Answer:
See attached file
Explanation:
4. Steel-frame construction relies on the creation of _______ to sustain the weight of the building. A. a steel cage B. mass pro
1 answer:
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Answer:
It will increase
Explanation:
Before the purchase of the automated machine, break even point is computed as follows:
Sale price: $40
Less variable cost: $18
Therefore, contribution per unit = $40 - $18 = $22.
With fixed cost at $16,000, breakeven point in units =
= 16,000/22
Break even cost = 727.27 units.
With the purchase of the automated machine, break even point is computed as follows:
Sale price: $40
Less variable cost: ($18 - $2) = $16
Therefore, contribution per unit = $40 - $16 = $24.
Fixed cost = $16,000 + $5,000 = $21,000.
Breakeven point in units = 21,000/24
Break even cost = 875 units.
Therefore, breakeven point will increase as a result of the purchase of the automated machine.
Answer:
A. Market Capitalization rate = 13%
B. Intrinsic Value = $46.22
Explanation:
<em>A. Market Capitalization rate:</em>
CAPM should be used to calculate market capitalization from the given data. Following is the formula for CAPM
r = risk free rate
M = market portfolio return
B = beta
Solution:
CAPM = 13%
<em>B. Intrinsic Value of stock</em>
Gordon Growth Model (GGM) should be used to calculate intrinsic value of stock based on the given data.
Following is the formula for GGM
D = Current Dividend
g = Dividend Growth rate
r = market capitalization rate (CAPM calculated in part A)
Solution:
DDM = $46.22
<em>Note: All values are rounded off to two decimal points.</em>