The company should accept the special order because it will get an additional profit of $4,000 ($12,500 - $7,500 - $1,000) for the special order. This additional profit amount can be acquired by separating the effect from the special order on each cost and sales of the company's business. The sales should increase by $12,500 ($5 x 2500 unit) amount if the job is taken and the variable cost should increase by $7,500 ($3 x 2500 unit). Lastly, the fixed cost should increase by $1,000 (the new machine).
Answer:
= $52.78 per share
Explanation:
<em>The value of a business can be determined using the free cash flow model. According to this model, the value of a firm is is the present value of its free cash flow discounted at the weigthed average cost of capital (WACC.)</em>
<em>The value of equity is the value of firm less value of other instruments (e.g debt and preferred stocks)</em>
<em>Value of equity = Value of the entire firm - Value of debt </em>
We can work out the the value per share using the steps below:
<em>Step 1</em>
<em>Calculate the total value of the firm</em>
Value of firm = 27.50/(0.1-0.07)
= $916.66 million
<em>Step 2</em>
<em>Calculate the value of equity</em>
<em>Value of equity = Value of the entire firm - Value of debt</em>
= $916.66 million - $125.0 million
=791.666 million
<em>Step 3</em>
<em>Calculate the value per share</em>
Value per share = Value of equity/ units of common stock
=$791.666 million/15 million units
= $52.78 per share
Answer:
$730,000
Explanation:
In the given question, the building was purchased and it repairs also. Plus, annual taxes are applicable to the property. The current market value and the book value of the building is also given in the question
For including the amount in the initial cash flow for the building project we consider the current market value of the building i.e $730,000. No other cost should be recognized
Answer:
c. place----distribution
Explanation:
Since it is stated in the example that Sidney's customers expressed a wish for the scanners to be sold through retail alongside the online shop, it is clear that Sidney's company faces an issue regarding the distribution channels.
Of course, there is room for improvement, as they have already noted the customer requests for such a distribution channel and they have a steady demand.
To secure (and increase) their existing customer base from the competitor, Sydney's company has to put <u>place and distribution</u> of its products in the marketing focus.
Answer: D) sampling bias.
Explanation:
Sampling bias refers to a scenario where conditions in the research give more subjects in the population of interest the chance to appear either more or less times than others instead of all the subjects having an equal chance of representation.
The students were to come in at different times yet Graham gave them all the same treatment conditions. This could lead to sampling bias because those who volunteered earlier are likely different from those who volunteered later.
