1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Stolb23 [73]
2 years ago
13

Your bank account pays an interest rate of 9 percent. You are considering buying a share of stock in XYZ Corporation for $90. Af

ter 1, 2, and 3 years, it will pay a dividend of $4. You expect to sell the stock after 3 years for $100.Is XYZ a good investment?
Business
1 answer:
dlinn [17]2 years ago
7 0

Answer: It is NOT a good investment.

Explanation:

Your bank account pays an interest of 9% per annum. This can be used as a discount rate to discount the dividends and the final Sales price to the present to see if the present value of Future benefits is more than what the stock is valued at now.

If the Present Value of the future benefits is higher than the cost now, XYZ is a good investment.

$4 are expected every year for 3 years and then on the third year, the stock will be sold for $100.

Discounting therefore gives us,

= (4 / (1 + 9%) ) + (4 / (1 + 9%)^2) + ( 4 / ( 1 + 9%) ^ 3) + ( 100 / ( 1 + 9%) ^ 3)

= 87.34

= $87.34

The Present Value of the future benefits including the future sales price is $87.34 which is less than the current cost of the stock at $90.

XYZ is NOT a good investment.

You might be interested in
A producer of beverages and snack foods wants to market its products to the 14-to-22-year-old demographic, providing incentives
yanalaym [24]

Answer:

b.digital marketing

Explanation:

According to my research, in 2019 it is calculated that about 88% of young adults aged 14-22 years old own a cellphone. This being the case, the smartest direct marketing to choose would be "digital marketing". This is because it will reach the vast majority of the 14-22 year old demographic as well as given them the ability to respond instantly to the time sensitive offers through their internet connected devices.

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

8 0
2 years ago
Your supermarket is trying to determine how many meatloaf dinners should be produced on Monday. The Monday demand for meatloaf d
Alecsey [184]

Answer:

The recommended production quantity is that which maximizes profit.

<em>Quantity 130</em>

<em />

Explanation:

Quantity to produce is the problem here. Remember that this is one of the fundamental questions in the discipline of Economics.

- What to produce?     - For whom to produce?

- How to produce?      - In what quantity?

Possible Production Quantities:

100,  110,  120, and 130

Mean Demand = 100

Standard Deviation = 20

Lowest possible demand = 100 - 20 = 80units

Highest possible demand = 100 + 20 = 120units

<u>* Solve, using the mean demand for each quantity level. Assume also that on every Monday, the minimum possible quantity is what is purchased. That's the safest assumption anyway.</u>

<u />

FOR QUANTITY 100,

Revenue = 7×100 = $700      Direct cost = 2×100 = $200

Indirect cost = 0.6×20 = $12          Total cost = 200 + 12 = $212

PROFIT = 700 - 212 = $488

FOR QUANTITY 110,

Revenue = 7×110 = $770        Direct cost = 2×110 = $220

Indirect cost = 0.6×30 = $18           Total cost = 220 + 18 = $238

PROFIT = 770 - 238 = $532

FOR QUANTITY 120,

Revenue = 7×120 = $840        Direct cost = 2×120 = $240

Indirect cost = 0.6×40 = $24           Total cost = $264

PROFIT = 840 - 264 = $576

FOR QUANTITY 130,

Revenue = 7×130 = $910          Direct cost = 2×130 = $260

Indirect cost = 0.6×50 = $30            Total cost = $290

PROFIT = 910 - 290 = $620

<em>Remember, the base assumption is that only the minimum quantity of 80units is bought each Monday. This is the only way to account for wastage; which costs 0.6 dollar per unit. So, the more the quantity produced, the greater the likelihood of wastage.</em>

3 0
3 years ago
Roberta, the computer department manager at IT Mart, is considering whether to use a group to develop a plan to help employees s
Alenkinab [10]
I believe D is the answer
Hope this helps!
5 0
3 years ago
Northrup-Grumman Corporation is expected to pay $1.25 per share for its next dividend. If shares are trading at $27.22 and analy
hammer [34]

Answer:

the  return on common shares is 6.99%

Explanation:

The computation of the return on common shares is shown below:

= Dividend ÷ Stock price + growth rate

= $1.25 ÷ $27.22 + 2.4%

= 6.99%

hence, the  return on common shares is 6.99%

We simply applied the above formula so that the correct value could come

And, the same is to be considered

3 0
2 years ago
Prior to liquidating their partnership, Joyce and Xi had capital accounts of $50,000 and $105,000, respectively. Prior to liquid
Iteru [2.4K]

Answer:

Joyce cash distribution   = $262500

Explanation:

given data

Joyce capital = $50,000

Xi capital = $105,000

liabilities = $10,000

assets sold = $190,000

to find out

we consider Determine the amount received by Joyce as a final distribution from liquidation of the partnership

solution

we carrying value of non-cash asset prior to liquidation is

value of non-cash asset prior to liquidation = $50,0000 + $105,000 + $10,000

value of non-cash asset prior to liquidation =  $615000

so Profit on Liquidation  is = value of non-cash asset prior to liquidation - Sale of Asset

Profit on Liquidation  is = $615000 - $190,000

Profit on Liquidation  is = $ 425000

and here since

Joyce and Xi share income and losses equally

so Joyce share of profit will be

Joyce share of profit  = 50% × $ 425000

Joyce share of profit  = $212500

and

so Joyce cash distribution  will be

Joyce cash distribution  = Joyce share of profit + Joyce capital

Joyce cash distribution   = $212500 + $50,000

Joyce cash distribution   = $262500

4 0
3 years ago
Other questions:
  • How is dragonwave, inc revenues by product categroy?
    9·1 answer
  • The company's total assets are $40,000. The following is a listing of the company’s accounts and account balances as of December
    14·1 answer
  • Athlon Company acquired 30 percent of the common stock of Opteron Corporation, at underlying book value. For the same year, Opte
    8·1 answer
  • The International Property Right Index scores countries based on the legal and political environment and how well property right
    11·1 answer
  • In skill-based pay systems, performance measures are primarily based on _____.A. supervisor's appraisalB. individual productivit
    11·1 answer
  • Service providers should refrain from asking feedback from customers to save time that can be used to provide better service qua
    15·2 answers
  • A firm's dividends have grown over the last several years. 3 years ago the firm paid a dividend of $1. Yesterday it paid a divid
    7·1 answer
  • Help me please.. there is no option on here for Human Resources principals, so I jus clicked business as the subject..
    13·1 answer
  • alculating Net Float [LO1] Each business day, on average, a company writes checks totaling $17,000 to pay its suppliers. The usu
    14·1 answer
  • Crane Company received proceeds of $799000 on 10-year, 9% bonds issued on January 1, 2019. The bonds had a face value of $848000
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!