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nexus9112 [7]
3 years ago
9

Phillips industries runs a small manufacturing operation. for this fiscal year, it expects real net cash flows of $197,000. the

company is an ongoing operation, but it expects competitive pressures to erode its real net cash flows at 6 percent per year in perpetuity. the appropriate real discount rate for the company is 11 percent. all net cash flows are received at year-end. what is the present value of the net cash flows from the company's operations?
Business
1 answer:
Stolb23 [73]3 years ago
8 0

Answer: Present value of the cash flows of the company is $1,158,824.

Explanation: Philips industries have the cash flow for $197,000. The industry needs to find the present value of the cash flow and the cash flows growth is decreasing every year by 6%.

The present value of the cash flows for perpetuity with decreasing growth rate is:

Present value = Cash flow for year 1 (C1) / (discount rate - growth)

where, Cash flow for the year 1 (C1) = $197,000

Discount rate (r) = 11%

Growth rate (g) = -6%

Present value of the cash flows (PV) = $197000/[0.11 - (-0.060)]

Present value of the cash flows (PV) = $197000/0.17

Present value of the cash flows (PV) = $1,158,824

Therefore the present value of the cash flows of the company is $1,158,824.

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Answer:<u><em>If the monopolist's marginal revenue is greater than its marginal cost, the monopolist can increase profit by selling more units at a lower price per unit. </em></u>

Explanation:

If the monopolist's marginal revenue is greater than its marginal cost, the monopolist can increase profit by selling more units at a lower price per unit. In the case of higher MR , the maximum profit will come about at the level of where MR is equal to the MC. So in this case to increase the profit, MR i,e, also the price can be lower to the level of MC to sell more commodity and earn higher profits.

7 0
3 years ago
Lee Sun's has sales of $3,900, total assets of $3,600, and a profit margin of 5 percent. The firm has a total debt ratio of 41 p
sasho [114]

Answer:

The answer is 9.18 percent.

Explanation:

Return on equity = Net income(profit) / Total equity.

We need to find net profit and equity.

1. To find net income:

Profit margin = profit/sales

So profit = 0.05 x $3,900

= $195

2. To find asset:

Total debt ratio = total debt(liabilities)/ assets

Total debt = 0.41 x $3,600

Total debt(liabilities) = $1,476

Equity = Assets - liabilities

$3,600 - $1,476

= $2,124.

Therefore, return on equity is:

$195 /$2,124

0.0918

Expressed as a percentage

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7 0
4 years ago
Illiquid currencies tend to exhibit ________ volatile exchange rate movements, as the equilibrium prices of their currencies adj
Sunny_sXe [5.5K]

Answer:

B) More; even minor

Explanation:

Illiquid (or exotic) currencies are foreign currencies that are not generally traded in exchange markets. They trade at very low volumes and are usually extremely volatile since both the demand and supply is very limited. Since there are very few suppliers and consumers of exotic currencies, any additional transaction can result in large changes in their value.

3 0
3 years ago
Fink Insurance collected premiums of $17,900,000 from its customers during the current year. The adjusted balance in the Deferre
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Fink's revenue from insurance premiums for the current year is: $13,500,000

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Insurance premiums recognised for the current year -

Insurance collected + Beginning Deferred premiums account - Ending Deferred premiums account

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3 years ago
A firm is considering investing in a new machine that will last for 6 years. They expect the new machine to initially reduce the
Julli [10]

Answer:

-$155,000

Explanation:

The quantity of inventory that would be reduced= -105000

The decrease in parts inventory = 10000

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= -60000

Then the net working capital

= 105000 + 10000 - 60000

= $155000

Therefore the net working capital for this project in the sixth year is = -$155000

4 0
3 years ago
Read 2 more answers
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