Discuss the importance of determining a firm cost of capital

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Reference no: EM132609055

Question 1: Discuss the importance of determining a firm cost of capital?

Question 2: Moneague Wholesale Ltd. Income Statement for the year ended Dec. 31, 2019

$000 $1000

Sales                                   $ 5000

Less Cost of Sales                     (3700)

Gross Profit                              1300

Less Operating Expenses              (1000)

                                                  300

Profit before Interest and Taxes

Interest                                       (112)

Profit before taxes                              188

Taxes (40%)                                        75

Profit after tax                                    113

Dividend                                                 33

Retained Profit                                              80

Calculate:

i. Working capital

ii. Inventory Conversions period

iii. Receivable Collection Period

iv. Payable Deferral Period

v. Cash Conversion Cycle

Reference no: EM132609055

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