Answer:
In order to find IRR we have to set the present value of all cash flows to 0,
IRR is the rate at which if we discount the payments the NPV (net present value) will be 0
-1875000+
415,350/(1+IRR)
415,350/(1+IRR)^2
415,350/(1+IRR)^3
415,350/(1+IRR)^4
415,350/(1+IRR)^5
415,350/(1+IRR)^6
415,350/(1+IRR)^7
Now we can use trial and error to see at what rate will the npv be
IRR= 12.35%
Another simple way of doing is using the cash flow function of a financial calculator and input these values.
CF0=1875000
C01=415,350
C02=415,350
C03=415,350
C04=415,350
C05=415,350
C06=415,350
C07=415,350
Explanation:
Answer:
The partners will have unlimited liability.
Explanation:
Limited partnership is a form of partnership in which two or more people share ownership of a business. The existence of two types of partners is an essential requirement for a limited partnership. These two partners include:
1) General partner.
2) Limited partner.
-General partners are the partners that are fully involved in the daily management of the business. They are solely in charge of decision making process in the company, general partners are also liable for the debts incurred in the business.
-Limited partners are not involved in the daily management of the company, they only participate by investing money into the business and as such they are prohibited from making any type of decision in the organization.
<span>C. Making the column wider by dragging between the A and the B to the right</span>
Answer:
A. $117 million
B.13%
C. $21.75
Explanation:
B. Calculation to determine How large a loss in dollar terms will existing FARO shareholders experience on the announcement date
Expected Loss= 390*30%
Expected Loss= $117 millions
Therefore How large a loss in dollar terms will existing FARO shareholders experience on the announcement date will be $117 millions
B. Calculation to determine What percentage of the value of FARO’s existing equity prior to the announcement is this expected gain or loss
First step is to calculate the Existing Shares Value
Existing Shares Value =36*$25
Existing Shares Value= $900 millions
Now let calculate the Expected Loss %
Expected Loss % = $ 117/$ 900
Expected Loss % = 13%
Therefore the percentage of the value of FARO’s existing equity prior to the announcement is this expected gain or loss will be 13%
C. Calculation to determine At what price should FARO expect its existing shares to sell immediately after the announcement
Price Per Share: $ 25*(1 - 0.13)
Price Per Share$25*0.87
Price Per Share: $21.75
Therefore what price should FARO expect its existing shares to sell immediately after the announcement is $21.75
Answer:
11.28%
Explanation:
Midwest fastener stock is expected to have a 16% booming economy
12% normal economy
-3% recession economy
The probability of an economic boom is 12%
The probability of a normal state is 80%
The probability of a recession is 8%
Therefore, the expected rate of return can be calculated as follows
= (return in booming economy×probability of boom economy)+(return in normal economy × probability of normal economy)+(return in recession economy×probability of recession economy)
= (16%+12%)+(12%+80%)+(-3%+8%)
= 192%+960%+(-24%)
= 192%+960%-24%
= 1,128%/100
= 11.28%
Hence the expected rate of return on the stock is 11.28%
