Answer:
$12.14
Explanation:
The computation of the current value of one share of the stock is shown below:
D2 = (1 × 1.25) = $1.25
D3 = (1.25 × 1.25) = $1.5625
Now
Value after year 3 is
= (D3 × Growth rate) ÷ (Required return - Growth rate)
= (($1.5625 × 1.06) ÷ [0.17 - 0.06)]
= $15.05681818
Now
Current value is
= Future dividends × Present value of discounting factor(17%,time period)
= $1 ÷ 1.17 + $1.25 ÷ 1.17^2 + $1.5625 ÷ 1.17^3 + $15.05681818/1.17^3
= $12.14
Answer:
true
Explanation:
For example, if a bank account has a $100 minimum balance requirement, you want to make sure that you don't let your balance fall to $99.99 or less.
Answer:
C. Yes. If repair rates are higher for planes that have been resold, this would be an indication of a lemons problem
Explanation:
Lemons problem is an issue of quality of product, asset, investment : due to asymetric information about the respective quality.
Asymetric Information is when one one party in transaction has more knowledge about the quality of product or asset, than the other party.
Second hand goods are an illustration of this case, as seller has more information about the real quality of good or asset than buyer.
Lemon's problem in single engines airplanes : can be analysed by concept of second hand goods 'asymetric information, lemons problem' it. If the 2nd hand resold planes require higher repairs, it indicates that the buyer had asymetric information about bad quality of planes ( the information which seller had), but realisation of bad quality later implies higher repairs.
Answer:
e. Project X has both a higher present value and a higher future value than Project Y.
Explanation:
The project X cash flows are higher in initial years than of project Y. The present value of project X cash flows will be greater than project Y. The time value of money of project X will be greater than Project Y.
The future value of Project X will also be higher than project Y because it has higher cash flows in earlier years. When future value will be calculated the project X will give the higher Future value than project Y.
Answer:
1. 1.875 hours
2. $20.25
3. $37.97
Explanation:
The computation is shown below:
1. For Standard direct labor hours per oil change, it is
= (Actual time spent on the oil change) + (Setup and downtime + Cleanup and rest periods) × Actual time spent on the oil change
= 1.25 hours + (22% + 28%) × 1.25 hours
= 1.25 hours + 0.625 hours
= 1.875 hours
2. Standard direct labor hourly rate, it is
= (Hourly wage rate) + (Payroll taxes + Fringe Benefits) × hourly wage rate
= $15 + (10% + 25%) × $15
= $15 + $5.25
= $20.25
3. And, the standard direct labor cost per change is
= Standard direct labor hours per oil change × Standard direct labor hourly rate
= 1.875 hours × $20.25
= $37.97
We simply applied the above formulas for each one part
