answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
kramer
2 years ago
8

The net cash flows of Advantage Leasing for the next 3 years are $42,000, $49,000 and $64,000 respectively, after which the grow

th rate will be a constant 2% with a WACC of 8%. What is the present value of the terminal value
Business
2 answers:
geniusboy [140]2 years ago
6 0

Answer:

The present value of terminal value is $ 863,689.48  

Explanation:

Terminal value=Cash flows at third year*(1+g)/WACC-g

cash flows at the third year is $64,000

g is the growth rate of net cash flows which is 2% in perpetuity

WACC is 8%

Terminal value=$64,000*(1+2%)/(8%-2%)

                       =$64000*1.02/0.06

                       =$ 1,088,000.00  

The present value of terminal=terminal value*discount factor in year 3

discount factor in year=1/(1+8%)^3=0.793832241

Present value of terminal cash flow=1,088,000.00 *0.79383224

                                                           =$ 863,689.48  

dangina [55]2 years ago
4 0

Answer:

​$863​,​689.48

Explanation:

Terminal value means the value of an asset at future date.. The terminal value is the last value after the third year.. The formula goes thus

Terminal Value=( Last cash flow X 1 + Growth rate) / (Required return - growth return)

TV= [640000 X (1+2%) ] / [8% - 2 %]

TV= 64000 X 1.02 / 0.08-0.02

TV=65280 / 0.06

TV=$1,088,000

Terminal value is $1,088,000

To get the present value of Terminal value

Pv= Terminal value (1+i)^n

Pv= 1,088,000(1+0.08)^3

Pv= 1,088,000(1.08)^3

Pv=1,088,000(1.259712)

Pv=863​,​689.48

Therefore, the present value of the terminal value is $863​,​689.48

You might be interested in
Denti-Way Systems, a manufacturer of dental appliances, invented and patented a new x-ray machine that radically reduced mainten
Ronch [10]

Answer:

The correct answer is letter "C": international.

Explanation:

International business strategies are the systems used to plan and implement a series of actions driven to compete and place a company in the international market. The process implies analyzing and evaluating the target market, implementing the organization's operations abroad using innovative technology and strategies, and monitoring the results. At this stage, firms tend not to be worried about production costs until the entry of competitors.

7 0
2 years ago
Bill Blum insured his hardware store with a fire insurance policy for $88,000 at a cost of $0.84 per $100. Ten months later his
Dovator [93]

Answer:$616

Explanation:

The insurance policy is a policy on an annual basis in which premium are paid in advance to enable the insurance firm to provide cover for the clients.

Cost of insurance

$0.84* ($88000/100)

= $732.92 per annum

However since the insurance was cancelled after 10 months he will only be responsible for 10 months.

$739.2/12*10

=$616

4 0
2 years ago
Southwest Components recently switched to activity-based costing from the department allocation method. The Fabrication Departme
LiRa [457]

Answer:

Raw materials

<u>Debit           Credit</u>

               299,000

Wages Payable

<u>Debit           Credit</u>

               146,000

Factory Overhead

<u>Debit           Credit</u>

                708,200

WIP inventory

<u>Debit           Credit</u>

299,000

 146,000

<u> 708,200</u>

1,153,200

Explanation:

3,500pounds x $20 overhead per pound  = 70,000

710 inspections x $220 per inspection  =     156,200

50 setups x $2,500 per setup  =                   125,000

17,000 machine hours x $21  =                  <u>     357,000</u>

Total applied overhead:                                 708,200

The raw material will be credited as we decrease our inventory

the Direct labor will be wages payable

the factory overhead will be credited to represent the allcoated amount

4 0
2 years ago
Flask Company reports net sales of $3,010 million; cost of goods sold of $2,650 million; net income of $530 million; and average
Dafna1 [17]

Answer:

Total assets turnover = 1.2 times

Explanation:

Total assets turnover tells the efficiency of a firm's assets in generating revenue.

The formula for total assets turnover is net sales over average total assets.

Total assets turnover = Sales / average total assets

Total assets turnover = 3010 / 2510 = 1.199 or 1.2 times

3 0
2 years ago
How do Human Services differ from other Consumer Services? is it to Human Services are nonprofit agencies that help individuals
Amanda [17]

The ACTUAL answer to this question is Human Services focus on helping individuals live better lives rather than providing solely commercial or corporate services. Originally I thought this was the right answer but I wanted to make sure, so the other person who answered this question made me doubt myself and choose the wrong answer. I would've gotten 100% if this person ACTUALLY knew the right answer instead of guessing. Also I was thinking that Human Services isn't non profitable, but I blew off any doubts because I ASSUMED they'd write the right answer because if you're gonna answer a question on here you should be sure that the info is correct. Please rate the other answer 1 star so people know not to trust their answer.

5 0
2 years ago
Read 2 more answers
Other questions:
  • cathy's customer base is 2/3 residential and 1/3 business . if she has 350 residential customers, how many total customers does
    5·1 answer
  • At December 31, 2019, Bramble Corporation had the following stock outstanding. 10% cumulative preferred stock, $100 par, 108,506
    11·1 answer
  • Kent Manufacturing produces a product that sells for $70.00. Fixed costs are $163,200 and variable costs are $28.00 per unit. Ke
    5·1 answer
  • ABC Inc. just paid a dividend of $1.00 this year. The stock price is $15.43 currently. The market risk premium is 15% and the ri
    11·1 answer
  • During sales at her accessories store, Manila likes to display large signs in the store window to attract customers. She also pu
    10·2 answers
  • On the day his son was born, a father decided to establish a fund for his son's college education. The father wants the son to b
    12·1 answer
  • Pendergast, Inc., has no debt outstanding, and has a total market value of $180,000. Earnings before interest and taxes (EBIT) a
    8·1 answer
  • Lakeland Chemical manufactures a product called Zing. Direct materials are added at the beginning of the process, and conversion
    8·1 answer
  • The following information is from the 20X1 annual report of Weber Corporation, a company that supplies manufactured parts to the
    8·1 answer
  • Cash flows during the first year of operations for the Harman-Kardon Consulting Company were as follows: Cash collected from cus
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!