Answer:
Kaynaddi here is the answer of your question
The agent is not the owner of the apartment so he will not take care of the apartment, because he isn't supposed to pay the cost of fixing damages in the apartment. To mitigate this risk renter can be asked to pay a deposit which can be adjusted for any damages done in the apartment.
A provision in the lease agreement for the annual renewal allows an incentive for a renter who is long term. Doing so will help maintain leased apartment.
Answer:
1 ) Variable Overhead Rate Variance = ( SR - AR )* AH
= ( $21 - $20) 3,500
= $3,500 Favorable
2 ) Labor Rate = ( SR - AR )* AH
= ( $24 - $24.9) 2,290
=$2,061 U
Explanation:
TOTAL = Standard cost - Incurred cost
Standard Cost = $70,000 + $4,550
= $74,550
Standard Rate = $74,550 / 3,550
= $21
cost incurred = AR * machine hours
cost per machine hour = $70,000/3,500
=$20
2) Labor Rate = ( SR - AR )* AH
= ( $24 - $24.9) 2,290
=$2,061 U
AR = $57,021/2,290 = $24.9
AR = Actual Rate
SR = Standard Rate
AH = Actual hours
Answer:
Explanation:
The computation is shown below:
The free cash flow is
= Expected net operating profit after taxes - net capital expenditure - net operating working capital
= $2,400 million - $360 million - $45 million
= $1,995 million
Now the total firm value is
= Free cash flow ÷ (cost of capital - growth rate)
= $1,995 million ÷ (11.70% - 3.90% )
= $1,995 million ÷ 7.8%
= $25,576.92 million
Now the intrinsic value of equity is
= Total firm value - outstanding debt - preferred stock
= $25,576.92 million - $11,510 million - $6,394 million
= $7,672.92 million
And, the intrinsic value per share
= $7,672.92 million ÷ 675 million shares
= $11.37 per share
Answer:
Using the discount cash flow model to value the company, we can say that the company is worth $85 million / 12% = $708.33 million
Each stock should be worth approximately $708.33 million / 100 million = $7.0833 per stock
If the company uses the cash to finance new projects, then future cash flows should be approximately $97.75 million, and the company's value = $97.75 million / 12% = $814.583 million. This represents a 15% increase in value. The stock price should also increase by 15% to $8.1458 per stock.
If the company instead decides to repurchase stocks using all the cash, then it could repurchase 35.29 million stocks. Since we are assuming that the company's future cash flows wouldn't be affected by this decision, then the company's total value will still be $708.33 million, but each stock would be worth much more = $708.33 / 64.71 million stocks = $10.95. This represents a 34.36% increase with respect to the other alternative of investing the cash.
The issue here, is that this situation is not very realistic. It is not normal for a company to use all of its cash to repurchase stocks since it would result in a huge increase in stock prices (stock prices are set by supply and demand). Also, this would also result in a sharp increase in the cost of equity due to higher risks.
