1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
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.

You might be interested in
In tax year 2020, a married taxpayer with AGI of $300,000 had gross investment income of $6,150 (which included a long-term capi
Irina-Kira [14]

The amount of net investment income tax that the taxpayer is required to pay is $231.

<h3 />

<h3>What is net investment income tax?</h3>

Net Investment Income Tax are generally imposed by the Internal Revenue on entities' net investment income.

Net investment income tax = ($6,150 - $75) * 3.8%

Net investment income tax = $6,050 * 3.8%

Net investment income tax = $231

In conclusion, the amount of net investment income tax that the taxpayer is required to pay is $231.

Read more about income tax

<em>brainly.com/question/25257355</em>

8 0
2 years ago
Suppose you bought 100 shares of IBM at $200 per share. What is the maximum loss if you place a stop-loss order at $165
Lynna [10]

Answer:

$3,500

Explanation:

Placing a stop-loss order at $165 means that the last amount that the stock traded, it had a price of $165 per share.

Based on that, it is evident that each stock has lost $35 when compared to the price at which the stop-loss order was placed and the initial cost per share of $200.

Loss per share=$200-$165=$35

The loss incurred on 100 shares of IBM=loss per share*number of shares owned

The loss incurred on 100 shares of IBM=$35*100

The loss incurred on 100 shares of IBM=$3,500

4 0
3 years ago
The term that is used to refer to a situation in which one party to an economic transaction has less information than the other
Dmitry_Shevchenko [17]

Answer: The correct answer is choice c.

Explanation: Asymmetric information is the term that is used to refer to a situation in which on part to an economic transaction has less information than the other party. This term is also known as information failure.

3 0
3 years ago
If ten years ago the price of a movie ticket was $5 and the average hourly wage was $10, and today the price of a movie ticket i
adelina 88 [10]

Answer:

It means movies are relatively cheaper than working hours

Explanation:

In order to estimate the relativity of the two activities, there is a need to compare the changes over ten years

1. 10 years ago, Movie ticket= $5, 10 Years later Movie ticket= $8, the 10 year difference is $3

2. 10 years ago, average hourly wage = $10, 10 years later, average hourly wage = $20, the 10 year difference is $10

First, it means for the $3 change in movie ticket cost, there was a $10 change in the average hourly wage.

Put differently, while movie ticket got a 60% increase in price 3/5 x 100=60%

Average hourly wage got 100% increase  10/10 x 100= 100%

It means that working hours got more expensive and movie tickets got cheaper

8 0
3 years ago
A manager invests $20,000 in equipment that would help the company reduce it's per unit costs from $15 to $12. He expects the eq
yKpoI14uk [10]

Since the cost of $20,000 has been incurred two years ago, the firm should check and see as to how many units of the product were produced in the two years. Did the firm produce enough items to break even the cost of acquisition. Additionally the business should also check the current market value of this two year old equipment. The business manager should weigh in the savings that is to be obtained from outsourcing along with the resale value of the old machine and then take a declension as to whether the company should go for outsourcing. Also, the business manager must examine whether the outsourcing can happen for the long run. This is because two years down the line, outsourcing may have increased the cost and again another process may look attractive. So a through cost benefit analysis should be made before taking a decision.

6 0
3 years ago
Other questions:
  • Some people consistently make great investment decisions. Why?
    14·1 answer
  • The following information is available for Wonderway, Inc., for 2018: Factory rent $ 28,300 Company advertising 20,200 Wages pai
    13·1 answer
  • What do you call the second year of high school?
    10·1 answer
  • Suppose that a pharmaceutical company wants to grow in size but is constrained in the short run by its production capacity. What
    14·1 answer
  • Muckrakers were writers who wrote mostly about blank in government and business
    15·2 answers
  • Oriole Company's Assembly Department has materials cost at $3 per unit and conversion cost at $7 per unit. There are 30300 units
    7·1 answer
  • A manufacturer reports the following costs to produce 10,000 units in its first year of operations: Direct materials, $10 per un
    6·1 answer
  • Consider a stock priced at $30 with a standard deviation of 0.3. The risk-free rate is 0.05. There are put and call options avai
    6·1 answer
  • Courts Distributors needed two hundred compact refrigerators on a rush basis. It contacted Eastinghouse Corporation, a manufactu
    7·1 answer
  • Product, price, place, and promotion are the four elements in the
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!