Estimate the weighted cost of capital

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1. Electronics Unlimited has the following capital structure: 60% stock, 10 % preferred stock, and 30% in debt. The after-tax cost of debt is 8%, the cost of preferred stock is 10%, and the cost of common stock is 12%. What is the Weighted Cost of Capital (WACC).

2. Your company's fixed costs are $2 million and variable costs are $5 million. If revenue is $9 million and it sells 1,000,000 units, what is the company's unit contribution margin?

3. What is the present value of $1,000 to be received in five years discounted back to the present at five percent?

4. What is the future value of $1,000 invested for 12 years at ten percent interest compounded annually?

5. What is the accumulated value of $1,000 received annually for five years at five percent?

6.a. A company has the following accounts: cash ($25,000), net income ($50,000) interest income ($12,000), accounts payable ($75,000), factory ($85,000), equity ($305,000), inventory ($75,000), and accounts receivable ($6,000). What is the current ratio for the company? Show your calculation

b. What is the return on equity? Show your calculation

7. Acme Consulting has the following operating data for last year.

Revenues $180,000
Supplies Expense $45,000
Salaries $70,000
Rent Expense $1,500
Accounts Payable $8,000
Administrative Expense $6,000
Cash collections from prior year's sales $10,000

b. What is income before tax?

8. If Acme Consulting has equity of $500,000, what is its return on equity (ignoring taxes)? What is its net profit margin?

Reference no: EM1358841

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