Answer:
$10.84
Explanation:
The computation of willing to pay today is shown below:
For this first we have to find out the present value that is shown below:
Year Dividend per share Present value Present value
interest factor @12%
1 $0.57 0.893 $0.509
2 $0.62 0.797 $0.494
3 $0.77 0.712 $0.548
4 $1.07 0.636 $0.681
Present value $2.232
Now the price for the fourth year is
= (Next year dividend) ÷ (Required rate of dividend - growth rate)
where,
Next year dividend = $1.07 + $1.07 × 3.8%
= $1.07 + 0.04066
= $1.11066
So, the price for the fourth year is
= ($1.11066) ÷ (12% - 3.8%)
= $13.545
Now the present value of fourth year dividend is
= $13.545 × 0.636
= $8.61
So the willing to pay today is
= $2.23 + $8.61
= $10.84
The interest earnings one gives up to hold more liquid assets are an opportunity cost.
What does a business' potential cost entail?
An opportunity cost illustration.
Opportunity cost is, to put it simply, what a business owner loses out on when choosing one course of action over another. It is a method for quantifying the advantages and dangers of any choice, resulting in more effective decision-making in general.
The opportunity cost of keeping money at home is Rs. 2000 per year as opposed to keeping it in the bank. As an easy example of opportunity cost, let's say a person has Rs. 50000 in his hand and has the choice to keep it with him at home or deposit it in the bank, which will yield interest of 4% annually.
Learn more about opportunity cost.
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Answer:
$192,000 million
Explanation:
Calculation for how much revenue should Parmac recognize in the current year
First step is to find the percentage of completion using this formula
Percentage of completion=Cost incurred/Total expected cost
Let plug in the formula
Percentage of completion=$144 million/$360 million
Percentage of completion=0.4*100
Percentage of completion=40%
Last step is to find the revenue recognized using this formula
Revenue recognized=Total contract *Percentage of completion
Let plug in the formula
Revenue recognized=$480 million*40%
Revenue recognized=$192,000 million
Therefore the amount of revenue that Parmac should recognize in the current year will be $192,000 million
The probability is 40%. You have a 40 people out of 100 that are male and gave favourable responses.
