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hichkok12 [17]
4 years ago
7

Bodle, Kane, Marcus, 9e, Equity Valuation Consider a company with a P/E ratio of 15, in an industry with an average P/E ratio of

20, and the same required return (k) as the industry average. This company is potentially appropriate addition to an investor's portfollo for which of the following reasons? an Click the answer you think is right. V The firm's PVGO is higher than the industry average. The firm's PVGO is lower than the industry average. The stock could be considered a value investment. The firm's growth prospects are stronger than average for the industry Read about this Do you know the answer?
Business
1 answer:
Natali [406]4 years ago
4 0

Answer:

First option is correct.

Explanation:

The company is potentially an appropriate addition to the investor's portfolio due to high PVGO ratio as the investor believes that company can earn better return by investing profit into future growth opportunities.

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AudioCables, Inc., is currently manufacturing an adapter that has a variable cost of $0.50 per unit and a selling price of $1.40
Sedaia [141]

Answer: Yes. AudioCable should buy a new equipment

Explanation:

Audiocables Inc. without new equipment:

Selling price: $1.40

Variable cost: $0.50

Fixed cost: $14,000

Sales: 30000 units

Total cost = Fixed cost + Variable cost

= $14000 + ($0.50 × 30000)

= $14000 + $15000

= $29000

Revenue = Sales × Selling price

= 30000 × $1.40

= $42000

Profit = Revenue - Total Cost

= $42000 - $29000

= $13000

Audiocables Inc. with new equipment:

Selling price: $1.40

Variable cost: $0.60

Fixed cost: $14,000 + $6000 = $20000

Sales: 50000 units

Total cost = Fixed cost + Variable cost

= $20000 + ($0.60 × 50000)

= $20000 + $30000

= $50000

Revenue = Sales × Selling price

= 50000 × $1.40

= $70000

Profit = Revenue - Total Cost

= $70000 - $50000

= $20000

From the calculations made, AudioCable buy a new equipment as profit generated is more.

5 0
3 years ago
Eugene agrees to finish painting Hazel’s house within two weeks of the time they agree to in the contract. A week in, Eugene rea
Yanka [14]

Answer:

Yes, Hazel needs to pay extra $700

Explanation:

As per pre-existing duty rule, a person is obligated to perform his duty at the consideration agreed upon initially. Any modification to the contract is void.

Exceptions to this rule:

  • As per new contract, if the person undertaking his duty hires another person to perform the work so as to complete it in time, then modifications are valid and enforceable.
  • Modifications are valid in case of unforeseen contingencies like war, recession, change in economic conditions and strikes.

In this case, Hazel agreed to pay $700 extra. Under pre-existing duty rule, she is not required to pay Eugene extra $700 but since Eugene took additional help exception to the rule applies and Hazel is obligated to pay $700 extra.

6 0
3 years ago
Read 2 more answers
According to functional job analysis, all jobs require workers to interact with?
Sloan [31]

According to functional job analysis, all jobs require workers to interact with data, people, and things. There are different ways to conduct a functional job analysis, but these ways measure workplace roles through established scales. These scales are usually categorized into seven categories: data, people, things, instruction, reasoning, math, and language.

Functional job analysis is the practice of examining job requirements and assigning a suitable candidate for that job or examining a candidate's qualifications and skills and assigning a suitable job to that candidate. It also works in reverse by not matching the wrong candidate with the job or vice versa. An obvious example is not hiring someone with no hands to do any job that requires lifting things. With only two types of jobs in a small business, this is not a difficult proposition. In a large company with thousands of people doing hundreds of different jobs, it can become a Gordian knot. It is up to the functional job analyst to become Alexander with the sword.

Learn more about functional job analysis:

brainly.com/question/24239905

#SPJ4

3 0
2 years ago
Justus Motor Co.has a WACC of 11.50%, and its value of operations is $25.00 million. Justus's free cash flow is expected to grow
lakkis [162]

Answer:

FCF_0=1.05

So option (b) is correct option

Explanation:

We have given value of operation PV = $25.00

WACC, that is Ke = 11.50% = 0.1150

It is grow at a constant rat of 7 % so g = 0.07

We have to find the value of FCF_0

We know that value of operation is given by

PV=\frac{FCF_0(1+g)}{Ke-g}

So 25=\frac{FCF_0(1+0.07)}{0.1150-0.07}

FCF_0=1.05

So option (b) is correct option

4 0
3 years ago
On January 1, Greene Inc. issued $5,000,000, 9% bonds for $4,685,000. The market rate of interest for these bonds is 10%. Intere
skad [1K]

Answer:

b.$296,500.

Explanation:

Calculation to determine what Greene should report as unamortized bond discount

First step is to calculate the discount amount

Discount Amount= ($5,000,000 × .09) - ($4,685,000 × .10)

Discount Amount= $18,500

Now let determine the unamortized bond discount

Unamortized bond discount=$315,000 - $18,500 Unamortized bond discount= $296,500

Therefore Greene should report unamortized bond discount of $296,500

5 0
3 years ago
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