Additional practice - Intro .pdf - ACTG 326: Cost...

ACTG 326: Cost Accounting
Multiple choice questions: Choose the BEST answer for each question
MaryBlige Inc.
MaryBlige Inc. maintains a capital structure of 80% equity and 20% debt. The company currently has an
effective tax rate of 30% and it ’s cost of equity capital is 12%. To obtain debt financing, MaryBlige Inc.
issued bonds with an interest rate of 10%. What is the company’s weighted average cost of capital?
a. 8.0%
b. 10.4%
c. 11.0%
d. 11.6%
Additional practice: Introuction, Performanec measuers and Balanced scorecard - 1
MissyElliott Corporation
Malissa, the owner and CEO of MissyElliott corporation is setting up the compensation contacts for her
senior manager for the upcoming year. She is trying to assess different performance measures, and she
tasks you with calculating these measures for the previous financial year for benchmarking purposes. She
provides the following information about the previous financial year:
Revenues $950,000
Variable costs 575,000
fixed costs 336,500
Total assets 350,000
Required rate of return 10%
1. The return on investment (ROI) was: