Ada Sand and Gravel LLC sells concrete for $35 per yard. The variable cost per yard is $25. Fixed costs are $500,000 including depreciation of $80,000. Compute the cash breakeven in yards.
Below is the long term and capital section of the balance sheet for the Seattle Distributing Co.
|
Category
|
Value
|
|
Notes Payable
|
$300,000
|
|
Bonds Payable
|
500,000
|
|
Preferred Stock
|
100,000
|
|
Common Stock
|
500,000
|
|
Retained Earnings
|
400,000
|
Interest of notes is 6%, bonds payable 4%, preferred stock dividends are 5% and the common shareholders opportunity cost is 10%. The tax rate is 25%.
Compute the average weighted cost of capital. You may want to calculate your answer using Excel, and paste the solution into the solution window.