Which of the following statements is correct? a. suppose some of a publicly-traded firm's stockholders are not diversified; they hold only the one firm's stock. in this case, the capm approach will result in an estimated cost of equity that is too low in the sense that if it is used in capital budgeting, projects will be accepted that will reduce the firm's intrinsic value. b. the cost of capital used to evaluate a project should be the cost of the specific type of financing used to fund that project, i. e., it is the after-tax cost of debt if debt is to be used to finance the project or the cost of equity if the project will be financed with equity. c. the bond-yield-plus-risk-premium approach is the most sophisticated and objective method for estimating a firm's cost of equity capital. d. the cost of equity is generally harder to measure than the cost of debt because there is no stated, contractual cost number on which to base the cost of equity. e. the after-tax cost of debt that should be used as the component cost when calculating the wacc is the average after-tax cost of all the firm's outstanding debt.

Fanning company is considering the addition of a new product to its cosmetics line. the company has three distinctly different options: a skin cream, a bath oil, or a hair coloring gel. relevant information and budgeted annual income statements for each of the products follow. skin cream bath oil color gel budgeted sales in units (a) 110,000 190,000 70,000 expected sales price (b) $8 $4 $11 variable costs per unit (c) $2 $2 $7 income statements sales revenue (a × b) $880,000 $760,000 $770,000 variable costs (a × c) (220,000) (380,000) (490,000) contribution margin 660,000 380,000 280,000 fixed costs (432,000) (240,000) (76,000) net income $228,000 $140,000 $204,000 required: (a) determine the margin of safety as a percentage for each product. (b) prepare revised income statements for each product, assuming a 20 percent increase in the budgeted sales volume. (c) for each product, determine the percentage change in net income that results from the 20 percent increase in sales. (d) assuming that management is pessimistic and risk averse, which product should the company add to its cosmetics line? (e) assuming that management is optimistic and risk aggressive, which product should the company add to its cosmetics line?

Why is efficiency an important economic goal?

Inventory by three methods; cost of goods sold the units of an item available for sale during the year were as follows: jan. 1 inventory 20 units at $1,800 may 15 purchase 31 units at $1,950 aug. 7 purchase 13 units at $2,040 nov. 20 purchase 16 units at $2,100 there are 18 units of the item in the physical inventory at december 31. determine the cost of ending inventory and the cost of goods sold by three methods, presenting your answers in the following form: round your final answers to the nearest dollar. cost inventory method ending inventory cost of goods sold a. first-in, first-out method $ $ b. last-in, first-out method $ $ c. weighted average cost method $ $