Answer:
The firm's optimal capital structure is 80% Debt and 20% Equity.
The WACC at this optimal capital structure is 10.28%.
Explanation:
Note: See the attached excel file the computation of the weighted average cost of capital (WACC) at the optimal capital structure. Also note that the data in the question are merged together but they are sorted in the attached excel file before answering the question.
The optimal capital structure of a firm can be described as a combination of debt and equity financing that is the beat in which market value of the firm is maximized while its cost of capital is minimized.
Using the weighted average cost of capital (WACC), the optimal capital cost capital structure occurs at a point where the WACC is the lowest.
From the attached excel file, the lowest WACC is 0.1028, or 10.28%. At this firm Market Debt- to-Value Ratio (wd) which is debt is 0.80 (i.e. 80%), and Market Equity-to-Value Ratio (ws) which is equity is 0.20 (i.e. 20%).
Therefore, the firm's optimal capital structure is 80% Debt and 20% Equity.
The WACC at this optimal capital structure is 10.28%.
It will help organize the flow of ideas
Answer:
b. unskilled labor, skilled labor, and professionals
Explanation:
- As the people services include the semi and skilled based works done they include Lawn care, security guards, and skilled labor as plumbing and catering and those of the professionals include the accountant, lawyers, and the managing consultants.
Answer:
The answer is $18,810
Explanation:
Cost of goods sold equal:
Beginning or opening inventory plus purchases minus ending or closing inventory.
Monte Vista returned some inventories and also took advantage of discount. So this will reduce the cost of total purchases for the quarter.
Total purchase = new purchases minus purchase returns minus any discount enjoyed.
So total purchase is now:
$10,000 - $1,350 - $340
=$8,310
Therefore cost of goods sold is:
$44,000 + $8,310 - $33,500
=$18,810
Answer:
$6,625,000
Explanation:
Direct material $1,323,600
Direct labor. $1,680,000
Total factory overhead. $3,544,200
Add: Opening work in process inventory $455,300
Less: Closing work in process inventory ($378,100)
Costs of goods manufactured $6,625,000