Whipple Industries Inc. is in the process of determining its optimal capital budget for next year. The following investment projects are under consideration: Required Expected Rate Project Investment of Return A $2 million 20.0% B $3 million 15.0% C $1 million 13.5% D $4 million 13.0% E $1 million 12.5% F $3 million 12.0% G $5 million 11.5% The firm's marginal cost of capital schedule is as follows: Amount of Funds Raised Cost $0 - $6 million 12.0% $6 million - $12 million 12.5% $12 million - $18 million 13.5% Over $18 million 15.0% Determine Whipple's optimal capital budget (in dollars) for the coming year. a. $5 million b. $10 million c. $14 million d. $11 million
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
which one is correct please confirm?
QUESTION 19
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Whipple Industries Inc. is in the process of determining its optimal capital budget for next year. The following investment projects are under consideration:
Required
Expected Rate
Project
Investment
of Return
A
$2 million
20.0%
B
$3 million
15.0%
C
$1 million
13.5%
D
$4 million
13.0%
E
$1 million
12.5%
F
$3 million
12.0%
G
$5 million
11.5%
The firm's marginal cost of capital schedule is as follows:
Amount of Funds Raised Cost
$0 - $6 million 12.0%
$6 million - $12 million 12.5%
$12 million - $18 million 13.5%
Over $18 million 15.0%
Determine Whipple's optimal capital budget (in dollars) for the coming year.
a. $5 millionb. $10 millionc. $14 milliond. $11 million
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