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AURORKA [14]
3 years ago
13

Justus Motor Co.has a WACC of 11.50%, and its value of operations is $25.00 million. Justus's free cash flow is expected to grow

at a constant rate of 7.00%. What was the last free cash flow, FCF0 in millions?a. $0.95b. $1.05c. $1.16d. $1.27e. $1.40
Business
1 answer:
lakkis [162]3 years ago
4 0

Answer:

FCF_0=1.05

So option (b) is correct option

Explanation:

We have given value of operation PV = $25.00

WACC, that is Ke = 11.50% = 0.1150

It is grow at a constant rat of 7 % so g = 0.07

We have to find the value of FCF_0

We know that value of operation is given by

PV=\frac{FCF_0(1+g)}{Ke-g}

So 25=\frac{FCF_0(1+0.07)}{0.1150-0.07}

FCF_0=1.05

So option (b) is correct option

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Paula Boothe, president of the Armange Corporation, has mandated a minimum 10% return on investment for any project undertaken b
Vlad1618 [11]

Answer:

Residual income= $36,000

Explanation:

Residual income is the income that is generated in excess of the minimum required rate of return, which in this case is 10%. Any income above 10% return is considered as residual income. In this case the investment is 1,800,000 and 10% of that is 180,000 (0.1*1,800,000). So any income made above $180,000 will be residual income. In order to find the residual income we subtract the minimum income required from the actual income.

In this case the minimum income required is 180,000 and the actual operating income is 216,000 so residual income=

216,000-180,000= $36,000

4 0
3 years ago
In the past, the policy-making relationship between states and the federal government was called ______, since there was clear s
jeka94

In the past, the policy-making relationship between states and the federal government was called Dual federalism, since there was a clear separation of policy responsibility between the two levels.

Dual federalism, also known as hierarchical federalism or shared sovereignty, is a political arrangement in which powers are clearly divided between federal and state governments, with state governments exercising delegated powers without federal interference. .

Even the House and Senate are examples of dual federalism. Both houses may be involved in approving federal laws that affect different states and require state involvement, but issues can only be passed through the senator's desk or state senators. representative.

Learn more about Dual federalism here: brainly.com/question/5544302

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7 0
1 year ago
How do society, politics, and culture affect HRM?
saul85 [17]

Explanation:

Human resource management is responsible for attracting, retaining and helping employees to develop skills that will contribute to an organization achieving its objectives and goals.

Therefore, this strategic business area is directly impacted by society, politics and culture, as human capital in companies is increasingly valued in companies, as today's society is more connected and more informed, which requires companies to adapt to increasingly developed and organized standards with respect to labor relations.

The globalized world directly impacted the relationship between the employee and the company, as it is necessary to stand out in an environment where there is so much competition, and this is also included in the area of ​​human resources, because through an effective HR management, it is possible to capture and retaining talent for the organization that adapts to a world where there is greater interaction, greater need for innovation and vision.

The policy is also essential for the protection of employees and their rights, which means that HR must not only comply with legislative requirements for hiring, but also offer benefits that exceed those required, so that candidates are attracted to work in a company well positioned in the market.

8 0
3 years ago
It is not possible for abandonment options to decrease a project's risk as measured by the project's coefficient of variation.
Tatiana [17]

This is false abandonment options should decrease a project's risk.

4 0
2 years ago
In the theory of perfect competition, the assumption of easy entry into and exit from the market implies:_____.
Hitman42 [59]

The assumption in perfect competition that there is an easy entry and exit from the market implies that firms will make a zero economic profit in the long run.

<h3>Why do firms make a zero economic profit?</h3>

In a pure competition, companies are allowed to freely enter and leave.

They take advantage of this to enter a market when prices are high and economic profit is being made.

As more firms enter, the economic profit keeps decreasing as prices decrease until this profit gets to zero and then turns to economic losses.

At this point, some firms will leave the market to stop making losses. When they do, the supply will decrease which leads to prices rising once more.

The cycle will then repeat itself and keep the companies at a zero economic profit in the long run.

Find out more on perfect competitions at brainly.com/question/1748396

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3 0
2 years ago
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