Simple teasing, offhand comments, and isolated incidents that are not very serious are not

Landrum Corporation is considering investing in specialized equipment costing $250,000. The equipment has a useful life of 5 ye

aalyn [17]

Answer: ARR = Average profit/Initial outlay x 100

ARR = $19,000/$250,000 x 100

ARR = 7.60%

The correct answer is C

Depreciation = Cost - Residual value/Estimated useful life

= $250,000 - $20,000/5 years

= $46,000 per annum

Average profit = Total profit/No of years

= $325,000/5

= $65,000

$

Average profit 65,000

Less: Depreciation 46,000

Average profit after depreciation 19,000

Explanation: In determining the accounting rate of return of the investment, there is need to calculate depreciation using straight line method. The amount of depreciation would be deducted from the average profit so as to obtain the average profit after depreciation. The average profit would be divided by the initial outlay in order to obtain the accounting rate of return.

5 0

2 years ago

A company currently pays a dividend of $2.8 per share (D0 = $2.8). It is estimated that the company's dividend will grow at a ra

Vinil7 [7]

Answer:

Intrinsic value: 53.41 dollars

Explanation:

First, we use the CAPM model to know the value of the stock

$Ke= r_f + \beta (r_m-r_f)$

risk free 0.085

premium market =(market rate - risk free) = 0.045

beta(non diversifiable risk) 1.3

$Ke= 0.085 + 1.3 (0.045)$

Ke 0.14350

Now we need to know the present value of the future dividends:

D0 = 2.8

D1 = D0 x (1+g) = 2.8 * 1.23 = 3.444

D2 3.444 x 1.23 = 4.2361200

The next dividends, which are at perpetuity will we solve using the dividned grow model:

$\frac{divends}{return-growth} = Intrinsic \: Value$

In this case dividends will be:

4.23612 x 1.07 = 4.5326484

return will be how return given by CAPM and g = 7%

plug this into the Dividend grow model.

$\frac{4.5326484}{0.1435 - 0.07} = Intrinsic \: Value$

value of the dividends at perpetity: 61.6686857

FInally is important to note this values are calculate in their current year. We must bring them to present day using the present value of a lump sum:

$\frac{Principal}{(1 + rate)^{time} } = PV$

$\frac{3.444}{(1 + 0.1435)^{1} } = PV$

3.011805859

$\frac{4.23612}{(1 + 0.1435)^{2} } = PV$

3.239633762

$\frac{61.6686857}{(1 + 0.1435)^{2}} = PV$

47.16201531

We add them and get the value of the stock:

53.413455

5 0

3 years ago

Plz helpp ill love u forever

LiRa [457]

Answer:

The answer is A.

Explanation:

In each other presentation, choosing the “Reuse Slides” tool and then browsing to find the credits slide in the original presentation.

Brainliest please!!!!!!!!!

5 0

2 years ago

A reading researcher does what

Dmitry_Shevchenko [17]

Answer:

They reveal how the author(s) interpreted the findings of their research and presented recommendations or courses of action based on those findings.

Explanation:

7 0

2 years ago

9. Mackenzie PLC is considering expanding a production line. The new equipment for the line will cost $255,000. In addition, the

NNADVOKAT [17]

Answer:

Net Present Value = $59,632.78

Explanation:

<em>The net present value NPV) of a project is the present value of cash inflow less the present value of cash outflow of the project. </em>

<em>NPV = PV of cash inflow - PV of cash outflow </em>

Present value of cash inflow:

65,000 × (1.09375)^(-1) + 98000 ×(1.09375)^(-2)+ 126,000 ×(1.09375)^(-3)+ 132,000 × (1.09375)^(-4)= 326882.7792

PV of annual maintenance cost :

=1,500 × (1- 1.09375^(-4))/0.09375

=4819.84773

NPV = 26882.7792 - 4819.84773 - (255,000+12250)

= 59,632.78

8 0

3 years ago