Answer:
$21.67
Explanation:
Exhibit 21-3 is attached with the answer .Please find it.
Total cost of production includes the fixed cost and variable cost. Fixed Cost remains constant as $500 in the exhibit, but the variable cost changes with each production level.
Cost of producing 60 units
Variable cost = $800
Fixed cost = $500
Total cost = $800+500 = $1,300
Product cost per unit = Total cost / numbers of unit = $1,300 / 60 = $21.67
Nothing. The sentence is fine as it is.
The statement above is true. Forecasting is the utilization of notable information to decide the heading of future patterns. Organizations use estimating to decide how to apportion their financial plans or plan for expected costs for an up and coming timeframe. This is regularly in view of the anticipated interest in the products and ventures they offer.
Answer:
The expected price of the stock is $122.03
Explanation:
To calculate the expected price of the stock at the end of the year or at Year 1, we first need to determine the required rate of return on the stock. We will use the CAPM equation to calculate the required rate of return.
The required rate of return is calculated as,
r = rRF + Beta * (rM - rRF)
Where,
- rRF is the risk free rate
- rM is the return on market
r = 0.05 + 1 * (0.14 - 0.05)
r = 0.14
We already have the price of the stock today, the D1 and the required rate of return. Using the constant dividend growth model of DDM, we calculate the growth rate in dividends to be,
P0 = D1 / (r - g)
115 = 9 / (0.14 - g)
115 * (0.14 - g) = 9
16.1 - 115g = 9
16.1 - 9 = 115g
7.1 / 115 = g
g = 0.0617 or 6.17%
Using the same formula and replacing D1 with D2, we can calculate the price of the stock at the end of the year or at start of Year 1.
P1 = 9 * (1+0.0617) / (0.14 - 0.0617)
P1 = $122.03
So here is the answer of the given question above:
In terms of economics, Harber's process takes a huge amount of capital. Initially, the process demands for a very high pressure and this is very expensive to produce. Second, the company would need to establish extremely sturdy pipes and containment vessels to endure the very high pressure, in order to produce this required condition; the building process is very costly as well as the maintenance. Hope this answer helps.
