Speedy delivery systems can buy a piece of equipment that is anticipated to provide an 7 percent return and can be financed at 4 percent with debt. later in the year, the firm turns down an opportunity to buy a new machine that would yield a 11 percent return but would cost 13 percent to finance through common equity. assume debt and common equity each represent 50 percent of the firm’s capital structure.

To be able to better compare stock performance within the same industry, similar companies are grouped into? a)market sectors b) industry blocks c) performance sectors d) average earning blocks

The distinction between a normal and an inferior good is

Steele bicycle manufacturing company currently produces the handlebars used in manufacturing its bicycles, which are high-quality racing bikes with limited sales. steele produces and sells only 10,000 bikes each year. due to the low volume of activity, steele is unable to obtain the economies of scale that larger producers achieve. for example, steele could buy the handlebars for $31 each: they cost $34 each to make. the following is a detailed breakdown of current production costs: after seeing these figures, steele's president remarked that it would be foolish for the company to continue to produce the handlebars at $34 each when it can buy them for $31 each. calculate the total relevant cost. do you agree with the president's conclusion?