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damaskus [11]
3 years ago
14

Lara Technologies is considering a total cash outlay of $250,000 for the purchase of land, which it could lease out for $35,000

per year. If alternative investments are available that yield a 12% return, the opportunity cost of the purchase of the land is a. $30,000 b. $4,200 c. $250,000 d. $35,000
Business
1 answer:
o-na [289]3 years ago
3 0

Answer:

opportunity cost = 30,000

Explanation:

The opportunity cost is the return in the alternative investment:

250,000 x 12% = 30,000 opportunity cost

The economic profit would be the  lease less the opportunity cost

35,000 - 30,000 = 5,000 economic profit

<u>Note: If there was two or more alternatives, </u>we should pick the investment with the highest yield.

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Conversion cost is the sum of a.selling cost and administrative costs. b.product costs and period costs. c.direct labor cost and
defon

Answer:

The answer is  c.direct labor cost and overhead costs.

Explanation:

Conversion costs include direct labor and overhead expenses incurred in the process of converting raw materials into finished products

8 0
2 years ago
For the year, Wilson Manufacturing, Inc. increased its current assets by $62,000, decreased its current liabilities by $55,000,
Oksana_A [137]

Answer:

investment cash flow is $19,000

Explanation:

given data

current assets = $62,000

current liabilities = $55,000

fixed assets = $19,000

to find out

investment cash flow for the year

solution

as we know that cash flows increase or decrease as the result of change in the fixed assets is consider to be cash flows by investment activities

and Changes in working capital cash flow is operating cash flows not investment cash flows

so we can say that

investment cash flow is $19,000

8 0
2 years ago
Transactional leadership ______.
borishaifa [10]

Answer:

Letter c is correct. <em><u>Is found in the bulk of leadership models.</u></em>

Explanation:

The transactional leadership style is characterized by organization, supervision and performance. It is a common leadership model in most leadership models because it is based on goal achievement.

The leader behaves like a boss, requires compliance with organizational standards, and analyzes the performance of each employee to determine the matching reward. Transactional leadership is compared to the principles of Scientific Management, there are no concerns of the manager with motivational factors that influence the team, but with the fulfillment of demands and optimal organizational flow.

Despite being a less flexible leadership model, the benefits of the model are gained through the performance reward system, which positively influences employee productivity.

6 0
3 years ago
What is a target audience and why is it important to consider when creating a multimedia presentation?
ss7ja [257]

A target audience is the group that you are trying to attract. It is important to have one for your multimedia presentation because it is impossible to appeal to all groups, so you must narrow down who you are trying to reach.

A target audience is the group or demographic that you are aiming the multimedia presentation at. A target audience may include things like a specific gender, age group, marital status or income level.

A target audience is important when creating a multimedia presentation because you want to attract attention, but it is impossible to attract everyone’s attention. You need to include features that will appeal to your target audience. These features may include photos, music or topics that will appeal to a particular group.

4 0
3 years ago
You must estimate the intrinsic value of Lowell Technologies’ stock. The end-of-year free cash flow (FCF1) is expected to be $30
Hunter-Best [27]

Answer:

Firm's estimated intrinsic value per share of common stock = $40.00

Explanation:

Intrinsic value:

Intrinsic value is a way of describing the perceived or true value of an asset.

Formula:

Intrinsic value = free cash flow / required rate - growth rate

As the end-of-year free cash flow (FCF1) = $30  and it is expected to grow at a constant rate of 5.0% a year thereafter.

so FCF2 = 30 (1 + 5%)

FCF2 = 31.5

Value at year 1 = FCF2 / required rate - growth rate

Therefore by putting the values in the above formula, we get

Value at year 1 = 31.5 / 0.08 - 0.05

Value at year 1 = 31.5 / 0.03

Value at year 1 = 1,050

As the company’s WACC is 8.0%, so

Value today = 30 / (1 + 0.08)1 + 1,050 / (1 + 0.08)1

Value today = $1,000 million

As stated in the question it has $200 million of long-term debt, and there are 20.0 million shares of common stock outstanding.

Intrinsic value = (1,000 - 200) / 20

Intrinsic value = $40.00

8 0
3 years ago
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