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Pani-rosa [81]
3 years ago
14

TH Manufacturers expects to generate cash flows of $129,600 for the next two years. At the end of the two years the business wil

l be sold for an estimated $3.2 million. What is the value of this business at a discount rate of 14 percent?
Select one:

a. $2,704,654.82
b. $2,284,644.28
c. $2,675,703.29
d. $2,848,391.60
e. $2,900,411.36
Business
1 answer:
arsen [322]3 years ago
7 0

Answer:

Vo  = <u>C1  </u>    +        <u>C2 + V2</u>

        1 + k              (1 + K)2

Vo = <u>$129,600  </u> +   <u>$129,600 + $3,200,000</u>

        1 + 0.14            (1 + 0.14)2

Vo = $113,684.21  + $2,562,019.08

Vo = $2,675,703.29

The correct answer is C

Explanation:  

The current value of the business equals cashflow in year 1 divided by 1 + K plus the aggregate of cashflow and sales value in year 2 divided by 1 + k raised to power 2.

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Last year, Alfred's Automotive had a price-earnings ratio of 15 and earnings per share of $1.20. This year, the price earnings r
drek231 [11]

Answer:

Investors’ outlook for the firm has improved.

Explanation:

Computation of Market price.

MPS = PE ratio ×  EPS

⇒ MPS (Previous) = $1.20 × 15

⇒ MPS (Previous) = $18

⇒ MPS (Current) = $1.20 × 18

⇒ MPS (Current) = $21.60

So, we say that the market price has increased.

Investors’ outlook for the firm has improved.

6 0
4 years ago
In a group of 68 students, each student is registered for at least one of three classes – History, Math and English. Twenty-five
Zarrin [17]

Answer:

c.10

Explanation:

We have 68 students, 3 of them are registered in three classes, so (68-3 =65), 65 students are registered in one or two classes.

Additionally, we know that:

  • 25 students are registered for History.
  • 25 students are registered for Math
  • 34 students are registered for English

If we want to know only the registrations of students that are registered for one or two classes, we should substract 3 in every class (the three students that ar registered for the three classes)

So, now we have:

  • 22 students registered for History.
  • 22 students registered for Math
  • 31 students  registered for English

Total registrations for stdents registered in one or two clases: 22+22+31= 75

75 registrations of 65 students

So 75-65=10 .. There are 10 students registered for 2 classes.

7 0
4 years ago
This is where labor and other factors of production are sold in the circular flow model of income in economic theory *it’s for e
erik [133]

Answer:

Resource Market

Explanation:

A resource market is a market from where businesses purchase inputs that can be used for production.

Resource Market is a market where labor and other factors of production are sold in the circular flow model of income in economic theory.

In Resource Market, households are the sellers and firms are the buyers.

8 0
3 years ago
If interest rates are rising:
AleksandrR [38]

Answer:

c. planned investment spending is most likely to decrease.

Explanation:

High interests rates reduce the levels of investment in an economy.  Investments are capital intensive ventures and will require borrowing to finance them. When interest rates are high, loans become expensive. For a project to be viable in times of high-interest rates, it will need to have a very high rate of return.

When interest rates are high, banks will offer a higher rate of return on savings. Using savings to finance investments become more costly. Investors would prefer to put their money in a deposit account for higher interest payments than to invest.

High-interest rate thus slows down investments expenditures.  The cost of borrowing goes up while the incentives to save increase.

3 0
4 years ago
Martina wants to expand her business. She will need to buy a larger facility and equip it with additional machinery. She should
soldi70 [24.7K]

Answer:

Certified Development Company 504 Loan Program

Explanation:

The US Small Business Administration 504 Loan or Certified Development Company program is designed to provide financing for the purchase of fixed assets, which also means real estate, buildings and machinery, at a price below the normal market rate. Its mission involve boosting the development of various businesses. The SBA offers a number of different loan programs linked to a particular capital need of growing businesses. The 504 program works by sharing the loan among three parties. The business owner puts in a minimum of 10%, a conventional lender which is the bank puts up 50%, and Certified Development Company (CDC) puts up the remaining 40%.

5 0
4 years ago
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