Answer:
The company should not develop the new product as The operation cash flow is too low as compared to the OCF that results in zero NPV
.
Explanation:
In order to know if the company should develop the new product we would have to make the following calculations:
The No, of units the company expects to sell = Market share*Market size = 4.5%*120,000 = 5,400
Total contribution = No. of units sold*contribution margin per unit = 5400*87.20 = $470,880
Fixed costs = $418,000
Profit before tax = Total contribution - Fixed costs = $470,880 - $418,000 = $52,000
Net profit = (1-Tax rate)*Profit before tax = (1-34%)*$52,000 = $34,320
Since there are no depreciation costs(assumed), net profit is the operating cash flow.
Therefore, the company should not develop the new product as The operation cash flow is too low as compared to the OCF that results in zero NPV
.
Answer:
A) A bond's current yield must always be either equal to its yield to maturity or between its yield to maturity and its coupon rate.
Explanation:
the yield to maturity = current yield +/- capital gains yield
current yield = yield to maturity +/- capital gains yield
the capital gains yield is positive or negative depending if the bond was sold at a premium or at a discount which results in a coupon rate being either higher or lower than the yield to maturity.
so the current yield must always be within a range between yield to maturity and coupon rate
Answer:
$30, 154.50
Explanation:
For compute the maximum amount, we need to calculate the present value which is shown below:
Present value would be
= Paying amount for five years × PVIFA factor at 11.2% for 5 years
= $8,200 × 3.6774
= $30,154.68 approx
Simply we multiplied the paying amount with the PVIFA factor to get the maximum paying amount
And, refer to the PVIFA table
Answer:
Decomposition subdivides the major deliverables into smaller components. It is a tool and technique of the Create WBS process and is isued to create a WBS.
Level two components might be deliverables, phases, subprojets, or some combination
Answer: Participating preferred
Explanation:
Participating preferred is a stock which pays specific dividends rate to their customers and also receives additional dividends, this is made known Board of Directors and paid by the company, this meets up with the objectives a customers has for investing and having a stable income. It is so known as performance preferred and it gives the holder the benefit of collecting extra dividends.
