Problem 14-15 Finding the WACC [LO3] You are given the following information for Watson Power Co. Assume the company’s tax rate is 21 percent. Debt: 16,000 6.5 percent coupon bonds outstanding, $1,000 par value, 27 years to maturity, selling for 105 percent of par; the bonds make semiannual payments. Common stock: 490,000 shares outstanding, selling for $67 per share; the beta is 1.18. Preferred stock: 21,500 shares of 4.3 percent preferred stock outstanding, currently selling for $88 per share. The par value is $100 per share. Market: 6 percent market risk premium and 5.4 percent risk-free rate. What is the company's WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Answers

Answer 1

Answer:

The company's WACC is 9.71%.

Explanation:

Note: See the attached excel file for the computation of company's Weighted Average Cost of Capital (WACC).

The weighted average cost of capital (WACC) can be described as the rate that is expected to be paid on average by a company to all holders of its securities to finance the assets of the company.

The following formula are used in the excel file to compute the WACC of the company.

Cost of debt = Type this function that is used in the excel sheet “=Rate(Number of years * 2,((Coupon rate/2)*Par value),-Selling price),Par value)*2*(1 -  Tax rate)”. That is, type “=RATE(27*2,((6.5%/2)*1000),-1080,1000)*2*(1-21%)” in the excel file and press enter. This gives 4.83420280657156%

Note: Make sure you note all the commas and signs in the cost of debt function.

Cost of Common stock/equity using CAMP = Risk-free rate + (Beta * Market risk premium) = 5.4% + (1.18 * 6%) = 12.48%

Cost of preferred stock = (Par value * Dividend rate) / Current price = ($100 * 4.3%) / 88 = 0.0488636363636364’ or 4.88636363636364%


Related Questions

When comparing investment opportunities with approximately the same cost and risk level, choose the investment with the:

Answers

Answer: highest positive net present value

Explanation:

Net present value is typically used by organizations in order to know the projects that will bring more profit to an organization.

Therefore, when comparing investment opportunities with approximately the same cost and risk level, choose the investment with the highest positive net present value.

Chester's balance sheet has $105,038,000 in equity. Further, the company is expecting net income of 3,000,000 next year, and also expecting to issue $4,000,000 in new stock. If there are no dividends paid what will beChester's book value?

Answers

Answer:

$112,038,000

Explanation:

The book value is computed as shown below:

= Equity balance + net income + issue of new stock

= $105,038,000 + $3,000,000 + $4,000,000

= $112,038,000

McConnel corporation has bonds on the market with 16.5 years to maturity, a YTM of 7.7 percent, a par value of 1000 and current price of 1065. The bonds make semiannual payment and have a par value of $1,000.Required:What must the coupon rate be on these bonds?

Answers

Answer:

Coupon rate = 0.08402 or 8.402%

Explanation:

To calculate the price of the bond, we need to first calculate the coupon payment per period. We assume that the interest rate provided is stated in annual terms. As the bond is a semi annual bond, the coupon payment, number of periods and semi annual YTM will be,

Coupon Payment (C) = x

Total periods (n)= 16.5 * 2 = 33

r or YTM = 7.7% * 1/2 = 3.85% or 0.0385

The formula to calculate the price of the bonds today is attached.

Using the bond price formula and the available values, we calculate the coupon rate to be,

1065 = x * [( 1 - (1+0.0385)^-33) / 0.0385]  +  1000 / (1+0.0385)^33

1065 = x * (18.50739407)  +  287.4653284

1065 - 287.4653284 = x * 18.50739407

777.5346716 / 18.50739407  = x

x  =  42.012 rounded off to $42.01

If the semi annual coupon payment is $42.01, the annual coupon payment will be 42.01 * 2 = $84.02

The coupon rate on bonds is = 84.02 / 1000

Coupon rate = 0.08402 or 8.402%

The company currently markets McDog T-bone, Lapdog Lunchtreats, Rover's Potroast, and Puppy Porterhouse in the dog food market. Prime Cuts will be an addition to the

Answers

Answer:

company's product line in the dog food market

Explanation:

In the description provided, it can be said that Prime Cuts will be an addition to the company's product line in the dog food market. A product line is a group of related products all marketed under a single brand name and are sold by the same company to the same targeted group of consumers. Such as in this scenario, all of the products listed are dog treats/food with different ingredients and are all sold by the same company to people looking for dog food.

