A-Rod Manufacturing Company is trying to calculate its cost of capital for use in making a capital budgeting decision. Mr. Jeter, the vice-president of finance, has given you the following information and has asked you to compute the weighted average cost of capital. The company currently has outstanding a bond with a 9.9 percent coupon rate and another bond with an 7.5 percent rate. The firm has been informed by its investment banker that bonds of equal risk and credit rating are now selling to yield 10.8 percent. The common stock has a price of $53 and an expected dividend (D1) of $1.73 per share. The historical growth pattern (g) for dividends is as follows: $ 1.28 1.42 1.57 1.73 The preferred stock is selling at $73 per share and pays a dividend of $6.90 per share. The corporate tax rate is 30 percent. The flotation cost is 2.0 percent of the selling price for preferred stock. The optimum capital structure for the firm is 30 percent debt, 10 percent preferred stock, and 60 percent common equity in the form of retained earnings.

Ursus, inc., is considering a project that would have a five-year life and would require a $1,650,000 investment in equipment. at the end of five years, the project would terminate and the equipment would have no salvage value. the project would provide net operating income each year as follows (ignore income taxes.):

crow design, inc. is a web site design and consulting firm. the firm uses a job order costing system in which each client is a different job. crow design assigns direct labor, licensing costs, and travel costs directly to each job. it allocates indirect costs to jobs based on a predetermined overhead allocation rate, computed as a percentage of direct labor costs. direct labor hours (professional) 6,250 hours direct labor costs ($1,800,000 support staff salaries ,000 computer ,000 office ,000 office ,000 in november 2012, crow design served several clients. records for two clients appear here: delicious treats mesilla chocolates direct labor 700 hours 100 hours software licensing $ 4,000 $400 travel costs 8,000 1. compute crow design’s direct labor rate and its predetermined indirect cost allocation rate for 2012. 2. compute the total cost of each job. 3. if simone wants to earn profits equal to 50% of service revenue, how much (what fee) should she charge each of these two clients? 4. why does crow design assign costs to jobs?

Bcorporation, a merchandising company, reported the following results for october: sales $ 490,000 cost of goods sold (all variable) $ 169,700 total variable selling expense $ 24,200 total fixed selling expense $ 21,700 total variable administrative expense $ 13,200 total fixed administrative expense $ 33,600 the contribution margin for october is: