Classification of costs, manufacturing sector. The Cooper Furniture Company of Potomac, Maryland, assembles two types of chairs (Recliners and Rockers). Separate assembly lines are used for each type of chair. Required:
Classify each cost item (A—I) as follows:
a. Direct or indirect (D or l) cost for the total number of Recliners assembled.
b. Variable or fixed (V or F) cost depending on how total costs change as the total number of Recliners assembled changes. (If in doubt, select on the basis of whether the total costs will change substantially if there is a large change in the total number of Recliners assembled.) You will have two answers (D or l; V or F) for each of the following items:

a. Cost of fabric used on Recliners
b. Salary of public relations manager for Cooper Furniture
c. Annual convention for furniture manufacturers; generally Cooper Furniture attends
d. Cost of lubricant used on the Recliner assembly line
e. Freight costs of Recliner frames shipped from Durham to Potomac, MD
f. Electricity costs for Recliner assembly line (single bill covers entire plant)
g. Wages paid to temporary assembly-line workers hired in periods of high Recliner production (paid on hourly basis)
h. Annual fire-insurance policy cost for Potomac, MD plant
i. Wages paid to plant manager who oversees the assembly lines for both chair types

Calculate the cost of each capital component—in other words, the after-tax cost of debt, the cost of preferred stock (including flotation costs), and the cost of equity (ignoring flotation costs). use both the capm method and the dividend growth approach to find the cost of equity. calculate the cost of new stock using the dividend growth approach. what is the cost of new common stock based on the capm? (hint: find the difference between re and rs as determined by the dividend growth approach and then add that difference to the capm value for rs.)assuming that gao will not issue new equity and will continue to use the same target capital structure, what is the company’s wacc? e. suppose gao is evaluating three projects with the following characteristics. each project has a cost of $1 million. they will all be financed using the target mix of long-term debt, preferred stock, and common equity. the cost of the common equity for each project should be based on the beta estimated for the project. all equity will come from reinvested earnings. equity invested in project a would have a beta of 0.5 and an expected return of 9.0%.equity invested in project b would have a beta of 1.0 and an expected return of 10.0%.equity invested in project c would have a beta of 2.0 and an expected return of 11.0%.analyze the company’s situation, and explain why each project should be accepted or rejected g

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Consider two similar industries, portal crane manufacturing (pcm) and forklift manufacturing (flm). the pcm industry has exactly three incumbents with annual sales of $800 million, $200 million and $100 million, respectively. the flm industry has also exactly three incumbents, with annual sales of $500 million, $450 million and $400 million, respectively. which industry is more likely to experience a higher level of rivalry?