Potential projects by thinking of our variable costs

Assignment Help Financial Management

Reference no: EM13927560

In my company I could apply this to our potential projects by thinking of our variable costs as the hours charged by consultants to the projects they are working on, each additional billable hour that is produced will add incrementally to our cost so it is variable. However, the space they are working in and their laptops cost the same whether they are producing 1 billable hour or 400 – these would be fixed costs.

How would you mitigate risk in this situation?

Reference no: EM13927560

Questions Cloud

Use leverage up to a maximum debt to equity ratio : According to the FCIC report, New Century Financial used the Federal Reserve discount window to raise the capital it needed to finance the origination of mortgages. A financial institution is permitted to use leverage up to a maximum debt to equity r..

Reserve discount window to replace other source of liquidity : We learn from Gorton’s book that banks in August 2007 went right to the Federal Reserve discount window to replace other sources of liquidity that were becoming scarcer. In addition managers of the bank made public announcements that they were using ..

Give one example of unethical behavior involving mrp : Give one example of unethical behavior involving MRP and one involving ERP, and state the ethical principle violated for each example.

How robert wallace should resolve the dilemma : Robert Wallace graduated from Indiana University in 2002 with a BA in history and certification to teach high school social studies. He went right to work as a teacher, but after a few years he found himself increasingly frustrated with his work from..

Potential projects by thinking of our variable costs : In my company I could apply this to our potential projects by thinking of our variable costs as the hours charged by consultants to the projects they are working on, each additional billable hour that is produced will add incrementally to our cost so..

What is expected return on portfolio-is equally invested : What is the expected return on a portfolio that is equally invested in the two assets? If a portfolio of the two assets has an expected return of 12.3 percent, what is its beta? If a portfolio of the two assets has a beta of 2.53, what are the portf..

What will be the debt-to-equity ratio : Reliable Gearing currently is all-equity-financed. It has 28,000 shares of equity outstanding, selling at $100 a share. The firm is considering a capital restructuring. The low-debt plan calls for a debt issue of $380,000 with the proceeds used to bu..

Consultant to evaluate its cost of capital : Data Inc. recently hired you as a consultant to evaluate its cost of capital. Using the following information, determine Data Inc’s cost of capital. ? New debt can be raised at a rate equal to the yield to maturity (YTM) on the company’s outstanding ..

What happens to the expected return on the stock : The common stock and debt of Northern Sludge are valued at $70 million and $30 million, respectively. Investors currently require a return of 16.0% on the common stock and 7.7% on the debt. If Northern Sludge issues an additional $13 million of commo..

User Account

All Pages