Answer:
The firm should pay $46907.57 for the given project.
Explanation:
Given information:
Return = $15000 annually
Time = 5 years
Opportunity cost = 18%
The formula for payment is
where, R is return, OC is opportunity cost, t is time in years.
Substitute R=15000, t=5 and OC=0.18 in the above formula.
Therefore the firm should pay $46907.57 for the given project.
Answer: $22000
Explanation:
The amount of Superior's dividend declarations during its recent year of operation will be calculated thus:
Ending retained earnings ($91000) = Beginning retained earnings ($75000) + Net income ($38000) - Dividend declared
$91000 = $113000 - Dividend declared
Dividend declared = $113000 - $91000
Dividend declared = $22000
Therefore, Superior's dividend declarations during its recent year of operation is $22000
Answer:
The correct answer is $79,000 and $37,000.
Explanation:
According to the scenario, the given data are as follows:
Net income = $116,000
Doug's Salary = $52,000
Receive an interest = 10%
So, the amount to be shared equally = [$116,000 - $52,000 - ( 10% × $220,000) - ( 10% × $320,000)] ÷ 2
= $5,000
So, Doug share = $52,000 + ( 10% × $220,000) + $5,000
= $79,000
Kayla share = (10% × $320,000) + $5,000 = $37,000
Answer:
PV of the stock today = $115.83
Explanation:
We will use the discounted cash flows approach to calculate the price of the stock today. This approach values the stock by accumulating the present value of all the expected future cash flows from the stock/asset.
As the preferred stock pays a constant dividend after equal intervals of time and for an indefinite period, it can also be treated as a perpetuity. Thus, the formula for the present value of perpetuity will be used to calculate the price of the stock at year 10 that we will discount back to today.
Present value of perpetuity = Cash flow / expected rate of return
PV of stock at Year 10 = 10 / 0.052
PV of stock at Year 10 = 192.3076923
The value of the today will be,
PV of the stock today = 192.3076923 / (1+0.052)^10
PV of the stock today = $115.83
