Answer:
See explanation
Explanation:
See the images to get the result.
Answer:
AD2 and then to AD3
Explanation:
If the investment is continued to increase by federal reserve it would only be feasible when money creation decreases the interest rate.
The aggregate demand would then be expanded and the aggregate demand curve shifted to the right. The necessary increase in aggregate demand must be such that aggregate shifts in demand curve from AD1 to AD2 to AD3.
Answer:
$3.64 million
The Npv can be turned into cash by borrowing $18.18 million today and paying back in one year time with the $20 million that would be paid
Explanation:
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
Cash flow in year 0 = $-10 million
Cash flow in year 1 = $20 million - $5 million = 15 million
I = 10%
NPV = 3.63 million
The Npv can be turned into cash by borrowing $18.18 million today as the present value of 20 million is 18.18 million
20 million / 1.10 = 18.18 million
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Answer:
Nov 1 Cash $2,300,000 Dr
Notes Payable $2300,000 Cr
Dec 31 Interest Expense $34,500 Dr
Interest Payable $34,500 Cr
Explanation:
The interest is payable at maturity that is at the start of May as the nite is for six months. However, at the end of the period the adjusting entry will be made. On 31 December the 2 months interest is accrued. The expense relates to this period so will be recorded as an expense and as a payable.
The 9% is the annual rate.
the annual Interets is 2300000*0.09 = 207000
So, the 2 month interest will be = 207000 * 2/12 = 34500
Answer:
The Intrinsic Value or Calculated Price of the under-study stock is $98.57.
Explanation:
In the 1st year, the company is expected to Pay a Dividend of $5.3. This is calculated by multiplying the compound factor (1.06) with the current dividend of $5.
In the 2nd year, the growth rate will remain the same. So, multiplying $5.3 with the same compound factor of (1.06) and you will get $5.62.
In the third year, the growth rate will come down to 3.5% and this rate will be constant now. So, multiply the dividend of year 2 with the compound factor of (1.035) and you will get $5.81. Convert this figure to Perpetuity and the formula is;
Cash Flow / Cost of Equity - Growth Rate
This formula for Horizon value will give you $105.72.
Now, you have to find the Present value of all these three calculated Cash flows, add them all and you will get the Intrinsic Value.
Thanks.