Answer:
Direct material price variance= $1,200 favorable
Explanation:
Giving the following information:
Standard price= $8 per gallon
Last month, 3,000 gallons of direct materials were purchased for $22,800.
To calculate the direct material price variance, we need to use the following formula:
Direct material price variance= (standard price - actual price)*actual quantity
Actual price= 22,800/3,000= $7.6 per gallon
Direct material price variance= (8 - 7.6)*3,000= $1,200 favorable
Answer:
Present value of the offer = $739,018.03
Explanation:
The cash flows described in the question from end of year 1 to end of year 20 represent a growing annuity for 20 years. The present value of a growing annuity is calculated as follows:
PV= ![\frac{P}{i-g}*[1-[\frac{1+g}{1+i}]^n]](https://tex.z-dn.net/?f=%5Cfrac%7BP%7D%7Bi-g%7D%2A%5B1-%5B%5Cfrac%7B1%2Bg%7D%7B1%2Bi%7D%5D%5En%5D)
where P = the annuity payment in the first period
i = interest rate per period that would be compounded for each period
g = growth rate
n = number of payment periods
P in the 1st year = the base salary of $59,000 + the 10% bonus of $5,900 = $64,900; g is 3.9% ;i=0.1 and n = 20
Present value of the offer = 15,000 received immediately + PV of the growing annuity
=
=739,018.03
Answer:
$6.3 per share
Explanation:
There are two method of Valuation of the firm
- Weighted average cost of the capital (WACC)
- Free cash flow to equity (FCFE)
We have to calculate the value of the firm using FCFE. Free cash flow to equity (FCFE) is the amount of cash flow generated by the business and potentially available for distribution among the stockholders.
Value of firm = Free cash flow / required rate of return = $120,000 / 12% = $1,000,000
Market value of Equity = Total value of firm - Market value of Debt - Market value of Preferred share
Market value of Equity = $1,000,000 - $300,000 - $70,000 = $630,000
Value of Patrick's stock = Market Value of equity / shares of stock outstanding = $630,000 / 100,000 = $6.3 per share