing in a project, you will not actually receive the IRR unless you can reinvest the project’s intervening cash flows at the IRR.
Answers
The correct answer is-
1(a). FALSE. If projects A & B are mutually exclusive and their NPVs are less than zero, accept both projects.
1(b). FALSE. Internal rate of return method shows how many years take to recoup the initial investment.
1(c). TRUE. Any time you consider investing in a project, you will not actually receive the IRR unless you can reinvest the project’s intervening cash flows at the IRR.
1(a). FALSE. If projects A & B are mutually exclusive and their net present values (NPVs) are less than zero, it would not be advisable to accept both projects. When projects are mutually exclusive, it means that choosing one project automatically excludes the other. In such cases, it is generally recommended to accept the project with the higher positive NPV or reject both projects if their NPVs are negative. Accepting both projects with negative NPVs would likely result in a net loss for the company.
1(b). FALSE. The internal rate of return (IRR) method does not directly show how many years it takes to recoup the initial investment. The IRR is the discount rate at which the present value of the project's cash inflows equals the present value of its cash outflows, resulting in an NPV of zero. It represents the rate of return generated by the project over its entire duration. While it is related to the payback period (the time it takes to recover the initial investment), the IRR does not provide a direct measure of the payback period.
1(c). TRUE. Any time you consider investing in a project, the actual realization of the internal rate of return (IRR) depends on the ability to reinvest the project's intervening cash flows at the IRR. The IRR represents the rate of return that equates the present value of the project's cash inflows with the present value of its cash outflows. If the intervening cash flows can be reinvested at the IRR, then the project will achieve the calculated IRR. However, if the company cannot reinvest the cash flows at the IRR, the actual realized rate of return may differ from the IRR.
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Penny Corporation acquired an 80% interest in Sadie Corporation in 20X1 at a cost equal to book value and fair value.
In 20X3 Sadie sold land that cost $60,000 to Penny for $75,000. The land remained in Penny's possession until 20X5 when Penny sold it to an outside entity for $100,000. Needless to say, in 20X3, Penny posted a debit to land and a credit to cash for $75,000, and in 20X5, Penny posted a debit to cash for $100,000, a credit to land for $75,000, and a credit to gain on sale of land for $25,000. Penny uses the complete equity method to account for the investment in Sadie.
The following figures were obtained from the financial statements of Penny and Sadie:
20X3 20X4 20X5
Penny’s Separate Income $300,000 $400,000 $500,000
S’s Net Income $100,000 $80,000 $90,000
Combined Land of P and S $160,000 $180,000 $120,000
(P’s Land + S’s Land)
Note: Penny’s Separate Income includes all entries appropriate for the transactions described above. It does not include any accruals related to the entries Penny should record under the equity method.
Answers
Under the complete equity method, Penny Corporation would record its share of Sadie Corporation's net income as an increase in the investment account. The investment account would be adjusted for any dividends received from Sadie and for any intercompany transactions between the two companies.
To calculate Penny Corporation's investment in Sadie Corporation at the end of each year, we need to use the following formula:
Investment in Sadie = Initial investment + (Penny's share of Sadie's net income - dividends from Sadie) +/- intercompany transactions
Here are the calculations for each year:
20X3:
Initial investment = Cost equal to book value and fair value
Investment in Sadie = Initial investment + (0.80 x $100,000) = Initial investment + $80,000
Investment in Sadie = Initial investment + $80,000 = $160,000
(Note: The intercompany land sale between Penny and Sadie does not affect the investment account since it is a transaction between two subsidiaries of the same parent company.)
20X4:
Investment in Sadie = $160,000 + (0.80 x $80,000) = $224,000
20X5:
Investment in Sadie = $224,000 + (0.80 x $90,000) = $296,000
(Note: The gain on sale of land must be eliminated to reflect intercompany land transfers properly. Thus, the entry recorded by Penny should be a debit to investment in Sadie for $25,000, a credit to land for $75,000, and a credit to gain on sale of land for $50,000.)
The combined land of Penny and Sadie equals $160,000 in 20X3, $180,000 in 20X4, and $120,000 in 20X5.
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a lender charges 5 points on a $100,000 loan. how much does the borrower have to pay in points?
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When a lender charges 5 points on a $100,000 loan, the borrower is required to pay a percentage of the loan amount as points.
In this case, 5 points correspond to 5% of the loan amount. To calculate the amount, we multiply the loan amount ($100,000) by 5% (0.05).
$100,000 * 0.05 = $5,000
Therefore, the borrower has to pay $5,000 in points.
Points are upfront fees charged by the lender as a percentage of the loan amount. They are separate from the interest charged on the loan. The purpose of points can vary but often includes compensating the lender for administrative costs, processing fees, or as a way to increase their yield on the loan.
