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2 years ago

Financial managers use escalation to consider the effects of inflation on an acquisition program by applying:_____________

Business

1 answer:

Neporo4naja [7]2 years ago

3 0

Answer:

D. Inflation factors to actual costs incurred by the contractor

Explanation:

The effect of inflation on the profitability of a product cannot be overemphasized. At the time of inflation the profitability of a project will be reduced and the cost of capital will increase. The effect of inflation on a project can be determined by applying inflation factor.

Inflation impacts on the cash flow from a project, especially a project with a long life span.

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You have won the lottery. You will receive $5,500,000 today, and then receive 40 payments of $1,900,000. These payments will sta

san4es73 [151]

Answer:

no, you shouldn't take the offer because the present value of your prize is higher than $35 million.

Explanation:

we must first calculate the present value of the annuity in 6 months. The effective interest rate per year = (1 + 9%/365)³⁶⁵ - 1 = 1.094162145 - 1 = 0.094162145 = 9.4162145

the discount rate for every 6 months:

0.094162145 = (1 + r)² - 1

1.094162145 = (1 + r)²

√1.094162145 = √(1 + r)²

1.046022058 = 1 + r

r = 0.046022058 = 4.6%

now the present value of the annuity in 6 years = $1,900,000 x (annuity factor, 4.6%, 40 periods) = $1,900,000 x 18.14185 = $34,469,515

then we must find the present value = $34,469,515 / 1.046 = $32,953,647.23

the total value of your prize = $32,953,647.23 + $5,500,000 = $38,453,647.23

6 0

2 years ago

Playtown Corporation purchased 75 percent of Sandbox Corporation common stock and 40 percent of its preferred stock on January 1

Nesterboy [21]

Answer:

Elimination Journal.

Retained Earnings $210,000 (debit)

Common Stock $ 150,000 (debit)

Investment in Sandbox Corporation $270,000 (credit)

Non-Controlling Interest $90,000 (credit)

Explanation:

When dealing with consolidation of Financial Statements, the Equity and Retained Earning in the Subsidiary has to be eliminated from the records whilst the Investment in Subsidiary and the Non-Controlling Interest in Subsidiary are recognized.

Elimination of the common items in consolidation is done by the use of Pro-forma Journals.

Goodwill or Gain on Bargain Purchase are also recognized on the date of acquisition of subsidiary.

Goodwill is the excess of Purchase Price and Non-Controlling interest over the Net Assets Acquired.While Gain on Bargain Purchase is the excess of Net Assets Acquired over Purchase Price and Non-Controlling interest.

Elimination Journal.

Retained Earnings $210,000 (debit)

Common Stock $ 150,000 (debit)

Investment in Sandbox Corporation $270,000 (credit)

Non-Controlling Interest $90,000 (credit)

8 0

2 years ago

A borrower has applied for a refinance on her property valued at $235,000. She currently has a HELOC with a $47,000 limit and cu

gladu [14]

Answer:

c. 70% / 81% / 90%

Explanation:

Loan to Value ratio LTV is the ratio of borrowers principal loan balance to the appraisal value of the property. Combined Loan to Value Ratio CLTV is the ratio which considers the sum of all the loan taken on the property. High loan to Value ratio is the one which loan is exceeding by the value of borrowers home.

8 0

2 years ago

Rhashan wants to improve the readability of the documents used by his organization. In 5–10 sentences, describe ways in which Rh

slega [8]

Rhashan can used a font like Arial. It is much easier on your eyes than a font that has curls at the end. He needs to very brief and to the point. Business and organizations do not want to publish rambling. Paragraphs longer than eight lines are not good for readability. To make his ideas look organized and to assist busy readers in finding key ideas, Rhashan needs to insert a “talking subhead” roughly every five paragraphs. Talking subheads tell a story. Something similar to newspaper headlines.

3 0

2 years ago

When drawing a histogram it is important to

mel-nik [20]

D, label the vertical axis so the reader can determine the counts or percent in each class interval.

8 0

2 years ago