Answer and Explanation:
The computation is shown below:
a. The expected value of payout arise from emergency is
= 0.01 × $67,500
= $675
b. The expected value of payout arise from capped coverage insuance is
= (0.9 × $500) + (0.09 × $2,500)
= $675
c. The risk averse shows the minimum exposure with respect to the swings of the income or there would be the loss in the income. Since the payout amount is same in both the cases so here we considered option B
Answer:
Trend analysis is analysisof dollar changes and percentage changes over several years.
Explanation:
A trend analysis is a method of analysis that allows traders to predict what will happen with a stock in the future.
Answer:
c. Division 1 should continue to do business with Division 2 because Division 1's variable cost per part is only $18.
Explanation:
Since the variable cost per part is only $18 and Division 1 sells to Division 2 at $25, it is in the company's overall interest that business should continue between the two divisions.
The cost of getting the part from outside is $26. This will incur more cost to the company and create excess capacity for Division 1.
Fixed costs are not relevant in making a decision of this nature. The costs would be incurred irrespective of the decision made. They are therefore irrelevant. The relevant cost is the variable cost of $18 per unit. It should be the focus of the decision, including the possibility of excess capacity for Division 1.
Answer:
$43.19
Explanation:
Use dividend discount model(DDM) to solve this question; specifically constant dividend growth model.
P0 = D1/(r-g)
P0 = Current price
D1 = Next year's dividend = $3.11
r = investors' required return = 11.4% or 0.114 as a decimal
g = dividend growth rate = 4.2% or 0.042 as a decimal
P0 = 3.11/(0.114 - 0.042)
P0 = $43.19
Therefore, this stock price is $43.19
Answer:
I have prepared the cash disbursement schedule as requested,find it in the attached excel template.
Explanation:
Kindly note that data for other months whose cash disbursements are not required such February ,March and July had impact on the schedule one way or other,hence they are shown in the computation.
In addition, I have color blue to lay emphasis on the three months requested for.
