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mina [271]
3 years ago
12

Southern Tours is considering acquiring Holiday Vacations. Management believes Holiday Vacations can generate cash flows of $218

,000, $224,000, and $238,000 over the next three years, respectively. After that time, they feel the business will be worthless. If the desired rate of return is 14.5 percent, what is the maximum Southern Tours should pay today to acquire Holiday Vacations?A) 519,799.59
B) 538,615.08
C) 545,920.61
D) 595.170.53
E) 538,407.71
Business
1 answer:
lara31 [8.8K]3 years ago
6 0

Answer:

The maximum Southern Tours could pay to acquire the Holiday Vacations is the present is the value of the inflows to be generated from the target company.

The present of the target business is $519,799.59  

Explanation:

That amount is the maximum that should be paid for the target business,depending on negotiation skills of Southern Tours' management.

A  lower price could be bargained,which better makes the investment more profitable.

Find attached spreadsheet for detailed computations.

Download xlsx
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Shtirlitz [24]

Answer: so you are giving someone instructions like how to make a sandwich with a lot of detail so someone could do everything you did :)

Explanation:

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3 0
3 years ago
Effective SCM requires reducing cost, increasing inventory velocity and compressing cycle time. What of the following is true? 1
-Dominant- [34]

Answer:

The answer is: 4) More frequently than not, the three objectives are compatible.

Explanation:

Toyota is famous for its Just in Time (JIT) management. They are the absolute kings of efficient supply chain management and they were able to do it by making the three objectives compatible. That doesn't mean that they all have to be dealt with at the same time and with the same intensity.

Toyota's first goal was to reduce costs and in order to reduce costs they had to increase their inventory turnover. Then they discovered that in order to keep increasing inventory turnover, they had to compress their cycle time. When they were able to compress their cycle time, their turnover increased even more and their costs were lowered. The system produces continuous feedback and their efficiency keeps increasing.

I once visited one of their factories that produces almost 500 pickup trucks per day and every single work station had available inventory for only 4 trucks; only 4 engines, 16 doors, etc. It is amazing how they do it considering that every 3 minutes one truck is fully produced.

The three objectives are not only compatible, but they are absolutely necessary for the SCM to be effective.

7 0
3 years ago
reventive action ____________. a. realigns the performance of the project work with the project management plan b. seeks to ensu
torisob [31]

Answer:

The correct answer is letter "B": seeks to ensure the future performance of the project work is aligned with the project management plan.

Explanation:

Preventive actions are defined as those that aim to mitigate risks inherent in the operations of a business. Preventive actions lead to entities creating contingency plans that allow them to have certain strategies in front of unexpected situations that could harm the firm's operations.

<em>The project risk management plan is the reference that prevention actions take at the moment of recognizing the set of activities that should be followed to ensure the optimal future performance of a project.</em>

8 0
3 years ago
The Comil Corporation recently purchased a new machine for its factory operations at a cost of $328,325. The investment is expec
Solnce55 [7]

Answer: 15%

Explanation:

IRR is the discount rate that makes the NPV equal zero. Required rates of return that are less than the IRR will therefore result in a positive NPV and those that are higher will result in a negative NPV.

Use Excel to find the IRR.

= IRR(-328325,115000,115000,115000,115000)

= 15%

As the required rate of 13% is less than the IRR of 15%, the new machine will have a positive NPV.

6 0
2 years ago
The United States currently imports all of its coffee. Suppose the annual demand for coffee by U.S. consumers is given by the de
Vlada [557]

Answer:

(a) $7; $205 million

(b) $9; $195 million

(c) $400 million

(d) $390 million

(e) Loss = $10 million

Explanation:

(a) Price paid by consumers when no tariff imposed:

= Marginal cost + Distribution cost

= $6 + $1

= $7

Quantity demanded:

Q = 240 - 5P

   = 240 - 5 × $7

   = 240 - $35

   = $205 million pounds

(b) At imposed tariff of $2 per pound, then the new price paid by consumers:

= Marginal cost + Distribution cost + Tariff

= $6 + $1 + $2

= $9

New quantity demanded:

Q = 240 - 5P

   = 240 - 5 × $9

   = 240 - $45

   = $195 million pounds

(c) Lost consumer surplus:

= ($9 - $7)($195) + (0.5)($9 - $7)($205 - $195)

= ($2 × $195) + (0.5 × $2 × $10)

= $390 + $10

= $400 million

(d) Tax revenue collected by government:

= Quantity demanded under tariff × tariff

= $195 × $2

= $390 million

(e) Tax revenue of $390 million received is less than the value of coffee sold under tariff $400 million.

Loss = $400 million - $390 million

        = $10 million

4 0
3 years ago
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