Question

**Participation #6: **

** **Why is it desirable to construct capital budgeting rules so that higher-risk projects become less acceptable than lower-risk projects?

Find answers to questions asked by student like you

Q: XXX, Inc. finances tis seasonal working capital need with short-term bank loans. Management plans to...

A: Calculating the interest payment on the working capital loan. We have,Loan Amount = $ 65,000Interest...

Q: Suppose you observed the following situation: Security Beta Expected Return Cooley, Inc. 1.6 19%...

A: Calculation of Risk Free Rate:The risk free rate can be calculated using the CAPM. Follow the below ...

Q: A store will give you a 4.00% discount on the cost of your purchase if you pay cash today. Otherwise...

A: Let's assume the cost of purchase is C. On immediate payment,Discount = 4%Hence, the discounted cost...

Q: Chang Industries has bonds outstanding with a par value of $200,000 and a carrying value of $203,000...

A: Calculation of gain or loss on retirement:

Q: Is there an easily identifiable debt-equity ratio that will maximize the value of a firm? Why or why...

A: No, there is no such ratios.

Q: A firm with sales of $500,000 has average inventory of $200,000. T he industry average for inventory...

A: Computation of inventory turnover:

Q: Below is part of the response you provided to a question I previously asked. I was wondering if you...

A: Since yoiu have asked further explanation on cash flow at the time of expiration, I assume that you ...

Q: ck my ork The Titanic Shipbuilding Company has a noncancelable contract to build a small cargo vesse...

A: Calculation of Range of Opportunity Cost of Capital using IRR rule:The cash flows in the initial yea...

Q: The simplified balance sheet for the Dutch manufacturer Rensselaer Felt (figures in € thousands) is ...

A: Recall the popular equation:Ra = Ws x Rs + Wd xRd + We x Rewhere Ra = return on assets;Ws, Wd and We...