Business, 15.10.2019 21:10 0gNanaa

Suppose a firm's managers receive bonuses that increase with the size of the firm's roe, which was 30% last year and is forecasted to remain at this level during the coming year provided the firm takes on no new expansion projects. its cost of capital is 10%. now the firm has the opportunity to make a new investment that promises a 20% return on the invested capital. which of the following statements is not correct? a. the example in this question demonstrates the serious weakness in using roe as the primary criterion in setting executive compensation. b. the new project should be rejected because, if it is accepted, the firm's roe will decline from 30% because the new roe will be a weighted average of the old 30% and the 20% returns on the new investment. c. the new project should be accepted because its expected return exceeds the cost of the capital that will be used to finance it.

Answers: 1

Show answers

Another question on Business

Business, 21.06.2019 22:40

Job a3b was ordered by a customer on september 25. during the month of september, jaycee corporation requisitioned $2,400 of direct materials and used $3,900 of direct labor. the job was not finished by the end of the month, but needed an additional $2,900 of direct materials in october and additional direct labor of $6,400 to finish the job. the company applies overhead at the end of each month at a rate of 100% of the direct labor cost. what is the amount of job costs added to work in process inventory during october?

Answers: 3

Answer

Business, 22.06.2019 02:00

Keshawn used to work for an it company in baltimore, but lost his job when his company decided to use workers in new delhi instead. this is an example of:

Answers: 1

Answer

Business, 22.06.2019 13:30

Presented below is information for annie company for the month of march 2018. cost of goods sold $245,000 rent expense $ 36,000 freight-out 7,000 sales discounts 8,000 insurance expense 5,000 sales returns and allowances 11,000 salaries and wages expense 63,000 sales revenue 410,000 instructions prepare the income statement.

Answers: 2

Answer

Business, 22.06.2019 14:30

Turtle corporation produces and sells a single product. data concerning that product appear below: per unit percent of sales selling price $ 150 100 % variable expenses 75 50 % contribution margin $ 75 50 % the company is currently selling 5,600 units per month. fixed expenses are $194,000 per month. the marketing manager believes that a $5,300 increase in the monthly advertising budget would result in a 190 unit increase in monthly sales. what should be the overall effect on the company's monthly net operating income of this change?

Answers: 1

Answer

You know the right answer?

Suppose a firm's managers receive bonuses that increase with the size of the firm's roe, which was 3...

Questions