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3 years ago

The Rivoli Company has no debt outstanding, and its financial position is given by the following data:

Business

1 answer:

anzhelika [568]3 years ago

7 0

Answer:

Intrinsic value is $45

Explanation:

The starting point to determining Rivoli Company intrinsic value is to compute the earning after tax as shown below:

Earnings after tax=earning before tax*(1-tax rate)

earnings before tax is $600,000

tax rate

earnings after tax=$600,000*(1-0.25)

=$600,000*0.75

=$450,000

Then we need to compute earnings per share;

Earnings per shares=earnings after tax/weighted average number of shares

=$450,000/100,000

=$4.5

Intrinsic value=earnings per share/cost of equity

cost of equity is 10%

intrinsic value=$4.5/10%

=$45

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Wildhorse, Inc., a resort management company, is refurbishing one of its hotels at a cost of $6,336,382. Management expects that

Xelga [282]

Answer and Explanation:

The computation of the IRR is shown below:

<u>Year Particulars Amount (in $) </u>

0 Initial cost -6,336,382

1 Year 1 cash inflows 1,460,000

2 Year 2 cash inflows 1,460,000

3 Year 3 cash inflows 1,460,000

4 year 4 cash inflows 1,460000

5 Year 5 cash inflows 1,460,000

6 Year 6 cash inflows 1,460,000

IRR 10.12%

Perform the IRR formula i.e.

= IRR() in excel

Now the net present value is

= Present value of cash inflows - initial investment

= ($1,460,000 × 4.1114) - $6,336,382

= $6,002,644 - $6,336,382

= -$333,738

The 4.1114 is the PVIFA factor of 6 years at 12%

hence, the Wildhorse should not go ahead with the project

5 0

3 years ago

he following information pertains to Lightning Inc., at the end of December: Credit Sales $ 20,000 Accounts Payable 10,000 Accou

agasfer [191]

Answer:

What is the appropriate amount of Bad Debt Expense?

Bad debt expense $ 1,178

Allowance for Uncollectible Accounts $ 1,178

Explanation:

The total amount of Allowance for Uncollectible Accounts is a credit of $0,400

Initial Balance

Accounts Receivable $ 10,400

Allowance for Uncollectible Accounts $ 0,400

The aging method indicates that the total amount must be :

Acc. Rec Allow.

7% $ 7,000 $ 0,490 Not yet due

15% $ 1,700 $ 0,255 1-30 days

49% $ 1,700 $ 0,833 more than 30 days

$ 10,400 $ 1,578

It's necessary to entry the next journal entry to meet the amount indicated by the aging method.

Bad debt expense $ 1,178

Allowance for Uncollectible Accounts $ 1,178

7 0

3 years ago

Luxury Dwellings Inc. is a condominium-building company that is based in the country of Veritas. Itsells high-priced homes to co

meriva

Answer:

A) international

Explanation:

Luxury Dwellings knows that their clients are wealthy individuals from their home country Veritas and specially from foreign countries. That is why they are not worried about local economic conditions and about varying costs. Since their brand if highly recognized overseas, they are more worried about satisfying their international clients.

This is very common in vacation destinations, including some in the US, like Miami. Many luxury real estate companies located in Miami carry out marketing campaigns in European, Asian and Latin countries more than in domestic markets.

7 0

3 years ago

Lin Corporation has a single product whose selling price is $140 per unit and whose variable expense is $70 per unit. The compan

ivanzaharov [21]

Answer:

The sales unit to achieve a target profit of $6,250 is 545 units

The sales units to achieve to achieve a target profit of $9,400 is 590 units

Explanation:

The quantity at target profit=fixed cost+target profit/contribution per unit

fixed expense=$31,900

target profit $6,250

contribution per unit=$140-$70

=$70

unit sales at a target profit of $6,250=($31,900+$6,250)/$70

=545 sales units

fixed expenses $31900

target profit of $9400

contribution per unit is $70

unit sales at a target profit of $9,400=($31900+$9400)/$70

=590 sales unit

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3 years ago

Market equilibrium is: Select one: a. the point at which a nation reaches full employment b. the time period used to determine t

fenix001 [56]

Answer:So far we have learned to measure real GDP, but how do we end up with that real GDP? Of all of the different amounts of national income and price levels that might exist, how do we gravitate toward the one that gets measured each year as real GDP?

In short, it is the interaction of the buyers and producers of all output that determines both the national income (real GDP) and the price level. In other words, the intersection of aggregate demand (AD) and short-run aggregate supply (SRAS) determines the short-run equilibrium output and price level.

Once we have a short-run equilibrium output, we can then compare it to the full employment output to figure out where in the business cycle we are. If current real GDP is less than full employment output, an economy is in a recession. If current real GDP is higher than full employment output, an economy is experiencing a boom. If the current output is equal to the full employment output, then we say that the economy is in long-run equilibrium. Output isn’t too low, or too high. It’s just right.

Explanation: hope this helps

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2 years ago