Rahman stock just paid a dividend of $3.00 per share. Future dividends are expected to grow at a constant rate of 6% per year. What is the value of the stock if the required return is 12%

Answers

Answer:value of stock for the required return of 12 % =  $53

Explanation:

Given

current dividend just paid = $3.00

dividend to grow at constant rate of 6%

required rate of return =12%

to calculate the value of stock for the requitred return of 12 % , we use the dividend growth model which is  

Current price = dividend ( 1 + growth rate )/ (required rate -growth rate )

                        = 3 x (1+6%) / 12-6 = 3 x 1.06 /6% =3.18/0.06=  $53

Therefore  value of stock for the requitred return of 12 % ,=  $53

Currently Baldwin is paying a dividend of $1.10 (per share). If this dividend stayed the same, but the stock price rose by 10% what would be the dividend yield

Answers

Answer:

Dividend yield = 227.06%

Explanation:

Assuming the Closing stock market summary for Baldwin company is $44.05

Dividend yield = Dividend * 100 / (Price* (1 + growth rate) )

Dividend yield = 1.10 * 100 / (44.05 * (1+0.10) )

Dividend yield = 1.10 * 100 / (44.05 * 1.10)

Dividend yield = 110 / 48.455

Dividend yield = 2.2706

Dividend yield = 227.06%

Assume the Apple division of the Gala Company had the following results last year (in thousands). Managements required rate of return is 10% and the weighted average cost of capital is 8%. Its effective tax rate is 30%. What is Apple division's residual income

Answers

Answer:

$50,000

Explanation:

The computation of the residual income for each division is shown below:

As we know that

Residual income = Operating income - target income

where,  

Operating income is given in the question  

And, the target income could be calculated by

= Average invested assets × required rate of return

= $4,500,000 × 10%

= $450,000

So, the residual income is

= $500,000 - $450,000

= $50,000

Long-term debt ratio 0.3
Times interest earned 10.0
Current ratio 1.2
Quick ratio 1.0
Cash ratio 0.4
Inventory turnover 3.0
Average collection period 73 days

Use the above information from the tables to work out the following missing entries, and then calculate the company’s return on equity.

Net sales _____$
Cost of goods sold
Selling, general, and administrative expenses 20.00
Depreciation 30.00
Earnings before interest and taxes (EBIT) _____$
Interest expense
Income before tax _____$
Tax (35% of income before tax)
Net income _____$

Answers

12$ 18$ 35$ 14$ I think

Auto Body Repair Shop (ABRS) promises to pay Ben $1,000 a week to work for ABRS. Ben accepts and quits his job with Car Care Service. ABRS fails to provide a job for Ben. Ben has a cause of action based on

Answers

Answer:

Breach of Contract

Explanation:

If a contract was signed that promised a job/salary, then rescinding the job by the prospective employer is grounds for a "Breach of Contract" lawsuit.

A company’s common stock has a market value of $63.18 per share and its next dividend is expected to be $3.26 per share. The stock’s beta is 1.2, the tax rate is 35%, and the market risk premium is 6.1% per year. The yield to maturity for the company’s long-term debt is 6.4% per year. If the riskiness of the company’s equity requires that it provide a risk premium of 3.2% per year over the yield on its long-term debt, what is the company’s annual cost of internal equity financing?

Answers

Answer:

Cost of equity = 9.6%

Explanation:

The cost of equity is the return a firm theoretically pays to its equity investors, In order to calculate the cost of equity here we need to add up the yield to maturity for the company's long term debt and the risk premium per year over the yield on its long term debt.

Solution

Cost of equity = Yield to maturity + Risk premium

Cost of equity = 6.4% + 3.2%

Cost of equity = 9.6%

Why must corporate managers use multiple techniques of project evaluation? Which technique is most commonly used and why? Describe several ways you may be able to use the techniques above as you progress in your professional career.

Answers

Answer:

The most important technique for project evaluation is the net present value (NPV) which compares the present value of discounted cash flows against the  initial costs associated with the project. The other two most important techniques used are the payback period (either regular or discounted) and the internal rate of return (IRR).

Depending on the company's needs, sometimes one technique might be used instead of others. E.g. technological firms generally use the payback period because most of their projects have a very short life, 1 or 2 years. Other times, you might have to compare different projects and even if they are not mutually exclusive, no company can dispose of money freely. It only invests in certain projects that have a minimum required rate of return.

But the basic technique, the NPV, is the most relevant in a sense that no project with a negative NPV should be accepted.

