Answer:
MIRR = 4.32%
Explanation:
year cash flow
0 -$795,000
1 $375,000
2 -$500,000
3 $600,000
4 $400,000
Since there are 2 cash outflows, the IRR calculation would result in two different answers (1 for every cash outflow), that is why we use the MIRR function in excel.
=MIRR (cash flows, finance rate, reinvestment rate)
=MIRR (-795000 to 400000, 5.5%, 5.5%)
Since we are only given one interest rate, we will use it as our finance rate and our reinvestment rate.
MIRR = 4.32%
Answer:
B. $6,448,519
Explanation:
The computation of the present value of this growing annuity is given below:
PVA = [Cash flow at year 1 ÷ (interest rate - growth rate)] × {1 - [(1 + growth rate) ÷ (1 + interest rate)^number of years}
= [$675,000 ÷ (0.18 - 0.13)] × [1 - (1.13 ÷ 1.18)^15]
= $6,448,519
Hence, the correct option is b.
Answer: Option D
Explanation: In simple words, price elasticity refers to the degree of change in demand of a commodity with respect to change in its price. It generally shows the fact that when the price of a commodity rises the demand for ti decreases due to various phenomenon coming into force such as income effect etc.
The price elasticity is calculated by dividing the change in quantity demanded with the change in price.
Answer: a. Increase in financing activities for the issuance and a decrease in financing activities for the dividends.
Explanation:
When using the Indirect method of the Cash Flow Statement, you will find 3 sections namely, the Operating Activities, Investing Activities and Financing Activities.
The Operating Activities deal with the normal business Transactions and related entries that keep the business running.
Investing Activities have to do with entries related to Non Current Assets as well as stocks and bonds in other companies.
The above relates to the Financing Section that handles the raising of Capital needed to run the business. They include long term debt and Equity.
When new Equity is announced it is a Cash inflow for the business meaning that there will be an INCREASE in Financing Activities.
Dividends have the effect of reducing Equity so it is a Cash Outflow. This means that there will be a DECREASE in Financing Activities as a result of the declared Dividends.
Answer:
$7,738,000
Explanation:
The computation of total stockholders' equity is shown below:-
= $3,410,000 + $560,000 + $2,090,000 + $388,000 + $1,440,000 - $150,000
= $7,888,000 - $150,000
= $7,738,000
Therefore for computing the total stockholders' equity we simply add all values except treasury stock and deduct the treasury stock.
