Answer:The cost of capital that will make both investments equal is 17.045%
Explanation:
Investment A
$1.5 million will be received in perpetuity we can there use perpetuity formula to Value investment A.
Value of Investment A = 1500 000/r
Investment B
$1.2 Million will be received in Investment B with a growth rate of 3% will then use Gordon's growth rate model to value investment B.
Value of investment B = (1200 000 x (1+0.03))/(r - 0.03)
Value of investment B = 1236000/(r - 0.03)
1500 000/r = 1236000/(r - 0.03)
1236000(r) = 1500000(r - 0.03)
(r - 0.03) = 1236000( r)/1500000
r - 0.03 = 0.824r
r - 0.824r = 0.03 = 0.176r = 0.03
r = 0.03/0.176 = 0.170454545
R = 17.045%
The cost of capital that will make both investments to be equal is 17.045%
Answer:
Explanation:
The preparation of the stockholders' equity section of the balance sheet for Donnie Hilfiger as of December 31, 2015 is presented below:
DONNIE HILFIGER
Balance Sheet
(Stockholders' Equity Section)
As of December 31, 2015
Common stock $350,000
Preferred stock $1,000,000
Additional paid in capital $3,200,000
Total paid in capital $4,550,000
Retained earnings $,1600,000
Total $6,150,000
Less: Treasury stock - $400,000
Total Stock holders equity $5,750,000
Answer:
service-oriented business
Explanation:
Ape.x verified
Answer:
a. A Strategic budget will be used by the upper management in planning for the next five years.
b. A flexible budget will be used by a store manager who wants to plan for different levels of sales.
c. A Cash budget will be used by an accountant who wants to determine whether the company has sufficient funds to cover expenses.
a. A Master Budget will be used by a CEO who wants to make companywide plans for the next year.
Explanation:
- Strategic budget, is finnancial planing to achieve the long term goals of the company.
- flexible budget is used for different level of sales volume.
- Cash budget usted for forescast the cash balance.
- Master Budget uses a schedule to present financial statements.
A news article details the destruction of a recent earthquake. Readers of the article likely to do as result are Overestimate their risk of earthquakes. Thus option A is correct.
<h3>What is Earthquake?</h3>
Earthquakes is referring to a kind of natural disaters which occurs due to the movement of tectonic plates. when these tectonic plates move and collapse with one another results in an earthquake.
When a news article shows destruction related to earthquakes people will most likely analyze their risk from earthquakes and evaluate whether they are safe from them or not.
Therefore, option A is appropriate.
Learn more about Earthquakes, here:
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