On July 1, Shady Creek Resort borrowed $400,000 cash by signing a 10-year, 9% installment note requiring equal payments each June 30 of $62,328. What is the journal entry to record the first annual payment

Answers

Answer:

                             Journal Entry

                                    Debit       Credit

Interest Expense      $36,000

Notes Payable          $26,328

Cash                                             $62,328

Workings

Interest portion for one year = 400,000 * 9% = $36,000

Total installment paid = $62,328

So, principal portion repaid = $62,328 - $36,000

 = $26,328

On January 1, 2021, Legion Company sold $270,000 of 4% ten-year bonds. Interest is payable semiannually on June 30 and December 31. The bonds were sold for $169,056, priced to yield 10%. Legion records interest at the effective rate. Legion should report bond interest expense for the six months ended June 30, 2021, in the amount of: (Round your answer to the nearest dollar amount.)

Answers

Answer:

Interest expense = $8453

Explanation:

We can calculate Bond interest expense by multiplying Carrying value of the bond with the effective interest rate and the period of time,

DATA

Carrying value of bond = $169,056

Effective interest rate = 10%

Period of time = 6 months

Interest expense =?

Calculation

Interest expense = Carrying value x Effective interest rate x Time period

Interest expense = $169,056 x 10% x [tex]\frac{6months}{12months}[/tex]

Interest expense = $8453

Where can you go in the Banking Center to review downloaded bank feed transactions that have already been matched to existing transactions in QuickBooks Online?a. For Review tabb. Reviewed tabc. Recognized tab d. Excluded tab

Answers

Answer:

Where can you go in the Banking Center to review downloaded bank feed transactions that have already been matched to existing transactions in QuickBooks Online?

a. For Reviewed tab

Explanation:

In QuickBooks online, you have the Reviewed tab where you can download at least the last 90 days of transactions, made with your bank or credit card. QuickBooks is also able to categorize all the downloaded transactions you have done. In the reviewed tab you can find all the accepted bank transactions.

Blue Cab Company had 69,000 shares of common stock outstanding on January 1, 2021. On April 1, 2021, the company issued 39,000 shares of common stock. The company had outstanding fully vested incentive stock options for 14,500 shares exercisable at $11 that had not been exercised by its executives. The end-of-year market price of common stock was $32 while the average price for the year was $31. The company reported net income in the amount of $364,915 for 2021. What is the diluted earnings per share (rounded)

Answers

Answer:

$3.38

Explanation:

The diluted earnings per share is calculated as;

First, we need to calculate the weighted average outstanding shares.

Weighted average outstanding share is

= Common shares + (Issued shares × 9/12[April - December] + [(Issued shares - Shares exercisable)

= 69,000 shares + (39,000 shares × 9/12) + ( 14,750* - 5,145*)

= 69,000 + 29,250 + 9,605

= 107,855

Therefore, the diluted earnings per share is;

= Net income / Weighted average outstanding shares

= $364,915 / 107,855

= $3.38

Note : (14,500 shares × 11) / 31

= 5,145

. Which of these statements is true about the field of organizational behavior? 1 point A. It examines how individuals and teams in organizations relate to one another and to their counterparts in other organizations. B OB researchers systematically study various topics at a common level rather than at multiple levels. C. Information technology has almost no effect on organizational behavior. D. The field of organizational behavior relies exclusively on ideas generated within the field by organizational behavior scholars. E. The origins of organizational behavior are traced mainly to the field of economics.

Answers

Answer:

A. It examines how individuals and teams in organizations relate to one another and to their counterparts in other organizations.

Explanation:

Organizational behavior examines how individuals and teams in organizations relate to one another and to their counterparts in other organizations.

An organizational behavior can be defined as the study of people's opinions, feelings, actions and how people perceive an organization.

This ultimately implies that, an organizational behavior is the study of people's opinions, feelings, actions and how people perceive an organization.

Basically, it measures how an organization relates with its external environments. This is very key to formulating policies, mission and achieving a successful long-term organizational goals and objectives.

XARA is a newly emerging wine company. After extensive market research, XARA divides its market into wine enthusiasts, casual drinkers and restaurants. Each category has its own needs, traits and marketing goals. In this scenario, XARA has engaged in market _________.

Answers

Answer: segmentation

Explanation:

Market segmentation is when a business market that is made up of different customers is being divided, into smaller groups or segments based on some characteristics.

From the question, we are informed that XARA is a newly emerging wine company. After extensive market research, XARA divides its market into wine enthusiasts, casual drinkers and restaurants. Each category has its own needs, traits and marketing goals. In this scenario, XARA is using market segmentation.

