Answer:
If a firm decreases its sustainable growth rate (g), the price of their stock will probably decrease. I will use the following example:
P₀ = Div₁ / (Re - g)
P₀ = $2 / (12% - 5%) = $28.57
if the growth rate g decreases to 2%, and the rest remains unchanged, then
P₀ = $2 / (12% - 2%) = $20
Answer:
The correct answer to the following question is option A) Quantity sold.
Explanation:
A data can be defined as any fact or figure or statistics or any information which is written in unorganized form such as symbols or letters , to represent ideas, objects, results or analysis etc. So in simple words it is just collection of facts and from the given options in the question only option A is correct.
Current value of cash inflows equals present value at irr =%
The quantity of money flowing into your company is known as the cash inflow. When there is more money coming in than going out, there is a positive cash flow. Gains from an investment you made are included in cash inflow. It includes the cash you receive right away from customers in exchange for the goods or services you provide. To calculate net cash inflow, deduct total fixed costs and total variable costs from the company's annual sales. The term "cash inflow" refers to all of the revenue generated by your company's operations, including any profit-generating tactics. Any money leaving your company, let the IRR be x%, is considered a cash outflow, which also includes any debts, liabilities, and operating expenditures.
Learn more about cash inflows here
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Answer:
Their total assets next year has to be $124,725
Explanation:
<em>Step 1: Determine the initial assets and liabilities</em>
The total assets can be expressed as;
A=C+E
where;
A=total assets
C=common stock
E=retained earnings
In our case;
A=unknown
C=$12,173
E=$91,949
replacing;
A=12,173+91,949=$104,122
<em>Step 2: Determine total liabilities</em>
Total liabilities=initial liability+dividends
where;
Initial liability=$73,225
dividends=$15,000
replacing;
Total liabilities=73,225+15,000=$88,225
<em>Step 3: Determine new assets</em>
Using the formula;
Net profit=new assets-total liabilities
where;
Net profit=$36,500
new assets=unknown=n
total liabilities=$88,225
replacing;
36,500=n-88,225
n=36,500+88,225=$124,725
n=$124,725
Their total assets next year has to be $124,725
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Answer:
a. <u>Total assets of the firm</u>:
Cash $8,000
Equipments $10,000
Accounts Receivable <u>$9,000</u>
Total Assets <u>$27,000</u>
b. <u>Net income of the firm</u>
Service Revenue $36,000
Less: Rent Expenses $11,000
Less: Utilities Expense $4,000
Less: Salaries and Wages Expense <u>$7,000</u>
Net Income <u>$14,000</u>