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ExtremeBDS [4]
3 years ago
8

Analysts project the following cash flows for Hopkin’s Corporation during the next three years: Year 1: – $27 million (this is n

egative $27 million), Year 2: $42 million, Year 3: $52 million. Free cash flow is then expected to grow at a constant 6% rate. Hopkin’s weighted average cost of capital is WACC = 11%. 12) (8 pts) What is Hopkin’s terminal, or horizon, value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.
Business
1 answer:
Maksim231197 [3]3 years ago
3 0

Answer:

The terminal value is $1102.4 million

Explanation:

The terminal value is the value of future cash flows discounted back to the period from where the cash flow growth becomes constant. The calculation of terminal value is important in Discounted cash flow models because terminal value contains a large percentage of the company's value. The formula to calculate the terminal value of this company will be,

Terminal value = FCF3 * (1+g)  /  (WACC - g)

Terminal Value = 52 * (1+0.06)  /  (0.11 - 0.06)

Terminal Value = $1102.4 million

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Borrowed 152300 for three years if the qouted rate (apr) is 11.75% and the compounding is daily what is the effective annual rat
Vikki [24]

Answer:

The appropriate response is "12.47%".

Explanation:

The given values are:

Borrowed amount,

= 152300

APR,

= 11.75%

i.e.,

= 0.1175

Now,

The effective annual rate will be:

= (\frac{1+APR}{n} )^n

On substituting the given values, we get

= (\frac{1+0.1175}{365} )^{365}

= (\frac{1.1175}{365} )^{365}

= 1.12466-1

= 0.1247 \ or \ 12.47 \ percent

7 0
3 years ago
Cost, revenue, and profit are in dollars and x is the number of units. Suppose that the marginal revenue for a product is MR = 1
n200080 [17]

Answer:

Profit 6,130

Explanation:

MC = 30X + 4

when X=5

Cost to produce 5 units:

We will need to calcualte the MC for 1, 2 , 3, 4 and 5 units and then add them together

MC = 30(5) + 4 = 150 + 4 = 154

MC = 30(4) + 4 = 150 + 4 = 124

MC = 30(3) + 4 = 150 + 4 =  94

MC = 30(2) + 4 = 150 + 4 =  64

MC = 30(1) + 4 = 150 + 4 =   34

Total                                   470

Giving this, now anther way, more easy would be to use the Gauss method to a summatory:

S=\frac{n\times(n+1)}{2}

S to 5 from 1 of (30x+4) =

30 \times \frac{5\times6}{2} +4 \times 5

S = 470

Now we can continue:

Total Marginal cost 470 + Fixed Cost: 900 = 1370

MR = 1500 revenue for adding 1 unit

1500 x 5 = 7500 total revenue

total revenue - total cost = profit

7500 - 1370 = 6,130

3 0
3 years ago
Emily spent $259,600 to rehabilitate a certified historic building (adjusted basis of $168,740) that originally had been placed
tatiyna

Answer: $51,920

Explanation:

For a building that was constructed before 1936, the rehabilitation credit is 20% of the amount that the taxpayer spent to rehabilitate the historic building. As this building was constructed in 1935, Emily qualifies for that 20% credit:

= 20% * 259,600

= $51,920

5 0
3 years ago
Which of the following is NOT true: Question 6 options: 1) Data marts typically have fewer data sources than data warehouses 2)
tamaranim1 [39]

Answer:

The incorrect statement is number (2): Data marts typically have broader focus than data warehouses.

Explanation:

Data marts are data structures built on a database. In this structure, consolidated data is stored that will be used as a feed for an analysis tool. Data marts are specialized in storing data of a specific area of an organization. A group of datamarts is called Datawarehouse.

Therefore, <em>data marts have a narrower focus than data warehouses.</em>

4 0
3 years ago
Calidasth is a company that sells cosmetic products. Its retail outlets offer discount sales at the end of every season. In the
Alex Ar [27]

Answer:

<u>Limited Relationships</u>

Explanation:

Customer Relationship management (CRM) refers to the practices and policies followed by an organization w.r.t interaction with it's customers. The concept lays emphasis upon creating healthy customer relationships and solving customer questions and queries in the most efficient manner.

CRM in a way represents the technology or platform a company uses so as to manage it's external interactions with customers.

Software, artificial intelligence, etc represent some of the areas wherein CRM has grown technologically.

The given case points towards the existence of a transactional relationship i.e relationships which is limited only till the transactional level. Under this, the company's does not exactly establish relationship with customers.

3 0
3 years ago
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