Acort industries owns assets that will have an 80% probability of having a market value of $50 million in one year. there is a 20% chance that the assets will be worth only $20 million. the current risk-free rate is 5%, and acort’s assets have a cost of capital of 10%.
a. if acort is unlevered, what is the current market value of its equity? b. suppose instead that acort has debt with a face value of $20 million due in one year.. according to mm, what is the value of acort’s equity in this case? c. what is the expected return of acort’s equity without leverage? what is the expected return of acort’s equity with leverage? d. what is the lowest possible realized return of acort’s equity with and without leverage?

Xie company identified the following activities, costs, and activity drivers for 2017. the company manufactures two types of go-karts: deluxe and basic. activity expected costs expected activity handling materials $ 625,000 100,000 parts inspecting product 900,000 1,500 batches processing purchase orders 105,000 700 orders paying suppliers 175,000 500 invoices insuring the factory 300,000 40,000 square feet designing packaging 75,000 2 models required: 1. compute a single plantwide overhead rate, assuming that the company assigns overhead based on 125,000 budgeted direct labor hours. 2. in january 2017, the deluxe model required 2,500 direct labor hours and the basic model required 6,000 direct labor hours. assign overhead costs to each model using the single plantwide overhead rate.

(a) what was the opportunity cost of non-gm food for many buyers before 2008? (b) why did they prefer the alternative? (c) what was the opportunity cost in 2008? (d) why did it change?

Why is accountability important in managing safety