Answer:$364,520 is the year end stock
Explanation:
Stock records at year end. 300,370
1. Add $58,510, ownership of good on fob remains with vendor until delivery.
2.ignore $95240 from closing stock because they have not been receive at year end
3.1gnore $ 23,320 from closing stock because they have not been receive at year end
4. Include 50,750 in closing stock because they have not been deliver at year end.
5. Exclude $45110 from closing stock because they were not receive at year end.
Answer:
Each share worth is $2.59
Explanation:
According to the given data we have the following:
D1 = Cash Flow at the end of year 1 = $ 10 million
r = Cost of Capital = 10% = 0.1
g = perpetual growth of cash flows
Hence, The present value of Cash Flows = D1/(r-g)
= 10/(0.1-0.03)
=10/0.07
= $ 142.8571428571 million
= $ 142.86 million
To find the equity value we need to remove the net debt from cash flows
Net Debt = Debt - Cash
= 22 - 8.5
= $ 13.5 million
Now net cash flows = Cash Flows - Net Debt
= 142.86 - 13.5
= $ 129.36 million
Therefore, each share worth = Present Value of Cash Flow / No of Outstanding Shares
= 129.36 / 50 (Both values are in millions so the zeros are ignored)
= 2.5872
= $2.59
Each share worth is $2.59
Answer:
The proper cash flow amount to use as the initial investment in fixed assets when evaluating this project is $35,640,000.
Explanation:
Cash flow = Opportunity costs + cost + upgrdation
= $11.7 million + $22.9 million + $1,040,000
= $35,640,000
Therefore, The proper cash flow amount to use as the initial investment in fixed assets when evaluating this project is $35,640,000.
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Answer:
Intrinsic value of a firm is the actual value of the firm, and not the market price of the share based value.
Explanation:
Intrinsic value is generally computed using the asset based method, as per this method we compute the actual value of each asset in the firm separately, and then deduct the value of liabilities from it. In this manner, we estimate the current value of the firm.
Whereas the market value is computed using the stock price of in the market.
As the market value is based solely on the market value of the stock, it does not consider sometimes the actual circumstances, as for example, the land value of the firm might be 10 times more than the value recorded in the books. Because it is recorded at historical cost, although the current value is generally more of a well established firm.