Market research is a systematic attempt to acquire data about target markets and customers: learn everything you can about them, starting with their names. It is considered as the crucial part of business strategy.

XARA is a newly emerging wine company. After extensive market research, XARA divides its market into wine enthusiasts, casual drinkers and restaurants. Each category has its own needs, traits and marketing goals. In this scenario, XARA is using market segmentation.

Market segmentation is when a business market that is made up of different customers is being divided, into smaller groups or segments based on some characteristics.

To know more about Market, refer to the link:

https://brainly.com/question/13959285

Instead of a dividend of $1.60 per share, the company has announced a share repurchase of $16,000 worth of stock. How many shares will be outstanding after the repurchase?

Answers

Answer:

9,690 stocks

Explanation:

some information is missing:

Market Value Balance Sheet

Cash            $45,300        Equity $515,300

Fixed assets    $470,000    

Total           $515,300        Total         $515,300

total number of shares outstanding = 10,000

stock's market price = $515,300 / 10,000 = $51.53

stocks repurchased = $16,000 / $51.53 = 310.50, but we must round down to 310 stocks

stocks outstanding after repurchase = 10,000 - 310 = 9,690

Consider a $1,000-par-value 20-year zero-coupon bond issued at a yield to maturity of 10%. If you buy that bond when it is issued and continue to hold the bond as yields decline to 9%, the imputed interest income for the first year of that bond is

Answers

Answer:

$14.87

Explanation:

Computation the imputed interest income for the first year of the bond

First step

Using this formula

Imputed interest income= Par value/(1+yield to maturity)^Numbers of years

Let plug in the formula

Imputed interest income$1,000/(1.10)^20

Imputed interest income= $1,000/6.72749

Imputed interest income=$148.64

Second step

Imputed interest income=$1,000/(1.10)^19= Imputed interest income=$1,000/6.11590

Imputed interest income=$163.51

Hence,

Imputed interest income=$163.51 - $148.64

Imputed interest income= $14.87

Therefore the imputed interest income for the first year of the bond will be $14.87

A manufacturing company has variable overhead costs of $2.50 per unit and fixed costs of $5,000 per month. Each unit requires 4 hours of direct labor and the company expects to produce 2,000 units each month. The standard overhead rate will be

Answers

Answer:

Standard Overhead rate is $1.25 per Direct labor hours

Explanation:

Total variable cost (2000 unit * $2.50) =    $5,000

Total fixed cost                                       =    $5,000

Estimated Overhead cost                     =     $10,000

Estimated Direct labor hour = 2000 unit * 4 hours = 8,000 hours

Standard Overhead rate = Estimated overhead cost / Estimated Direct labor hour

Standard Overhead rate = $10,000 / 8,000 hours

Standard Overhead rate = $1.25 per Direct labor hours

Which of the following statements is CORRECT? a. Commercial paper can be issued by virtually any firm so long as it is willing to pay the going interest rate. b. Short-term debt is favored by firms because, while it is generally more expensive than long-term debt, it exposes the borrowing firm to less risk than long-term debt. c. Commercial paper is a form of short-term financing that is primarily used by large, strong, financially stable companies. d. Trade credit is provided only to relatively large, strong firms. e. Commercial paper is typically offered at a long-term maturity of at least five years.

Answers

Answer: Commercial paper is a form of short-term financing that is primarily used by large, strong, financially stable companies.

Explanation:

Commercial papers a promissory notes which are issued by companies on a short term basis that are unsecured. It should be noted that that they are used by the strong, large, and financially stable companies.

Commercial paper are issued in order to finance payroll, and also meet a company's short-term liabilities.

You own a portfolio that has a total value of $235,000 and it is invested in Stock D with a beta of .82 and Stock E with a beta of 1.43. The beta of your portfolio is equal to the market beta. What is the dollar amount of your investment in Stock D?

Answers

Answer:

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Prepare journal entries to record each of the following four separate issuances of stock. A corporation issued 10,000 shares of $20 par value common stock for $240,000 cash. A corporation issued 5,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $45,500. The stock has a $1 per share stated value. A corporation issued 5,000 shares of no-par common stock to its promoters in exchange for their efforts, estimated to be worth $45,500. The stock has no stated value. A corporation issued 2,500 shares of $50 par value preferred stock for $170,500 cash.

Answers

Answer:

1.

DR Cash.................................................$240,000  

CR Common Stock................................................... $200,000

Paid in Excess of Par- Common Stock.....................$40,000

Working

Common Stock = $20 * 10,000 = $200,000

Paid in Excess of Par- Common Stock = 240,000 - 200,000 = $40,000

 

2.

