If a bakery hires on person to bake cookies and another to bake cakes,the bakery is applying the concept of specialization.

In the context of investing, the term market refers to Select one:

Kamila [148]

The right answer for the question that is being asked and shown above is that: "d. the place where stocks, bonds, and securities are traded." In the context of investing, the term market refers to d. the place where stocks, bonds, and securities are traded.

8 0

3 years ago

Read 2 more answers

Down Under Boomerang, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $2.

Sedbober [7]

Answer:

Explanation: please refer to the explanation section

Initial fixed asset Investment = 2.33million = 2 330 000

Modified Accelerated Cost recovery System

The Fixed Asset Falls under the 3 year MACRS class the project the asset which states that Asset Depreciation range Midpoint is 4 years or less The period for this project is 3 years

Estimated annual sales = $1735000

costs = $640,000

Initial Net working Capital investment = $300,000

Residual Value (Value of the fixed asset at the end) = $255,000

a. Projected Cash flows

Year 0

Cash outflows = 2 330 000 - 300 000 - 255 000 = 2375000

year 1 year 2 year 3

Estimated sales 1735000 1735000 1735000

costs -640000 -640000 -640000

Depreciation -791666.67 -791666.67 -791666.67

Residual Value 255000

Net sales 303333.33 303333.33 558333.33

Tax 25% -75833.33 -75833.33 -139583.33

Net Cash flows 227500 227500 418750

Depreciation = (2330 00 + 300 000 -255000)/3= 791666.67

Tax = Net sales x 25%

b Net Present Value (Required rate Return = 9%)

PV = 227500/(1+0.09)^1 + 227500/(1 + 0.09)^2 + 418750/(1+0.09)^3

Present Value of cash flows = 723549.63

Net Present Value = 723549.63 - 2630 000 = -1906450.37

The net present Value is Negative indicating the project will not bring positive returns

5 0

2 years ago

3. You have $100 to invest. The price of XYZ stock is $100. You sell short one share of XYZ and then invest all available funds

tigry1 [53]

Answer:

HPR = holding period Return is 20%

Explanation:

Given original Investment = $100

Short sale proceeds for 1 share = $100

Investment made of $100 + short sale proceeds of $100 at 5% YTM.

So Maturity Value = Investment x (1+YTM)^number of years

= 200 x (1 + 0.05)^1 = 210

Therefore, In order to cover Short sale of 1 share, we will have to buy 1 share at a closing value of $90

As such, holding period Return = (Investment proceeds from ZCB - Buying price of stock - Investment amount) / Investment Amount

= (210 - 90 - 100) / 100 = 0.2 or 20%

Hence, HPR = holding period Return is 20%

5 0

3 years ago

Which of the following is an appropriate solution to an overspending allowance?

nika2105 [10]

Answer:

a

Explanation:

8 0

3 years ago

Your venture has net income of $600,000 taxable income of $1,000,000 operating profit of $1,200,000 total financial capital incl

Butoxors [25]

Answer:

EVA = -$180,000

Explanation:

given data

net income = $600,000

taxable income of $1,000,000

operating profit = $1,200,000

total financial capital = $9,000,000

tax rate = 40%

WACC = 10%

solution

we get here EVA that is express as

EVA = NOPAT - Invested Capital × WACC ..................1

and here

NOPAT = EBIT × ( 1 - Tax Rate ) .........2

put here value

NOPAT = operating profit × (1 - Tax Rate)

NOPAT =$1,200,000 × (1 - 0.40)

NOPAT =$720,000

so put in equation 1 we get

EVA = NOPAT - Invested Capital × WACC

EVA = $720,000 - $9,000,000 × 10%

EVA = -$180,000

3 0

3 years ago