What causes a liability to be credited and an expense to be debited?

Justus Motor Co.has a WACC of 11.50%, and its value of operations is $25.00 million. Justus's free cash flow is expected to grow

lakkis [162]

Answer:

$FCF_0=1.05$

So option (b) is correct option

Explanation:

We have given value of operation PV = $25.00

WACC, that is $Ke$ = 11.50% = 0.1150

It is grow at a constant rat of 7 % so g = 0.07

We have to find the value of $FCF_0$

We know that value of operation is given by

$PV=\frac{FCF_0(1+g)}{Ke-g}$

So $25=\frac{FCF_0(1+0.07)}{0.1150-0.07}$

$FCF_0=1.05$

So option (b) is correct option

4 0

3 years ago

Astor Manufacturing stores hazardous and volatile chemicals in its warehouse. The warehouse has state-of-the-art equipment to ma

Wittaler [7]

Answer:

C. strictly liable for Will's injuries

Explanation:

In law, Strict liability is a situation when defendant is required to be responsible to a certain situation, but can't be considered as guilty to any violation.

There are two points that need to be highlighted from the case above:

1. Astor Manufacturing process has fulfilled all of its safety regulation for storing the dangerous product.

2. The dangerous product owned by Astor Manufacturing caused William's injury.

The regulations for hazard management is created by the government, and the leak is not caused by their negligence. It's caused by unexpected natural disaster. This is why we can't say that Astor is guilty to any violation.

But still, the chemical that they created injured William. The court will most likely force Astor to be responsible for all the medical expenses incurred by william.

6 0

4 years ago

A bond has a face value of $1,000, a coupon of 4% paid annually, a maturity of 30 years, and a yield to maturity of 7%. What rat

Lelechka [254]

Answer:

-11.8%

Explanation:

the key to answer this question is to remember that valuation of a bond depends basically of calculating the present value of a series of cash flows, so let´s think about a bond as if you were a lender so you will get interest by the money you lend (coupon) and at the end of n years you will get back the money you lend at the beginnin (principal), so applying math we have the bond value given by:

$price=\frac{principal*coupon}{(1+i)^{1} }+ \frac{principal*coupon}{(1+i)^{2} } \frac{principal*coupon}{(1+i)^{3} }+...+\frac{principal+principal*coupon}{(1+i)^{n} }$

so in this particular case that one year later there are 29 years to maturity so we have:

$price=\frac{1,000*0.04}{(1+0.08)^{1} }+ \frac{1,000*0.04}{(1+0.08)^{2} } \frac{1000*0.04}{(1+0.08)^{3} }+...+\frac{1,000+1,000*0.04}{(1+0.08)^{30} }$

$price=553.6638$

so as we have a higher rate the investment has the next return:

$return=\frac{553.66}{627.73} -1$

$return=-11.8\%$

4 0

3 years ago

If creditors add finance charges after subtracting payments made during the billing period, this is called the: A. APR method. B

vladimir1956 [14]

The correct answer is D. Adjusted balance method.

Adjusted balance method in termed as the method which is being used by finance companies and banks to calculate for finance charges or interest income. which is known to be associated with credit card account or bank account.

The finance waits to aggregate all the adjustments and also calculates finance charges or interest rates by the end of billing period which will depend with the ending balance.

6 0

3 years ago

Read 2 more answers

Suppose, that after a successful career, a worker retired precisely as planned with precisely the amount saved that they intende

IgorC [24]

Answer: Yes it is

Explanation:

The Permanent Income Hypothesis posits that human expenditure in the short term is based on the amount of income they expect to get as income over the long term.

If a person for instance, knows that they will receive a pay cut at the end of the year, they will probably spend less today to survive the pay cut.

Same goes for the worker in this scenario. They know that the amount they saved is all they have now and into the future so they are adjusting their expenses to ensure they survive on that saving.

7 0

3 years ago