Answer:
$863,689.50
Explanation:
The computation of the present value of the terminal value is shown below:
The terminal value at the end of the third year is
= Third year Cash flows × (1 + growth rate) ÷ (required rate of return - growth rate)
= $64,000 × (1 + 2%) ÷ (8% - 2%)
= $1,088,000
Now its present value is
= terminal value at the end of the third year ÷ (1 + rate of interest)^number of years
= $1,088,000 ÷ (1 + 8%)^3
= $863,689.50
This is the answer but the same is not provided in the given options
Answer:
Bill has $25,000 at-risk and he can also deduct $25,000 from his income due to the losses associated with his rental activity.
Explanation:
At risk amounts are the money that investors can lose due to a bad business decision or performance. The maximum amount that an investor can deduct is equal to the at-risk amount that he/she has invested.
Bill's at-risk $25,000 are equal to the money he spent on house repairs.
Answer:
Explanation:
Given:
Total population after time (P) = 100% + 50% = 1 + 0.5 = 1.5
Starting population (p) = 100% = 1
Number of year (t) = 4 year
rate of growth = r
Computation:
Exponential growth function for population :
P = 
1.5 = 
1.5 = 
From taking log:
4r = ln(1.5)
Answer:
<u><em>decrease</em></u>
Explanation:
<em>If there is a low demand for a product, the price for that product will decrease.</em>
Answer:
$28
Explanation:
Calculation to determine at what price should a share sell
First step is calculate the Required return using this formula
Required return=Risk free rate+Beta*(market rate-risk free rate)
Let plug in the formula
Required return=5+1.4*(15-5)
Required return=5+1.4*(10)
Required return=5+14
Required return=19%
Now let determine the Current price using this formula
Current price=D1/(Required return-Growth rate)
Let plug in the formula
Current price=3.92/(0.19-0.05)
Current price=3.92/0.14
Current price=$28
Therefore the price that a share sell is $28