Paying points upfront can provide the borrower with a lower interest rate over the life of the loan. Each point paid typically reduces the interest rate by a certain percentage. However, it's important for borrowers to consider their financial situation, the length of time they plan to keep the loan, and the potential savings in interest payments to determine if paying points is beneficial.
In the given scenario, the borrower must pay $5,000 upfront as points, in addition to any other closing costs and fees associated with the loan. It's crucial for borrowers to carefully review and understand all terms, costs, and conditions before committing to a loan agreement.
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What is the maximum amount of good y that can be purchased if x and y are the only two goods available for purchase and px = $10, py = $20, x = 0, and m = 400?
Answers
The maximum amount of good y that can be bought if x and y are the only two goods that are available for purchase is 20.
What is a budget set?
This is the amount of the combinations of two goods that a consumer is able to buy at the given market price with his income.
We have the equation
P1X + P2Y = 400
Definition of terms
P1 = price of first good = $10
p2 = price of second good = $20
x = units = 0
Put the values in the equation above
$10*0 + $20*y = 400
20y = 400
y = 20
We conclude that the amount of good y that can be bought is 20.
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The maximum amount of good y that the business can purchased is 20 units.
What is income allocation?The income allocation in the given case can be understood as the proper segregation of income for purchasing two goods at the market price, that is best feasible for the business within their income.
Computation:
Given,
\(\rm{P}_1x + P2y = 400\)
\(\rm{P_1\) is $10
\(\rm{P_2\) is $20
x units are 0
\(\begin{aligned}\text{P}_1x + \text{P}_2y& = 400\\\\\$10\times0 + \$20\times y& = 400\\\\20y &= 400\\\\ y&= 20\;\text{units}\end{aligned}\)
Therefore, when the price of good y is $20 the business can purchase 20 units.
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Revenue on the income statement for the year ended december 31, 2020 equals the ______.
Answers
There is always a reward for every labour, Revenue on the income statement is equal to the amount earned by selling to customers during 2015.
What is revenue?
Revenue is the money generated or given as a reward in exchange for business transactions such as buying and selling.
Therefore, revenue on the income statement for the year ended December 31, 2020 is equal to the amount earned by selling to customers during 2015.
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The following is the trial balance of kencho sales located in Tabs, Thimphu as on 31st December 2019.You are required to prepare financial statements as at 31st December 2019.
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You received a great money-saving credit card offer in the mail, complete with a rewards program. After you read on further, however, you find that the one dollar spent for every mile earned may not be such a great offer after all, since getting a $500 airline ticket only happens after you first acquire 25,000 miles (spending $25,000 to do so). This is a ________ schedule. fixed-ratio variable-interval variable-ratio fixed-interval
Answers
Answer: variable-ratio
Explanation:
Based on the information given, since getting a $500 airline ticket only happens after one acquire 25,000 miles (spending $25,000 to do so), this is Variable ratio schedule.
Variable-ratio schedule is regarded as a form of reinforcement which occurs when there is a reinforcement of a response when there are different responses that are unpredictable and this lead to a high number of responses. An example is lottery and gambling.
John F. Kennedy belleved that a leader should be
A. in the military
B. elected
C.a lifelong student
Answers
Answer:
c
Explanation:
Most businesses use __________ networks.
wired
wireless
Answers
Answer: wired
Explanation:
wired is the cheapest
Select the correct answer.
Which of the following is a one of the steps of the Sale Management by Objective (SMBO) approach?
A. setting coordinated goals for salespeople
B. following up with customers
C. differentiating products from competitors
D. ceasing communication with customers that do not pay
E. ignoring unwanted customers
Answers
Answer:
A) Setting coorinated goals for salesperson
Explanation:
correct me if Im wrong.
Answer:
A
Explanation:
Miguel is trying to decide what luggage to buy. He has a choice of brown or black, wheels or no wheels, and small, medium, or large.
What is the probability of Miguel buying a large black piece of luggage with wheels?
Answers
The probability of Miguel buying a large black piece of luggage with wheels is 1/12.
When you perform the calculations, you would find out that you would have to multiply the variables and possible chances of occurrence and the answer is 1/12.
What is Probability?This refers to the chance of an event occurring and this is based on several factors.
Hence, we can see that The probability of Miguel buying a large black piece of luggage with wheels is 1/12.
When you perform the calculations, you would find out that you would have to multiply the variables and possible chances of occurrence and the answer is 1/12.
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Managing the supply chain has become more important as a result of firms increasing their levels of.
Answers
Managing the supply chain has become more important as a result of firms increasing their levels of production.
Production is the process where the supply chain is the most important due to which different outcomes come and the profit can be determined. This also determines the managers and the labors work efficiency and the result of the work done.
It helps in increasing the level of work efficiency and production levels so that maximum out of the best done is achieved in a firm. Hence, supply chain is important.
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