Answer:
This is an example of using exchange rate forecasting to assist with <u>capital budgeting</u> decisions, with the goal of improving the value of the MNC via influencing the <u>dollar value of foreign cash flows.</u>
Capital budgeting decisions have to do with decisions a company makes on investments that it would like to go into. Depositing money into a Eurozone bank account is that investment so this is a capital budgeting decision.
The goal of this investment is to improve the value of the company by gaining from an appreciation of the Euro so that a higher dollar amount can be acquired for the Euros held.
Answer: When a manager develops a cost of capital for a specific project based on the cost of capital for another firm which has a similar line of business as the project, the manager is utilizing the pure play approach.
Explanation: Pure play method is an approach to estimate the cost of equity capital of private companies. To do this, members will go in and exam the beta coefficient of different companies to focus on them.
Answer:
Purple Panda Pharmaceuticals
Annual Free Cash Flow (FCF):
FCF = Sales Revenue - (Operating costs + Taxes) - Required investments in operating capital or net operating profit after taxes - net investment in operating capital =
Net Income = $1,400,000
additional NOWC = 35,000
Capital expenditures = 500,000
FCF = $865,000
Explanation:
a) Data and Calculations:
EBIT = $2,000,000
Tax = 30% or $600,000
Net Income = $1,400,000
additional NOWC = 35,000
Capital expenditures = 500,000
FCF = $865,000
Purple Panda Pharmaceuticals' Free Cash Flow shows what is available for distribution to security holders after the payment of taxes. Purple Panda will use the information from its Free Cash Flow to judge if a project will pay off and generate enough cash flow so that shareholders' value will be enhanced.
The two ways that Ashley should engage in—in order to
increase the profits of her business are the following;
<span>·
</span>Cut back expenses – this will lessen the expense
that could contribute to her business as a way of saving up and using the money
when only needed
<span>·
</span>Increasing sales – this is a strategy used in
means of having product’s at high prices in a way of earning a lot more
<u>Answer:</u> D. 60,000 shares at $5 per share
<u>Explanation:</u>
The company has 15,000 shares and offers to split the stock four-for-one. It means that the there will be four times the number of shares but the total value of the shares, before and after the split, would remain the same.
The total value of shares = $15,000 x 20 = $300,000
Since the stock split is 4-for-1, the number of shares would be = 15000 x 4
= 60,000 shares
Therefore the total value of shares divided by the number of shares will give us the par value of the shares:
300,000 / 60,000 = $5
