Answer:
$1,102,820
Explanation:
The computation of the net present value is shown below:
= Present value of yearly cash inflows - initial investment
where,
Present value of yearly cash inflows is
= Annual year cash inflows × PVIFA factor
= $300,000 × 2.9906
= $897,180
And, the initial investment is
= $1,500,000 + $500,000
= $2,000,000
So the net present value is
= $897,180 - $2,000,000
= $1,102,820
Answer:
The maximum that should be paid for the stock today is $45 per share.
Explanation:
To calculate the current share price or the maximum that should be paid for the stock today, we will use the dividend discount model approach.
The dividend discount model (DDM) estimates the value of a share/stock based on the present value of the expected future dividends from the stock. We will use the two stage growth model of DDM here as the growth in dividends of the stock is divided into two stages.
The formula for current price under two stage growth model is,
P0 = D0 * (1+g1) / (1+r) + D0 * (1+g1)^2 / (1+r)^2 + ... + D0 * (1+g1)^n / (1+r)^n +
[( D0 * (1+g1)^n * (1+g2)) / (r - g2)] / (1+r)^n
Where,
g1 is initial growth rate
g2 is the constant growth rate
r is the required rate of return
So, the price of the stock today will be,
P0 = 2 * (1+0.20) / (1+0.12) + 2 * (1+0.20)^2 / (1+0.12)^2 +
[( 2 * (1+0.20)^2 * (1+0.06)) / (0.12 - 0.06)] / (1+0.12)^2
P0 = $45
Answer: $200,000
Explanation:
The cost will be allocated to customer Y, if a cause-effect relationship cannot be established with any cost driver will be calculated thus:
Total sales = $600,000 + $400,000 + $200,000 = $1,200,000
The percentage of Y on total sales will be:
= $400,000/$1,200,000 × 100
= 1/3 × 100
= 33.33%
Therefore, the cost that's allocated to Y will then be:
= $600,000 × 33.33%
= $600,000 × 0.3333
= $200,000
Therefore, the correct answer is $200,000
Answer:
increase both aggregate supply and real output.
Explanation:
A rise in productivity makes it possible for each and every firm to rise the greater amount of output. due to this aggregate supply will rise which will lead to increase in the real output.
Also the rise in productivity increase the aggregate supply and the AS curve would be shifted to right that rise the real output but reduce the level of the price in the new equilibrium output level
Therefore the above represent the answer
Answer:
$6,450
Explanation:
Calculation to determine the balance in Cash for this design service business
Using this formula
Cash balance=Cash Amount invested+Cash Received-Rent- Equipment purchased-Supplies
Let plug in the formula
Cash balance=$7,000+$3,000-$700-$2,000-$850
Cash balance=$6,450
Therefore the balance in Cash for this design service business is $6,450
