What is the new discount rate

Assignment Help Managerial Accounting
Reference no: EM132617202

Problem 1: In talking with advisors about the project, due to uncertainty, a suggestion was made that the discount rate was about 30% too low. Calculate what the new discount rate would be following this suggestion. (Note: it is not 37.75% That would be over 400% increase!) What is the new discount rate, and what impact does this have on the project? Given the other implications to the company as presented in the case, and the fact that the cost of capital is 7.75%, what recommendation would you give Mr. Hansson?

Reference no: EM132617202

Questions Cloud

Define the connection between ebp and the quadruple aim : Healthcare organizations continually seek to optimize healthcare performance. For years, this approach was a three-pronged one known as the Triple Aim.
Identifying how prompts and reinforcements can be used : Develop a graphic organizer that lists, defines, and describes three examples of prompts, reinforcements, and generalizations
Who should approach the family about organ donation : Your patient is a 23-year-old female with a history of headaches. This morning she was experiencing a really bad headache as her boyfriend was driving her.
Sketch the budget constraint for spencer : Spencer, an undergraduate student at UAB, receives money from his parents every month to spend on two possible goods: football tickets and books.
What is the new discount rate : What is the new discount rate, and what impact does this have on the project? Given the other implications to the company as presented in the case
Examine healthcare organization websites : In this Discussion, you will consider this adoption. You will examine healthcare organization websites and analyze to what extent these organizations use EBP.
Evaluate whether proposal is acceptable on financial grounds : Evaluate whether proposal is acceptable on financial grounds. Ensure that your answer is discussed and supported by relevant calculations/workings
Prepare the journal entry on October : Prepare the journal entry on October 31, 2016, to record the first interest payment and the amortization of the premium/discount
Produce two examples of management accounting information : Produce two examples of management accounting information that could help management when making each of the decisions

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Calculate the cost of goods sold for january

Assume Super Builders applies 40% markup on cost. What is the selling price of Job 103? Calculate the cost of goods sold for January

  Determine per-unit factory overhead allocate to the gasoline

Determine the per-unit factory overhead allocated to the gasoline and diesel engines under the single plantwide factory overhead rate method.

  What the main trouble with variable costing

The main trouble with variable costing is that it ignores the increasing importance of fixed costs in manufacturing companies. Do you agree? Why?

  Calculate the performance measure that potentially induces

Calculate the performance measure that potentially induces (i.e., reduces) the aforementioned under-investment problem. Financial Performance Measures

  How to compute firm present weighted average cost of capital

How to Compute the firm present weighted average cost of capital? The HASF Company was recently formed to manufacture a new product

  Calculate boxcars predetermined overhead rate

Calculate Boxcar's predetermined overhead rate - calculate Boxcar's applied overhead and how much was Boxcar's over- or under-applied overhead for the month of March?

  Negative effect in revenue earned

The overhead costs to re-vamp a new system, production slow-down, costs of training will all have a negative effect in revenue earned if this change is done after the fact.

  Create a schedule of expected cash collections from sales

Create a schedule of expected cash collections from sales, by month and in total, for the second quarter. What is the accounts receivable balance on June 30th?

  Each district for purposes of performance evaluation

Compute the costs that would be allocated at the end of the month to each district for purposes of performance evaluation. Hint: calculate and apply the budgeted variable cost/kilometer.

  Which management by exception refers to the practice

Which Management by exception refers to the practice of only investigating variances? that are material in dollar amounts relative to budgeted amounts.

  Would the ada wilson be likely to use job costing

Would the Ada Wilson be likely to use job costing or process costing for manufacturing footballs under these assumptions? Explain.

  Cost behavior over time-relevant range

Within this year your property taxes on your commercial building are not likely to change, and as such they are considered fixed; yet with a simple change in operating periods - to include up to a few years, these are more than likely to flux.

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