Answer:
a) 6,730.40
b) 418
c) 131.10
Explanation:
price after trade discount:
printer = 500 x (1 - 12%) = 440
toner = 150 x (1 - 8%) = 138
since the invoice was paid during the discount period, the total amount paid on December 30 was [(440 x 10) + (20 x 138)] x (1 - 5%) = 6,730.40
net price per unit:
printer = 440 x 0.95 = 418
toner = 138 x 0.95 = 131.10
d) total cost including operating expenses = (6,730.40 x 1.15) = 7,739.96
selling price = 7,739.96 / 0.75 = 10,319.95 ≈ 10,320
e) (printer + toner) x 1.15 = (418 + 131.10) x 1.15 = 631.465
selling price of 1 printer and 1 toner = 631.465 / 0.75 = 841.95 ≈ 842
f) yes, a profit was made since the original selling price was calculated assuming a 25% net profit, and the discount was only 15%
Answer:
B. $9
Explanation:
Assets value = $500 million
Liability value = $50 million
Use following formula to calculate NAV
Net Assets value = Assets value - Liability value
Net Assets value = $500 million - 50 million
Net Assets value = $450 million
Net Assets value = $450 million / 50 million
Net Assets value = $9 per share
So, the correct option is B. $9.
Answer:
The stock A is most valuable as the fair value of Stock A is $100 which is more than the fair value of Stock B ( $83.33) and Stock C ($34.28).
Explanation:
to calculate the fair price of the stocks, we will use the DDM or dividend discount model. The DDM bases the value of a stock on the present value of the expected future dividends from the stock.
Let r be the discount rate which is 10%.
a.
The stock is like a perpetuity as it pays a constant dividend after equal intervals of time and for an indefinite period.
The price of this stock can be calculated as,
Price or P0 = Dividend / r
P0 = 10 / 0.1 = $100
b.
The constant growth model of DDM can be used to calculate the price of this stock as its dividends are growing at a constant rate forever.
P0 = D1 / r - g
Where,
- D1 is the dividend for the next period
- r is the cost of equity or discount rate
- g is the growth rate in dividends
P0 = 5 / (0.1 - 0.04)
P0 = $83.33
c.
The price of this stock can be calculated using the present of dividends.
P0 = 5 / (1+0.1) + 5 * (1+0.2) / (1+0.1)^2 + 5 * (1+0.2)^2 / (1+0.1)^3 +
5 * (1+0.2)^3 / (1+0.1)^4 + 5 * (1+0.2)^4 / (1+0.1)^5 + 5 * (1+0.2)^5 / (1+0.1)^6
P0 = $34.28
Answer: Option (b) is correct.
Explanation:
According to the theory of comparative advantage, a country has a comparative advantage in producing a commodity if the opportunity cost of producing that commodity in terms of other commodity is lower in that country as compared to the other country.
Hence, a country exports the commodity in which it has a comparative advantage and imports the commodity in which it has a comparative disadvantage because the opportunity cost of producing these commodities is higher than the other country.
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