Answer:
Sid should buy the company
Explanation:
given data
dividend = $1.70 per share
constant rate = 5%
required return = 11%
growth rate increase = 6.5%
increasing the required return = 12%
solution
we get here intrinsic value of the company in both by use Gordon Growth Model that is here present value
PV = ( Do × (1 + g) ) ÷ (r - g) .......................1
here Do is current dividend and g is growth rate and r is required rate of return
so here put value in current case
PV = ( 1.7 × (1 + 0.05) ) ÷ (0.11 - 0.05)
solve it we get
PV = $29.75 .............................2
and
now put value for buying company case
so
PV = ( 1.7 × ( 1 + 0.065)) ÷ ( 0.12 - 0.065)
solve it we get
PV = $32.92 ..............................3
so Sid should go ahead buying the company
Answer:
cost of direct materials purchases 160,800
Explanation:
pounds required for production 54,000
desired ending inventory 2,800
total needs 56,800
beginning inventory (3,200)
units to be purchased 53,600
cost per unit of direct materials 3
cost of direct materials purchases 160,800
<u>Notes:</u>
The pounds for production and the ending inventory are the raw materials demand.
The beginning inventory is a portion we already have, so we need to purchase less.
Then, we multiply the pounds to be purchased by their cost to get the total cost for direct materials
Hi there
1,000÷0.20
=5,000
5,000−1,000
=4,000....Answer (this is the total amount of money can be created)
Hope it helps
Answer:
Budgeted cost of goods sold = $7,650,000
Explanation:
Computation table for budgeted cost of goods sold
<u>Particular Amount </u>
Total Sales 225,000
Add: Desired stock in hand 90,000
<u>Less:</u><u> Beginning stock 60,000 </u>
<u>Budgeted production 255,000
</u>
Budgeted cost of goods sold = 255,000 x $30
Budgeted cost of goods sold = $7,650,000