Cost of capital

replacement cost is greater than the firm’s cost of capital. So, what cash flow, when divided $100,000, gives 6%. A. $4,800 B. $6,000 C. $6,600 D. $8,000 6. Beverly Enterprises owns a nursing home that is currently earning $2.0 million in cash flow on an annual basis, but this amount is expected to drop in the future. The nursing home has a book value of $20 million, a replacement cost of $40 million, and a current sale value of $10 million. If Beverly Enterprises has a cost of capital…

while continuing with the same current facility of the distribution channel. Lack of Wholesale experience or Be in need of Wholesale Experience: in spite of the fact that the detailed costs indicate that "direct distribution" is the profitable solution for the company, but those costs do not have an impact on the cost, both figurative, and literal of managing the wholesale operation. If Crafton Industries, Inc. had an opportunity to juncture the rollout of their wholesale operation, they would…

of these people are in constant possession of an EpiPen, an auto-injector containing epinephrine used to reverse anaphylaxis (“Anaphylaxis,” 2016). However, in recent years the price of the EpiPen has increased substantially; a two-pack currently costs $609 (Pollack, 2016). Because Mylan commands around 85 percent of the epinephrine auto-injector market, almost all of those at risk have been affected (Herrick, 2016: 2). Concerns about drug price increases, like the EpiPen’s, have caused…

Many organizations create budgets on an annual basis to outline the predicted desires of each branch inside the enterprise. Using the yearly budget technique additionally, this limits some time that corporations spend developing and coping with capital resources. Although large companies might also have employed accountants or different experts to create the business budget, small enterprise proprietors are normally accountable to finish this feature themselves (Weingartner,…

profit or have deficit in the last 2 years. Increase 5% of the market share Do more market research and redesign the product roadmap to attract more customers. Invest more capital to improve the user experience and the quality of its website and app. Reduce operation cost and manufacture cost by moving 50% of factories to some lower cost areas. While implementing the above plan, there is no doubt that J.C.Penney will meet some issues and barriers. There are two major issues that we think may…

CYCLE COSTING LIFE CYCLE COSTING  Life cycle costing is defined as the total cost throughout its life including planning, design, acquisition & support costs & any other costs directly attributable to owing / using the asset.  Category of LCC capital assets: • Initial costs • Operating costs • Disposal costs SIMPLE FORMULA FOR LCC LCC= Capital + Lifetime operating cost + Lifetime maintenance cost + Disposal cost –Residual value NUMERICAL EXAMPLE 1. A company is planning a new product.…

The difference between reserve and reserve funds are as follows: Reserve • working capital or operating fund • funded by general revenue (i.e. taxes) • allocation or accumulated surplus • do not earn interest • examples, contingencies, equipment replacement, winter maintenance • established and pre-determined purpose • must be applied to that purpose only and at Council discretion and approval Reserve Funds - overall • investment fund • physical isolation of money/asset • interest earning •…

to help with making the decision to enter the 16oz bottling market. As a supplement to the memo, attached is an excel spreadsheet that provides the details. Cost & Income Estimations Once the assessment was made to explore 16oz bottle production, the costs associated with the investment need to be evaluated. First, the projected cost of the machine is $300,000 which includes $40,000 of modification. The estimated life of the machine is seven years with a salvage value of $30,500. The…

Costs borne by a firm can fall into two categories: explicit and implicit. According to “Principles of Economics”, explicit costs are monies that are paid out in order to run the business and may include such things as wages or rent; while implicit costs “represent the opportunity cost of using resources already owned by the firm.” (OpenStax, 2014, p. 159). My husband and I operate a small business which is a martial arts school. At this company we have explicit costs, our largest explicit costs…

So altogether the researcher found out that the management controllable variables of the bank determine the profit of the bank of Ceylon. Among them a special consideration should be forwarded to the efficiency of capital ratio management. 5.2. Recommendations A well established, healthy banking industry is must for sustainable development of any country. The banking industry in Sri Lanka has great impact in the GDP of Sri Lanka. A state bank, BOC has to play vital…