Answer:
b.The company made large investments in fixed assets.
Explanation:
When company cuts dividend , cash in balance sheet will not reduce . It wii be in the form of reserve.
When company makes investment in fixed asset , its cash will decrease.
When the company sold a division and received cash in return , its cash will increase.
The company issued new common stock , its cash will increase .
The company issued new long-term deb , its cash increases .
So option b is correct.
Answer:
a. 54
b. 810 dollars
c. 390 dollars
d. 75 pictures
e. 561.6 dollars and 562.5 dollars
f. 38 pictures
Explanation:
demand per week = 18 pictures
annually this demand = 18 *52 = 936
charge per unit = 60 dollars
order for 6 weeks = 6*18 = 108 quantities
cost of ordering = 45 dollars
cost of holding annually = 15 dollars
a. current average inventory
= (18*6)/2
= 54 pictures
b. current annual holding cost
(108/2)*15
= 810 dollars
c. current annual holding cost
= 936/108 * 45
= 390 dollars
d. size orders to be placed
= 
= 
= 74.9
≈ 75 pictures have to be ordered
e. ordering holding cost per picture
936/75 * 45
= 561.6 dollars
and inventory holding cost per picture
= 75/2 * 15
=562.5 dollars
f. shop inventory per year at optimal ordering quantity
= 75/2
= 37.5
≈ 38 pictures
Explanation:
Let’s explore one by one as proposed:
An oil cartel raises oil prices: all prices in the oil-related products will increase making it more expensive for companies to be able to afford employees. As the US economy is heavily based on oil import and consumption, the unemployment rate (let´s call it UR from now on) would increase. Countries that export more than import could benefit from this scenario.
The U.S. dollar gains value against foreign currencies: It would be more expensive to produce goods in the US as its currency becomes stronger. Hence companies could choose to produce overseas, increasing the UR. One of the factors that attract investments is a cheap currency, meaning that a company could operate there at lower costs than anywhere else.
American consumers expect higher income in the future: As fights about average salary would arise between employees and companies, igniting even sindicalization, its proper to think that the same as above could occur; companies could choose to produce overseas in countries less demanding of labor rights and income, such as China provinces (I would recommend for you to watch American Factory, a awarded Netflix documentary about that subject).
Brazil experiences economic growth and increases its demand for U.S. exports: as I said in the first alternative, a country that has increased or more expensive exports could benefit from that creating more jobs, in this case decreasing the UR. If Brazil demands more US products, more has to be produced by the country, which would mean more people employed in this attractive sector.
U.S. real estate values rise: to be honest, it only affects indirectly. As housing becomes more expensive, people have to work more to be able to afford housing. That would mean they seeking better-paying jobs or in the absence of those being homeless of at least unable to buy a home. We could argue that the UR would decrease because it becomes more expensive to afford housing and hence people would migrate more but that’s a long shot rationale.
Answer:
a)
$50 = $2 / (16% - g)
16% - g = $2 / $50 = 4%
g = 16% - 4% = 12%
expected growth rate = 12%
b)
P₀ = $2 / (16% - 5%)
P₀ = $2 / 11%
P₀ = $18.18
c)
P/E ratio = share price / EPS
since the share price decreases from $50 to $18.18, the P/E ratio will decrease. When you are dividing a number, if the numerator decreases while the denominator remains still, the answer will decrease.
