Answer:
Instructions are below.
Explanation:
Giving the following information:
Option 1:
$12,000 cash now
Option 2:
$900 every quarter for 4 years.
Interest rate= 8% compounded quarterly
We need to determine the present value of option 2.
First, we need to calculate the future value of the investment. We will use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= cash flow= 900
n= 4*4= 16
i= 0.08/4= 0.02
FV= {900*[(1.02^16)-1]} / 0.02
FV= $16,775.36
Now, we determine the present value:
PV= FV/(1+i)^n
PV= 16,775.36/(1.02^16)
PV= $12,219.94
It is more profitable to accept option 2. It provides the highest present value.
Answer:
E. The aftertax salvage value is $81,707.76.
Explanation:
The computation is shown below:
Accumulated depreciation is
= $287,000 × ( .2 + .32 + .192 + .1152)
= $237.406.40
Now the book value is
= Purchase value - accumulated depreciation
= $287,000 - $237,406.40
= $49,593.60
And, the selling value is $99,000
So after tax salvage value is
= Salvage value - (Salvage value - book value) × tax rate
= $99,000 - ($99,000 - $49,593.60) × 35%
= $81,707.76.
Price per share / Earnings per share = Price-Earnings Ratio
Price-Earnings Ratio shows how much the investors are willing to pay per earnings for the company. For example, if the P/E Ratio is 15 suggests that the investors of a stock is willing to pay $15 per $1 of earnings of the company may produce over the year.
Answer:
Increase by $97,650
Explanation:
Increment Sale $247,500
(450 * $550)
<u>Less Increment cost</u>
Direct materials $90,000
(450 * $200)
Direct labor $36,000
(450 * $80)
Manufacturing overhead $20,250
(450 * $150 * 30%)
Administrative expenses <u>$3,600</u> <u>$149,850</u>
(450 * $80 * 10%)
Profit will increase by <u>$97,650</u>
Answer:
$76.93 per share
Explanation:
The computation of ex-dividend stock price is shown below:-
Sale of division = $2,7,00,000
Outstanding shares = 375,000
Dividend per share = Sale of division ÷ Outstanding shares
= $2,7,00,000 ÷ 375,000
= $7.2
Stock price after dividend = Sold shares - Dividend per share
= $84.13 - $7.2
= $76.93 per share
Therefore for computing the stock price per dividend we simply subtract dividend per share from sold shares.
