Which of the following statements are consistent with how inflation affects the three functions of money? Check all that apply.

A buyer makes and signs a written offer. The seller writes in one small change to the offer and signs it. This document is known

SVEN [57.7K]

Answer:

The correct answer is letter "D": a counteroffer.

Explanation:

A counteroffer is any offer made after an initial offering. It is valid only if both parties in a commercial transaction accept it. Counteroffers imply the initial offering was rejected by one of the parties involved in the transaction, thus, the terms must be reviewed until the parties reach an agreement. Otherwise, the contract would not proceed.

6 0

3 years ago

Which of the following would not involve a capital-budgeting analysis?

JulijaS [17]

Answer:

The correct answer is B. The adoption of a new cost driver for overhead application.

Explanation:

This option is chosen because it is not directly related to organizational capital, or the production of goods or the provision of services. Otherwise it happens with options A and C, which does merit an analysis of the capital budget.

Option B is only taken into account in the analysis of the sales budget or production costs.

7 0

3 years ago

Jones Blanket Company sells blankets for $25 each. The variable cost of each blanket is $10. If fixed cost is $4,500,000, the

Nutka1998 [239]

Answer:

given statement is true

Explanation:

given data

sells blankets = $25 each

variable cost = $10

fixed cost = $4,500,000

break minus even point = 300,000 units

to find out

true/ false

solution

we will check here break minus even point for find true or false

so here

Contribution is express as = sells blankets - variable cost

Contribution = $25 - $10 = $15

so

break minus even point = $\frac{fixed \ cost}{Contribution}$

put here value

break minus even point = $\frac{4500000}{15}$

break minus even point = 300,000

so we can say given statement is true

8 0

3 years ago

at is Dantzler's horizon, or continuing, value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Ye

dybincka [34]

Answer:

a. Horizon Value = $856 million

b. Firm’s value today = Value of Firm = $641.61 million

c. Current Price per Share = $32.72

Explanation:

Note: This question is not complete. The complete question is therefore provided before answering the question as follows:

Dantzler Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCFS) during the next 3 years, after which FCF is expected to grow at a constant 7% rate. Dantzler's WACC is 12%.

Year FCF ($ millions)

0 -

1 -$18

2 $25

3 $40

a. What is Dantzler's horizon, or continuing, value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.) Round your answer to two decimal places. Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. million

b. What is the firm's value today? Round your answer to two decimal places. Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. Do not round your intermediate calculations. million

c. Suppose Dantzler has $20 million of debt and 19 million shares of stock outstanding. What is your estimate of the current price per share? Round your answer to two decimal places. Write out your answer completely. For example, 0.00025 million should be entered as 250.

The explanation of the answers is now given as follows:

a. What is Dantzler's horizon, or continuing, value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.) Round your answer to two decimal places. Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. million

Horizon Value = Year 3 FCF * (100% + Constant growth rate) / (WACC – Constant growth rate) = $40 * (100% + 7%) / (12% - 7%) = $856 million

b. What is the firm's value today? Round your answer to two decimal places. Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. Do not round your intermediate calculations. million

Value of Firm = (Year 1 FCF /(100% + WACC)^1) + (Year 2 FCF / (100% + WACC)^2) + ((Year 3 FCF + Horizon value) / (100% + WACC)^3)

Value of Firm = (-18/(100%+12%)^1+(25/(100%+12%)^2)+((856+40)/(100%+12%)^3))

Value of Firm = $641.61 million

c. Suppose Dantzler has $20 million of debt and 19 million shares of stock outstanding. What is your estimate of the current price per share? Round your answer to two decimal places. Write out your answer completely. For example, 0.00025 million should be entered as 250.

Current Price per Share = (Value of Firm – Debt) / Number of shares of stock outstanding = (641.61 - 20) / 19 = $32.72

7 0

3 years ago

Celine Co. will need €500,000 in 90 days to pay for German imports. Today's 90-day forward rate of the euro is $1.07. There is a

harkovskaia [24]

Answer:

$1,000

Explanation:

The computation of the expected value of the real cost of hedging payable is shown below:-

Real cost of hedging 1 = (€500,000 × $1.07 × (90 ÷ 360)) - (€500,000 × $1.02 × (90 ÷ 360))

= $133,750 - $127,500

= $6,250

Real cost of hedging 2 = (€500,000 × $1.07 × (90 ÷ 360)) - (€500,000 × $1.09 × (90 ÷ 360))

= $133,750 - $136,250

= -$2,500

Expected value of the real cost of hedging payable = (Real cost of hedging 1 × Spot rate Given Percentage) + (Real cost of hedging 2 × Given percentage)

= ($6,250 × 0.40) + (-$2,500 × 0.60)

= $2,500 - $1,500

= $1,000

7 0

3 years ago