C !!!!!!! I just took the test
Answer:
True
Explanation:
The perpetuity formula used to determine the value of stock is:
stock value = <u>dividend </u>
interest rate
The discounted cash flow formula used to determine the value of a project or a revenue generating asset is:
present value = <u>cash flow </u>
discount rate
The cash flow is equivalent to the dividend, and the discount rate is equivalent to the interest rate.
Answer:
$21,943
Explanation:
Calculation to determine the annual operating cash flow
Using this formula
Operating Cash Flow =(Annual Revenue-Variable costs - Fixed costs)×(1-Tax rate)+( Annual depreciation×Tax rate )
Let plug in the formula
Operating Cash Flow =[ ($132,100 - $80,200 - $20,700) x (1 - 0.35)]+ ($4,750 x 0.35)
Operating Cash Flow =
Operating Cash Flow =($31,200×0.65)+$1,663
Operating Cash Flow =$20,280+$1,663
Operating Cash Flow =$21,943
Therefore the annual operating cash flow is $21,943
Answer:
41 contract
Explanation:
The farmer must sell forward:
186,550×(1/0.91)
=186,550×1.09890
= 205,000 bushels of yellow corn.
This requires selling:
205,000/5,000 = 41 contracts
Therefore Farmer Brown should buy or sell to hedge his position 41 contract
Answer: B
Explanation:
Boeing would have received only $14.0 million, rather than $14.6 million, had it not entered into the forward contract. Additionally, Boeing gained $0.6 million from forward hedging