Vang Enterprises,which Is Debt-Free and Finances Only with Equity from Retained

question 83

Multiple Choice

Vang Enterprises,which is debt-free and finances only with equity from retained earnings,is considering 7 equal-sized capital budgeting projects.Its CFO hired you to assist in deciding whether none,some,or all of the projects should be accepted.You have the following information: r_RF = 4.50%; RP_M = 5.50%; and b = 0.92.The company adds or subtracts a specified percentage to the corporate WACC when it evaluates projects that have above- or below-average risk.Data on the 7 projects are shown below.If these are the only projects under consideration,how large should the capital budget be?

• A)$100
• B)$ 75
• C)$ 50
• D)$ 25
• E)$ 0

Describe the design and importance of a letterhead in business communication.

Identify key parts of a business letter, including date line, salutation, complimentary close, and inside address.

Understand the characteristics and purposes of various types of reports in business communication.

Recognize the importance of a clear purpose statement using action verbs in report writing.

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Definitions:

Warranty Expense

The estimated cost of honoring product warranties, which companies recognize to match expenses with related revenues.

Estimated Warranty Costs

Projected expenses that a company expects to incur to repair or replace products during a warranty period.

Estimated Liability

A financial obligation that is expected to occur but has not been finalized in amount or timing.

Warranty Expenses

Costs that a company anticipates for repairing or replacing defective products sold to customers under warranty.