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2 years ago

Production activities are done as needed in order to satisfy a specific demand.

Business

1 answer:

worty [1.4K]2 years ago

7 0

Hi there!

Usually, this is the case. However, just like when hoverboards first came out, there was a shortage of hoverboards and production activities had to ramp up production. However, after a few months, production activities were at a high level, but demand petered out.

-AwesomeRepublic :)

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Computech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends.

sertanlavr [38]

Answer:

$9.687

Explanation:

Given:

Year 3 dividend = $1.00

Year4&5 growth rate = 17%

Constant rate = 7%

Required return rate = 16%

Year 4 dividend wil be:

D4 = 1.00 * 1+growth rate

= 1.00 * (1+0.17)

= $1.17

Year 5 dividend=

D5 = $1.17 * (1+0.17)

= $1.3689

Value of stock after year 5 will be given as:

$\frac{D5 * (1+growth rate)}{required return - growth rate}$

$= \frac{1.3689*(1+0.07)}{0.16-0.07}$

= $16.2747

For the current value of stock, we have:

Cv= Fd* Pv of discounting factor

Where Cv = current value of stock

Fd = future dividend

Pv = Present value of discounting factor

Therefore,

$C_v = \frac{1.00}{1.16^3} + \frac{1.17}{1.16^4} + \frac{1.3689}{1.16^5} + \frac{16.2746}{1.16^5}$

=$9.6871382455

≈ $9.687

The value of stock today =

$9.687

8 0

3 years ago

A firm has net income of $197,400, a return on assets of 8.4 percent, and a debt-equity ratio of .72. What is the return on equi

Karolina [17]

Answer:

C 14.45

Explanation:

Return on equity = .084 ×(1 + .72) = .1445, or 14.45 percent

8 0

2 years ago

On January 15, 2019, Dillon purchased the rights to a mineral interest for $3,500,000. At that time, it was estimated that the r

lutik1710 [3]

Answer:

$175,000

Explanation:

Depletion per Unit =$3500000 / 500000 = $7 per unit

25,000 units were sold during the year.

There are two ways of figuring depletion on mineral property.

1. Cost Depletion

2. Percentage Depletion

Generally, we must use the method that gives you the larger deduction.

Calculation of Cost Depletion:

Cost Depletion = Units Sold * Depletion Rate = 25,000 units * $7 per unit = 175,000

Calculation of Percentage Depletion:

Percentage Depletion = Gross Income from Property During the Year * Depletion Rate = 800,000 * 22% = 176,000

Percentage Depletion cannot be more than 50% of net taxable income from the property.

Percentage Limit = (Sales - Expenses ) * 50% = (800,000 - 500,000) * 50% = 300000*50% = 150,000

Thus Percentage Depletion is limited to $150,000

Thus, the deduction is $175,000 (Higher to Cost or Percentage Depletion)

7 0

3 years ago

When Bill's Diner moves from the production combination of 35 burgers and 25 hotdogs to the combination of 25 burgers and 65 hot

Aleonysh [2.5K]

Answer:

<h2>In the context of Consumer Theory or Indifference Curve involving two goods,the opportunity of any one good is computed by how much of the other good is foregone or sacrificed to purchase one more unit of that particular good.</h2>

Explanation:

In this instance,when Bill's diner consumes 35 burgers and 25 hotdogs,its opportunity cost of additional hot dog= $\frac{35}{25} =\frac{7}{5}=1.4$ .Therefore,initially Bill diner's opportunity cost of an additional hot dog is 1.4 units of burger.

Now,when Bill's diner chooses to consume a combination of 25 burgers and 65 hot dogs,its opportunity cost of additional hot dogs= $\frac{25}{65} =\frac{5}{13} =0.385$ approximately.Hence,Bill's diner is willing to sacrifice approximately 0.385 units of burger to consume an additional unit of hot dog.
Now,due to the change in consumption combination,the change in opportunity cost of additional hot dog= $(1.4-0.385)=1.015$ units of burger.Notice,that here the opportunity cost of additional hot dog decreased from 1.4 units of burger to 0.385 units of burger as Bill's diner changed the consumption combination of both burgers and hot dogs.

7 0

2 years ago

If inflation in the U.S. is projected at 3% annually for the next 5years and at 7% annually in Turkey for the same time period,

GrogVix [38]

Answer:

6.86011 Turkish liras per US dollar

Explanation:

US's inflation 3% for the next 3 years

Turkey's inflation 7% for the next 3 years

current Lira/Dollar spot rate (L/$) = 5.6702 (liras per dollar)

inflation rate US = (1 + 0.03)⁵ = 1.159274
inflation rate Turkey = (1 + 0.07)⁵ = 1.402552

difference = 1.402552 / 1.159274 = 1.20985 x current spot rate = 1.20985 x 5.6702 = 6.86011

Since the Turkish inflation rate is higher than the American inflation rate, then the Turkish lira will depreciate faster than the US dollar.

5 0

3 years ago