Answer:
5 years
Explanation:
Given:
For proposal X
The initial Investment = $10,700,000
Useful life = 5 years
Estimated annual net cash inflows for 5 years = $2,140,000
Residual value = $50,000
since,
the depreciation method is a straight line
thus,
payback period for the proposal X will be given as:
Payback period = (Initial investment) / (Estimated annual cash inflows)
on substituting the values, we get
Payback period = $10,700,000 / $2,140,000
or
Payback period for the proposal X = 5 years
Answer:
The correct answer is letter "D": equal to the present value of all expected future dividends.
Explanation:
The Constant-Dash-Growth Valuation or the Gordon Growth Model is used to calculate the intrinsic value of a stock today based on the stock's expected future dividends. It is widely used by investors and analysts to compare the predicted stock value against the actual market price. The difference between them may determine if the stock is overvalued or undervalued by the market.
Answer:
C) 200 percent profit; 100 percent loss.
Explanation:
There is a 50% chance that the company will make profit (20% profit) and 50% chance that it will lose money (20% loss).
Balin borrows $90 and invests $10 from his own money.
50% profit chance = $120 - $90 = $30 (200% profit)
50% loss chance = $80 - $90 = -$10 (100% loss)