« previous next »

Author Question: The price used to sell goods or services between subsidiaries in a company is A) the tax ... (Read 109 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?

Giardia is one of the most common intestinal parasites worldwide, and infects up to 20% of the world population, mostly in poorer countries with inadequate sanitation. Infections are most common in children, though chronic Giardia is more common in adults.

Did you know?

Elderly adults are at greatest risk of stroke and myocardial infarction and have the most to gain from prophylaxis. Patients ages 60 to 80 years with blood pressures above 160/90 mm Hg should benefit from antihypertensive treatment.

Did you know?

The training of an anesthesiologist typically requires four years of college, 4 years of medical school, 1 year of internship, and 3 years of residency.

Did you know?

Illicit drug use costs the United States approximately $181 billion every year.

Did you know?

Cutaneous mucormycosis is a rare fungal infection that has been fatal in at least 29% of cases, and in as many as 83% of cases, depending on the patient's health prior to infection. It has occurred often after natural disasters such as tornados, and early treatment is essential.

Sample of an informed consent to perform an operation, sedation, anesthesia, and other medical servi Sample of an informed consent to perform an operation, sedation, anesthesia, and other medical servi
This headache remedy was “guaranteed” by the drug company; 1906. This headache remedy was “guaranteed” by the drug company; 1906.
Shippers Declaration for Dangerous Goods Shippers Declaration for Dangerous Goods
Trees provide ecosystem services to people Trees provide ecosystem services to people
U.S. Subsurface Coal Mining: Output, Price, and Output per Worker-Hour, 1949–1994 U.S. Subsurface Coal Mining: Output, Price, and Output per Worker-Hour, 1949–1994
Helgeson Company has identified the following items for possible inclusion when taking a ... Helgeson Company has identified the following items for possible inclusion when taking a ...
Video: Condensation and Hydrolysis Animation

For a complete list of videos, visit our video library