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9 days ago

At the beginning of the school year, representatives of credit card companies and banks flock to college campuses. students are

often offered free gifts, student credit cards, free checking accounts other incentives for opening an account. but students usually have no credit history that lenders can use as a guide to assess risk. why would these financial organizations try so hard to capture student business

Business

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Following top-down methods is used when projects closely follow past projects in regard to features and costs of those features,

stepan [3596]

Answer: Apportionment

Explanation: Apportionment, also referred to as analogous estimating, is utilized when projects closely align with previous ones concerning features and costs. This allows for rapid estimation regarding project duration, cost, and features with minimal effort, accuracy, and reliance on historical data. The apportionment methodology is common in fairly standard projects with limited variation or customization.

4 0

1 month ago

Malkin corp. has no debt but can borrow at 8.75 percent. the firm’s wacc is currently 16 percent, and there is no corporate tax.

Scilla [3833]

Response:

16%

17.3%

23.25%

16%

Clarification:

WACC represents the average cost of capital for a firm, based on the proportions of debt and equity multiplied by their respective costs.

Having the capital cost, the next step is to compute the equity cost.

Cost of Capital = (Cost of Equity x Proportion of equity) + (Cost of Debt x Proportion of Debt)

No Debt

16% = (Cost of Equity x 1 ) + (8.75% x 0)

16% = Cost of Equity + 0

Cost of Equity = 16%

15% Debt and 85% for Equity (100%-15%)

16% = (Cost of Equity x 85% ) + (8.75% x 15%)

0.16 = (Cost of Equity x 0.85) + 0.013125

0.16 - 0.013125 = Cost of Equity x 0.85

0.146875 = Cost of Equity x 0.85

Cost of Equity = 0.146875 / 0.85 = 0.17279

Cost of Equity = 17.3%

50% Debt and 50% for Equity (100%-50%)

16% = (Cost of Equity x 50% ) + (8.75% x 50%)

0.16 = (Cost of Equity x 0.50) + 0.04375

0.16 - 0.04375 = Cost of Equity x 0.50

0.11625 = Cost of Equity x 0.50

Cost of Equity = 0.11625 / 0.50 = 0.2325

Cost of Equity = 23.25%

WACC in b and c remains at 16%

7 0

1 month ago

Read 2 more answers

A consumer makes purchases of an existing product X such that the marginal utility is 10 and the price is $5. The consumer also

stepan [3596]

Answer:

To maximize utility, the consumption of product Y should be increased while reducing the intake of product X.

Explanation:

The utility-maximizing principle asserts that a consumer optimizes utility when the marginal utility per dollar spent is equal for both products.

For Product X, the marginal utility per dollar is:

$\frac{MU_X}{P_X}=\frac{10}{5}$

= 2 utils per dollar

For Product Y, the marginal utility per dollar is:

$\frac{MU_Y}{P_Y}=\frac{8}{1}$

= 8 utils per dollar

According to this principle, the consumer should increase the consumption of product Y and decrease that of product X.

4 0

2 months ago