Answer:
$1,042.04
Explanation:
to calculate the present value using a continuously compounded interest rate, we can use the following 2 formulas:
1) present value = cash flow / eⁿˣ
- e = 2.71828
- x = 5% / 2 = 2.5%
- n = 10
- cash flow = $1,030
present value = $1,030 / 2.71828¹⁰ˣ⁰°⁰²⁵ = $1,030 / 1.284 = $802.16
2) present value of an annuity = payment [(1 - e⁻ⁿˣ) / (eˣ - 1)]
- payment = $30
- x = 2.5%
- n = 9
- e = 2.71828
present value = $30 [(1 - 2.71828⁻⁹ˣ⁰°⁰²⁵) / (2.71828⁰°⁰²⁵ - 1)] = $30 [(1 - 2.71828⁻⁹ˣ⁰°⁰²⁵) / (2.71828⁰°⁰²⁵ - 1)] = $30(0.2015 / 0.0252) = $239.88
present value of the stream of cash flows = $802.16 + $239.88 = $1,042.04
Answer:
Maxwell world consider choice equal to $310000
Explanation:
given data
accept a salary = $60,000
salary = $25,000
bonus = 20% of net income
to find out
amount of income would be necessary so that Maxwell would consider
solution
we get here income by bonus that is express as
bonus = 2 ( income - bonus - salary ) ..............1
3500 = 2 ( income - ( 0.2 × 35000 ) - ( 0.2 × (75000 + 35000) )
solve it we get
income = $310000
so Maxwell world consider choice equal to $310000
Answer:
Current dividend per share paid (Do)
= <u>Total dividend </u>
No of shares outstanding
= <u>$1,600,000</u>
1,000,000 shares
= $1.60 per share
Current market price = $31
Growth rate = 8% = 0.08
Ke = Do<u>(1 + g)</u> + g
Po
Ke = $1.60<u>(1 + 0.08)</u> + 0.08
$31
Ke = 0.1357 = 13.57%
Interest rate on borrowing (Kd) = 10%
Tax rate (T) = 40% = 0.40
WACC = Ke(E/V) + Kd(D/V)(1-T)
WACC = 13.57(65/100) + 10(35/100)(1 - 0.4)
WACC = 8.82 + 2.10
WACC = 10.9%
The correct answer is A
Explanation:
In this case, we need to calculate cost of equity. The cost of debt has been given, which is the interest rate on long-term borrowing (10%). Since the debt proportion in the capital structure is 35% and equity proportion is 65%, it implies that the value of the firm is 100%. Then, WACC is the aggregate of cost of each stock and the proportion of each stock in the capital structure.
Answer:
A. 27,000
B. 77,000
Explanation:
What is Reggie's accounting profit?
REVENUE - EXPENSES AND DEPRECIATION
90000-18000-6000-3000=63000
What is Reggie's economic profit?
REVENUE - EXPENSES AND DEPRECIATION - IMPLICIT COSTS
90000-18000-60000-3000-76000 = -13000
1) accounting profit = TR - explicit cost
= 90,000 - 63,000
= 27,000,
2) economic profit = TR - economic cost
= 90,000-(13,000)
= 77,000
C. A podcast is a prerecorded usually audio about someone discussing a subject.
