Which of the following statements is CORRECT? a. The bond-yield-plus-risk-premium approach is the most sophisticated and objective method for estimating a firm's cost of equity capital. b. The cost of capital used to evaluate a project should be the cost of the specific type of financing used to fund that project, i. e., it is the after-tax cost of debt if debt is to be used to finance the project or the cost of equity if the project will be financed with equity. c. The after-tax cost of debt that is used as the component cost when calculating the WACC is the average after-tax cost of the firm's outstanding debt. d. The cost of equity is generally harder to measure than the cost of debt because there is no stated, contractual cost number on which to base the cost of equity. e. Suppose some of a publicly-traded firm's stockholders are not diversified; they hold only the one firm's stock. In this case, the CAPM approach will result in an estimated cost of equity that is too low in the sense that if it is used in capital budgeting, projects will be accepted that will not maximize the firm's intrinsic values.

Prairie, inc. produces one single product. it has an annual capacity of 10,000 units, but currently uses only 80% of it. each unit is sold for $50 and requires direct material worth $30 and direct labor worth $5. manufacturing overhead cost is $10 per unit of which 70% is variable. should a special order to sell 1,000 units at $44 be accepted? yes no

20. sinclair company's single product has a selling price of $25 per unit. last year the company reported a profit of $20,000 and variable expenses totaling $180,000. the product has a 40% contribution margin ratio. because of competition, sinclair company will be forced in the current year to reduce its selling price by $2 per unit. how many units must be sold in the current year to earn the same profit as was earned last year? a. 15,000 units b. 12,000 units c. 16,500 units d. 12,960 units

Suppose the following items were taken from the balance sheet of nike, inc. (all dollars are in millions.) 1. cash $ 2,316.7 7. inventory $ 2,245.6 2. accounts receivable 2,786.2 8. income taxes payable 80.3 3. common stock 2,841.1 9. equipment 1,783.8 4. notes payable 291.2 10. retained earnings 6,162.5 5. buildings 3,959.7 11. accounts payable 2,624.6 6. mortgage payable 1,092.3 perform each of the following. classify each of these items as an asset, liability, or stockholders’ equity, and determine the total dollar amount for each classification. (enter amounts in millions up to 1 decimal place, e.g. 45.5 million.) cash accounts receivable common stock notes payable buildings mortgage payable inventory income taxes payable equipment retained earnings accounts payable assets $ 13092 liability $ 4088.4 stockholders’ equity $ 9003.6 etextbook and media determine nike’s accounting equation by calculating the value of total assets, total liabilities, and total stockholders’ equity. (enter amounts in millions up to 1 decimal place, e.g. 45.5 million.) total assets = total liabilities + total stockholders’ equity