DR Promotion Expenses................................$45,500  

CR Common Stock.........................................................$5,000

Paid in Excess of Par- Common Stock ........................$40,500

Working

Common stock = 5,000 * 1 = $5,000

Paid in Excess of Par- Common Stock = 45,500 - 5,000 = $40,500

 

3

DR Promotion Expenses..........................$45,500  

CR Common Stock....................................................$45,500

 

4

DR Cash  ...................................................$170,500

CR Preferred Stock .....................................................$125,000

CR Paid in Excess of Par - Preferred Stock ..............$45,500

Working

Preferred Stock = 50 * 2,500 = $125,000

Paid in Excess of Par - Preferred Stock = 170,500 - 125,000 = $45,500

In a production bottleneck situation, the product with the highest contribution margin per unit should be given priority over a product that has the highest contribution margin per bottleneck hour.

a. True
b. False

Answers

Answer:

b. false

Explanation:

A bottleneck is a point at which there is the stoppage in the system of production. The inefficiencies that are generated through the bottleneck developed the delays and leads to the high cost of production

Here in the given situation, since there is the highest contribution margin per unit that gives more priority as compared with the contribution margin per bottleneck hour i.e. totally wrong as it should give the priority to the contribution margin per bottleneck hour

Therefore the given statement is false

A mother, aged 60, wishes to withdraw monies from her variable annuity to pay for her son's college education. Which statement is true regarding the taxation of the withdrawal?
A. The withdrawal is 100% taxable
B. Any amount withdrawn above the cost basis is taxable
C. Any amount withdrawn above the cost basis is taxable, and is subject to a 10% penalty tax
D. The withdrawal is not subject to tax

Answers

Answer:

Any amount withdrawn above the cost basis is taxable

Explanation:

This woman is above 59½ years at age 60. If she was least than 60, she would be owing a 10% penalty on the taxable amount of this withdrawal. But since she is above this age she has to pay income taxes on the whole taxable amount of the funds she withdrew. Variable annuities would never be taxed the money is withdrawn. Therefore option B is the best answer for This question.

_____ is a method for determining the estimated annual costs and benefits for a project and the resulting annual cash flow.

Answers

Answer:

Cash flow analysis, is the right answer.

Explanation:

“Cash flow analysis” is the method that determined the actual cash that goes out of the business and the actual cash that comes in the business. Basically this method is used for financial purposes. This method exhibits the actual cost that the business has incurred and the actual benefit it has earned. Moreover, new investors that invest in the company primarily sees the financial report of the company and then take the decision to invest.

Lance contributed investment property worth $507,500, purchased Five years ago for $312,500 cash, to Cloud Peak LLC in exchange for an 70 percent profits and capital interest in the LLC. Cloud Peak owes $380,000 to its suppliers but has no other debts.

Required information

A. What is Lance’s tax basis in his LLC interest?

B. What is Lance’s holding period in his interest?

C. What is Cloud Peak’s basis in the contributed property?

D. What is Cloud Peak’s holding period in the contributed property?

Answers

Answer:

a. Lance's Tax basis in his LLC interest

= Basis of investment property + Shares in LLC debt

= $312,500 + ($380,000 * 70%)

= $312,500 + $266,000

= $578,500

Therefore, LLC common debt obligation treated as non-recourse debt, lance income allocation ratio is used to allocate a share of LLC debt to him

b. Lance holding period in his interest is 5 years. The holding period of the contributed assets "tacks onto" his partnership interest because Lance contributed a capital asset

c. Cloud Peak's basis in the contributed property is $312,500. Also, the carryover basis would be taken by the LLC in the contributed property

d. Cloud's Peak holding period in the contributed property is 3 years

Night Shades, Inc. (NSI), manufactures biotech sunglasses. The variable materials cost is $11.13 per unit, and the variable labor cost is $7.29 per unit.Required:a. What is the variable cost per unit?b. Suppose the company incurs fixed costs of $875,000 during a year in which total your answer to 2 decimal places, e.g., 32.16.) production is 190,000 units. What are the total costs for the year?c. If the selling price is $44.99 per unit, does the company break even on a cash basis? I depreciation is $435,000 per year, what is the accounting break-even point?

Answers

Answer:

Explanation:

Giving the following information:

Unitary direct material cost= $11.13

Unitary direct labor cost= $7.29

A.

