Answer:
The market value of Lotle Group is $ 83.53.
Explanation:
The market value of Lotle Group can be calculated by dividing the perpetual net operating income (EBIT) with company WAAC. Detail calculation is given below.
MW = EBIT/WAAC = $ 9/10.775% = $ 83.53
<u><em>WAAC Calculation</em></u>
WAAC = 14%*(50/80)% + 9%(0.60)(30/80)
WAAC = 8.75% + 2.025% = 10.775%
<u>Solution and explanation</u>
Present value of the $1,500 monthly payments is
PMT $1,500
Annual Rate 6.05%
Number of period (NPER) 420
Present value Annuity (PVA) (calculated in excel using PV function) $261,528.41
$261,528.41
Cost of Home $310,000
Amount of principal still owe = $310,000 - $261,528.41 $48,471.59
Balloon payment in 35 years, which is the FV of the remaining principal =
Present Value $48,471.59
Annual Rate 6.05%
Number of period (NPER) 420
Future Value (calculated in excel using FV function) $400,677.90
Balloon payment = $400,677.90
Answer:
Performing a horizontal Analysis
Explanation:
Particularly in the case of investigating fraud and error, horizontal changes are the most direct way of focusing on changes because rather than the vertical which looks at the change as a percentage of Sales or Total Assets, the horizontal looks at change in each item from period to period, and takes the change amount as a percentage of the initial year's amount. i.e (Year 2 amount - Year 1 amount) / Year 1 amount = % Change in item in consideration.
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D. the shareholders decide who sits on the board of directors