Answer:
Break-even point in units= 2,000
Explanation:
Giving the following information:
Fixed costs= $6,000
Selling price= $6 each
Unitary variable cost= $3
T<u>o calculate the break-even point in units, we need to use the following formula:</u>
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 6,000 / 3
Break-even point in units= 2,000
Answer:
32.03%
Explanation:
The computation of the standard deviation is as follows;
As we know that
Average return = Total return ÷Total time period
= (32 + 24 - 48 + 12 - 9) ÷ 5
= 2.2%
Now
Return (Return - Average Return)^2
32 (32 - 2.2)^2 = 888.04
24 (24 - 2.2)^2 = 475.24
-48 (- 48 - 2.2)^2 = 2520.04
12 (12 - 2.2)^2 = 96.04
-9 (-9 - 2.2)^2 = 125.44
Total = 4104.8%
Now
Standard deviation is
= [Total (Return - Average Return)^2 ÷ (Time period- 1)]^(1 ÷ 2)
= [4104.8 ÷ (5 - 1)]^(1 ÷ 2)
= [4104.8 ÷ 4]^(1 ÷ 2)
= 32.03%
Answer:
4
Explanation:
The computation of the process capability index is shown below:
Data provided in the question according to the question is as follows
USL = 27
LSL = 21
X = (21 +27) ÷ 2 = 24 (take the average)
Standard Deviation: 0.25
After placing the above values, the process capability index is 4
hence, the process capability index, if they were to center the mean is 4
Answer:
Zork's cost of equity capital is 12.85%
Explanation:
Cost of equity=Rf+Beta* Mrp
Rf is the risk-free rate of 4.6% which is rate of return on government security
Beta of the stock is 1.13
Mrp is the market risk premium which is the incentive given over and above the risk free rate in order to compensate investors for risk taken by investing in stock i.e 7.3%
cost of equity=4.6%+(1.13*7.3%)=12.85%
Answer:
We know the company's ROE and plowback ratio, and we can use these 2 figures to find out the future growth rate of the company. In order to do this we need to multiply the ROE by plowback ratio.
0.18*0.7=0.126= 12.6%
We can also find the company's dividend, by (1- plowback ratio) we get how much percentage of the earning is the company distributing as dividends.
(1-0.7)= 0.3 which is the dividend payout ratio
Dividend= Dividend payout ratio *EPS
0.3*6=1.8
This dividend is the dividend which the company will pay in the upcoming year after which they will have a constant growth rate, so in order to find the intrinisc value now, we need to find the intrinsic value of the stock will be in the upcoming year using the upcoming years dividend and then discount that value by the required return of the stock to get the current years intrinsic value.
Now we can use the DDM formula to find the intrinsic value of the stock in the upcoming year.
The formula for DDM is D*(1+G)/(R-G)
D= 1.8
G= 0.126
R=0.14
1.8*(1+G)/0.14-0.126
=144.77
Discount it to find the present value
144.77/1.14
=128.5
The intrinsic value of the stock should be 128.5
Explanation:
