Answer:
C) Will increase by $100
Explanation:
We can calculate the expected profit by adding:
$6,000 x 10% = $600
$4,000 x 30% = $1,200
<u>-$2,000 x 60% = -$1,200</u>
expected profit = $600
If best profit increases to $,7000 then the new expected profit will be:
$7,000 x 10% = $700
$4,000 x 30% = $1,200
<u>-$2,000 x 60% = -$1,200</u>
expected profit = $700
The new expected profit is $100 larger than the previous expected profit.
Answer:
C. $11.03
Explanation:
We need to first compute the firm's value which is shown below.
Firm's value = Free cash flow ÷ (Weighted average cost of capital - Growth rate)
Firm's value = $4.7 million ÷ ( 10.8% - 3.7%)
= $4.7 million ÷ 7.1%
= $66,197,183
Stock price = (Firm value - Debt) ÷ Number of shares
= ($66,197,183 - $33,100,000) ÷ 3,000,000
= $33,097,183 ÷ 3,000,000
= $11.03
Answer:
The balance in retained earnings at December 31 is $264,000.00
Explanation:
The balance in retained earnings at December 31 can be computed using the below ending retained earnings formula:
ending retained earnings=beginning retained earnings+net income-dividends
beginning retained earnings was the opening balance of retained earnings at January 1 2020 which was $215,000
net income for the year is $130,000
dividends of $81,000 were paid
ending retained earnings=$215,000+$130,000-$81,000=$ 264,000.00
Answer:
The answer is 18%
Explanation:
Return on investment is defines as the revenue or profit that is earned by a business as a result of certain amount invested in a business or activity.
It is calculated by dividing profit realised by the amount invested.
The magazine subscription costs $45 a year, so for 3 years a subscriber pays 45*3= $135
However the amount he actually paid is $115 for the 3 years.
Gain in this transaction= 135- 115= $20
Return on investment= gain/amount invested
Return on investment= 20/115
Return on investment= 0.17391
Return on investment= 17.391%
This is closes to 18%