Total variable cost per unit= 11.13 + 7.29= $18.42

B. Fixed costs= $875,000

Production= 190,000

Total costs= 875,000 + 18.42*190,000= $4,374,800

C.

To calculate the break-even point in units, we need to use the following formula:

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 875,000 / (44.99 - 18.42)

Break-even point in units= 32,932 units

D. Depreciation= $435,000

Accounting break-even point= (875,000 - 435,000) / 26.75

Accounting break-even point= 16,449 units

Sea Blue manufactures flotation vests in Charleston, South Carolina. Sea Blue's contribution margin income statement for the month ended December 31, 2018, contains the following data:
Sea Blue
Income Statement
For the Month Ended December 31, 2018
Sales in Units 32,000
Net Sales Revenue $608,000
Variable Costs:
Manufacturing 96,000
Selling and Administrative 108,000
Total Variable Costs 204,000
Contribution Margin 404,000
Fixed Costs:
Manufacturing 124,000
Selling and Administrative 94,000
Total Fixed Costs 218,000
Operating Income $186,000
Suppose Overboard wishes to buy 4,600 vests from Sea Blue. Sea Blue will not incur any variable selling and administrative expenses on the special order. The Sea Blue plant has enough unused capacity to manufacture the additional vests. Overboard has offered $15 per vest, which is below the normal sales price of $19.
1. Identify each cost in the income statement as either relevant or irrelevant to Sea Blue's decision.
a. Variable Manufacturing Costs
b. Variable Selling and Administrative Costs
c. Fixed Manufacturing Costs
d. Fixed Selling and Administrative Costs
2. Prepare a differential analysis to determine whether Sea Blue should accept this special sales order.
3. Identify long-term factors Sea Blue should consider in deciding whether to accept the special sales order. In addition to determining the special order's effect on operating profits, Sea Blue's managers also should consider the following:
A. Will Sea Blue's other customers find out about the lower sale price Sea Blue accepted from Overboard? If so, will these other customers demand lower sale prices?
B. Will the special order customer come back again and again, asking for the same reduced price?
C. How will Sea Blue's competitors react? Will they retaliate by cutting their prices and starting a price war?
D. All of the above
E. None of the above

Answers

Answer:

1. Variable Cost

Manufacturing 96,000 ( Relevent )

Selling and administrative 108,000 ( Irrelevent )

Fixed Cost

Manufacturing 124,000 ( Irrelevent )

Selling and administrative 94,000 (Irrelevent )

2. $55,200

3. A. If the regular customer found out about this order and will demand a lower price?

B. Will this order customer come back again and again asking the same reducted price?

C. Will this order price will start a price war with the competitors?

Explanation:

1. Calculation to Identify each cost in the income statement as either relevant or irrelevant to Sea Blue's decision.

Variable Cost

Manufacturing 96,000 ( Relevent )

Selling and administrative 108,000 ( Irrelevent )

Fixed Cost

Manufacturing 124,000 ( Irrelevent )

Selling and administrative 94,000 (Irrelevent )

2. Preparation of a differential analysis to determine whether Sea Blue should accept this special sales order.

Differential analysis

Expected increase in income in revenue

( 4,600 vest * $15 per vest ) 69,000

Less :Expected increase in Variable manufacturing

( 4,600 vest * $3 per vest) (13,800)

=$55,200

Variable manufacturing cost of $96,000 / divide by 32,000 units will give us $3

Based on the above calculation Sea blue should accept this order reason been that the order will increase their operating income by the amount of $55,200.

3. The manager of Sea blue should know that the sale might affect their regular sale in long run.

Therefore In addition to determining the special order's effect on operating profits, Sea Blue's managers also should consider:

A. If the regular customer found out about this order and will demand a lower price?

B. Will this order customer come back again and again asking the same reducted price?

C. Will this order price will start a price war with the competitors?

Interviews are designed to determine if the employer feels a candidate is a good fit for the job. What benefit does an interview offer the job candidate

Answers

Explanation:

The job interview is a form of selection used by companies to select candidates for a job more effectively, because through it, the recruiter will meet the candidate in person, ask questions about issues related to his resume and his professional experiences , as well as the opportunity to analyze the way you communicate, your interests and your personality.

The advantage of the interview for the job candidate is to demonstrate your good intentions when occupying the job through an ethical, cordial posture and to have the opportunity to talk about some professional experiences that may be of interest to the employer and the company. It is also an opportunity for the candidate to clarify doubts about the responsibilities of the position and any other doubts related to the company or job function.

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