Answer:
$ + 195593.6
Explanation:
First lets calculate the After depreciation net book value of the machine by computing depreciation as per MACRS 5-year class
Year 1 % Dep = 20%
Year 2 % Dep = 32%
Year 3 % Dep = 19.20%
So NBV of machine after 3 years
= 580,000 - (580000*0.20)-(580000*0.32)-(580000*0.1920)
=$167,040
We calculate the net taxable value of the gain as
=180,000 - 167040 = $12,960
Tax = 12960*0.34 = $4406.4
Thus the net cash flow proceeds from the sale of machine are as follows,
NCF = 180,000 - 4406.4 + 20,000 = $195593.6
where $20,000 is the freed working capital.
Hope that helps.
Answer: True
Explanation: The Dividend Discount Model (DDM) is a quantitative method that is used in valuing a company's stock price based on the assumption that the current fair price of a stock is equal to the sum of all of the company's dividends in the future.
The Dividend Discount Model assumes that a dividend will grow constantly indefinitely. This assumption is safe for companies that are very mature and have an established history of regular dividend payments.
However, this model may not really be the suitable model to be used in valuing companies that are new and which have dividend growth rates that are fluctuating or have no dividend at all.
Answer: The correct answer is "c. Many people are bothered by pollution in the area".
Explanation: The Coase Theorem points out that if property rights are well defined and transaction costs are zero, the negotiation between the parties will lead us to an optimal point of allocation in the market.
Whoever keeps the right will depend on the value of what each party produces and the costs of losing the right to property.
However, Coase's theorem ceases to be valid when there are high negotiation costs, for example between a company and thousands of inhabitants of an area (like in this case) or when property rights are not well defined (all parties believe they have the right to do what they want).
Answer:
$62,960
Explanation:
Computation for the cost of goods sold for Year
Using this formula
Cost of goods sold for Year=Cash payments for inventory, purchased and manufactured -Increase in inventories during
Let plug in the formula
Cost of goods sold for Year=$64,713 million-$1,753 million
Cost of goods sold for Year=$62,960
Therefore the cost of goods sold for Year will be $62,960
Answer:
d. all of these.
Explanation:
Best-effort underwriting refers to the selling of shares or securities with best efforts involved. Generally it aims at maximum selling, the price is not in consideration, the number of shares sold is what matters.
Investment banks or underwriters do not care much about selling price as their commission is flat and fixed, irrespective of total revenue from sales.
Also there is no guarantee or agreement to sell specified number of securities, rather there is a promise to make best efforts for maximum sale.
