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3 years ago

Explanation of own capital

1 answer:

3 0

Capital is the money that is being used in order to start an individual or corporation business.
Own meaning self.
Thus own capital means self capital or your own money being used to start a business.

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Publix has 2,700 pounds of bananas with a total cost of $864. Because the bananas have become too ripe, Publix is contemplating

tamaranim1 [39]

Answer: an increment in profit $1615

Explanation:

2700 pounds of Banana

Total cost = $864

If sold = $1485

When converted into bread $2565 and sold at the cost of $4480

Oven rentage = $300

What is the incremental effect on income if Publix converts the bananas to banana bread?

Sales Amount - Expenses incurred

= $4480 - $2565 + $300

= $4480 - $2865

= $1615

If he had sold the bananas

Sales amount - cost amount

= $1485 - $864

= $621

By converting the bananas to bread the incremental effect on income is it would yield more profits at $1615 compared to when sold at which is $621

3 0

3 years ago

Scottech is examining an investment opportunity that will involve buying $100,000 worth of equipment. They will need $10,000 in

aleksandrvk [35]

Answer:

113,000.

Explanation:

Let go through all the items to see whether we need to include them in the initial outlay or not.

(1) $100,000 worth of equipment => Yes

(2) Shipping will cost $5,000 and installation will cost $8,000 => Yes (Add to purchase price of equipment)

(3) Paid a management consultant $4,000 to analyze this project => No =>This is sunk cost (already incurred regardless of accept or reject the prject)

(4) Increase sales by $20,000 per year => No => under operating cashflow.

(5) $3,500 to train the employees to use the new equipment => No => under operating cashflow.

So, total initial outlay = 100,000 + 5,000 + 8,000 = 113,000.

7 0

3 years ago

Which is most true of an annual rate of 4% compounded quarterly? A) It is equivalent to 4.4% paid annually. B) It is equivalent

Artemon [7]

Answer:

D) It is equivalent to 4.06% paid annually

Explanation:

Since it is not talking about annuity and simple compound interest, therefore assuming investment value = $100 then interest will be as follows:

Interest for each quarter = $\frac{4}{100} \times \frac{3}{12}$ = 1%

But this 1% will be paid on the compounded value

Interest at end of Quarter 1 = $100 X 1% = $1

Compounded value at end of Quarter 1 = $100 + $1 = $101

Interest at end of Quarter 2 = $101 X 1% = $1.01

Compounded value at end of Quarter 2 = $101 + $1.01 = $102.01

Interest at end of Quarter 3 = $102.01 X 1% = $1.0201

Compounded value at end of Quarter 3 = $102.01 + $1.0201 = $103.0301

Interest at end of Quarter 4 = $103.0301 X 1% = $1.030301

Compounded value at end of Quarter 4 = $103.0301 + $1.030301 = $104.060401

Now net return annually = $4.060401/$100 = 4.06%

Final Answer

D) It is equivalent to 4.06% paid annually

6 0

3 years ago

A corn processor in Nebraska has decided to purchase a futures contract for corn. The contract will increase in value if the pri

VikaD [51]

Answer:

hedging

Explanation:

According to my research on different business strategies, I can say that based on the information provided within the question in this example, the corn processor is hedging. This term refers to an investment position whose main focus is to offset potential losses or gains that may be incurred by a certain investment.

I hope this answered your question. If you have any more questions feel free to ask away at Brainly.

6 0

3 years ago

CMS Corporation's balance sheet as of today is as follows: Long-term debt (bonds, at par) $10,000,000 Preferred stock 2,000,000

Dovator [93]

Answer:

$5,412,000

Explanation:

Given:

Long-term debt (bonds, at par):$10,000,000

Preferred stock :2,000,000

Common stock ($10 par): 10,000,000

Retained earnings: 4,000,000

Total debt and equity :$26,000,000

Coupon rate = 4%(semi annually)

Par value = $1000

YTM = 12%

Required:

Find the current market value of the firm's debt.

Find the bond price:

Bond price $= (C * (\frac{1 - (\frac{1}{(1+i)^n})}{i}) + (\frac{m}{(1+i)^n})$

$= (C * (\frac{1 - (\frac{1}{(1+0.06)^2^0})}{0.06}) + (\frac{1000}{(1+0.06)^2^0})$

$= 541.20$

Bond price = $541.20

Find number of bonds:

Number of bonds $= \frac{10,000,000}{1,000} = 10,000$

Now, to find the current market value of the firm's debt, use:

Current market value of debt = number of bonds × bond price

= 10,000 × 541.20

= $5,412,000

Current market value of the firm's debt = $5,412,000

7 0

3 years ago