C)people have scare resources and must make choices
Answer:
one possibility is that you spent more on your assets, than your assets are making. In other words, some assets may have a low or negative net worth
Answer:
NPV= 5,493.79
Explanation:
<u>To calculate the net present value (NPV), we need to use the following formula:</u>
NPV= -Io + ∑[Cf/(1+i)^n]
Cf1= 18,708 / 1.09= 17,163.30
Cf2= 21,200 / 1.09^2= 17,843.62
Cf3= 17,800 / 1.09^3= 13,744.87
∑[Cf/(1+i)^n]= $48,751.79
NPV= -43,258 + 48,751.79
NPV= $5,493.79
Answer:
a. E4 = Eo(1 + g)4
$3.51 = $1.00(1 + g)4
<u>$3.51</u> = (1 + g)4
$1.00
3.51 = (1 + g)4
4√3.51 - 1 = g
1.3688 - 1 = g
g = 0.3688 = 36.88%
b. Earnings for next year (E1)
E1 = Eo(1 + g)1
E1 = $1.00(1 + 0.3688)1
E1 = $1.37 per share
c. D1 = 45% of E1
D1 = 0.45 x $1.37 = $0.62 per share
d. Ke = <u>D1</u> + g
Po
Ke = <u>$0.62</u> + 0.3688
$20
Ke = 0.3998 = 39.98%
e. Kn = <u>D1 </u> + g
Po(1 - FC)
Kn =<u> $0.62 </u> + 0.3688
$20 - $3
Kn =<u> $0.62 </u> + 0.3688
$17
Kn = 0.4053 = 40.53%
Explanation:
The compound annual rate of growth is calculated as E4 = Eo(1 + g)4
Where E4 is earnings per share at the end of year 4, Eo is the current earnings per share and g refers to growth in earnings. Since E4 and Eo have been provided, g becomes the subject of the formula.
E1 is calculated as Eo(1 + g)1 where E1 refers to earnings per share at the end of year 1.
Since dividend payout ratio is 45%, D1 will be 45% of E1. D1 denotes dividend at the end of year 1.
Cost of equity equals dividend at the end of year 1 divided by the current market price plus the annual rate of growth.
Answer:
d. Failure to achieve this goal may result the cash account being too high
Explanation:
The B/AR/CR process is part of a revenue cycle, it is regarded as a process in accounting with a structure that interacts with various process that supports how financial managers makes decision. It is a structure of how people activities, equipments and controls helps in creating the free flow of records that supports repetitive routines.