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2 years ago

Cakes by Dominic

Business

1 answer:

CaHeK987 [17]2 years ago

7 0

Answer:

One motive that Dominic might have was that he has always wanted to become an entrepreneur and his grandmother wants him to take over the shop for her since his cake-making skills had very much improved since he started. And another motive Dominic had was that there was not a lot of jobs open for him in the area, so he was glad to help.

Explanation:

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Colt Systems will have EBIT this coming year of $ 17million. It will also spend $7 million on total capital expenditures and inc

m_a_m_a [10]

Answer:

a) market value of equity 589,488,461.54

b) it can loan up to 212,500,000

c) as the liabilities provides a tax shield because, interest expense are tax deductible while dividends don't The companu find a tax incentive to take debt

Explanation:

Free Cash Flow for the firm:

17,000,000 earnings before taxes

- 7,000,000 CAPEX

+ 3,000,000 depreciation

- 5,950,000 income tax*

7,050,000 FFCF

we solve using the gordon grow model:

7,050,000x1.087 / (0.10 - 0.087) = 589,488,461.54

* income tax: 17,000,000 x 35% = 5,950,000

b) We can consider the income as the installment of a perpetuity

17,000,000 / 0.08 = 212,500,000

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2 years ago

Suppose the level of real GDP supplied by firms is $10.5 trillion and the price level is 105. In this case, the quantity of real

Ulleksa [173]

Answer:

The new equilibrium will have a lower level of price and the GDP will be $9 trillion

Explanation:

The law of the demand explain the movements of the aggregate demand, the new equilibriun will have a lower level of price and the real GPD of $9 trillion. The change in the level of price depends on elasticities of the agregate demand and the agragate supply.

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2 years ago

McCann Co. has identified an investment project with the following cash flows.

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Answer:

Explanation:

Cash flow is 530 , 690 , 875 and 1090 in 1st to 4 th year respectively

discount rate = 10 %

NPV = 530/ 1.10 + 690 / (1.10)² + 875/(1.10)³ + 1090/ (1.10)⁴

= (530x1.10³ + 690 x 1.10² + 875x 1.10 + 1090)/ 1.10⁴

= (705.43 x +834.9 +962.5 +1090)1.10⁴

= 3592.83 / 1.10⁴

= 2453.95

Discount rate 18%

NPV = 530/ 1.18 + 690 / (1.18)² + 875/(1.18)³ + 1090/ (1.18)⁴

= (530x1.18³ + 690 x 1.18² + 875x 1.18 + 1090)/ 1.18⁴

= (870.80696 +960.756 +1032.5 +1090)1.18⁴

= 2039.46

Discount rate 24%

NPV = 530/ 1.24 + 690 / (1.24)² + 875/(1.24)³ + 1090/ (1.24)⁴

= (530x1.24³ + 690 x 1.24² + 875x 1.24 + 1090)/ 1.24⁴

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2 years ago

8. Suppose that you are assigning costs to a major project to be undertaken this year by your firm, DynoSoft Applications. One p

makvit [3.9K]

Answer:

$2,565,360

Explanation:

Learning curve rate = [log (learning curve)] ÷ log 2

= log (0.7) ÷ log 2

= -0.515

Time to complete 20th iteration:

$=Total\ labor\ hours\times[20^{-0.515}]$

$=200,000\times[20^{-0.515}]$

= 200,000 × 0.21

= 42,756 labor hours

cost of the twentieth iteration = 42,756 labor hours × $60 per hour labor rate

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2 years ago

Flyer Company has provided the following information prior to any year-end bad debt adjustment: Cash sales, $161,000 Credit sale

laila [671]

Answer:

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Explanation:

Given the above information, we will compute the bad debt expense as;

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= $6,440 - $2,300

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2 years ago