Answer:
1. Measure of the percentage change in earnings before interest and tax or operating cash flow:
B) Degree of operating leverage
2. P/E Ratio of 10 indicates that:
c. The value of the stock will be 10 times the initial investment at the time of maturity.
Explanation:
Company B's degree of operating leverage is the financial measure that shows the degree of change of the operating income of the company in relation to a change in her sales revenue. With this measure, investors and analysts of Company B are able to evaluate how sales impacts the company's operating income. There are many ways to measure a company's degree of operating leverage. One of the methods subtracts the variable costs of sales and divides that number by sales minus variable costs and fixed costs.
Company A's P/E ratio or price/earnings ratio is the measure of the relationship between the current market price and its earnings per share. It is used to evaluate the value of the company's stock. It points out whether the company's stock is undervalued, overvalued, or correctly valued.
The cost of successfully defending a patent in an infringement suit should be amortized over the remaining estimated life of the patent. Amortization means adding the cost to patent account and dividing the costs of the suit by twenty years or by the remaining useful life of the patent, whichever one is shorter.
Answer:
c. has decreasing slope and a person is risk averse.
Explanation:
The marignal utility of wealth represent that the subsequent utility of the person wealth is not perceived as necessary/joyful as the previous one.
This makes the slope of the utility function to go upward but at slower grow.
The first units of wealth produce a great improvement in utlity compared with the followings just like in any other good or service provided in the economy.
Answer:
The amount to be deposited today = $13,590.33
Explanation:
<em>The amount to be paid for the annuity would the sum equal to the present value of the cash flow from the annuity.</em> The present value of an ordinary annuity is determined using the relationship below:
PV of annuity = A× ( (1-(1+r)^(-n) )/r
A- Annual cash flow
r- interest rate per annul
n- Number of years
PV- Present Value of annuity'
DATA
A-1000
r- 4%
n- 20
PV = 1,000 ×( (1 - 1.04^(-20))/0.04 =$13,590.33
The amount to be deposited today = $13,590.33
Answer:
A. She will get a share of the residual earnings of the business.
Explanation:
When someone buys a corporation's stock, they become co-owners of the corporation and acquire a fraction (or piece) of the corporation.
Stockholders like Salma, are entitled to voting rights (proportional to the amount of stocks owned), dividend distributions (own a fraction of the corporation's profits) and essentially own a piece of the corporation's wealth.
