Answer:
a custom-designed product.
Explanation:
In this case, an airplane is a highly customized product. Each airplane is specifically built and arranged to meet the special and unique needs of its clients. For example, each airplane is painted with the colors and the logo of the airline company. The seats are also arranged depending on the specific requirements of the clients.
Answer:
$2,216.28 million
Explanation:
JJ MoneyTree Inc firm's total corporate value shall be determined through the following mentioned formula:
Total Corporate value= [(Free Cash Flow(1+g))/(WACC-g)]
In the given question:
Free Cash Flow=$156 million
g=constant growth rate=3%
WACC=10.25%
Total Corporate value= [(156(1+3%))/(10.25%-3%)]
=$2,216.28 million
Answer:
The required rate of return is 11%
Explanation:
Dividend valuation method calculated the value of stock based on dividend payment, growth rate and required rate of return.
Use following formula to calculate the the required rate of return
Price = Dividend / ( Required Rate of return - Growth rate )
20 = $1 / ( Required Rate of return - 6% )
20 = $1 / ( Required Rate of return - 0.06 )
Required Rate of return - 0.06 = $1 / $20
Required Rate of return - 0.06 = 0.05
Required Rate of return = 0.05 + 0.06
Required Rate of return = 0.11
Required Rate of return = 11%
Answer:
Sunk cost
Explanation:
The sunken cost is the expense previously incurred that will not be compensated in future. Plus, it's also called past expense.
The cost at the time of decision-making is not significant and it should be ignored.
In the given question, the $3,500 spent which is not now recovered and hence represents the sunk cost