The four 'Cs' of credit are : Character, Capacity or Cashflow, Capital and Conditions.
Out of the 4 'Cs' of credit, the two 'Cs' that deal with the earning potential and available cash are 'Capacity' and 'Capital'.
Capacity: It is the assessment the of the ability of any business to pay bills and maintain the cash flow. It contains in it the debt structure of the firm and the unused credit.
Capital: It is the assessment, if a company has the ability to pay back its creditors by the help of its financial resources or available cash.
Answer: Virtual organization
Explanation:
Virtual organization is referred to as or known as a permanent or temporary collection of the geographically dissipate individuals, organizational units, groups, or maybe the entire organization that tends to depend upon the electronic linking so as to complete production of the process. Virtual organizations do not tends to represent an organization's attribute but on the other hand is taken in consideration as a completely different organizational form.
Answer:
Price to be paid today = $118.35
Explanation:
<em>The price of a share can be calculated using the dividend valuation model </em>
<em>According to this model the value of share is equal to the sum of the present values of its future cash dividends discounted at the required rate of return. </em>
The model can applied as follows:
PV of dividend = D×(1+r) ^(-n)
D- dividend , r - required rate , n- number of year
D- 9.25, r - 16%, n = 2
PV of dividend = 9.25 × (1.16)^(-2)= 6.9
PV of disposal value
PV of dividend = F × (1+r) ^(-n)
D- disposal value , r - required rate , n- number of year
PV of disposal value = 150 × (1.16)^(-2)= 111.47
Price to be paid today
Total present value = 6.9 + 111.47 = 118.35
Price to be paid today = $118.35
Answer:
Explanation:
The amount of bills are 1000
Let the number of $20 bills be x
Let the number of $50 bills be y
Using a ratio method, we assume that the ration of the bills are 20:50
Adding both ratios, we have 20 + 50 = 70.
To find x, we have
(20 ÷ 70) × 1000
0.286 x 1000
286 bills
To find y, we have
(50 ÷ 70) × 1000
0.714 x 1000
714 bills
Having calculated the number of bills for $20 and $50, we calculate the value of each bills.
we have, 286 x $20 = $5,720
714 x $50 = $35,700
Adding these above amounts, we have
$5,720 + $35,700 = $41, 420 which is approximately $41,000.
Cheers.
Answer:
The answer is: Leslie should fund projects A and C
Explanation:
In order to determine if a project should be accepted, the first thing Leslie has to do is determine the projects´ Net Present Value (NPV). If the NPV is 0 or more, then the projects could be funded.
The formula to calculate NPV is:
NPV = ∑{p/( 1+r)t} - C
- p = net cash flows from the period
- r = discount rate (8.5% in this case)
- t = number of periods
- c = capital invested
<u>Project A:</u>
p = $4000;$4000;$4000
r = 8.5%
t = 3
c = $7,500
The NPV for Project A is $2,716.09
<u>Project B:</u>
p = $3000;$4000;$3000
r = 8.5%
t = 3
c = $8,000
The NPV for Project B is $511.52
<u>Project C:</u>
p = $0;$2,500
r = 8.5%
t = 2
c = $2,000
The NPV for Project C is $123.64
Once you calculate the NPVs from projects A,B and C you must determine how to distribute the $15,000 available. All three projects have positive NPVs, so they are profitable. But you can´t fund projects A and B since their combined costs ($7,500 + $8,000 = $15,500) exceeds $15,000. Leslie should invest in project A since its NPV is higher ($2,716.09 ˃ $511.52). She should also fund project C since its NPV is positive ($123.64) and the capital needed is smaller (only $2,000).
