Calculate the weighted average cost of capital for the following firm: it has $600000 in debt, $400000 in common stock and $200000 in preferred stock. It has a 4% cost of debt, 14% cost of common stock, 12% cost of preferred stock and a 34% tax rate.

The following is total monthly budgeted cost and activity information for the four activity centers in the billing department of Oregon Power Company:

In September, actual total costs and activity were as follows:

Required
Compute the flexible-budget variances for the following two activity cost items (round unit costs to two decimal places and enter favorable variances as positive numbers and unfavorable variances as negative numbers):

  Correspondence   

  Statement inquiry   

What is veterans affairs doing to address the rising cost of health care to veterans and to the US gov’t for veterans?

COURSE: Information Technology for the Health Professions

A store sells a brand of olive oil of 400 bottles per month.

The cost of each bottle is $4.85 , and the cost of placing an order is $10.00.

Assuming the holding costs are based on a 20% annual interest rate, and stock-outs are not allowed,

a) What is the optimal lot size they should order and what is the time between orders of this product?

b) If lead time is 2 weeks to get the product to the store, what is the reorder point based on the on-hand inventory?

c) If it sells for $5.99, what is the annual profit (excluding overhead and labor costs) from this item?

A. Alex purchased a CNC machine on 1st October 2019 at a cost of $110,000 (including GST). This machinery is estimated to have a useful life of seven years.

B. Alex purchased a Holden car on 1 May, 2019 at a cost of $63,000, estimated to have a useful life of five years.

Required: With reference to relevant legislation and case law, discuss and calculate what amount is allowed as a deduction for the decline in value of the machinery and the Holden car discussed above, using both Prime cost and Diminishing value methods.

Scenario 10.5:

A firm produces garden hoses in California and in Ohio. The marginal cost of producing garden hoses in the two states and the marginal revenue from producing garden hoses are given in the following table:

      California             Ohio

    Qc        MCc      Qo     MCo    Qc + o   MR   

     1            2           1         3            1        24

     2            3           2         4            2        20

     3            5           3         6            3        16

     4            9           4         8            4        12

     5          16           5       12            5          8     

     6          24           6       17            6          4

21) Refer to Scenario 10.5. From the perspective of the firm, what is the marginal cost of the 5th garden hose?

A) 4

B) 5

C) 16

D) 12

why the answer is B

Calculate the weighted average cost of capital for a company given the following:

       Dividend expected in year one: $1.62/share

       Expected dividend growth rate in perpetuity: 3.5%/year

       Current market price of company’s common stock: $13.00/share

       Company’s debt is in the form of 7-year, 11% (annual) bonds with a face value of $1,000 per bond. Current market value of bonds is $1,058.81/bond

       Number of common stocks outstanding: 21,000,000

       Market value of debt and equity combined: $420 million

       The company’s marginal tax rate: 35%

Calculate the weighted average cost of capital for a company given the following:

         Risk-free rate: 3.20%

         The market risk premium: 12.40%

         Common stock’s beta: 1.35

         Company’s debt is in the form of 6-year, 8.6% bonds (semi-annual), face value of $1,000, selling for $946.52.

         The company’s finances its needed capital with 30% debt.

         The company’s marginal tax rate: 30%

Sensitivity Analysis
Consider the project where the initial cost is $200,000, and the project has a 5-year life. There is no salvage. Depreciation is straight-line (Depreciation = 200,000/5 = 40,000)
Unit Sales = 6000, Price per unit = $80 (Sales = 6,000 x 80)
Variable cost per unit = $60 (Variable Costs = 6,000 x 60)
The required return is 12%, and the tax rate is 21%  What are the cash flow each year, NPV and IRR in each case, if we changed fixed costs only?

In this make or buy problem, you should compute the total cost of making a particular part and the total costs of buying the same part. Try following the solutions steps:

Determine the parameters of the make cost function - the variable costs per unit and the fixed costs.

Determine the fixed costs that are avoidable and the fixed costs that are unavoidable.

Determine the buy price.

Determine the alternative use of the idle resources under the buy,

Note that the question does not ask for the total make costs and the total buy costs but instead asks for the difference between the two. Make sure that you submit the answer as a positive or a negative number as instructed.
______________________________________________________

BKF.com provides banks access to sophisticated financial information and analysis via the web, enabling them to instantly evaluate both personal and commercial loan applications. To better focus on its client services, BKF.com is considering outsourcing some of its internal functions. Its controller, Jenny Lee, suggests starting with the company's internal email system. She recently attended a conference and learned that GTE and NBC outsource their email function to companies such as Google and Yahoo. Lee began her analysis by identifying the total costs related to last month's in-house email operation, when there were 3,650 employee mailboxes:

Lee analyzed the computer hardware costs further and determined that:

47% were allocated costs that will continue even if the email system is abandoned.

19% were non-personnel direct costs that will be avoided if the email system is abandoned.

34% were monthly salaries for two, equally paid interns who worked only on the email system.

Mail.com, a leading provider of internet messaging outsourcing services, has offered to host BKF.com's email function for $13.20 per mailbox. BKF.com will still need to pay for the virus protection software, and it will need one of the interns to maintain the virus protection and quarantine suspicious emails. Also, a company has agreed to pay BKF.com $4,100 a month to use the computer storage space that will become available if BKF.com outsources its email function.

Finally, Lee estimates that 3,980 mailboxes will be required per month next year.

REQUIRED

By how much will BKF.com's monthly profits change if they decide to outsource its email function to Mail.com instead of managing the service internally?   (Note: if the buy costs are less than the make costs, enter the difference as a positive number; if the make costs are less than the buy costs, enter the difference as a negative number.)