Gross profit is equal to:

Enterprises face the challenge of deciding which investments to make and how to allocate scarce resources to competing projects.

Tema [17]

Answer: Business case

Explanation: In other to eliminate the dilemma posed by having to allocate resources particularly in those which are not readily available in abundance or having to choose between two or more different options, tasks or projects, managers are often faced with a decision dilemma which are is usually analysed by making a business case in other to identify the modalities attached with each project or task on the basis of risk, benefit attached, cost, timing of such projects and so on. This will enable managers to arrive at a reasonable justification to choose an option over the other which will yield a longterm return or benefit to the organization.

5 0

4 years ago

Jen's Fashions is growing quickly. Dividends are expected to grow at a 19 percent rate for the next 3 years, with the growth rat

Sedaia [141]

Answer:

Ans. Current Share Price=$33.85

Explanation:

Hi, we first have to establish the dividend for the first 3 years and the dividend when the growth rate falls off to a constant rate of 8% with the formula to find the present value of a perpetuity with constant growth rate. From there, we need to bring all the above cash flows to present value and that is the price of the share. The formula is as follows.

$Price=\frac{D1}{(1+r)^{1}}+\frac{D2}{(1+r)^{2} } +\frac{D3}{(1+r)^{3} } +\frac{D3(1+g)}{(r-g)} \frac{1}{(1+r)^{3} }$

To find D1, D2,and D3, we have to do this.

D1=Do(1+0.19)

D2=D1(1+0.19)

D3=D2(1+0.19)

Since 0.19 is the growth rate for 3 years. Everything should look like this

$Price=\frac{4.04}{(1+0.12)^{1}}+\frac{4.29}{(1+0.12)^{2} } +\frac{25.52}{(1+0.12)^{3} } +\frac{25.52(1-0.08)}{(0.12+0.08)} \frac{1}{(1+0.12)^{3} } =33.85$

notice that the sign of the last part do not coincide with the formula, that is because the growth rate from the first 3 years is -8%.

Best of luck.

7 0

4 years ago

On January 1, 20X1, Prim Inc. acquired all of Scrap Inc.â€™s outstanding common shares for cash equal to the stockâ€™s book valu

aliya0001 [1]

Answer:

Prima Inc.

1. c. Decrease depreciation expense and recognize no goodwill amortization

Rudd Corporation:

2. The amounts of Amortization and Goodwill Expense to be reported in Rudd's 20X8 financial statements are:

= d. $ 0 $ 0

3. The amount of the intercompany loans and profits that should be eliminated are:

. $100,000 $300,000

4. The amount of goodwill that should be reported as a result of this business combination is:

= c. $400,000.

Explanation:

Data and Calculations:

2. Recorded goodwill = $100,000

Estimated useful life = 5 years

Amortization and Goodwill Expense = $0

3. Intercompany loans = $100,000

Intercompany profits = $300,000

4. Long Corp.'s

Cost Fair Value

Cash $ 160,000 $ 160,000

Inventory 480,000 460,000

Property, plant and equipment (net) 980,000 1,040,000

Liabilities (360,000) (360,000)

Net assets $1,260,000 $1,300,000

Payment = $1,700,000

Goodwill (acquired) = $400,000 ($1,700,000 - $1,300,000)

3 0

3 years ago

Which of the following refers to the marketing activity in which a firm "ambushes" consumers with promotional content in places

dlinn [17]

The correct answer is choice 4, ambient advertising.

Ambient advertising is the practice of placing unusual advertisements or promotion content on items and in areas where consumers would net be expecting to see advertising. This ambient advertising may be in bathrooms, inside refrigerators, or many other areas where you would not expect to see advertising.

7 0

3 years ago

Which of the following is considered a low-risk investment?

KonstantinChe [14]

Certificates of deposit is considered a low-risk investment.

<h3><u>Explanation: </u></h3>

CD s or Certificates of Deposits are the accounts for making deposits and are offered by banks. These funds that you deposit in this account will be safer and it should be deposited for some specific time period. There will not be any uncertainty associated with this type of investments.

The interest rates will not be change based on any factors.But the advantage is that if you want to withdraw the invested amount before the maturity period there should be some penalties associated with that. So we can have several CD account to withdraw during the maturity dates.

6 0

3 years ago