Answer:
Explanation:
Let's first determine the free cash flow of the firm
Particulars Years
1 2 3
EBIT 540 680 750
<u>Tax at 36% (0.36*540) (0.36*680) (0.36*750) </u>
Less: 345.6 435.2 480
Net Capital -
Spending 150 170 190
<u>Change in NWC 70 75 80 </u>
Less: 125.6 190.2 210
The terminal value at the end of T =(3 years) is:
![= \dfrac{Free \ cash \ flow}{unlevered \ cost - expected \ growth \ rate}](https://tex.z-dn.net/?f=%3D%20%5Cdfrac%7BFree%20%5C%20cash%20%5C%20flow%7D%7Bunlevered%20%5C%20cost%20-%20expected%20%5C%20growth%20%20%5C%20rate%7D)
![= \dfrac{250}{0.1643-0.04}](https://tex.z-dn.net/?f=%3D%20%5Cdfrac%7B250%7D%7B0.1643-0.04%7D)
![= \dfrac{250}{0.1243}](https://tex.z-dn.net/?f=%3D%20%5Cdfrac%7B250%7D%7B0.1243%7D)
= 2011.26
Finally, the value of the firm can be computed as follows:
Years Free Cash Flow PVIF PV
1 125.6 0.6589 107.88
2 190.2 0.7377 140.31
3 210 0.6336 133.06
<u>Terminal Value 2011.26 0.6336 1294.33 </u>
<u>Value of the firm ⇒ $1655.58</u>
This participative style of leadership suggests that Gary is a <u>"democratic" </u>leader.
Democratic leadership, otherwise called participative leadership or shared leadership, is a sort of leadership style in which individuals from the gathering play a more participative job in the basic leadership process. This sort of administration can apply to any association, from private organizations to schools to government.
Everybody is given the chance to take part, thoughts are traded unreservedly, and talk is energized. While the majority rule process tends to center around gathering equity and the free stream of thoughts, the pioneer of the gathering is still there to offer direction and control. The democratic leader is accused of choosing who is in the gathering and who gets the opportunity to add to the choices that are made.
Answer:
The annual worth of the overhead costs for 7 year-period is
A = $389743.42.
<em>Then the time value of the annual worth is discounted by 8%</em>
∴ $389743.42 x 0.08 = $31179.47.
Explanation:
Using the formula
A = P(1 + r/n)![{nt}](https://tex.z-dn.net/?f=%7Bnt%7D)
Where:
A = ?
t = 7
P = $200,000.00
r = 10%
n= 1
TVM =8%
∴ A = $200,000.00(1 + 0.10/1)![{1 * 7}](https://tex.z-dn.net/?f=%7B1%20%2A%207%7D)
A = $200,000.00(1.10)![{7}](https://tex.z-dn.net/?f=%7B7%7D)
A = $200,000.00(1.9487171)
A = $389743.42
<em>Then the time value of the annual worth is discounted by 8%</em>
∴ $389743.42 x 0.08 = $31179.47
Answer:
Then the constant increases?
The right answer for the question that is being asked and shown above is that: "A. Company A makes bold moves and grows rapidly." <span> The company that would be most risky to invest in is that </span><span>A. Company A makes bold moves and grows rapidly.</span>