Answer:
$31.24 is the current value of one share at a discount rate of 12 percent
Explanation:
Price today = [PVF 12%, 2 *d2]+[PVF12%,4 ] + [PVF 12%, 5 * P]
=[.79719* 2 ] +[.63552*2] + [ .56743*50]
= 1.5944+ 1.2710+ 28.37
= 31.24
Answer:
TFC : Horizontal Line parallel to X axis
TVC : Upward sloping inverse S shape curve from origin
TC : Upward sloping increase S shape curve, with Y axis intercept = TFC
Explanation:
Total Fixed cost [TFC] is the total production expenditure, done on fixed factors of production (Eg - on machine, building etc). It is incurred even at zero level of output, stays same (constant) irrespective of output level. So, it's curve is a constant horizontal line.
Total Variable Cost [TVC] is the total production expenditure, done on variable factors of production (Eg - on raw material). It is zero at zero level of output, directly related to level of output thereafter. It first increases at a decreasing rate, then increases at an increasing rate. So, it's curve is inverse S upward sloping curve from origin.
Total Cost [TC] is the total cost incurred on all factors of production (fixed & variable). It is sum of TVC & TFC. As TFC is constant at all levels of output, TC changes due to change in TVC. So, TC is also directly related to output level, first increases at increasing rate & then at decreasing rate. Hence, it is also a inverse S upward sloping curve. But, it also includes constant TFC. So, the curve has intercept on Y axis = TFC (it doesn't start from origin).
Answer:
a. $25,000
Explanation:
The computation of net cash provided by operating activities is shown below:-
Particulars Amount
Net Income $30,000
Add Depreciation $5,000
Less Increase in Accounts Receivables -$7,000
Less Decrease in Accounts Payable -$3,000
Net cash Provided by Operating Activities $25,000
Answer:
1. $100,000 and 25%
2. $137,200 and 34.3%
3. $150,000 and 27%
Explanation:
1. It does not expand
a. Net income= $100,000 (as given in the question)
b. Return on equity= (net income)/(shareholder’s equity)
Shareholder’s equity= $400,000
Thus return on equity= 100000/400000 = 0.25 or 25%
2. It expands and issue $160,000 in debt
a. Net income= $100000 + 50000 – 12800 (debt interest 8% of $160000)
= $137,200
b. Return on equity= (net income)/(shareholder’s equity)
= 137200/400000
=0.343 or 34.3%
3. It expands and raises equity of $160000
a. Net Income= $100000 + 50000
= $150000
b. Return on equity= (net income)/(shareholder’s equity)
= 150000/(400000 + 160000)
Where ($560,000) 400000 + 160000 is shareholder’s equity
= 0.27 or 27%
