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Author Question: Why should firms that own and operate multiple businesses that have different risk characteristics ... (Read 65 times)

rachel9

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on: Jul 10, 2018
Why should firms that own and operate multiple businesses that have different risk characteristics
  use business-specific, or divisional costs of capital?
 
  A) Not all divisions have equal risk and the firm might accept projects whose returns are higher
  than are deemed appropriate.
  B) Not all lines of business have equal risk and it is likely that the firm will accept projects whose
  returns are unacceptably low in relation to the risk involved.
  C) Not all business divisions have equal risk and the firm will likely become less risky in the
  future.
  D) Use of the same weighted average cost of capital for all divisions may result in too much
  money being allocated to the least risky division.

Question 2

Lasalle Industries is considering the purchase of a new machine that will cost 250,000, plus an
  additional 10,000 to ship and install. The new machine will have a 5-year useful life and will be
  depreciated to zero using the straight-line method.
 
  The machine is expected to have a salvage
  value of 30,000 at the end of year five. LaSalle's income tax rate is 40. The additional net working
  capital from this project of 50,000 is expected to return to its pre-project level upon termination.
  What is the non-operating terminal cash flow of the machine?
  A) 68,000 B) -32,000 C) 48,000 D) 80,000
Foundations of Finance ¦ Keown, Petty, Martin ¦ 9th Edition
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ktidd

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Reply #1 on: Jul 10, 2018
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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rachel9

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Reply 2 on: Jul 10, 2018
Thanks for the timely response, appreciate it

nathang24

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Reply 3 on: Yesterday
Wow, this really help

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