Answer: $40
Explanation:
First find the required return using CAPM;
Required return = Riskfree rate + beta * (Market return - riskfree rate)
= 6% + 0.5 * (13% - 6%)
= 9.5%
Then use DDM to determine intrinsic value;
= Next dividend / (Required return - growth rate)
= 5 / (9.5% - (-3%))
= $40
Answer:
Operating activities
Investing activities
Financing activities
Explanation:
In a cash flow statement, the activities of the organization are usually recognized in 3 parts namely; Operating activities, investing activities and financing activities.
The operating activities include elements such as net profit, non cash items, change in current assets and liabilities.
The investing activities include cash flows from the disposal and purchase of assets etc
The financing activities includes cash flows from the disposal and sale of shares etc.
The net cash flows from these activities is the netted off the cash balance at the beginning of the period to get the cash balance at the end of the period.
Hence the order of presentation of activities on the statement of cash flows is
Operating activities
Investing activities
Financing activities
Answer:
$69020
Explanation:
Selling price -$54
Incremental selling price =54*(1-0.16)=45.36
Incremental sales - 45.36*7000= 317520
Contribution -
Direct materials = 24*7000 = (168000)
Direct labor = 6*7000 = (42000)
Variable manufacturing = (21000) (3*7000)
Variable selling price = (3500) 2*(1-0.75)
Total contribution = 83020
Additional cost of machine (14,000)
Incremental profit 69,020
Answer:
The effective annual rate on loan would be 8.24%
Explanation:
Formula for Effective annual rate ( EAR ) -
(1 + APR / Number of compounding periods in a year) ^ (Number of compounding periods in a year) - 1
where, the APR IS 8% ,
Number of compounding periods - 4 quarters
So now putting these values in the formula -
(1+8% / 4) ^4 - 1
= (1 + 2%) ^4 -1
= (1 + .02)^4 -1
= (1.02)^4 - 1
= 1.08243216 - 1
= .08243216
Now multiplying this by 100 to make it in percentage
= 8.24% ( approximately )
Answer: Yes
Explanation:
Even though the scrubber system is expensive, it is worth it as it is improving human health in the society. This will count towards the sustainable development of the society as well as the social responsibility of the company.
And if the company is worried about profits, installing this system will show that they care about the society and its people which will probable increase their customer base when they include this deed in their marketing campaigns. People generally love a "compassionate" company so this is a strong likelihood.
