Sam Jones Has an Engineering Firm

question 42

Multiple Choice

Sam Jones has an engineering firm.He wants to build a new headquarters building.The building will cost $1,500,000.He will put down $450,000 and have a bank finance the remainder at prime plus 2 percent.The prime lending rate is currently 8.5 percent.Sam will withdraw the money for the down payment from his mutual fund account where he has earned 13% for the last ten years.What is Sam's weighted average cost of capital?

• A)11.25%
• B)8)5%
• C)13.00%
• D)10.5%

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Definitions:

Sex-Stereotyped

Having attributes or characteristics traditionally assigned to a specific gender by society.

Group Opinion

The collective judgment or viewpoint shared among members of a group.

Conform

To change one’s behavior or beliefs in order to match those of others, often as a result of real or imagined group pressure.

Biological Agents

Microorganisms or toxins that can cause diseases or medical conditions in humans, animals, or plants.