Answer:
He should pay $18,086.88 for the investment.
Explanation:
Giving the following information:
Yearly cash flow= $4,650
Number of years= 5
Rate of return= 9%
To determine the price to pay for the investment, we need to determine the present value of the cash flow.
First, we need to calculate the final value using the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual cash flow= 4,650
i= 0.09
n= 5
FV= {4,650*[(1.09^5)-1] / 0.09}
FV= $27,828.90
Finally, the present value:
PV= FV/ (1+i)^n
PV= 27,828.90/ 1.09^5
PV= $18,086.88
He should pay $18,086.88 for the investment.
Answer:
<h2>First Part</h2>
1. True
Liquidity ratios such as the Current ratio are used to show that a company can cover its short-term obligations.
2. True
Asset management ratios juxtapose a company's performance vs its long term assets and so provide insights into management's efficiency.
3. False
Debt management ratios show how much of the company is funded by total debt not whether it has sufficient cash to repay its short- term debt obligations.
4. True
Profitability ratios take into account how much income is raised by a company so when this increases, the ratios will as well.
5. True
Market-Value ratios show the firm's value in the market which is a reflection of what investors and the markets think about the firm's growth prospects or current and future operational performance.
<h2>Second Part</h2>
The Weakness/ Limitations are;
a. A firm may operate in multiple industries.
Should this be the case, the company's performance in one sector cannot necessarily be compared to companies that operate in that single sector because it would not take into account the company's other sectors which may impact figures.
c. Different firms may use different accounting practices.
When different accounting practices are used, ratio analysis may not be a true indication of the situations in the company. For instance, a company using LIFO cannot be effectively compared to a company using FIFO when using ratio analysis.
Answer: $2.595mil in March and $0 in May.
Explanation:
Digby Corporation uses the Accrual Method of Accounting. This method of Accounting posits that entries should be recorded only in the period that they were incurred regardless of when payment was received or made.
This means that if Revenue is received in a certain month but only paid for in another month,the accounting records will show the entire revenue amount on the original month.
In reference to Digby, they earned a revenue of $2.595 million in March and that is the amount that they will record as Revenue in March using Accrual Accounting.
Answer:
Letter A is correct.<u><em> At the competitive level.</em></u>
Explanation:
An <u><em>oligopoly</em></u> is a marketing structure that occurs when some companies come together to determine the supply of products or services.
In this type of market there is imperfect competition, where market control is exercised by few companies, capable of regulating the behaviors and market decisions of other companies.
Therefore in an oligopoly situation the ideal is that the price level of a company be defined at a competitive level, since the goods produced are homogeneous and the degree of differentiation occurs in the variables of service, quality, image and not so much in the variation of prices. price.
Answer:
c) scarcity
Explanation:
Scarcity is a state in which resources are relatively less then the requirement, and thus an individual aims to best utilize those limited resources.
In the given instance,
There is a large group of stranded passengers, who are standing next to a disabled bus, seats available are only three.
Since there is limited number of seats with relatively high demand the problem here is of about an issue relating to
c) scarcity
