El Salvador has a population density of about 620 people per square mile and neighboring Honduras a population density of about
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Answer:
Ans. The best estimate of the current intrinsic stock price is $36.51
Explanation:
Hi, first, we have to determine the cash flows for year 1 and 2 (when the stock grows at 25%) and then, the terminal value (using the constant growth rate of 6%). Then we have to bring to present value all the cash flows (terminal value included) and since the terminal value is an amount of money expressed in dollars of year 2, we have to bring it to present value, discounted at the WACC.
Normally, we need to use the rate of return of the equity but in this case this is not possible due to the lack of information. What we can do is to find the value of the company´s equity, which means that If we bring to present value tha cash flows of year 1 and 2 and the terminal value (using thte WACC as a discount rate) and add the short term invesments and substract the debt of the company, we can find the equity´s value and divide it by the outstanding shares, therefore obtaining a good aproximation to the intrinsic value of the stock. It all goes like this.
Note. Notice that 1.75 millions were the last cash flow so we need to find the cash flow for year 1 (CF1)
Where (PV) means present value.
Now, let´s do the following operation
Then, the equity´s value is $36.51 millions.
Now, the intrinsic value of the stock is the value of its equity divided by the number of outstanding shares.
So, the intrinsic value of Huxley Building Supplies' is $36.51
Best of luck.
Answer:
The Linear programming model is given as below
Profit Function:
Constraints:
Explanation:
As the question is not complete, the complete question is found online and is attached herewith.
Let the number of product 1 to be produced is X, that of product 2 is Y and product 3 is Z
so the maximizing function is the profit function which is given as
Now as the number of hours in a week are 40 and there are a total of 10 type 1 machines so the total number of machine 1 hours are 40*10=400 hours
As from the given table product 1 uses 2 machine hours of machine 1, product 2 uses 2 machine hours of machine 1 and product 3 uses 1 hour of machine 1 so
Now as the number of hours in a week are 40 and there are a total of 6 type 2 machines so the total number of machine 2 hours are 40*6=240 hours
As from the given table product 1 uses 3 machine hours of machine 2, product 2 uses 4 machine hours of machine 2 and product 3 uses 6 hour of machine 2 so
Now as the number of hours in a week are 40 and there are a total of 8 type 3 machines so the total number of machine 3 hours are 40*8=320 hours
As from the given table product 1 uses 4 machine hours of machine 3, product 2 uses 6 machine hours of machine 3 and product 3 uses 5 hour of machine 3 so
Now as the machine 1 is used as 2X+2Y+Z in a week and the week is of 40 hours so the number of machines to be used are given as
Now as the machine 2 is used as 3X+4Y+6Z in a week and the week is of 40 hours so the number of machines to be used are given as
Now as the machine 3 is used as 4X+6Y+5Z in a week and the week is of 40 hours so the number of machines to be used are given as
Now the workers are available for 35 hours so the worker available at the machine 1 is given as
That of machine 2 is given as
That of machine 3 is given as
As the total number of workers is 19 so the constraint is given as
So the Linear programming model is given as below
Profit Function:
Constraints:
