Answer:
d. 16% - buy
Explanation:
R = (D1 / P0) + g
Where, R=Expected Return, P0 = Current Market Price = $40, D1=Expected Dividend=$, g = Expected Growth Rate = 11% = 0.11
Expected Return = R = ($2/$40) + 11%
R = 0.05 + 0.11
R = 0.16
R = 16%
Expected Return is higher than the required return of 12%. Hence, it should be bought (it is expected to give higher return than required)
Answer:
The answer is: E) set up a line of credit with a bank that offers a revolving credit agreement.
Explanation:
A revolving credit is a credit line where the bank charges a business a commitment fee and allows the business to borrow money and use it only when they need the funds. This type of credit line lets the business decide when to use the money according to their cash flow needs.
I say to look it up on the internet.
Answer: an apple is a fruit that grows from trees
Explanation:
ROI as a financial ratio is calculated as follows:
ROI = Net profit/Total investments
In the current case,
Net profit = Net operating income = $700,000
Total investments = Operating assets = $600,000
After purchasing the new machine,
Total investments = 600,000*1.08 = $648,000
Therefore, the new ROI is;
ROI = 700,000/648,000 ≈ 1.08 = 108%
