Project analysts-when firm has flotation costs equal

Assignment Help Financial Accounting
Reference no: EM13826136

When a firm has flotation costs equal to 7 percent of the funding need, project analysts should:

increase the project's discount rate to offset these expenses by multiplying the firm's WACC by 1.07.

increase the project's discount rate to offset these expenses by dividing the firm's WACC by (1 - 0.07).

add 7 percent to the firm's WACC to get the discount rate for the project.

increase the initial project cost by multiplying that cost by 1.07.

increase the initial project cost by dividing that cost by (1 - 0.07).

Reference no: EM13826136

Questions Cloud

Write about the environment for small business : The question is relates to Economics, mainly macroeconomics and the question is clarify about conducive business environment, mainly for small businesses in the USA and Brazil.
Determining the present value-annual value : The estimated cash flow of Project XP-05/3 is given below:
Training event-compare the differences in the two events : What motivates you to learn? Think about a training event that you have participated in that did not motivate you to learn during the event. Compare that event to a training event where you were motivated to learn. Compare the differences in the two ..
Nursing applying ethical and legal principles to resolve : Nursing Applying Ethical and Legal Principles to Resolve Ethical Dilemma in Nursing
Project analysts-when firm has flotation costs equal : When a firm has flotation costs equal to 7 percent of the funding need, project analysts should:
Computation of annual value-present value of cash flow : The cash flow for an engineering project is given below:
Nursing applying ethical and legal principles to resolve : Nursing Applying Ethical and Legal Principles to Resolve Ethical Dilemma in Nursing
Assumption of the dividend growth model : Which one of the following is an underlying assumption of the dividend growth model?
Challenges of conducting an orientation meeting : This question related to HR Management and it is about virtual team management. The difficulties in conducting team orientation meeting virtually rather than face-to-face have been described in the solution and how to overcome these difficulties h..

Reviews

Write a Review

Financial Accounting Questions & Answers

  Calculate the following variances for april indicating

Construct an Excel or other spreadsheet to demonstrate how the solution to part 1 would change if the following information changes:the actual labour rates were $27.00, $22.90 and $17.00 for labour classes 3,2 and 1 respectively.

  Compute the contribution margin

Compute its production cost per unit under absorption costing and compute the contribution margin

  Use equivalent units in job costing

Why don’t we use equivalent units in job costing? Why is it necessary to compute separate per-unit costs for materials and conversion costs?

  Process costing problem

Koram manufactures a product called “Blob”. It makes Blob in one department and uses a process costing system for tracking and assigning of product costs. Blob is a liquid that has no particular purpose. How many physical pounds of Glob were actually..

  Total assets and total liabilities

Assume the following situation: Your business is 3 years old sole proprietorship. It has sales of $300,000 and net income after taxes of $40,000. Your total assets are $100,000 and your total liabilities are $2,000. You want to hire a fourth employee..

  Calculate the present value-future value-number of periods

Calculate the present value given the following information: future value = $1,000; number of periods = 3; interest rate of 5%.

  Preparation of the cash flow statementthe following events

preparation of the cash flow statement.the following events occurred at handsome hounds grooming company during its

  Theory question based on revenue recognition principlemany

theory question based on revenue recognition principle.many companies sell products allowing their customers the right

  Determine the weighted- average contribution margin

determine the (1) weighted- average contribution margin, (2) break-even point in units, and (3) number of units of each product that will be sold at the break-even point.

  Prepare the consolidated financial statements

Prepare the consolidated financial statements for 20X3 using the direct method. Using the deferral method, prepare a statement of revenues and expenses and a statement of changes in net assets for Wise Owls for 20X1.

  Question 1 fixed and variable cost behaviorespresso express

question 1 fixed and variable cost behaviorespresso express operates a number of espresso coffee stands in busy

  Find which of depreciation method applied

Is book value an estimation of an asset's fair market value? Describe.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd