Answer:
$1,384.24
Explanation:
The computation of the expected terminal enterprise value in year 2 is shown below:
Terminal value in year 2= Free cash flows for the year 3 ÷ (Capitalization Rate - growth rate)
= $88 million × (1 + 10%) × (1 + 10%) × (1 + 4%) ÷ (12% - 4%)
= $110.7392 ÷ 8%
= $1,384.24
Hence, the expected terminal enterprise value in year 2 is $1,384.24
We simply applied the above formula so that the approximate value could arrive
Answer and Explanation:
The journal entries are shown below:
For Vaughn:
Equipment $16,080
Accumulated Depreciation $25,460
To Equipment $37,520
To Cash $4,020
(Being the exchange is recorded)
For Bramble:
Equipment(new) $16,750
Accumulated Depreciation $13,400
Cash $4,020
Loss on exchange(balance item) $3,350
To Equipment(old) $37,520
(Being the exchange is recorded)
Only these entries are passed and it attains lacking of commercial substance
Answer:
Annuity
Explanation:
Life Insurance & Annuity have opposite goals.
Life Insurance provides insured person's family with lump sum payment, after individual dies.
Annuity provides insured person with assured income streams, throughout his or her lifetime.
They are opposite as one facilitates lifetime income security, however the other after life financial security.
Answer: B. Both firm A and firm B choose the low price.
Explanation:
Both firm A and Firm B will choose the low price and make profits of $3 if there is no cooperation.
This is because at any other price, the other firms could go with the low strategy and get more profit.
For instance, if Firm A is using a low price and Firm B is using a high price then Firm A makes profit of $10 whilst B makes $1.
Conversely, if Firm B charges a low price and A a high price, A will make paltry profits of $1 while B would make $10.
Their best option therefore is to both pick the low price and make $3.
If they were cooperating they could both charge a high price and make $5 each.
Your question was incomplete so I attached the payoff matrix.
B, because monopolistic market sells homogeneous goods.When a firm raises its price,it loses all of the customers