Answer:
What are the three basic categories of control? Educational/awareness, physical, supervision 5. How do you implement controls? Ensure controls are communicated to those involved in the activity.
Answer:
Falls by $100,000
Explanation:
In this question, we are asked to calculate and state what happens when demand for land falls and as a result, there is also a fall in rental rate.
Firstly, we cost the total of 1000 acres. The price of 1000 acres is simply the multiplication of the 1000 acres by the $500 unit price= 500 * 1,000 = $500,000
We now calculate the price or worth of the land when demand falls
This is mathematically equal to 400 * 1000 = $400,000
Now, the net economic rent fall would be $500,00 - $400,000 = $100,000
Hence, there would be a fall of $100,000 as the demand for land falls
You are considering an investment for which you require a 14 percent rate of return. the investment costs $61,900 and will produce cash inflows of $26,000for three years.You should not accept this project based on its internal rate of return, because the IRR is 12.51 percent
Answer:
a. 1.27%
b. 15.24%
c. 16.35%
Explanation:
a. What is the monthly return on this investment vehicle?
The formula for the value of a Perpetuity is;
Value = Payment/ rate
Rate = Payment/ Value
Rate = 1,450/114,000
= 0.0127
= 1.27%
b. What is the APR?
APR is the annual rate. The above figure is the monthly rate.
APR = Monthly rate * 12
= 1.27 * 12
= 15.24%
c. What is the effective annual return?
Effective annual return = [1 + (APR/n)]^n – 1
n is the number of compounding periods which is 12 here for monthly compounding.
= [1 + (15.24%/12)]^12– 1
= 16.35%
Answer:
Return on equity(r) = 0.16
Plowback ratio(b) = 50 = 0.5
Earnings per share(EPS) = $2
D1 = 50% x $2 = $1
Cost of equity(Ke) = 0.12
Growth rate(g) = b x r
= 0.5 x 0.16
= 0.08 = 8%
Current market price(Po) = D1/Po + g
= $1/0.12 - 0.08
= $25
Market price in 3 years = Po(1+g)n
= $25(1+0.08)3
= $25(1.08)3
= $31.49
Explanation:
In this case, we need to calculate growth rate by multiplying the plowback ratio by return on equity. Then, we will calculate the current market price as shown above. Thereafter, we will subject the current market price to a 3-year growth rate to calculate the market price in 3 year's time
