A firm is considering an investment that will earn a 6% rate of return. If it were to borrow the money, it would have to pay 8% interest on the loan, but it currently has the cash, so it will not need to borrow. Should the firm make the investment?

Q: Savion is restoring a car and has already spent $4, 000 on the restoration. He expects to be able to…

A: Sunk cost = $4000.$4000 is a sunk cost because Savion has already spent $4000 on the restoration and…

Q: A large restaurant business in the USA (hundreds of locations in several states) that is considering…

A:

Q: The law of diminishing returns implies that Multiple Choice O O O O the more hours you spend…

A: According to the law of diminishing returns as one input variable is increased, there will…

Q: 3 Hidden Cost of Capital Does your company charge your division for the capital that it uses? If…

A: Capital's hidden cost These are unforeseen costs that occur when someone makes a transaction.…

Q: Joan Zorba orders calculators for her office supply stores. Each calculator cost $35, currently she…

A: EOQ =  Square root ( 2 x Co x D / Ch ) Where , D = Annual demand = 5 / day x  6 days/ week x 52…

Q: Jerome's current job pays $X/yr and provides $Y in benefits like insurance. He can start a business…

A: Approach to solving the question: Detailed explanation: The option that is true for Jerome's…

Q: Ms. Susan is renovating her townhouse for a total price of $18,000. The work will be done in a month…

A: The total price for renovation of the townhouse is $18000. The work gets over by a month and will be…

Q: For Elizabeth, one of the most exciting aspects of landing a full-time job was being able to buy a…

A: The average total cost is calculated by dividing the total cost of production by the total output.…

Q: The short run is Group of answer choices the length of time a CEO serves on a board the period in…

A: Answer to the question is as follows:

Q: The economic characteristics of agricultural land which makes it a long term investment is it

A: Economics as a subject deals with the allocation of scarce resources among humans with unlimited…

Q: Joseph migrated to Canada from Ghana 5 years ago. He currently works in sales but is considering…

A: We are going to use Time value of money concept to answer this question.

Q: When deciding upon the optimal amount of capital, a firm will decide to purchase additional capital…

A: This question is about the concept of optimal capital structure. The optimal capital structure of a…

Q: If Microsoft earned 0.85 dollars per share in 2000, what is the rate of interest applied for…

A: An interest rate refers to a percentage that is charged on the principal (original amount) of a loan…

Q: Suppose that you are trying to make a decision regarding the purchase of a new machine for the plant…

A: Given information 3 criteria to take a decision to purchase a new machine: 1) Price of machine (Most…

Q: What is the discounting factor?

A:

Q: Fire and Flower Holdings Corporation of Ottawa produce computer memory sticks. If the price of the…

A: The company Fire and Flower Holdings is included in the licence market. As a computer memory stick…

Q: Is the asset's cost basis used in calculating the gain or loss to the firm?

A: Answer - Asset cost basis - It the value of asset which is used for tax purposes .This help to…

Q: Define the term the cost of capital?

A: The cost of capital is a very important term for the term for investors and a company which is the…

Q: Loessing Compan produced and sold 12,000 units last year with sales price of $45 per unit and unit…

A: Since all direct expenses have been deducted from sales, contribution seems to be the amount of…

Q: How low must the fixed cost be to break even?

A: Break-Even Point (sales dollars) = Fixed Costs ÷ Contribution Margin Contribution Margin = Price of…

Q: What equation shows the relationship of MC to AVC when AVC is rising?

A: Marginal Cost It refers to the change in the total cost due to one unit change in output. Variable…

Q: Loessing Compan produced and sold 12,000 units last year with sales price of $45 per unit and unit…

A: Since all direct expenses have been deducted from sales, contribution seems to be the amount of…

Q: How does rising organic composition of capital threaten the rate of profit?

A: Historically, there have been a lot of economic theories stating the requirements for the…

Q: Assume you are selling pizzas at $3 per pizza Your fixed costs (rent, salaries, and utilities) are…

A: At Break Even Point, total revenue is equal to total cost. A firm neither earns profit nor incur…

Q: An artisanal manufacturing plant has 30 horsepower of connected load and consumes 2,800…

A: Given, A consumer consumes 2,800 kW hours monthlyManufacturing load of the plant is 30…

Q: You run a school in Florida. Fixed monthly cost is $5,755.00 for rent and utilities, $5,797.00 is…

A: Costs in a business are in any type of activity are of two main types – fixed costs and variable…

Q: How did you arrive at the new unit productivity percentage of 17.75?

A: Introduction The productivity of a production system is similar to the efficiency of the production…

Q: How would an increase in inflation rate affect the market price of ABC company?

A: The reduction in the currency’s purchasing power is considered inflation. Theoretical estimation of…