Answer:
A. $38,500
Explanation:
The net present value is the present value of after tax cash flows from an investment less the amount invested.
Npv can be calculated using a financial calculator.
Cash flow in year 0 = $-190,000
Cash flow each year from 1 to 3 = $75,000
Cash flow in year 4 = $75,000 + $25,000 = $100,000
I = 15%
NPV = $38,417.21
To find the NPV using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
I hope my answer helps you
Answer:
$81.52
Explanation:
The current share price is the present value of future dividends as well as the present value of the terminal value of dividends beyond year 6 as shown thus:
Current dividend=$3.95
Year 1 dividend=$3.95*(1+5%)=$4.15
Year 2 dividend=$4.15*(1+5%)=$4.36
Year 3 dividend=$4.36*(1+5%)=$4.58
The required rate of return(discount rate) for the dividends in the FIRST 3 years above is 14%
Year 4 dividend=$4.58*(1+5%)=$4.81
Year 5 dividend=$4.81*(1+5%)=$5.05
Year 6 dividend=$5.05*(1+5%)=$5.30
The required rate of return(discount rate) for the dividends in the NEXT 3 years above is 12%
Terminal value of dividend=Year 6 dividend*(1+growth rate)/(rate of return-growth rate)
growth rate=5%
rate of return=10%(rate of return thereafter)
terminal value=$5.30*(1+5%)/(10%-5%)
terminal value=$111.30
current share price=$4.15/(1+14%)+$4.36/(1+14%)^2+$4.58/(1+14%)^3+$4.81/(1+12%)^4+$5.05/(1+12%)^5+$5.30/(1+12%)^6+$111.30/(1+10%)^6
current share price=$81.52
Answer:
Demand for home repair and building supply is INCOME ELASTIC
Explanation:
One reason why many ethical home repair and building supply businesses continue to charge pre-hurricane prices to their customers, even though due to the huge increase in demand they could charge much more. These firms probably recognize that demand for home repair and building supply is INCOME ELASTIC.
Although there was no direct fall in income however the loss of property means a negative impact on already earned income. Hence charging higher prices because of higher demand will be a misunderstanding of the income elasticity of demand.
Answer:
Observational study
Explanation:
The appropriate study for a gas station owner who wants to find out whether customers are satisfied with the service they receive or not is "Observational Study."
Given that the Observational study is a type of research study or scientific investigation in which the researcher observes the effect of an action or activities such as risk factors, or outcomes without a direct impact on the intervention from the researcher.
In this case, the satisfaction of customers concerning the services they receive can only be observed by the researcher without influencing the services or how the customers perceived their level of satisfaction.
Answer: Option A
Explanation: Assets having no physical existence are called intangible assets for example :- goodwill, patent rights.
Amortization can be defined as the method of distributing the value of intangible assets over its useful life, thus for amortization the asset must have a definite life.
While amortizing , first its recoverability is evaluated by comparing fair value with carrying value and after that the difference in both is calculated.
