A Customer Just Paid $35,620 for a Delivery Van

question 32

Multiple Choice

A customer just paid $35,620 for a delivery van. If the percent markup based on cost is 30%, what was the cost?

• A) $27,400.00
• B) $24,934.00
• C) $25,659.00
• D) $20,741.18

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Definitions:

Crossover Rate

The discount rate at which two projects have the same net present value (NPV), used in capital budgeting.

IRR

Internal Rate of Return, a financial metric used to assess the profitability of potential investments, measuring the discount rate at which the net present value of costs and benefits equal zero.

WACC

Stands for Weighted Average Cost of Capital, a calculation used to assess the cost of a company’s financing by averaging the cost of its equity and debt, weighted by their proportion in the company’s capital structure.

WACC

Weighted Average Cost of Capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is proportionately weighted.