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vodka [1.7K]
3 years ago
15

Example 1-1, based on a study of Intel Corporation that used a present value model (Cornell 2001) , examined what future revenue

growth rates were consistent with Intel’s stock price of $61.50 just prior to its earnings announcement, and $43.31 only five days later. The example states, ""Using a conservatively low discount rate, Cornell estimated that Intel’s price before the announcement, $61.50, was consistent with a forecasted growth rate of 20% per year for the subsequent 10 years and 6 percent per year thereafter."" Discuss the implications of using a higher discount rate than Cornell did.
Business
1 answer:
kakasveta [241]3 years ago
8 0

Answer:

Taking the present value of a single cash flow into consideration. If the discount rate is increased then, the cash flow would also be increased especially if a constant present value is maintained.

By comparison; let's make an assumption that Cornell used a higher discount rate, then that means he would need to project a higher level of assumed future cash flows that is higher than the present value to have been consistent with the given pre announced price of $61.50.

So, the implied growth rate consistent with a price of $61.50 would have been higher than the 20 percent growth rate estimated by Cornell.

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lyudmila [28]

Answer:

$65 per unit

Explanation:

For computing the cost per unit first we have to determine the cost of goods manufactured which is shown below:

Cost of goods manufactured = Opening work in process + direct material cost + direct labor cost + manufacturing overhead cost - ending work in process

= $10,000 + $12,000 + $6,000 + $4,000 - $6,000

= $26,000

And, there is a production of 400 MP3 players

So, the cost per unit is

= $26,000 ÷ 400 MP3 players

= $65 per unit

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he auditors have some uncertainties, but these uncertainties are not so material that they cannot form an opinion on the fairnes
ddd [48]

Answer:

D. The auditors cannot form an opinion on the fairness of presentation of the financial statements as a whole.

Explanation:

The issue of a disclaimer of opinion normally represent that the auditor could not able to form the opinion on the fairness of the financial statements that shows the financial position and the condition of the company.

He is not able to give his opinion for the company financial statements

So, the last option would be correct

And, the rest of the options would be incorrect

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4 years ago
Granfield Company is considering eliminating its backpack division, which reported an operating loss for the recent year of $42,
maxonik [38]

Find the given attachment

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4 years ago
Part 1 Household consumption, which accounts for about _______% of the economy, grew at a 4.2% annualized rate during the second
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Answer:

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*Data obtained from federal government sources.

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masha68 [24]

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