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Lina20 [59]
3 years ago
3

You own 50 shares in a major corporation stock valued at $128 per share. This stock gained 12% in value last year. Assuming the

stock will continue to grow at the same rate over the next 5 years, calculate the value of the stock per share in the 5th year.
Business
1 answer:
motikmotik3 years ago
0 0

Answer:

  • <u><em>$225.58</em></u>

<u><em></em></u>

Explanation:

The growth of this <em>stock</em> is an example of annual compounded interest: the value will increase at the same rate over the next 5 years, thus every year its value will be multiplied by 1 + 0.12 = 1.12.

Thus, at the end of the year 5, the share will have multiplied its value (1.12)⁵ times:

         Value=\$128\times 1.12^5\approx\$128\times 1.76234=\$225.58

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DENIUS [597]

Answer:

The correct answer is option C.

Explanation:

The opportunity cost of any economic decision is the cost of giving up its alternative. We are aware that we have limited resources with alternative uses and we have to use these resources to satisfy alternative needs and wants. In order to increase spending resources on one thing, we need to decrease spending on its alternative.  

Here, the parking spot on the driveway can be used for personal use or can be used for renting. The opportunity cost of using the spot for personal parking is the money that could have been earned by renting it to others.

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2 years ago
The acquisition cost of a certain raw material changes frequently. The book value of the inventory of this material at year end
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Answer: B. FIFO method

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3 years ago
Non-toxic-toys currently has $400,000 of equity and is planning a $160,000 expansion to meet increasing demand for its product.
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1. $100,000 and 25%

2. $137,200 and 34.3%

3. $150,000 and 27%

Explanation:

1. It does not expand

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    b. Return on equity= (net income)/(shareholder’s equity)

Shareholder’s equity= $400,000

Thus return on equity= 100000/400000 = 0.25  or 25%

2. It expands and issue $160,000 in debt

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=0.343  or 34.3%

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a. Net Income= $100000 + 50000

= $150000

b. Return on equity= (net income)/(shareholder’s equity)

= 150000/(400000 + 160000)

Where ($560,000) 400000 + 160000 is shareholder’s equity

= 0.27 or 27%

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