Answer:
Provided in Explanation
Explanation:
This is a very general question however I’ll try to answer it to the best of my knowledge.
If I use my own assumptions then these will be the Projections:
Selling Price $79.99 Selling Price $69.99
Cost of Sales/unit $40.00 Cost of Sales/unit $40.00
Expenses/unit $15.00 Expenses/unit $15.00
Demand @ $79.99 1000 Demand @ $69.99 1200
Sales $79,990.00 Sales $83,988.00
Cost of Sales $40,000.00 Cost of Sales $48,000.00
Expenses $15,000.00 Expenses $18,000.00
Profit $24,990.00 Profit $17,988.00
The final decision however relies on the Price Elasticity of the Product. If the Product is Price elastic then lowering the Price will lead to a significant rise in Demand. However if the Product is Price inelastic then lowering the Price will not lead to a significant rise in Demand and thus profit margins will be lowered. If the Product is Price inelastic then it is better to increase prices in order to gain more profits. In the case of Unit Elasticity the change in Demand will be at the same proportion as price change so it won’t be of any use to change the Price.
Answer:
$3080
Explanation:
Calculation to determine what the amount of salaries earned but unpaid at the end of the accounting period is:
Salaries earned but unpaid at the end of the accounting period =3850-$770
Salaries earned but unpaid at the end of the accounting period =$3080
This question is to complex. In Order for this to be answerable you would need to put it into chunks
Answer:
I strongly believe that the requirement is to calculate the price of the bond.
The bond is worth $ 70,824,063.03
Explanation:
It is noteworthy that a rational would-be investor would pay for a bond a price that reflects the cash flows receivable from the bonds in future discounted to today's terms.
The future cash flows comprise of the semi-annual coupon interest of $4 million(10%/2 *$80 million) for 20 periods as well as the repayment of the principal $80 million at the end of period 20
Since coupon is paid every six months, the coupon would be twenty times over the life of the bond(paid twice a year for 10 years)
To bring the cash inflows today's term, we multiply them them by the discounting factor 1/(1+r)^N , where is the yield to maturity of 12% and N is the relevant the cash flow is received.
The discounting is done in attached spreadsheet leading $ 70,824,063.03 present value today.
Answer:
The correct answer is D. 10.00%
Explanation:
To get internal rate of return we use excel or a spreadsheet. See document attached.
Make the cash flow to solve this problem. At moment 0 we have the investment cost , in this case $1.475.668 (negative) From period 1 to period 5, we have different incomes o benefits. Salvage value is 1.615.205, we are going to get it at moment 5 (positive).
Then, we calculate the Net cash flow that is the difference between benefits and cost.
We use all the result (positive and negative) in Net cash flow to get the IRR.
Net Present Value (NPV) 768907
Internal Rate of Return (IRR) 10,00%
