U . S . Treasury bill is yielding 2.3 percent and the return on the market is 11.2 percent . The corporate tax rate is 34 percent . What is the firm ’ s weighted average cost of capital ?
11.56 percent
11.30 percent
11.18 percent
10.64 percent
9.69 percent
Andy deposited $ 3,000 this morning into an account that pays 5 percent interest , compounded annually . Barb also deposited $ 3,000 this morning into an account that pays 5 percent interest , compounded annually . Andy will withdraw his interest earnings and spend it as soon as possible . Barb will reinvest her interest earnings into her account . Given this , which one of the following statements is true ?
Barb will earn more interest the second year than Andy .
Barb will earn more interest the first year than Andy will .
Andy will earn compound interest .
Andy will earn more interest in year three than Barb will .
After five years , Andy and Barb will both have earned the same amount of interest .
When utilizing the percentage of sales approach , managers :
1 . Estimate company sales based on a desired level of net income and the current profit margin .
2 . Consider only those assets that vary directly with sales .