Answer:
a. Four-firm concentration ratio is the total sales percentage of the top 4 burger shops in the industry;
= 25% + 24% + 18% + 12%
= 79%
b. Herfindahl index is the sum of the squares of the percentage sales of all the shops in the industry;
= 25² + 24² + 18² + 12² + 11² + 6² + 4²
= 1,842
c. Top 3 shops combine to form one shop.
= 25 + 24 + 18
= 67%
Four-firm ratio = 67% + 12% + 11% + 6%
= 96%
Herfindahl index = 67² + 12² + 11² + 6² + 4²
= 4,806
Answer:
d) $228,000 outflow
Explanation:
Calculation for the amount that the salaries should be reflected in the analysis
Using this formula
Salaries=Salaries expense-(Salaries expense*Tax rate)
Let plug in the formula
Salaries=$380,000-($380,000*40%)
Salaries=$380,000-$152,000
Salaries=$228,000 Outflow
Therefore salaries should be reflected in the analysis by a: $228,000 outflow
Answer:
The correct answer is letter "B": The rate of return decreases.
Explanation:
Net Present Value or NPV is a mathematical calculation used to determine if a project could be profitable or not. NPV is obtained by subtracting the present value of outflows from the present value of inflows, In case NPV is positive, it is expected a project will provide the firm profits, while a negative NPV implies the company incurring in losses.
<em>The Rate of Return (RoR) has an inverse relation with the NPV meaning if the RoR decreases the NPV will increase and vice versa.</em>
Answer:
The Current price of stock $35.20
Explanation:
The computation of the current share price is shown below:
Particulars Dividend PVF at 14% Present value
D1 $ 7.50 0.877 $6.58
D2 $8.25 0.769 $6.35
D3 $15.00 0.675 $10.12
D4 $1.80 0.592 $1.07
D5 $1.87
P4 $18.72 0.592 $11.08
1.87 ÷ (14% - 4%)
Current price of stock $35.20
Investors can receive compounding returns by investing their earnings back into their original investment. For example, if they earn $10 from a stock they invested in, they would place that $10 back into the stock that earned them that money.
