What is the weighted average cost of capital?
What will be an ideal response?
The weighted average cost of capital (WACC) approach to capital budgeting involves forecasting the all-equity free cash flows of the firm and then finding the value of the levered firm by discounting the all-equity free cash flows at an appropriate WACC. It is a one-step procedure for finding the value of the operating assets plus the value of the interest tax shields. The weighted average cost of capital is the weighted sum of the after-tax required rate of return on the firm's debt and the required rate of return on the firm's levered equity. The weight for the after-tax rate of return on the firm's debt is the ratio of the market value of the debt to the market value of total assets. The weight for the rate of return on the firm's levered equity is the ratio of the market value of the equity to the market value of total assets. Once the total value of the firm is found, the market value of equity is found by subtracting the market value of the debt from the value of the levered firm.
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An electronics part manufacturer reprimanded an employee. The number of defective parts produced by the employee increased. The increase in the number of defective parts is probably an example of:
a. assignable variation. b. common-cause variation. c. random variation. d. homoscedasticity. e. costs of attrition.
Which of the following are the recommended percentage groupings of the ABC classifications of the dollar volume of products?
A. A items get 25 percent, B items get 15 percent, and C items get 60 percent. B. A items get 15 percent, B items get 45 percent, and C items get 40 percent. C. A items get 15 percent, B items get 35 percent, and C items get 50 percent. D. A items get 20 percent, B items get 30 percent, and C items get 50 percent. E. A items get 25 percent, B items get 35 percent, and C items get 40 percent.
Use the data set below (Data Set E3) to answer the questions that follow. Data Set E3 Period Sales Volume 1 1000 2 1200 3 1450 4 1750 5 2200 6 2750
a. Find the four-period simple moving average forecasts for Periods 5 and 6. b. Find the four-period weighted moving average forecasts for Periods 5 and 6 using weights of 0.05, 0.15, 0.30, and 0.50 from the earliest period to the latest period, respectively. c. Which set of forecasts is more accurate, the simple moving average forecasts or the weighted moving average forecasts? Why is that set of forecasts more accurate in this particular case (using Data Set E3)? d. Will that type of forecast always be more accurate? Why or why not?
The AdWords Application Programming Interface (API) allows developers to use applications that:
a. are accessible only through AdWords editor. b. can appear throughout the Google Search Network. c. can be uploaded into the Ad gallery. d. interact directly with the AdWords server