With a certain medical insurance​ policy, the customer must first pay an annual ​$100 ​deductible, and then the policy covers 80​% of the cost of​ x-rays. The first insurance claims for a specific year submitted by a person are for two​ x-rays. The first​ x-ray cost ​$620​, and the second​ x-ray cost ​$960. How​ much, in​ total, will he need to pay for these​ x-rays?

In July, one of the processing departments at Okamura Corporation had beginning work in process inventory of $13,000 and ending work in process inventory of $18,000. During the month, the cost of units transferred out from the department was $148,000. In the department's cost reconciliation report for July, the total cost to be accounted for under the weighted-average method would be: Multiple Choice $31,000 $119,000 $132,000 $166,000

In April, one of the processing departments at Terada Corporation had beginning work in process inventory of $27,000 and ending work in process inventory of $33,000. During the month, $250,000 of costs were added to production and the cost of units transferred out from the department was $244,000. In the department's cost reconciliation report for April, the total cost to be accounted for under the weighted-average method would be:

3. Describe the twofold cost of sex, the cost of males, and the cost of recombination.
4. What are the differences between sexual and natural selection? Define and explain each (including the basic principles of evolutionary changes and natural selection) with examples from the readings and class.

please explain in about 3-4 paragraph so that I could understand clearer please.

In what sense is the cost of capital an opportunity cost? An opportunity cost to whom? And, Is it possible that there could be sources of financing that have a zero cost?

The Cost of Capital: Cost of Retained Earnings

The cost of common equity is based on the rate of return that investors require on the company's common stock. New common equity is raised in two ways: (1) by retaining some of the current year's earnings and (2) by issuing new common stock. Equity raised by issuing stock has a(n)

cost, r_e, than equity raised from retained earnings, r_s, due to flotation costs required to sell new common stock. Some argue that retained earnings should be "free" because they represent money that is left over after dividends are paid. While it is true that no direct costs are associated with retained earnings, this capital still has a cost, a(n)

cost. The firm's after-tax earnings belong to its stockholders, and these earnings serve to compensate them for the use of their capital. The earnings can either be paid out in the form of dividends to stockholders who could have invested this money in alternative investments or retained for reinvestment in the firm. Therefore, the firm needs to earn at least as much on any earnings retained as the stockholders could earn on alternative investments of comparable risk. If the firm cannot invest retained earnings to earn at least r_s, it should pay those funds to its stockholders and let them invest directly in stocks or other assets that will provide that return. There are three procedures that can be used to estimate the cost of retained earnings: the Capital Asset Pricing Model (CAPM), the Bond-Yield-Plus-Risk-Premium approach, and the Discounted Cash Flow (DCF) approach.

CAPM

The firm's cost of retained earnings can be estimated using the CAPM equation as follows:

r_s = r_RF + (RP_M)b_i = r_RF + (r_M - r_RF)b_i

The CAPM estimate of r_s is equal to the risk-free rate, r_RF, plus a risk premium that is equal to the risk premium on an average stock, (r_M - r_RF), scaled up or down to reflect the particular stock's risk as measured by its beta coefficient, b_i. This model assumes that a firm's stockholders are

diversified, but if they are diversified, then the firm's true investment risk would not be measured by and the CAPM estimate would

the correct value of r_s.

Bond Yield Plus Risk Premium

If reliable inputs for the CAPM are not available as would be true for a closely held company, analysts often use a subjective procedure to estimate the cost of equity. Empirical studies suggest that the risk premium on a firm's stock over its own bonds generally ranges from 3 to 5 percentage points. The equation is shown as: r_s = Bond yield + Risk premium. Note that this risk premium is

the risk premium given in the CAPM. This method doesn't produce a precise cost of equity, but does provide a ballpark estimate.

DCF

The DCF approach for estimated the cost of retained earnings, r_s, is given as follows:

Investors expect to receive a dividend yield, , plus a capital gain, g, for a total expected return. In

, this expected return is also equal to the required return. It's easy to calculate the dividend yield; but because stock prices fluctuate, the yield varies from day to day, which leads to fluctuations in the DCF cost of equity. Also, it is difficult to determine the proper growth especially if past growth rates are not expected to continue in the future. However, we can use growth rates as projected by security analysts, who regularly forecast growth rates of earnings and dividends.

Which method should be used to estimate r_s? If management has confidence in one method, it would probably use that method's estimate. Otherwise, it might use some weighted average of the three methods. Judgment is important and comes into play here, as is true for most decisions in finance.

Quantitative Problem: Barton Industries estimates its cost of common equity by using three approaches: the CAPM, the bond-yield-plus-risk-premium approach, and the DCF model. Barton expects next year's annual dividend, D₁, to be $1.50 and it expects dividends to grow at a constant rate g = 3.1%. The firm's current common stock price, P₀, is $28.00. The current risk-free rate, r_RF, = 4%; the market risk premium, RP_M, = 5.3%, and the firm's stock has a current beta, b, = 1.2. Assume that the firm's cost of debt, r_d, is 6.11%. The firm uses a 3.3% risk premium when arriving at a ballpark estimate of its cost of equity using the bond-yield-plus-risk-premium approach. What is the firm's cost of equity using each of these three approaches? Round your answers to 2 decimal places.

What is your best estimate of the firm's cost of equity?