Answer:
11.21%
Explanation:
the opportunity cost of capital can be determined by calculating the weighted average cost of capital
WACC = [weight of equity x cost of equity[ + [weight of debt x cost of debt x (1 - tax rate)] + [weight of preferred stock x cost of preferred stock]
0.3 x 10.76 + (0.5 x 13.91) + (0.2 x 0.65 x 7,87)
3.228 + 6.955 + 1.231
11.21%
The net present value of the proposed project is closest to -$80,822.
Since the project saves $80,000 in costs each year, we treat these savings income for the next 4 years. We then calculate the Present value Interest Factor of an annuity using the formula :
PVIF of an annuity = { [ 1 - [ (1+r)⁻ⁿ ] } ÷ r
PVIF of an annuity = { [ 1 - [ (1.09)⁻⁴ ] } ÷ 0.09
PVIF of an annuity = 3.240 (rounded to three decimals)
PV of the cost savings = (3.240*80000) = $2,59,178 (rounded to nearest $)
NPV = PV of cost savings - Value of investment
NPV = 2,59,178
- 3,40,000
Answer:
P₀ = $106.96
Explanation:
the current dividend paid by IBM was $6.30 per stock
Div₀ = $6.30
Div₁ = $6.615
Div₂ = $6.94575
Div₃ = $7.2930375
Div₄ = $7.657689375
Div₅ = $8.040573844
Div₆ = $8.321993928
we must first determine the terminal value at year 5 = Div₆ / (rrr - g) = $8.321993928 / (10% - 3.5%) = $128.0306758
now we must discount the future values using the 10% discount rate:
P₀ = $6.615/1.1 + $6.94575/1.1² + $7.2930375/1.1³ + $7.657689375/1.1⁴ + $8.040573844/1.1⁵ + $128.0306758/1.1⁵ = $6.013 + $5.740 + $5.479 + $5.230 + $4.993 + $79.50 = $106.96
Answer:
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Answer: A trial balance is a bookkeeping worksheet in which the stability of all ledgers are compiled into debit and savings account column totals that are equal. The typical purpose of producing a trial stability is to ensure the entries in a company's bookkeeping device are mathematically correct.
Explanation: