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kkurt [141]
3 years ago
10

An analyst seeks to determine the value of Bulldog Industries. After careful research, the analyst believes that free cash flows

for the firm will be $80 million in the upcoming year (year 1) and will grow at 10% annually for each of the two following years (years 2 and 3). The free cash flows will grow at a rate of 5% after year 3. What is the Terminal Value (in millions of $) of Bulldog at the end of year 3 at a WACC of 10%?
Business
1 answer:
Reil [10]3 years ago
3 0

Answer:

$2,033

Explanation:

The computation of the terminal value at the end of the year 2 is shown below:

= {Free cash flow of the firm × (1 + growth rate) × (1 + growth rate) + (1+ growth rate)} ÷ (WACC - growth rate)

= {($80 million × (1 + 0.10) × (1 + 0.10) × (1 + 0.05)} ÷ (10% - 5)

= $101.64 ÷ 0.05

= $2,033

We simply applied the above formula so that the Terminal value could arrive

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In the case of ________, it was determined that a test for promotion of firefighters to certify test scores was discarded becaus
Vladimir [108]

Answer:

Ricci vs. DeStefano

Explanation:

This case is a US labor law case that occurred in 2009, where twenty (20) firefighters at the New Haven Fire Department claimed to be discriminated against because they were refused promotion despite the fact that they passed the test.

More noticeably, no blacks and a very small number of Hispanics qualified for the promotion.

The result of the lawsuit was that $2 million was paid to the firefighter plaintiffs and New Haven reestablished the results and promoted 14 out of the 20 plaintiffs. For fees and costs, their attorney Karen Lee Torre was paid $3 million.

6 0
3 years ago
Two different manufacturing processes are being considered for making a new product. The first process is less capital-intensive
baherus [9]

Answer:

700 units

Explanation:

FC1 : Fixed Costs from process 1

VC1 : Variable cost per unit from process 1

FC2 : Fixed Costs from process 2

VC2 : Variable cost per unit from process 2

FC1 = $50,000

VC1 = $700 per unit

FC2 = $400,000

VC2 = $200 per unit

To calculate the break-even (quantity) point we must equate the TC1 (Total cost of process 1) to TC2 (Total cost of process 2)

TC1 = TC2

FC1 + VC1(y) = FC2 + VC2(y)      where y is the break-even units

50,000 + 700y = 400,000 + 200y

500y = 350,000

y = 350,000 / 500

y = 700 Units

7 0
3 years ago
Read 2 more answers
Mackie Services operates a website that links experienced statisticians with businesses that need data analyzed. Statisticians p
jasenka [17]

Answer:

d. Revenue of $375

Explanation:

The amount paid by the Vetmed associates is an expense for associates

The amount received by statisticians is a revenue for them

Mackie Services an intermediate between the two and so, the percentage amount received by Mackie Services is a revenue

Mackie's income statement would include a revenue of:

= Amount paid to statisticians * % Received

= $1,500 * 25%

= $375

6 0
3 years ago
Kouba Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.52 direct labor-
Anvisha [2.4K]

Answer:

Kouba Corporation

Direct labor budget for April and May:

                                                         April           May

Production in units                         1,700          1,600

Direct labor-hours per unit             0.52           0.52

Total direct labor-hours needed     884             832

Total direct labor-hours paid          960             960

Direct labor rate                           $9.00          $9.00

Total direct labor cost                $8,640        $8,640

Explanation:

a) Data and Calculations:

                                                          April           May

Production in units                         1,700          1,600

Direct labor-hours per unit             0.52           0.52

Total direct labor-hours needed     884             832

Total direct labor-hours paid          960             960

Direct labor rate                           $9.00          $9.00

Total direct labor cost                $8,640        $8,640

Idle hours paid for                              76              128

Cost for idle hours                        $684          $1,152

b) The Kouba Corporation pays its workers for a total of 204 idle hours with a total cost of $1,836 for the two months period.  This amount is substantial, about 10% of the total amount paid for the two months.

6 0
3 years ago
Which term describes the individual use of products that can lead to externalities?
gulaghasi [49]

The term which describes the individual use of products that can lead to externalities is "consumption externalities."

<h3>What is consumption externalities?</h3>

There may be possible costs and advantages experienced by other parties who were not engaged in a transaction that when an individual investor or party engages in some transaction, such as using a good or service. They are referred to as externalities.

There are two types of externalities, which are-

  1. The positive externality is really an unintended advantage gained by a third party as a result of the creation or use of a commodity by another party. Positive externalities show that the societal advantages of creating or consuming products outweigh the individual advantages to third parties.
  2. The negative externality would be an indirect expense incurred by a third party as a result of the creation or use of a product by another party. Negative externalities show that the societal costs are greater than the private costs to third parties.

To know more about externalities, here

brainly.com/question/14018373

#SPJ4

4 0
2 years ago
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