Answer:
3.33%
Explanation:
Data provided in the question:
Real per capita GDP in South Korea in 1957 = $400
per capita GDP in South Korea in 1978 = $800
Total number of years taken to double the GDP = 21 years
Now,
Using the Rule of 70, which states that
Number of years to double the GDP = 70 ÷ (average annual economic growth rate )
thus,
21 years = 70 ÷ average annual economic growth rate
or
Average annual economic growth rate = 3.33%
Answer:
Depreciation expense 2019= $17,062.5
Explanation:
Giving the following information:
Purchase price= 102,000
Useful life= 8
Salvage value= 11,000
To calculate the depreciation expense under the double-declining balance, we need to use the following formula:
Annual depreciation= 2*[(book value)/estimated life (years)]
2018= 2*[(102,000 - 11,000)/8]= $22,750
2019= 2*[(91,000 - 22,750)/8]= $17,062.5
Brings income and makes the economy better
Answer:
A) $560 million
Explanation:
First lets calculate the NPV of the cash stream by this investment,
PV Cash stream = Cash flow/ (r-g), where r = avg cost of capital and g = growth of the cash stream.
PV = 50 / (0.09 - 0.04) = $1000 million
We assume that external finance issuance costs are payable as a part of initial outlay of the project and so,
Total initial outlay = 420 + 20 = $440 million
NPV of the project then,
NPV = 1000 - 440 = $560 million
Hope that helps.
Answer:
The un levered beta ( bu) of the company is 1.52
Explanation:
Given information -
Equity (E) - $20 million
Debt (D) - $5 million
Beta ( levered ) - 1.75
Tax rate ( T ) = 40%
D / E ( Debt to Equity ratio ) = $ 5 million / $20 million = .25
Formula for taking out un levered beta ( bu) is -
Beta levered ( bl ) = Beta un levered ( bu ) [1 + (1 - T ) D / E ]
1.75 = bu [1 + (1 - 40% ) .25
1.75 = bu [1 + .6 x .25 ]
1.75 = bu [ 1 + .15 ]
1.75 = bu [ 1.15 ]
bu = 1.75 / 1.15
bu = 1.52
