Answer:
Cost of equity = 11.20%, Value of Equity = $39.25
Explanation:
a. Cost of equity = Rf + B(Rm-Rf)
Cost of equity = 4% + 1.2(6%)
Cost of equity = 4% + 7.20%
Cost of equity = 11.20%
b. P/E ratio = 20
Market Price / EPS = 20
Market Price = EPS * 20
-->P1 = $2.17 * 20 = $43.40
DPS1= $0.24
Value of Equity = P1/Cost of Equity + DPS1/Cost of equity
Value of Equity = $43.40/1.1120 + $0.24/1.1120
Value of Equity = $39.03 + $0.22
Value of Equity = $39.25
Answer:
Min 2M + 3B
Explanation:
Data provided in the question
Let us assume M denotes the making units
B denotes the buying units
So,
Making cost per unit = $2
And, the buying cost per unit = $3
And, the total number of units required = 4,000 units
Based on the above information, the objective function is Min 2M + 3B.
This indicates the minimum total cost
Hence, the correct option is A.
Answer:
$3,927
Explanation:
For the computation of bid price first we need to follow some steps which is shown below:-
Manufacturing overhead rate = Overhead cost ÷ Machine hours
= 45,000 ÷ 100,000
= $0.45
Total manufacturing cost charged to the school
= 2,000 + 400 + (900 × 0.45)
= $2,805
Markup cost = $2,805 × 0.4
= $1,122
Bid price of job = Total manufacturing cost charged to school + Markup cost
= $2,805 + $1,122
= $3,927
Answer:
The amount that has to be deposited today is $6205.63
Explanation:
The given parameters are;
The annual interest rate for the first 5 years = 4 percent
The annual interest rate for the next 4 years = 4.6 percent
The annual interest rate for the final 8 years = 5.3 percent
Let the amount deposited be X, we have;
X × (1 + 0.04)⁵ + X × (1 + 0.04)⁵×(1.046)⁴ + X × (1 + 0.04)⁵×(1.046)⁴ ×(1.053)⁸ = $30,250
X ((1.04)^5 + (1 + 0.04)^5×(1.046)^4 + (1 + 0.04)^5×(1.046)^4 ×(1.053)^8) = $30,250
X × 4.875 = $30,250
X = $30,250/$4.875 = $6205.63
The amount that has to be deposited today = $6205.63.
