Standardizing purchases is the approach most likely to be used for leverage purchases. Thus, the correct answer option is (d) ''standardizing purchases''.
Leverage purchases refer to the purchase of those assets for which people use a significant amount of borrowed money with the hopes of growing their money in the future. For example, if an individual takes out a loan to invest in their business, the investment the individual pour into theri business helps them to earn more money than if he would not pursue their venture at all. For leverage purchases, standardized purchases are the most useful approach. The standardized purchases approach defines a set of consistent rules for leverage purchases.
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Answer:
Losses for the producers of Waterworld, if they finished the movie would be <u>$50 million</u>. If they did not finish the movie, losses would be <u>$130 million.</u>
Explanation:
This is because, the difference between all their expenses in making the movie and the revenue generated is actually <em>$50 million</em>. This happens to be their losses while on the other-hand, if they didn't finish making the movie, it would be <em>$130 million </em>(aside the cost spent in finishing the movie after rebuilding the set)
Answer:
$66.78
Explanation:
Dividend Valuation method is used to value the stock price of a company based on the dividend paid, its growth rate and rate of return. The price is calculated by calculating present value of future dividend payment.
Value of Share = Dividend / (Rate of return - Growth rate)
P0 = D0 ( 1 + g ) / ( r - g )
where
P0 = Value of stock at time 0 / today = ?
D0 = Dividend paid at time 0 / current = $3.15
g = growth rate = 6%
r = rate of return = 11%
Placing all these values in the formula
P0 = $3.15 ( 1 + 6% ) / ( 11% - 6% )
P0 = $3.339 / 5%
P0 = $66.78
Answer:
The pound's forward discount or premium is 3.74%
Explanation:
The current spot rate is 1 Pound = $2
The interest rate parity exists, then:
The forward rate:
1 Pound*1.07 = $2*1.11
1.07 Pound = $2.22
1 pound = $2.0748
The Premium in Pound = $2.0748 - $2
= $0.0748
Premium rate = $0.0748/$2*100
= 3.74%
Therefore, The pound's forward discount or premium is 3.74%
