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Butoxors [25]
3 years ago
7

The management of dominican sugar company is considering whether to process further raw sugar into refined sugar. refined sugar

can be sold for $2.23 per pound, and raw sugar can be sold without further processing for $1.43 per pound. raw sugar is produced in batches of 42,500 pounds by processing 100,000 pounds of sugar cane, which costs $0.36 per pound of cane. refined sugar will require additional processing costs of $0.49 per pound of raw sugar, and 1.25 pounds of raw sugar will produce 1 pound of refined sugar.
Business
1 answer:
horsena [70]3 years ago
5 0

We shall Ignore cost of sugar cane at $0.36 per pound, as its going to be incurred for both processes.

Lets find the cash flow from not processing further:

42500 pounds Sugar @ $1.43 per Pound $60,775

Lets find the cash flow from Processing Further:

If 42500 pounds of raw sugar are processed further, we get 34000 pounds of refined sugar(42500/1.25)

34000 pounds of refined [email protected] $2.23 per pound $75280

Additional Processing charges for 42500 [email protected]$0.49 ($20825)

Total Cash Flow $54995

As can be observed, the organisation earns more when they sell raw sugar, Thus sugar should not be processed further.

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Old Quartz Gold Mining Company is expected to pay a dividend of $8 in the coming year. Dividends are expected to decline at the
LenKa [72]

Answer:

$133.33

Explanation:

Calculation for The intrinsic value of the stock

Intrinsic value of the stock = 6% + [−0.25(14% − 6%)] = .04

Intrinsic value of the stock = 8/[.04 − (−.02)]

Intrinsic value of the stock = 8/.06

Intrinsic value of the stock = $133.33

Therefore the intrinsic value of the stock is $133.33

8 0
2 years ago
Suppose a ten firm industry has total sales of​ $35 million per year. The largest firm have sales of​ $10 million, the third lar
lyudmila [28]

Answer:

0.66

Explanation:

the fourfirm concentration ratio is the sum of the concentration ratio of the four largest firms in the industry.

The sales of the second largest firm = $35 million - ( $10 million + $4 million+ $2 million + $12 million ) = $7 million

concentration ratio of firm 1 = $10 million / $35 million = 0.29

concentration ratio of firm 2  = $7 million / $35 million = 0.2

concentration ratio of firm 3 = $4 million / $35 million = 0.11

concentration ratio of firm 4 = $2 million / $35 million = 0.06

Adding the ratios together = 0.66

3 0
2 years ago
The Rivoli Company has no debt outstanding, and its financial position is given by the following data:
anzhelika [568]

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

7 0
3 years ago
On January 1, James Industries leased equipment to a customer for a four-year period, at which time possession of the leased ass
MA_775_DIABLO [31]

Answer:

-  $700,000

<u>- 82,270</u>

<u>- </u> $617,730

- present value of $1: n=4, i=5%

- the present value of an ordinary annuity of $1: n=4, i=5%

Explanation:

Amount to be recovered (fair value):                                              $700,000

Less: Present value of the residual value ($100,000 x .82270*):      82,270

Amount to be recovered through periodic lease payments:           $617,730

Lease payments -: end of each of the next four years: ($617,730 ÷ 3.54595**) $174,207

* present value of $1: n=4, i=5%

** present value of an ordinary annuity of $1: n=4, i=5%

7 0
3 years ago
What cost advantage does e-commerce offer businesses
katovenus [111]
Small Business United Nations (UN) and Organization for Economic Cooperation and Development (OECD) Definition
Fewer than 500 employees
5 0
3 years ago
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