Why might a business owner prefer to raise capital through a loan rather than through selling shares to an investor ?

On January 2, 2019, Twilight Hospital purchased a $96,400 special radiology scanner from Crane Inc. The scanner had a useful lif

Aneli [31]

The preparation of the incremental analysis of Twilight hospital is presented below:

<u>Particulars Retain scanner Replace scanner Net income </u>

Annual

operating cost $318,000 $243,000 $75,000

($106,000 × 3) ($25,000 × 3)

New

scanner cost $110,000 -$110,000

Old scanner salvage -$45,500 $45,500

Total $318,000 $307,500 $10,500

In this way, the incremental analysis should be prepared.

Learn more about the salvage value here: brainly.com/question/15711481

4 0

3 years ago

A term describing a firm's normal range of operating activities is: (a) Relevant range of operations. (b) Break-even level of op

OLga [1]

Answer:

A firm's normal range of operating activities is relevant range of operations.

Explanation:

Relevant range of operations can be described simply as a firm or company's expected range of activities without any extreme economic conditions. It is the range where the firm operates in normal conditions. Within this range the firm's operations run smoothly. Outside this range revenue and expenditure may fluctuate from what was expected.

7 0

3 years ago

The price of a stock is:_______.a) the future value of all expected future dividends, discounted at the dividend growth rate. b)

goldfiish [28.3K]

Answer:

The answer is D.

Explanation:

The price of a stock is also known as price of equity. This is the price the equity of a company is presently worth. The price the potential investors will be able to purchase it. One of the ways of calculating price of a stock is the Dividend Discount Model which can be calculated by:

Ke = (D1÷Po) - g

Ke is the Cost of equity(i.e the required rate of return for investors)

D1 is the next year dividend payments

Po is the price of the stock

g is the expected dividend growth rate

To get Po, we can rewrite the formula as:

Po = D1÷Ke - g÷Ke

We can see now that the expected future dividends will be discounted at the ''Ke'' which is the investors'required rate of return

5 0

3 years ago

A store has 5 years remaining on its lease in a mall. Rent is $1, 900 per month, 60 payments remain, and the next payment is due

photoshop1234 [79]

Answer:

a) No, since the present value of new lease is more than old.

b) Detailed information about the explanation is shown below

c) At 39.80% nominal WACC

Explanation:

a

PV of old and new lease terms

Old Cash Flow New Cash Flow

0 0 0 0

1-9 - 1900 1-9 0

10-60 - 1900 10-60 2700

NPER 60 NPER 60

rate 1% rate 1%

PV ($85,414.57) PV ($98,250.36)

PV ( 1%, 60, 1900) PV ( 1%,9,- PV(1%,51, 2700))

Should the new lease be accepted? <u> No, since the present value of new lease is more than old.</u>

b) If the store owner decided to bargain with the mall's owner over the new lease payment, what new lease payment would make the store owner indifferent between the new and the old leases?

For this part pv of old lease should be equal to pv of new lease at t = 9

85414.57 × (1.01)⁹ 93416.657

Nper 51

Rate 1%

New lease amount ( $2,347.26)

PMT (1%, 51,93416.66)

c)

Period Old Lease New Lease Change in lease

0 0 0 0

1-9 -1900 0 -1900

10-60 -1900 -2700 800

-1900

800

3.317% x 12 = 39.80%

IRR(Values 1:60)

The store owner is not sure of the 12% WACC - it could be higher or lower. At what nominal WACC would the store owner be indifferent between the two leases?

At 39.80% nominal WACC

4 0

3 years ago

In ________ organizational cultures, more individuality is shown through the organization's rules being less strictly applied.

kap26 [50]

Answer:

weak

Explanation:

An organization's culture describe the behavior of an organization. It comprised of the beliefs and values that should be shared in the organization

In the case when there is a weak organization culture so here the rules of the organization should be less strictly followed instead of more strictly followed as it is a weak organization structure

Therefore the weak should be the term that should be applied in the current situation

3 0

3 years ago