« previous next »

Author Question: The price used to sell goods or services between subsidiaries in a company is A) the tax ... (Read 43 times)

Lobcity

  • Hero Member
  • *****
  • Posts: 524
on: Jul 1, 2018
The price used to sell goods or services between subsidiaries in a company is
 
  A) the tax avoidance price.
  B) set at the marginal cost of the producing subsidiary.
  C) determined by the minimum of the average cost curve.
  D) a transfer price.

Question 2

Describe the Capital Asset Pricing Model (CAPM) and how it is used in capital budgeting decisions.
 
  What will be an ideal response?


asdfasdf

  • Sr. Member
  • ****
  • Posts: 339
Reply #1 on: Jul 1, 2018
Answer to Question 1

D

Answer to Question 2

CAPM is a procedure for adjusting a measure of the required rate of return on a firm's stock for risk. This risk-adjusted measure of the required rate of return on a firm's stock is used as the opportunity cost of capital in equity financing of a capital project. The projected cash flows from the project are discounted back to a net present value using this risk-adjusted rate of return. The risk adjustment is based on the Beta value of a firm's stock: the ratio of the volatility in the rate of return on a firm's stock to the volatility in the rate of return on a market portfolio of stocks.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Cucumber slices relieve headaches by tightening blood vessels, reducing blood flow to the area, and relieving pressure.

Did you know?

Parkinson's disease is both chronic and progressive. This means that it persists over a long period of time and that its symptoms grow worse over time.

Did you know?

It is difficult to obtain enough calcium without consuming milk or other dairy foods.

Did you know?

When Gabriel Fahrenheit invented the first mercury thermometer, he called "zero degrees" the lowest temperature he was able to attain with a mixture of ice and salt. For the upper point of his scale, he used 96°, which he measured as normal human body temperature (we know it to be 98.6° today because of more accurate thermometers).

Did you know?

For about 100 years, scientists thought that peptic ulcers were caused by stress, spicy food, and alcohol. Later, researchers added stomach acid to the list of causes and began treating ulcers with antacids. Now it is known that peptic ulcers are predominantly caused by Helicobacter pylori, a spiral-shaped bacterium that normally exist in the stomach.

The Stillwater Mining Company The Stillwater Mining Company
HCPCs Modifiers Used for Medical Office Services Cont. HCPCs Modifiers Used for Medical Office Services Cont.
A company that sells sweatshirts finds that the profit can be modelled by P(s)= ... A company that sells sweatshirts finds that the profit can be modelled by P(s)= ...
Draw an Edgeworth box for two consumers over two goods Draw an Edgeworth box for two consumers over two goods
A company that makes environmental measuring devices has calculated their revenue and costs as ... A company that makes environmental measuring devices has calculated their revenue and costs as ...
Jia's Fashions recently paid a $2 annual dividend. The company is projecting that its ... Jia's Fashions recently paid a $2 annual dividend. The company is projecting that its ...
Video: The pH scale - Strong acids and Weak acids

For a complete list of videos, visit our video library