Answer:
The company's cost to produce 1,000 gallons of product B is $7,131.25.
Explanation:
This can be calculatd as follows:
Product B share of joint cost = (Product B sales value / (Product B sales value + Product A sales value)) * Cost to split-off point = ($32.20 / ($32.20 + $3.00)) * $5,500 = 0.914772727272727 * $5,500 = 5,031.25
Product B total additional separable process beyond split-off = Additional cost per gallon * Number of gallons of product B produced = $2.10 * 1,000 = $2,100
Therefore, we have:
Company's cost to produce 1,000 gallons of product B = Product B share of joint cost + Product B total additional separable process beyond split-off = 5,031.25 + $2,100 = $7,131.25
Therefore, the company's cost to produce 1,000 gallons of product B is $7,131.25.
Answer:
.b. It is appropriate to use the constant growth model to estimate a stock's value even if its growth rate is never expected to become constant
TRUE The multi-stage valuation considers different grow rates for the subsequent years
Explanation:
a. Two firms with the same expected free cash flows and growth rates must also have the same value of operations
FALSE as their cost of capital can differ.
c. If a company has a weighted average cost of capital WACC = 12%, and if its free cash flows are expected to grow at a constant rate of 5%, this implies that the stock's dividend yield is also 5%.
FALSE dividend yield is a relationship between price and dividend it doesn't considers the growth of the company, just current values.
d. The value of operations is the present value of all expected future free cash flows, discounted at the free cash flow growth rate
FALSE They are discounted at the difference between return and grow rate
e. The constant growth model takes into consideration the capital gains investors expect to earn on a stock.
FALSE It considers the capital gains as speculations
Answer:
4,444.44 units
Explanation:
For the computation of Number of units to be sold to earn target profit first we need to follow some steps which are shown below:-
Selling price per unit = Sales ÷ Number of units sold
= $300,000 ÷ 5,000
= $60
Variable cost per unit = Total variable cost ÷ Number of units sold
= $180,000 ÷ 5,000
= $36
Increase in selling price = $60 × 5%
= $3
New selling price per unit = $60 + $3
= $63
New contribution margin per unit = New selling price per unit - Variable cost per unit
= $63 - $36
= $27
Number of units to be sold to earn target profit = (Fixed cost + Target profit) ÷ Contribution margin per unit
= ($90,000 + $30,000) ÷ $27
= $120,000 ÷ $27
= 4,444.44 units
Answer: a decrease in U.S. next exports and increase in U.S. investment
Explanation:
Net export is the measure of a country's total trade. Net exports can be calculated by subtracting the value of all goods and services a county imports from the value of the total goods and services the country exports.
When exports reduce and imports increase, then the net exports (exports ‐ imports) will reduce. Since the U.S. company buys a new industrial sewing machine from a company that is located in France, this means that the U.S net export will decrease.
The sewing machine can be used for the production of cloth. This will lead.to an increase in investment.
