The first step in the decision-making process requires you to do what?

SCI just paid a dividend (D₀) of $1.92 per share, and its annual dividend is expected to grow at a constant rate (g) of 4.00% pe

Readme [11.4K]

Answer:

intrinsic value of SCI’s shares is $33.28 per share

Explanation:

given data

dividend (D₀) = $1.92 per share

constant rate (g) = 4.00% per year

required return (rs ) = 10.00%

to find out

intrinsic value of SCI’s shares

solution

we know that intrinsic value is here express as

intrinsic value = current dividend × ( 1+ growth rate ) ÷ ( required rate - growth rate ) .............................1

put here value we get

intrinsic value = $\frac{1.92*(1+0.04)}{0.10-0.04}$

intrinsic value = 33.28

so intrinsic value of SCI’s shares is $33.28 per share

3 0

2 years ago

On March 1st, Mr. Smithe signed up for a fitness program at Fit Co. and paid $960 for the entire program upfront. The program in

vichka [17]

Answer:

Revenue - March = $160

Explanation:

The accrual principle in accounting states that the revenues for a period should match the expenses for that particular period and any revenue or expense should be recorded in the period to which it relates to. This means that the upfront fee received by Fit Co. is a liability and should not be recorded as a revenue until it is earned. So, by providing two sessions in the month of March, Fit Co. has earned revenue for 2 sessions out of the twelve. Thus, at the end of March, Fit Co. should record a revenue of,

Revenue - march = 960 * 2/12 = $160

8 0

2 years ago

Which of the following can cause an increase in the price of a discount bond? a. An increase in the YTM. b. A decrease in the YT

eduard

Answer:

b. A decrease in the YTM.

Explanation:

Price of the bond is calculated using present value of future cash flows. while calculating present values of the cash flows or price of the bond, we use YTM for discount purpose. As we that higher rate gives lower Present value and Lower rate gives higher present value. Interest rate behave inversely with present value. So the reduction in YTM will increase the price of the bond.

3 0

2 years ago

Wexford Industrial Supply is considering a new project with estimated depreciation of $26,000, fixed costs of $79,000, and total

slava [35]

Answer:

6949 units

Explanation:

Given:

Estimated depreciation of the new project = $26,000

Fixed cost = $79,000

Total sales = $187,000

Estimated variable costs per unit = $11.80

let the break-even production be 'n'

Now,

the break-even point is achieved when there is no profit no loss

thus,

Profit = 0

Also,

Profit = Total sales - Fixed cost - (Total variable cost) - Estimated depreciation

or

0 = $187,000 - $79,000 - ( $11.80 × n) - $26,000

or

11.80 × n = 82000

or

n = 6949.15 ≈ 6949 units

8 0

2 years ago

School Days Furniture, Inc., manufactures a variety of desks, chairs, tables, and shelf units which are sold to public school sy

Blababa [14]

Answer:

Production Budget ( July August September) 5200, 6300, 9000

Sales Budget ( July August September) $ 300,000 $ 360,000 $ 450,000

Direct Materials Budget ( July August September) $ 31860 $ 39,420 $ 48,600

Direct Materials Units Budget ( July August September) 53,100 65,700 81,000

Direct Labor Budget ( July August September) $ 163,800 $ 198450 $ 283,500

Direct Labor Hours Budget ( July August September)7800 9450 13500

Explanation:

The formula used are

1) Production Budget = Sales + Desired Ending Inventory Less Opening Inventory

2) Sales Budget= Sales * Price Per unit

3) Raw Materials Budget = Production + Desired Ending Inventory Less Opening Inventory

Raw Materials Costs= Raw Materials Budget * Costs

4) Direct Labor Hours Budget = Production * Direct Labor Hours

Direct Labor Budget = Direct Labor Hours Budget* Wages Per Hour

School Days Furniture, Inc.

Production Budget

July August September

Sales 5000 6000 7500

+ Desired

Ending Inventory 1200 1500 ------(assuming zero inv)

Less Opening

Inventory 1000 1200 1500

Production Budget 5200 6300 9000 

Production Budget = Sales + Desired Ending Inventory Less Opening Inventory

School Days Furniture, Inc.

Sales Budget

July August September

Sales 5000 6000 7500

Price Per unit $ 60 $60 $ 60

Sales Budget $ 300,000 $ 360,000 $ 450,000 

Sales Budget= Sales * Price Per unit

School Days Furniture, Inc.

Raw Materials Budget

July August September

Production Budget 5200 6300 9000

+ Desired

Ending Inventory 630 900 ------(assuming zero inv)

Less Opening

Inventory 520 630 900

Materials Requiremnt 5310 6570 8100 

Board (feet) 10 10 10

Direct Materials 53,100 65,700 81,000

Plank Costs 0.60 0.60 0.60

Direct Materials $ 31860 $ 39,420 $ 48,600 

Raw Materials Budget = Production + Desired Ending Inventory Less Opening Inventory

Raw Materials Costs= Raw Materials Budget * Costs

School Days Furniture, Inc.

Direct Labor Budget

July August September

Production Budget 5200 6300 9000

Direct Labor hours 1.5 1.5 1.5

Direct Labor Hours 7800 9450 13500

Wages Per hour $ 21 $ 21 $21

Direct Labor Budget $ 163,800 $ 198450 $ 283,500

Direct Labor Hours Budget = Production * Direct Labor Hours

Direct Labor Budget = Direct Labor Hours Budget* Wages Per Hour

4 0

2 years ago